The Evolution of Patents: The Digital Age

8. The Digital Age: How Patents Adapted to New Technologies

The digital age brought new challenges to the patent system, particularly in how it interprets and examines emerging technologies. The unique characteristics of software, algorithms, and internet-based innovations led to new landmark legal cases and motivated new policies.

Software Patents

As software became central to modern technology, patenting it introduced new legal challenges. Unlike most traditional inventions, which typically involve physical products, software is intangible. Additionally, the iterative nature of software development—in which updates often build on existing code—can make it difficult to distinguish between novel innovations and minor improvements.

Several landmark U.S. Supreme Court cases have shaped how software is patented. In Diamond v. Diehr (1981), the Court confirmed that abstract mathematical formulas cannot be patented. However, it ruled that if a machine or process uses a mathematical algorithm as part of a broader, patentable invention, it can qualify for protection.

The U.S. Supreme Court's decision in Bilski v. Kappos (2010) clarified that while abstract ideas cannot be patented, specific and practical applications of these ideas might be eligible for protection. In this case, the Court upheld the rejection of a patent application for a method of hedging financial losses in the energy industry, concluding that the abstract investment strategy described was not patentable. Read more about what kinds of inventions can be patented.

Later, in Alice Corp. v. CLS Bank International (2014), the Court clarified that merely applying an abstract idea on a computer isn’t enough for patent eligibility. This case led to a multi-step test to determine whether a software-related invention qualifies for patent protection. Read more about the USPTO’s multiple-step test for patent eligible subject matter.

Despite these hurdles, software patents remain critical for protecting innovation. Companies continue to adapt to these legal standards, which reflect the challenge of balancing technological progress with the need to avoid overly broad patents that stifle competition. Learn more about patenting software.

The Rise of the Internet and E-Commerce

The rise of the internet and e-commerce introduced a wave of technological innovations and new patent opportunities. As digital commerce and communication evolved, technologies such as virtual shopping assistance, secure online transactions, and web-based services became crucial areas for patent protection. Patents for these technologies have been vital for protecting intellectual property and fostering innovation in the rapidly growing e-commerce sector.

One notable example of patented e-commerce and business methods is Amazon’s 1-Click Ordering feature, which simplifies the online purchasing process by allowing customers to complete transactions with a single click. A recent example is Levi Strauss & Co.'s patent for “Systems for a digital showroom with virtual reality and augmented reality” (U.S. Patent No. 11562423). This patent showcases how traditional retailers are adopting digital technology to enhance customer engagement and streamline the shopping experience. Learn more about patenting business methods.

Patent Attorney Help Available Online

At Carson Patents, we specialize in helping inventors secure patent protection for their inventions. Contact us to schedule a free patent consult with our team, led by Gregory Carson, a USPTO-registered patent attorney, engineer, and inventor.

Bibliography:

Alice Corp. v. CLS Bank International, 573 U.S. 208 (2014).

Diamond v. Diehr, 450 U.S. 175 (1981).

Bilski v. Kappos, 561 U.S. 593 (2010).

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