Software patents are crumbling, thanks to the Supreme Court

The Supreme Court’s June ruling on the patentability of software — its first in 33 years — raised as many questions as it answered. One specific software patent went down in flames in the case of Alice v. CLS Bank, but the abstract reasoning of the decision didn’t provide much clarity on which other patents might be in danger.

Now a series of decisions from lower courts is starting to bring the ruling’s practical consequences into focus. And the results have been ugly for fans of software patents. By my count there have been 11 court rulings on the patentability of software since the Supreme Court’s decision — including six that were decided this month.  Every single one of them has led to the patent being invalidated. [This means] that the pendulum of patent law is now clearly swinging in an anti-patent direction. Every time a patent gets invalidated, it strengthens the bargaining position of every defendant facing a lawsuit from a patent troll.

The end of “do it on a computer” patents

In the late 1990s and early 2000s, the Patent Office handed out a growing number of what might be called “do it on a computer” patents. These patents take some activity that people have been doing for centuries — say, holding funds in escrow until a transaction is complete — and claim the concept of performing that task with a computer or over the internet. The patents are typically vague about how to perform the task in question.

The Supreme Court invalidated a patent like that in its decision this year. The patent claimed the concept of using a computer to hold funds in escrow to reduce the risk that one party would fail to deliver on an agreement. The Supreme Court ruled that the use of a computer did not turn this centuries-old concept into a new invention.

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Great.. There is hope for US yet. Nice going.