United States: Software Patents: History And Strategies (Pt. I – History)

This is part one of a two part series. Part two focuses on current strategies for obtaining software patents. Read part two  here.

1952-2010:  Software Patents Historically (before Bilski and Alice)

For centuries in United States patent law, the question of patentability of the subject matter of an invention under 35 U.S.C. §101 was fairly cut-and-dry.  Assuming the subject matter was new (under 35 U.S.C. §102) and not obvious (under 35 U.S.C. §103), the subject matter of a patent claim was patentable if:

  1. The claim described a process, machine, manufacture, or composition of matter, AND
  2. The claim did not describe a law of nature, a natural phenomenon, or an abstract idea.

While software-based inventions can typically be categorized as machines or processes or some combination of the two, the questions that has plagued courts, inventors, and patent practitioners alike for decades is – what qualifies as an "abstract idea" in the world of software, and which software-based inventions are disqualified as unpatentable as a result?

In passing the Patent Act of 1952, Congress attempted to explain the "abstract idea" question by noting that "Einstein could not patent his celebrated law that E=mc2; nor could Newton have patented the law of gravity."  Instead, patents were meant to protect "any thing under the sun that is made by man." MPEP 2105, citing S. Rep. No. 1979, 82d Cong., 2d Sess., 5 (1952).  This did not yet clarify the patentability of software, which had yet to move out of research laboratories by 1952, and which was both man-made and often reliant on mathematical or abstract principles in its execution.

In 1968, a few years after "minicomputers" the size of modern household kitchen refrigerators began gaining popularity, the US Patent Office (the precursor to the US Patent and Trademark Office) issued guidelines prohibiting the patenting of inventions using computer-made calculations. These were eventually challenged by the US Court of Customs and Patent Appeals, the precursor to the Federal Circuit.  In the 1970s, the Supreme Court seemed to side with the Patent Office and expressly rejected two software patent applications for including little other than mathematics.  Gottschalk v. Benson, 409 U.S. 63 (1972); Parker v. Flook, 437 U.S. 584 (1978).

Prospects for software patents looked grim until 1981, when the Supreme Court held that a software algorithm that guides a heating process for curing rubber was, in fact, patentable.  Diamond v. Diehr, 450 U. S. 175 (1981).  The Supreme Court concluded that the software algorithm of Diehr was not merely an abstract idea, throwing the software patentability question back into the forefront once again. The Supreme Court interfered little with the "abstract idea" software subject matter eligibility question for nearly three decades afterward, during which the Federal Circuit became increasingly lenient in allowing software patents before slowly beginning to pull back in the late 2000s.

2010-2014:  The Supreme Court adds "Significantly More" to the Analysis with Alice

The Supreme Court finally returned its attention to the "abstract idea" question by affirming its importance in a narrow 2010 ruling rejecting a patent application directed to hedging energy investment risks, Bilski v. Kappos, 561 U.S. 593 (2010).  In 2014, the Supreme Court modified the "abstract idea" subject matter eligibility rule by asserting that an abstract idea could, in fact, be patentable, so long as the patent application in question claims "significantly more" than the abstract idea, which the Court decided was not present in several patent applications directed to formulation and trading of risk management contracts. Alice Corp. v. CLS Bank International, 573 U.S. ___ (2014).

Thus, after Alice, the rule is that the subject matter of a patent claim is patentable if:

  1. The claim describes a process, machine, manufacture, or composition of matter, AND
  2. The claim:
    1. does not describe a law of nature, a natural phenomenon, or an abstract idea, UNLESS
    2. the claim ALSO describes additional elements that amount to "significantly more" than the exception (e.g., more than an abstract idea)

2015:  The USPTO Provides Guidance Via Examples

For patent practitioners, the Supreme Court's Alice decision produced more questions than answers, as the Court expressly declined to define "something more" and stated that it "need not labor to delimit the precise contours of the 'abstract ideas' category."

The USPTO stepped in by publishing two sets of "abstract idea" examples based alternately on caselaw and on hypothetical claims.  The first set of examples was published in January 27, 2015 ("Abstract Idea Examples", Examples 1-5) and the second on July 30, 2015 ("July 2015 PTO Update Appendix 1: Examples", Examples 21-27).

The table below identifies and categorizes the examples provided by the USPTO in January and July of 2015 based on their patentability or unpatentability, and based on the reasoning provided therefore.  Some examples are categorized under multiple columns where the USPTO provided multiple claims with different conclusions.




(not abstract idea)


(abstract idea + more)


(abstract idea)

EX. 26: Internal Combustion Engine (U.S. Pat. 5,533,489) EX. 1: Isolating and Removing Malicious Code from Email Messages (Hypothetical) EX. 3: Digital Image Processing (Research Corporation v. Microsoft) EX. 5: Digital Image Processing (Digitech Imaging v. Electronics for Imaging)
EX 27: System Software – BIOS (U.S. Pat. 5,230,052) EX. 2:  Composite Web Page (DDR Holdings) EX. 4: Global Positioning System (SiRF Tech. v. ITC) EX. 6: Game of Bingo (Planet Bingo v. VKGS)
EX. 23: CLAIM 1:  Graphical User Interface for Relocating Obscured Textual Information (Hypothetical) EX. 21: CLAIM 2:  Transmission of Stock Quote Data (Offline) (Google v. Simplair) EX. 7: E-Commerce With Transaction Performance Guaranty (buySafe v. Google)
EX. 23: CLAIM 4:  Graphical User Interface for Relocating Obscured Textual Information (Hypothetical) EX. 8: Distribution of Products Over The Internet (Ultramercial)
EX. 25: CLAIM 1:  Rubber Manufacturing (Diamond v. Diehr) EX. 21: CLAIM 1:  Transmission of Stock Quote Data (Google v. Simplair)
EX. 25: CLAIM 2:  Rubber Manufacturing (hypo based on Diamond v. Diehr) EX. 22: Graphical User Interface for Meal Planning (Dietgoal Innovations v. Bravo)
EX. 23: CLAIM 2:  Graphical User Interface for Relocating Obscured Textual Information (Hypothetical)
EX. 23: CLAIM 3:  Graphical User Interface for Relocating Obscured Textual Information (Hypothetical)
EX. 24:  Updating Alarm Limits (Parker v. Flook)


2015:  The USPTO Provides Guidance Via Caselaw

The USPTO also published a listing identifying a number of Supreme Court and Federal Circuit cases in July, which it has been updating periodically throughout 2015 ("July 2015 PTO Update Appendix 3: Subject Matter Eligibility Court Decisions").  The USPTO most recently updated this listing November 4, 2015 as of publication of this article.

The cases identified by the USPTO in July 2015 PTO Update Appendix 3 are Supreme Court and Federal Circuit cases relevant to the subject matter eligibility claim, some of which were decided at least partly based on an "abstract idea" inquiry.

Unfortunately for practitioners and inventors in the software space, the USPTO's listing of cases in the July 2015 PTO Update Appendix 3 is heavily stacked in favor of a finding of unpatentability, particularly with regard to the abstract idea question.

The table below quantifies the total number of cases, of the cases identified in the July 2015 PTO Update Appendix 3, in which the Supreme Court or Federal Circuit found either patentability or unpatentability.  It also identifies the total number of patents or patent applications, since some of the identified cases issued rulings concerning multiple patents or patent applications.

Conclusion: PATENTABLE

(not abstract idea

or abstract idea + more)


(abstract idea)

Supreme Court 2 cases
2 patents / applications
4 cases
7 patents / applications
Federal Circuit 4 cases
5 patents / applications
34 cases
46 patents / applications


2015:  The USPTO Must Base 35 U.S.C. §101 Rejections on Similarity to Court Decisions

The USPTO, on July 30, 2015, also issued a "July 2015 PTO Update: Subject Matter Eligibility" document in addition to the July 2015 PTO Update Appendix 1 and the July 2015 PTO Update Appendix 3 documents.  The "July 2015 PTO Update: Subject Matter Eligibility" document provides additional guidance regarding how USPTO Examiners are meant to use the cases identified in July 2015 PTO Update Appendix 3 and he examples identified in January 2015's Abstract Idea Examples document and July 2015's 2015 PTO Update Appendix 1 document.

In particular, "July 2015 PTO Update: Subject Matter Eligibility" document guides USPTO Examiners, on page 3, to "ensure that a claimed concept is not identified as an abstract idea unless it is similar to at least one concept that the courts have identified as an abstract idea" (emphasis added).  Thus, a subject matter rejection under 35 U.S.C. §101 (e.g., alleging that the invention is an "abstract idea" without "something more") must be supported as similar to one of the cases identified in Appendix 3 or, presumably, to one of the USPTO examples (identified is January 2015's Abstract Idea Examples document and July 2015's 2015 PTO Update Appendix 1 document), many of which are based on caselaw.

Based on the various examples and cases provided, the July 2015 PTO Update categorized the existing "abstract idea" rejections into four categories, namely:

  1. fundamental economic practices – commerce-related activities (e.g., creating contractual relationships, satisfying or avoiding legal obligations, managing risks, investments, banking authorizations, mortgage payment techniques, modifying transaction amounts, self-imposed spending limits, shopping, using advertising as an exchange or currency)
  2. certain methods of organizing human activity – interpersonal or intrapersonal activities (e.g., marketing, advertising, sales techniques, auctions, managing contractual relationships, translation, processing insurance claims, arbitration, managing a Bingo or poker game, satisfying in-game purchases, satisfying or avoiding legal obligation, managing mental processes, diet planning, prescribing medication)
  3. mathematical relationships and formulas – mathematical concepts (e.g., conversions, computations, calculations, equations, formulas, arithmetic operations, calculation-focused algorithms)
  4. an idea "of itself" – generally, any mental process that can be performed by a human mind, or by a human using a pen and paper (e.g., collecting, obtaining, comparing, cataloguing, moving, recognizing, scanning, storing, displaying, or organizing information)

[i] Diamond v. Diehr, 450 U.S. 175 (1981); Mackay Radio, 306 US 86 (1939).

[ii] Alice Corp. v. CLS Bank Intl., 574 US __ (2014);Bilski v. Kappos, 561 US 593 (2010); Parker v. Flook, 437 U.S. 584  (1978);Gottschalk v. Benson, 409 U.S. 63 (1972).

[iii] DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014); Research Corporation Technologies Inc. v. Microsoft Corp., 627 F.3d 859 (Fed. Cir. 2010). [Patent: 5,111,310]; SiRF Tech. Inc. v. Int'l Trade Commission, 601 F.3d 1319 (Fed. Cir. 2010); In re Abele, 684 F.2d 902, 214 U.S.P.Q. 682 (CCPA 1982) [Patent: 4,433,380].

[iv] Morales v. Square, Inc., No. 2015-1319, __ Fed. Appx. __ (Fed. Cir. 2015); Joao Bock Transaction Systems, LLC v. Jack Henry & Associate,No. 2015-1245, __ Fed. Appx. __ (Fed. Cir. 2015);  Hemopet v. Hill's Pet Nutrition, Inc., No. 2015-1218, __ Fed. Appx. __ (Fed. Cir. 2015); CMG Financial Services, Inc. v. Pacific Trust Bank, F.S.B., No. 2014-1855, __ Fed. Appx. __ (Fed. Cir. 2015); Retirement Capital Access Management Co., LLC v. U.S. Bancorp, No. 2015-1039, __ Fed. Appx. __ (Fed. Cir. 2015); In re Karpf, No. 2014-1773, __ Fed. Appx. __ (Fed. Cir. 2015);  Versata Dev. Group, Inc. v. SAP America, Inc., __ F.3d __ (Fed Cir, 2015);  Intellectual Ventures I LLC v. Capital One Bank 792 F.3d 1363 (Fed Cir, 2015); In Re Webb, No. 2014-1652, __ F.Appx __ (Fed Cir, 2015); Internet Patents Corp. v. Active Network, Inc., 790 F.3d 1343 (Fed Cir, 2015); OIP Technologies, Inc. v. Amazon.com, Inc., 788 F.3d 1359 (Fed Cir, 2015); Federal Home Loan Mortgage Corp. aka Freddie Mac v. Graff/Ross Holdings LLP, 604 F.Appx 930 (Fed Cir, 2015); Dietgoal Innovations LLC v. Bravo Media LLC, 599 Fed. Appx. 956 (Fed. Cir. 2015); Gametek LLC v. Zynga Inc., 597 Fed. Appx. 644 (Fed. Cir. 2015); Fuzzysharp Technologies Inc. v. Intel Corp., 595 Fed. Appx. 996 (Fed. Cir. 2015); Content Extraction and Transmission LLC v. Wells Fargo Bank, N.A., 776 F.3d 1343 (Fed. Cir. 2014); Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709 (Fed. Cir. 2014); buySAFE, Inc. v. Google, Inc., 765 F.3d 1350 (Fed. Cir. 2014); Planet Bingo, LLC v VKGS LLC, 576 Fed. Appx. 1005 (Fed. Cir. 2014); Digitech Image Techs., LLC v Electronics for Imaging, Inc., 758 F.3d 1344 (Fed. Cir. 2014);  Cyberfone Systems, LLC v. CNN Interactive Group, Inc., 558 Fed. Appx. 988 (Fed. Cir. 2014); SmartGene, Inc. v Advanced Biological Labs., 555 Fed. Appx. 950 (Fed. Cir. 2014). Accenture Global Services, GmbH v. Guidewire Software, 728 F.3d 1336 (Fed. Cir. 2014);  PerkinElmer Inc. v Intema Ltd., 496 Fed. Appx. 65 (Fed. Cir. 2012); Bancorp Services v. Sun Life, 687 F.3d 1266, 1278 (Fed. Cir. 2012); Fort Properties, Inc. v. American Master Lease LLC, 671 F.3d 1317 (Fed. Cir. 2012); Dealertrack Inc. v Huber, 674 F.3d 1315 (Fed. Cir. 2012); Cybersource Corp. v. Retail Decisions, Inc., 654 F.3d 1366 (Fed. Cir. 2011); Research Corporation Technologies Inc. v. Microsoft Corp., 627 F.3d 859 (Fed. Cir. 2010) [Patent: 5,341,228]; In re Ferguson, 558 F.3d 1359 (Fed. Cir. 2009); In re Comiskey, 554 F.3d 967 (Fed. Cir. 2009); In re Grams, 888 F.2d 835 (Fed. Cir. 1989); In re Meyer, 688 F.2d 789 (CCPA 1982); In re Abele, 684 F.2d 902, 214 U.S.P.Q. 682 (CCPA 1982) [Patent App: 04/850,892]; In re Maucorps, 609 F.2d 481, 203 U.S.P.Q. 812 (CCPA 1979).

Originally published November 13, 2015

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions