The current US Supreme Court is one of the most divided in history, but the justices managed to come together for a unanimous decision this week to strike a blow against software patents. The Court has narrowed the definition of an invention in the US to exclude abstract ideas that have simply been implemented on a computer. Some were hoping that the Court would make broad statements about the (in)validity of software patents in general, but this is still a step in the right direction.
The case in question pitted Alice Corp against CLS Bank Int, both financial institutions of which you’ve likely never heard. Lawsuits between banking companies have the potential to be tremendously boring, but this one could have ripple effects through much of the tech industry. The Court’s decision today basically says that tacking on “then do it on a computer” to an existing idea is not patentable.
It sounds a little bizarre on the face of it. Surely people would not be so bold as to simply toss in a generic computerization step and apply for a patent, right? It’s actually a well-known loophole and a favorite of patent trolls. In this case, Alice Corp claimed a patent on escrow services, which have existed for centuries. Oh, but Alice had the brilliant idea of doing escrow on a computer. The ruling striking down Alice’s patent is 20 pages long, which is short for a Supreme Court opinion. In it, Justice Clarence Thomas attempts to set a standard by which these fringe software patents can be judged — generic computer implementation doesn’t make an abstract idea patentable.
The reasoning used in the opinion is strikingly similar to another of the Court’s recent patent cases, that of Myriad Genetics. In that case, the Court unanimously decided that human genes cannot be patented, and invalidated the Utah-based company’s claim on the BRCA1 and BRCA2 genes, which are important for diagnosing breast and ovarian cancers. It’s the same deal — you cannot apply a common technique to a non-patentable idea and magically have a patent (even if it was hard to do).
We’re probably not looking at the end of patent trolling, but some of the particularly egregious patents out there are in trouble. True patent trolls often rely on incredibly broad business method patents that use the “do it on a computer” loophole. For example, sell a thing, but do it with a computer. Or distribute a newsletter on a computer. [Read: The Patent War: Is it killing innovation?]
These exceptionally lame patents aren’t instantly dead, but lower courts could easily point to the Supreme Court ruling and toss them out. This screws up the business model of patent trolls, which relies mainly on intimidating people with protracted and expensive legal battles. The trolls lose their leverage when many of these generic software patents are likely to be invalidated the first time they come before a judge.
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