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Software and Business Method Inventions After <i>Alice</i>
Patent attorneys are often asked the question: “Is my idea patentable?” Frequently the idea is related to software or business methods. Well-known business methods include Amazon's “1-click shopping” and Priceline's “reverse auction.” In the new digital economy, innovative software and business method models have given rise to new, very successful companies, such as Facebook, LinkedIn, Uber, and Airbnb.
As important as software and business method inventions are in the new digital economy, it is often unclear whether they can be patented. This uncertainty is largely due to a legal rule that “abstract ideas” are not eligible for patent protection, which is based on a long line of U.S. Supreme Court cases, with Alice Corporation v. CLS Bank International, 134 S. Ct. 2347 (June 19, 2014), being the most recent and influential. The basic rationale for the rule is a concern over so-called “preemption” of abstract ideas. That is to say abstract ideas are the basic building blocks of science and industry, and allowing patents to monopolize abstract ideas can preempt the use of such basic building blocks.
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