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Supreme Court Affirms Federal Circuit's Software Patent Decision

By Gabriella Khorasanee, JD on June 27, 2014 | Last updated on March 21, 2019

Alice Corp. v. CLS Bank International was one of the most anticipated patent decisions this term, as companies and attorneys alike, were eager to see how the Supreme Court would determine the fate of software patents.

And all that waiting with bated breath was for naught. Instead, the Court gave us a ruling that did little to change the existing legal landscape.

The Federal Circuit

In a one-paragraph per curiam opinion, that was shorter than the four pages needed to list the attorneys involved in the case, the Federal Circuit held that Alice Corp's "method and computer-readable media claims are not directed to eligible subject matter under 35 U.S.C. § 101." If it had left it at that, perhaps the Supreme Court would not have granted cert. But it was what followed that was problematic -- over 100 pages of concurrences, dissents, and "additional reflections."

The Supreme Court

In an unanimous decision, authored by Justice Thomas, the Court had to determine whether the patent at issue -- a software patent that essentially computerized settlement risk in financial transactions -- was patent eligible, or rather a patent-ineligible abstract idea. The Court affirmed the Federal Circuit, and held "that the claims at issue are drawn to the abstract idea of intermediated settlement, and that merely requiring generic computer implementation fails to transform that abstract idea into a patent-eligible invention."

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Future Impact

So where does that leave us? Though the Court gave us "some clarity to a confused area of the law concerning when software can be patented[, it] ... did not provide a definitive test on when software can be patented as some had hoped," reports Reuters. Another problem highlighted by the decision is that is "the continuation of [a] larger trend" -- that judicial exception to patentability can invalidate patents -- which, "as the Court itself acknowledges, the judge-made doctrine in this area has the potential to swallow all of patent law," says SCOTUSblog.

With no clear test for determining the patent eligibility of software patents, you can be sure that the Supreme Court has not yet written the last word on the issue.

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