SCOTUS Affirms That Abstract Ideas Are Not Patent-Eligible

It is no secret that innovation suffers because of the current state of patent law. Too many overly broad patents are issued and present patent trolls with the opportunity to sue, sue, and sue again. Today, the High Court in Alice Corp. v. CLS Bank, made abundantly clear that abstract ideas are not patentable. The patent at issue (and that was issued by the USPTO) claimed exclusive rights to the idea of an intermediated settlement, i.e., the use of a third-party to mitigate settlement risk. The Court pointed out that “The use of a third-party intermediary (or ‘clearing house’) is … a building block of the modern economy.” It is a fundamental, abstract idea that is not patent-eligible. Alice Corp. tried to argue that the use of a computer transformed the abstract idea into a something special that was subject to patent protection. The Court shot this down. “We conclude that the method claims, which merely require generic computer implementation, fail to transform that abstract idea into a patent-eligible invention.”

All 9 Justices joined in this common-sense result. Hopefully, the patent examiners at the USPTO will read this decision carefully and decline to rubber stamp some of the ridiculous requests that the examiners have in the past deemed patentable.