United States: CBM Review Denied For Technological Invention Directed To Financial Product

The Patent Trial and Appeal Board (PTAB or Board) may deny covered business method (CBM) review if the challenged patent is for a technological invention, even if it is directed at a financial product or service. Sally Beauty Holdings, Inc. v. Intellectual Ventures I LLC, Case No. CBM2016-00030 (PTAB, Aug. 2, 2016) (Turner, APJ).

Section 18 of the America Invents Act provides for a transitional program for reviewing CBM patents. A CBM patent is a patent that “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, except that the term does not include patents for technological inventions.” Within this definition of a CBM patent, the PTAB has broadly interpreted the phrase “financial product or service” based on the legislative history. In particular, the legislative history explains that the phrase is intended to encompass a patent that claims activities that are “financial in nature, incidental to a financial activity or complementary to a financial activity.”

Here, the PTAB first found that the patent at issue relates to a financial product or service because the specification of the patent discloses examples of relating to “bank account records, 401k account information, and credit card balance information.” Although the petitioner primarily based its analysis on claims that the patent owner disclaimed, the PTAB still found that the specification makes it clear that the non-disclaimed claims relate to a “financial product or service.”

The PTAB found that the challenged patent was a technological invention, however, because 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 petitioner only argued that a single disclaimed claim was directed at unpatentable subject matter under 35 USC § 101. Although the petitioner only analyzed a single disclaimed claim, the PTAB did not dismiss the petition in its entirety. Instead, the PTAB analyzed the arguments that were made by the petitioner and evidence presented to determine if the arguments were sufficient with respect to the remaining claims. After completing this analysis, the PTAB rejected the petitioner’s arguments and found that the petitioner failed to consider the claims as a whole, as required by § 101. Therefore, the PTAB declined to institute CBM review. 

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