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During the last two years “software patents” have become extremely difficult to obtain because of a 2014 court ruling called ‘Alice’. Just taking a business process and reimplementing it in software isn’t enough to be able to claim originality and patentability. These types of patents were disqualified in the court case ruling Alice v. CLS Bank in June 2014.
According to a study by Fenwick and West, more than 400 patents have been invalidated because of the Alice ruling two years ago. Patenting business processes has become extremely difficult to be able to do given this new ruling.
Section 101 of Title 35 of US patent law says that patents can be granted to protect any process, machine, manufacture or composition of matter, with the three exceptions of: laws of nature, physical phenomena, and abstract ideas. In the Alice case, it was determined that software business patents were being applied to abstract ideas, and because of that, are invalid.
After the Alice ruling, nearly 82 percent of all business process patent applications were rejected by the patent office, compared to roughly 32 percent prior to the Alice ruling.
David Kappos, a former director of the patent office, is quoted by Bloomberg Businessweek saying that invalidation of patents is “out of control” and has “definitely gone too far. Important software innovations that are highly technical are being deemed unpatentable. You can get software patents allowed in both China and Europe that aren’t allowable in the U.S. anymore.”