Faced with a patent threat, renewable energy and climate change companies may have a new defense option – a Covered Business Method (CBM) proceeding. Ushered in less than 2 years ago as part of comprehensive patent reform legislation called the America Invents Act, a CBM review provides a timely, lower-cost alternative to District Court litigation for defendants to test whether a patent remains patentable before paying royalties.
Mindful of needs in the financial services industry, Congress provided eligibility criteria to initiate CBM review. In this way, a company had to first show the patent met a financial prong – in that it claimed activities incidental or complementary to a financial activity. As a result many felt their respective industries were exempt from CBM proceedings.
This week, in a case brought by Opower Inc., judges at the Patent Trial and Appeal Board (PTAB) instituted CBM review of an energy management patent now owned by CleanTech Business Solutions, LLC.1 See, CBM2014-00155. In so doing the judges acknowledged that a patent where an energy resource was a “valuable resource” exchanged for currency or other item of value met the financial prong of the test for CBM eligibility.
Institution demonstrates that certain energy patents are susceptible to CBM-proceedings when the patent claims in question are broad enough to encompass activities used in the practice, administration, or management of a financial product or service. Here, even though the patent was related to generating an energy resource and this proceeding was assigned to Tech Center 2100 which has a CBM institution rate below average, the breadth of the claims seem to have made the ‘245 patent susceptible to CBM review. (Tech Center 2100 has a CBM-institution rate of 65%, compared to the average CBM-institution rate of about 75%.)
Institution now begins the next phase of a tightly run CBM proceeding where CleanTech Business Solutions will have the ability to respond to the PTAB’s initial determination that the claims of the ’245 patent were directed to non-statutory subject matter, indefinite, and/or obvious. The entire proceeding can last a year from institution with a final written decision expected by early 2016.