Patent eligibility after Alice

The US Supreme Court decision in Alice v CLS Bank (2014) regarding the eligibility of subject matter for patent protection has had an enormous impact on the ability to protect computer-implemented inventions in particular.

While the issue in Alice involved certain patent claims covering the facilitation of financial transactions, the effect of the court’s decision on software and business method patents is profound. The court found that the patent claims in issue were drawn merely to an abstract idea, and that implementing those claims utilising a computer was not enough to transform that idea into subject matter entitled to patent protection.

This has given rise to a marked increase in motions by accused infringers in litigation seeking to invalidate such patents, as well as an increased difficulty in getting software and business method patent applications allowed. More than half of Alice motions have been successful, with more business method than software patents being declared invalid. This has given encouragement to those who are the targets of such patents. And it presents a challenge to patent attorneys seeking to guide their clients active in these areas.

The diverse nature of the parties interested in this area of the law is best shown by the fact that 52 amicus curiae briefs were filed by interested parties urging the Supreme Court in Alice to decide the issue of software patent eligibility. These included the Institute of Electrical and Electronics Engineers, the US Patent and Trademark Office itself, Google, Amazon, Microsoft, Adobe, HP, IBM, and a consortium of retailers and manufacturers.

Post-Alice decisions

Given the foregoing, are we to have a funeral for software patents after the Alice decision? The answer is an emphatic “no”. As recently as May 12, 2016, the US Court of Appeals for the Federal Circuit in the significant post-Alice decision of Enfish v Microsoft provided hope for software patents.