Earlier this month, on September 16, 2020, the Transitional Program for Covered Business Method (CBM) Review expired. Enacted as part of the AIA and spanning eight years, CBM Review was promoted within Congress as a vehicle to challenge weak patents, i.e., patents that should not have been issued in view of the Supreme Court’s Bilski decision and, later, its Alice decision. CBM Review was limited in duration and scope, and applied only to “covered business method[s]” while excepting “technological inventions.” In supporting those goals, CBM Review was utilized primarily within the financial industry, and permitted entities to challenge patents based on patent eligibility, unlike other post-grant tools that permitted only challenges based on prior art, such as ex parte reexamination and inter partes review (IPR).
CBM Review filings reached peak usage several years after being enacted. A surge of filings was driven by an astronomically high invalidation rate at the Patent Trial and Appeal Board (PTAB), which was over 94% as of January 2015. In recent years, however, as the Federal Circuit narrowed the PTAB’s jurisdiction over CBM Review, parties filed far fewer CBM Review petitions than in earlier years.
And as compared to other review tools, CBM Reviews were used only minimally.
Source: USPTO, Trial Statistics IPR, PGR, CBM (January 2020), https://www.uspto.gov/sites/default/files/documents/trial_statistics_20200131.pdf
In view of the program’s sunset, some groups advocated for an extension of CBM Review and even argued for it to be made permanent. The Quality Patents Coalition, a consortium of retailers, banks, and others in the financial and service industries, advocated in a letter to Senator Richard Blumenthal and Senator David Perdue that the program should be extended to prevent a future “avalanche of meritless litigation.”
On the other hand, groups representing patent owners, such as the Licensing Executives Society (LES) and the Institute of Electrical and Electronics Engineers (IEEE), advocated for the expiration of CBM Review. A letter from the IEEE to Senator Thom Tillis and Senator Chris Coons cited CBM Review as “potent in decimating patent rights without the protections available in Article III courts.”
Director Andrei Iancu of the United States Patent and Trademark Office (USPTO) sides with patent owners. In a September 15, 2020, moderated event, he noted that CBM Review is “not a very popular program,” citing that around a dozen CBM Review petitions, compared with more than 1,000 IPR petitions, were filed in 2020. Further, Director Iancu characterized CBM Review as “inherently problematic in that it isolates a particular area of technology. And as we’ve been discussing throughout . . . as a general principal, it’s not good and it’s not in the tradition of the American patent system to isolate for whatever purpose a particular area of technology. So it should be allowed to sunset. It’s been the PTO’s long-standing position that it should sunset; even the prior administration issued a public statement that it should be allowed to sunset.”