If you look at CLS Bank v. Alice, the Court concludes that intermediated settlement is an abstract idea because it is "a fundamental economic principle." So to use your example, data compression (replacing frequently-repeated sequences with a shorter representation) might be a "fundamental computer science principle." But Lempel-Ziv-Welch, a specific compression algorithm, wouldn't be.
Basic Lossless compression can function like this:
Imagine a string of 1's and 0's e.g. 10010000011000101111001
This string can be trivially compressed in a losses manor using this algo, every time the bit changes to a one or zeor, record the previous run of bits. So we would compress this string to look like: [1,1][0,2][1,1][0,5][1,2][0,3][1,1][0,1][1,4][0,2][1,1]
I understand now this is a terrible example however it is good enough here.
So since most/all compression algos are just using a pre-defined set of choices on how to compress data in either a lossless or lossy manor. The only difference between two compression algos would be their rules for what data to keep and how to arrange it more efficiently into a different data structure.
I think the analogy of board games can be used here. While you are free to get a trade mark on many aspects of your game, you can not patent the actual rules or game play. http://www.copyright.gov/fls/fl108.html
The rules and game play is what makes Risk different from mouse-trap.
Replace rules with compression algo (or any software algo...) and we come to the conclusion of software is not patentable.
So at what point does a collection of fundamental computer science concepts become patentable?
The line is completely arbitrary using the compressions algo example. I honestly have not been able to reason through a real life example that hold up to this scrutiny.
Maybe I am misinterpreting your answer, so if I am, I apologize, just ignore me =D
EDIT
Thanks to person for the discussion free down vote. Why engage when you can suppress.
There's a good argument to be made that the cost of the line drawing exceeds the benefits. I don't think it does, generally, but maybe it does for software. That said, I think you should make some money if you invent LZW. I don't like the idea of an economy where you can't make money off R&D unless you package it into a product with lots of advertising and sales people. I don't think that creates the best incentives.
I think the second example provides a great illustration of the divide between software patent proponents and detractors. Some people think a thing like LZW should be patentable, because they imagine inventing something on that scale of ingenuity and want to be able to make money off of it. Other people, in the scope of a larger project, usually, come up with things on the scale of ingenuity of LZW compression and are exasperated to discover that someone else patented it a few years prior and wants prohibitively large licensing fees, rendering the technology unusable; they don't think such things should be patentable because from their perspective it reduces innovation.
I've often heard the claim that game rules are uncopyrightable but that they might possibly be patentable.
Despite your assurances, I am uncomfortable with this decision. Indeed, I am uncomfortable with Gottschalk v. Benson. I don't think a bright line exists between patent-eligible software and ineligible algorithms -- in this I agree with the Vox article. I would much rather have seen a decision that invalidated this patent on the grounds that taking an existing manual process and computerizing it is, by itself, obvious.
