The U.S. Supreme Court case Parker v. Flook in 1977 revolved around the patent eligibility of a mathematical algorithm used in computer programming for alarm limits during catalytic conversion processes. The petitioner, Acting Commissioner of Patents and Trademarks, argued that while an abstract idea itself is not patentable, its application to a new and useful end should be considered as such under Section 101 of the Patent Act. However, respondent Dale R. Flook countered that his method was more than just an abstract principle because it involved updating alarm limits within existing technological processes. In a unanimous decision led by Justice Stevens, the court ruled against Flook stating that although he had discovered a novel and useful mathematical formula for computing updated alarm limits; this alone did not qualify him for patent protection since laws of nature, natural phenomena or abstract ideas are not eligible for patents according to established legal precedents. The court further clarified that merely applying these principles or formulas using some unspecified post-solution activity does not transform them into patent-eligible applications but rather they must be applied in developing inventions with significant practical utility beyond their inherent scientific value.

In the dissenting opinion for Parker v. Flook, Justice Stewart argued that the majority's decision to deny patent protection to a method of updating alarm limits during catalytic conversion processes was misguided. He contended that while laws of nature, physical phenomena and abstract ideas are not patentable, an innovative application of these concepts should be eligible for such protection. The algorithm in question was part of a larger process which had practical utility in the petrochemical and oil-refining industries; therefore it wasn't an abstract idea but rather a useful application deserving legal safeguarding. According to him, denying this patent would discourage future innovation by failing to protect inventors' rights over their unique applications of scientific principles or mathematical formulas within industrial processes.