History of Patent Law

The history of patents with respect to computer software revolves around five key cases involving the patenting of algorithms. The first of these cases was Gottschalk v. Benson. This involved a patent which Bell Laboratories filed for to protect code which converted decimals into binary numbers. The patent was originally denied by the U.S. Patent and Trademark Office. BitLaw, a comprehensive Internet resource on technology law, describes, "[The U.S. PTO] rationale was that patents could only be granted to processes, machines, articles of manufacture, and compositions of matter". [28]. In the end, the Supreme Court upheld this rationale, ruling that the patent office had made the correct choice in denying the patent. It rested on an argument which would be used in several future cases: that a computer to which an algorithm is added does not become a unique, patentable machine.

The second Supreme Court case centering on the patentability of computer algorithms was Dann v. Johnston. The technology in this case was a machine which sorted checks into categories by numbering them. Again the Supreme Court ruled that the patent was rightfully not granted by the PTO.

Parker v. Flook was the third case involving algorithms to reach the Supreme Court. This situation proved interesting because it was not a simple algorithm, but instead a complex software control. When the software monitoring the sensors involved in a chemical process recognized trends consistent with a dangerous runaway condition, an alarm was triggered. Despite the unique nature of the algorithm and the fact that the claim only covered petrochemical processing, the Supreme Court upheld the PTO again. The argument was that tying an algorithm to a specific use does not make it patentable.

In 1981, however, the landmark case--Diamond v. Diehr--was settled. In this case, the invention concerned was a method for curing rubber. The process involved a computer which calculated and controlled the level of heat applied to the rubber in the process. BitLaw explains, "The Supreme Court stated that in this case, the invention was not merely a mathematical algorithm, but was a process for molding rubber, and hence was patentable. This was true even though the only "novel" feature of this invention was the timing process controlled by the computer."

Finally, in 1989, In v. Iwahashi was settled. Though the matter involved a simplified method for calculations involving voice-recognition, the outcome of the ruling was profound: any algorithm could now be patented if presented in the correct format.

[29].