Appeals court ruling could be 'death' of software patents

But an EFF lawyer says the federal circuit's patent ruling doesn't provide much new guidance

By , IDG News Service |  IT Management

In the case, defendant CLS argued that Alice's four software patents covering a computerized trading platform for currencies were too abstract to be patentable. A district court agreed, but the appeals court reversed the decision.

The appeals court, however, heard arguments in February to examine whether an abstract idea combined with a computer is patentable, and whether some software patent claims involving methods, systems or storage should be grounds for granting a patent.

"There is nothing in the asserted method claims that represents 'significantly more' than the underlying abstract idea," Judge Alan Lourie wrote for the majority. "As described, adding generic computer functions to facilitate performance" is not enough to make an abstract idea patentable.

Alice's lawyers had argued that the patents covered specific ways a computer is configured to run the company's trading platform, but Lourie rejected that argument. Adam Perlman, Alice's lawyer in the federal circuit hearing, declined to comment Friday.

The patented processes of "providing end-of-day instructions to the exchange institutions to reconcile the parties' real-world accounts with the day's accumulated adjustments to their shadow records is a similarly trivial limitation that does not distinguish the claimed method," Lourie wrote. "Whether the instructions are issued in real time, every two hours, or at the end of every day, there is no indication in the record that the precise moment chosen to execute those payments makes any significant difference in the ultimate application of the abstract idea."

Moore agreed with the majority that an abstract idea is not patentable when it's tied to a computer, but she argued the Alice patents went beyond abstract ideas into "a practical application of the underlying idea, limited to the specific hardware recited and the algorithms disclosed to perform the recited functions."

The case generated briefs from Google, Facebook, Newegg and software trade group BSA, with some tech companies arguing the Alice patents should be invalid.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.

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