PTAB cites Enfish, refuses to institute Covered Business Method Review on Mirror World patent

uspto-building-angle-335 copyEarlier today the Patent Trial and Appeal Board (PTAB) of the United States Patent and Trademark Office (USPTO) declined to institute a covered business method (CBM) review of U.S. Patent No. 6,006,227, which is owned by Mirror World Technologies, LLC. See Apple, Inc. et al v. Mirror World Technologies, LLC (CBM2016-00019). Mirror Worlds asserted the ‘227 patent against the Petitioners in a patent infringement action filed in the Eastern District of Texas in December 2013.

Apple, Inc., Best Buy Stores, LP, and, LLC, had filed a covered business method Petition pursuant to 35 U.S.C. §§ 321–329 seeking to institute review of claims 13, 14, 17, 20, 22, 42, 44, and 55 of the ‘227 patent. Mirror Worlds filed a preliminary response.  After considering the petition and the patent owner’s preliminary response the Board determined that the Petitioners failed to demonstrate that is was more likely than not they would prevail with respect to at least one challenged claim. As a result, the Board denied the Petitioner’s request to institute the covered business method review of the challenged claims.

The decision is significant not only because the PTAB refused to institute a covered business method review, but because the panel — Administrative Patent Judges Thomas Giannetti, David McKone, and Barbara Parvis — cited the Federal Circuit’s recent decision in Enfish v. Microsoft when they found that the challenged claims of the ‘227 patent were not abstract.


The ‘227 Patent

The ‘227 patent describes the invention presented as a system for managing personal electronic information. The Board treated claim 13 as illustrative:

13. A method which organizes each data unit received by or generated by a computer system, comprising the steps of:

generating a main stream of data units and at least one substream, the main stream for receiving each data unit received by or generated by the computer system, and each substream for containing data units only from the main stream;

receiving data units from other computer systems;

generating data units in the computer system;

selecting a timestamp to identify each data unit;

associating each data unit with at least one chronological indicator having the respective timestamp;

including each data unit according to the timestamp in the respective chronological indicator in at least the main stream; and

maintaining at least the main stream and the substreams as persistent streams.

Covered Business Method?

A covered business method patent is “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.” AIA § 18(d)(1); see 37 C.F.R. § 42.301(a). The Petitioners contended that the requirement was met because the patent specifically states the invention is intended to “cover the organization of financial activities and/or monetary matters.” The patent owner argued that what matters is what is in the claims, not what is described as an objective of the invention in the specification.

A majority of the Board did not agree, however, saying that whether claims do not need to be limited by express language to a financial product or service, but rather only that the claims must be broad enough to cover a financial product or service. Judge McKone, in an opinion concurring in the result, agreed with the patent owner and would have found that the ‘227 patent was not a covered business method. McKone explained that he believe the Federal Circuit, as directed in Blue Calypso, has explained that the focus must be on the express language of the claims themselves rather than on the specification.

Eligibility Under 35 U.S.C. 101

The Petitioners argued that the challenged claims are direct to an abstract idea that is not patent eligible subject matter. According to the Petitioners, “the challenged claims of the ‘227 patent are direct to the abstract idea of organizing items of information, i.e., ‘data units,’ in chronological order.” The patent owner responded that the Petitioners’ view “entirely omits the core concept of the claimed invention: using a ‘main stream’ and ‘substreams.'”

The patent refers to a “stream” as a time-ordered sequence of documents. See col. 4, ll. 66–67. The patent refers to a “substream” as a subset of the main stream document collection. See col. 5, ll. 16–17. Although a document may belong to any number of substreams, it remains part of the main stream. See col. 5, ll. 14–16.

The Board was persuaded by the patent owner’s, particularly the arguments relating to the fact that the claims could not be performed entirely by the human mind or with pen or paper. The Board found that the patent owner established that the claims specifically require operations to be performed by a computer system, and that the problem being address specifically arose in the realm of computer operating systems, which was relevant given the Federal Circuit’s ruling in DDR Holdings, LLC v. The Board found unpersuasive the Petitioners’ argument that those with photographic memories could perform activities covered by the patent claims at issue, which does seem rather a stretch at best.

Given that the the Federal Circuit has within the last several weeks issued an important, precedential opinion in Enfish, the Board authorized and received supplemental submissions from the parties specifically addressing that decision. Ultimately, the Board concluded, as did the Federal Circuit in Enfish, that the claims at issue do not recite an abstract idea. The Board explained: “Like the claims under consideration in Enfish, we are persuaded that the challenged claims of the ?277 patent are directed to an “improvement in computer functionality.”

Although it was unnecessary to go beyond the first step of the Mayo/Alice framework, the Board did take the next step to point out that they were not persuaded by the Petitioners’ arguments relating to step two of the Mayo/Alice framework. Pointing out that the district court judge reached the same conclusion, the Board explained (with citations omitted):

The claims do not recite a generic computer system and, like those claims upheld in DDR Holdings, are “rooted” in non-abstract computer technology. We agree with Patent Owner that the claims are not directed generically to organizing and storing data, but instead to the particular use of streams and substreams. We note that the district judge in the pending district court litigation reached the same conclusion.

The Board went on to explain that in addition to considering the Federal Circuit’s recent ruling in Enfish, the Board also considered the even more recent ruling in In re TLI Communications LLC Patent Litigation. The Board also specifically noted that it placed no significance on the fact that the claims at issue in Enfish were written in means-plus-function format because claim format is not a determining factor in a 101 analysis, citing TLI.

For more on the Enfish decision please see:


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Join the Discussion

6 comments so far.

  • [Avatar for Ternary]
    May 27, 2016 10:46 am

    And the mess continues. While there is some indication that the PTAB is coming to their senses, as in this article, I read:
    “A majority of the Board did not agree, however, saying that whether claims do not need to be limited by express language to a financial product or service, but rather that the claims must only be broad enough to cover a financial product or service.”

    What the PTAB is saying is that any technical improvement of a computer can likely be applied to a financial product or service and thus meets a CBM requirement. And in a next step the PTAB considers if a technical improvement to the computer is really a technical improvement to a computer.

    The statute clearly exempts “technical improvements: from CBM review, while the PTAB now brings it into the review, clearly with the intent to apply Alice. They then try to kill the claims on “abstract idea” but are eventually convinced that the claims are not an abstract idea, but are indeed computer-related technology improvements, so the claims do not cover a CBM, which should have been the decision right from the start.

    The CBM is a procedure particularly related to financial products. I see none of that intent in this case.

  • [Avatar for Eric Berend]
    Eric Berend
    May 27, 2016 09:01 am

    As a primarily electrical-mechanical inventor, I am still quite aghast at the software-centric emphasis, of the vast majority of the concentration and successful efforts to undermine U.S. patent jurisprudence and replace it with this enormous ‘AIA’ racket masquerading as U.S. Constitutional due process.

    It is clear that with regards to the physicals, software-centric ‘damn the torpedoes, full speed ahead’ motivation of so-called “reforms”, has been wrought with utter recklessness as to the collateral effects upon other forms of patent-eligible inventions; or, indeed, with deliberate calculation as to these deleterious effects.

    Incidental harm owing to the complexity of a related domain of applicability is one thing; but for these details to so precisely and simultaneously disempower the individual inventor and deliver a ‘laundry list’ of benefits to infringers, is far from “paranoid”: these are the deliberate, premeditated actions of an enemy.

    As I have recently advocated in comments posted to another article here on, the U.S. Patent system is now an utterly broken fraudulent racket operated for the benefit of wealthy infringers; and is, in fact, sinister to individual inventors; and should therefore, be abolished entirely. In such a scenario, at least I will be able to steal their IP just as readily and well as these corrupt, empowered infringers.

    Said abolishment is not my preferred situation; I advocate for the legitimate compact elucidated in the U.S. Constitution, Article I, Section 8, Clause 8. However it is dubious as to whether any part of that original bargain can be restored, within my lifetime.

  • [Avatar for EG]
    May 27, 2016 08:22 am

    Hey Gene,

    Like IPRs, Congress should have never enacted these CBM patent provisions.

  • [Avatar for Curious]
    May 27, 2016 12:35 am

    A covered business method patent is “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.”
    How is this even conceivably a “covered business method”? After reading the specification, one example of the stream of data units is the presentation of stock/financial information. However, it is a stretch to say that presenting information about a stock price is the “practice, administration, or management of a financial product or service.” Under this interpretation, any claim directed to presenting information (downloaded from the internet) on a computer is a covered business method since this information could conceivable be stock prices.

    Oh, I forgot … this is the USPTO — nothing constitutes a stretch for the USPTO.

  • [Avatar for Gene Quinn]
    Gene Quinn
    May 26, 2016 05:01 pm

    Fish has legs… oh my… for patent humor that is probably about as good as we can hope! Still, made me chuckle, at least a little.

  • [Avatar for Appearance of ...]
    Appearance of …
    May 26, 2016 04:27 pm

    Humm… maybe Einfish has “legs” after all!

    Thank you. I will be here all week.