The courts set a new record for rejecting software patents in 2014

Courts have recently grown increasingly hostile to software patents. A June Supreme Court ruling significantly limited the kinds of software inventions that are eligible for patent protection. And even before that ruling, there had been a dramatic increase in the number of legal decisions holding that software-related inventions were unpatentable.

The year isn't even over, but legal analytics firm Lex Machina has new data that shows 2014 has set a new record for cases in which a court rules that a patent shouldn't have been granted because the invention it claims — usually related to software — isn't eligible for patent protection.

This chart shows the number of trial court rulings that held that a patent was invalid based on section 101 of patent law. That's the section that defines what technologies are eligible for patent protection. As you can see, it has become much more common for the courts to rule that an invention isn't eligible for patent protection.

Leanne Rakers, a patent attorney at the law firm of Harness Dickey, isn't surprised at the recent surge of decisions invalidating patents based on their subject matter. She points out that in addition to this year's Supreme Court ruling, there were two previous Supreme Court rulings in 2012 and 2013, respectively signaling a need for stricter standards for what can be patented.

In 2014, the trial court rulings in the above chart were overwhelmingly focused on software patents, the subject of this summer's Supreme Court ruling. By my count, 17 of the 20 rulings were in software patent cases. Also, 17 out of 20 rulings have been made since the Supreme Court's decision.

Of course, there are a lot more than 17 software patents in the world, and rulings like this are never going to invalidate more than a small fraction of them. But Rakers says these rulings will shift the balance of power in every patent dispute. Patent holders, she says, "might not go through expensive litigation knowing that their claim is most likely going to be held invalid." At the same time, she said, "there are unresolved issues of what exactly is or is not patent-eligible subject matter." So expect to see a lot of litigation over this issue in the coming years.

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