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US Supreme Court Justices hear arguments in game-changing software IP case

Which computer-implemented inventions are patent eligible?

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The US Supreme Court is hearing arguments today in a case that could help to set a new standard for when software is eligible for patent protection.

The nine judges are due to hear an hour's oral discussion on the Alice Corp v CLS Bank case, a patent lawsuit over financial software whose decision could come to affect businesses in healthcare, IT, telecoms and other industries.

Google, Dell, Microsoft, Red Hat and HP are just some of the tech companies that have filed legal papers on the issue in the hopes of swaying the court to either tighten or loosen patenting rules for software. Advocacy groups including the Electronic Frontier Foundation and the American Civil Liberties Union have also submitted filings.

The case has gone on appeal to the Supreme Court after a lower court ruled that Alice Corp's patents for a computer program used in financial transactions were invalid. CLS Bank, based in New York, argued that all the patents did was describe a way of moving the concept of escrow onto a computer, so they weren't eligible for patent protection.

The arguments have made the heart of the matter just how to figure out when software is innovative and inventive and deserves IP protection. Companies like Google would prefer to see a stricter definition of innovation and fewer software programs receiving protection but other advocates say that if CLS Bank wins, software developers could lose out on needed protections for their inventions.

Google said in its amicus brief to the court that "abstract patents" should not be protected.

"Patent claims that simply describe an abstract idea such as financial intermediation and generically recite the use of conventional computer or other data processing equipment to carry out that idea are not patentable," the firm said. "Instead, a claim must disclose and limit itself to a specific way of implementing the idea.

"The software industry developed and flourished without abstract patents before changes in the Federal Circuit's jurisprudence led to a flood of them. Far from promoting innovation, abstract software patents have impaired it by granting exclusive rights over high-level ideas and thereby blocking others from undertaking the truly innovative task of developing specific applications."

But firms like patent heavyweight IBM have warned against going too far in the other direction.

"The fact that the court is now actively considering such a basic question as whether computer-implemented inventions such as software are even eligible for patent protection is deeply troubling," it said in its own filing.

"Technology has enabled an astounding diminishment of the man-machine interface, but it has not erased the need for that interface and, as a result, even the most problematic computer-implemented invention will be meaningfully different from and narrower than the associated abstract idea."

Tech firms and patent lawyers were hoping that the courts could come up with some kind of legal standard when the Court Of Appeals heard the same case last year, but instead ten judges released around 120 pages worth of opinions that failed to make anything clearer.

A ruling from the Supreme Court is expected at the end of June. ®

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