CBMs Not Limited to Products or Services of the Financial Services Industry

A recent Patent Trial and Appeal Board (PTAB) decision provides further guidance regarding the scope of “covered business method” (CBM) patents under the AIA. AIA § 18(d) defines “covered business method patents” as patents claiming “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 patens for technological inventions.” As illustrated by the PTAB’s recent determination that a patent for smart-phone advertising was subject to CBM review, this definition extends beyond the world of banks and financial services.

In Google Inc. v. Unwired Planet, LLC, CBM2014-00006, Paper 11 (April 8, 2014), the PTAB confirmed that CBM reviews are “not limited to products or services of the financial services industry.” Looking to the AIA’s legislative history, the PTAB found the proper inquiry is whether the patent claims activities that are “financial in nature, incidental to a financial activity, or complementary to a financial activity.”

Claim 25 of U.S. Patent No. 7,203,752 recites a method of controlling access to location information for wireless communication devices that is requested by a “client application.” Based on the patent’s disclosure, the Petitioner argued that such client applications could be used in business applications incidental or complementary to financial products or services, such as banks or other financial service companies. In response, the Patent Owner argued that such a broad definition of “covered business methods” would improperly capture patents only remotely related to financial uses.

Rather than considering the types of businesses using the “client application,” the PTAB focused on how that application could be used. The ’752 patent explained that a business could use the claimed client application to learn when a wireless device is in its area so that relevant advertising may be transmitted to the wireless device. Advertising, the PTAB found, is complementary or incidental to the financial activity of a service or product sales, making claim 25 of the ’752 patent a “covered business method.” As this analysis illustrates, patents unrelated to the financial services industry, but still financial in nature, may qualify for CBM review.