Covered Business Method Proceedings

May 15, 2017

Patents related to certain business methods may be challenged for patentability at the US Patent and Trademark Office (USPTO) through a covered business method (CBM) review proceeding.

The transitional program for covered business method patents applies only to “covered business method patents,” i.e., those 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. Claims for “technological inventions” are excluded from this definition. To be afforded review, the claims need to cover products and services that are financial in nature, while products and services that are only incidental to a financial activity likely will not be reviewed under CBM.

CBM proceedings are only available to persons who are accused of infringement of a covered business method patent. Generally, if a person is able to bring a declaratory judgment motion on a patent, he or she is eligible to file a CBM petition. However, a CBM petition cannot be filed if a Post-Grant Review (PGR) petition is available (i.e., within nine months after the issue date of a patent filed after March 15, 2013).

Similar to PGR proceedings, CBM proceedings may be used to challenge a claim of an issued patent on the grounds of utility, novelty, obviousness, written description, enablement, or double patenting.

Although CBM proceedings use many of the same standards and procedures as Inter Partes Review (IPR) and PGR proceedings, the estoppel provisions for CBM proceedings are different. Specifically, grounds that were not raised in a prior CBM proceeding, but that reasonably could have been raised, may still be raised in subsequent district court proceedings. However, like estoppel in a PGR proceeding, a challenger may not pursue subsequent actions in the USPTO based on any ground that was actually raised or reasonably could have been raised in the prior CBM proceeding.

The transitional program for CBM patent reviews is set to expire in September 2020.