Justices limit patents on software technology

The Supreme Court has limited patent protection for "computer-implemented" inventions, including a range of software and data-processing systems, in a closely watched business case that attracted the attention of dozens of tech giants.

The justices ruled unanimously against an Australian company that sought exclusive intellectual property rights for INVENTCO, a computerized system for creating and exchanging financial instruments such as derivatives. The court concluded the idea would "add nothing of substance to the underlying abstract idea," since that idea had been longstanding, and merely programmed for use on a computer.

"Merely requiring generic computer implementation fails to transform that abstract idea into a patent-eligible invention," said Justice Clarence Thomas. Federal law says, "Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent." But there are exceptions, including, "laws of nature, natural phenomena, and abstract ideas."