Posts Tagged: "CBM"

In the late 1990s, prolific inventor David Petite invented a foundational technology for the Internet of Things. His invention drove proliferation of wirelessly networked machines and met with huge commercial success. But last month, the U.S. Court of Appeals for the Federal Circuit upheld the revocation of his patent through a byzantine and controversial administrative proceeding. This patent was subjected to a Covered Business Method Review (CBM) at the Patent Trial and Appeal Board (PTAB). The PTAB is a division of the U.S. Patent and Trademark Office (USPTO) created by the 2011 America Invents Act that has invalided a whopping 84% of the 3,000 patents they have reviewed. Coming too late to save Petite’s patent, the “transitional” CBM program expired September 16 of this year (two other types of PTAB proceedings remain in effect). CBM was not used nearly as much as the other PTAB proceedings, which have no restrictions on subject matter. Yet, corporate interests are still trying to revive CBM, and there’s buzz that attempts are being made to reinstate the program via the fiscal 2021 spending bill this week. There’s no logical basis to do so.

On November 17, 2020, in SIPCO LLP v. Emerson Electric Co., No. 2018-1635, slip op. (Fed. Cir. Nov. 17, 2020), the Court of Appeals for the Federal Circuit extended the reasoning of the Supreme Court in Thryv, Inc. v. Click-to-Call Technologies, LP, 140 S. Ct. 1367 (2020) barring appeal of decisions to institute inter partes review (IPR) under 35 U.S.C. § 314(d), and held that decisions made by the Patent Trial and Appeal Board (PTAB) to institute proceedings for covered business methods (CBMs) are not subject to appeal under 35 U.S.C. § 324(e). While the CBM transitional program of the America Invents Act (AIA) expired on September 16, 2020, the statutes applied when instituting and conducting review under the program were those of post-grant review (PGR) (under § 18(a)(1) of the AIA), and so the effect of the Federal Circuit’s decision in SIPCO is likely to be much more far-reaching.

District court filings were substantially lulled this week, with about a third of what’s normal—33—filed to the Patent Trial and Appeal Board’s 32 petitions, propped up by lithium-ion battery company Amprius filing eight inter partes reviews (IPRs) against the Japanese Softbank (via Fortress IP)-owned Traverse CF non-practicing entity (NPE). CBM Sunset: The little-used covered business methods (CBM) program sunsets today. As evidenced by the lack of any substantial rush to file any at the last minute, the proceeding had for years been eclipsed both by Federal Circuit rulings narrowing the scope of the program and by the explosion and success of subject matter challenges in the district courts. While there have been rumors of a last-minute attempt to revive the program, for now it seems destined for the dustbin of history.

Two weeks before the Transitional Program for Covered Business Method Patents (CBM) Program, implemented in 2012 under the America Invents Act (AIA), is set to expire, a special interest group dubbed the “Quality Patents Coalition”, is reportedly urging Congress to extend the program for one year. The CBM program is currently set to expire on September 16, 2020. In June, in response to reports of the imminent request for an extension, a number of organizations submitted a letter to Senator Thom Tillis (R-NC) arguing that “CBM should expire of disinterest, if not to eliminate a proceeding of questionable use, of illegitimate vintage, and of unjust intent.”

Rather than allowing it a quiet death, the financial services industry is making a quiet effort to keep the Covered Business Methods (CBM) Program at the Patent Trial and Appeal Board (PTAB) alive. The special interest group has reportedly enlisted Senator Richard Blumenthal (D-CT) to push for an extension of the CBM program for one year. A rider on the next COVID supplemental appropriations package, or possibly a FY 2021 Commerce Department appropriations bill, would carry the grant of CBM’s stay of expiration.

The Patent Trial and Appeal Board (PTAB) recently issued its first-ever preliminary guidance on motions to amend claims filed by patent owner Sanofi and, although the substituted claims haven’t escaped an obviousness challenge from Mylan, patent owners might be able to use that guidance as a roadmap for their own motions to amend claims. In other PTAB decisions between October 1 and 16, USAA escaped covered business method (CBM) reviews based on the technological invention exclusion, NHK Spring factors led the PTAB to deny two inter partes reviews (IPRs) petitioned against TRUSTID patents, oral hearings were held in Apple’s IPRs against Qualcomm, despite the patent settlement agreement between the two firms, and NuCurrent failed to avoid Samsung IPRs after arguing issue preclusion based on district court litigation of a forum selection clause in a contract between the two companies.

On October 9, the Patent Trial and Appeal Board issued a final written decision in a covered business method (CBM) review which invalidated all 38 claims of Nasdaq’s U.S. Patent No. 7747506, Recipient Status Indicator System and Method, challenged by Miami International Holdings (MIAX), on Section 101 grounds for being directed to unpatentable subject matter. The decision is the latest in a series of CBM reviews at the PTAB which stem from a district court patent infringement proceeding targeting fintech technologies employed by MIAX’s technological securities trading platform.

The Federal Circuit issued a precedential decision on Wednesday reversing-in-part, vacating and remanding a decision of the Patent Trial and Appeal Board that had found certain claims of U.S. Patent No. 8,908,842 (the ’842 patent) subject to covered business method review, patent ineligible and unpatentable for obviousness. SIPCO LLC v. Emerson Electric (Fed. Cir., Sept. 25, 2019). Judge Reyna dissented in part. In a footnote, the Court distinguished its reasoning from its finding in the garage door-opener case, Chamberlain Group, Inc. v. Techtronic Industries Co., in which the Court found claims reciting wireless communication of status information about a movable barrier operator to be directed to an abstract idea. “Unlike in Chamberlain, SIPCO’s claimed invention does not simply use “well understood,” off-the-shelf wireless technology for its intended purpose of communicating information,” said the Court.

On August 15, Trading Technologies International, Inc. (TT) petitioned the Federal Circuit again for panel rehearing and rehearing en banc of its recent decision that found TT’s Ladder Tool invention to be subject to the USPTO’s Covered Business Method (CBM) review process and abstract under Section 101. TT argues that the PTAB did not follow the precedent of the Supreme Court or Court of Appeals for the Federal Circuit (CAFC) when reviewing its patent claims. The latest brief relates to U.S. Patent No. 7,725,382 (the ‘382 patent), while TT’s request for rehearing filed July 31 related to U.S. Patent No. 7,693,768.

The Federal Circuit recently reversed the District of Minnesota’s denial of summary judgment and held claims related to paper check processing invalid under 35 U.S.C. § 101. Despite the claims being directed to processing “physical” checks, the Court held that “the abstract idea exception does not turn solely on whether the claimed invention comprises physical versus mental steps.”  The Court also reasserted that novelty and/or non-obviousness does not obviate ineligibility under Section 101. See Solutran, Inc. v. Elavon, Inc., Nos. 2019-1345, 2019-1460, 2019 U.S. App. LEXIS 22516 (Fed. Cir. July 30, 2019) (Before Chen, Hughes, and Stoll, Circuit Judges) (Opinion for the Court, Chen, Circuit Judge).

Since the Supreme Court upheld the constitutionality of inter partes review (IPR) a little more than a year ago in Oil States, several patent owners have brought other constitutional challenges to America Invents Act (AIA) trial proceedings. These cases have been slowly percolating at the Patent Trial and Appeal Board (PTAB), the U.S. Court of Federal Claims, and the U.S. Court of Appeals for the Federal Circuit. In many cases, however, the Federal Circuit has declined to address these constitutional claims on the merits, finding them unnecessary to resolve or insufficiently developed by the parties. But early last week, the Federal Circuit for the first time addressed the applicability of the Takings Clause of the Fifth Amendment to IPRs, holding in Celgene Corp. v. Peter, Case No. 18-1167 (Fed. Cir. 2019) “that the retroactive application of IPR proceedings to pre-AIA patents is not an unconstitutional taking under the Fifth Amendment.” While the court’s holding may appear on its face to forestall current and future Takings Clause challenges to AIA proceedings, its analysis leaves some questions unanswered, and may even provide a narrow path forward for future takings claims. Furthermore, given the Supreme Court’s predilection for addressing both AIA and Takings Clause issues, the Federal Circuit panel’s decision may not be the last word on this interesting issue.   

On July 31, Trading Technologies, a firm that develops software used for electronically trading derivatives, filed a combined petition for panel rehearing and rehearing en banc at the U.S. Court of Appeals for the Federal Circuit. The appellant is seeking review of the Federal Circuit’s earlier decision this May in Trading Technologies International v. IBG LLC (IBG IV), which confirmed the results of four covered business method (CBM) review proceedings at the Patent Trial and Appeal Board (PTAB) that invalidated patent claims owned by Trading Technologies as unpatentable under Section 101 of the patent law. In doing so, Trading Technologies argues that the Federal Circuit panel failed to follow both U.S. Supreme Court and Federal Circuit precedent, as well as previous Federal Circuit decisions upholding the validity of other Trading Technologies patents that share a specification with one of the invalidated patents.

Yesterday, the U.S. Supreme Court ruled in Return Mail, Inc. v. United States Postal Service that the U.S. government doesn’t qualify as a “person” for the purposes of petitioning the Patent Trial and Appeal Board (PTAB) to institute inter partes review (IPR) proceedings under the America Invents Act (AIA). The majority opinion was authored by Justice Sonia Sotomayor and joined by Chief Justice John Roberts and Justices Clarence Thomas, Samuel Alito, Neil Gorsuch and Brett Kavanaugh, while Justice Stephen Breyer dissented, joined by Justices Ruth Bader Ginsburg and Elena Kagan. While most in the patent community felt the decision was predictable considering the Supreme Court’s precedent on the topic, some saw the dissent’s point or expressed surprise at the narrowness of the holding and the disparate treatment by the court of the IPR process compared with other administrative procedures. The Return Mail case was argued at the Supreme Court by Beth Brinkmann, co-chair of Covington’s Appellate and Supreme Court Litigation Group, who said, “The Court’s decision confirms that federal agencies do not get an extra chance to challenge privately held patents under the AIA.” Brinkman’s colleague, Richard Rainey, who co-led the Supreme Court team and handled the case before the Federal Circuit, added: “This is a significant victory for Return Mail and for all technology companies and patent holders that may find themselves in the government’s crosshairs. By excluding federal agencies from AIA review proceedings, the Court’s decision limits the government’s ability to bring duplicative challenges to the validity of privately-owned patents.” Here’s what some others in the patent community had to say.

The PTAB not only assented to Mirror Imaging’s suggestion that a five-page brief be entered in advance of the hearing but added that parties may submit one brief for each of the four CBM review proceedings which were petitioned by Fidelity… This could be a pivotal moment in the history of the PTAB specifically, and the USPTO more generally. If Director Iancu can achieve the goal of having the Patent Office speak with one voice, with patent examiners and the PTAB all following the same law and guidance, he will have achieved a united Patent Office that has been elusive, but desperately needed.