Trading Technologies: Successful Software Patents

January 20, 2017
Post by Blog Staff

In Trading Technologies v. GQG, the Federal Circuit addressed the patentability of software directed to a specific purpose. Trading Technologies owns patents for a computerized method and system for trading stocks, and other related goods. The method relies on improved software and user interface to facilitate stock transactions at a faster and more efficient pace. The system as a whole therefore decreases the time spent placing an electronic trade, thus increasing the user's chances of having orders filled at optimal prices and quantities. The lower court considered whether this system was patent eligible material within the meaning of statute and the Supreme Court's opinion in Alice Corporation Pty. Ltd. V. CLS Bank International.

In Alice, the court determined that a patent's claim is not patent eligible material where it is "directed to"a patent-ineligible concept, (such as natural phenomena or laws of nature) and the elements of the claim do not add enough to "transform the nature of the claim"into something patent eligible. Partly because of the holding in Alice, the Federal Circuit has been hesitant to view software as patent eligible subject matter. However, in Trading Technologies, the Federal Circuit noted that some types of "technologic modifications"to improve functioning of a system generally produce patent eligible material. In particular, "for some computer-implemented methods, software may be essential to conduct the contemplated improvements."Trading Technologies' system clearly improves the accuracy of trader transactions, albeit through software. Thus, because the claimed subject matter of the patents is "directed to a specific improvement to the way computers operate,"the user interface method "imparts a specific functionality"in a program designed to solve a specific problem, rendering it patent eligible subject matter.

As of January 18, 2017, when the case was decided, Trading Technologies Int'l v. GQG, Inc. was not a precedential decision. Given that this short case provides an affirmative example of software deemed to be patent eligible subject matter—certainly, a rare thing—those working with software patents or other disciplines frequently seen as directed to patent-ineligible concepts should make good use of this case's persuasive weight.

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