Jun 19, 2014 · 2 minutes

Today, the Supreme Court ruled that a general business procedure that's been in practice for years cannot be patented simply because someone found a way to do it on a computer.

The specific business procedure in question is "a method for exchanging financial obligations" used by banking institutions. A firm called Alice Corp. had patented a electronic method of accomplishing this method, but because the procedure itself is "abstract" and has been in practice for years, the court ruled that simply patenting an software version of it won't fly.

So what does that mean for other software patent litigation suits (often initiated by "patent trolls") which have skyrocketed since 2007?

Software patents will almost certainly take a hit after this ruling, but this isn't the death blow many had hoped.

Timothy B. Lee explains at Vox:

The court writes that 'many computer-implemented claims' are eligible for patent protection. It doesn't elaborate on which claims those are, so it's a little unclear what that means, but software patent supporters will seize on that language as evidence that most software patents are still valid.
Essentially the distinction will be, is the patent an "abstract idea" or a "concrete process"? In the case of Alice Corp., the "scheme for mitigating 'settlement risk,'" they patented is abstract in the sense that it's a generalized process accomplished by many banks. On the other hand, had Alice Corp. patented a concrete list of novel computerized steps that accomplish this abstract idea, would it have won the case? That's where it gets fuzzier.

Here's Lee again:

The Supreme Court rejects the patent because 'each step does no more than require a generic computer to perform generic computer functions.' But many computer programmers would point out that this describes all software.
So both software patent supporters and opponents will find something to use in this ruling to justify their future claims. On one hand, the court emphasizes that this decision only concerns software patents on "abstract ideas." On the other, the court's mealymouthed wording, depending on how you interpret it, could hypothetically be used to take down any software patent.

Still, the language is likely too vague for this to bring the hammer down hard on software patents. For proponents of software patent reform, the ruling is an example of the court merely kicking the can down the road a bit as opposed to straight through the uprights. But at least it's playing for the right team.

[illustration by Brad Jonas for Pando]