SAN FRANCISCO — ON Monday the Supreme Court is scheduled to hear arguments in perhaps the most important intellectual property case in a decade: Alice v. CLS Bank. Narrowly speaking, the case is a patent dispute over computerized escrow accounts. But more broadly, it offers the court an opportunity to resolve two decades of economically harmful confusion over how the law grants patent protection to computer software.

Since the mid-1990s the software patent system has operated by its own rules. Compared with patents for other innovations, those for software are granted using a very broad and lax standard of invention. Ordinarily, the law requires inventors to explain not just the result of an invention, but also how the invention actually works. If you invent a car that drives on water, you have to explain exactly how you get it to stay afloat. Not so for software: the mere idea of a floating car is enough.

The consequences of this lax standard have been disastrous. Because software patents can cover vast areas of territory, they are the weapon of choice for “patent trolls”: people or companies that hold patents but make no products, and bring patent-infringement lawsuits against companies that do make products, offering to settle for less than the cost of fighting the suit. Patent trolling is an extraordinarily lucrative but singularly destructive practice. A majority of patent lawsuits are now filed by parties using this strategy.

How did the law arrive at such a misguided approach to software patents? In short, through a simple misunderstanding about the nature of computer code.