U.S. appeals judges quiz lawyers on rules for patenting software

Fri Feb 8, 2013 7:05pm EST
 

By Diane Bartz

WASHINGTON (Reuters) - Lawyers squared off on Friday over U.S. rules for granting patents for software, or if software should be patented at all, in arguments in a case closely watched by Google Inc, Facebook Inc and other technology companies.

The full U.S. Court of Appeals for the Federal Circuit heard arguments in the case, which involves whether patents for a computerized system for exchanging financial obligations are valid. The case has drawn wide interest because it could help determine parameters for software patent protection.

Disagreement was apparent among the 10 judges on the panel, and experts said they expected a divided decision, which could land the case before the U.S. Supreme Court.

The case began in 2007 when Alice Corp of Melbourne, Australia, sued CLS Bank International for patent infringement. Alice is owned in part by National Australia Bank Ltd.

CLS, which runs a foreign-exchange settlement system, argued that the Alice patents were invalid because they were nothing more than an abstract idea.

Under patent law, an abstract idea - such as the idea of a self-driving car - cannot be patented but the engineering that creates a self-driving car can be patented.

Mark Perry, the attorney who argued for CLS Bank, said that the U.S. Patent and Trademark Office initially rejected one patent as too abstract but did approve it after Alice Corp re-wrote it to add the use of a computer.

But in the case of at least one of Alice's claims, an impatient Judge Kim Moore strongly disagreed. "Wow! This is so far from ... an abstract idea!" she said, referring to a portion of one patent.   Continued...