Covered Business Method Patents Overview

Covered Business Method (CBM) Review

[Transitional Program for] Covered Business Methods

Section 18 of the America Invents Act creates a specific post-grant review proceeding for covered business method patents. The transitional program for covered business method patents will employ generally the same standards and procedures as post-grant review. The transitional program aims to give parties an alternative to litigation for business method patents.

• Began in 9-16-12 and sunsets 9-16-2020 (so CBM petition must be filed between these dates)

• Conducted by the PTAB

• Generally, you can use anything (all disclosure types) to challenge under all bases (101, 102, 103, 112) EXCEPT best mode

Eligible Patents:

1. Effective September 16, 2012, but both pre-AIA and AIA patents and application are eligible
2. Must be a covered business method patent
3. Generally defined in the AIA as a method or corresponding apparatus for performing data processing or other operations for financial product or service
4. Based on what the patent actually claims
5. Definition excludes patents for “technological inventions,” which is determined on a case-by-case basis:
   1. Whether the claimed subject matter as a whole:
      1. recites a technological feature that is novel and unobvious over the prior art; and
      2. Solves a technical problem using a technical solution

Standards & Procedures:

1. Mostly same as for PGR, with a few exceptions:
   1. Limited to specific patents
   2. For pre-AIA patents, prior art is limited
   3. WHO CAN FILE: you can only file CBM if (and AFTER) YOU GET SUED (or at least enough controversy for DJ)
   4. Petitioner has burden of establishing that patent is eligible for CBM review
   5. Cannot file CBM petition during time a PGR petition could be filed, i.e., 9 months after issuance of a patent
2. If the Director determines it is “more likely than not the petitioner will prevail on at least one claim challenged,” a proceeding will be instituted. This decision is non appealable.
3. Preponderance standard (lower than in court)
4. Estoppel applies
5. Court has discretion to stay – factors: simplification of issues, streamlining trial, completion of discovery, trial date set, prejudice to nonmoving party, reduce litigation burden
6. May file an immediate interlocutory appeal from court’s decision to stay (CAFC, de novo)
7. Final decision is appealable to the CAFC