I only heard about this case recently, via my fab lecturer, Erik Dean. I don't know how I missed it at the time.
In a long-awaited decision, the Supreme Court issued its opinion in Alice Corp. v. CLS Bank today, striking down an abstract software patent. Essentially, the Court ruled that adding âon a computerâ to an abstract idea does not make it patentable. Many thousands of software patentsâparticularly the vague and overbroad patents so beloved by patent trollsâshould be struck down under this standard. Because the opinion leaves many details to be worked out (such as the scope of an âabstract ideaâ), it might be a few years until we understand its full impact.
Alice Corp.'s patent claimed a form of escrowing that was well known. Called an âintermediated settlement,â it allowed a third party to act as an intermediary by creating âshadow accountsâ for parties, and only allowing transactions to go through if the âshadow accountâ showed the party had enough money. Ohâand it was done with a computer.
The Alice case has a long history in the courts. The case was originally filed in 2007. In 2011, the district court held that all the patent's claims were invalid as abstract. In 2012, a divided panel at the Federal Circuit reversed. In 2013, the full Federal Circuit vacated the panel opinion and again found the claims too abstract in a decision that had 10 judges produce 7 different opinions. And now, in 2014, the Supreme Court has finally ended it: Aliceâs claims are invalid.
In a concise 17-page opinion, the Supreme Court recognized that Alice claimed the abstract concept of âintermediated settlement,â something the Supreme Court recognized was âa fundamental economic practice long prevalent in our system of commerce.â Having done this, the Supreme Court reaffirmed that merely adding âa generic computer to perform generic computer functionsâ does not make an otherwise abstract idea patentable. This statement (and the opinion itself) makes clear that an abstract idea along with a computer doing what a computer normally does is not something our patent system was designed to protect.