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SCOTUS nixes patent on financial risk software in closely watched case

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The Supreme Court of the United States has tossed out an Australian company's patent for business software in a closely watched case that clarifies standards for awarding patents.

The justices ruled unanimously Thursday that the government should not have issued a patent to Alice Corp. in the 1990s because the company simply took an abstract idea that has been around for years and programmed it to run through a computer.

The decision makes clear that to obtain a patent, a company's idea must actually improve how a computer functions or make other technical advancements. It could also help give technology firms a stronger defense against so-called patent trolls — companies that buy up patents and force businesses to pay license fees or face costly litigation.

The software at issue allows a neutral third party to make sure all parties to a financial trade have lived up to their obligations. New York-based CLS Bank International claimed the patent was invalid.

"We conclude that the method claims, which merely require generic computer implementation, fail to transform that abstract idea into a patent-eligible invention," said Justice Clarence Thomas, writing for the court.

Dozens of technology firms — including Google and Facebook — submitted friend of the court briefs in the case, asking the high court to restrict the free flow of software patents they say are often too vague and can block other companies from innovation. But other companies, such as IBM, warned that too many new restrictions could nullify thousands of existing patents and discourage companies from investing in research and development.

Patents give inventors legal protection to prevent others from making, using or selling a novel device, process or application. The Supreme Court has ruled in the past that abstract ideas, natural phenomena and laws of nature cannot be patented.

The U.S. Court of Appeals for the Federal Circuit had ruled that Alice Corp.'s patent was invalid, but only five of the 10-member panel of judges could agree on why.

The Obama administration had also urged the court to invalidate the Alice patent and urged the justices offer more clarity to help lower courts decide what is and isn't valid. The administration said several factors should be considered, including whether the software improves how the computer functions or uses a computer to improve how another technological process works.

Companies have spent millions fighting patent troll litigation from firms that buy up patents from others and make money by asserting infringement and demanding licensing fees or settlements.

The case is Alice Corp. v. CLS Bank International, 13-298.

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  1. by the time anybody gets to such files they will probably have been totally vacuumed anyways. they're pros at this at universities. anything to protect their incomes. Still, a laudable attempt. Let's go for throat though: how about the idea of unionizing football college football players so they can get a fair shake for their work? then if one of the players is a pain in the neck cut them loose instead of protecting them. if that kills the big programs, great, what do they have to do with learning anyways? nada. just another way for universities to rake in the billions even as they skate from paying taxes with their bogus "nonprofit" status.

  2. Um the affidavit from the lawyer is admissible, competent evidence of reasonableness itself. And anybody who had done law work in small claims court would not have blinked at that modest fee. Where do judges come up with this stuff? Somebody is showing a lack of experience and it wasn't the lawyers

  3. My children were taken away a year ago due to drugs, and u struggled to get things on track, and now that I have been passing drug screens for almost 6 months now and not missing visits they have already filed to take my rights away. I need help.....I can't loose my babies. Plz feel free to call if u can help. Sarah at 765-865-7589

  4. Females now rule over every appellate court in Indiana, and from the federal southern district, as well as at the head of many judicial agencies. Give me a break, ladies! Can we men organize guy-only clubs to tell our sob stories about being too sexy for our shirts and not being picked for appellate court openings? Nope, that would be sexist! Ah modernity, such a ball of confusion. https://www.youtube.com/watch?v=QmRsWdK0PRI

  5. LOL thanks Jennifer, thanks to me for reading, but not reading closely enough! I thought about it after posting and realized such is just what was reported. My bad. NOW ... how about reporting who the attorneys were raking in the Purdue alum dollars?

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