CAFC Rejects PTAB’s Extension of CBM Review to Non-Financial Patents

November 22, 2016

In Unwired Planet LLC v. Google, No. 2015-1812, (Fed. Cir. Nov. 21, 2016), the CAFC overruled a PTAB decision that opened CBM review to a much wider range of patents than contemplated by the AIA statute.   CBM review is supposed to be available only for patents directed to financial products or services.  AIA § 18(d).  But the Board proposed a standard that would allow CBM review of patents that are merely “incidental to financial activity or complementary to a financial activity.” Unwired, Slip Opinion at 4.


The patent at issue claimed a method for sharing a wireless device’s location only with authorized clients.  The PTAB ruled that this patent qualified for CBM review because the claims cover activities that are  “incidental to” a financial service - citing an example where cell phones share their location with nearby businesses who then push advertisements to the phones that ultimately lead to product sales (the requisite "financial activity"). Id. at 4


The CAFC harshly criticized the PTAB’s proposal with some amusing analogies:


  • “The patent for a novel light bulb that is found to work particularly well in bank vaults does not become a CBM patent because of its incidental or complementary use in banks.” Id. at 12.


  • “Does the sale of the dirt that results from use of [a] ditch digger [patent] render the patent a CBM patent?” Id. at 12.


“All patents, at some level, relate to a potential sale of a good or service.”  (Id. at 12). The CAFC vacated the Board’s decision, holding that the Board’s test for determining whether a patent is a CBM patent is not in accordance with the law.

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