The Software IP Report

No CBM Patent Review for Delivering Files to a Cell Phone

A patent directed to wirelessly “delivering an audio and/or visual media file” was not a covered business method patent, leading the USPTO’s Patent Trial and Appeal Board (PTAB) to deny a petition to institute a covered business method review.  FaceBook, Inc. v. Skky LLC, Case CBM2017-00006, US Patent No. 9,215,310 (PTAB April 11, 2017).  Interestingly, one tactic that allowed the patent owner to succeed in eluding the petition was its selective disclaimer of dependent claims that could have been construed as covered business method claims.

The PTAB began by noting that the statutory definition of a covered business method as “operations used in the practice, administration, or management of a financial product or service” covered “a wide array of ‘monetary matters.’”  However, recently, the

PTAB’s reviewing court clarified the scope of CBM review, and held that the Board’s reliance on phrases in the legislative history, i.e., whether the patent claims activities “incidental to” or “complementary to,” a financial activity as the legal standard to determine whether a patent is a CBM patent, was not in accordance with AIA § 18(d)(1). Unwired Planet, LLC v. Google Inc., 841 F.3d 1376, 1379–82 (Fed. Cir. 2016); Secure Axcess, LLC v. PNC Bank Nat’l Ass’n, No. 2016-1353, — F.3d –, (Fed. Cir. Feb. 21, 2017).

The PTAB focused its analysis on whether disclaimed claims 2, 4, 11, and 14 should be disregarded.  Even if disclaimed claims are no longer part of the patent, the petitioner argued that these claims should be considered for purposes of covered business method analysis.  However, the PTAB, seeming to rely on the principle of claim differentiation, thought that, “[i]f anything, considering disclaimed claims 4 and 14, as Petitioner urges, further shows that claims 1 and 10 do not require a financial activity.”(Emphasis in original.)  The independent claims did not require any financial activity; the specification made clear that the financial activity recited in the independent claims was optional.  It may have been “contemplated” to charge a fee for the invention of independent claims 1 and 10, but it was not “required.”

Thus, the petition for covered business method review failed because

Petitioner, at best, establishes that the existing challenged claims encompass methods or systems that may include potential financial activity such as a sale. Petitioner’s showing is not sufficient, because “[a]ll patents, at some level, relate to potential sale of a good or service.” See Unwired Planet, 2016 WL 6832978, at *5. As Patent Owner argues, “[i]t is not enough that a sale has occurred or may occur, or even that the specification speculates such a potential sale might occur.” Prelim. Resp. 11 (quoting Unwired Planet, 2016 WL 6832978, at *8).

Lessons for Practice

As seen in a recent case related to this one, a statutory disclaimer typically forces the PTAB to treat a challenged patent as if it lacks the disclaimed claims.  Here the door was left open for the disclaimed claims to nonetheless inform the PTAB of the scope of the disclaimed claims.  This panel, at least, slammed that door shut.  Lessons?  Well, first, one could read this case as an example of the PTAB taking the opportunity to manage its growing docket.  And second, statutory disclaimers are clearly an effective scalpel for patent owners  trying to protect challenged patents.