Implementing a claim drawn to an abstract idea through a Software is a patentable?

Whether implementing a claim drawn to an abstract idea through a computer program (Software) is a patentable subject matter? This was the question came up before the Supreme Court of America for its consideration in Alice Corp. v. CLS Bank International, 573 U.S. __,(2014). Implementing any claims based on an abstract idea on a computer program or software cannot transform such abstract idea into a patentable subject matter. Thus, in this case apex court held that, the patents were held to be invalid because the claims were drawn to an abstract idea.

Alice Corp. v. CLS Bank International

Facts:Alice Corp holds certain patents on computer programs as well as electronic methods which can be utilised for financial trading system mitigating the settlement risk, where any commercial transactions done online between two parties are settled by a third party.The patents claim: a method for exchanging financial obligations; a computer system configured to carry out that method; and a computer-readable medium containing program code for performing that method.

Alice alleged that, CLS Bank International has infringed their patents and using a similar technology for financial transactions. However, CLSBank International, challenged the claims as not infringed, invalid, or unenforceable. Alice counterclaimed infringement.

Re, to Supreme Court’s decision in Bilski v. Kappos 561 U.S. 593 (2010), the district court held that the claims were ineligible for patent protection under 35 U.S.C. 101, which defines the subject matter eligible for patent protection, contains an implicit exception for laws of nature, natural phenomena, and abstract ideas. Subsequently, matter came before the Supreme Court for its consideration.

Opinion of the Court

While delivering the Opinion of the Court, court observed that, Escrow is not a patentable invention, and merely using a computer system to manage escrow debts does not qualify to be a patentable subject matter. In this regard, court relayed on the decision in Mayo v. Prometheus, where it was held that, an abstract idea could not be patented just because it is implemented on a computer.

Court observed that, a two-step analysis as envisagedin Mayo v. Prometheusshall be adopted to decide whether an abstract idea can be a subject matter of patent. i.e.

  • Court must determine whether the patent claim under examination contains an abstract idea, such as an algorithm, method of computation, or other general principle; and
  • Court must determine whether the patent adds to the idea something extra that embodies an inventive concept.

Court further noted that, mere instruction to implement an abstract idea on a computer cannot impart patent eligibility. In other words, mere recitation of a generic computer cannot transform a patent-ineligible abstract idea into a patent-eligible invention.i.e., Stating an abstract idea while adding the words apply it is not enough for patent eligibility,nor is limiting the use of an abstract idea to a particular technological environment.

Dissenting Opinion of the Court, noted that, the business methods were categorically outside the patent system. However, they accepted the view of majority that, the claimed subject matter was an abstract idea.

Even though this case didn’t mention software as such, it is considered as a decision on software patents or patents on software for business methods, because it didn’t say anything on the kinds of software which can be patented. In other words, Supreme Court failed to draw a guideline on the patentability of computer programs.