WASHINGTON - The Supreme Court agreed on Friday to rule on the divisive issue of what kinds of software are eligible for patent protection in a case being closely watched by the technology industry.
The court's decision may prove key to deciding under what circumstances companies can be sued for using certain software in their products.
The court said in a one-line order that it would hear a case brought by Alice Corporation Pty Ltd, which holds a patent for a computer system that facilitates financial transactions. The patent is challenged by CLS Bank International.
The court took no action on another case raising the same issue involving a patent dispute between WildTangent Inc and Ultramercial Inc.
The deep interest that the software industry and patent experts have in what is a threshold issue in patent litigation was underscored by the number of companies and industry groups that asked the court to decide the issue.
Companies including Google Inc, Hewlett-Packard Co, Facebook Inc and Netflix Inc had already signaled their interest in the issue by asking the court to hear the WildTangent case. Many also filed briefs in lower courts.
With the rise of computer-based products in recent years, courts have struggled to apply patent law. Some legal experts, including the Electronic Frontier Foundation, a digital civil liberties group, say that courts are too keen to uphold patents on ideas that are too vague to deserve protection.
Such vague patents can be used against big tech companies, which say they are forced to spend money defending lawsuits instead of investing in research and development. Technology companies are particularly concerned about litigation brought by so-called "patent trolls," defined as companies that hold patents only for the purpose of suing other companies seeking to develop new products.