The Supreme Court unanimously ruled Thursday against financial...

The Supreme Court unanimously ruled Thursday against financial software firm Alice, saying that “the mere recitation of a generic computer cannot transform a patent-ineligible abstract idea into a patent eligible invention” (http://1.usa.gov/1lChQWR). The court affirmed a ruling at the U.S. Court of Appeals for the Federal Circuit that Alice couldn’t assert four of its patents on financial software against CLS Bank International because they were abstract. The case drew amicus briefs from multiple industry giants -- including Amazon, Facebook, Google, IBM, Microsoft, Netflix, Verizon and Twitter -- that mostly favored CLS Bank. The ruling, long expected to favor CLS Bank (CD April 1 p14), does not offer a clear delineation of what constitutes an abstract idea, experts told us. The Alice ruling does not constitute a wholesale rejection of abstract ideas’ patentability, but that the simple use of a computer to perform an abstract idea would “add nothing of substance to the underlying abstract idea,” Justice Clarence Thomas wrote in the court’s opinion. Had the court ruled otherwise, “an applicant could claim any principle of the physical or social sciences by reciting a computer system configured to implement the relevant concept,” the opinion said. “We tread carefully in construing this exclusionary principle lest it swallow all of patent law.” Inventions that involve transforming abstract ideas “’to a new and useful end'” remain patentable, the court said. Microsoft, which had favored a narrow Supreme Court ruling, praised the court in a statement for having “distinguished the Alice patent from software inventions.” The Supreme Court “went the right way” in its ruling, and “that they went unanimously the right way is a great sign,” said Matt Levy, Computer & Communications Industry Association patent counsel. CCIA also filed an amicus brief siding with CLS Bank. The court’s ruling reaffirms its previous precedent in Mayo v. Prometheus that abstract ideas aren’t patentable and extends that into the software sector, he said. “It might have been nice if they were able to give a more detailed test, but I understand why they didn’t,” Levy said. “As with any Supreme Court decision, the devil is going to be in the implementation details by the district courts and the Federal Circuit.” Justices Stephen Breyer, Ruth Bader Ginsburg and Sonia Sotomayor issued a short concurring opinion that appears to advocate for invalidating all business method patents, he said. The Alice ruling will likely eventually invalidate “the majority of all software patents in force today,” said Durie Tangri patent lawyer Mark Lemley. “You can patent particular improvements in computers, but you can’t patent using a computer or the Internet to implement your idea.” Lemley filed an amicus brief in Alice on behalf of a group of companies that included LinkedIn, Netflix, Rackspace, Twitter and Yelp (http://bit.ly/SWERXO), but noted he was not speaking to us on behalf of those companies. The ruling is likely to have the greatest impact on the Patent and Trademark Office’s Patent Trial and Appeal Board, where it had already “become much easier” to challenge patent eligibility with the implementation of the America Invents Act, said Miles & Stockbridge patent lawyer James Carmichael, former administrative patent judge at PTAB. “This is going to be a great sword in the quiver of patent challengers wanting to cancel patents at PTAB.”