US Supreme Court and patents

Stuff reports:

The US Supreme Court has grappled with the standards for software patents, considering the issue for the first time in decades in a case that has divided the computer industry. …

The case concerns claims that CLS Bank International, a New York-based provider of settlement services, infringed patents owned by Melbourne-based Alice Corp. The patents cover a computerised system for using an intermediary to limit the risk that one party to a derivative trade will renege on its obligations.

CLS says Alice’s patents run afoul of Supreme Court decisions that say abstract ideas aren’t entitled to legal protection. Alice, which is partially owned by National Australia Bank, said the abstract-idea exception to patent eligibility is a narrow one.

Justice Ruth Bader Ginsburg suggested that Alice’s argument was doomed by a 2010 Supreme Court decision that limited patents on business methods by rejecting a proposed patent on a system for hedging energy trades. She asked Alice’s lawyer, Carter Phillips, how his client’s idea was any “less abstract than hedging.”

Other justices were similarly sceptical. Justice Anthony Kennedy said a group of college engineering students could probably write the computer code for Alice’s idea over a weekend.

“My guess is that that would be fairly easy to program,” he said.

You can’t always tell how a decision will go by the questioning, but it sounds like the Court is skeptical over overly broad patents that block innovation, That would be a good thing.

The Obama administration is urging the court to issue a broader ruling that would put new limits on the availability of software patents. Solicitor General Donald Verrilli told the court that software was eligible for patenting only if it “improved the functioning of the computer technology” or “is used to improve another technology.”

Software can generally no longer be patented in NZ, unless it is basically embedded in a machine.