The America Invents Act (AIA) provided several mechanisms for reviewing the validity of issued patents. While Inter Partes Review (“IPR”) is commonly used, a review of Covered Business Method (“CBM”) patents is another mechanism for reviewing validity. Moreover, challenging a patent using CBM can be more desirable than in an IPR, since CBM provides the petitioner more bases for review than in an IPR.1

To qualify for CBM review, the patent at issue must “claim 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. Like many statues, this standard has been debated to determine the scope of review that is allowed under CBM.

In determining whether a patent is eligible for CBM, the Patent Trial and Appeal Board (“PTAB”) generally focuses on the claims of the patent. iHeartMedia, Inc. v. Impulse Radio, LLC, CBM2016-00010, Paper 10 at *8 (May 9, 2016). As noted by the PTAB, the legislative history of the AIA indicates that “financial product or service” should be interpreted broadly. Id. In this regard, the claims need not expressly recite language directed to financial products or services. Apple, Inc. v. Mirror Worlds Technologies, LLC, CBM2016-00019, Paper 12 at *7 (May 26, 2016). Rather, a patent is eligible for CBM if the embodiments in the specification are financial in nature and the embodiments fall within the scope of the claims. Id. Moreover, to be eligible for CBM, the patent need only have one claim directed to the embodiments which are financial in nature. iHeartMedia at *8.

In addition to requiring that the patent be directed to a “financial product or service,” patents directed to a “technological invention” are excluded from CBM. AIA § 18(d)(1). “To determine whether a patent is for a ‘technological invention’ under the statute, [the PTAB determines] ‘whether the claimed subject matter as a whole recites a technological feature that is novel and unobvious over the prior art; and solves a technical problem using a technical solution.’ 37 C.F.R. § 42.301(b).” Apple at *10. To satisfy the first prong of this test, at least one claim must not recite technological features that were novel or nonobvious of the prior art. Square, Inc. v. Protegrity Corporation, CBM2015-00014, Paper 41 at *22 (April 28, 2016). Regarding the second prong, the Board may look to the specification, as well as the claims, to determine if the specification describes one or more technical problems and which the claimed invention provides a technical solution thereto. Id. at *24.

Recent decisions indicate that the PTAB will rely on the embodiments described in the specification to broadly interpret if a patent is directed to a “financial product or service.” In determining whether the patent is directed to a “technological invention,” the PTAB will look only at the claims to determine if the claimed invention is not novel or nonobvious, and will rely on both the claims and the specification when addressing the second prong of the test to determine if the claimed invention is a technical solution to a technological problem.