For those of you interested in the patent component of “the useful Arts,” the Supreme Court recently issued its decision in Alice Corp. v. CLS Bank Int’l.  The decision was much anticipated because of the impact it was expected to have on so-called “business method” patents.  Business method patents have, since their inception, walked a fine line between unpatentable abstract ideas and protectable subject matter.  In recent history, they have found themselves increasingly on the wrong side of that line.

I’ll assume that most of you reading this are more interested in the branding and trademark side of intellectual property.  Accordingly, a short explanation on the “abstract idea” limitation to patents may be in order.  As Justice Thomas explains in Alice:

“Laws of nature, natural phenomena, and abstract ideas are not patentable….  We have described the concern that drives this exclusionary principle as one of pre-emption….  Monopolization of those tools through the grant of a patent might tend to impede innovation more than it would tend to promote it, thereby thwarting the primary object of patent laws….

At the same time, we tread carefully in construing this exclusionary principle lest it swallow all of patent law….  At some level, all inventions embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas.  Thus, an invention is not rendered ineligible for patent simply because it involves an abstract concept….  Applications of such concepts to a new and useful end, we have said, remain eligible for patent.”

To say that is a fuzzy gray line would be an understatement, and patent owners and alleged infringers have long struggled with drawing it.  This was particularly true in the context of software patents, where patent applicants started to make heavy use of computer-implemented means-plus-function claims and would do little more than disclose and claim a general-purpose computer programmed to undertake particular algorithms or iterative processes.  Because algorithms are iterative processes, they typically fall within the “abstract idea” category, and because computers can essentially be programmed to do anything, the use of computer-implemented means-plus-function claims start to work as de facto patents on the algorithms or processes themselves.  Over the past several years, the Supreme Court has started to reclaim some of this ground.  This case represents the most-recent effort in that regard.

The ultimate impact of Alice remains to be seen, although there are certainly plenty of opinions out there.  Many believe this will help eliminate bad software patents, which will pave the way for greater innovation and competition.  Others could argue that the absence of clear protection for certain method patents will disincentivize people to invent.  Personally, I believe there are some very low quality patents out there, and Alice will provide an additional welcome tool to get rid of them.