Federal Circuit issues confusing ruling on software patent eligibility

The judges, like the rest of us, are scratching their heads on patent-eligible computer-related inventions

Software patents are absolutely essential for America’s technology sector—or they are choking that sector to death. Experts vehemently disagree on which view is correct. So do executives running hardware, software and Internet businesses. Judges have been just as confused, and not just about the economic value of these software patents. They have been unable to agree on which software patents (if any) are valid, and which should be struck down as unpatentable “abstract ideas.” That’s why so many businesses and their patent counsel were eagerly awaiting the Federal Circuit’s en banc decision in CLS Bank Int’l v. Alice Corp. The court was tackling this issue of patent eligibility head on, aiming to bring much-needed clarity to this area of the law.

Alas, that didn’t happen. On May 10, when the Federal Circuit issued its decision in CLS, the court revealed that it was as confused as everyone else. The 10 judges issued five opinions and one set of “additional reflections,” none of which garnered majority support. Instead of specifying a standard for patent-eligible computer-related inventions, “we have propounded at least three incompatible standards, devoid of consensus,” wrote Federal Circuit Judge Pauline Newman.

New Nightmare

The Federal Circuit’s decision in CLS is a nightmare for businesses and their patent counsel. The court has cast doubt on a vast number of patents, without providing a clear standard for determining whether any of these patents are valid.


Steven Seidenberg

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