United States: InterPartesReview BLOG: Federal Circuit Lets CBM-Narrowing Decision Stand

The Federal Circuit has denied a request for rehearing en banc of a case, decided last fall, that narrowed the types of patents that may qualify as a Covered Business Method. The case, Unwired Planet v Google,1 involves the standard to be applied for determining whether a patent is eligible for CBM review.

Key Takeaway.  The Federal Circuit's November 2016 panel decision in the case – which rejected that portion of the Board's CBM standard covering matter "incidental" or "complementary" to a financial activity – remains in place. As a result, the PTAB will most likely be applying a narrower definition for "covered business method," as it has done since the panel decision issued. Parties should be aware of greater scrutiny and narrower scope of patents eligible for CBM review, and that Patent Owners have more opportunity to challenge allegations that a patent meets the statutory definition for CBM patents.

Background.  When determining whether to institute a CBM patent trial, the PTAB normally decides, as a threshold matter, whether the challenged patent qualifies as a covered business method. Beginning with the earliest CBM cases, the Board had applied a broad standard to that determination, such that covered business method review would encompass patents claiming "activities that are financial in nature, incidental to a financial activity or complementary to a financial activity." In Unwired Planet, the Board determined that U.S. patent 7,203,752, which relates to restricting access to a wireless device's location information, qualified for CBM review as "incidental or complementary to the financial activity of service or product sales."

On appeal, the Federal Circuit disagreed with the Board's decision, rejecting the broad standard that the Board had applied for determining CBM eligibility. In particular, the CAFC determined that the portion of the Board's standard relating to "incidental to a financial activity or complementary to a financial activity" would encompass patents not within the statutory bounds of CBM review. Although acknowledging that the court had previously endorsed the "financial in nature" aspect of the Board's standard, the CAFC stated that the "incidental" or "complementary" prongs are not found in the statute. While recognizing that some patents meeting the Board's standard would also fall within what the court termed a "narrow" statutory CBM definition, the CAFC criticized the breadth of the "incidental" or "complementary" prongs, which might capture such (hypothetical) patents as a light bulb that works in a bank vault, or a ditch digger used to extract dirt that is sold. According to the court, sales activity should not be a determinative factor, since all patents, at some level, may relate to potential sale of goods or services.

Google filed a petition for rehearing en banc in January, 2017, asserting that the court lacked jurisdiction to review whether a patent qualifies for CBM review, and that the court should have deferred to the PTO's view of the appropriate standard for determining CBM eligibility.

En Banc Petition Denied; Panel Decision Remains in Effect.  In its April 4, 2017 order in Unwired Planet, the court denied Google's petition for rehearing en banc.2  The court also referred the case to the panel as a petition for panel rehearing (which was also denied). Judge Hughes, concurring in the court's denial of rehearing of the panel decision, expressed his view that the court should not hear appeals relating to the PTAB's determinations of CBM eligibility. Of note, as Judge Hughes mentioned, the full Federal Circuit is expected to further refine the court's view on appealability of PTAB decisions in the Wi-Fi One v. Broadcom case.3

The court's Unwired Planet order leaves in place the panel decision in the case, which had vacated the Board's decision and remanded for further consideration. As a result, the case now heads back to the PTAB for a new determination on CBM review eligibility – one not based on whether the claims cover matter "incidental" or "complementary" to a financial activity.

Google has indicated its intent to file a petition for certiorari to seek review by the Supreme Court. Thus, the Supreme Court may ultimately decide to weigh in on the issue – and, in particular, the question of appealability.

In the meantime, we can expect the PTAB to adhere to the panel decision regarding the standard for determining whether a patent claims a covered business method, and in particular the PTAB will not be able to rely on the "incidental" or "complementary" prongs of its former test. As such, the scope of patents potentially subject to CBM review will be narrower. Patent owners should remain alert for the opportunity to challenge allegations that a patent meets the statutory definition for CBM patents, and to seek rehearing or appeal of prior determinations, where available. Patent challengers should be aware of the narrower scope of patents eligible for CBM review, and of greater scrutiny likely to be placed on the issue.

Footnotes

1.    Unwired Planet, LLC v. Google Inc., 841 F.3d 1376 (Fed. Cir. 2016).

2.    Unwired Planet, LLC v. Google Inc., No. 15-1812 (April 4, 2017) (order denying petition for rehearing).

3.   Wi-Fi One, LLC v. Broadcom Corp., No. 15-1944 (Fed. Cir. Jan. 4, 2017) (order granting rehearing en banc).

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions