The PTO Provides Additional Guidance for Meeting the “Financial Products or Services” Requirement for Instituting CBM Reviews - Photoshelter, Inc. and Vectorstock Media Ltd. v. Uniloc USA, Inc. and Uniloc Luxembourge S.A.; Informatica Corp. v. Protegrity Corp.

by McDermott Will & Emery
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In a series of decisions addressing whether an abstract idea involves “financial product or service” in the context of covered business method (CBM) reviews, the Patent Trial and Appeal Board (PTAB or Board) found all of the challenged patents to be directed to financial products or services. Photoshelter, Inc. and Vectorstock Media Ltd. v. Uniloc USA, Inc. and Uniloc Luxembourge S.A., Case CBM2015-00023 (PTAB, May 21, 2015) (Tierney, APJ); Informatica Corp. v. Protegrity Corp., Case CBM2015-00010 (PTAB, May 11, 2015) (Petravick, APJ) (hereinafter Informatica I); Informatica Corp. v. Protegrity Corp., Case CBM2015-00021 (PTAB, June 1, 2015) (Turner, APJ) (hereinafter Informatica II).

In Photoshelter, the petitioner sought a CBM review for a patent directed to a rights management system for storing, researching, buying and selling intellectual property rights. The parties disputed whether the patent was eligible for a CBM review.

The petitioner argued that the claims, which required visually presenting license terms and conducting a licensing transaction, were directed to financial activities. The patent owner asserted that the challenged claims were not directed to a product or service particular to a financial institution, such as a bank or insurance company, and that the presentation of information, such as a license term, did not require financial activity. However, the Board found that the patent owner interpreted the statute too narrowly, explaining that “the patent need not recite a specific financial product or service. Rather, the patent claims must only be broad enough to cover a financial product or service.” Here, the challenged claims are directed to buying and selling intellectual property rights, which is a financial activity for purpose of CBM review.

In Informatica I, the petitioner sought a CBM review for a patent directed to protecting data against unauthorized access. The petitioner argued that the claims covered a method for performing data processing, including protecting against unauthorized access of data, which is at least incidental to the practice, administration or management of a financial product or service. The patent owner argued that not a “single word in any single claim” is directed to a financial product of service, that none of the prior art cited by the petitioner were directed to a financial product or service and that the petitioner failed to cite any examples of financial products using the method of the claims.

The Board agreed with the petitioner, noting that the legislative history indicates that the words “financial product or service” should be interpreted broadly. Here, the Board found that the claimed data processing rules were described in the specification as used to protect against unauthorized access of a data portion in a database, and that banking (one of the examples in the specification) was a field where such protection was desired. Because banking is a financial activity, the Board held that the challenged claims involved the practice, administration or management of a financial product or service. In a related proceeding, the Board instituted a CBM review for the same arguments as stated above. (See Informatica II.)

In all three decisions (Photoshelter, Informatica I and Informatica II), the patent owners argued that the claims of the patent were directed to “technological inventions” and therefore should be exempt from CBM review. But in all three cases the Board disagreed, finding that at least one claim of each patent failed to recite a technological feature that is novel or unobvious over the prior art. The Board also found that those claims do not solve a technical problem using a technical solution.

Practice Note: If a patent is directed to a financial transaction of almost any sort, it is likely the Board will find that the patent involves a “financial product or service” for purpose of a CBM review. The lesson to be drawn from these (and similar) decisions is that the Board has taken a broad view with respect to the “technological inventions” prong of the CBM test and, in close cases, will likely err on the side of instituting the CBM review. According to the recent statistics, of the 213 CBM proceedings in which the PTAB addressed these issues, 191 (90 percent) resulted in a finding that the challenged patent satisfied both the “financial product or services” prong and were not exempt from CBM review under the “technological invention” exception. Only six proceedings (2.8 percent) resulted in a finding that the challenged patent was directed to a technological invention (source: DocketNavigator).

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