Federal Circuit Determines the Statutory Standard for Instituting Review of Covered Business Method PatentsNovember 25, 2016

      Unwired Planet v. Google involved a review of what standard the Patent Trial and Appeal Board should use in order to institute reviews of Covered Business Method (CBM) patents. Unwired owns the patent in question which describes a system and method for restricting access to a wireless device’s location information. Google petitioned for CBM review of several claims of the patent, and the Board did so. A covered business method patent claims a method, apparatus, or operation used in the practice, administration, or management of a financial product or service. CBM patents differ from utility patents in that they do not cover “technological inventions,”those inventions claiming novel and unobvious technological features. In its review, the Board was concerned with whether the claims were directed to a Covered Business Method, among other things. On appeal, therefore, the Federal Circuit considered whether the challenged claims were directed to patentable subject matter, but placed particular emphasis on whether the patent in question is in fact a CBM patent and whether the Board applied the correct definition of “covered business method.‚¬

      When determining whether a patent is a Covered Business Method patent (and thus entitled to CBM review), the standard the Board applied was “whether the patent claims activities that are financial in nature, incidental to a financial activity, or complementary to a financial activity.‚¬  However, according to the Federal Circuit this is not the “operative standard.”This standard makes the statutory limits the scope on CBM patents useless, and the particular phrasing of “incidental”and “complementary”is not found in the statute itself. Rather, “CBM patents are limited to those with claims that are directed to methods and apparatuses of particular types and with particular uses ‚¬Ëœin the practice, administration, or management of a financial product or service.'”Patents do not become CBM patents simply because they have an “incidental”or “complementary”financial use.

      The Federal Circuit’s ruling in this case will narrow the scope of patents considered as CBM patents by the Patent Trials and Appeal Board. Potential patentees attempting to file a Covered Business Method patent will need to be cognizant of the fact that a narrower understanding of what constitutes a CBM patent also narrows the parts of the Patent and Trademark Office’s jurisdiction. As patents that fall outside the definition of a CBM patent are outside the Patent Trial and Appeal Board’s authority to review, claimants will need to have greater awareness of the potential downstream litigation impact of filing such a patent.