Section 101 of the Patent Act may provide the answer to reining in software patents

Recall in Bilski, the U.S. Supreme Court basically held the “machine or transformation” test to be okay, but not exclusive. However, the court rejected the Bilski patent as unpatentable under Section 101 of the Patent Act. 

Now, the Court of Appeals for the Federal Circuit (CAFC), has used Section 101 of the Patent Act to invalidate some patent claims. If the claims are simply "abstract ideas," they are not patentable under Section 101. By opening up Section 101 to wider scrutiny, the USSC made it much easier for other courts to reject patent claims. 

In this case, analyzed by Gametime IP, the claims concerned a patent from CyberSource that referenced matching transaction information to IP addresses to see if there was an indication of fraud. The court noted such a comparison was nothing more than an abstract idea, a “mental process,” not patentable under Section 101.

Is this a trend? It bears watching, as software patents continue to be under intense scrutiny.