Recent decisions by the Patent Trial and Appeal Board (PTAB) and the Federal Circuit have left patent owners with some uncertainty as to whether their patents could be subject to review and invalidation under the America Invents Act’s Covered Business Method (CBM) review process.

The AIA created CBM review to provide an opportunity for petitioners to challenge a patent’s validity before the PTAB if the challenged patent pertains to “a financial product or service” that is not “technological.” The statute itself provides little insight regarding what a non-technical “financial product or service” entails. Moreover, unlike in IPR where patents can only be challenged as being anticipated or obvious over patents and printed publications, CBM review allows patents to be challenged on nearly any ground that could otherwise be asserted in district court litigation. Therefore, it is paramount that patentees and patent challengers alike understand which financial products or services-related patents may be susceptible to CBM review.

In a recent CBM review, IBG LLC v. Trading Techs. Int’l, Inc. (CBM 2015-00179), which challenged the claims of TTI’s patent directed to a graphical user interface (GUI) for an electronic trading system, the PTAB ruled that the claims in TTI’s patent were ineligible as an abstract idea, and “do not add significantly more to the abstract idea or fundamental economic practice.” The illustrative claim from TTI’s patent was directed to a method of using a computer for displaying transactional information and facilitating trading. TTI argued that its patent was claiming a specific GUI tool, a novel technological invention, and not simply computer data processing. The PTAB ruled that 1) the patent was directed to a method for performing data processing used in the practice, administration, or management of a financial product or service, and 2) the claimed subject matter did not solve a technical problem using a technical solution, and therefore, was patent ineligible.

On its own, the IBG decision provides some insight as to how the PTAB currently views the scope of CBM review and how such review would be applied in practice. However, when considered with the Federal Circuit’s recent decision in Trading Techs. Int’l, Inc. v. CQG, Inc. (Fed. Cir. 2017), that scope and application loses some clarity.

In CQG, another TTI patent directed to a GUI was under review. CQG, the alleged infringer, had moved for a judgment as a matter of law, asserting the claims of the patent were directed to patent-ineligible subject matter. The district court held that the claims were not directed to an abstract idea, and also that the claims recited an inventive concept that was patent-eligible under § 101. The Federal Circuit agreed, affirming the district court’s holding that the patent improves upon existing GUIs and does not merely claim displaying information on a GUI.

When viewed more closely, the PTAB’s IBG decision, and the Federal Circuit’s CQG decision are seemingly at odds given that the two TTI patents are substantially similar in their claimed subject matter. The PTAB determined that one patent claimed an abstract idea, but both the Federal Circuit and the lower court determined that TTI’s other GUI patent did not claim an abstract idea and moreover, recited an inventive concept that added significantly more to existing GUI’s. Further illustrating the schism between the two tribunals, the PTAB had previously instituted a CBM review of the TTI’s patent that was the subject of the CQG case, but once the Federal Circuit issued its decision, the PTAB terminated the CBM proceeding.

Further adding to the lack of clarity facing patent owners, the Federal Circuit issued several decisions in 2015 holding that a patent may be considered a Covered Business Method even if its subject matter relates to a business method outside the financial industry. These included the Versata Development Group, Inc. v. SAP America, Inc. decision, which involved a patent that was not explicitly directed to financial products. However, more recently in Unwired Planet, LLC v. Google Inc. (Fed. Cir. 2016), the CAFC backed away from this broader interpretation of “financial product or service” and held that a patent must be more than “incidental to or complementary to a financial activity” for it to be reviewable in a CBM review.

Taken as a whole, recent jurisprudence fails to provide much clarity as to the scope of CBM review and how such review should be, or will be, applied in practice before the PTAB. Instead, they subject the financial industry to great uncertainty as to whether those patents are valid and enforceable, and as to whether they are susceptible to CBM review. As a note to patent challengers, Post Grant Review provides the same range of patent attacks as CMB review, and should be considered as an alternative to CBM for patents that were issued within nine months of the planned challenge.