Federal Circuit Vacates Patent Trial And Appeal Board Decisions On CBM Proceedings Because the Challenged Patents Were For Technological Inventions And Thus Not Eligible For CBM Review
On February 13, 2019, the Court of Appeals for the Federal Circuit (CAFC) issued an opinion vacating covered-business-method review (CBM) decisions by the Patent Trial and Appeal Board (PTAB). Trading Technologies International, Inc. v. IBG LLC, —F.App’x—, (Fed. Cir. Feb. 13, 2019). The CAFC ruled that the challenged patents were not eligible for CBM review because they were for “technological inventions.”
A CBM is an administrative procedure by which one can challenge the patentability of an issued patent claim on various grounds, including patent eligibility, anticipation, obviousness, lack of written description, lack of enablement, or indefiniteness. However, a patent is not eligible for CBM review unless it both (i) 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, and (ii) is not directed to a “technological invention.” The second prong, per 37 C.F.R. § 42.301(b), is a case-by-case determination based on “whether the claimed subject matter as a whole recites a technological feature that is novel and unobvious over the prior art; and solves a technical problem using a technical solution.”
The instant appeal involved four related patents directed to the same subject matter. Two of the patents were subject to an earlier Federal Circuit decision, in which the Federal Circuit upheld their patent eligibility under 35 U.S.C § 101 because the claims were not directed to an abstract idea. Trading Technologies International, Inc. v. IBG LLC, 675 F.App’x 1001, 1004 (Fed. Cir. 2017). The Federal Circuit concluded that “the claimed subject matter is directed to a specific improvement to the way computers operate, for the claimed [GUI] method imparts a specific functionality to a trading system directed to a specific implementation of a solution to a problem in the software arts.”
The Federal Circuit in the instant appeal noted that the “discussion of those [two] patents in the context of eligibility is instructive to the technological invention question” at issue for CBM eligibility. The Federal Circuit found that, if “the claimed subject matter is directed to a specific improvement to the way computers operate,” as it held in the earlier appeal, then the patents are also for a “technological invention.” Accordingly, the Federal Circuit vacated the Board’s decisions, holding that the patents were not eligible for CBM review.
After this decision, there can be little doubt that the technological-invention CBM-eligibility prong is, in the eyes of the Federal Circuit, similar to—if not synonymous with—patent eligibility under 35 U.S.C. § 101.