Running concept through computer doesn’t merit patent

WASHINGTON — The Supreme Court was unanimous Thursday in ruling that simply implementing basic business concepts through the use of a computer is not enough to make such a method eligible for a patent.

If it were, Justice Clarence Thomas wrote for the court, an applicant could stake a claim to “any principle of the physical or social sciences by reciting a computer system configured to implement the relevant concept.”

The case, Alice Corp. v. CLS Bank, had drawn the attention of the nation’s biggest technology companies.

Some, such as Microsoft and IBM, were concerned about the loss of existing patents. Others, including Google and Facebook, worried that business process patents are too easily awarded, thwart innovation and launch waves of unproductive litigation.

But while the case was heralded as having the potential to affect hundreds of thousands of software patents, the justices continued their pattern of deciding patent cases narrowly and mostly restricted to the facts of specific cases.

In the one at issue, the court said Australia-based Alice Corp. should not have received a patent for its computer-implemented process for mitigating the chances that one party in a financial transaction will not pay all it owes.

Patents are awarded for inventing any “new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.” But there are three exceptions: for “laws of nature, physical phenomena, and abstract ideas.”

Alice came up with a computer-aided method to ensure that foreign currency transactions proceed smoothly and protect the parties. CLS developed a similar program.

Thomas said that Alice’s method was an abstract idea that falls within the exceptions. Alice had not done enough to elevate the concept into something more, Thomas said.

“The mere recitation of a generic computer cannot transform a patent-ineligible abstract idea into a patent-eligible invention,” Thomas wrote.

The justices upheld a decision by the U.S. Court of Appeals for the Federal Circuit, the specialized court that hears patent claims. While that court said Alice should not have received the patent, its judges split several ways on why.

Reaction to the Supreme Court decision was subdued.

Victoria Espinel, president and chief executive of BSA/The Software Alliance, praised the court for making clear that “real software inventions are patentable under U.S. law and that merely connecting an abstract idea to a computer doesn’t make it patentable.”

But others said the court’s incremental and cautious steps provide little clarity.

Adam Mossoff, an intellectual property law professor at George Mason University, called the opinion “surprisingly short.”

He said the ruling “provides little to no legal guidance to the courts as to how to apply this decision in the future such that inventors and commercial firms working in the innovation industries can know with certainty if their discoveries or inventions are patentable or not.”