Why the CLS Bank case matters

On Thursday, the Supreme Court issued a unanimous ruling in the Alice v. CLS Bank, reaffirming that abstract ideas are not eligible for patent protection. The Court correctly distinguished Alice’s invalid business method patents from valid patents that advance technology.

We applaud the Court for its ruling, and in particular their recognition that the patents in question are not software patents. The Alice claims describe a method for reducing risk in financial transactions, with no connection to any technological innovation.

The Court’s opinion follows closely the amicus brief we submitted with HP and Adobe, and recognizes that software inventions are eligible for patents, especially where they “improve the functioning of the computer itself … [or] effect an improvement in any other technology or technical field.” [p.15]

Software patents are no different than other technological or industrial inventions that are patent-eligible under Section 101. Software now powers nearly every inventive device, service and product in our world today. Virtually every industry and sector of the economy has been transformed by software. The Alice decision is an affirmation that these innovations are patent-eligible.

This ruling will preserve patent protection for software-enabled technologies that is critical to incentivizing innovation in every industry and sector of the economy.

About the Author

Deputy General Counsel & Corporate Vice President, Legal and Corporate Affairs, Microsoft

Horacio Gutiérrez is Corporate Vice President and Deputy General Counsel in charge of the Microsoft products and services group (PSG). In this role, he oversees the team that provides front-line legal support to all of Microsoft's engineering and marketing teams, including Devices and Studios, Applications, Services and Dynamics, Operating Systems, Cloud and Enterprise, and Marketing. Previously, Horacio led the worldwide intellectual property group, including the development, maintenance and enforcement of the company’s IP portfolio, inbound and outbound patent licensing, and IP legal and public policy strategy. Prior to his eight years leading the IP group, Mr. Gutiérrez was based in Paris, where he was Microsoft's associate general counsel for Europe, the Middle East and Africa. Mr. Gutiérrez started his career at Microsoft in Fort Lauderdale, Fla. at the company’s Latin American regional headquarters, where he was responsible for commercial and corporate matters for the region.