The US Supreme Court on Monday heard arguments for and against a patent claimed by Alice Corporation. This patent has been contested by CLS Bank International that has said that Alice Corp’s patents only made use of the fundamental principles of intermediated settlement of escrow. The case and the ruling are being watched by the software industry as well because the ruling has the scope to affect the definition of patents in the software industry. However, many of the Supreme Court judges hearing the case appear to want to avoid going into the deeper issue of defining software patents.
In the present case, Alice Corp has claimed a patent for a system it uses to settle escrow. However, the CLS Bank claims that the system is part of a fundamental economic concept. The court has to decide whether Alice Corp’s ideas can be patented. Already, the court has ruled that natural laws, natural phenomena, and abstract ideas cannot qualify for patents. Even if this particular patent clears the first stage, it can be contested on grounds such as obviousness, indefiniteness and lack of novelty.
The Supreme Court definition of patents will affect the software industry as it has many patents that need to be protected while also ensuring that patent trolls do not file vague patents that hamper actual technological developments.
In the past, US courts have worked to maintain this balance and ensure that real innovation is not hampered because of others owning patents even as the financial interests of innovators are protected. As The New York Times has pointed out, past rulings show that the Supreme Court has not protected ideas that might be close to the innovative threshold if it could hamper further developments and innovations in the field.