Patent Trolls beware. There’s a Supreme Court-backed knight crossing your bridge, wielding a powerful verdict.
On Thursday, in a unanimous decision in Alice Corp. vs. CLS Bank International, the Supreme Court ruled that ideas are not patentable just because they are performed on a computer. Although the ruling still leaves plenty of ambiguity in the patentability of software, it is one step closer in the recent anti-NPE movement.
Non-practicing entities, or NPEs, have been on the minds of high-tech business owners and the lawyers representing them for decades.
Today, however, the trial court invalidated Alice’s patents, stating they were just concepts, not patentable ideas.
“Viewed as a whole,” wrote Justice Thomas wrote (via New York Times), “petitioner’s method claims simply recite the concept of intermediated settlement as performed by a generic computer.”
“[The methods neither] improve the functioning of the computer [nor] effect an improvement in any other technology or technical field.”
In the recent past, the court was weary of hampering innovation by restricting patenting requirements. Long advocates for protecting intellectual property of both the individual and businesses, courts worry that reigning in patent trolls means restraining creativity and invention.
What do intellectual property experts think?
Dana Rao, Vice President, Intellectual Property and Litigation, Adobe, wrote to Forbes:
“The Supreme Court added another nail in the coffin of patent trolls with a decision that reinforces the common-sense belief that patents can’t be granted for abstract ideas that have been around forever. Importantly, they made a critical distinction between those abstract patents and valid software patents that improve a technological process,” said Rao.
“This ruling supports true innovators while helping rein in the abuse of the system by the patent trolls. We’re pleased to see the judiciary acting where Congress would not. But we still need Congress to act, as only they can meaningfully change the economic incentives that are driving the abuse of the patent litigation system.”
If that happens, patent litigators—like patent trolls—might also find themselves without a job.
According to Bruce Wexler, partner at Paul Hastings, who wrote to Daniel Fisher at Forbes, patent lawyers shouldn’t fret quite yet. In fact, maybe the Supreme Court’s ruling just made their job easier.
“Chief Judge Archer’s dissent in In re Alappat some 20 years ago is now the majority rule,” writes Wexler.
“The mere recitation of some structure in a patent claim is not the dispositive test for patent eligibility. Patent law demands more. The invention must reside in the application of an idea. While this can raise grey areas, the argument cannot simply be about whether or not structure appears in a patent claim.”
If anything, the Supreme Court ruling is one more reason innovators should contact patent experts about what is, and is not, patentable. Law firm managers should keep their clients apprised of changes in patent law. Between the America Invents Act and recent rulings against NPEs, intellectual property practice areas will have their hands full.
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