PTAB Must Use Only Statutory Definition to Classify Covered Business Method Patents: Federal Circuit | Practical Law

PTAB Must Use Only Statutory Definition to Classify Covered Business Method Patents: Federal Circuit | Practical Law

In Unwired Planet, LLC v. Google, Inc., the US Court of Appeals for the Federal Circuit held that the Patent Trial and Appeal Board (PTAB) erred in expanding the definition of a covered business method patent by not strictly relying on the statutory language of the Leahy-Smith America Invents Act (AIA).

PTAB Must Use Only Statutory Definition to Classify Covered Business Method Patents: Federal Circuit

by Practical Law Intellectual Property & Technology
Published on 22 Nov 2016 • USA (National/Federal)
In Unwired Planet, LLC v. Google, Inc., the US Court of Appeals for the Federal Circuit held that the Patent Trial and Appeal Board (PTAB) erred in expanding the definition of a covered business method patent by not strictly relying on the statutory language of the Leahy-Smith America Invents Act (AIA).
On November 21, 2016, in Unwired Planet, LLC v. Google, Inc., the US Court of Appeals for the Federal Circuit held that the Patent Trial and Appeal Board (PTAB) incorrectly relied on a non-statutory definition of a covered business method (CBM) patent in analyzing multiple patent claims ( (Fed. Cir. Nov. 21, 2016)). The PTAB asked whether the claims in question were incidental or complementary to a financial activity. The Federal Circuit held that the PTAB should have applied the statutory definition from the Leahy-Smith America Invents Act (AIA) instead. Counsel practicing in front of the PTAB should apply the strict statutory definition going forward.
Google, Inc. petitioned the PTAB for CBM review of U.S. Patent No. 7,203,752 ('752 patent). The '752 patent describes a system and method for restricting a client application's access to a wireless device's location information. The PTAB first reviewed whether the '752 patent is a CBM patent by asking whether the claims covered activities that are:
  • Financial in nature.
  • Incidental to a financial activity.
  • Complementary to a financial activity.
The PTAB found that the claims were incidental or complementary to a financial activity and instituted CBM review on that basis.
The AIA defines a CBM patent in Section 18(d)(1). The PTO previously adopted that definition without alteration. The Federal Circuit held that the PTAB failed to apply the proper statutory definition in making its CBM determination because:
  • The statutory definition established by the AIA and adopted by the PTO governs and does not include the incidental or complementary standard used by the PTAB.
  • A policy statement during a debate over the AIA referencing the incidental or complementary standard was not grounds to expand the CBM definition.
The Federal Circuit therefore vacated the decision and remanded the case for reconsideration.
The Federal Circuit's decision narrows the definition of a CBM patent and should make it more difficult for petitioners to subject patents to CBM review. Counsel practicing in front of the PTAB should avoid referencing the broader incidental or complementary standard when arguing for CBM review.