Supreme Court Curbs Patentability of Computerized Business Methods

On June 19, the U.S. Supreme Court unanimously decided in Alice Corporation Pty. Ltd. v. CLS Bank International, et al. that a computer-implemented business method for using an intermediary to reduce risks associated with settling financial transactions is not eligible for patenting. More broadly, the Court held that abstract ideas, which are unpatentable, are not limited to preexisting, fundamental truths that exist apart from human action and that, when an invention involves an abstract idea, merely requiring generic computer implementation of that idea does not transform it into a patent-eligible invention. This holding is good news for Wall Street firms and other companies in the financial industry that have been seeking ways to fend off patent assertions, often by non-practicing entities or “patent trolls,” involving computerized business methods.