Section 18 of the America Invents Act is certainly one the most controversial. This Section tasks the USPTO with creating a “Transitional Program for Covered Business Method Patents.” As envisioned by the AIA in Section 18(d), the program would apply the new post-grant review processes to “covered” patents that 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.
Congress has defined what is covered, but has left it to the USPTO to define what is excluded as a “technological invention.” § 18(d)(2) This definition of business method patents was likely drawn from the USPTO Manual of Classification 705 – making patents that were issued under that class particularly vulnerable to post-grant review under this new program.
The program would on September 16, 2012, and applies to any covered patent issued “before, on, or after that effective date.” § 18(a)(2). The provision can only be used, however, by companies that have been sued or charged with infringement of a covered patent. § 18(a)(1)(B).
The provision entered the America Invents Act via an amendment authored by Senator Charles Schumer (D-NY), possibly after intense lobbying from the financial services industry. Many presume that the provision specifically targets DataTreasury, a company who has had significant success in enforcing patents 6032137 and 5910988 against financial services industries. This presumption is only buttressed by § 18(c), a provision specifically exempting automated teller machines for venue purposes, a tactic preferred by DataTreasury to ensure venue in the Eastern District of Texas.
Senator Maria Cantwell’s (D-WA) amendment to strip the provision from the bill failed by a wide margin.
The biggest question moving forward is how and when will the USPTO define “technological inventions.” If the definition is narrow, Section 18 review could capture thousands of business method patents that tangentially relate to financial products or services. But if the definition is expansive, Section 18 could have limited effect. It is even possible that the definition of “technological inventions” could capture DataTreasury’s patents, the ostensible target of the entire provision. We’ll be watching, and will report here on Patent Re-ForUm.