US Supreme Court Decision Puts Software Patents In Jeopardy

September 1, 2014

In Alice Corp. v. CLS Bank International, SCOTUS affirmed a Federal Circuit decision invaliding a patent for using a computer to execute a well-established method of settling investment trades. Justice Thomas, writing for the Court, said that “merely requiring generic computer implementation fails to transform that abstract idea into a patent-eligible invention.” The plaintiff in the case, Alice Corp., is a non-practicing entity (also known as a “Patent Troll” because they use their patents to accuse others of patent infringement for large settlements or long-term licensing deals). Some commentators are praising the decision as bringing clarity to the gray areas in patent law that Patent Trolls use to intimidate businesses into paying them for licenses. Those in the software industry are concerned that the decision will stifle innovation.

TAKE AWAY: This case may have a devastating effect on patent protection for software and mobile apps. There are other avenues for protecting software and mobile apps, for instance copyright and trade secrets. It all depends on a number of variables such as the projected shelf life, the amount of testing and bug fixes needed before it can be marketed and the extent to which the company can keep the source code a secret.


The Trademark Trial and Appeal Board of the U.S. Patent and Trademark Office issued a monumental decision to cancel six registrations of the Washington Redskins. The basis for the cancellation was that the Redskins mark is a “scandalous or immoral” mark, which, under the Lanham Act (the federal trademark statute) is grounds to refuse or cancel registration. The team can still use these trademarks. It just no longer has registration. The team has appealed the ruling.

TAKE AWAY: Sometimes we have a ‘tin ear’ when it comes to choosing a trademark. It sounds good to us but to others it can be offensive or off-putting. For instance, it may be counterproductive to choose a logo design that is reminiscent of a symbol with a bad history. When choosing a trade name, logo or tag line, make sure that it doesn’t put a dark cloud over your product or service.


In 2010, photographer Daniel Morel took a series of photos of the aftermath of the Haiti earthquake. He posted them on his Twitter account. Agence France-Presse (“AFP”) took the photos and licensed them to Getty Images. Morel sued for copyright infringement. AFP and Getty Images argued that the Twitter terms of use allowed AFP to exert ownership over the photos and license them to Getty Images. A jury found against them and awarded Morel $1.2 million in statutory damages. In denying AFP and Getty’s motion to overturn the jury verdict, the court held that this type of intentional and willful disregard for Morel’s copyright justified the large award.

TAKE AWAY: This case has two primary take aways. First, not everything on the Internet is free for the taking. Second, carefully read the terms of service and use section of an agreement if you are going to use someone else’s creative content. The Twitter terms of service grant a license only to “Twitter and its partners.” AFP didn’t fall into the definition of a Twitter partner. AFP took the images, stamped its own identifier on them and then licensed them to Getty for its own personal gain. That use was certainly beyond the scope of Twitter’s terms of service.


Social media has given the public a forum for voicing opinions about everything. False negative reviews can drive away customers. But what about false positive reviews? False positive reviews can expose a business to claims of false advertising. The New York Times article titled “Give Yourself 5 Stars? Online, It Might Cost You” (New York Times, September 22, 2013) reported that New York regulators cracked down on deceptive false positive reviews on reputation websites such as Yelp, Google and Yahoo. Nineteen companies were forced to pay a

TAKE AWAY: Social media and reputation websites can be a great resource for business building. However, you can’t assume an alias and make up a review for your own product or service. Nothing stops you from advertising how good your products and services are. But you have to identify yourself as the source of the glowing report. To discuss how these issues

To discuss how these issues apply to your company contact:
Beverly A. Berneman (312)696-1221,


If it’s important for you to keep up to speed with the latest IP Law news, then be sure to read Golan & Christie’s new blog “IP News for Business” by Beverly Berneman. You’ll find the blog on our Web site starting November 3.

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