The question of whether software can be patented is a hot topic in the world of intellectual property. In general, software on its own is not considered patentable because it is seen as an abstract idea. However, if the software provides a specific technological improvement or is tied to a particular machine, it may qualify for a patent.
When Software Cannot Be Patented
Software is often rejected for patents when it is considered an abstract idea, meaning it is too general or not tied to a specific invention. In 2014, the U.S. Supreme Court ruled in Alice Corp. v. CLS Bank International that simply using a computer to carry out a basic process is not enough to qualify for a patent. This means things like financial transactions, organizing data, or using mathematical formulas on a general computer usually won’t be approved for a patent.
For example, in the Alice case, a company tried to patent a computer-implemented scheme for mitigating settlement risk by using a third-party intermediary. However, the court ruled that the claims were drawn to an abstract idea of intermediated settlement, and that merely requiring generic computer implementation failed to transform that abstract idea into a patent-eligible invention.
When Software Can Be Patented
Not all software is ineligible for patents. If a program introduces a new and specific way to solve a technical problem, it may qualify. For example, in DDR Holdings, LLC v. Hotels.com, L.P. (2014), a software system that created a unique way to keep users on a website instead of redirecting them was found to be patentable. The court said this was not just an abstract idea but a technical innovation that solved a “particular Internet-centric problem” and included additional features that ensured the claims were more than a drafting effort designed to monopolize an abstract idea.
Another case, Enfish, LLC v. Microsoft Corp. (2016), involved a special type of database that improved computer performance. The court determined that the claims did not consist of general-purpose computer components added to a fundamental economic practice or mathematical equation, but rather the claims were directed to a specific implementation of a solution to a problem in the software arts. As a result, the court decided this was a true technological improvement and was therefore eligible for a patent.
Coding and Website Development: Are They Patentable?
Coding, including website development, is usually not patentable unless it introduces a new technical advancement. For example, basic website features like displaying web pages or interactive buttons are not unique enough for a patent. In CyberSource Corp. v. Retail Decisions, Inc. (2011), a method for detecting online credit card fraud was found to be too general and not patentable. The Supreme Court held that mental processes are not patent-eligible subject matter because the application of only human intelligence to the solution of practical problems is no more than a claim to a fundamental principle. Since the method claimed consisted of only a general approach of obtaining information about credit card transactions utilizing an Internet address and then using that information in some undefined manner to determine if the credit card transaction is valid, the court determined that this was a fraud detection method that could be mentally performed and, therefore, unpatentable. However, if website coding includes a novel encryption method or an advanced way to process data, it may qualify.
Recent Software Patent Cases
The rules around software patents continue to evolve and be tested. In Realtime Tracker Inc. v. RELX, Inc. d/b/a LexisNexis (2024), a company tried to patent software that tracked billable hours for lawyers. The court deemed the claims in the patent as patent-ineligible, concluding that there was no inventive concept and it consisted only of an abstract idea performed by a computer.
In 2024, the U.S. Patent and Trademark Office (USPTO) also updated its guidelines on the use of artificial intelligence (AI) technology related to inventions and patents. This makes it easier to understand how AI-assisted inventions can be considered patent eligible, such as the requirement that an inventor be a natural person. To increase the likelihood of obtaining a patent for an AI-assisted invention, it is recommended that the primary focus of inventorship analysis be on the human contributions.
Other Methods of Software Protection
Even if not patent-eligible, software potentially can still be protected under copyright and trade secret laws.
Copyright law protects the expression of an idea, but not the underlying functionality. For example, federal copyright law can protect, at least to an extent, source code and object code as a “literary work.” However, it will not protect the functional aspects of the software, or the algorithms, methods, or systems implemented by the software.
Trade secrets can be used to protect confidential business information that gives a company a competitive advantage, such as increased economic value. For software, this could cover proprietary algorithms, software designs, source code, and internal processes and architectures. To qualify as a trade secret, the software must be kept secret and actively protected as confidential. Active protection can be demonstrated by the use of non-disclosure agreements, restricting access to the code, and implementing security measures.
Conclusion
While software itself is often considered too abstract to be patented, some innovations can qualify if they clearly improve technology. To increase the chances of getting a software patent, inventors should focus on highlighting the specific technical improvements or solutions to real problems their software provides. In some instances, it may be possible to protect software using a combination of copyright, trade secrets, and patents. Understanding these legal principles can help businesses and developers protect their unique ideas.
For legal guidance on your intellectual property needs, contact the Intellectual Property Practice Group at Sandberg Phoenix & von Gontard P.C.
