In two recently denied petitions for covered business method (CBM) review, the Patent Trial and Appeal Board (PTAB or Board) provided further guidance on what claimed subject matter is eligible for CBM review. BMC Software, Inc. v. zIT Consulting GmbH, Case No. CBM2016-00044 (PTAB, Aug. 23, 2016) (Giannetti, APJ); Plaid Technologies Inc. v. Yodlee, Inc. and, Inc., Case No. CBM2016-00037 (PTAB, Aug. 16, 2016) (Zecher, APJ). In doing so, the PTAB underscored that claims with general utility devoid of any terms tied to a financial-related activity are not subject to CBM review.

In the BMC decision, the PTAB observed that, according to the America Invents Act (AIA), a CBM 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.” BMC argued that the challenged patent—which related to managing mainframe computer system usage for large mainframe computers—met the requirements of the CBM statute because it claimed a method used in the management of a financial product. Admitting that the claims did not include any financial limitations on their face, BMC maintained that the claims should be considered financial in nature because the specification described the claimed method as managing a licensing contract.

Reviewing the claims and the specification, the PTAB found the claims had only general utility and lacked any financial limitations. The PTAB disagreed with the petitioner’s argument that the claimed subject matter produced a financial result by reducing costs. According to the PTAB, “[s]aving money is not necessarily a financial activity under the covered business method patent review statute,” because, reductio ad absurdum, if it were, “then every patent that led to a cost reduction would qualify for review.” The PTAB discounted BMC’s citation of prior non-binding PTAB authority, explaining that “we do not find covered business method patent review available for patents that claim generally useful technologies that also happen to be useful to financial applications.”

The PTAB similarly found that the claims challenged by Plaid Technologies were not tied to any financial limitations and had only general utility. In that case, the challenged patent was generally related to the field of internet navigation and, in particular, to a method and apparatus for gathering summary information from users or websites and presenting that information as HTML to the users or websites via either push or pull technology. Quoting the US Court of Appeals for the Federal Circuit’s recent CBM analysis in Blue Calypso, the PTAB explained that “§ 18(d)(1) [the CBM statute of the AIA] directs us to examine the claims when deciding whether a patent is a [CBM] patent” (emphasis in original) (IP Update, Vol. 19, No. 4). The PTAB further explained that while the Federal Circuit in Versata (IP Update, Vol. 18, No. 8) recognized that the AIA term “financial product or service” should be interpreted broadly, there are limits to the breadth of that term: “As the Federal Circuit explained, ‘[t]he plain text of the statutory definition contained in § 18(d)(1) . . . on its face covers a wide range of finance-related activities’” (emphasis in original). The PTAB then examined a number of prior CBM denials, noting that for each case, the claims at issue were found to have only general utility.

Practice Note: These PTAB decisions underscore that in order to have CBM review instituted, at least one claim of the challenged patent must have financial limitations expressly or inherently recited. In BMC, the petitioner admitted that the claims did not include any financial limitations on their face. In Plaid, the petitioner essentially did so as well. Neither petitioner supported its position with any claim constructions linking any claim term to a financial limitation. For cases where challenged patents do not include claims that expressly recite financial limitations, prospective CBM petitioners should consider urging claim constructions linking the claims to inherent financial limitations.

AIA / § 315(2) ESTOPPEL