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Evolution of US Software Patent Law

Posted on: August 27, 2014

Grant of software patents has been an ongoing and a challenging topic that is discussed from over a decade. The software patent laws are amended and is being evolved based on various case laws handled by the US courts. Some of the mile-stone case laws that have impacted the decision for getting patents for the software applications are discussed below.

As per Section 101 of 35 U. S. Code, 1952 (US Patent Act, 1952) provides that: “Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent thereof, subject to the conditions and requirements of this title.”

However, there are exceptions with respect to this section, namely, laws of nature, natural phenomena and abstract ideas. Any claims wholly falling under any of these exceptions shall be ineligible for patent protection.

Mile-stone US Case Laws:

The first software patent that was filed was for a process patent in the year 1972 (Gottschalk v. Benson). The process is about converting the binary-coded decimal numerals into pure binary numerals on a general purpose digital computer using an algorithm. The process patent was then rejected by the court based on the following lines:

A series of mathematical calculations or mental steps does not constitute a patentable "process" within the meaning of the Patent Act.

In the year 1978, a software patent was filed related to updating alarm limits to trigger alarms during a catalytic conversion process. The invention was mainly about computing and setting a mathematical formula for adjusting the alarm value. The court rejected the proposed invention as the only novel feature of the method and is associated with a mathematical formula used to adjust the alarm value.

As per 35 U.S.C 101 of the Patent Act, mathematical formula alone does not constitute a subject matter for patentability.

In the year 1980, a patent application was filed by Diehr for a process of molding raw, uncured synthetic rubber into cured precision products. The proposed invention was allowed on the following basis:

A physical machine or a process of making use of a mathematical algorithm which involves “transforming or reducing an article to a different state or a thing” is an eligible subject matter for patenting even if it includes a software component.

In the year 1998, protection for a business method was proposed by Signature Financial Group. The proposed invention was considered as one of the first judicially recognised software patents. The court allowed the grant of the patent based on the following basis:

Any application that produces a useful, concrete and tangible result can be patented.

In the year 2014, a patent application for protecting a method to check the fund in the user’s account to fulfil a contract was filed. However, the application filed for this method was rejected on the following basis:

Any abstract idea that does not result in transformation of results does not constitute a patentable subject matter.

The above mentioned case laws provide pointers for analyzing whether a software application is allowed for the grant of the patent or not as per the US case laws.



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