July 22, 2019

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Federal Circuit Clarifies Scope of Covered Business Method Review

The Federal Circuit has further clarified the scope of the covered business method (CBM) review program under the America Invents Act (AIA), explaining in Secure Axcess, LLC. v. PNC Bank National Association that in order for patent to be a CBM patent, it is not enough that the claimed subject matter may be used in a financial activity.  Rather, to qualify as a CBM patent, a patent must have at least one claim that contains a financial activity element.

The AIA contains a temporary program by which a CBM patent may be challenged on any ground of patentability.  A threshold requirement to CBM review is that the challenged patent is in fact a covered business method patent.  The AIA defines a CBM patent as “a patent that 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 patent at issue in Secure Access covers systems and methods for authenticating web pages.  In deciding that the challenged patent qualified for CBM review, the Patent Trial and Appeal Board (PTAB) ignored that the claims included no specific financial activity element and determined it was a CBM patent because its authentication methods could be used incidental to financial activity.  The Federal Circuit reversed, noting that the phrase “incidental to a financial activity” is not in the statutory definition of a CBM and is therefore not a proper consideration in determining whether or not a patent is a CBM patent.

The Court explained that when determining if a patent is a CBM patent, it is not sufficient for the patent to simply claim a method or apparatus that is in fact used in the practice of a financial product or service.  Instead, the Court interpreted the statute to require that the patent contain at least one claim that contains a financial activity element.  According to the Court, should the statute be interpreted otherwise it would sweep too broadly, giving the CBM program “a virtually unconstrained reach,” conferring CBM patent status to any patent whose claims performed any operations that happened to be used in the practice of a financial product or service.

Like the Court’s recent decisions in Unwired Planet and Ameranth, the Secure Axcess decision restricts the PTAB’s application of the CBM review program and reminds petitioners, patent owners, and patent prosecutors alike to be aware of the strict statutory definition of a CBM patent.

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About this Author

William A. Meunier, Mintz Levin, Patent Litigation Lawyer, Biotech Attorney
Member

Bill focuses his practice on all aspects of intellectual property litigation, with a particular emphasis on patent infringement matters and other disputes related to the enforcement of intellectual property rights. He has litigated intellectual property cases in District Courts throughout the United States, including the Eastern District of Virginia, Northern and Southern Districts of California, Eastern District of Texas, District of Massachusetts, District of Delaware, Northern District of Ohio, and Middle District of North Carolina.

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Tiffany Knapp, Mintz Levin Law Firm, Intellectual Property Attorney
Associate

Tiffany concentrates her practice on intellectual property litigation, with an emphasis on patent cases. She uses her background in computer science and mathematics to help clients in matters at the International Trade Commission and in Federal District Courts.

Prior to joining Mintz Levin as an Associate, Tiffany was a law clerk to Clerk Joseph Stanton of the Massachusetts Appeals Court. During her last year in law school, prior to graduation, Tiffany worked as an Intern to Mintz Levin’s IP practice. She assisted with the preparation of and research for documents to help clients strategize the use of their patent portfolio, such as a market-specific patent litigation and damages awards report. Tiffany researched effects of Supreme Court decisions and the America Invents Act on the rights and litigation strategies of patent holders, and prepared memoranda and drafted publications related to the development of standard setting organizations and their impact on patent policies.

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