The Supreme Court yesterday handed down a decision in a landmark case, known as Alice Corp v CLS Bank. Here’s a link to the decision.

In a nutshell, Alice Corp was issued a patent for a computer implemented payment system. CLS Bank argued that the patent was invalid because it took an existing system and simply implemented “well known” steps on a computer.

The Supreme Court agreed with CLS and said that patents are not valid if they generically implement an existing abstract idea on a computer.

This could have the effect of invalidating a number of existing “method” type patents.

Software makers had watched the case closely amid concern that a broad high-court ruling against Alice could have rendered even highly inventive software patents vulnerable to attack.

BSA, a trade association representing Microsoft Corp. and other software makers, said the opinion “will help everyone distinguish abstract ideas that are not patentable from real software inventions that are.”

The decision avoided broad new pronouncements and stuck closely to precedent, but observers said it could strike a blow against a proliferation of weaker software patents.

It will likely be a while until the effects of this decision shake out.