On June 13, 2016, the Patent Trial and Appeal Board (PTAB) entered its first Final Written Decision in a Post Grant Review (PGR) proceeding. The PTAB found that the Petitioner had failed to show unpatentability based on prior art, but the PTAB agreed with the Petitioner that all claims are directed to unpatentable abstract ideas under 35 U.S.C. § 101.

US Patent No. 8,660,88 (the ‘888 patent) is directed to a system, method, and computer-readable medium for evaluating a relative market value of a cattle sale group. In the PGR, the Petitioner relied on two grounds that are not available in an Inter-Parties Review (IPR) proceeding.

First, the Petitioner argued that the Angus System, an on-line system that utilizes “genetic merit” estimates of cattle, was prior art because it was “in use” before the ‘888 patents filing date. See IPR2015-00003, Petition, Paper No. 2 at page 39. This could not have been asserted in an IPR Petition, which is limited to patents and printed publications. However, the PTAB did not agree with the Petitioner regarding the “in use” ground, finding that the Petitioner had not shown that Angus system to be prior art. The PTAB found that declarations used to show the availability of the Angus system before the filing date of the ‘888 patent were not sufficiently corroborated. See IPR2015-00003, Final Written Decision, Paper No. 56 at pages 18-21.

Second, the Petitioner asserted that claims of the ‘888 patent are not directed to statutory subject matter under 35 U.S.C. § 101. The PTAB agreed, finding that all claims of the ‘888 patent are directed to a fundamental concept of “determining an animal’s relative economic value based on its genetic and physical traits.” See IPR2015-00003, Final Written Decision, Paper No. 56 at pages 25-33. The assertion of grounds that are unavailable in an IPR proceeding shows the power of a PGR proceeding.

As a side note, if the ‘888 patent had been asserted against the Petitioner and the Petitioner were able to establish that the feature “market value of a sale group is financial in nature, the Petitioner would have been able to request Covered Business Method (CBM) review See AIA § 18(d)(1). A CBM review, like PGR, is not limited to grounds of unpatentability based on patents and printed publications (see AIA § 18(a)(1)). A CBM review would have enabled the Petitioner to present the same grounds with limited estoppel compared with the estoppel of a PGR. See AIA § 18(a)(1)(D) regarding CBM proceedings (emphasis added): “The petitioner in a transitional proceeding that results in a final written decision … may not assert, either in a civil action arising in whole or in part under section 1338 of title 28, United States Code, or in a proceeding before the International Trade Commission under section 337 of the Tariff Act of 1930(19 U.S.C. 1337), that the claim is invalid on any ground that the petitioner raised during that transitional proceeding.”) The PTAB Final Written Decision noted that the ”888 patent is not involved in any district court proceeding. See IPR2015-00003, Final Written Decision, Paper No. 56 at page 4. Assuming that the ‘888 patent was never asserted against the Petitioner, the Petitioner could not take advantage of the Covered Business Method (CBM) review. See AIA § 18(a)(1)(B).