By Lawrence Hurley
WASHINGTON Dec 6 The U.S. Supreme Court agreed
on Friday to rule on the divisive issue of what kinds of
software are eligible for patent protection in a case being
closely watched by the technology industry.
The court's decision may prove key to deciding under what
circumstances companies can be sued for using certain software
in their products.
The court said in a one-line order that it would hear a case
brought by Alice Corporation Pty Ltd, which holds a
patent for a computer system that facilitates financial
transactions. The patent is challenged by CLS Bank
The court took no action on another case raising the same
issue involving a patent dispute between WildTangent Inc and
The deep interest that the software industry and patent
experts have in what is a threshold issue in patent litigation
was underscored by the number of companies and industry groups
that asked the court to decide the issue.
Companies including Google Inc, Hewlett-Packard Co
, Facebook Inc and Netflix Inc had
already signaled their interest in the issue by asking the court
to hear the WildTangent case. Many also filed briefs in lower
With the rise of computer-based products in recent years,
courts have struggled to apply patent law. Some legal experts,
including the Electronic Frontier Foundation, a digital civil
liberties group, say that courts are too keen to uphold patents
on ideas that are too vague to deserve protection.
Such vague patents can be used against big tech companies,
which say they are forced to spend money defending lawsuits
instead of investing in research and development. Technology
companies are particularly concerned about litigation brought by
so-called "patent trolls," defined as companies that hold
patents only for the purpose of suing other companies seeking to
develop new products.
Companies differ over what type of patent protections
software products should receive. While some, like Google, favor
looser protections, others, like International Business Machines
Corp would prefer that most software be patent eligible.
The U.S. Court of Appeals for the Federal Circuit, which has
primary responsibility for interpreting patent law, has
struggled to adopt a test that judges can use to review software
patent claims, with various judges reaching different
"Hopefully, the case will accomplish at the Supreme Court
what it could not at the Federal Circuit: greater clarity in the
law," said Alice's attorney, Carter Phillips. CLS's attorney,
Mark Perry, declined to comment.
The legal question boils down to how innovative an invention
should have to be to receive legal protection.
The law in question is the U.S. Patent Act, which states
that anyone who "invents or discovers a new and useful process,
machine, manufacture, or composition of matter," or an
improvement of an existing one, can get a patent.
An invention related to an abstract idea can be patented,
but it must include a way of applying the idea.
Mark Lemley, a patent law expert at Stanford Law School,
wrote in a brief filed on behalf of Facebook and others that the
appeals court had left the law "hopelessly confused."
Lemley wrote in an email on Friday that he expects the high
court to agree with the appeals court that the patents in
question were not patent eligible.
"But the devil will be in the detail of the court's
opinion," he added.
Dennis Crouch, a professor at the University of Missouri
School of Law who blogs about patent law, said he is amazed that
courts have yet to determine once and for all that software can
The confusion has led patent lawyers to play down the
software elements of inventions when applying for patents at the
U.S. Patent and Trademark Office, he added.
"My hope is that this case will be a vehicle for the Supreme
Court to clarify the law so that we can get back to business
rather than playing language games at the patent office," Crouch
The case is Alice Corporation v. CLS Bank, U.S. Supreme
Court, No. 13-298.