The landmark decision by the Supreme Court in Alice vs CLS bank in 2014 created a stir across the tech industry followed by a wave of patents related to computer implementation being invalidated by PTAB and courts. However, on a detailed scrutiny of the judgment reveals that the court nowhere, in the 21-page opinion, held that computer implemented inventions are not patentable subject matter. In fact, the court even doesn’t use the term software even once. The court while upholding the patent eligibility of computer implemented inventions expressly recognized that the countless incredible technological inventions that form the bedrock of our innovation economy deserve patent protection. The patents at issue in this case disclosed a computer implemented scheme for mitigating “settlement risk” (i.e., the risk that only one party to a financial transaction will pay what it owes) by using a third-party intermediary. The patent was invalidated on grounds of being an abstract idea related to fundamental economic practice, not that computer implemented invention do not warrant legal rights. The court, although skipped detailed discussion on what an abstract idea is, held that any pre-existing fundamental truth would be an abstract idea.
The court explained that its not the case of conventional steps using computers being added to the claims make the claims patent ineligible. It’s about the well-known methods in industry practice being described at a high level of generality using convention general purpose computer. (Read how to overcome drafting challenges for computer implemented inventions). The court has also expressly stated that any claim that purports to improve the functioning of the computer itself or allows improvement in any other technology domain is definitely eligible for patent protection.
The court went on to explain that
“At some level, “all inventions . . . embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas.” Id., at ___ (slip op., at 2). Thus, an invention is not rendered ineligible for patent simply because it involves an abstract concept.Application[s] of such concepts “‘to a new and useful end,’” we have said, remain eligible for patent protection.”
While deciding whether the claims of the subject invention does something more than the general-purpose computer, each claim element and then their ordered combination has to checked to identify whether it performs in a manner different to the conventional computers. There is so much material out their summarizing the Alice decision but simply reciting that the invention must do something more than the general-purpose computer. Let’s clear it out to our readers what exactly this second step of Alice framework means. If each of the claim elements describe a step which doesn’t require the computer function in a special manner, it would be deemed as conventional practice. Generalizing further on this for better understanding, method claims of a particular invention related to authenticating a bank account transaction involves:
receiving a request for a transaction from a trading account associated with a user; – No special configuration or program required for any computer to implement this. Normal input/output functions available on general purpose computer would achieve this
receiving an alpha-numeric code for an authentication of the trading account associated with the user; No special configuration or program required for any computer to implement this. Normal input/output functions available on general purpose computer would achieve this
authenticating the alpha-numeric code from an information repository wherein the information repository comprises a mapping index of alpha-numeric codes to trading account; No special configuration or program required for any computer to implement this. The said repository is nothing but a look-up table stored in general memory of the computer
executing, in response to the authentication, the transaction from the trading account. No special configuration or program required for any computer to implement this. Normal input/output functions available on general purpose computer would achieve this
However, lets assume another scenario wherein the computer is programmed to convert the alpha-numeric code to a control signal using a cryptographic hash function and user’s bio-metric and is then sent to an electronic intermediary which utilizes an algorithm to detect any impostor/fraud with the alpha-numeric codes. Now it would definitely not be a conventional computer , subject to the fact the algorithm that is being used to identify fraud activity is unique. This is a general example to help people understand what does something more exactly means in Alice test. Even the algorithm in the latter case may be determined as something already existing and which case we need to identify some other features to be added to the claims.