Takeaway: The scope of a covered business method patent review is not so broad as to encompass any claim that may result in cost-savings or be used financially.

In its Decision, the Board found that the ‘373 patent is not a covered business method patent and denied institution of a covered business method patent review of claims 1-20 of the ‘373 patent. The ‘373 patent “relates to a test system that executes an enhanced test process for testing components, such as semiconductor devices on a wafer, circuit boards, packaged devices, or other electrical or optical systems, and collecting and analyzing test data.” Petitioner challenged the patentability of the ‘373 patent claims based on patent-ineligible subject matter under 35 U.S.C. § 101.

The Board stated:

A “covered business method patent” is “a patent that 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, except that the term does not include patents for technological inventions.”

See AIA § 18(d)(1) (emphasis added); 37 C.F.R. § 42.301(a).

The Board addressed Petitioner’s argument that the “legislative history reflects that the definition of covered business method patent was drafted to encompass patents claiming activities that are financial in nature, incidental to a financial activity, or complementary to a financial activity.” Specifically, Petitioner contended that “[t]he activities claimed in the ‘373 patent are incidental to a financial activity or complementary to a financial activity” for three reasons.

First, Petitioner argued that the systems and method claimed in the ‘373 patent “are inherently part of a manufacturing company’s cost-saving (i.e., financial) activities.” The Board agreed with Patent Owner, however, that such an argument is applicable to any patent and “unduly expands the intended scope of covered business method review reflected in the AIA legislative history and the CBM Rules.” The Board found no language in the claims or specification describing alleged “lower repair costs, reduced variability, product quality, or cost saving activities, let alone any specific financial product or service or finance-related activity.”

Second, Petitioner argued that “tests on semiconductors are at least incidental or complementary to financial transactions because semiconductors are ubiquitous components in the modern financial system.” The Board agreed with Patent Owner that Petitioner’s position would “in essence” improperly “confer covered business method patent review eligibility on any patent claiming something used ‘in the modern financial system.’” The Board was not persuaded, as the statutory language “requires [the Board] to focus on the challenged claims rather than speculate on possible uses of products recited in the claims.”

Third, Petitioner “theorizes that for claims 1-17, which do not expressly recite semiconductors, but instead include ‘such generic claim limitations as ‘component’ and ‘tester,’ those claims might be construed so broadly as to encompass such activities as liquidity stress testing on banks (as a component of the financial system).’” The Board rejected Petitioner’s argument, as it “would lead to impermissibly different constructions for the term ‘component’” as used in the other claims, and Petitioner failed to rebut the presumption that the same terms in different claims have the same meaning. The Board rejected Petitioner’s broad construction.

In sum, “[t]he focus of [the Board’s] inquiry is on the claims and whether the ‘373 patent claims a method of performing data processing or other operations used in the practice, administration, or management of a financial product or services—as the Versata court stated, ‘finance-related activities.’” Based on the foregoing, the Board did not institute a covered business method patent review as to any of the challenged claims.

Fairchild Semiconductor Corp. v. In-Depth Test LLC, CBM2015-00060

Paper 11: Decision Denying Instituting of Covered Business Method Review

Dated: August 3, 2015

Patent: 6,792,373 B2

Before: Linda M. Gaudette, Barry L. Grossman, and Peter P. Chen

Written by: Chen

Related Proceedings: In-Depth Test LLC v. Fairchild Semiconductor Corp., No. 14-1090 (D. Del. Aug. 22, 2014); Linear Tech. Corp. v. In-Depth Test LLC, Case IPR2015-00421 (PTAB Dec. 11, 2014)