Further information about patentability in the United States can be found in the Manual of Patent Examining Procedure (MPEP). This manual is published by the United States Patent and Trademark Office (USPTO) and is the reference manual used by both patent examiners and patent agents/attorneys. Chapter 2100, in particular, gives a comprehensive overview of the standards for patentability including the patentability of computer-related inventions and mathematical algorithms, a discussion of the related case law, and guidance on how to overcome an examiner's rejection of a given set of claims.
In the 1981 case of Diamond v. Diehr, the United States Supreme Court ordered the USPTO to grant a patent on an invention, even though a substantial part of the invention consisted of a computer program which used well-known formulae for calculating the time when rubber was cured and the mold could be opened. The Supreme Court stated that in this case, the invention was not merely a mathematical algorithm, but a process for molding rubber, which was therefore patentable.
After this point, more patents on software began to be granted, albeit with conflicting and confusing results. The United States Court of Appeals for the Federal Circuit (CAFC) eliminated any doubt as to the patentability of software in a series of rulings. The first, In re Alappat, explained that a novel algorithm combined with a trivial physical step constitutes a novel physical device. Therefore, a computing device on which is loaded a mathematical algorithm is a "new machine", which is patentable under traditional patent law. This was further bolstered in In re Lowry, which stated that a data structure representing information on a computer's hard drive or memory is similarly to be treated as a physical device. Patent examiners require the words "computer readable" in a software claim to distinguish over printed matter such as instructions printed on paper.
Finally, in State Street Bank & Trust Company v. Signature Financial Group, Inc., the CAFC ruled that a numerical calculation that produces a "useful, concrete and tangible result", such as a price, is patentable.
The United States Supreme Court was silent on these cases. The first commentary appeared in a dissenting opinion regarding the case of LabCorp v. Metabolite, Inc. Although certiorari had been granted, the Court rescinded it; the minority argued that the question of subject matter in patent law should be addressed. Notably, Justice Breyer's dissent stated that "[State Street] does say that a process is patentable if it produces a 'useful, concrete, and tangible result.' But this Court has never made such a statement and, if taken literally, the statement would cover instances where this Court has held the contrary." He continues to directly address the claim that software loaded onto a computer is a physical device: "......And the Court has invalidated a patent setting forth a process that transforms, for computer-programming purposes, decimal figures into binary figures-even though the result would seem useful, concrete, and at least arguably (within the computer's wiring system) tangible."
The Clinton administration appointed Bruce Lehman as Commissioner of the Patent and Trademark Office in 1994. Unlike his predecessors, Lehman was not a patent lawyer but the chief lobbyist for the Software Publishing Industry. In 1995, the PTO established some broad guidelines for examining and issuing software patents. The PTO interpreted the courts as requiring the PTO to grant software patents in a broad variety of circumstances. Note, that although the U.S. Congress has never legislated specifically that software is patentable, the broad description of patentable subject in the Patent Act of 1952 and the failure of Congress to change the law after the court decisions allowing software patents, has been interpreted as an indication of Congressional intent.
Another effect of this change was that as courts began to permit software invention to be patentable, other courts also began restricting the use of copyright law to obtain patent-like protection of software.