On June 19, 2014, the
Supreme Court ruled on Alice Corporation
Pty. Ltd. V.CLS Bank International case that Alice Corp’s patent fails to
transform abstract idea into a patent-eligible invention under section 101 of
Patent Act and is therefore invalid. This case is important because it sends
out a clear message that using a computer to implement an abstract idea does
not make that invention eligible for a patent.
Alice Corp. owns patent on a process of verifying payments on a computer. The company claims it has a patent on using a computer to confirm a financial transaction and says anyone using a computer process to do this should pay the company a fee. CLS Bank, which settles foreign exchange transactions challenged this patent. The U.S Supreme court unanimously sided with CLS. This ruling invalidated a significant number of patents, generally called “software patents”, that are misapplied in the first place.
To understand why this ruling is significant to reduce the impact of patent trolls requires understanding why many software patents are in fact trivial. Software patents differ from other patents in that many software inventions are merely translating practical everyday functions into the computer programs. Some of these practical everyday functions include budget planning or putting items on shopping cart. If the inventors were allowed to claim credit for these overly broad or/and abstract ideas, platform entrepreneurs who enter the game later will have hefty fees to pay. The court's decision effectively prevent the patent system to over-reward easy ideas and generate needless costs on people who do the real work of transforming practical everyday functions into viable platform economy.
Alice Corp. owns patent on a process of verifying payments on a computer. The company claims it has a patent on using a computer to confirm a financial transaction and says anyone using a computer process to do this should pay the company a fee. CLS Bank, which settles foreign exchange transactions challenged this patent. The U.S Supreme court unanimously sided with CLS. This ruling invalidated a significant number of patents, generally called “software patents”, that are misapplied in the first place.
To understand why this ruling is significant to reduce the impact of patent trolls requires understanding why many software patents are in fact trivial. Software patents differ from other patents in that many software inventions are merely translating practical everyday functions into the computer programs. Some of these practical everyday functions include budget planning or putting items on shopping cart. If the inventors were allowed to claim credit for these overly broad or/and abstract ideas, platform entrepreneurs who enter the game later will have hefty fees to pay. The court's decision effectively prevent the patent system to over-reward easy ideas and generate needless costs on people who do the real work of transforming practical everyday functions into viable platform economy.
Hey Yi. Great job on this post. I really liked how you included the grey area involved with software patents. They do just translate functions into computer programming languages most of the time. I never thought of software like that but this post did a good job explaining it.
ReplyDeleteYi,
ReplyDeleteNice points on this blog post. It really shows a great under standing of the material at hand. I think your argument on the software languages was on point.
Interesting view on the software patents. Definitely like to see your personal thoughts in these posts
ReplyDeleteHi Yi,
ReplyDeleteGreat blog post. I particularly liked how you not only focused on the case and software patenting, but focused even more on the implications and dynamics of today's software patenting. It may be helpful to create a bulleted section summarizing and organizing your thoughts!
Yi,
ReplyDeleteYou did a wonderful job of putting this litigation into perspective. However, I want to ask you: do you not think that the beginning of creating some of these so-called "simple" software codes was novel? I think there is some novelty that should be rewarded for, especially when there are so many un-useful/poorly executed patents out there.
Sasha
Yi,
ReplyDeleteI thought this was a great post. Not only do you do a great job of explaining this specific case, but I felt like you did a great job in explaining the implications of this case on patent law as a whole.
Mark