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November 2016 Archives

Federal Circuit Rules PTAB's Definition of CBM Patent Is Too Broad

Patent attorneys may be wondering where to go after a federal appeals court upended a decision involving location services on mobile devices.

In a unanimous decision, the appeals court ruled that a patent review board had overstepped its authority in denying the patent as a "covered business method." Judge Jimmie Reyna said the board used an overbroad definition that would have allowed the board to consider challenges to virtually any device that could be used in commerce. He said, in essence, that it is not a covered business method just because it could result in a sale.

"Take, for example, a patent for an apparatus for digging ditches," he wrote in the decision for Unwired Planet, LLC. "Does the sale of the dirt that results from use of the ditch digger render the patent a CBM patent? No ..."

In 2014, the Supreme Court ruled that certain software patents were "abstract ideas," ineligible for patent protection, despite requiring the use of a computer for implementation. In the subsequent years, that decision, Alice Corp. v. CLS Bank, and the two-part test it established, has been used to invalidate a host of software patents. Yet, in a handful of decisions, the Federal Circuit has taken a more permissive approach, reversing lower court invalidations and holding that the abstract idea test did not render specific software patents ineligible.

The Federal Circuit did so again this Tuesday, reversing the invalidation of patents that were "parts of a system designed to solve an accounting and billing problem faced by network service providers," and exposing a growing rift between the Federal Circuit judges.