The Supreme Court unanimously ruled Thursday against financial software firm Alice, saying that “the mere recitation of a generic computer cannot transform a patent-ineligible abstract idea into a patent eligible invention” (http://1.usa.gov/1lChQWR). The court affirmed a ruling at the U.S. Court of Appeals for the Federal Circuit that Alice couldn’t assert four of its patents on financial software against CLS Bank International because they were abstract. The case drew amicus briefs from multiple industry giants -- including Amazon, Facebook, Google, IBM, Microsoft, Netflix, Verizon and Twitter -- that mostly favored CLS Bank. The ruling, long expected to favor CLS Bank (CD April 1 p14), does not offer a clear delineation of what constitutes an abstract idea, experts told us. The Alice ruling does not constitute a wholesale rejection of abstract ideas’ patentability, but that the simple use of a computer to perform an abstract idea would “add nothing of substance to the underlying abstract idea,” Justice Clarence Thomas wrote in the court’s opinion. Had the court ruled otherwise, “an applicant could claim any principle of the physical or social sciences by reciting a computer system configured to implement the relevant concept,” the opinion said. “We tread carefully in construing this exclusionary principle lest it swallow all of patent law.” Inventions that involve transforming abstract ideas “’to a new and useful end'” remain patentable, the court said. Microsoft, which had favored a narrow Supreme Court ruling, praised the court in a statement for having “distinguished the Alice patent from software inventions.” The Supreme Court “went the right way” in its ruling, and “that they went unanimously the right way is a great sign,” said Matt Levy, Computer & Communications Industry Association patent counsel. CCIA also filed an amicus brief siding with CLS Bank. The court’s ruling reaffirms its previous precedent in Mayo v. Prometheus that abstract ideas aren’t patentable and extends that into the software sector, he said. “It might have been nice if they were able to give a more detailed test, but I understand why they didn’t,” Levy said. “As with any Supreme Court decision, the devil is going to be in the implementation details by the district courts and the Federal Circuit.” Justices Stephen Breyer, Ruth Bader Ginsburg and Sonia Sotomayor issued a short concurring opinion that appears to advocate for invalidating all business method patents, he said. The Alice ruling will likely eventually invalidate “the majority of all software patents in force today,” said Durie Tangri patent lawyer Mark Lemley. “You can patent particular improvements in computers, but you can’t patent using a computer or the Internet to implement your idea.” Lemley filed an amicus brief in Alice on behalf of a group of companies that included LinkedIn, Netflix, Rackspace, Twitter and Yelp (http://bit.ly/SWERXO), but noted he was not speaking to us on behalf of those companies. The ruling is likely to have the greatest impact on the Patent and Trademark Office’s Patent Trial and Appeal Board, where it had already “become much easier” to challenge patent eligibility with the implementation of the America Invents Act, said Miles & Stockbridge patent lawyer James Carmichael, former administrative patent judge at PTAB. “This is going to be a great sword in the quiver of patent challengers wanting to cancel patents at PTAB.”

Google stands behind the methodology used in its Video Quality Report for YouTube and “plans to expand” use of the tool into countries outside the U.S. and Canada, a spokesman told us. Google’s Video Quality Report is continuing to operate even as Netflix has ended its small-scale test of messages explaining the cause of video latency on some ISPs (CD June 18 p7). The Google report displays information about the streaming quality on a user’s ISP and rates what level of video quality definition a user can reasonably expect will allow for smooth playback using that ISP’s service. The Google spokesman referred us to a report on its methodology, which says the firm uses automated systems to collect information about the user’s ISP and location to determine which ISP video quality information to display,. Those automated systems may receive inaccurate location information, Google said. The ratings are based on information about the amount of data transferred based on a user request and the amount of time it takes to transfer the data, Google said (http://bit.ly/1nPD8iq).

The number of Tariff Act Section 337 patent investigations at the International Trade Commission has dropped since a spike in 2011, said an ITC report. The ITC began 69 investigations in 2011, after initiating about 30 in 2009 and nearly 60 in 2010. It began 42 investigations in 2013, up from about 40 in 2012. There is controversy over patent cases brought by “non-practicing entities” that don’t manufacture the product under investigation, said the commission’s report June 10 (http://1.usa.gov/1sm2IjU). But since 2006, only 20 percent of Section 337 complaints were filed by non-manufacturing companies, said the ITC. They succeeded in getting only four exclusion orders banning imports of infringing products, and in all four cases the company developed the technology at issue instead of buying the patent, it said.

Half of all U.S. broadband homes will own at least one smart home device by 2020, Parks Associates said in a study released Monday. “Consumer adoption of smart home solutions is growing at a rapid pace,” said Tom Kerber, director-home controls and energy research, in a news release (http://bit.ly/1lstD3Y). “Our research shows 43 percent of U.S. broadband households are willing to purchase a smart home package that offers home management, safety, or security features. Industry leaders are growing 100 percent year over year as the smart home market, which is a key segment within the Internet of Things, is booming."

The International Trade Commission stayed a cease-and-desist order Wednesday while the U.S. Court of Appeals for the Federal Circuit considers whether data transmissions are “articles” that can be imported and can violate Section 337 of the Tariff Act. The ITC had issued the order against ClearCorrect in April, barring the company from transmitting files to the U.S. that it uses to manufacture invisible realignment braces via a 3D printer. The agency had said the transmission of the files over the Internet constitutes importation, and that the files violated patents held by Align Technology. ClearCorrect filed an appeal on May 2. The ITC said it doesn’t usually stay Section 337 remedial orders, but will do so in the case because the issue of whether data is an article that can be imported is an “admittedly difficult question.”

Candidate submissions for membership on ICANN’s Coordination Group for NTIA’s transition of the Internet Assigned Numbers Authority (IANA) are due July 2, said an ICANN news release (http://bit.ly/1hJi7Gv). The group, which will have 27 members, will be a new body within ICANN to help guide the transition, said ICANN’s “Next Steps” proposal (http://bit.ly/1q4zTqg) for the IANA transition. Thirteen ICANN groups and committees will have Coordination Group representatives, including the At-Large Advisory Committee (two members); Country Code Names Supporting Organization (four members); Generic Names Supporting Organization (three members); Governmental Advisory Committee (two members); Internet Engineering Task Force (two members); and Internet Society (two members), it said. The committees are encouraged to have their candidate submissions filed by the end of the ICANN 50 conference (http://bit.ly/ScSgL2) June 26, said ICANN.

Voters are much more likely to vote for candidates favoring Electronic Communications Privacy Act updates than for those who don’t back updating ECPA, and 84 percent of voters said it’s time for an update, said polling from the Digital 4th Coalition, which supports refreshing the act (http://bit.ly/1pH85WG). The coalition of civil liberties and conservative groups commissioned Vox Populi to poll registered and active voters in six states and one city -- Arkansas, Colorado, Georgia, Nevada, New Hampshire, Virginia and Los Angeles -- during the week of May 26. “Americans of all ages, genders, political affiliation and races want their online privacy protected,” Digital 4th said. Voters who spent the most time online were also most likely to support ECPA updates, it said. Digital 4th wants Congress to pass the Email Privacy Act (HR-1852), which would update the ECPA to require a search warrant of all remotely stored electronic communications.

The Copyright Alert System (CAS) is a “non-punitive, voluntary effort,” and Comcast doesn’t want to “disrupt” its customers’ Internet access, said a company spokesman Monday. More information about CAS’s mitigation measures for repeat infringers is necessary to determine the viability of the program, said copyright experts in interviews (CD June 10 p9). The idea behind CAS is to have an “educational conversation” with consumers who infringe, said the Comcast spokesman. Repeat infringers using Comcast will receive a “persistent in-browser notification” until the customer contacts the ISP, he said. “Account termination is not an option,” he said. AT&T won’t “terminate a subscriber’s Internet service as part of the CAS program,” said a spokesman by email. AT&T’s mitigation measures “will temporarily redirect the user to a landing page that will require the account holder to review educational material on Copyright,” he said Monday. “Upon completion, the customer will be released from the landing page, and no further action will be taken under the program terms."

Retail ISPs may have an incentive to “discipline and punish upstream ISPs, content distributors and content creators that refused to pay a surcharge,” Pennsylvania State University law professor Rob Frieden told several FCC officials at the closed portion of a net neutrality regulation workshop May 30, said an ex parte filing posted Tuesday to docket 14-28 (http://bit.ly/1kighad). ISPs have several options to provide “enhancements to conventional ‘best efforts’ routing of traffic,” Frieden said. “Better than best efforts” routing is a form of price and quality-of-service discrimination, but such paid prioritization can occur without making it possible for ISPs to engage in unreasonable discrimination unblocking of traffic, he said. Content distribution networks and negotiation between content providers and ISPs provide interconnection alternatives to the traditional peering and transiting arrangements, he said. Due to risk of “artificial congestion and other tactics to leverage, or coworkers higher payments” that may result in more disputes, the commission should require ISPs to disclose interconnection arrangements that deviate from the traditional “best efforts” standard, he said. “ISPs have solidified their control over the Internet ecosystem, despite the conventional wisdom that content rules,” Frieden said in an attached presentation (http://bit.ly/1kigtq7). The presentation was part of a two-day agency symposium on the future of broadband regulation (CD May 30 p9)).

By 2024, nearly nine in 10 new cars sold worldwide will have embedded connectivity, “offering huge potential for mobile operators,” said U.K. research firm Analysys Mason in a report Tuesday (http://bit.ly/1jisVGP). In-car connectivity “has come full circle” since Bell introduced the first car phone in 1946, it said. “Vehicle manufacturers are bringing many models to market during 2014 and 2015 with embedded cellular connectivity, giving consumers an early glimpse of what is possible when the automotive and telecom worlds collaborate.” In the next decade, when it’s expected nearly half the cars in use will have embedded connectivity, “consumers will expect their experiences inside the car to be aligned with their experiences outside of the car, meaning that they will want access to all the apps and services they are used to in their modern digital lifestyles,” the report said. “They will also expect their streaming media and infotainment services in their cars to have the same degree of reliability and uptime as they do when they tune in to FM radio. As a consequence, mobile network operators will have to rethink how they build-out their next-generation 4G networks.”