The US Supreme Court has today delivered its latest opinion on software patentability, bringing the world’s largest high-tech market more closely in line with tougher European practice. Handing down its opinion in the much awaited Alice Corp. v CLS Bank International case, it reconfirmed recent cases that make clear that implementation on a computer is, in itself, insufficient to make an invention patentable.

In today’s opinion – which considered patents directed to computer-implemented escrow arrangements – the Court made clear that the claimed generic computer implementation did not make an abstract method patentable. It held that to be patentable, a claim must instruct a practitioner to do more than implement the abstract idea on a generic computer. In this particular case, the Court held that the computer limitations added nothing to the inventive concept that was not present in the abstract method. It also held that claims directed to a computer-implemented method and an apparatus arranged to carry out that method must be considered analogously.

The Supreme Court’s opinion concurs with earlier decisions of European and UK tribunals that the substance, not the form of claims must be determinative of patentability.

This opinion ends a protracted legal battle between Alice Corp. and CLS Bank International, which began in May 2007, when CLS Bank International sought to have certain patents owned by Alice Corp. relating to a computerised trading platform declared invalid and unenforceable. Following a declaration by the District Court that all claims were unpatentable, Alice Corp. appealed to the Court of Appeals for the Federal Circuit, which in an en banc hearing in May 2013 reached "judicial deadlock" with the ten judges’ views as to the patentability of the asserted claims spanning the full spectrum of possible combinations.

Today’s news will hopefully add further clarity to the question of software patentability in the US. While much software will remain patentable, it will likely become more difficult to obtain patents for some computer-implemented business schemes. The US has, for some time now, been hardening its approach to software patentability, thereby bringing its practice more in line with European practice.

The Supreme Court’s opinion confirms that for a software invention to be patentable in the US, the computer must do more than merely automate an abstract business method. The Court’s reference to a requirement for improvement in ‘an existing technological process’ brings the US closer to Europe on this difficult issue than it has been for some time. It seems that both jurisdictions will now look for some technical ‘inventive concept’ if an invention is to be patentable.

European companies may need to reconsider their patent filing strategies as a consequence of this opinion. Strategies premised on the availability of US patents directed to relatively abstract business concepts may no longer be appropriate. Of course, a new judicial pronouncement like this in such a difficult area will cause some uncertainty until there is a body of decisions which makes clear how the law will be applied in practice.