Software is not a tangible item, yet it can be patented. It can also be copyrighted. It’s the only thing in the world that can receive both protections from the United States government. Software patents are a hot-button issue in technology. Big corporations and those who thrive on buying, selling, licensing, and enforcing patents love them. Small businesses, open source advocates, and many software engineers hate them.
Today, the U.S. Supreme Court will hear arguments on whether software (aka “computer-implemented inventions”) can continue to be patented. The case is Alice Corp. vs. CLS Bank and it focuses on software built to eliminate settlement risk in currency and financial transactions where money is held in escrow. The arguments began when Alice Corp. said that CLS Bank is offering services that infringe on their patent.
Alice Corp, in lower courts, has ruled that its idea can be patented because it’s used on a computer, thus making it an invention. What will be heard, and the core of CLS Bank’s arguments against Alice Corp, has been that the idea is not an invention just because it’s coded into a computer.
The arguments aren’t much different than what went through the courts in the 1970s, until the Supreme Court finally ruled on software-related patents, establishing strict rules on what qualifies. Those rules were eventually undermined by lower courts with other decisions, causing the market to flood with software patents.
In the 1970s, IBM and Microsoft’s Bill Gates were ardently against software patents, going so far as to say that they would bring the software industry “to a standstill.” Today, IBM is vigorously pro-patent for software and Microsoft spends millions every year protecting its vast software patent portfolio.
Potentially, hundreds of thousands of software patents could be on the block should the Supreme Court decide that software is not patent-able or, once again, if it severely restricts how patents can be applied. This would have far-reaching, even deadly consequences in many aspects of tech, but it could also fundamentally change things for the better. It’s a matter of who you ask.
Whatever the case, the tech industry’s eyes will be on the high court for the next few months awaiting an answer.