Alice Software Patent [How To Avoid The Same Mess in 3 Steps]

Alice is a Supreme Court decision, not a person

The Alice Corp. v. CLS Bank International Supreme Court decision changed – and potentially reduced – the scope of patent protection for software in the US.

The story started with Alice Corp, suing CLS Bank International for infringement of four patents on software to reduce settlement risk in financial-trading systems, which is the risk that one party will fulfill its side of a trade while the other party will not. The case went all the way up to the Supreme Court.


The Supreme Court decision invalidated software patents which are related only to an abstract idea or which simply involve putting some known concept in software. In other words, the decision said that there had to be a real human contribution, a real technology, that is inventive. But the decision rejected a specific, bright-line test. So what did it decide?

Here are three examples of the effects of the Alice decision.

  • Software patents have to be based on technology
  • The technology has to be inventive
  • How you write your software patent application has a big impact

So what does it all mean?

Ultimately the meaning of the Alice decision will be determined by how lower courts interpret it. We discuss these decisions and their effects on software patents below.

1. Software patents have to be based on technology

One recent lower court decision, called Ultramercial v. Hulu, argued that patents for adding advertisements to television shows were invalid because they were based on an abstract idea. In other words, there was no real technology.

However, this certainly doesn’t mean that all software patents were invalidated by this decision or even all business method patents, which are patents based on a general concept executed in software. It does mean that the actual technology used to implement the idea is now much more important to describe and protect in the patent.

2. The technology has to be inventive

In contrast to the Ultramercial decision, in the very recent ruling in California Inst. of Tech. v. Hughes Communications Inc, just a couple of weeks ago, the judge upheld the validity of a software patent that protected a new computing solution to the problem of error correction through data encoding.

Confused? Here is where you need to consult a patent expert. There are two important points to remember about these decisions. First, the technology itself has to be inventive ? not just taking an old idea and implementing it in software. And the second point is….

3. How you write your software patent application has a big impact

The rules have changed for writing software patent applications. Now you need to describe the technology itself in more detail – not just relying on a general description of the underlying concept. Furthermore, you need to directly tie your technology to the invention that you are trying to protect. Correctly written patents are still being upheld in the e-commerce space – just ask, which lost a patent infringement case recently.

Software patents, including for web or mobile apps, video games and e-commerce ideas, can still protect your unique software ideas – but you need to be careful about how you present your idea and how you write your patent application. Consulting a patent expert is more important than ever.


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  • […] software patents. The US believes that software can be an invention like any other; even with the new patent rules, patents on simple business method are still allowed. Business method patents include most […]

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