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US Court Overturns Software Patent in Landmark Ruling

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The USA Supreme Court has passed a ruling that could prove to be a major benefit to companies fighting vexatious patent lawsuits from so called patent trolls.

In a specific ruling relating to an ongoing case between a US bank and an Australian patent holding company, the court ruled that a software patent was not valid as it just took an pre-existing idea and then applied to being used on a computer.

The court ruling means that inventions need to improve computer functionality, or show some level of improvement in order to qualify for a patent.

Software patents have long been a contentious issue in the USA with arguments on both sides claiming they either support development, or hinder it. There has however been a general concern by most commentators that software patents are too easily granted. Those have often been the bread-and-butter of patent trolls who are able to show that often fairly insignificant functions in a device are in fact covered by a patent.

New York-based CLS Bank International was the alleged infringer, and decided to fight the patent claim, saying that Alice was a patent troll.

In the new decision by the US Supreme Court, Australia based Alice Corp was found to have taken an existing abstract idea covering financial trading and simply added the term "generic computer implementation" to a patent application.

The court threw that out as not sufficient enhancement on the original idea to merit a patent claim.

The move is now expected to lead to a larger number of companies fighting patent lawsuits on the grounds that software patents can now more easily be overturned.

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Tags: USA