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Appeals Court Ruling Could Signal Death of Software Patents

post Wednesday May 29, 2013

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A recent ruling by a United States court could signal the impending death of software patents. The appeals court ruled that an idea that is simply tied to a software or computer system is not patentable by strictly being attached to a computer system. This ruling has the potential to clearly eliminate the potential of patenting any software.
The U.S. Court of Appeals for the Federal Circuit ruled that a handful of patents held by Alice are now invalid because they are considered to be too abstract and do not justify a patent. This case involved Alice and CLS Bank. This ruling runs counter to the prior understanding and established precedent that software that was operating on computers or computer systems was eligible for patent. The defendant in the Case, CLS Bank, argued at the district level that the platforms utilized for currency trading and were protected in the four patents in question, were in fact too abstract and should not be protected. The district court ruled in favor of Alice but the court of appeals reversed the initial decision. The judges involved in the case were markedly split and disagreed on a variety of issues, but the majority decisions still reached the conclusion that the four patents in combination with the computer systems were in fact not patentable and were considered to be too abstract. One of the only issues that the judges seemed to agree on is the need for a greater level of clarity on this issue.
This decision could have positive impacts by providing clarity but also could undermine a great deal of existing patents on a wide variety of software and computer related items. In the dissenting opinion of Judge Kimberly Moore, there is a great amount of concern over the likely negative consequences of this ruling. Judge Moore wrote, “if all of these claims, including the system claims, are not patent-eligible, this case is the death of hundreds of thousands of patents, including all business method, financial system, and software patents as well as many computer implemented and telecommunications patents.” If Judge Moore is in fact correct, a great deal of intellectual property could become much less valuable and increasingly difficult to protect. Additionally, this ruling could establish a precedent that negatively influences innovation and the creation of new software patents.
The ruling in the CLS Bank v. Alice case distinctly provides some level of clarity but also could undermine the further development of new software technology. Future courts will certainly evaluate this case and utilize this ruling to determine the patentability of ideas connected with software and computer systems.
Source:Info World
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