Dann v. Johnston
Headline: Court reverses patent-appellate decision and blocks a patent on a computerized bank bookkeeping system, making it harder for this inventor and others to patent similar banking software.
Holding: The Court held the inventor’s computerized bank bookkeeping system obvious and unpatentable under the law barring patents on ideas that would have been obvious to a skilled practitioner, and reversed the patent-appellate court.
- Prevents the inventor from receiving a patent for this bank bookkeeping software.
- Makes it harder to patent similar bank computer programs as new inventions.
- Leaves unresolved the general question of patentability of computer programs.
Summary
Background
An inventor applied for a patent on a machine system sold as a computer program that lets banks give customers categorized subtotals of checks and deposits. Customers label each transaction with a category code; the bank reads the codes with magnetic ink, stores them in transaction files, and a programmed computer produces individualized statements showing category subtotals. The Patent Office examiner and Board rejected the claims on several grounds, including that they were obvious and indefinite; the Court of Customs and Patent Appeals (CCPA) reversed and found the system to be within the technological arts.
Reasoning
The core question was whether the inventor’s system was patentable or was obvious under the law that bars patents for ideas that would have been obvious to skilled practitioners (35 U.S.C. § 103). The Supreme Court focused on prior uses of data processing in banking and on an earlier Dirks patent for business data processing. The Court concluded that a person reasonably skilled in the field, aware of both existing banking computer uses and the Dirks system, would find the inventor’s combination obvious. The Court therefore reversed the CCPA and held the claims unpatentable as obvious.
Real world impact
The decision prevents this inventor from obtaining a patent on the described banking bookkeeping program and makes it harder for similar software-based banking inventions to succeed as patents on obviousness grounds. The opinion did not decide the broader question whether computer programs are patentable in general and remanded the case for further proceedings consistent with its ruling.
Dissents or concurrances
At the earlier CCPA stage the court split 3–2, with the CCPA majority viewing the system as technological and distinguishable from Benson; two Justices here did not participate.
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