First Covered Business Method Review and Inter Partes Review Instituted

Scott Daniels | January 10, 2013

Yesterday the Patent Office “instituted” its first “Covered Business Method Review” and “initiated” its first “Inter Partes Review Trial.”

In SAP America v. Versata Development Group, CBM2012-00001, the APJs determined that the “challenged claims are more likely than not unpatentable under 35 U.S.C. § 101” as claiming “an unpatentable abstract idea.”  In doing so, the APJs overruled the patentee’s objection that the post-grant review provision of the AIA does not authorize a § 101 challenge to a patent.  35 U.S.C. § 282(b)(2)&(3).  The APJs explained that § 282(b)(2) allows a challenge based “on any ground specified in part II [of the Patent Statute] as a condition of patentability” and that patent eligibility under § 101 is such a condition.  The APJs also cited portions of the AIA legislative history as support for their ruling.

The APJs also determined that the challenged claims “are more likely than not anticipated by” § 102 prior art sale.

In Garmin Int’l v. Cuozzo Speed Technologies, IPR2012-00001, the APJs were required to construe the phrase “integrally attached” in claims for a “speed limit indicator,” a handy device that advises an automobile driver his or her speed and the relevant speed limit in the particular locale.  The APJs first noted the requirement that they give the claims their “broadest reasonable construction,” but then construed the claims narrowly so that they were distinguishable over most of the prior art references.  Of course, this narrow construction might help the Petition with the infringement issue in the parallel District Court infringement action.

For three of the claims, however, the APJs decided to “exercise discretion” by cobbling together a combination of references, that was not explicitly presented in the Petition, and determined that there is a “reasonable likelihood” that the three claims are obvious over that combination of prior art.

Both proceedings are now underway.

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