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18 September 2013Patents

US bank files covered business method review

A bank has filed a challenge against a technology company at the US Patent and Trademark Office claiming it has been asserting an invalid patent against it.

Branch Banking and Trust (BB&T) has challenged Maxim Integrated Products’ (Maxim) generic integrated circuit patent by filing a covered business method petition (CBM).

CBMs, which became available as a result of the America Invents Act in 2012, allow companies that are being sued for patent infringement a tool to challenge the validity of patents relating to data processing and other operations used in the practice, administration, or management of a financial product or service.

Filed on Monday September 16, the challenge questions the validity of Maxim’s patent, which claims to protect “the transfer of valuable information between a secure module and another module.”

BB&T, which is represented by Ropes & Gray LLP, claims Maxim has asserted its patent against the mobile banking smartphone applications it offers as well as its mobile banking website.

“A challenger gets to present evidence of invalidity on a wide variety of issues to a panel of three administrative patent judges who have 10-20 years’ experience deciding patent matters,” said Jim Myers, partner at Ropes & Gray, in Washington, DC, explaining the benefits of the CBM system.

“Once the proceeding is initiated, which usually takes five-six months, a decision will then be issued within one year.  The cost to the parties is much less than traditional court litigation.”

The patent, US patent no. 5,949,880, was filed in 1996 and issued in 1999.

But in documents filed at the USPTO, BB&T claimed it is “nothing more than an attempt to patent a well-known and un-patentable abstract idea.”

It added: “Maxim asserts, for example, that the ’880 Patent’s claims cover contemporary smartphones with mobile banking software installed even though that technology did not exist in 1996…

“The patent itself concedes that the technology was well known and commonplace”.

The challenge marks the second time a CBM petition has been filed by a major bank since the procedure was implemented in September last year.

Maxim and BB&T both declined to comment on the proceedings.

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