Supreme Court to Consider Software Patent Case

The US Supreme Court has agreed to hear an appeal of a decision by the US Court of Appeals for the Federal Circuit that an abstract idea does not become patentable simply because it is connected to a computer system.

The Court of Appeals for the Federal Circuit has primary responsibility for interpreting US patent law.  It has struggled over the years to define the standards that judges should use to evaluate the validity of software patents.

The Federal Circuit’s May ruling in the case of CLS Bank v. Alice could lead to the “death” of software and business method patents, according to dissenting Judge Kimberly Moore.

Alice, an electronic marketplace company, holds four patents related to a computerized trading platform for currencies.

After being sued for patent infringement, defendant CLS Bank International contended that Alice’s so-called inventions were too abstract to be patentable.  A district court agreed.

The Federal Circuit decided en banc that Alice’s patent claims were invalid.  But the decision included seven separate opinions that failed to clarify the patent-eligibility of software claims.

The Federal Circuit’s decision was widely criticized and left software patent owners guessing about whether their inventions were really eligible for patents.  Technology groups including the Electronic Frontier Foundation, a digital civil liberties group, urged the Supreme Court to review the case.

In its appeal, Alice has asked the Supreme Court to decide:

Whether claims to computer-implemented inventions—including claims to systems and machines, processes, and items of manufacture—are directed to patent-eligible subject matter within the meaning of 35 U.S.C. § 101 as interpreted by this Court.

Mark Lemley, a StanfordLawSchool professor and patent expert, wrote in a brief on behalf of Facebook and other companies that the Federal Circuit’s decision had left the law “hopelessly confused.”  He later wrote that he expects the Supreme Court to find that Alice’s inventions are not patent-eligible.

Stay up-to-date on the latest Intellectual Property Law news from Sheldon Mak & Anderson.

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