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Friday, 20 June 2014 10:08

Supreme Court gives trolls a bit of a scare

Written by Nick Farrell

You can’t patent an idea

The US Supreme Court ruled unanimously that you can’t patent an idea that's not all that original and implement it on a computer.

It might seem obvious but it is the basis of a lot of patent trollage across the pond. The case centred around using a computer to safeguard complex financial transactions, largely among banks. The software was designed to reduce the risk that one party can't hold up its end of the deal.

Justice Clarence Thomasruled that the third-party settlement concept is an "abstract idea," and using a computer to implement it "cannot transform a patent-ineligible abstract idea into a patent-eligible invention."

The case, Alice Corp. v. CLS Bank International, posed huge risks for both sides. If the court had upheld the patent, the world would have been flooded with patent trolls. The number of software patents granted annually has soared from about 2,000 in 1980 to more than 40,000. They account for nearly half of all patent lawsuits in recent years.

But there was a risk that the court could have struck down a broad swath of patents, rendered thousands of existing ones extinct and created havoc for some of the nation's leading business and software companies. The Supremes did not squash software patents but ruled narrowly and along the lines of its past precedents.

Justice Clarence Thomas said that an invention is not rendered ineligible for patent simply because it involves an abstract concept. Patents that pose no risk of pre-emption remain eligible for the monopoly granted under our patent laws."

Carter Phillips, the lawyer for Alice Corp., had warned that striking down the patent could implicate "hundreds of thousands" of others and a brief submitted by IBM said such breakthrough applications as e-mail, Web browsing and mobile phones would not have qualified.

Victoria Espinel, CEO of The Software Alliance said the ruling makes clear that real software inventions are patentable under US law.

Nick Farrell

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