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The U.S. Supreme Court cast a shadow over software patents with its landmark decision in Alice Corp. Pty Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347, 2355 (2014). As Justice Clarence Thomas bluntly put it, “[s]tating an abstract idea while adding the words ‘apply it with a computer'” is not enough to invoke patent protection. Since Alice, courts have routinely invalidated software patents at the motion to dismiss stage, leaving many to wonder whether Alice had sounded “the death-knell for patent protection of computer implemented inventions.” Improved Search LLC v. AOL Inc., Civ. No. 15-262-SLR (D. Del. Mar. 22, 2016). A recent decision from the Federal Circuit provides some hope for software patents facing invalidation. However, subsequent court decisions have applied this new decision with mixed results.

Under 35 U.S.C. § 101, an inventor cannot patent certain subject matter — laws of nature, natural phenomena and abstract ideas have been determined ineligible for a patent. To determine whether a patent falls into one of these categories, the Supreme Court established a two-step framework. Alice, 134 S. Ct. at 2354. Courts must first determine whether the patent covers an ineligible concept such as an “abstract idea.” If the answer is yes, courts then look to the elements of the patent’s claims both individually and as an ordered combination to see if there is an “inventive concept” that transforms the “abstract idea” into an eligible concept. Id. Following Alice, lower courts have often found software patents are “abstract” under the first step of the Alice inquiry by characterizing the claims in terms of the overall concept they implement. Once a claim is found “abstract” in the first step, it is difficult to show a transformative “inventive concept” for the second step of the analysis. At this stage, courts often find it fatal when the patent uses conventional computer equipment and software instructions. Of course, this sweeps in most software patents because most software is written and implemented using conventional equipment.

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