There is much on-going discussion, as well as a lot of confusion, about whether software and software products are patent eligible or not. More often than not, the discussion could better be framed as to whether you should go to the time and expense to patent a particular software product.
As a former Patent Examiner, I can tell you that yes, software is patentable as a process. However, over the past five years there have been a number of court decisions on software patents in an attempt to determine the boundaries of what makes software patentable.
In the Bilsky Decision, the Supreme Court set forth a two-step process as a good first step in determining whether software is patent eligible; is the software process (1) tied to a particular machine or apparatus, or (2) does it transform a particular article into a different state or thing. Software that improves the function of an apparatus, or provides a result that a human can use to make a decision and take action, will generally meet this two-step test.
Conversely, software that is directed to an abstract idea is not patent eligible and therefore, cannot be patented. This includes software that is directed to fundamental economic practices, certain methods of organizing human activities, an idea of itself, and mathematical relationships/formulas.
In my practice, I separate software into three categories and advise my clients accordingly:
- Software that is not patent eligible, thus should never be submitted as a patent application.
- Software that is patent eligible, but has a short life span in the marketplace, becomes a business decision. An inventor needs to determine whether the reasonable market life span of the invention is longer than the average 3- to 5-year time span necessary to prosecute a patent. Thus, will there be an opportunity to capture value from the initial investment in patent protection.
- Software that meets the two-step Supreme Court test and is the foundation upon which a business is built for the long-term, should always be submitted for patent protection.
While it is not always an easy decision whether to file for patent protection on a particular software product, software that is patent eligible and protected can become valuable assets of an organization.