Addressing the standard for instituting a covered business method (CBM) review, the Patent Trial and Appeal Board (PTAB or Board) found that the petitioner met its burden in demonstrating that the challenged patent is a CBM patent. Motorola Mobility, LLC v. Intellectual Ventures I, LLC, Case No. CBM2015-00004 (PTAB, Mar. 21, 2016) (Kauffman, APJ).

The patent at issue is directed to software for operating a user station for communicating with a multiplicity of independently operating data sources via a non-proprietary network. The patent owner asserted the patent against the petitioner in a district court. In response, the petitioner filed its first petition for CBM review of the claims, which the Board declined to institute, finding that the petitioner did not adequately demonstrate that the patent is a CBM patent. Specifically, the Board found that the petitioner offered only conclusory analysis as to whether the claimed subject matter recites a technological feature that is novel and unobvious, and that the petitioner failed to address whether the challenged patent solves a technical problem using a technical solution.

The petitioner then filed the current petition for CBM review. Although the patent owner attempted to argue that the Board lacked jurisdiction in the present case as a result of its previous denial of institution, the Board disagreed and instituted on the petition.

In its final written decision, the Board found that the petitioner met its burden to show that the challenged patent is a CBM patent. The first part of the two-part CBM inquiry is whether the patent “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.” The petitioner cited examples from the specification showing that the claimed method could be used for tax or other governmental filings, and could have analogous uses in financial planning and portfolio management systems. The patent owner argued that the cited portions failed to establish that the claims themselves had a particular application to financial activity. The Board disagreed, explaining that a financial product or service need not be explicitly recited in the claims in order to satisfy the first part of the test.

The second part of the CBM inquiry is whether the patent is a technological invention, which in turn involves a two-prong test of whether the claimed subject matter (1) as a whole recites a technological feature that is novel and unobvious over the prior art, and (2) solves a technical problem using a technical solution. The Board found that the challenged claims recite known prior art technology, a fact that the patent owner conceded. Despite this concession, the patent owner argued that institution was not proper, because the prior art did not recite the specific sequence of the claimed steps. The Board was not persuaded, however, and explained that the second step of the CBM inquiry is not the same as an anticipation or obviousness analysis; rather, the proper inquiry is whether the claimed subject matter as a whole recites a technological feature that is novel and unobvious over the prior art.

As to the second prong of the technological invention inquiry, the Board found that the specification expressly identified the problem it solves as “the problem of enabling simple, economical and prompt mass distribution of electronic information products.” With respect to the patent owner’s contention that the problem was more technical in nature, the Board concluded that this argument was not reflected in the claims, which were general in nature. The Board therefore concluded that the claims do not solve a technical problem with a technical solution.