Neither software nor computer programs are explicitly mentioned in statutory United States patent law. Patent law has changed to address new technologies, and decisions of the United States Supreme Court and United States Court of Appeals for the Federal Circuit (CAFC) beginning in the latter part of the 20th century have sought to clarify the boundary between patent-eligible and patent-ineligible subject matter for a number of new technologies including computers and software. The first computer software case in the Supreme Court was Gottschalk v. Benson in 1972. Since then, the Supreme Court has decided about a half dozen cases touching on the patent eligibility of software-related inventions.
State Street Bank and Trust Company v. Signature Financial Group, Inc., 149 F.3d 1368, also referred to as State Street or State Street Bank, was a 1998 decision of the United States Court of Appeals for the Federal Circuit concerning the patentability of business methods. State Street for a time established the principle that a claimed invention was eligible for protection by a patent in the United States if it involved some practical application and, in the words of the State Street opinion, "it produces a useful, concrete and tangible result."
Business method patents are a class of patents which disclose and claim new methods of doing business. This includes new types of e-commerce, insurance, banking and tax compliance etc. Business method patents are a relatively new species of patent and there have been several reviews investigating the appropriateness of patenting business methods. Nonetheless, they have become important assets for both independent inventors and major corporations.
Patentable, statutory or patent-eligible subject matter is subject matter which is susceptible of patent protection. The laws or patent practices of many countries provide that certain subject-matter is excluded from patentability, even if the invention is novel and non-obvious. Together with criteria such as novelty, inventive step or nonobviousness, utility, and industrial applicability, which differ from country to country, the question of whether a particular subject matter is patentable is one of the substantive requirements for patentability.
Gottschalk v. Benson, 409 U.S. 63 (1972), was a United States Supreme Court case in which the Court ruled that a process claim directed to a numerical algorithm, as such, was not patentable because "the patent would wholly pre-empt the mathematical formula and in practical effect would be a patent on the algorithm itself." That would be tantamount to allowing a patent on an abstract idea, contrary to precedent dating back to the middle of the 19th century. The ruling stated "Direct attempts to patent programs have been rejected [and] indirect attempts to obtain patents and avoid the rejection ... have confused the issue further and should not be permitted." The case was argued on October 16, 1972, and was decided November 20, 1972.
Freeman-Walter-Abele is a now outdated judicial test in United States patent law. It came from three decisions of the United States Court of Customs and Patent Appeals—In re Freeman, 573 F.2d 1237, In re Walter, 618 F.2d 758 ; and In re Abele, 684 F.2d 902 —which attempted to comply with then-recent decisions of the Supreme Court concerning software-related patent claims.
In re Bilski, 545 F.3d 943, 88 U.S.P.Q.2d 1385, was an en banc decision of the United States Court of Appeals for the Federal Circuit (CAFC) on the patenting of method claims, particularly business methods. The Federal Circuit court affirmed the rejection of the patent claims involving a method of hedging risks in commodities trading. The court also reiterated the machine-or-transformation test as the applicable test for patent-eligible subject matter, and stated that the test in State Street Bank v. Signature Financial Group should no longer be relied upon.
In United States patent law, the machine-or-transformation test is a test of patent eligibility under which a claim to a process qualifies for consideration if it (1) is implemented by a particular machine in a non-conventional and non-trivial manner or (2) transforms an article from one state to another.
In United States patent law, a method, also called "process", is one of the four principal categories of things that may be patented through "utility patents". The other three are a machine, an article of manufacture, and a composition of matter.
Bilski v. Kappos, 561 U.S. 593 (2010), was a case decided by the Supreme Court of the United States holding that the machine-or-transformation test is not the sole test for determining the patent eligibility of a process, but rather "a useful and important clue, an investigative tool, for determining whether some claimed inventions are processes under § 101." In so doing, the Supreme Court affirmed the rejection of an application for a patent on a method of hedging losses in one segment of the energy industry by making investments in other segments of that industry, on the basis that the abstract investment strategy set forth in the application was not patentable subject matter.
AT&T Corp. v. Excel Communications, Inc., 172 F.3d 1352 was a case in which the United States Court of Appeals for the Federal Circuit reversed the decision of the United States District Court for the District of Delaware, which had granted summary judgment to Excel Communications, Inc. and decided that AT&T Corp. had failed to claim statutory subject matter with U.S. Patent No. 5,333,184 under 35 U.S.C. § 101. The United States Court of Appeals for the Federal Circuit remanded the case for further proceedings.
Mayo v. Prometheus, 566 U.S. 66 (2012), was a case decided by the Supreme Court of the United States that unanimously held that claims directed to a method of giving a drug to a patient, measuring metabolites of that drug, and with a known threshold for efficacy in mind, deciding whether to increase or decrease the dosage of the drug, were not patent-eligible subject matter. The decision was controversial, with proponents claiming it frees clinical pathologists to practice their medical discipline, and critics claiming that it destabilizes patent law and will stunt investment in the field of personalized medicine, preventing new products and services from emerging in that field.
CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, is a United States Court of Appeals for the Federal Circuit case that disputed patent eligibility for the '154 patent, which describes a method and system for detecting fraud of credit card transactions through the internet. This court affirmed the decision of United States District Court for the Northern District of California which ruled that the patent is actually unpatentable.
Alice Corp. v. CLS Bank International, 573 U.S. 208 (2014), was a 2014 United States Supreme Court decision about patent eligibility. The issue in the case was whether certain patent claims for a computer-implemented, electronic escrow service covered abstract ideas, which would make the claims ineligible for patent protection. The patents were held to be invalid because the claims were drawn to an abstract idea, and implementing those claims on a computer was not enough to transform that abstract idea into patentable subject matter.
In re Lowry, 32 F.3d 1579 was a 1994 decision of the United States Court of Appeals for the Federal Circuit on the patent eligibility of data structures. The decision, which reversed a PTO rejection of data structure claims, was followed by a significant change in PTO policy as to granting software related patents, a cessation of PTO appeals to the Supreme Court from reversals of PTO rejections of software patent applications, an increasing lenity at the Federal Circuit toward such patents and patent applications, and a great increase in the number of software patents issued by the PTO.
In re Alappat, 33 F.3d 1526, along with In re Lowry and the State Street Bank case, form an important mid-to-late-1990s trilogy of Federal Circuit opinions because in these cases, that court changed course by abandoning the Freeman-Walter-Abele Test that it had previously used to determine patent eligibility of software patents and patent applications. The result was to open a floodgate of software and business-method patent applications, many or most of which later became invalid patents as a result of Supreme Court opinions in the early part of the following century in Bilski v. Kappos and Alice v. CLS Bank.
In re Schrader, 22 F.3d 290 is a 1994 decision of the United States Court of Appeals for the Federal Circuit in which the court summarized and synthesized its precedents under the Freeman-Walter-Abele Test of patent eligibility. Under this test a key element is that the claimed invention is implemented with some type of hardware—that is, a particular machine. This was one of the last Federal Circuit decisions using that test.
Versata Development Group, Inc. v. SAP America, Inc., 793 F.3d 1306, is a July 2015 decision of the Federal Circuit affirming the final order of the Patent Trial and Appeal Board (PTAB), the recently created adjudicatory arm of the United States Patent and Trademark Office (USPTO), invalidating as patent ineligible the claims in issue of Versata's U.S. Patent No. 6,553,350. This was the first case in the Federal Circuit reviewing a final order in a Covered Business Method (CBM) invalidation proceeding under the America Invents Act (AIA). The case set an important precedent by deciding several unsettled issues in the interpretation of the CBM provisions of the AIA>, including what are business-method patents under the AIA and whether the AIA authorizes the PTO to hold such patents invalid in CBM proceedings on the ground that they are patent ineligible under 35 U.S.C. § 101 as "abstract ideas."
Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, is a 2016 decision of the United States Court of Appeals for the Federal Circuit in which the court, for the second time since the United States Supreme Court decision in Alice Corp. v. CLS Bank upheld the patent–eligibility of software patent claims. The Federal Circuit reversed the district court's summary judgment ruling that all claims were patent–ineligible abstract ideas under Alice. Instead, the claims were directed to a specific improvement to the way computers operate, embodied in the claimed "self-referential table" for a database, which the relevant prior art did not contain.
