Poverty, income levels drive minimum wage debate

WASHINGTON — "Give America a raise!" President Barack Obama implored Congress in his State of the Union address.

But it would cost jobs, Republicans warned.

The political divide over raising the federal minimum wage is deep, driven by politics, ideology and demographics. Democrats represent more low-wage workers than Republicans do.

According to the Census Bureau, nearly every congressional district with a large concentration of poor people is represented by a Democrat. There are 40 House districts where at least 20 percent of families live in poverty. Thirty-eight are represented by Democrats. The government defines poverty as an annual income below $11,670 for a single person living alone, and below $23,850 for a family of four.

Of the 100 poorest districts, Democrats represent 73.

The Census Bureau says 43 congressional districts have per capita incomes under $20,000 a year. All but 10 are represented by Democrats.

Obama and Democrats in Congress are making a big push to raise the federal minimum wage. It's part of their effort to highlight income inequality, an issue they plan to emphasize in congressional elections this fall.

"This will help families," Obama told Congress during his State of the Union Address. "It will give businesses customers with more money to spend."

Obama has endorsed a bill to gradually raise the federal minimum wage from $7.25 an hour to $10.10 by 2016. Senate Democrats are planning votes on a bill, but Republicans are working to block it.

House Speaker John Boehner, R-Ohio, isn't expected to bring the bill to a vote in the House.

"When you raise the price of employment, guess what happens?" Boehner said. "You get less of it."

A recent Associated Press-GfK poll found that 55 percent of Americans support a minimum wage increase, while 21 percent oppose it and 23 percent are neutral. But congressional districts don't always mirror national sentiment.

An analysis by the Congressional Budget Office highlights the political divide:

Democrats touted the finding that increasing the minimum wage would boost earnings for more than 16.5 million people while lifting 900,000 people above the federal poverty level by 2016.

Republicans noted that CBO also said employment would be cut by roughly 500,000 jobs.

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Mass. gas prices trickle down a penny

BOSTON — The price of a gallon of gas in Massachusetts has trickled down by a penny.

AAA Southern New England reports Monday that self-serve, regular is down to an average of $3.51 per gallon from last week.

The current price is a full nickel below the national average and 8 cents below the average at the same time last year, but still 3 cents per gallon higher than a month ago.

AAA found self-serve, regular selling for as low as $3.37 per gallon and as high as $3.69.

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Jury selection begins in Apple-Samsung case

SAN JOSE, Calif. — Jury selection began Monday in the latest legal battle between the fiercest rivals in the world of smartphones, with Apple and Samsung accusing each other, once again, of ripping off designs and features.

The trial in Silicon Valley marks the latest round in a long-running series of lawsuits between the two tech giants that underscore a much larger concern about what is allowed to be patented.

"There's a widespread suspicion that lots of the kinds of software patents at issue are written in ways that cover more ground than what Apple or any other tech firm actually invented," Notre Dame law professor Mark McKenna said. "Overly broad patents allow companies to block competition."

The latest Apple-Samsung case will be tried less than two years after a federal jury found Samsung was infringing on Apple patents. Samsung was ordered to pay about $900 million but is appealing and has been allowed to continue selling products using the technology.

Dozens of attorneys gathered in U.S. District Court for the latest legal skirmish in which Apple Inc. accuses Samsung of infringing on five patents on newer devices, including Galaxy smartphones and tablets. In a counterclaim, Samsung says Apple stole two of its ideas to use on iPhones and iPads.

"Apple revolutionized the market in personal computing devices," Apple attorneys wrote in court filings. "Samsung, in contrast, has systematically copied Apple's innovative technology and products, features and designs, and has deluged markets with infringing devices."

Samsung countered that it has broken technological barriers with its own ultra-slim, lightweight phones.

"Samsung has been a pioneer in the mobile device business sector since the inception of the mobile device industry," Samsung attorneys wrote. "Apple has copied many of Samsung's innovations in its Apple iPhone, iPod, and iPad products."

In the current case, Apple claims Samsung stole a tap-from-search technology that allows someone searching for a telephone number or address on the Web to tap on the results to call the number or put the address into a map. In addition, Apple says Samsung copied "Slide to Unlock," which allows users to swipe the face of their smartphone to use it.

Samsung countered that Apple is stealing a wireless technology system that speeds up sending and receiving data.

The most attention-grabbing claim in the case is Apple's demand that Samsung pay a $40 royalty for each Samsung device running software allegedly conceived by Apple. The figure is more than five times more than the amount sought in the previous trial and well above other precedents between smartphone companies.

If Apple prevails in the case, the cost to Samsung could reach $2 billion. Apple's costs, if it loses the litigation, are expected to be about $6 million. The costs could be passed on to consumers, experts said.

"You rarely get from the jury what you ask for, so companies aim high," said German patent analyst Florian Mueller. "But in my opinion this is so far above a reasonable level the judge should not have allowed it."

The problem, he said, is that each smartphone has thousands of patented ideas in it; Apple is challenging just five.

Throughout the three years of litigation, Samsung's market share has grown. One of every three smartphones sold last year was a Samsung, now the market leader. Apple, with a typically higher price, was second, with about 15 percent of the global market.

Apple claims the following Samsung products now infringe on Apple patents: Admire, Galaxy Nexus, Galaxy Note, Galaxy Note II, Galaxy SII, Galaxy SII Epic 4G Touch, Galaxy SII Skyrocket, Galaxy SIII, Galaxy Tab II 10.1 and Stratosphere.

Samsung claims the following Apple products infringe on Samsung patents: iPhone 4, iPhone 4S, iPhone 5, iPad 2, iPad 3, iPad 4, iPad mini, iPod touch (fifth generation), iPod touch (fourth generation) and MacBook Pro.

With the San Jose federal courtroom just a 15-minute drive from Apple's Cupertino headquarters, even jury selection can be difficult. In the previous case, several prospective jurors were dismissed because of their ties to the company.

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Minimum wage value falling but fairness is debated

WASHINGTON — The federal minimum wage has been below what's needed to keep a family of three out of poverty since 1980. It's also well shy of the peak of its buying power almost half a century ago.

Is the current $7.25 hourly minimum fair? Is now the time to raise it, and if so, by how much?

There is no objective answer. It depends on the political slant of lawmakers or the views of economists being asked.

Economic data over the minimum wage's 76-year history doesn't provide definitive help. It shows erosion over time in the plight of minimum-wage earners, but that reflects what the nation's political system has produced, not necessarily what's fair.

Democrats backed by President Barack Obama are preparing to force election-year votes on gradually increasing today's minimum to $10.10 by 2016, an effort that seems likely to fail in Congress but that Democrats hope will drive their supporters to the polls in November's congressional elections. Republicans generally oppose the proposal, saying it would cost too many jobs.

As a Senate clash over the issue approaches — perhaps this week — here's a look at the equity questions the dispute raises.

Q: What should be the minimum wage's goal?

A: Along with labor and liberal groups, Sen. Tom Harkin, D-Iowa, sponsor of the $10.10 push, says the aim should be to boost low-earners and their families over the federal poverty line.

As recently as 1979, when minimum-wage workers earned $2.90 hourly, they made an annual $6,032 for a 40-hour work week. That exceeded that year's poverty line of $5,784 for a family of three.

The following year, when the hourly minimum rose to $3.10, a full-time worker earned $6,448. But that dipped below that year's $6,565 poverty level for the same-sized family, and it's stayed beneath the threshold since.

The current $7.25 minimum leaves that worker earning $15,080, well below the 2013 poverty level of $18,552 for a family of three. By reaching $10.10 in 2016, minimum-wage workers would earn $21,008 — surpassing the nonpartisan Congressional Budget Office's poverty level projection for that year by around $2,300.

Q: What do Republicans say?

A: Many don't offer an alternative figure and say their counterproposal remains a work in progress.

Sen. John Thune, R-S.D., a leading GOP opponent of Harkin's bill, says an increase to $10.10 is unfair to low-wage workers because it would cost too many of them their jobs — around 500,000, according to a Congressional Budget Office report in February. That same report said 16.5 million low-paid workers would see higher earnings, and about 900,000 people would be lifted over the poverty threshold.

Thune says that while the federal minimum wage isn't going away, regional economies and hiring markets vary so much that states should be allowed to set their own minimum wage levels. All but five states already have minimums, but currently the law requires that the federal level prevails if it is higher than a state's.

Republicans and conservatives also say the focus should be on creating a stronger economy with more jobs and better educated workers who can demand higher wages and not have to rely on a federal minimum.

Q: Historically, has the minimum wage had the same buying power for workers?

A: No. Since it stays stagnant unless Congress votes to change it, its buying power has fluctuated widely and today is well below its peak.

The federal minimum wage first took effect in 1938 and was 25 cents. That was worth about $4.06 in today's dollars, its lowest value, according to the nonpartisan Congressional Research Service, which analyzes issues for lawmakers.

The minimum wage crested in value in 1968, when it was $1.60 but had $10.69 in buying power in today's dollars. That was well above today's $7.25.

The peaks and valleys of the minimum wage tend to reflect the political party in power. It didn't change during the 1980s under Republican President Ronald Reagan. The last increase was enacted under President George W. Bush in 2007 after Democrats took control of Congress.

Q: How has the minimum wage compared with workers' average earnings over the years?

A: By that measure, too, the minimum wage has taken some hits in recent years. It's another comparison that supporters cite to argue that it's time to boost the federal minimum.

According to the Congressional Research Service, minimum-wage earners fared best in 1968 compared with their co-workers in private industry. That year, the federal minimum of $1.60 was 54 percent of average private sector earnings of $2.95.

It's eroded since then. The current $7.25 federal minimum was just 36 percent of the $20.31 average in the private sector in November.

Q: Do conservatives concede that point?

A: No. They argue that if the real goal is improving the plight of low-income workers, it would be more efficient to increase the earned income tax credit. That program — started under GOP President Gerald Ford and expanded by Reagan — provides tax breaks to lower-earning families, including government cash payments if their credit exceeds taxes owed.

Conservatives say the credit is more effective because it wouldn't cost jobs and virtually all the money would go to poorer people. Because some minimum-wage workers are members of higher-earning families, about 30 percent of the higher earnings from an increased minimum wage would go to families making over triple the poverty level, the Congressional Budget Office estimates.

One problem: While a minimum-wage increase would be paid by employers, enlarging the earned income tax credit, a $60 billion program, would cost federal taxpayers. That's an additional drain on the Treasury that some Republicans oppose.

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Global stocks mostly up after Yellen comments

LONDON — Global stocks mostly rose Monday after U.S. Federal Reserve Chair Janet Yellen said interest rates in the world's largest economy would stay low for some time yet.

Yellen's comments shored up confidence in financial markets as they suggest the U.S. central bank will continue supporting economic growth despite its campaign to slowly reduce the size of its monetary stimulus program.

The Dow was up 0.8 percent at 16,454 while the S&P 500 was up the same rate at 1,872.81.

European stocks underperformed the global market, however, with Britain's FTSE 100 closing 0.3 percent lower at 6,598.37.

Germany's DAX shed 0.3 percent to 9,555.91 and France's CAC 40 lost 0.5 percent at 4,391.50 after a report showed another drop in inflation across the eurozone. The decline to a four-year low raises concerns of deflation and will add pressure on the European Central Bank to loosen its monetary policy on Thursday.

Earlier, in Asia, Japan's Nikkei 225 gained 0.9 percent to 14,827.83 as investors anticipated the government or the central bank would announce measures to offset the impact of a sales tax hike. Japan's sales tax will increase to 8 percent from 5 percent on Tuesday, a move needed to help stabilize government finances but also a possible setback to economic recovery.

Harumi Taguchi, principal economist at IHS Global Insight, said an unexpectedly weak industrial output report also added pressure for the Bank of Japan to pursue additional monetary easing.

Investors also increasingly expect that China's government will take measures to prevent a slowdown in the world's No. 2 economy. An official manufacturing survey due Tuesday might cement those views after another survey released last week show China's manufacturing at an eight month low.

Hong Kong's Hang Seng added 0.4 percent to 22,151.06 but China's Shanghai Composite shed 0.4 percent to 2,033.31. Australia's S&P/ASX 200 rose 0.5 percent.

South Korea's Kospi finished 0.2 percent higher after losing ground in early trading. The country's military returned fire into North Korean waters after shells from a North Korean live-fire drill fell south of the rivals' disputed western sea boundary.

Lee Sun-yub, an analyst at Shinhan Investment Corp., said the exchange of fire had little impact on foreign investors in South Korea while some local institutional investors used the incident to take profit.

In energy markets, benchmark crude for May delivery was down 30 cents at $101.37 a barrel in electronic trading on the New York Mercantile Exchange. The contract gained 39 cents to close at $101.67 on Friday.

In currencies, the euro was up 0.2 percent at $1.3782 while the dollar strengthened 0.1 percent against the Japanese yen, to 103.08 yen.

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Lufthansa cancels 3,800 flights due to strike

BERLIN — Germany's Lufthansa will cancel some 3,800 flights because of a three-day strike by the pilots' union later this week, hitting more than 425,000 passengers.

The cancellations include domestic and intercontinental connections Wednesday, Thursday and Friday, the airline said Monday.

"A strike of three consecutive days would be one of the biggest walkouts in Lufthansa's history," the company wrote in a statement.

A union representing pilots at Lufthansa called for the strike last week in a long-running pay dispute. Among other issues, the Vereinigung Cockpit union said Lufthansa had failed to make a "negotiable offer" during two years of pay negotiations.

Though the strike starts Wednesday, some Tuesday flights have been canceled for logistical reasons.

Lufthansa, Lufthansa Cargo and the company's budget airline Germanwings are all affected.

Passengers were being informed about the cancellations by text messages and emails, Lufthansa said.

The airline tried to rebook their customers onto other airlines and offered them the opportunity to use their plane tickets on trains in Germany instead.

Lufthansa said the strike would cost the airline tens of millions of euros.

Lufthansa had to cancel hundreds of flights last week when public-sector workers went on strike at seven German airports in a dispute that had nothing to do with the airline.

Lufthansa has been trying to cut costs amid tough competition from European budget carriers and aggressively expanding government-owned Gulf airlines.

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US stocks rise as investors close out quarter

NEW YORK — Stocks rose broadly in midday trading Monday as the market headed for its fifth straight quarterly gain. Microsoft led the technology sector higher.

KEEPING SCORE: The Standard & Poor's 500 index rose 15 points, or 0.8 percent, to 1,872 as of 12:15 p.m. Eastern. The Dow Jones industrial average rose 123 points, or 0.7 percent, to 16,446. The technology-heavy Nasdaq composite rose 53 points, or 1.3 percent, to 4,209.

BROAD GAINS: Twenty-eight of the 30 members stocks in the Dow average rose. Microsoft continued to rise after its Office for iPad software was released last week to highly positive reviews. Microsoft rose $1.04, or 3 percent, to $41.34. The stock is up 8 percent this month.

HEALTHCARE DEAL: Johnson & Johnson accepted an offer of about $4 billion from the private equity firm Carlyle Group to buy its Ortho-Clinical Diagnostics business. J&J said the deal for the blood-testing unit should close by mid-year. J&J rose 39 cents, or 0.5 percent, to $97.83.

QUARTER END: Trading is expected to be heavier and more volatile Monday as investors close out their first-quarter positions. At the end of each quarter, fund managers will often sell their worst-performing stocks and buy more of their best-performing stocks in an effort to make their portfolios look better when investors get their quarterly statements. The phenomenon has the Wall Street nickname of "window dressing." If the stock market closes higher Monday, it would be the fifth-straight quarterly rise for the S&P 500.

"There's a lot of re-allocation going on today," said J.J. Kinahan, chief strategist with TD Ameritrade.

YELLEN: In a speech, Federal Reserve Chair Janet Yellen said Monday that she thinks the struggling U.S. job market will continue to need the help of low interest rates "for some time." Her remarks come after investors have grown anxious that the Fed might raise short-term rates starting in mid-2015. Yellen has previously suggested that the Fed could start raising short-term rates six months after it halts its bond purchases, which most economists expect by year's end.

MORE GM WOES: General Motors fell 40 cents, or 1 percent, to $34.33. Congressional investigators released a memo Sunday that showed GM was familiar with its ignition switch defects in 2005, but did nothing to address the problem. GM's CEO Mary Barra is scheduled to appear in front of Congress Tuesday to address the automaker's recalls.

OTHER MARKETS: Bond prices fell. The yield on the 10-year Treasury note edged up to 2.74 percent from 2.72 percent late Friday. The price of crude oil slipped 42 cents to $101.25. Gold dropped $4.80 to $1,289.50 an ounce.

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Yellen: Job market needs low rates 'for some time'

WASHINGTON — Federal Reserve Chair Janet Yellen made clear Monday that she thinks the still-subpar U.S. job market will continue to need the help of low interest rates "for some time."

Yellen's remarks signaled that even after the Fed phases out its monthly bond purchases later this year, it has no plans to raise a key short-term rate anytime soon. The bond purchases have been intended to keep long-term loan rates low.

Her remarks sent a reassuring message to investors, many of whom had grown anxious that the Fed might raise short-term rates by mid-2015. Their concerns were stirred two weeks ago, when Yellen suggested that the Fed could start raising short-term rates six months after it halts its bond purchases, which most economists expect by year's end.

A short-term rate increase would elevate borrowing costs and could hurt stock prices.

But on Monday, Yellen indicated that the Fed still thinks rates should remain low to stimulate borrowing, spending and economic growth.

"I think this extraordinary commitment is still needed and will be for some time, and I believe that view is widely held by my fellow policymakers at the Fed," Yellen said in her first major speech since taking over the Fed's leadership in February.

Stocks, which had been up before Yellen began speaking, rose further on her remarks before slipping later. Low rates tend to lead some investors to shift money into stocks and thereby raise stock prices.

Speaking to a national conference on community reinvestment in Chicago, Yellen described the U.S. job market as less than healthy despite steady improvement since the recession ended nearly five years ago. She said the difficulty many people are still having finding full-time work shows that low rates are still needed to encourage borrowing and spending.

In an unusual touch for a speech by a Fed chief, Yellen described the personal stories of three people who had lost their jobs during the recession and struggled to find work.

"They are a reminder that there are real people behind the statistics," Yellen said. She noted the struggles of a medical claims processor, a printing plant worker and a construction worker who lost their jobs during the Great Recession.

"The past six years have been difficult for many Americans, but the hardships faced by some have shattered lives and families," she said. "Too many people know firsthand how devastating it is to lose a job at which you had succeeded and be unable to find another; to run through your savings and even lose your home."

Yellen said that while the unemployment rate has fallen from a peak of 10 percent in October 2009 to 6.7 percent in February, by many measures the job market remains weak. She said she and her Fed colleagues think an unemployment rate between 5.2 percent and 5.6 percent would be "consistent with maximum sustainable employment."

As she did at her first news conference two weeks ago, Yellen said she monitors measures beyond the unemployment rate in assessing the job market. These include the percentage of unemployed workers who have been out of work for more than six months and a gauge of people without jobs who have stopped looking for one or who have had to take a part-time job even though they would like full-time work.

"The recovery still feels like a recession to many Americans, and it also looks that way in some economics statistics," Yellen said. "In some ways, the job market is tougher now than in any recession."

Yellen's remarks came at a national conference on community development sponsored by the Fed and other banking regulators and the Treasury Department. Afterward, she toured a manufacturing lab at Daley College to observe a program to train students for high-tech manufacturing jobs.

Yellen presided over her first Fed interest-rate meeting on March 18 and 19. At that meeting, the Fed approved a third $10 billion cut in its monthly bond purchases to $55 billion. It's used the bond purchases to try to keep long-term rates low.

The Fed also dropped language from its statement that had said rates would likely remain low "well past" the time unemployment fell below 6.5 percent. Instead, it said it would review "a wide range of information" before starting to raise rates. It said it planned to keep short-term rates low for a "considerable time" after it stops buying bonds.

Asked at her news conference to define a "considerable time," Yellen said it "probably means something on the order of six months."

That comment rattled investors, who feared it could mean the Fed would start raising rates in the first half of 2015, earlier than many had expected.

Yellen's comments on Monday about the Fed's commitment to low rates could help convince investors that the first Fed rate increase will more likely come later.

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Dem push for health law rooted in demographics

WASHINGTON — While much of America was upset about the botched rollout of President Barack Obama's health care overhaul, most Democrats in Congress were still willing to give the law a chance to work.

Without the law, many of their constituents wouldn't have health insurance.

No new law has been more polarizing during Obama's presidency. It passed in 2010 without a single Republican vote, and GOP lawmakers have been railing against it ever since.

House Republicans have voted more than 50 times to repeal all or parts of the law. Almost all of their changes died in the Democratic-controlled Senate.

Why do Democrats and Republicans view this law so differently? Ideology plays a big role — Democrats are generally more willing than Republicans to look to government to help address people's problems.

Demographics shape the debate, too.

If a community has a large concentration of people without health insurance, there is a good chance it is represented by a Democrat in Congress. Of the 50 congressional districts with the most uninsured people, all but nine are represented by Democrats.

"Folks look at (the law) as a chance to have some peace of mind that, as I keep saying because it's so true in my district, that they don't have to worry about sending their son or daughter to the hospital with the fear that when they come home, they're also going to get a bill that will drive them into personal bankruptcy," said Rep. Xavier Becerra, D-Calif. "It's real. These are folks often living paycheck to paycheck."

About 251,000 people in Becerra's Los Angeles district — more than 36 percent — didn't have health insurance in 2012, according to the Census Bureau. That's the third-highest rate in Congress.

Rep. Marc Veasey, D-Texas, had the highest rate — 39 percent of his district. He has been working with groups in Texas to help people enroll in the new program.

The health care law is expected to provide coverage to an additional 25 million people by 2016, according to projections by the Congressional Budget Office. At that point, 91 percent of American citizens and legal residents would have coverage.

Nevertheless, even Republicans with large numbers of uninsured constituents don't like the law. They contend that the law's mix of taxes and mandates is killing jobs while making health insurance more expensive for many.

"I will continue to work with my colleagues in Congress to repeal Obamacare in order to protect Americans' access to the care they need, from the doctors they choose, at a price they can afford," Rep Mario Diaz-Balart, R-Fla., says on his website.

More than 32 percent of Diaz-Balart's south Florida district didn't have health insurance in 2012, the most for any Republican member of Congress.

In the average House district represented by a Democrat, 16 percent of residents had no health insurance in 2012, according to census data. In the average Republican district, 14.4 percent had no insurance.

The averages are that close in part because Democrats also represent the nine congressional districts with the fewest number of uninsured. All nine are in Massachusetts.

Massachusetts passed its version of the health law in 2006, when former GOP presidential candidate Mitt Romney was governor. By 2012, only 4.3 percent of Massachusetts residents had no health insurance, the lowest rate in the nation.

"It's the state version of the Affordable Care Act," Becerra said. "So for all those who say that this isn't going to work, you just have to look at the experience in Massachusetts to know that, give it time, and it will not only work but work well."

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Follow Stephen Ohlemacher on Twitter: http://twitter.com/stephenatap

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Supreme Court could limit software patents

WASHINGTON — Is it too easy for high-tech companies to patent inventions that are not really new, but simply take an old idea and blend it with computer wizardry?

The Supreme Court wrestled with that question Monday as justices considered making it tougher for the government to issue patents for computer software.

The outcome could send tremors through an industry that touches virtually every sector of the economy, from gadgets on smart phones to advances in anti-lock brakes.

The issue has divided the nation's technology giants, with companies like Microsoft Corp. and IBM warning that new restrictions could nullify thousands of existing patents that are the product of billions in research and development. On the other side, firms including Google, Facebook and Netflix say the free flow of software patents has become a "plague" on the industry, blocking companies from promoting innovation.

The justices weighed arguments in a case involving Alice Corp., an Australian financial company that in the 1990s patented a computer program to reduce the risk in financial transactions. The software allows a neutral third party to make sure all parties to a trade have lived up to their obligations.

New York-based CLS Bank International challenged the patent as invalid, arguing that Alice merely took a concept that has been around since ancient human history and programmed it to run through a computer.

Justice Anthony Kennedy suggested a bunch of second year college engineering students could come up with the same software over a weekend.

"My guess is that would be fairly easy to program," Kennedy told Carter Phillips, the attorney representing Alice.

Justice Stephen Breyer suggested the idea was no different than when King Tut of ancient Egypt used an abacus to keep track of how much gold to give away. If businesses can simply take an abstract idea and patent it because it runs on a computer, instead of true competition, "you will have competition on who has the best patent lawyer," Breyer said.

Phillips responded that Alice's system was much more complicated, allowing multiple parties around the world to settle transactions in real-time. He said the position CLS was taking meant that essentially no computer software would be eligible for patent protection. That would undercut hundreds of patents, including those that have been issued for word processing or browsing the Internet, he said.

Patents are the legal protection that gives inventors the right to prevent others from making, using or selling a novel device, process or application. Companies that obtain patents rely on costly litigation to prevent others from using them, unless they pay a licensing fee.

The Supreme Court has previously ruled that abstract ideas, natural phenomena and laws of nature cannot be patented. But the court has not laid out detailed criteria for determining when computer software patents are valid.

In recent years, the court has taken a stricter approach to patent law. Last year, the court ruled that human genes could not be patented, ending three decades of patent awards by government officials. In 2012, the court threw out patents that protected medical diagnostic tests.

The U.S. Court of Appeals for the Federal Circuit ruled that Alice Corp.'s patents couldn't be granted, but that court was hopelessly fractured, with no majority opinion. Only five of the 10-member panel of judges agreed that Alice merely took a well-settled economic concept and put it into a computer program.

One dissenting judge warned that the appeals court decision would "decimate the electronics and software industries" while another dissenter said it would cause "the death of hundreds of thousands of patents." Since the Federal Circuit's ruling was so divided, technology companies are hoping the Supreme Court offers more clarity.

Mark Perry, arguing for CLS Bank, said the computer must be essential to the operation of the program and not just an advance in technology. He said encryption technology that allows financial information to move securely over the Internet is an example of an invention worthy of a patent.

"This is not the death of software patents," Perry said. Noting that dozens of friend of the court briefs were submitted by major software companies mostly siding with CLS, Perry said: "The software industry is all before this court saying 'This is fine with us.' "

Solicitor General Donald Verrilli, arguing on behalf of the Obama administration, said the court could simply rely on recent precedents to find the Alice program didn't deserve a patent. But he urged the court to issue more clarity to help lower courts decide what is and isn't valid.

Verrilli said several factors should be considered, including whether the software improves how the computer functions or uses a computer to improve how another technological process works.

But Chief Justice John Roberts said he was "doubtful that that's going to bring about greater clarity and certainty."

A decision is expected by June.

The case is Alice Corp., v. CLS Bank International, 13-298.

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Follow Sam Hananel on Twitter at http://twitter.com/SamHananelAP

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