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American Express Company v. Signature Systems, LLC: PTAB Decisions on Instituting CBM Review Are Based Only on the Petition and Preliminary Response

Addressing whether a petitioner seeking a covered business method (CBM) review could file a reply to the patent owner’s preliminary response, the Patent Trial and Appeal Board (PTAB or Board) answered in the negative, explaining that a decision to institute a CBM review is based only upon the information and claims presented in the petition. American Express Company v. Signature Systems, LLC, Case No. CBM2015-00153 (PTAB, Oct. 23, 2015) (Tierney, APJ).

In June of 2015, American Express filed a petition requesting CBM review of a patent relating to a method and system for electronic exchange of reward points. The patent owner filed a preliminary response arguing that the institution of a CBM review is moot because the claims upon which the petition is based have been either amended or cancelled, as indicated in a Notice of Intent to Issue Ex Parte Reexamination Certificate that issued in September of 2015.

American Express requested to file supplemental briefing on the mootness issue raised in the preliminary response. American Express contended that the amended claims would likewise be unpatentable and requested to file a reply brief to be considered by the PTAB at the time of institution. The patent owner opposed the request, arguing that the issues are fully briefed and that the Board can render a decision on whether to institute a CBM based on the petition and preliminary response. Further, the patent owner contended that if the Board allows American Express to file a reply brief, then the patent owner should fairly be afforded an opportunity to file a sur-reply.

According to 35 U.S.C. § 324(a), a CBM review should be instituted if “the information presented in the petition…, if such information is not rebutted, would demonstrate that it is more likely than not that at least 1 of the claims challenged in the petition is unpatentable.” (Emphasis added.) The Board interpreted § 324(a) to mean that decisions on whether or not to institute a CBM review are based only on the petition and the preliminary response, if one is filed. Accordingly, the Board denied American Express’s request for additional briefing.

Practice Note: In this case the patent owner beat American Express to the PTO, filing for ex parte re-examination of the patent in question three months prior to American Express requesting inter partes review of the same patent. By so doing, the patent owner may have more control over the supplemental examination process, which can yield cost and strategic advantages.

Clark Gordon authored this article.

© 2022 McDermott Will & EmeryNational Law Review, Volume V, Number 335
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