United States: Boundaries Of America Invents Act Review Procedures Still Being Defined

With the America Invents Act (AIA), the Patent and Trademark Office (PTO) was tasked with creating a new administrative process for challenging certain business method patents. But nearly five years since the AIA, the boundaries of these reviews — known as covered business method reviews (CBM)  —  are still being defined. As illustrated by the recent case of Global Tel*Link Corp. v. Securus Technologies Inc., the debate continues even as to what is required for a patent to be eligible for covered business method review (CBM review).

In Global Tel*Link, Global successfully instituted a covered business method patent review of a patent owned by Securus only to have the proceeding terminated a year later on the grounds that the patent was not eligible for CBM review.

CBM reviews, under the AIA, require the party petitioning for review of the patent at issue to prove that the patent is eligible. Under the statute, to do so, the petitioning party must show that the patent at issue "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, except that the term does not include patents for technological inventions." AIA § 18(d)(1).

The PTO has interpreted the legislative history of the AIA as explaining "that the definition of covered business method patent was drafted to encompass patents 'claiming activities that are financial in nature, incidental to a financial activity or complementary to a financial activity.'" 77 Fed. Reg. 48,374, 48,735 (Aug. 14, 2012) (quoting 157 Cong. Rec. S5432 (daily ed. Sept. 8, 2011)). But this definition is vague and has caused problems.

In the decision to institute CBM review in Global Tel*Link, the PTO described the patent at issue, U.S. Pat. No. 7,860,222, as directed to compiling and reporting data from networks, such as networks used by correctional facilities. The system described by the patent  allowed a user to perform a word search on telephone calls placed by inmates using the correctional facility network. Other information could also have been accessed through the system such as telephone numbers contacted by inmates at other correctional facilities. Telephone calls could also be monitored in real time, disconnected, tagged for later review, bookmarked, or annotated. 

In finding the claims eligible for CBM review, the Patent Trial and Appeals Board (PTAB) looked at the specification and determined that the systems and methods, as claimed and disclosed in the specification, supported financial services and transactions. The specification noted that the data could be used "with respect to . . . credit decisions (e.g., decisions with respect to providing goods or services, such as calling service, in realtime), . . . commerce (e.g., determining a source of funding), payments (e.g., determining a proper entity to receive payment), and/or the like." Also according to the specification, vendors providing services to inmates "may be given access to the information management system via a remote computer system and/or telephone (wireline and/or wireless) to receive order from the facility, verify accounts or status of payment, and coordinate delivery of good and services." Based on such evidence, the PTAB concluded that claim 21 was at least complementary or incidental to a financial activity. Accordingly, the PTAB found the patent qualified for CBM review.

One year later, the PTAB panel came to the opposite conclusion and ended the CBM review. In reversing its prior decision, the PTAB panel noted that the intervening Federal Circuit decision in Blue Calypso, LLC v. Groupon, Inc., 815 F.3d 1331, 1340 (Fed. Cir. 2016) and its focus on the language of the claims was instructive. In that decision upholding CBM review jurisdiction, the Federal Circuit relied heavily on the inclusion of the financial term "subsidy" in the claims. The Federal Circuit further noted that prior decisions not to institute CBM review by the PTAB were "properly focuse[d] on the claim language at issue and, [found] nothing explicitly or inherently financial in the construed claim language."

With the focus on the claims, the PTAB noted that the representative claims in Global Tel*Link "[were] devoid of any terms that reasonably could be argued as rooted in the financial sector, directed to a financial transaction, inherently financial, incidental to a financial activity, or complementary to a financial activity." Rather the claims were directed to communication. The PTAB cautioned that too broad an interpretation of "activities that are financial in nature, incidental to a financial activity or complementary to a financial activity" would allow for CBM review of patents claiming anything that could be used in connection with a financial service such as an Ethernet cable, computer monitor, or writing instrument. Though the specification of the patent included at least one illustrative embodiment directed to a financial use, the PTAB was not swayed. In concluding that the patent at issue was not eligible for CBM review, the PTAB found that the "mere ability to use the claimed invention in a financial context, standing alone, does not require a finding that the financial prong has been met, especially when the specification as a whole suggests a broader application."

The Global Tel*Link case provides increased clarification on just what patents are eligible for CBM review. In particular, Global Tel*Link emphasizes the importance of claim language in determining which patents are eligible for CBM review. Even where the specification could be read to cover an activity that was "financial in nature, incidental to a financial activity or complementary to a financial activity," that specification may not be sufficient to cause the patent to be CMB eligible where the specification recites other uses and the claims are devoid of financial terms.

Yet even with this decision, patent counsel should exercise caution in reading this case too broadly. The PTAB took pains to include several hedging statements in its opinion. While emphasizing the importance of the claims, the PTAB indicated that "statements in the specification that a claimed invention has particular utility in financial applications may weigh in favor of determining that a patent is eligible for a covered business method patent review" and that "we do not interpret section 18 of the AIA as requiring the literal recitation of financial products or services in a claim."

So while Global Tel*Link provided some answers as to which patents are eligible for CBM review, it still included ample conflicting statements to allow for this dispute to continue for some time.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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