Covered Business Method Patent Review

How Expansive Is the Definition of “Covered Business Method Patent?”

The USPTO’s Patent Trials and Appeals Board (PTAB) has held that patent claims directed to “de-identifying health care data” are directed to a “covered business method” under Section 18 of the America Invents Act.  Symphony Health Solutions Corp. v. IMS Health, Inc., Case CBM2015-00085 (Patent 8,473,452 B1) (PTAB Sept. 10, 2015).  The PTAB held that a CBM patent’s claims need not “particularly target the financial industry.”  It is enough that the “challenged claims recite a system and method used in the practice, administration, or management of financial services and products.” The PTAB found that U.S. Patent No. 8,473,452 “relates to a system and method for gathering and analysis of health-care related data as well as techniques for de-identifying [i.e., scrubbing] individuals from pharmaceutical data, in order to maintain privacy.”  The claims included an electronic data store, and could be performed by a conventional computer.  One disclosed use for the system was “to make business decisions,” including relating to sales and marketing. The Patent Owner argued “that the ’452 patent has no particular relation to the financial services industry, and does not “particularly target” the financial sector.”  Further, the Patent Owner expressly disclaimed claims that smacked of financial data; these claims… Read More »How Expansive Is the Definition of “Covered Business Method Patent?”

PTAB Finds Patent Claims Directed to Organizing Digital Images Patent-Ineligible in CBM Review

The Patent Trial and Appeal Board (“PTAB”) has held all claims of U.S. Patent No. 7,260,587 patent-ineligible under 35 U.S.C. § 101, and the rubric of Alice Corp. v. CLS Bank.  Bank of America, NA v. Intellectual Ventures II LLC, Case CBM2014-00033 (PTAB May 18, 2015). The claims of the ’587 patent are directed to organizing and searching digital images. According to the ’587 patent, a customer categorizes a plurality of hard copy prints, e.g., personal photographs, and associates a pre-ordered, machine readable instruction form to each category. Thereafter, a service provider digitally scans the plurality of prints and instruction forms while maintaining the respective category, and stores the digital image files with the associated category onto a digital storage medium. Per a customer order, the service provider produces a product incorporating images from one or more categories as requested. The patent owner argued that the claims were not directed to an abstract idea because the claims purportedly do not “fall within any of the categories of abstract ideas enumerated by the Supreme Court.” Additionally, the patent owner argued that the conceptual method for organizing digital images requires a machine because digitizing and organizing hard copy prints via an instruction… Read More »PTAB Finds Patent Claims Directed to Organizing Digital Images Patent-Ineligible in CBM Review

PTAB Invalidates Financial Administration Patent Claims in CBM Review

Patent claims directed to “administration of financial accounts” are not patent-eligible under 35 U.S.C. § 101, held the Patent Trial and Appeal Board (“PTAB”) during a Covered Business Method (“CBM”) post-grant review. The final written decision from the PTAB found all claims of U.S. Patent No. 8,083,137 unpatentable under 35 U.S.C. § 101. Intellectual Ventures I LLC v. PNC Financial Services, Case CBM2014-00028 (PTAB May 18, 2015). The ’137 patent claims systems and methods for administration of financial accounts for users of credit cards, debit cards or other facilities. A profile stored in a database is keyed to a user’s identity where the user can establish pre-set spending limits on various user-selected categories and be notified of the spending. The patent owner was not able to establish that the claims relate to a “technological invention.” The PTAB credited the testimony of the petitioner’s expert witness as evidence that the ‘137 patent claims are directed to an abstract idea. Specifically, the claims on their face are “drawn to creating a budget, which is an abstract idea relating to a fundamental economic practice.” Additionally, the PTAB stated that the claims are “directed to mental steps that can be performed by a human.”… Read More »PTAB Invalidates Financial Administration Patent Claims in CBM Review

A District Court’s Denial of a Motion to Stay Is Not Appealable After a Petition Seeking a CBM Review Proceeding at the PTAB Has Been Filed (but not Granted)

The Federal Circuit has dismissed, for lack of subject matter jurisdiction, a denial of a motion to stay where petitions had been filed, but not granted, seeking covered business method (“CBM”) reviews  at the Patent Trial and Appeal Board (“PTAB”). Intellectual Ventures II LLC v. JPMorgan Chase & Co., 2015 U.S. App. LEXIS 5204 (Fed. Cir. Apr. 1, 2015). The accused infringer’s motion for a stay had been denied by the district court.  Intellectual Ventures II LLC v. JPMorgan Chase & Co., 13 Civ. 3777 (AKH) (S.D.N.Y. Aug. 11, 2014). The district court applied the four-factor test set forth in § 18(b)(1) of the America Invents Act (“AIA”), and concluded that overall judicial efficiency would be best served (i.e., the dispute would be resolved more quickly) by litigating the case in district court. The districts court’s main rationale was that the PTAB would first need to consider whether to even grant the petitions for CBM review. The district court noted that the PTAB is allowed to take twelve months to complete a CBM review, and this timeline could be extended another six months. The district court estimated that this procedure could take up to “four years,” as opposed to being… Read More »A District Court’s Denial of a Motion to Stay Is Not Appealable After a Petition Seeking a CBM Review Proceeding at the PTAB Has Been Filed (but not Granted)

Broad Interpretation of “Financial Product Or Service” and an Abstract Idea Makes Patent Claims Directed to Insurance Valuation Eligible for Covered Business Method Review

The USPTO’s Patent Trial and Appeal Board (PTAB) has instituted a Covert Business Method (CBM) review of three patents claiming methods for obtaining valuation reports relating to damaged vehicles for automobile insurance claim purposes. The PTAB thought that claims of U.S. Patent Nos. 7,912,740, 8,200,513, and 8,468,038 were directed to a “financial product or service” and thus were eligible for CBM review. Further, the PTAB thought it more likely than not that the claims were invalid for reciting patent-ineligible subject matter under 35 U.S.C. § 101, as well as obvious under 35 U.S.C. § 103. The PTAB’s three separate orders regarding the respective patents may be downloaded here, here, and here; the orders are very similar and for convenience this blog post focuses on the order relating to the ’740 patent. Section 18(d)(1) of the America Invents Act (AIA) defines a “covered business method patent” as one that “claims a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service.” However, “patents for technological inventions” are explicitly excluded from the scope of covered business method patents. Claim 1 of the ’740 patent recited “[a] method for… Read More »Broad Interpretation of “Financial Product Or Service” and an Abstract Idea Makes Patent Claims Directed to Insurance Valuation Eligible for Covered Business Method Review

What Is a “Covered Business Method Patent”?

In several recent cases, the Patent Trial and Appeals Board (PTAB) at the United States Patent and Trademark Office has rejected a petitioner’s contention that the patent claims put in issue encompassed a “financial product or service.” Accordingly, in these cases the PTAB declined to institute Covered Business Method (CBM) Review proceedings under § 18(d)(1) of the America Invents Act. Accused infringers wanting to use the CBM procedure should take note that there is a limit to how aggressive the PTAB will be in characterizing patents as encompassing a covered business method. According to Section 18(d)(1) of the AIA, a covered business method patent is one “that claims a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service,” excluding “patents for technological inventions.” Parties accused of infringement can petition the PTAB for a Post-Grant Review of covered business method patents on various grounds, including alleged invalidity under 35 U.S.C. § 101, in addition to under prior art provisions, 35 U.S.C. §§ 102, 103. Here are summaries of these recent cases in which the PTAB denied petitions for CBM review on the grounds that the patents… Read More »What Is a “Covered Business Method Patent”?

Initiation of CBM Review on Section 101 Grounds Justifies Stay of Patent Case

The Federal Circuit has affirmed the decision of Judge Stark in the District of Delaware to stay a lawsuit alleging infringement of U.S. Patent No. 6,625,582 following the U.S. Patent and Trademark Office’s decision to institute a Covered Business Method (CBM) review of the ’582 patent. Benefit Funding Systems, LLC v. Advance America Cash Advance Centers, Inc., Nos. 2014-1122, -1124, -1125 (Fed. Cir. Sept. 25, 2014). The district court had found that all statutory factors weighed in favor of a stay. On appeal, the patent owner argued that the PTAB did not have authority to consider, in a CBM, the question of patent-eligibility under 35 U.S.C. § 101. The Federal Circuit, in an opinion by Chief Judge Prost for a unanimous panel, while telegraphing disagreement, found that it did not need to reach this question to affirm the district court’s decision. Procedural Background One of the defendants, U.S. Bancorp, had filed a petition for a CBM Review with the USPTO’s Patent Trial and Appeal Board (PTAB) under the America Invents Act, Pub. L. No. 112-29, § 18, 125 Stat. 284, 329–31 (2011) (“AIA”), ten months after the plaintiff initiated litigation. The district court denied U.S. Bancorp’s initial motion for a stay,… Read More »Initiation of CBM Review on Section 101 Grounds Justifies Stay of Patent Case

PTAB Invalidates Business Method Claims in CBM Review

Inter partes review (IPR) and post-grant review proceedings conducted by the Patent Trial and Appeal Board (PTAB) at the United States Patent and Trademark Office are emerging as a potent tool for invalidating patents. Under the Covered Business Method (CBM) PG-Review available to accused infringers, the PTAB can invalidate patent claims under 35 U.S.C. § 101, in addition to under prior art provisions, 35 U.S.C §§ 102, 103. A good example of this trend is found in Salesforce.com, Inc. v. VirtualAgility, Inc., Case CBM2013–00024 (PTAB Sept. 16, 2014), where the PTAB invalidated claims of U.S. Patent No. 8,095,413 under Section 101, in addition to finding the claims anticipated under Section 102. Summary of the Patent under Review Claim 1 of the ’413 patent was directed to “[a] system for supporting management of a collaborative activity by persons involved therein, the persons not being specialists in information technology, the system being implemented using a processor and a storage device accessible to the processor.” The patent described acquiring data sets to represent a model entity, e.g., an organization having customer relationships, processes, capabilities, economic information, etc.  A first data set could be associated with a second data set so that entities could… Read More »PTAB Invalidates Business Method Claims in CBM Review

Covered Business Method Patent Found Likely Patent-Eligible Under 35 U.S.C. § 101

The Patent Trial and Appeal Board (PTAB) at the United States Patent and Trademark Office has arguably held that business method patent claims may be patent-eligible under 35 U.S.C. § 101. In PNC Bank v. Secure Axcess, LLC, Case CBM2014-00100 (PTAB Sept. 9, 2014), the PTAB held that U.S. Patent No. 7,631,191 was eligible for Covered Business Method review to be instituted under 35 U.S.C. § 324. However, the PTAB was “not persuaded Petitioner has demonstrated that it is more likely than not that the claims challenged in the Petition are unpatentable under 35 U.S.C. § 101.” Therefore, while instituting a CBM review because it found that the Petitioner was likely to prove the patent claims obvious under 35 U.S.C. § 103, the PTAB denied Section 101 as a ground for the proceeding. Claim 1 of the ’191 patent recites as follows: A method comprising: transforming, at an authentication host computer, received data by inserting an authenticity key to create formatted data; and returning, from the authentication host computer, the formatted data (i) to enable the authenticity key to be retrieved from the formatted data and (ii) to locate a preferences file, wherein an authenticity stamp is retrieved from the… Read More »Covered Business Method Patent Found Likely Patent-Eligible Under 35 U.S.C. § 101

Precedential PTAB Decision Provides Reminder That PG Patent Review Is Barred By Prior Civil Action Challenging Validity

On November 15, 2013, SecureBuy, LLC, petitioned the US Patent and Trademark Office for review of U.S. Patent No. 7,051,002 under the America Invents Act’s transitional program for covered business method patents. Two weeks earlier, on November 1, 2014, SecureBuy had filed actions in two different federal district courts seeking a declaratory judgment of invalidity of the ’002 patent. The Patent Trial and Appeal Board (PTAB), in a decision it has now designated as precedential, dismissed the petition because it was precluded by the prior civil suits. SecureBuy, LLC v. Cardinal Commerce Corporation, Case CBM2014-00035 (PTAB April 25, 2014). The PTAB explained that 35 U.S.C. § 325(a)(1) was controlling. Provisions of the America Invents Act provide for parties sued for infringing “covered business method patents” to institute post-grant proceedings. However, Section 325(a)(1) clearly states that “[a] post-grant review may not be instituted under this chapter if, before the date on which the petition for such a review is filed, the petitioner or real party in interest filed a civil action challenging the validity of a claim of the patent.” Accordingly, the PTAB’s analysis was simple. The Board explained that SecureBuy, two weeks prior to filing its petition for post-grant review… Read More »Precedential PTAB Decision Provides Reminder That PG Patent Review Is Barred By Prior Civil Action Challenging Validity