Washington --

The Supreme Court tossed out an Australian company's patent for business software Thursday in a decision that clarifies standards for awarding patents, but not as much as some firms had hoped.



The software at issue allows a neutral third party to make sure all parties to a financial trade have lived up to their obligations. CLS Bank International claimed the patent was invalid.


Dozens of technology firms - including Google and Facebook - submitted briefs asking the high court to restrict the free flow of software patents they say are often too vague and can block innovation. But other companies, including IBM, warned that too many new restrictions could nullify thousands of patents and discourage companies from investing in research and development.


He said the ruling makes it easier for companies to argue that flimsy patents should not have been granted in the first place.

But Jennifer Spaith, a Seattle patent attorney, said the court could have offered more guidance on how patent standards should apply to the latest innovations, including wearable technology, cloud computing and social media, that are changing how people communicate and work.


