Addressing the standard for initiating a covered business method (CBM) review, the Patent Trial and Appeal Board (PTAB) declined to institute CBM review given the generic, broad nature of the claims and specification. Ford Motor Company v. Versata Development Group, Inc., Case No. CBM2016-00100 (PTAB, Mar. 20, 2017) (Medley, APJ) (Turner, APJ, concurring) (Arpin, APJ, concurring).

Ford filed a petition challenging Versata’s patent directed to the processing of configuration queries to determine valid configuration answers, where the answers are prioritized by predetermined attributes. In its preliminary response, Versata forfeited certain claims by statutory disclaimer. Subsequent to the patent owner’s preliminary response, the PTAB authorized the petitioner to file a reply addressing the impact of the Unwired Planet decision (IP Update, Vol. 19, No. 12) and whether the disclaimed claims should be considered for determining the patent’s eligibility. After considering the issues, the PTAB, citing US Court of Appeals for the Federal Circuit precedent, explained that disclaimed claims should be treated as if they never existed. 

The PTAB also declined to institute CBM review, finding that the patent did not include any claim that satisfied the financial prong of the CBM patent eligibility test. The PTAB was not persuaded by petitioner’s argument that the claims, when read in light of the specification, recited terms attributable to price, or were at least “incidental to” or “complementary to” a financial activity. The PTAB cited the Federal Circuit’s rejection of the “incidental to” or “complementary to” language in the Unwired Planet decision. The PTAB explained that the CBM patent eligibility test is focused on the claim language, not simply on embodiments in the specification. Here, the PTAB agreed with the patent owner that the claims are “agnostic to the specific data with the attribute,” finding that the claims lacked any language related to pricing, financial products or services, and that the claims did not specify that price is an “attribute.” Although the PTAB acknowledged that price is described as an “attribute” in the specification and that the invention has application to financial services, it also noted that the specification described examples of non-financial attributes and applications beyond financial services. 

In concurrence, Administrative Patent Judge (APJ) Turner opined that the current state of the law for CBM review has become troubling for accused infringers that cannot avail themselves of CBM review proceedings given recent Federal Circuit precedent. Turner acknowledged that, as a matter of patent law, claims that do not recite explicitly anything directed to selling products or services cannot be supplemented by statements in the written description. He argued, however, that a broad patent claim intended to be directed to a financial product can escape review while a narrower patent claim directed to the same financial product would be forced into CBM review under the existing precedent. In a second concurrence, APJ Arpin explained that the statutory disclaimer of certain claims narrowed the scope of the challenged claims by clearly and unambiguously disclaiming “financial products” from the scope of the term “product.”

Practice Note: This decision continues the pattern of limiting eligibility for CBM review that stems from the Federal Circuit’s landmark decision in Unwired Planet and more recent decision in Secure Axxess (IP Update, Vol. 20, No. 3), where the Federal Circuit has taken a more strict reading of the statutory definition of a CBM patent.