The justices ruled unanimously that the government should not have issued a patent to
The decision makes clear that to obtain a patent, a company's idea must actually improve how a computer functions or make other technical advancements. It could also help give technology firms a stronger defence against so-called patent trolls — companies that buy up patents and force businesses to pay license fees or face costly litigation.
The software at issue allows a neutral third party to make sure all parties to a financial trade have lived up to their obligations.
"We conclude that the method claims, which merely require generic computer implementation, fail to transform that abstract idea into a patent-eligible invention," said Justice
Dozens of technology firms — including
Patents give inventors legal protection to prevent others from making, using or selling a novel device, process or application.
The Obama administration had also urged the court to invalidate the Alice patent and urged the justices offer more clarity to help lower courts decide what is and isn't valid. The administration said several factors should be considered, including whether the software improves how the computer functions or uses a computer to improve how another technological process works.
Companies have spent millions fighting patent troll litigation from firms that buy up patents from others and make money by asserting infringement and demanding licensing fees or settlements.
The case is
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