SUPREME COURT SAYS “NO PATENT” IN ALICE CORP. LTD.

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A business cannot obtain a patent for taking some ordinary process in the real world and coming up with a computer program to make it easier, according to the U.S. Supreme Court.

In ALICE CORPORATION PTY. LTD. v. CLS BANK INTERNATIONAL ET AL, decided in June of this year, a company called the Alice Corporation tried to patent an online system to reduce risk in financial transactions. Alice’s program was little different from a third-party clearinghouse or escrow service, except that it offered all such services automatically online. The fact that the activity could be accomplished on-line did not make it worthy of a patent, according to the Supreme Court. Alice didn’t really come up with a new idea, technique or process. It simply took an age-old process and created an app for it.

The decision is important because many companies have been seeking to drub out competition through patents that isolate their on-line apps. The high Court obviously feels that reduction in competition in this manner is not one of the policies served by the patent process.

Immediately after the Supreme Court decision, other courts began throwing out patent claims along the same lines. For instance, a judge in New York rejected a patent for a computer program that helped people plan meals. The program let people choose meals from picture menus, learn how the meals would fit into their diet or nutrition goals, and let them substitute items and see how those changes affected the results. But that’s no different from what nutritionists have been doing for years, the judge said, and even if a computer program makes it easier and faster, it’s not such a new idea that it can be protected with a patent.

Stephen Hammers

Stephen Hammers

Stephen Hammers is a California attorney with over 24 years experience in the trial of business and real estate matters. He has a 100% success rate in jury trials as lead counsel, and tries cases in all Courts of Los Angeles and Orange Counties. He is a writer and lecturer in matters involving business fraud, real estate and commercial lease litigation.
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Stephen Hammers
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