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22 November 2016Patents

PTAB’s definition of CBM patent makes Congress limits ‘superfluous’

The Patent Trial and Appeal Board’s (PTAB) interpretation of which patents are subject to covered business method (CBM) reviews renders the limits Congress placed on the definition as “superfluous”.

This is according to the US Court of Appeals for the Federal Circuit in a decision made yesterday, November 21.

The court said that the PTAB relied on an incorrect definition of CBM patent in evaluating a challenged patent.

Technology company and licensing platform Unwired Planet had appealed from a decision made by the PTAB in a CBM case.

The patent, US number 7,203,752, concerns a “Method and system for managing location information for wireless communications devices”.

It covers a system that allows users of wireless devices to set privacy preferences that determine whether applications are allowed to access their device’s location information.

Back in 2013, Google petitioned for a CBM review of a number of the patent’s claims.

The board issued its final written decision in April last year, finding that the challenged claims were directed to unpatentable subject matter.

Unwired appealed, arguing that the PTAB “erred in applying a standard that is broader than the America Invents Act contemplated to determine whether the ‘752 patent was a CBM patent”.

Google argued that that the board applied the correct definition of CBM patent in light of comments that the US Patent and Trademark Office (USPTO) made during the regulatory process.

According to Circuit Judge Jimmie Reyna, the PTAB relied on an incorrect definition of CBM patent in evaluating the challenged patent.

The PTAB based its review on “whether the patent claims activities that are financial in nature, incidental to a financial activity, or complementary to a financial activity”.

Reyna explained that the board had applied the “incidental to” and “complementary to” language from a USPTO policy statement, instead of the statutory definition.

The AIA defines a CBM patent as 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”.

However, the PTAB relied on a statement made by Senator Chuck Schumer (New York) which was quoted by the USPTO “in its response to public comments concerning its consideration of proposed interpretations of the statutory definition for a CBM patent”.

The USPTO did not adopt the general policy statement as a rule, and general policy statements are not legally binding.

The PTAB’s decision was vacated and the case was remanded for a decision on whether the ‘752 patent is a CBM patent.

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16 November 2016   The US Court of Appeals for the Federal Circuit has backed Google in a patent row between the technology company and licensing platform Unwired Planet.
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23 February 2017   The US Court of Appeals for the Federal Circuit concluded that the Patent Trial and Appeal Board adopted a statutory definition of covered business method patents that went too far.
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1 May 2018   The US Supreme Court has denied Google’s request for the court to clarify the scope of covered business method patents, as well as the ability of the US Court of Appeals for the Federal Circuit to review the determination of such a patent.