Healthcare Patents Not Immune from Covered Business Method Review

When Congress debated and enacted Section 18 of the AIA, creating “covered business method (CBM) review,” healthcare industry patent holders took comfort in the statute’s seemingly narrow reach—to patents that “claim[] 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. . . .” AIA § 18(d)(1); see 37 C.F.R. § 42.301(a). After three years of AIA implementation, patent holders from industry sectors outside of financial services have been affected by the USPTO’s arguably broad application of the statute. At present, the Federal Circuit has agreed with the USPTO’s broad interpretation of § 18’s scope, stating that “as a matter of statutory construction, the definition of ‘covered business method patent’ is not limited to products and services of only the financial industry, or to patents owned by or directly affecting the activities of financial institutions such as banks and brokerage houses.” Versata Dev. Grp., Inc. v. SAP Am., Inc., 2014-1194, slip op. at 35 (Fed. Cir. July 9, 2015) aff’g SAP Am., Inc. v. Versata Dev. Grp., Inc., CBM2012-00001.

Most recently, in CBM2015-00085, the Board instituted CBM review for a patent that “relates to a system and method for gathering and analysis of health-care related data as well as techniques for de-identifying individuals from pharmaceutical data, in order to maintain privacy.” Symphony Health Solutions Corp., v. IMS Health Incorporated, CBM2015-00085, Paper 7. The institution decision flatly rejected the Patent Owner’s contention that “the [] patent has no particular relation to the financial services industry, and does not ‘particularly target’ the financial sector.” To support its holding, the Board determined that the “claimed system and method recite activities used in the practice, administration, or management of a financial product or service” by latching onto passages in the specification rather than the claim language itself. The specification explained that (1) the claimed “health care field” relating to “health care data,” includes “claims data, such as pharmaceutical, medical and hospital claims data, i.e., claims for receiving payment or reimbursement”; (2) the “system and method are disclosed as being used to generate reports such as market shares, sources of business, and patient demographics;” and (3) the claimed system is used “in a number of ways to help make business decisions,” including enhanced sales force targeting, early warning of market share shifts, and accurate intelligence on market size and demand.”

Addressing whether the claimed subject matter amounted to technological inventions excluded from CBM Review, the Board concluded that the patent did not solve a technical problem using a technical solution. While the Patent Owner argued that the claims solve a technical problem—“that there is a significant volume of health care records. . . that need consistent de-identification”— the Board disagreed.  The Board focused instead on the specification’s description of a non-technical problem—“laws [that had] passed that prevent the transmission of personal information associated with individuals within health care claims data, where removing the specific personal data makes it harder to generate valuable research and marketing data.” Having held that the a technical problem did not exist, the Board further concluded that the claims did not set forth a technical solution as the “patent employs conventional computer equipment and programming to encode, link and transmit the health care data.”