The Supreme Court's decision did not clear up the issues of software patentability. The court basically acknowledged that there was a challenge in striking a balance between protecting inventors and stifling innovation, but they offered no solution to the problem.
"The patent application here can be rejected under our precedents on the unpatentability of abstract ideas." -Bilski decision
Although the Supreme Court did seem adamant about maintaining patents, the opinion did show some signs that the court understood that software is composed of abstract ideas. The Groklaw reading showed that certain passages give some degree of hope that the court may eventually come to believe that software is algorithms, and if their reasoning is applied to software patents they will eventually have to change the system to reflect this - meaning the process might remain patentable, but not the math used. Today's decision makes it pretty clear that you can't patent math.
More interpretations will certainly arise from this decision, and we'll have to wait and see how it affects future court decisions on software patents. Although the decision didn't bring the change that many hoped for, there are still some things to be optimistic about.
End Software Patents explains why it is important for courts to decide that software is unpatentable:
Every company is in the software business, which means that every company has software liability. We estimate costs of $11.2 billion a year due to software patent suits (see our 2008 State of Softpatents report), and not just by Microsoft and IBM—The Green Bay Packers, Kraft Foods, and Ford Motor are facing software patent infringement lawsuits for their use of the standard software necessary for running a modern business.
Software innovation happens without government intervention. Virtually all of the technologies you use now were developed before software was widely viewed as patentable. The Web, email, your word processor and spreadsheet program, instant messaging, or even more technical features like the psychoacoustic encoding and Huffman compression underlying the MP3 standard—all of it was originally developed by enthusiastic programmers, many of whom have formed successful business around such software, none of whom asked the government for a monopoly. So if software authors have a proven track-record of innovation without patents, why force them to use patents? What is the gain from billions of dollars in patent litigation?
Change is happening now. The 2008 ruling of the appeals court of the US Federal Circuit on the case in re Bilski narrowed the scope of what is patentable. Some experts even question if software patents are still valid at all in the US. ESP, under the direction of Ben Klemens, played a key role in this case. See our resources for lawyers page for details.
This site is an overview of how courts self-expanded their jurisdiction to include software despite the protests of practitioners such as Bill Gates or Adobe Microsystems, of the economic damage done, how the story is evolving today, and how your company can help to restore the software market to a world run by innovators, not judges.
You can find further interpretation of the decision on Groklaw.