ALGORITHM EXCEPTION

algorithm exception.Patents. The general rule that an abstract mathematical function, such as

an algorithm, cannot be patented. • The exception was first articulated by the U.S. Supreme Court

in Gottschalk v. Benson, 409 U.S. 63, 93 S.Ct. 253 (1972). The rule was undermined by State St. A

Bank & Trust Co. v. Signature Fin. Group, 149 F.3d 1368 (Fed. Cir. 1998). In that case, the court

decided  that  a  machine’s  transformation  of  numerical  data  into  a  calculated  share  price  was  a

sufficient and  practical application  of a  mathematical algorithm, formula, or  calculation because

the   final   share   price   was   “a   useful,   concrete   and   tangible   result.”   —   Also   termed

mathematical-algorithm exception. [Blacks Law 8th]