Software patents are finally getting their day in the nation’s highest court.
The Supreme Court has agreed to hear Alice Corporation v. CLS Bank International, which means that it will probably be addressing whether and how it’s possible to patent software.
At issue is whether or not patents on software are considered abstract ideas, which can’t be patented, or “business methods,” which can qualify for patent protection. In this particular case, Alice Corporation patented a method for transferring money and other financial instruments between two parties, while ensuring both held up their side of the deal.
Most recently, the case was brought before a 10-judge panel at the United States Court of Appeals for the Federal Circuit, where judges agreed that Alice’s patent wasn’t valid, but couldn’t agree on what test should apply for determining the validity of a software patent. It seems that split may have helped convince the Supreme Court to step in.
Earlier this year, the court denied a request to hear Ultramercial v. Hulu and WildTangent, which covered similar territory. In that case, another panel of judges from the same appellate court ruled that a patent governing a “Method and system for payment of intellectual property royalties by interposed sponsor on behalf of consumer over a telecommunications network” was valid, amid a massive outcry from the technology community.
Whatever the outcome, it could have significant implications for tech companies and patent holding firms like Bellevue-based Intellectual Ventures. If the Supreme Court figures out a test for determining which software patents are valid and which aren’t, that could crack down on the ever-expanding business of patent trolling.
