Covered Business Method
Review (CBMR)
To date, about 8% of the petitions filed with the PTAB have
been petitions seeking CBMR. CBMR is a temporary procedure
created by the AIA which, unless it is extended, will expire
on September 16, 2020. Until it expires, petitioners can seek
CBMR of any “Covered Business Method” patent, which the
AIA defines as patents claiming a method or apparatus for
“performing data processing or other operations used in
the practice, administration, or management of a financial
product or service.” (AIA § 18(d)( 1)). Similar to PGR proceedings,
CBMR petitioners can argue invalidity under 35 U.S.C. § 101
(ineligible subject matter), § 102 (lack of novelty) § 103
(obviousness), and § 112 (lack of enablement or written
description). For patents with a filing date after March 15,
2016, a petitioner cannot request CBMR until nine months
after issuance, or until after any instituted PGR proceeding
against the patent has been terminated.
Similar to IPRs and PGRs, the AIA requires that the PTAB issue
a final written decision on the patentability of any challenged
claim within one year of issuing a final written decision granting
a petition to institute a CBMR.
Unlike the other post-grant proceedings, to petition for
CBMR, a petitioner must have been sued for infringement
of the patent or have been charged with infringement of the
patent, such that the petitioner would have standing to bring
a declaratory judgment action in district court. Moreover, a
petitioner cannot petition for CBMR if the petitioner has filed
a civil action challenging patent validity.
Petitioners find CBMR particularly attractive because it offers
the opportunity to argue invalidity on any ground, while only
being estopped from asserting in a civil action or before the
USPTO grounds of invalidity which the petitioner “actually
raised” during the CBM review. However, recent Federal
Circuit decisions have drastically narrowed which patents
qualify as covered business method patents, rejecting
the PTAB’s initial broad application. Specifically, in order
to be a covered business method patent, at least one
claim of the patent must claim a “financial activity element.”
(Secure Axcess, LLC v. PNC Bank Nat’l Ass’n et al., No. 2016-
1353, 2017 WL 676601 (Fed. Cir. Feb. 21, 2017). Prior to the
recent ruling, the PTAB had been more flexible, allowing CBM
review of patents if the specification identified financial uses,
for example.
Looking Forward
Both domestic and foreign companies can take advantage
of post-grant proceedings to cost-effectively challenge
issued US patents. We expect that IPRs will continue to be
the dominant post-grant proceeding before the PTAB, for
both domestic and international patent challengers. Whether
the PTAB or the courts impose additional restrictions or relax
recent restrictions on procedural aspects will further impact
the utility of post-grant proceedings.
“Both domestic and foreign companies
can take advantage of post-grant
proceedings to cost effectively challenge
issued US patents.”
