eBay Inc., v. Moneycat LTD.

Addressing an alleged abuse of discretion asserted by a patent owner in instituting a covered business method (CBM) patent review, the U.S. Patent and Trademark Office’s Patent Trial and Appeal Board (PTAB or Board) concluded it did not abuse its discretion in instituting a proceeding based principally on two new combinations of prior art, where each combination contained a reference that was considered during the prosecution of the patent and where an admitted prior art reference was considered in instituting the CBM proceeding. eBay Inc., v. Moneycat LTD., CBM2014-0091, -00092, -00093 (PTAB, Dec. 1, 2014) (Hoskins, ALJ.).

The patent owner requested a rehearing of the decision to institute CBM proceedings for three related patents. The request presented three arguments supporting the contention that the Board abused its discretion. First, the patent owner asserted the Board instituted the review based either on a reference that was not prior art or  “an alleged ‘laid open’ patent application that was not provided to the Board (or Patent Owner), not an Exhibit to or mentioned in the Petition, and not advanced as the subject of proposed rejection in the Petition . . .”  The patent owner’s assertion was rejected by the Board based upon the clear language contained in the Board’s Institution Decision and the failure of the patent owner to prove the reference was not prior art.

Second, the patent owner argued that the Board erred in finding that all references, admitted by the patentee as prior art, qualify as prior art for consideration in CBM proceedings. However, the Board did not address this argument, instead find that the challenged patents included a description of the reference that constituted an admission that it was prior art under § 102(a).

Finally, the patent owner claimed the institution of the review was contrary to the statutory intent, when the review was based on a reference that the Patent and Trademark Office considered during the prosecution of the patent. The Board rejected this argument by stating that the review is based on two new combinations of prior art. Specifically, each new combination contains a reference, which was not previously considered in connection with the prosecution of each patent. Accordingly, the Board found that it did not abuse its discretion in instituting the CBM proceedings.