The Patent Trial and Appeal Board (PTAB) has denied institution of CBM patent review, as a claimed trading turret system did not constitute a financial activity. Cloud9 Tech. LLC v. IPC Systems, Inc., CBM2017-00037 (Pat. 8, 189,566 B2).
Cloud9 sued IPC for patent infringement and in response, IPC petitioned for CBM patent review. The test of whether a patent qualifies for CBM patent review includes two distinct aspects: (1) the “financial product or service” inquiry; and (2) the “technological invention” exception. The PTAB focused its analysis on the first element, finding it dispositive here.
The ‘566 patent, titled “Software based trading turret,” recites (emphasis added):
a turret switching system constructed to communicate to a Web server, a turret device, and to a remote communications device via a first communications network, the Web server being constructed to communicate to a client device via a second communications network, and the client device constructed to control switching across a plurality of lines; and
an interface having a button sheet corresponding to a plurality of line selectors and constructed to seize a corresponding line by causing the client device to communicate a predetermined message to the turret switching system over the second communication network.
Petitioner IPC argued that turret switching system encompassed financial activity—pointing to the specification which describes the turret switching system as “a specialized telephony switching system that allows a relatively small number of users to access a large number of external lines and provides enhanced communication features such as hoot-n-holler, push-to-talk, intercom, video and large-scale conferencing” and which is “often utilized in the financial industry such as trading floor environments, as well as security/law enforcement, utilities, healthcare, and customer support (e.g., contact centers) environments” (emphasis added).
The PTAB denied CBM patent review because it found that neither the turret switching system nor the turret [switching] device explicitly referred to trading or any other activity that arguably could be financial. The system pertains to a telephony switching system having specific telecommunication features and while the term “trading” is used, this term is not limited to financial activity (e.g., being usable for security/law enforcement, utilities, healthcare, and customer support (e.g., contact centers) environments, etc.”).
Lessons for Practice
If the scope of a claim could be construed to be financial activity commensurate with CBM patent review and drafter of a patent application wishes to avoid such review, the drafter should prepare the specification and claims broadly enough to encompass technical implementations as well. For example, as in the ‘566 patent, while the specification states that the turret trading system could be used in trading floor environments, it also cites other possible implementations: security/law enforcement, utilities, healthcare, customer support centers, etc. The patentee’s case may have been strengthened further if the term ‘trading’ had been omitted from the patent’s title and independent claim 13.