The Software IP Report

PTAB Denies Petition for CBM Review of Patent Directed to ATM Banking Transactions: a Portent for Patent-Eligibility of Business Methods? (Maybe Not)

By Charles Bieneman

Categories: Covered Business Method Patent Review, Patent Eligibility, The Software IP Report

The USPTO’s Patent Trial and Appeal Board (PTAB) has denied a petition for Covered Business Method (CBM) Review of U.S. Patent No. 6,081,792, whose claims recite methods of “providing money or an item of value to an account-holder” and “paying on behalf of a person for money or an item of value, from an account of the person held by a custodian of the account based on a bank account.” Petition for Covered Business Method Patent Review by NRT Technology Corp., CBM2015-00167 (PTAB January 22, 2016). The PTAB agreed that the claims were directed to a business method, with no technological invention; therefore, the claims were eligible for CBM review. However, the PTAB then found that the Petitioner had failed to demonstrate that it was more likely than not that the the claims were invalid under 35 U.S.C. § 101.

At first blush this seems to be a surprising result. The ’792 patent claims are all about sending and receiving information about transactions between banks and account holders, just the kinds of claims that other PTAB panels, and many district courts, have been invalidating since the Supreme Court’s 2014 decision in Alice Corp. Pty Ltd. v. CLS Bank Int’l. However, recall that a denial of a petition for review is different from a final order. In that light, the PTAB’s Order at a minimum supports speculation that the result here was driven at least in part by the PTAB’s apparent dissatisfaction with the Petitioner’s arguments, not by a robust consideration of the merits of the Section 101 patent-eligibility question.

Finding That the Claims Were Eligible for CBM Review

The definition of a CBM patent set forth in the America Invents Act requires that claims be directed to “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.” AIA § 18(d)(1). The Patent Owner did not dispute that the first prong of the CBM definition was met, and thus the only question was whether the ’792 patent recited a “technological invention.” The PTAB found that it did not.

Any technological elements recited in the ’792 patent claims, the Patent Owner did not dispute, including a “terminal, processor, ATM network, and POS network were present in the prior art.” Further, the PTAB rejected the Patent Owner’s contention that there were any new or innovative elements in the recited combination of software and hardware. The PTAB explained that “Petitioner argues persuasively that the ’792 patent does not solve a technical problem using a technical solution because existing ATMs already were capable of providing cash to users.” Therefore, the ’792 patent qualified as a CBM patent.

Petitioner’s Failure to Show Section 101 Invalidity Was More Likely Than Not

The independent claims of the ’792 patent on their face appear to be a business method, one easily reduced to an abstract idea under Alice Corp. Pty Ltd. v. CLS Bank Int’l. So why was a CBM not instituted?

The PTAB’s brief analysis of the Alice “abstract idea” test focused on the fact that the “Petitioner [did] not identify directly ‘the abstract ideas’ to which the claims are purportedly directed.” Instead, the PTAB found that the “Petitioner implicitly identifies them as: ‘providing money to an account holder’ and ‘trial-and-error.’” The PTAB agreed with the Patent Owner that “Petitioner has oversimplified the challenged claims.”

The PTAB explained that the claims were not “directed simply to the idea of providing money to an account holder or using trial-and-error until success is achieved.” Instead, “the claims are directed to particular methods of providing money to an account holder using an ATM via a POS transaction after an ATM transaction has failed.” Moreover, the Petitioner failed to meet its burden of showing that the claims were likely patent-ineligible. The PTAB noted that the Petitioner’s “analysis omits any consideration of the elements of the claims as ordered combinations to determine whether the additional elements transform the nature of the claims into a patent-eligible application.” (Emphasis in original.)

Disposing of all questions under Section 101, the PTAB further declined to institute a CBM proceeding on prior art grounds.

Takeaways

It is impossible to be certain whether the PTAB’s result here on the patent-eligibility question stemmed from a belief that the claims were patent-eligible, or from frustration that the Petitioner had not provided a more detailed analysis. However, a reading of the PTAB’s Order certainly suggests the latter. Might the Petitioner have been successful had it not “oversimplified the challenged claims?”  One is left thinking that perhaps this case is less of a bellwether for future CBM petitions, and more of an instance in which a particular petitioner failed to satisfy a particular PTAB panel.