by Dennis Crouch
IBG LLC v. Trading Technologies Int’l (Fed. Cir. 2019) (non-precedential)
This appeal stems from Covered Business Method (CBM) Review decisions on four related patents owned by TT. The PTAB instituted all four CBM reviews. However, by the time of final decision, two of the challenged patents had been already upheld on eligibility by the Federal Circuit. For those two patents, the PTAB followed the court’s lead and found the patents were directed to eligible subject matter. However, claims of the second set of patents were ruled invalid as ineligible and obvious.
On appeal, the Federal Circuit took a shortcut. Rather than directly addressing the underlying patentability question, the court vacated the PTAB determinations on jurisdiction grounds. The court held that the inventions at issue are “technological” and therefore not “covered business methods.”
Section 18 of the America Invents Act (AIA) creates the “Transitional Program for Covered Business Method Patents.” The program, which sunsets in 2020 allows broad challenges of business method patents — including challenges on eligibility grounds. However, the law includes a strict and limited definition of what counts as a “covered business method patent.”
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.
In its prior statement on the TT patents, the Federal Circuit ruled that the user interface patents were “directed to a specific improvement to the way computers operate.” Here, the court found its prior holding (as adopted by the PTAB) automatically leads to a conclusion that “the patents are also for a ‘technological invention’ under any reasonable meaning of that term.” The Board’s holding otherwise, according to the court, is “internally inconsistent and therefore arbitrary and capricious.” The result here is that the PTAB does not have authority to conduct a CBM review of these patents because they are “technological.”
CONFLICT DISCLOSURE: While in practice at the MBHB firm, I represented Trading Technologies and personally filed several infringement complaints asserting some of the patents at issue here. MBHB is also the primary financial sponsor of Patently-O. – DC