Business Method Patent Challenge

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Key CBM Revision Unpopular with Bar Assoc’s

One of the more intriguing mechanisms of the America Invents Act (AIA) is the Transitional Program for Covered Business Method (CBM) Patents. To date, these speciailized post grant patent challenges have been pursued in relatively limited numbers as compared to the more generic Inter Partes Review (IPR) proceedings. The reason for the disparity between CBM and IPR filing rates is quite simple — IPR is available for any technology not just “business method patents.” Yet, the CBM proceding is far superior to IPR in many strategic respects.

Recognizing the potential of CBM filings to have a greater impact on the patent litigation landscape, Congress is actively considering alterations to the existing statutory framework that would encourage greater use of this powerful AIA mechanism.…

Continue Reading Bar Associations Set to Oppose Changes to CBM Statute

PTAB Braces For Increased AIA Hearings & Reexamination Surge

As we head to the end of the summer months, many of the first patentability trials of the AIA are maturing for decision. Going forward, the USPTO’s Patent Trial & Appeal Board (PTAB) will face a growing number of these oral hearings, also the surge of inter partes patent reexamination filings made last September will also be headed to the Board for decision. At last week’s Patent Public Advicory Committee (PPAC) meeting, the PTAB reported on the progress of their workload, and their plans for staffing up in anticipation of the coming reexamination surge.…

Continue Reading Post Grant Buzz – Summer

AIA Alternatives to Patent Litigation Prove Wildly Popular

It’s hard to believe that it has only been 10 months since September 16, 2012. On that date, the new patent challenge proceedings of the America Invents Act (AIA) first became available. Since that day 400+ petions for trial (IPR and CBM) have been filed with the…

USPTO Faces Public Policy Dilemma

The Patent Trial & Appeal Board (PTAB) has the power to terminate an Inter Partes Review (IPR), Post Grant Review (PGR), or Transitional Proceeding for Covered Business Method Patents (CBM) upon request of the parties. This discretionary power to terminate a patentability challenge by agreement (37 C.F.R. § 42.74) is a new concept for the USPTO. Historically reexamination proceedings could not be terminated by agreement. In reexaminations (inter partes) where the contesting parties settled their dispute, the challenging party would simply drop out of the inter partes reexamination, but the Office would continue with the reexamination in the interests of public policy.  (cf. terminating an inter partes patent reexamination by operation of estoppel).

The PTAB greatly benefits from the ability to terminate post grant patent proceedings. This is because Board resources can be moved away from post grant proceedings that are no longer commercially relevant (at least as to the present parties) to those newly initiated, and there are plenty of them. Likewise, the ability to settle seems to encourage resolution of disputes as roughly 30 IPRs and CBMs have settled to date. But, some would argue that the public is left holding the bag for suspect patents that escape cancellation by operation of a private settlement.

While it is true that another challenger could come along and pick up where the last left off, such would be at a significant cost— AND the public would essentially be paying the USPTO twice for the same proceeding. Yet, there is a far better solution to this problem already on the books, one that would still allow the Board to free up judicial bandwidth. …
Continue Reading Public Policy vs. PTAB Post Grant Settlements

PTAB_Estoppel

CAFC Standard of Review Options Critical in Appeals From USPTO

The new patent challenge mechanisms of the America Invents Act (AIA) will greatly increase the number of CAFC appeal from the USPTO, as much as several hundred cases per year. This is because the patents subject to the new post grant proceedings (IPR, CBM, PGR) are almost always high-value assets involved in co-pending litigation, and these proceedings will conclude faster than any previous mechanism for challenging a U.S patent. At the time of this writing there are roughly 400 IPR and CBM proceedings pending, all of which will be ripe for appeal to the CAFC in 2014 absent settlement (rate of settlement is roughly 10% at present).

When evaluating the PTAB’s decisions on appeal, the CAFC employs either a de novo standard of review for questions of law or, the more deferential substantial evidence standard of review for questions of fact. Not surprisingly, appeals that employ the de novo standard provide a more significant opportunity for reversal. For this reason, it is important to understand the Court’s practice in applying one standard over the other.
Continue Reading Hundreds of PTAB Appeals Headed to CAFC in 2014

Supreme Court Review in CLS Bank to Create Perfect Storm for CBM Filings

Patent Holders in the business method patent space received a sobering dose of reality a few weeks back when the USPTO Patent Trial & Appeal Board (PTAB) cancelled the claims of the very first Covered Business Method (CBM) patent challenge. The petition (here) challenged U.S. Patent  6,553,350 of Versata Development Group. In May of 2011, Versata secured a $391 million dollar verdict in the Eastern District of Texas against CBM challenger SAP. Aside from the speed at which the USPTO acted on the petition, perhaps the most noteworthy aspect of the decision was the basis for the cancellation.

The PTAB expedited the typical 12 month CBM duration to 9 months since the only challenge to patentability was based on 35 U.S.C. § 101 (i.e., whether or not the claims were directed to subject matter that was eligible for patenting in the first instance). The PTAB found that the claims were not patentable under 101, and cancelled the challenged claims as being directed to an abstract idea. (Written Decision here)

The PTAB’s decision is this case was an eye opener to many business method patent litigants that had become accustomed to the “too slow to matter” world of USPTO patent reexamination. The SAP CBM decision made clear that the new post grant patent proceedings of the America Invents Act (AIA) can truly serve as a faster and cost effective alternative to patent litigation.

With the CAFC’s decision in CLS Bank v. Alice Corp (considering computer implemented business method claims) seemingly destined for Supreme Court Review, the PTAB may very quickly become the 101 court of choice going forward.
Continue Reading CLS Bank to Drive PTAB Business Method Patent Challenges?

Not All of the New Patent Reform Ideas are Good Ones

A few weeks back House Judiciary Committee Chair Bob Goodlatte (R-VA), released a “discussion draft” of further patent reform ideas. The Draft is a collection of adjustments to the U.S. patent system designed to encourage a dialogue on these important reform issues. In particular the abusive litigation tactics of so called “patent trolls” are the driving force behind the legislative effort. For this reason, the bulk of the proposals of the Goodlatte Draft are squarely aimed at preventing the abusive behaviors and practices of patent trolls. Yet, there is one proposal of the Draft that stands out as a glaring exception. This troll-friendly provision, if enacted into law, would virtually ensure the continued success of the patent troll business model.
Continue Reading Congress Considers Helping Patent Trolls?

PTAB Delivers on Congressional Mandate

As discussed previously, the very first petition for a Covered Business Method Patent Challenge (CBM) was filed on September 16th by SAP (CBM2012-00001). The petition (here) challenged U.S. Patent  6,553,350 of Versata Development Group. In May of 2011, Versata secured a $391 million dollar verdict in the…