United States Supreme Court Ruling in Alice v. CLS Bank – Software is Still Patentable

Recently, the United States Supreme Court decision in Alice v. CLS Bank ruling impacted the scope of software patents. Some opined that software was no longer patentable. The United States Patent & Trademark Office even withdrew notices of allowance for some of patent applications due to the presence of at least one claim having an “abstract idea.” Software and computer implemented inventions are impacted but the change in scope of impact will probably remain unclear for some time to come. The Supreme Court did not abolish software patents but it has increased the standard for eligibility of software patents.

Specifically, the United States Supreme Court unequivocally stated that if you have an idea so abstract that it cannot be patented, simply tying it to a “generic computer cannot transform a patent-ineligible abstract idea into a patent-eligible invention.” It also stated that tying an abstract idea to “purely functional and generic” hardware similarly would not make the idea patentable.

The United States Patent & Trademark Office (USPTO) issued preliminary guidelines in response to the decision. The guidelines provides a two step analysis which will apply to process and system claims.

For the first step, determining whether the claim is directed to an abstract idea, the memorandum provides four examples of abstract ideas referenced in Alice:

  • Fundamental economic practices;
  • Certain methods of organizing human activities;
  • An idea of itself; and
  • Mathematical relationships/formulas

If an abstract idea is present in the claim, the examiner should proceed to the next step, If an abstract idea is present in the claim, determine whether any element, or combination of elements, in the claim is sufficient to ensure that the claim amounts to significantly more than the abstract idea itself. Examples of limitations that may be sufficient to qualify as “significantly more” include:

  • Improvements to another technology or technical fields;
  • Improvements to the functioning of the computer itself;
  • Meaningful limitations beyond generally linking the use of an abstract idea to a particular technological environment.

Examples of limitations that are not enough to qualify as “significantly more” include:

  • Adding the words “apply it” (or an equivalent) with an abstract idea, or mere instructions to implement an abstract idea on a computer;
  • Requiring no more than a generic computer to perform generic computer functions that are well-understood, routine and conventional activities previously known to the industry.

The question of where the line of an abstract idea is drawn is still not clearly defined. I’ll wait for the updated USPTO guidelines, Patent Trial and Appeal Board (PTAB), and court decisions to provide additional clarity.

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