An idiosyncratic investment of National Australia Bank has come to an end, crushed by a unanimous decision of the Supreme Court of the United States.The court ruled on Alice Corporation versus CLS Bank International, a complex legal wrangle that turned on how software is patented.Melbourne inventor Ian Shepherd, through his company Alice Corporation Pty Ltd, filed a series of patents in the early 1990s in the US and elsewhere.NAB acquired a stake in Shepherd's business in 1995 and has invested A$26 million in Alice Corporation since then, including a top up of US$700,000 during the period of the court appeals. The bank holds 50 per cent of the ordinary shares and all of the preference shares in the company.NAB's investment in Alice Corp was one of a series it made in high-minded IT innovations that entangled the bank in drawn out litigation.Alice Corp sought to enforce patents that the firm said described the operating model of the specialist foreign exchange bank, CLS.The patents covered a method by which banks exchange obligations through the use of shadow credit and debit records held by a supervisory institution. The patents describe the priority order and limitations that apply to the processing of the obligations, and the need for each bank to maintain a credit balance in the shadow record.Alice Corp claimed that CLS Bank used an approach mirroring the business methods covered by its patents.Established in 1997 by several of the world's major banks, CLS Bank is a collaborative enterprise that aims to curtail (and almost eliminate) settlement risk.  It arose from the then usual practice of delayed settlement on foreign exchange transactions. Scores of banks and other financial institutions now own CLS, including NAB and Australia's other major banks.The Supreme Court ruled that "because the claims are drawn to a patent-ineligible abstract idea, they are not patent eligible."The claims at issue are directed a patent-ineligible concept: the abstract idea of intermediated settlement."Like risk hedging, the concept of intermediated settlement is a fundamental economic practice long prevalent in our system of commerce, and the use of a third-party intermediary (or clearing house) is a building block of the modern economy."A "method which merely require generic computer implementation, fail to transform that abstract idea into a patent-eligible invention," the court held.