Invalidating Someone Else's Patent - Part 4: Covered Business Method Review. Episode 80

Previously Discussed Invalidation Procedures

In the past three episodes, I covered three ways to invalidate a patent at the Patent Office: ex parte reexaminations, inter partes reviews, and post-grant reviews. In this episode, I’ll discuss another procedure, covered business method (CBM) review.

CBM review is very specific and, in fact, was phased out on September 15, 2020. It was a special procedure designed specifically for invalidating patents related to financial products and services. If your invention is unrelated to financial products or services, this procedure likely wouldn’t have applied to you. However, since this is a short episode, you might as well listen—or, if you’re trying to fall asleep, my voice might help with that too.

What Is Covered Business Method Review?

Technically, CBM review applies only to patents involving “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.”

Unlike other invalidation procedures, CBM review allows you to challenge a patent on any grounds, including:

• Novelty (whether the invention was new at the time of filing).

• Obviousness (whether the invention was an obvious improvement over existing technology).

• Subject matter eligibility (for example, if the patent covers an abstract algorithm or mathematical formula that should not have been patentable).

  
  

The standard the Patent Office used to determine whether to proceed with a CBM review was whether it was more likely than not that at least one of the challenged claims was unpatentable.

Who Can File for a Covered Business Method Review?

Unlike other invalidation procedures, CBM review had a unique requirement: you must have been sued for patent infringement before you could file a CBM review petition.

This meant that if you simply disliked a competitor’s patent or believed it was invalid, you couldn’t use this procedure unless you were actually being sued. Additionally, you had to wait nine months after the patent was issued before filing for CBM review. If you wanted to challenge a patent before that, you had to use post-grant review instead.

When Would You Use CBM Review Instead of Other Procedures?

Even though CBM review was specific to financial patents, you could still use post-grant review, inter partes review, or ex parte reexamination to challenge a business method patent.

CBM review was particularly useful when:

• More than nine months had passed since the patent issued (making post-grant review unavailable).

• You needed to present evidence beyond patents or printed publications, such as public use or on-sale activity.

• You wanted to argue that the patent was invalid based on subject matter eligibility rather than novelty or obviousness.

Why Was There a Special Procedure for Business Method Patents?

The Patent Office and Congress recognized that business method patents were particularly prone to litigation. There was ongoing debate about whether business method patents should even exist. Instead of clogging the court system with lawsuits over these patents, Congress created CBM review to provide an easier way to challenge them at the Patent Officerather than in court.

If someone sued you for infringing a business method patent, instead of letting the court decide whether the patent was valid, you could file a CBM review petition with the Patent Office. Once the petition was filed, the court case was put on hold until the Patent Office determined whether the patent was valid.

The End of CBM Review

CBM review was phased out in 2020, but it’s possible that a similar program could be introduced again in the future. Although it was a narrow, specialized procedure, it was useful for businesses sued for infringing financial-related patents.

And for those of you who grew up in the 80s—knowing is half the battle (yes, that’s a little reference for you!).

Conclusion

That’s the basics of covered business method review. While this procedure is no longer available, understanding why it existed gives insight into how patent litigation strategies evolve over time.

I’m Adam Diament, and until next time, keep on inventing!