Bad Day for Bad Patents: US Supreme Court Unanimously Strikes Down Abstract Software Patent

Posted in: Legal & Security at 22/06/2014 17:45

In a long-awaited decision, the Supreme Court issued its opinion in Alice Corp. v. CLS Bank today, striking down an abstract software patent. Essentially, the Court ruled that adding "on a computer" to an abstract idea does not make it patentable. Many thousands of software patents -- particularly the vague and overbroad patents so beloved by patent trolls -- should be struck down under this standard. Because the opinion leaves many details to be worked out (such as the scope of an "abstract idea"), it might be a few years until we understand its full impact.

Alice Corp.'s patent claimed a form of escrowing that was well known. Called an "intermediated settlement," it allowed a third party to act as an intermediary by creating "shadow accounts" for parties, and only allowing transactions to go through if the "shadow account" showed the party had enough money. Oh -- and it was done with a computer.

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