The Software IP Report

What Is a “Covered Business Method Patent”?

By Charles Bieneman

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

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 were not “covered business method patents.”

Par Pharmaceutical, Inc. v. Jazz Pharmaceuticals, Inc., Cases CBM2014-00149 – 151, 153 (PTAB Jan. 13, 2015). U.S. Patent Nos. 7,895,059, 8,457,988, 7,668,730, and 8,589,182 were held not to be covered business method patents. All the patents are related and directed to “a method for controlling access to sensitive prescription drug prone to potential abuse or diversion.” The PTAB found that the patent claims “do not recite or require an activity involving the movement of money or extension of credit in connection with the sale of a prescription drug.” Further, the “claims also do not recite a product or service particular to or characteristic of financial institutions such as banks, insurance companies, and investment houses.”

Salesforce.com v. Applications in Internet Time LLC, Cases CBM2014-00168, Case CBM2014-00162 (PTAB Feb. 2, 2015). U.S. Patent Nos. 7,356,482 and 8,484,111 each encompassed an “integrated system for managing changes in regulatory and non-regulatory requirements for business activities at an industrial or commercial facility.” As such, the patent claims were directed to business applications software. However, the claims had no clear relationship to financial services, and were not directed to “data processing or other operations used in the practice, administration, or management of a financial product or service.” The patents used the word “finance” only generally or incidentally, e.g., to refer “to an example of a business area within an organizational structure whose data may be stored in a business content database.”

Thanks to law clerk Robert Billings for his assistance in preparing this post.