Petitioner Cloud9 requested covered business method (CBM) review of IPC's U.S. Patent No. 8,189,566 before the USPTO's Patent Trial and Appeal Board. Due to the claims of the '566 patent not reciting a financial element, the Board denied the petition.
The '566 patent is directed to a trading turret system. As described in the patent's specification:
A trading turret system is a specialized telephony switching system that allows a relatively small number of users to access a large number of external lines and provides enhanced communication features such as hoot-n-holler, push-to-talk, intercom, video and large-scale conferencing. These features are often utilized in the financial industry such as trading floor environments, as well as security/law enforcement, utilities, healthcare, and customer support (e.g., contact centers) environments.
Claim 1 recites:
A communication system, comprising:
a turret switching system constructed to communicate to a Web server, a turret device, and to a remote communications device via a first communications network, the Web server being constructed to communicate to a client device via a second communications network, and the client device constructed to control switching across a plurality of lines; and
an interface having a button sheet corresponding to a plurality of line selectors and constructed to seize a corresponding line by causing the client device to communicate a predetermined message to the turret switching system over the second communication network.
In its substantive analysis, the Board first described the applicable law. Particularly, the America Invents Act (AIA) defines a CBM patent as one 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." The Board focused on whether claim 1 is directed to a financial product or service, because if the answer to the inquiry is negative, then the issue of whether the patent is for a technological invention becomes moot.
While the term "financial product or service" has been construed to include a large number of monetary matters, it does not include undertakings "incidental to," or "complementary to," a financial activity. This was made clear by the Federal Circuit's opinion last year in Unwired Planet, LLC v. Google Inc. Notably, in order for a claimed invention to be a financial product or service, a financial activity must actually be claimed.
Cloud9 asserted that "[t]he claims recite a method and corresponding apparatus for providing software trading turrets which are utilized in the financial industry, such as trading floor environments," and cited to the specification for support of this viewpoint. Consequently, Cloud9 contended that the '566 patent "claims an activity that is financial in nature: a communication system for trading."
The Board disagreed. Particularly, the Board pointed out that the claim language does not refer to a financial activity -- instead, it recites a turret switching system. Furthermore, the specification does not limit the scope of the claimed system to financial activity. As noted above, the specification explicitly states that the system could also be used in "security/law enforcement, utilities, healthcare, and customer support (e.g., contact centers) environments." Thus, the claim is not directed to a financial activity or an instrumentality used exclusively for financial activities.
Even though the claimed invention could be used by traders, the Board noted that "[i]t is not sufficient that a user of the turret switching device may be a trader, where eventually the trader may use the system's communication functions to conduct work that results in a financial reward." Further, "[t]he usefulness of the claimed communication system to traders does not make a patent covering that system a CBM patent."
Accordingly, the Board ruled that the claims do not recite a financial element, and therefore the patent is not eligible for CBM review.
This ruling is in line with Unwired Planet and other recent Federal Circuit and PTAB decisions. However, it leaves open the possibility that a claimed invention not reciting financial activity, but only described as being useful for certain financial activities, would be considered appropriate for the CBM program. In the weird world of business methods, either outcome would not be surprising.
