Thursday's ruling in a hotly anticipated case, Alice Corp v. CLS
Banks, emerged after the patent court, known as the U.S. Court of
Appeals for the Federal Circuit, failed to resolve a key legal
question. The patent court had split 5-5, effectively upholding a
lower court decision but offering no clear guidance, prompting the
Supreme Court to take the case.
In Thursday's unanimous decision, the only one to uphold the patent
court this year, the Supreme Court modestly cut back on software
patents by ruling that simply implementing an abstract idea using a
computer does not make an invention eligible to be patented.
The high court is taking more cases from the patent court than it
has in the past. This term's six cases are the most in a single
nine-month term since the Federal Circuit was set up to handle
patent cases in 1982. The term ends this month.
Although the Supreme Court often takes cases in order to reverse
lower court rulings, the rate of reversal of the Federal Circuit has
prompted considerable debate within patent law circles.
Some lawyers suggest it signals the Supreme Court has concerns over
how the Federal Circuit is handling patent law, which is
increasingly important to the economy due to the rise of the
"We see the Supreme Court pruning back the more pro-patent stance
that the Federal Circuit had taken," said Gregory Stobbs, a patent
expert at Harness Dickey law firm.
Almost as striking as the reversal rate has been the unanimity on
the high court. While the nine Supreme Court justices often are
split, on patent rulings they were unanimous.
"Every decision has basically said the Federal Circuit was being too
pro-patent," said Daniel Nazer, an attorney at the Electronic
Frontier Foundation, which favors fewer patent protections. Even
when the high court upheld the appeals court ruling in the software
case, it effectively faulted five of the judges who had offered a
different interpretation of the law.
The majority of this term's Supreme Court rulings delivered blows to
so-called patent trolls, defined as companies that hold patents only
for the purpose of suing firms seeking to develop new products.
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The software patent ruling was one of them. It followed Supreme
Court decisions in three other patent cases that experts view as
being detrimental to patent trolls.
In two related rulings issued in April, the court made it easier for
winners of patent lawsuits to have legal fees paid by the opposing
party. Then, in early June, the Supreme Court ruled in favor of
Nautilus Inc in a patent infringement case in which the court
clarified how unclear, or "indefinite" a patent could be before it
would be deemed invalid.
The patent court came under further scrutiny last month when Randall
Rader quit as chief judge and later announced plans to leave the
bench after he admitted sending an email praising a lawyer who
appears before the court.
Now the question is whether the Supreme Court will go on taking as
many patent cases. The Federal Circuit's new chief judge, Sharon
Prost, who ascended to the role in May, is viewed as more in
alignment with the Supreme Court than was Rader, who was generally
viewed as being in favor of broad patent rights.
The software case illustrates just how Rader and Prost differed on
the law: They were on opposite sides, with the Supreme Court
embracing Prost's interpretation of the law.
Similarly, in another appeals court case decided in April involving
Apple Inc and Google Inc's Motorola Mobility unit, the two judges
again differed on their interpretation of the law.
(Additional reporting by Diane Bartz and Daniel Levine)
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