Software Patents versus Abstract Ideas: The Debate Continues

As an update to my posts from 2017, 2019, 2020, March 2021, and August 2021, it has now been 93 months since the U.S. Supreme Court’s 2014 Alice Corp. v. CLS Bank decision. Yet the debate still rages over when a software (or computer-implemented) claim is patentable versus being simply an abstract idea “free to all men and reserved exclusively to none” (as eloquently phrased over 73 years ago by then-Supreme Court Justice Douglas in Funk Bros. Seed Co. v. Kalo Inoculant Co.).

Further, it has been 11 years since famed venture capitalist Marc Andreessen wrote the influential and often-quoted op-ed piece in the Wall Street Journal titled “Why Software Is Eating the World.” Today, the digital transformation where software is “eating the world” is undeniable. Let’s look at some facts and figures from the USA, Europe, and China.

Software Patents in 2021

In 2021, M&A values in the technology sector exceeded USD 1 trillion, the highest year on record, with a 64% increase versus 2020. And, software deals accounted for almost half of all the technology sector’s deals by value, seeing an increase of 121% compared to 2020 [Allen & Overy]. The United States is the largest technology market in the world, representing 33% of the total estimated IT spend for 2022, followed by Europe at 19% and China at 14% [CompTIA].

So, given the above, we sought to determine what percentage of U.S. Patent and Trademark Office (USPTO), European Patent Office (EPO)-, and Chinese Patent Office (CNIPA)-issued patents are “software-related.”

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