Software patents under United States patent law

Patent law has changed to address new technologies, and decisions of the United States Supreme Court and United States Court of Appeals for the Federal Circuit (CAFC) beginning in the latter part of the 20th century have sought to clarify the boundary between patent-eligible and patent-ineligible subject matter for a number of new technologies including computers and software.

Since then, the Supreme Court has decided about a half dozen cases touching on the patent eligibility of software-related inventions.

The court held that software instructions as such were too intangible to fit within any of the statutory categories such as machines or articles of manufacture.

[4] On June 19, 2014 the United States Supreme Court ruled in Alice Corp. v. CLS Bank International that "merely requiring generic computer implementation fails to transform [an] abstract idea into a patent-eligible invention.

"[5][6][7] The ruling continued: [...] the mere recitation of a generic computer cannot transform a patent-ineligible abstract idea into a patent-eligible invention.

Stating an abstract idea while adding the words "apply it with a computer" simply combines those two steps, with the same deficient result.

a computer," [] that addition cannot impart patent eligibility.Article 1, section 8 of the United States Constitution establishes that the purpose of intellectual property is to serve a broader societal good, the promotion of "the Progress of Science and the useful Arts" : Article 1, section 8 United States Constitution: Congress shall have Power [.

To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries; .

[11] In the first of the Supreme Court's computer software decisions (the "patent-eligibility trilogy"), Gottschalk v. Benson,[12] the Court reversed the CCPA's reversal of a Patent Office decision, thus denying a patent on an algorithm for converting binary-coded decimal numbers into pure binary numbers.

In so ruling, the Court looked back to 19th century decisions such as O'Reilly v. Morse,[13] which held that abstract ideas could not be made the subject of patents.

The principle, stated in Flook, that to be patent eligible the implementation of an abstract idea or law of nature must be inventive, rather than routine or conventional, became of paramount importance in Supreme Court jurisprudence at the beginning of the 21st century.

In the 1981 case of Diamond v. Diehr, the United States Supreme Court upheld the CCPA's reversal of the Patent Office, and ordered the grant of a patent on a process for curing rubber in a mold, a substantial part of which involved use of a computer program that used a well-known formula (the Arrhenius Equation) for calculating the time when rubber was cured and the mold could therefore be opened.

[21] This ruling was immediately preceded by In re Lowry,[22] which held that a data structure representing information on a computer's hard drive or memory is similarly to be treated as a patent-eligible physical device, and in which the Solicitor General's Office declined the PTO's request to seek certiorari.

Finally, in State Street Bank v. Signature Financial Group,[23] the CAFC ruled that a numerical calculation that produces a "useful, concrete and tangible result", such as a price, is patent-eligible.

And the Court [in Gottschalk v. Benson] has invalidated a patent setting forth a process that transforms, for computer-programming purposes, decimal figures into binary figures—even though the result would seem useful, concrete, and at least arguably (within the computer's wiring system) tangible.At about the same time, in a concurring opinion in eBay Inc. v. MercExchange, L.L.C.,[27] Justice Kennedy (joined by Justices Stevens, Souter, and Breyer) questioned the wisdom of permitting injunctions in support of "the burgeoning number of patents over business methods," because of their "potential vagueness and suspect validity" in some cases.

Bilski was followed by the Court's unanimous opinion in Mayo Collaborative Services v. Prometheus Labs, Inc.[15] Although it did not involve a software patent (it concerned a medical assay implementing a natural principle), it stated a methodology for determining patent eligibility that is currently dominant in software cases.

The Court used the analysis from the Mayo decision and held Alice's patents invalid as directed to an abstract idea.

In buySAFE, Inc. v. Google, Inc.,[30] the Federal Circuit invalidated under section 101 a patent on a computerized surety system for online transactions.

It said, "Using organizational and product group hierarchies to determine a price is an abstract idea that has no particular concrete or tangible form or application."

First, the court determines whether the claimed invention is based on an abstract idea or principle of some sort, often expressed at a high level of generality, such as a computerized escrow or surety arrangement, as in the Bilski and Alice cases.

Thus, Federal Circuit Judge Bryson explained when sitting by designation as a trial judge in the Loyalty v. American Airlines case:[39] In short, such patents, although frequently dressed up in the argot of invention, simply describe a problem, announce purely functional steps that purport to solve the problem, and recite standard computer operations to perform some of those steps.

In addition, because they describe the claimed methods in functional terms, they preempt any subsequent specific solutions to the problem at issue.

In Allvoice Developments US, LLC v. Microsoft Corp., the Federal Circuit in a May 2015 nonprecedential opinion invalidated patent claims to a speech recognition "interface" without undertaking an Alice analysis.

The court found it unnecessary to go through the two-step analysis because a set of instructions is not a machine or article of manufacture or composition of matter, and it did not purport to be a process.

[43] Moreover, it was intangible, and in the Digitech case, the Federal Circuit had held that except for processes, "eligible subject matter must exist in some physical or tangible form.