Takeaway: A covered business method patent is a patent that claims a method or apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service, not a method or apparatus that merely can be used in connection with a financial service.

In its Decision, the Board denied institution of covered business method patent review. The challenged ‘903 patent relates to “the powering of 10/100 Ethernet compatible equipment,” specifically “automatically determining if remote equipment is capable of remote power feed and if it is determined that the remote equipment is able to accept power remotely then to provide power in a reliable non-intrusive way.”

The Petition was denied “because Petitioner has not established that the ‘930 patent is a covered business method patent.” A covered business method patent is “a patent thatclaims 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, except that the term does not include patents for technological inventions.” AIA § 18(d)(1) (emphasis added). A patent need only have one claim directed to a covered business method to be eligible for review.

Petitioner first argued that claim 23 is “broad enough to cover a financial product or service” because it covers “remote equipment, which includes a variety of financial products and products incidental or complementary to financial activities.” The Board disagreed, as the “claim recites a specific way of providing remote power to an access device using a ‘low level current’ and ‘preselected condition’ of a resulting voltage level.” Petitioner did not point to any language in claim 23 or the specification of the ‘930 patent relating to a financial product or service.

Petitioner next argued “that the ‘930 patent is a covered business method patent because claim 23 ‘covers a large number of PoE [Power-over-Ethernet] devices used in retail spaces.’” However, the “fact that certain devices may be equipped for PoE does not mean that claim 23 ‘covers’ activities like transaction data analysis, inventory control, or supply chain management.” Similarly, Petitioner argued that claim 23 “covers a large number of PoE devices used in banking and financial services.” But again, “the fact that PoE-equipped devices may have uses other than receiving remote power, such as uses pertaining to banking, does not mean that claim 23 ‘covers such activities.’” Such a position, “in essence, would mean that any patent claiming something that can be used in connection with a financial service (e.g., an Ethernet cable, a generic computer monitor, or even a ballpoint pen) would be eligible for covered business method patent review, regardless of what the patent claims.”

Finally, Petitioner argued that the definition of “covered business method patent” should be interpreted broadly, citing to the legislative history of the AIA. The Board agreed with that general notion, but was ultimately “not persuaded that Patent Owner has accused financial products or services of infringing the claims of the ‘930 patent.”

In sum, the Board did not institute a covered business method patent review because Petition does not establish that the ‘930 patent qualifies as a “covered business method patent” under § 18(d)(1) of the AIA.

Sony Corp. of Am. v. Network-1 Techs., Inc., CBM2015-00078

Paper 7: Decision Denying Institution of Covered Business Method Patent Review

Dated: July 1, 2015

Patent: 6,218,930

Before: Joni Y. Chang, Justin T. Arbes, and Glenn J. Perry

Written by: Arbes

Related Proceedings: IPR2013-00071; IPR2013-00092; IPR2013-00383; IPR2013-00386; IPR2013-00495