H.R. 1249 Section 18


SEC. 18. TRANSITIONAL PROGRAM FOR COVERED BUSINESS METHOD PATENTS.


(a) Transitional Program.—

(1) ESTABLISHMENT.—Not later than the date that is 1 year after the date of the enactment of this Act, the Director shall issue regulations establishing and implementing a transitional post-grant review proceeding for review of the validity of covered business method patents. The transitional proceeding implemented pursuant to this subsection shall be regarded as, and shall employ the standards and procedures of, a post-grant review under chapter 32 of title 35, United States Code, subject to the following:

(A) Section 321(c) of title 35, United States Code, and subsections (b), (e)(2), and (f) of section 325 of such title shall not apply to a transitional proceeding.


(B) A person may not file a petition for a transitional proceeding with respect to a covered business method patent unless the person or the person’s real party in interest or privy has been sued for infringement of the patent or has been charged with infringement under that patent.


(C) A petitioner in a transitional proceeding who challenges the validity of 1 or more claims in a covered business method patent on a ground raised under section 102 or 103 of title 35, United States Code, as in effect on the day before the effective date set forth in section 3(n)(1), may support such ground only on the basis of—

(i) prior art that is described by section 102(a) of such title of such title (as in effect on the day before such effective date); or


(ii) prior art that—

(I) discloses the invention more than 1 year before the date of the application for patent in the United States; and


(II) would be described by section 102(a) of such title (as in effect on the day before the effective date set forth in section 3(n)(1)) if the disclosure had been made by another before the invention thereof by the applicant for patent.


(D) The petitioner in a transitional proceeding that results in a final written decision under section 328(a) of title 35, United States Code, with respect to a claim in a covered business method patent, or the petitioner’s real party in interest, may not assert, either in a civil action arising in whole or in part under section 1338 of title 28, United States Code, or in a proceeding before the International Trade Commission under section 337 of the Tariff Act of 1930 (19 U.S.C. 1337), that the claim is invalid on any ground that the petitioner raised during that transitional proceeding.


(E) The Director may institute a transitional proceeding only for a patent that is a covered business method patent.


(2) EFFECTIVE DATE.—The regulations issued under paragraph (1) shall take effect upon the expiration of the 1-year period beginning on the date of the enactment of this Act and shall apply to any covered business method patent issued before, on, or after that effective date, except that the regulations shall not apply to a patent described in section 6(f)(2)(A) of this Act during the period in which a petition for post-grant review of that patent would satisfy the requirements of section 321(c) of title 35, United States Code.


(3) SUNSET.—

(A) IN GENERAL.—This subsection, and the regulations issued under this subsection, are repealed effective upon the expiration of the 8-year period beginning on the date that the regulations issued under to paragraph (1) take effect.


(B) APPLICABILITY.—Notwithstanding subparagraph (A), this subsection and the regulations issued under this subsection shall continue to apply, after the date of the repeal under subparagraph (A), to any petition for a transitional proceeding that is filed before the date of such repeal.


(b) Request For Stay.—

(1) IN GENERAL.—If a party seeks a stay of a civil action alleging infringement of a patent under section 281 of title 35, United States Code, relating to a transitional proceeding for that patent, the court shall decide whether to enter a stay based on—

(A) whether a stay, or the denial thereof, will simplify the issues in question and streamline the trial;


(B) whether discovery is complete and whether a trial date has been set;


(C) whether a stay, or the denial thereof, would unduly prejudice the nonmoving party or present a clear tactical advantage for the moving party; and


(D) whether a stay, or the denial thereof, will reduce the burden of litigation on the parties and on the court.


(2) REVIEW.—A party may take an immediate interlocutory appeal from a district court’s decision under paragraph (1). The United States Court of Appeals for the Federal Circuit shall review the district court’s decision to ensure consistent application of established precedent, and such review may be de novo.


(c) ATM Exemption For Venue Purposes.—In an action for infringement under section 281 of title 35, United States Code, of a covered business method patent, an automated teller machine shall not be deemed to be a regular and established place of business for purposes of section 1400(b) of title 28, United States Code.


(d) Definition.—

(1) IN GENERAL.—For purposes of this section, the term “covered business method patent” means 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.


(2) REGULATIONS.—To assist in implementing the transitional proceeding authorized by this subsection, the Director shall issue regulations for determining whether a patent is for a technological invention.


(e) Rule Of Construction.—Nothing in this section shall be construed as amending or interpreting categories of patent-eligible subject matter set forth under section 101 of title 35, United States Code.

11 thoughts on “H.R. 1249 Section 18

  1. “That section (e) locks in place the current 101 jurisprudence and prevents the legislation from removing business methods from the 101 blessing.”

    Um it does both, but it also sets the stage for congress to deliver a deathblow to whatever subject matter in different statutes without people pointing to this one for confirmation that congress <3′s whatever they choose to kill later.

    Yes, I still especially like it. They should have put an (e) on the end of the business method exception currently on the books and we’d not be bothered by them any more today.

  2. Scholarly work at its finest:

    nice hyper link of :”and shall employ the standards and procedures of, a post-grant review under chapter 32 of title 35″

    0 documents found (0 returned) for U.S. Code Query :

  3. Finally, query whether a business method inherently involves more of a “value add” element than more traditional patent subject matter and accordingly the USPTO should require that the applicant’s specifically describe the “utility” aspect of the claimed invention, especially the value added by any referenced transformation. “Utility” or “Usefulness” is currently a theoretical requirement for patentability, but not much of a burden except perhaps in pharma and biotech applications.

  4. Also, if a proceeding to review validity of business method claims is provided, should it be pre-grant (not post-grant) and occur after publication of the application and reasonable opportunity for public review? Anyone could provide to the USPTO a packet that contains both prior art and analysis specifically showing why the application’s claims are not novel or are obvious in light of the included prior art. The examiner could select certain of these packets and require the applicant to address the analysis. If §282 was modified in light of the i4i decision, any analysis successfully addressed by the applicant would enjoy the deferential “clear and convincing” standard.

  5. Would a legislative review of the i4i decision provide a better resolution for business method patents? Under i4i, a court must presume that a patent, once granted by the USPTO, is valid even if particular prior art was not considered by the USPTO when granting the patent. This (along with a general weakening of the doctrine of inequitable conduct) may encourage applicants to not provide a full set of prior art disclosures. The applicant can thus effectively place the burden of finding prior art on the USPTO examiner and, subsequently, a monopolistic toll on industry if the examiner is less than perfect. If (i) the USPTO does not have experience or history with business methods and (ii) much business method prior art is not found in existing patents, the likelihood of problematic business method patents enjoying presumption of validity would increase. Should Congress modify §282 to state that the deferential “clear and convincing” standard continues to apply where the court finds that prosecution history shows that the USPTO considered particular prior art and that the non-deferential “preponderance of the evidence” standard otherwise applies? (I assume the standards should apply to all patents, not just “business method patents”.)

  6. 6,

    You are a dolt.

    That section (e) locks in place the current 101 jurisprudence and prevents the legislation from removing business methods from the 101 blessing.

    Do you really “especially like” it when you realize what it actually means?

  7. Oops my bad then.
    I didn’t read the whole post. This is about Business methods only. I guess I read too much like Ned.

  8. Are you saying a Patent may not be used in a Portfolio that does not belong to the Person Infinging it unless someone cracked that Egg first and was in Court for Infringement of that Patent, on the Patent they intend on Stealing? Wow I think that’s what you said,,, if not I like my Idea.

  9. Whoa, ghost post. I do believe this thing showed up after the post that now appears above it.

    Pretty nice statute. I especially like (e) at the end. Hopefully that’ll be enough to stop Scalia from reading into a law meant to protect people from certain patents that such patents are totally blessed by congress.

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