The standard governing which patents can be attacked in covered business method (CBM) patent review proceedings has received renewed attention recently. The Federal Circuit’s decision last month in Unwired Planet v. Google was a stern reminder to petitioners (and to the Patent Office) that not all patents that seem to be directed to “business methods” can be challenged in CBM proceedings.
To be subject to CBM, a patent must be a covered business method patent, which is defined by statute 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.” In Unwired Planet, the Federal Circuit chastised the Patent Office for allowing CBM challenges on patents that claim activities that are only “incidental to a financial activity or complementary to a financial activity,” noting that “incidental” and “complementary” go beyond the scope of the statute.
So the PTAB is now expected to apply a stricter standard in allowing CBM challenges, by rejecting petitions on patents that do not claim subject matter for use in the practice, administration, or management of a financial product or service. And what about the approximately 50 CBM proceedings already pending, that were instituted under the PTO’s previous, overly broad standard? A recent case suggests that the Board may go back on its CBM institution decisions if it believes that the patent does not meet the higher standard for CBM review, even if the patent owner doesn’t raise the Unwired Planet issue.
In Global Tel*Link v. Securus (CBM2015-00145), shortly before Unwired Planet was decided, the Board decided sua sponte that it had wrongly instituted CBM review on a patent whose claims were not sufficiently tied to a financial product or service to be eligible for CBM. The Board therefore terminated the CBM proceeding, even though the trial was already complete and ready for final written decision, and even though the patent owner had not challenged the institution decision on this issue. The panel majority (with one judge dissenting) decided that it had inherent authority to reconsider its own institution decision before rendering a final written decision, regardless of the late stage of the trial.
Petitioners in pending CBMs should expect patent owners to raise Unwired Planet as a reason for reconsideration of institution decisions, and patent owners should consider doing so. However, the Board’s proactive stance in Global Tel*Link suggests that petitioners in pending CBMs might not rest easy after Unwired Planet even if a patent owner does not take action. In at least two pending CBMs, the Board has already sua sponte ordered briefing on whether the institution decision should be reconsidered in view of Unwired Planet.