In one of his typically brief opinions, Justice Clarence Thomas of the US Supreme Court today wrote for a unanimous Court striking down a generic software patent using a long-known loophole in the patent system for protecting an abstract idea simply by linking it to implementation on a computer.
The case, Alice Corp. v. CLS Bank Int., is one of the relatively few software patent-related cases the court has ever heard, and anti-software patent advocates are, as a result, unlikely to come away from the decision fully satisfied. Today's ruling applies largely to a fringe element of business method and more troll-worthy software patents, rather than the murky world of software patents at large.
In short, the Court ruled that patents for what are known as "abstract ideas" (under the definition of US patent law) cannot become patentable in method, system, or process simply because a machine, specifically a generic computer, is included as a necessary but arbitrary part of the patented invention. Thomas, arguably the Court's most constitutionally minimalist member, gave his opinion in just over 16 pages, quite short by the modern Court's standards.
The specific case related to a patent for a method of settlement intermediation between financial institutions, and Thomas ruled that because the process described was a combination of long-standing concepts and methods well-known in the financial world, that simply applying them to a computer did not meet the transformative requirement (aka the "machine" step) the petitioners argued they did. Thomas fell short of ruling that the steps described were abstract in and of themselves, which would have proved a more impactful decision.
Instead, Thomas' opinion states that it is the alleged transformative step, applying the methods described in the patent to a computer, that is fatal. Taking a few conceptual steps to implement a well-known concept in the banking and business world along with some mathematical equations in order to implement an abstract idea (here, settlement intermediation) on a computer can never alone meet the bar for patent eligibility. Because the invention in no way substantially enhances the functionality of the computer or provides material advances in the art or science it is involved in (other than the benefit the generic computer itself provides), it cannot be patented. That is to say, simply because an idea or method is made better by using a computer is not enough to meet the bar for patentability. To say that would be to say that scanning the pages of a book into a computer could be patented as an invention (let's assume the scanner and communication standard were already invented), because the computer does not require paper, can increase the visible font size, and be used to enhance the contrast of the pages for better readability. Thomas is contending that things like this are inherent to applying the invention to a computer in the first place - the benefits are obvious to anyone skilled in the art or profession, and therefore not eligible for patent protection.
Thomas was also careful to state that at its heart, nearly every patent contains some level of abstraction. This, perhaps, is key to the more narrow ruling. A paragraph-long concurring opinion authored by one of the Court's more liberal justices, Sotomayor, joined by two others (Breyer and Ginsburg), takes issue with Thomas here. Whereas Thomas did not conclude that the method (steps) itself described in the petitioner's patent was abstract (nor did he explicitly say they were not abstract), the concurring justices did. This is something of a long-standing spat in patent law.
If the Court had taken the concurring opinion's view, this case would have had a decidedly stronger impact, most likely. Sotomayor would prefer that the Court state firmly that business method patents are null and void, a position that has seen strong support pretty much everywhere but the business world. Just what effect this would have on software patents, by relation, is unclear, though it would almost certainly be greater than today's decision.
As to the effect of the Court's judgment in the smartphone world? Don't expect Apple lawyers to start quivering any time soon. Today's ruling does put out some shockwaves in the software and tech patent world, but largely for true patent trolls, who tend to use business method or highly generic software patents (eg, patents upon the very concept of software using the "applied to a computer" loophole to hold water). So, bad news trolls, which is always good. You can read the full opinion via this link from The Verge, too.