Legal Definitions - mathematical-algorithm exception

The mathematical-algorithm exception is a rule that states that an abstract mathematical function, such as an algorithm, cannot be patented. This means that you cannot patent a mathematical formula or calculation by itself.

For example, if someone came up with a new algorithm for calculating prime numbers, they would not be able to patent it because it is just a mathematical formula.

However, there is an exception to this rule. If the mathematical formula or calculation is used in a practical and useful way, it may be eligible for a patent. For instance, if the algorithm is used to control a machine or produce a tangible result, it may be patentable.

One example of this is the State St. Bank & Trust Co. v. Signature Fin. Group case. In this case, the court decided that a machine's transformation of numerical data into a calculated share price was a practical application of a mathematical algorithm. The final share price was considered a useful, concrete, and tangible result, so it was eligible for a patent.