Covered business method (CBM) review is scheduled to end on September 15 this year.1 Part of the Leahy-Smith American Invents Act, CBM review was envisioned as a transitional tool for accused infringers to challenge weak patents'a shield against so-called patent trolls. CBM review had several advantages over other tools available under the AIA, such as inter partes review (IPR), and early CBM review filings were robust, numbering over a hundred each year from 2013 to 2015. But with only 8 CBM filings in 2019,2 it is apparent that something killed interest in the process well before its mandated termination date. With the end of the program just around the corner, now is a good time to review what went wrong with CBM review.
Certainly many factors have led to the drastic decline in CBM review filings, but the greatest contributor may well be the lack of clarity around which patents qualify for CBM review. By statute, CBM review was limited to patents that related to a "covered business method," with an exception for patents relating to "technological inventions."3 The statute defines a covered business method patent as:
"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."4
Based on this language, most practitioners assumed that the statute would be interpreted narrowly, limiting the types of patents that could be challenged to those directly touching on financial or banking transactions. However, cases like Versata suggested that the PTAB and the CAFC would interpret the statutory language more broadly.5 In Versata, the patent in question related to a pricing scheme based on the identity of the buyer.6 The patent owner argued that the patent did not fall under...
