Telecommunication Call Processing System Held to Be Eligible for Covered Business Method (CBM) Patent Review

On August 3, 2017, the U.S. Patent and Trademark Office Patent Trial and Appeal Board (PTAB) issued a decision instituting a Covered Business Method (CBM) patent review of U.S. Patent No. 7,783,021.  In this case, Securus Technologies, Inc. ("Petitioner") filed a Petition requesting a CBM review of the patent, owned by Global Tel*Link Corp. ("Patent Owner").

Under the statute 35 U.S.C. § 324, a CBM patent review may not be instituted unless the information presented in the Petition demonstrates "that it is more likely than not that at least 1 of the claims challenged in the petition is unpatentable."  For the present case, the PTAB determined that the information presented in the Petition established that the '021 Patent qualifies as a CBM patent that is eligible for review, and that it is more likely than not that the challenged claims are unpatentable under 35 U.S.C. § 103.  Here, we review the decision of whether the patent is in fact a CBM patent eligible for review.  (The determination of whether the patent is more likely than not unpatentable under 35 U.S.C. § 103 was made by comparing to five asserted prior art references, and is not addressed here).

The '021 Patent

The '021 Patent generally relates to telephone communication systems in penal institutions or similar facilities, specifically directed to systems with the capacity to allow the institutions to control, record, monitor, and report usage and access to a telephone network.  In one disclosed embodiment, the system allows an investigator to covertly monitor an inmate's conversation for suspicious activity.

The '021 Patent describes that a platform may include a site server, which serves as the main database for the telephone management system.  It has the ability to log and record details of all telephone calls placed through the system and store them.  The site server also digitizes all information and may include a recorder for recording the telephone calls and storing them in one or more databases.  User identification and authentication means described by the '021 Patent provide access to the telephone management system using PIN verification and biometric data verification.  For example, biometric data may include voiceprints, facial architecture, signature architecture, fingerprints, retinal prints, hand geometry, and the infrared pattern of the face.

In the Background of the Invention section of the '021 Patent, several prior art issues are addressed, such as to prevent such institutions from incurring unaccountable telephone costs, the institutions must either restrict access to outbound telephone lines or employ a telephone monitoring system to charge the responsible party for making the outbound communication, and in order for a system to be cost effective the system must critically monitor and record the activities of each individual user to properly charge each individual caller for his or her outgoing calls.

Of the claims challenged, claims 1, 7, 16, and 20 are independent claims.  Independent claim 1 is illustrative of the challenged claims and is reproduced below:

1.  An inmate telecommunication call processing system comprising:
    a plurality of trunk lines of a Public Switched Telephone Network (PSTN);
    at least one telephone terminal for making a telephone call, wherein said telephone terminal is located onsite at an institution;
    a central platform coupled to said plurality of trunk lines and coupled to said at least one telephone terminal for said telephone call, wherein said central platform is located offsite from said institution, and further wherein said central platform comprises one or more apparatuses for processing said telephone call;
    an administrative workstation for connecting to a said telephone terminal to monitor conversations between said institution without detection by said user; and
    at least one routing means coupled to said telephone terminal and said central platform;
    wherein said one or more apparatuses controls telephonic communication between said at least one telephone terminal and said plurality of trunk lines,
    wherein said one or more apparatuses records said conversations in said telephone call between a user associated with said at least one telephone terminal and an external party, and
    further wherein said one or more apparatuses digitizes audio and stores said audio for caller identification at said institution, and
    further wherein said one or more apparatuses communicates with an administrative workstation for billing regarding said telephone call originating from said institution.

CBM Standing

Section 18 of the AIA governs CBM patent reviews and limits such reviews to persons, or their privies, that have been sued or charged with infringement of a CBM patent.

The '021 Patent is the subject of a patent infringement suit brought by Patent Owner vs. Petitioner, and thus, a first prong for CBM standing is met.

For the second prong, a "covered business method 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."  AIA § 18(d)(1).

1.  Financial Product or Service

The Federal Circuit has recognized that as a matter of statutory construction, the definition of CBM patent is not limited to products and services of only the financial industry, or to patents owned by or directly affecting activities of financial institutions.  But the statutory definition of a CBM patent requires that the patent have a claim that contains, however phrased, a financial activity element.

The claims specificly recite billing functions, and thus, the burden was on the Patent Owner to show that the claims are somehow not directed to a "financial service".  The Patent Owner contended that billing here was merely an incidental or a complementary activity for receipt of telecommunication services.

But the PTAB disagreed.  Specifically, claim 1 recites, in part, "wherein said one or more apparatuses communicates with an administrative workstation for billing regarding said telephone call originating from said institution."  The PTAB found that specifically billing users is a financial service, and that nothing in the record indicates the system of the '021 Patent would or should be implemented without billing.  Thus, the billing activity is not incidental or complementary to other services.  As a result, the claims were found to satisfy the "financial product or service" component of the definition for a CBM patent set forth in § 18(d)(1) of the AIA.

2.  Technological Invention

The definition of a CBM patent in § 18(d)(1) of the AIA does not include patents for "technological inventions."  When determining whether a patent is for a technological invention, the PTAB considers:  "whether the claimed subject matter as a whole [(1)] recites a technological feature that is novel and unobvious over the prior art; and [(2)] solves a technical problem using a technical solution."  37 C.F.R. § 42.301(b).

For the technological invention exception to apply, both prongs (1) and (2) of the inquiry must be met affirmatively, meaning that a negative answer under either prong renders inapplicable the technological invention exception.

In this case, the PTAB found that neither prong of the technological invention inquiry was met.

Petitioner argued that the '021 Patent claims do not recite any technological feature that is novel or unobvious over the prior art, or that solves a technical problem using a technical solution.  Pet. 19–20 (citing Ex. 1002 ¶¶ 100–13).  Petitioner contended that the claims recite known technologies, such as telephone and computer networks, with no technical innovation over the prior art, such that the claims can be carried out using conventional software and hardware components.  Id. at 19–25.

Patent Owner pointed out that each claim recites "an administrative workstation" that monitors conversation or connects a call "without detection."  Patent Owner continued that the inventive software provides a means for patching into a call using circuitry without alerting the user or called party to the operator's presence.  Additionally, Patent Owner argued that the technical problem of the need to monitor, control, record and provide detailed records of the usage of a telephone system in a controlled institutional environment, is solved using an inventive combination of hardware and novel software.

But the PTAB found that the challenged claims only generically recite an "inmate telecommunication call processing system," which is not specific or unconventional.  Merely reciting known technologies and their use to accomplish an otherwise non-technological method does not render the challenged claims a technological invention.

The PTAB also found that the challenged claims do not involve a technical solution to a technical problem.  The challenged claims seek to solve the problems of monitoring of inmate calls, but the '021 Patent, however, does not describe specifically any technical issues presenting a technical problem to be solved.  The PTAB stated that the claimed solution –– to monitor conversations between said institutions without detection by said user –– is recited more as a fait accompli than a technical solution.

Thus, the claims were found to satisfy the definition for a CBM, and the technological invention exception did not apply.  Accordingly, the '021 Patent was found to be eligible for review under the transitional program for covered business method patents, and a CBM review as to all the challenged claims was instituted.

The result is not surprising, given that the claim specifically recites "billing" as a function to be performed.  It is curious to consider, however, whether the term "billing" was/is needed in the claim.  Billing is really referring to invoicing, or more generally, record-keeping so as to enable invoicing.  Thus, could the claim element have been phrased "wherein said one or more apparatuses communicates with an administrative workstation for billing keeping records regarding said telephone call originating from said institution"?

In addition, the term "administrative" workstation has somewhat of a financial institution feel to it, and that term "administrative" is likely unnecessary as well.  It does not provide any further structural or functional connotation to the "workstation".  Generally then, it would seem this claim may have been able to be drafted to avoid CBM jurisdiction while still covering the technical features of the invention.

Before Administrative Patent Judges Kevin F. Turner, Barbara A. Benoit, and Georgianna W. Braden
Decision by Administrative Patent Judge Turner