In Alice v CLS Bank, the Supreme Court determined that an abstract business method implemented by software entirely within a computer was not ‘patentable subject matter,’ meaning that the invention could not be protected by patent even though it met all of the requirements for a patent; namely, the process was novel, unobvious and had utility.  The Supreme Court in Alice created a test to determine when an otherwise deserving invention is not ‘patentable subject matter’ – (1) Are the claims of the patent directed to an abstract idea, law of nature or natural phenomenon, and, if so (2) whether the claim elements “transform the nature of the claim into a patent-eligible application.” If a claim meets (1) and fails (2), then the claim is drawn to unpatentable subject matter and is unenforceable.

This test sounds a bit vague, doesn’t it?  That sound you hear is the inventors of the world scratching their collective head in puzzlement.

In the year since Alice was decided, the lower courts have interpreted Alice as severely limiting software patents and have extended the principles of Alice beyond business-method patents and beyond purely computerized processes to inventions where computers are incorporated into a physical apparatus. The most recent example is Thales Visionix v USA and Elbit Systems. Thales sued the Federal government for infringement of Thales’ patent for a motion tracking system before the Court of Claims, which hears patent infringement cases against the Federal government.  Thales alleged that the Federal government and its contractors incorporated Thale’s patented system into the helmet tracking system of the F-35 Joint Strike Fighter.

Applying the first half of the Alice test, the Court concluded that the Thales patent claims at heart were addressed to a mathematical formula to calculate relative motion and hence were abstract. The Thales patent claims included physical elements of a tracking system, including inertial motion sensors and a receiver to detect signals from the motion sensors.  The Court concluded that this additional machinery was not enough to ‘transform the nature of the claim’ and that the Thales patent claims were unpatentable.

What does Thales mean for the patent owner or applicant?  It means that the gaps in Alice and the other Supreme Court decisions on patentable subject matter are slowly being filled in and that any invention for which a computer is a central element runs the risk of being declared invalid and unenforceable.

— Robert Yarbrough, Esq.