Alice: The Status Quo or Total Chaos?

On June 19, 2014 the Supreme Court handed down a highly important opinion discussing what is considered patentable subject matter in the United States. The case, Alice Corporation v. CLS Bank International, involved a group of patents for computer software that mitigated settlement risk in financial transactions. The Court held that these patents were not drawn to patent eligible subject matter under 35 U.S.C. § 101 (2012) because the claims were directed toward abstract ideas, which are unpatentable. This ruling has drawn decidedly mixed reactions from commentators in the legal field. Moreover, this case leaves United States Patent and Trademark Office (“USPTO”), courts, inventors and the industry grappling with the question as to what is patentable. Without a clear line, these parties are left to guess at what inventions fit within the ambiguous bounds of patentability. This Note explores the impact of the Alice decision and what standards, if any, the Court created in Alice. Part I discusses the history of 35 U.S.C. § 101 which defines patentable subject matter, § 101’s application, and judge-made exceptions to patentable subject matter. Part II discusses the history and rise of software patents in the United States. Part III discusses the reasoning of the Court in Alice. Finally, Part IV discusses the impact of Alice, the cases that have applied Alice, and whether Alicewill facilitate or hinder future determinations of what is eligible subject matter. Finally, the Note suggests options other than patenting and discusses how foreign countries handle patent applications for software and whether that could provide guidance to U.S. courts