Can I get a patent on my software idea? That’s one of the most common and complex questions an inventor asks. The answer has shifted over the decades, but since 2014, the U.S. legal system has settled into a framework that is challenging, yet navigable.

Yes, you can still patent software and business methods. But the way to a valid patent is now a lot more calibrated and a lot more technically demanding than it was in the dot-com era.

The basic business idea can no longer be secured through patenting if the only thing that makes it patentable is adding “on a computer” to it. The legal test today requires that anything eligible for a patent not only be novel and nonobvious but also be a genuine technical innovation.

This post explains today’s patent-eligibility legal test, the current key court cases that define it, and what you can and should do to tilt the odds in your favor when it comes to your application. Success today requires proving something far more substantial than a basic business idea.

The Foundational Hurdle: § 101 and the “Abstract Idea”

The entire debate centers on one part of U.S. patent law: 35 U.S.C. § 101. This law delineates which categories of inventions can receive a patent. Although it appears to be uncomplicated, courts have established three exceptions to patent eligibility:

• Natural laws (like gravity)
• Natural phenomena (such as a recently uncovered mineral)
• Abstract ideas (like a mathematical formula or a basic economic practice)

Courts and USPTO treat inventions in software and business methods as being directed to abstract ideas almost all the time. This means immediate and intense scrutiny.

The Game-Changer: The Alice Two-Step Framework

The 2014 decision by the Supreme Court in Alice Corp. v. CLS Bank International was a significant event. The court set forth a two-part test to figure out whether a patent claim directed to an abstract idea is also directed to a patent-eligible invention.

Step 1: Is the patent claim “directed to” a patent-ineligible concept?

For software or for a business method, the answer is nearly always yes, because the claim’s core is considered to be an abstract idea (like managing a financial transaction, organizing information, or automating a known business process).

This type of invention seldom gets through Step 1, so the genuine battle lines are drawn in Step 2.

Step 2: If yes, is there an “inventive concept”?

This is the vital issue. The court seeks an “inventive concept” that turns the abstract notion into something “significantly more.” For a claim to be patentable, it must encompass parts that:

• Enhance how the computer works.
• Unconventionally resolve a technical issue.
• Use the abstract idea in a specific, non-generic way that involves technology.

Merely asserting “put it on a computer” or using a run-of-the-mill computer to make an age-old human activity happen faster and more efficiently isn’t how you carve out that creative space. Take the example of escrow. You can’t patent that idea by saying you’ve imagined a computer-enabled escrow.

Key Post-Alice Cases: The Rules of the Road

Since Alice, the Court of Appeals for the Federal Circuit (the primary U.S. patent court) has issued several key decisions that have provided clarity on what qualifies as an “inventive concept.”

• Enfish, LLC v. Microsoft Corp. (2016): A foray into software patents in the courtroom; this case was a big win for software patents. The patent was for a self-referential database, a specific kind of storage mechanism that was supposed to work better than all the traditional ways. The court held it was patent-eligible because it was directed to an improvement in the computer functionality, and not mere the computer as an add-on tool.
• McRO, Inc. v. Bandai Namco (2016): This patent dealt with automating the lip-sync animation process in video games. More specifically, it covered a method that used certain, very unconventional, though specific, rules to achieve the goal of the invention. The court here also held the invention to be patent-eligible because of the specific rules of the invention lending a technical solution to a problem resulting in a tangible improvement over the prior art.
• American Axle & Manufacturing, Inc. v. Neapco Holdings (2019): A cautionary tale. This patent involved a method for making driveshafts that are quieter and more durable. The court invalidated it, finding the claims were directed to a natural law (Hooke’s Law, to be precise) without adding a sufficient inventive concept. This case highlights the Alice framework’s ongoing aggressiveness, even toward mechanical inventions, and has created significant uncertainty in the legal community.
• Recentive Analytics, LLC v. Fox Television Stations, LLC (2024): A Warning for AI Patents. This recent case offers a vital lesson for inventions relating to Artificial Intelligence. The patent in question claimed a system that employs predictive analytics to generate television advertising proposals. However, the Federal Circuit found the claims to be patent-ineligible. The court’s reasoning is rather straightforward. Simply putting “AI” or “predictive analytics” into a patent claim isn’t a sure-fire way to overcome Alice. The Federal Circuit, more or less stated that the problem that was being solved in the claimed invention seems to be an abstract idea and that the actual practice of what the patent is attempting to define has existed for a long time. In essence, it was a modern “do it on a computer” problem, where the known analysis was being performed at a much quicker rate by the computer.

Practical Guidance for Inventors and Businesses

The entryway to patenting software and business methodologies is still open, but it’s a narrow path that’s heavily guarded by the Alice framework. The paradigm has shifted. Today, a brilliant business concept is merely the starting point for seeking a patent. Eligibility is almost entirely dependent on your idea’s technical implementation and, more importantly, the new and nonobvious way in which your implementation accomplishes the idea’s goals. In short, the how has become far more important than the what.

In the present environment, a software invention that can be patented typically does one or more of the following:

• It addresses a problem that is clearly technical (think: reducing network latency, more efficient database queries, or a much more secure way to encrypt data) rather than merely business or social in nature.
• It improves the performance and/or the capabilities of the computer or network itself (as was the case in Enfish).
• It applies a set of specific, unconventional rules to reach a technical result that wasn’t reachable before (McRO’s forte).

Although the obstacles are great, the payoffs for obtaining a meticulously written software patent are still impressive. A solid patent can furnish a key defensive weapon in a closely contested market, erect a substantial barrier to entry for would-be competitors, entice venture capitalists to invest, and mightily jack up the valuation of a company in a future acquisition.

In the end, you must treat your patent application not as a business plan and not as a scheme for a future operation but as a technical document that will stand up in court. Every word must count; every claim must be specific and serve as testament that you have solved a particular technical problem. By concentrating on the way you have solved that problem and on why your solution is an unconventional improvement over the status quo, you can turn your idea from a scheme into a profitable operation.