- Until the 1970s it was impossible under U.S. patent law to patent processes executed using an algorithm--instead, all that could be obtained was copyright protection of the algorithm itself. In the 1970s, U.S. courts began allowing the USPTO to issue software patents. Since around 2000, however, court decisions and USPTO policy have tightened restrictions in this area.
- A software copyright protects the algorithm itself against copycats. A software patent, by contrast, protects a "new and useful process"--in other words, the function of the software instead of its algorithm. Since unique algorithms obtain automatic copyright protection as soon as they are recorded, there is no danger that someone could steal a software algorithm, use it to perform a new function and patent that usage to exclude the original software developer.
- U.S. patent law is designed to protect mechanical processes rather than mere designs that are embedded in algorithms. For this reason, patent lawyers attempt to frame an invention seeking patent protection as a computer system executing an algorithm rather than the algorithm itself. The distinction between the two as it applies to patentability is ambiguous in many cases.
- In order to be granted a patent, a new invention is expected to be "non-obvious" to the average learned practitioner in the field to which the invention belongs. Since software tends to evolve quickly, critics assert that the USPTO has been patenting software of "obvious" novelty--software that is somewhat unique but lacks the creative leap that defines the non-obviousness prong of the test for patentability.
- The current legal standard for software patentability was defined by the case In re Bilski. It allows a process to be patented if it is either attached to a particular machine or apparatus, or if it transforms one article into something else. It is still not clear to what extent a general-purpose computer can be considered a "particular machine" for the purpose of applying this standard. Legal standards are expected to continue to evolve in this area.
