Low Demand To Date for Specialized PTAB Review Proceeding

The new post grant patentability trials of the America Invents Act (AIA) are designed to serve as alternatives to costly patent litigation. One of the new post grant options is the very specialized, Transitional Program for Covered Business Method Patents, or “CBM” proceeding. This proceeding, like Inter Partes Review (IPR), is conducted before the administrative patent judges of the USPTO’s Patent Trial & Appeal Board.

As the name implies, a CBM proceeding is limited in scope to “business method” patents. Assuming a subject patent qualifies as a business method, and is asserted against a petitioner in a litigation (or a petitioner is otherwise charged with infringement), a CBM filing is available as an alternative to the litigation. Indeed, Congress devised CBM proceedings to virtually guarantee the stay of the higher cost litigation proceeding. The CBM provision was added to the AIA as a compromise between those that did not want a “second window” for Post Grant Review (PGR) (bio/pharma lobby) and those (financial/software) that felt the change in 101 case law (Bilski) should be applied to the multitude of patents that resulted from the State Street Bank decision. 

CBM is an especially powerful tool to combat business method patent assertions, yet only 17 have been pursued to date. Why?

Of course, CBM filings will never rival IPR filing numbers (225+ at the time of this writing) based upon their specialized standing requirements and subject matter restriction. Also, with so many business method patents relying on divided infringement theories, since the CAFC’s decision in Akamai, it may simply be that fewer such patents are being asserted.

Still, even with such filtering it is surprising that only a handful have been pursued to date. Given the significant petitioner benefits of a CBM proceeding, and the significant lobbying effort that was expended to provide this option, it seems there should be more of them.

In fact, there are some IPR filings that target patents that would seem to have been eligible for CBM. Certainly, a CBM is far more attractive if the strategy is to seek a stay.  And with CBM estoppel being narrower than IPR (i.e., restricted to only those issues actually raised), why choose IPR instead?

Perhaps some petitioners choose IPR rather than risk the denial of a CBM petition on subject matter grounds outside of their 12 month window. (Note the USPTO’s interpretation of a “business method” is being challenged in the EDVA). Or, perhaps the more liberal standard for securing additional discovery in a CBM, coupled with the availability of strong grounds of unpatentability on patents and printed publications tips the scales in favor of IPR over a CBM.

Until recently, the “stay guarantee” of the CBM statutes was largely theoretical. However, with courts now demonstrating their willingness to stay a parallel litigation upon the mere filing of  a CBM petition, and more courts considering such issues everyday, I expect CBM filings to inch up going forward.