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Still Alice: Not all software patents are being invalidated under Alice Corp. v. CLS Bank Int’l

Posted in Biotechnology, Development & Commercialization of Technology, Nanotechnology, Patent Counseling & Strategies, Uncategorized

On June 19, 2014, the U.S. Supreme Court issued a unanimous decision in Alice Corp. v. CLS Bank Int’l (Alice)[1].  In Alice, the Court held that several patents that pertained to a computerized platform for eliminating risk in conducting financial transactions between two parties were ineligible for patenting under 35 U.S.C. §101[2].  The Court reasoned that the patents were merely drawn to an abstract idea of intermediated settlement that utilized a “generic computer implementation.”

Since the issuance of Alice, many lower court decisions have relied on Alice to invalidate numerous patents directed to computer-implemented inventions.  Examples of these court decisions were summarized in a prior blog post[3].

However, not all patents directed to computer-implemented inventions have been affected by Alice.  For instance, in recent court decisions, many software-related patents were held to be patent-eligible in view of Alice. Examples of some of these decisions are summarized below:

  • DDR Holdings v. Hotels.com, 773 F.3d 1245 (Fed. Cir. 2014). Invention directed towards generating a composite web page that combined certain aspects of a host website with information from a third-party merchant was eligible for patenting because the invention addressed an important business challenge (i.e., retaining website visitors through the use of computer technology).
  • Inst. of Tech. v. Hughes Communs., Inc., Case No. 2:13-cv-07245-MRP-JEM (C. D. Cal., 2014). Invention directed to a data error correction code through encoding and decoding data was held to be patent-eligible because the utilized algorithm represented an inventive application of the underlying abstract ideas.
  • Helios Software LLC et al v. SpectorSoft Corporation, Case No. 12-081-LPS (Del., 2014). Invention directed to the remote monitoring of computer network sessions and network access was held to be eligible for patenting because it utilized a computer to play a significant and specific role in the monitoring process.
  • AutoForm Engineering GmbH v. Engineering Technology Associates, Inc., Case No. 2:2010cv14141, (E.D. Mich., 2014). Invention directed to a method of designing surfaces for tools used in sheet metal formation was held to be eligible for patenting because the process was described through numerous limitations that narrowed the scope of the patent.
  • McRO, Inc., v. Activision Publishing, Inc case, Case No. 2:14-cv-00336 (C.D. Cal., 2014). Invention directed towards configuring animated lips based on timed phonemes were held to be eligible for patenting because it addressed a technical process of automated three-dimensional computer animation.
  • Smartflash LLC et al v. Apple Inc, et al., Case No. 6:13cv447-JRG-KNM (E.D. Tex. 2015). Invention relating to data storage and controlled access systems for paying for and downloading digital content was held to be eligible for patenting because it aimed to prevent piracy while allowing instantaneous access.

The aforementioned court decisions suggest that software inventions that improve the functioning of a computer may remain eligible for patent protection in some instances.  The aforementioned court decisions also suggest that software inventions that improve a technical field may remain eligible for patent protection. Nonetheless, the full effect of Alice remains to be determined.

[1] Alice Corporation Pty. Ltd. v. CLS Bank International, et al., 573 U.S. ___, No. 13-298 (June 19, 2014).
[2] 35 U.S.C. §101 states that, “[w]hoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.”  Judicial exceptions to what constitutes patent eligible subject matter have included “abstract ideas,” “laws of nature,” and “natural phenomena.”
[3] See http://www.wintechblog.com/2014/10/alice-in-wonderland-the-ongoing-impact-of-alice-corp-v-cls-bank-intl-on-computer-implemented-inventions/