Federal Circuit Further Defines the Scope of Covered Business Method Review
In Unwired Planet, LLC v. Google Inc., No. 2015-1812 (Fed. Cir. Nov. 21, 2016), a panel of the Federal Circuit reviewed a covered business method patent (CBM) review decision of the Patent Trial and Appeal Board (PTAB), which had held the claims of a patent invalid under 35 U.S.C. §101. The patent, U.S. Patent No. 7,203,752, claimed a method of setting "privacy preferences" which would affect whether applications on a user's device could access the location information of the device.
The law governing CBM review states that the PTAB is allowed to institute CBM review for patents that claim "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." In this case, the PTAB had held that the patent was eligible for CBM review because an application that could be prevented from accessing location information could be an advertising application. This, it held, would make the patented invention "incidental or complementary" to a financial activity (service or product sales), which would make it eligible for CBM review.
The Federal Circuit noted that the "incidental or complementary" language that the PTAB relied on was not in the law governing CBM review, and came from a statement by Senator Chuck Schumer, who had sponsored the law in Congress. This statement was not enough to override the text of the law, which prohibited CBM review for "technological inventions." The Federal Circuit thus determined that CBM review should not have been instituted based on the reasoning that the PTAB used, and remanded the case for reconsideration under the proper standard.
This decision may limit the applicability of CBM review, which has seen increasing use as a method for challenging the patentability of claims under §101.
This case also demonstrates the standard that the Federal Circuit has adopted for the reviewability of covered business method patent review proceedings before the PTAB, demonstrated in SightSound v. Apple almost a year ago. The Federal Circuit maintains that the decisions of the PTAB to institute a CBM are not reviewable. However, the PTAB's determination of whether a patent qualifies as eligible for CBM review is reviewable on appeal of the final written decision. This means that, once the PTAB has reached a final written decision on a CBM matter, a party can then appeal the final written decision on the basis that the proceeding never should have been instituted in the first place.