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In 2014, the United States Supreme Court issued a landmark decision in the intellectual property case Alice Corp. v. CLS Bank International. Melbourne-based Alice Corp. attempted to patent a computer-implemented, electronic escrow service. In a unanimous decision, the Supreme Court ruled that the patents granted to Alice Corp. by the United States Patent and Trademark Office (USPTO) were invalid because the software-related inventions were abstract ideas and therefore not patentable.

Why should Congress step into the 21st century debate?

IP rights are often considered a driving force for technological innovation, deemed as “absolutely necessary to encourage creative intellectual endeavour in the public interest”. However, today’s post-Alice landscape is rife with legal uncertainty and is increasingly complex for innovators to navigate. The lack of standardisation also deals a significant blow to the investment opportunities and commercial development available to software companies.

Congress’ role in IP

In the year leading up to the Alice decision, software patents could be written and awarded without considering whether a subject matter was eligible for IP rights. However, this was not always the case. The exclusion of ‘abstract ideas’ from the patent system has a long history. Rules rooted in the first laws of the Founding era define patentable products as real-world technological inventions. Not ideas or algorithms per se.

In the 1960s and 1970s there was debate about whether software code should be protected by copyright. Congress put an end to the dispute in 1980, enacting the Computer Software Copyright Act to protect software developers and curb legal uncertainty. The new law confirmed that software would be protected by copyright and undoubtedly helped drive the PC Revolution of the next decade.

What can Congress do?

Obtaining software patents is difficult, but not impossible. The USPTO and lower courts including the Federal Circuit, continue to support new software. The real issue prompted by the Alice decision is more about where the Supreme Court has drawn the line on patenting abstract ideas. Most inventions at their heart are something abstract. If a middle ground cannot be properly defined, this could act as a disincentive to innovation. Users will be prevented from obtaining the legal protection they would expect for their efforts.

Congress could restrict legal uncertainty by reaffirming software as a patentable technological invention. After the PC Revolution in the 1990s, and as technology advanced, courts rightly recognised that software’s functional value should be protected by the patent system, as long as it can show “technical effect”.  The patent system should be dedicated to safeguarding innovation and protecting inventors – not questioning the validity of their ideas.

Interested in the role of technology to the future of IP, click here to read more.