Few topics in patent law provoke more controversy than the propriety of granting patents covering business methods. Some judges, lawyers and academics find it difficult to understand why patents that do not seem to claim scientific advancements should be eligible for patent protection. Two important Supreme Court opinions—Bilski v. Kappos, 561 U.S. 593 (2010) and the June 2014 decision in Alice Corp. Pty. v. CLS Bank Int’l, 134 S.Ct. 2347 (2014)—have invalidated business method patents, and the Supreme Court has instituted a test for patentable subject matter that few (if any) business method patents will meet. Applying that test, a growing number of trial and appellate courts, including several over the past few months, have dismissed infringement claims based on business method patents.

The test applied in Alice has two parts: first, the court determines whether the patent is directed to laws of nature, natural phenomena or abstract ideas. If so, the patent is valid only if “additional elements” in the claims supply an “inventive concept” that is “sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself.” The Supreme Court has made the test more difficult for patent owners by holding that simply requiring that a computer be used, or limiting the claims to a particular “technological environment” will not save an otherwise invalid patent.

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