“Covered Business Method” Is Not Anything Under the Sun, Says Federal Circuit

Claims directed to “managing distribution of location information generated for wireless communications devices,” do not recited a “covered business method” within the meaning of the America Invents Act, said the Federal Circuit in Unwired Planet, LLC v. Google, Inc., No. 2015-1812 (Fed. Cir. Nov. 21, 2016).  The court thus remanded the case to the Patent Trial and Appeal Board (PTAB), vacating the PTAB’s Final Decision that claims of U.S. Patent No. 7,203,752 were unpatentable under 35 U.S.C. § 101.

The Court considered claim 25 of the ’752 patent as representative:

A method of controlling access to location information for wireless communications devices operating in a wireless communications network, the method comprising:

receiving a request from a client application for location information for a wireless device;

retrieving a subscriber profile from a memory, the subscriber profile including a list of authorized client applications and a permission set for each of the authorized client applications, wherein the permission set includes at least one of a spatial limitation on access to the location information or a temporal limitation on access to the location information;

querying the subscribe profile to determine whether the client application is an authorized client application;

querying the subscriber profile to determine whether the permission set for the client application authorizes the client application to receive the location information for the wireless device;

determining that the client application is either not an authorized client application or not authorized to receive the location information; and

denying the client application access to the location information.

AIA § 18(d)(1) defines a “covered business method patent” as

a patent 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, except that the term does not include patents for technological inventions.

The parties did not dispute that the ’752 patent was for a technological invention; the question was whether the patent claimed “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.”  The PTAB, in its Decision to Institute a CBM proceeding, had somewhat tortuously reasoned that

The ’752 patent disclosure indicates the “client application” may be associated with a service provider or a goods provider, such as a hotel, restaurant, or store, that wants to know a wireless device is in its area so relevant advertising may be transmitted to the wireless device.   See ’752 patent col. 11 ll. 12–17. Thus, the subject matter recited in claim 25 of the ’752 patent is incidental or complementary to the financial activity of service or product sales.  Therefore, claim 25 is directed to a method for performing data processing or other operations used in the practice, administration, or management of a financial product or service.

Not so fast, said the Federal Circuit.  Noting that “this ‘incidental’ or ‘complementary’ language is not found in the statute,” but rather was provided by Senator Schumer to the USPTO, the court discounted the import of this single legislative statement, especially when weighed with other, inconsistent, statements.  CBM patent claims, the court explained, had to have something to do with the “practice, administration, or management of a financial product or service.”  The court further pointedly explained that

The patent for a novel lightbulb that is found to work particularly well inbank vaults does not become a CBM patent because of its incidental or complementary use in banks. Likewise, it cannot be the case that a patent covering a method and corresponding apparatuses becomes a CBM patent because its practice could involve a potential sale of a good or service. . . . Does the sale of the dirt that results from use of the ditch digger render the patent a CBM patent? No, because the claims of the ditch-digging method or apparatus are not directed to “performing data processing or other operations” or “used in the practice, administration, or management of a financial product or service,” as required by the statute. [Citation omitted.]  It is not enough that a sale has occurred or may occur, or even that the specification speculates such a potential sale might occur.

In light of its determination that the ’752 patent was not a Covered Business Method patent, the court did not need to reach the issue of Section 101 patent-eligibility.

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