Split Federal Circuit denies review of CBM scope
The US Court of Appeals for the Federal Circuit has denied an en banc review of a decision tackling the scope of covered business method (CBM) patents.
In a 40-page opinion handed down yesterday, June 6, the Federal Circuit voted 6-5 to deny rehearing of Secure Axcess v PNC Bank, a ruling made in February.
In the February decision, the Federal Circuit held that the Patent Trial and Appeal Board (PTAB) had adopted a statutory definition of CBM patents that went too far.
The decision had been made in light of Unwired Planet v Google (November 2016), which found that the board’s adopted characterisation of CBM scope in that case was contrary to the statute.
According to the court in Unwired Planet, the PTAB’s interpretation of which patents are subject to CBM reviews renders the limits that Congress placed on the definition as “superfluous”.
PNC Bank, and several other banks, then requested a review of the February decision, which had reversed the finding that a patent owned by internet security company Secure Axcess was a CBM.
Yesterday, the court denied a panel rehearing and a rehearing en banc.
Circuit Judge Richard Taranto, with whom Circuit Judge Roy Moore concurred, explained that because the CBM programme will expire in three years and because the issue presented in this case “has arisen only rarely”, further review of the issue would be a “poor use of judicial resources”.
“Should an extension of the CBM programme in some form be deemed desirable, Congressional redrafting is a better process through which to address the issues raised by the statute’s current language,” he said.
Circuit Judge Alan Lourie provided a dissenting opinion, with which Circuit Judge Sharon Prost and three other judges agreed.
In the February decision, the panel held that the statutory definition of a CBM patent requires that the patent has a claim that contains, however phrased, “a financial activity element”.
According to Lourie, that conclusion is “contrary to the statutory language, Congressional intent, and our case law”.
He added that the interpretation has “severely” limited what constitutes a CBM, and what may be considered in making that determination “clearly frustrates Congress’s intent in establishing CBM review”.
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