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What May Not Be Patented

15 January, 2016 - 09:34

Many things can be patented, but not (1) the laws of nature, (2) natural phenomena, and (3) abstract ideas, including algorithms (step-by-step formulas for accomplishing a specific task).

One frequently asked question is whether patents can be issued for computer software. The PTO was reluctant to do so at first, based on the notion that computer programs were not “novel”—the software program either incorporated automation of manual processes or used mathematical equations (which were not patentable). But in 1998, the Supreme Court held in Diamond v. Diehr 1 that patents could be obtained for a process that incorporated a computer program if the process itself was patentable.Saylor URL: 708

A business process can also be patentable, as the US Court of Appeals for the Federal Circuit ruled in 1998 in State Street Bank and Trust v. Signature Financial Group, Inc. 2 Signature Financial had a patent for a computerized accounting system that determined share prices through a series of mathematical calculations that would help manage mutual funds. State Street sued to challenge that patent. Signature argued that its model and process was protected, and the court of appeals upheld it as a “practical application of a mathematical, algorithm, formula, or calculation,” because it produces a “useful, concrete and tangible result.” Since State Street, many other firms have applied for business process patents. For example, obtained a business process patent for its “one-click” ordering system, a method of processing credit-card orders securely. (But see v., 3 in which the court of appeals rejected Amazon’s challenge to using its Express Land one-click ordering system.)