WASHINGTON -- The Supreme Court unanimously ruled Thursday that basic business methods may not be patented, even if computers are used to apply them.
The case, one of two unanimously decided by the court Thursday, involved a method for reducing the risk that parties in a transaction will not pay what they owe. Writing for the court, Justice Clarence Thomas said that was "a patent-ineligible abstract idea."
"Merely requiring generic computer implementation," he said, "fails to transform that abstract idea into a patent-eligible invention."
Patent claims over the way ideas are incorporated into computers, cellphones and other devices have become a challenge for many high-tech companies.
Many of those companies have interests that tug in opposite directions. They tend to hold large portfolios of valuable patents and want to protect them. But they must also contend with "patent trolls," companies that have obtained patents on sometimes vague concepts and that are more active in the courthouse than on the production line.
The patents at issue in Thursday's case were owned by Alice Corp., which developed a method for mitigating settlement risks among multiple parties.
The patents were challenged by CLS Bank International, which says it clears $5 trillion in foreign exchange transactions a day using methods to ensure that both sides perform. Alice Corp.'s patents, the bank said, merely recited "the fundamental economic concept of intermediated settlement of escrow."
A trial court invalidated Alice's patents, saying they recited only abstract concepts. That decision was effectively affirmed by the U.S. Court of Appeals for the Federal Circuit, a specialized court in Washington that hears patent disputes. But the decision was badly fractured, with seven opinions, none of which commanded a majority.
The Supreme Court affirmed that judgment in the Alice Corp. v. CLS Bank International, No. 13-298, saying Alice's idea was a fundamental economic practice and "a building block of the modern economy." The use of a computer added nothing, Thomas wrote.
In another ruling Thursday, the court shielded public employees from being punished or fired if they testify in court against their superiors, ruling that the First Amendment protects those who tell the truth and reveal corruption.
Such testimony is "speech as a citizen for First Amendment purposes" and deserves to be protected, the court said in a 9-0 decision.
The ruling revives a lawsuit by a former Alabama community college official. He testified against a state legislator who was drawing a paycheck from the college but doing no work. After his testimony, the official was fired.
Edward Lane sued several top college officials, saying he was fired for telling the truth, in violation of the First Amendment.
He lost in the lower courts, which dismissed his claim on the grounds that First Amendment does not protect public employees for exposing internal wrongdoing.
The Supreme Court had ruled similarly in a 2006 case involving the Los Angeles district attorney's office. That decision sharply limited the free speech rights of public employees.
In Thursday's opinion, the justices said testifying in court is protected because it is not part of an employee's "ordinary job duties."
The decision in Lane v. Franks revived the ex-official's lawsuit and sent it back to a lower court.
Information for this article was contributed by Adam Liptak of The New York Times and by David G. Savage of the Tribune Washington Bureau.
A Section on 06/20/2014