Congress to Choose
Between Competing Definitions
One of the more intriguing mechanisms of the America
Invents Act (AIA) is the Transitional Program for Covered Business
Method (CBM) Patents. To date, these specialized post grant patent
challenges have been pursued in relatively limited numbers as compared
to the more generic Inter Partes Review (IPR) proceedings. The reason for
the disparity between CBM and IPR filing rates is quite simple - IPR is
available for any technology not just "business method patents." Yet, the
CBM proceeding is far
superior to IPR in many strategic respects.
Recognizing the potential of CBM filings to have a
greater impact on the patent litigation landscape, Congress is actively
considering alterations to the existing statutory framework that would
encourage greater use of this AIA mechanism.The first proposal comes
from Senator Schumer (D-NY) as Senate Bill S.866
or the "Patent Quality Improvement Act." This bill was
introduced some weeks back to amend Sec. 18 of the AIA, which
pertains to CBM standing. The Bill proposes to remove the language "a
financial product or" from the standing definition. In its place, the bill
proposes "an enterprise, product, or." The change would effectively make clear
that any e-commerce patent, even if not related to finances per se,
is subject to a CBM challenge. (Note that the USPTO
has been sued very recently on the importance of this "financial" component of
The second proposal is part of the "discussion
draft" proposed by Congressman Goodlatte (R-Va). The draft discussion
seeks to import the holding of the decision made in SAP America, Inc.
v. Versata Dev. Group, Inc., CBM2012-00001, Paper 36 (January 9, 2013).
This is the USPTO decision that is subject to the lawsuit noted above.
In chosing between the two, Senator Schumer's language
would arguably expand CBM proceedings in the direction of e-commerce software
applications (i.e., "enterprise products" is a more generic reference to
non-financial methodologies/apparatus than currently recited in the statute).
This language would also undercut arguments that patents reciting
standard computer elements for implementing non-financial business methodology
are outside of the scope of the statute as "technological inventions."
The Goodlatte proposal would simply clarify the
already existing landscape, namely, a financial component is not required
for proper CBM standing. On the other hand, the Schumer proposal will
accomplish the clarification of the Goodlatte proposal while simultaneously
providing increased opportunities for patent challengers. Seems to
me that the Schumer Bill is the most likely result going forward considering
the significant anti-troll sentiment driving these legislative initiatives.
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