US software patents – Supreme Court will decide
The US Supreme Court has agreed to hear a new case on software patents: Alice Corporation Pty. Ltd. v. CLS Bank International.
The US Supreme Court will review a divided and inconclusive decision from the Court of Appeals for the Federal Circuit on whether a patent based on software is directed to patent-eligible subject matter under US law.
The patent, owned by Alice Corporation, relates to a data processing system for mitigating the risk of foreign exchange (FX) settlement. CLS Bank is alleged to operate systems for doing this, and is attempting to have the patent invalidated. The market is financially enormous: foreign exchange settlements submitted to CLS in October 2013 averaged about US$5 trillion per day.
The US Supreme Court has recently dramatically changed the rules for patenting genes (in Association for Molecular Pathology v Myriad Genetics) and for personalised medicine (in Mayo Collaborative Services et al. v Prometheus Laboratories), and may be about to do the same for software.
Comments made by the Supreme Court may be relevant in Australia if they are considered by local courts or the Australian Patent Office, although the legal basis for software patents in Australia is very different from the USA.