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Old 06-23-2014, 02:52 PM   #1
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Red Hat Assistant General Counsel Analyses Supreme Court's Patent Ruling

This morning the U.S. Supreme Court issued an important decision concerning software patents and took a small-but-meaningful step in the right direction.

In Alice Corp. v. CLS Bank, the Court reaffirmed that abstract ideas are not by themselves patentable and unanimously held that the software at issue was no more than an abstract idea. It also held that "merely requiring generic computer implementation fails to transform that abstract idea into a patent-eligible invention."

As I reported last March, the Alice Corp. case involved a patent for using a computerized trading platform for addressing settlement risk in financial transactions—that is, basically an automated escrow system. The Supreme Court framed the question presented in broad terms, indicating that it could make a far-reaching decision on software patents. Not surprisingly, in view of the high stakes, there were dozens of friend-of-the-court briefs, one of which was from Red Hat.

The opinion by Justice Thomas uses the traditional common law methodology of comparing one case to previous similar cases and harmonizing with those most similar. The opinion discusses Bilski and prior cases and states, "[W]e need not labor to delimit the precise contours of the ‘abstract ideas’ category in this case. It is enough to recognize that there is no meaningful distinction between the concept of risk hedging in Bilski and the concept of intermediated settlement at issue here." It would have been helpful to get a fuller explanation of how to determine when a patent is too abstract, but the Court has declined, in this case and prior ones, to attempt a comprehensive theory.
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