PTAB Follows Strict Application of CBM Statute Following Unwired Planet

By Joseph Herndon —

Petitioners, KAYAK Software Corp., OpenTable, Inc., Priceline.com LLC, and The Priceline Group Inc. filed a Petition requesting a covered business method (CBM) patent review of claims 1–9 and 12–17 of U.S. Patent No. 5,796,967.  International Business Machines Corp. (IBM), the Patent Owner, filed a Preliminary Response.  The Board issued a decision denying institution of the CBM patent review of any of the challenged claims because the Petitioner had not established that the challenged patent qualifies as a CBM patent.  This decision comes after the Federal Circuit's recent decision in Unwired Planet v. Google Inc., in which the Federal Circuit criticized the PTAB for allowing broad interpretation of the AIA statute.  The Board here followed the Federal Circuit's instructions for a strict application of the statute with respect to what patents qualify for CBM patent review.

The '967 patent relates to a method for presenting applications in an interactive service featuring steps for generating screen displays of the service applications at the reception systems of the respective users.  This method of presentation involves storing and processing applications or parts of applications at a user's local personal computer rather than at a remote server.  This helps avoid possible server bandwidth issues that can be caused by the server being required to serve too much data to multiple users simultaneously.  The '967 patent lists many applications that can take advantage of this method of presentation, including games, news, weather, movie reviews, banking, investments, home shopping, messaging, and advertising.

Of the challenged claims, claim 1 is independent and is reproduced below.

1.  A method for presenting interactive applications on a computer network, the network including a multiplicity of user reception systems at which respective users may request a multiplicity of available applications, the respective reception systems including a monitor at which the applications requested can be presented as one or more screens of display, the method comprising the steps of:
    a.    generating a screen display at a respective reception system for a requested application, the screen display being generated by the respective reception system from data objects having a prescribed data structure, at least some of which objects may be stored at the respective reception system, the screen display including a plurality of partitions, the partitions being constructed from objects, the objects being retrieved from the objects stored at the respective reception system, or if unavailable from the objects stored at the respective reception system, then from the network, such that at least some of the objects may be used in more than one application;
    b.    generating at least a first partition for presenting applications; and
    c.    generating concurrently with the first partition at least a second partition for presenting a plurality of command functions, the command functions including at least a first group which are selectable to permit movement between applications.

Covered Business Method (CBM) Patent

Section 18 of the AIA provides for the creation of a transitional program for reviewing covered business method patents.  A "[c]overed 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); see 37 C.F.R. § 42.301(a).  For purposes of determining whether a patent is eligible for a covered business method patent review, the focus is on the claims.

Effect of Statutory Disclaimer

Petitioner identified three claims (claims 1, 13, and 16) that it contended satisfy the financial-product-or-service requirement on the basis of their claim language.

Patent Owner argued, however, that neither claim 13 nor claim 16 may provide the basis for eligibility for covered business method patent review ("CBM eligibility"), because each of these claims has been disclaimed pursuant to 35 U.S.C. § 253(a) and 37 C.F.R. § 1.321(a).

A patent subject to a disclaimer under § 253(a) is treated as though the disclaimed claims never existed.  Accordingly, even though claims 13 and 16 of the '967 patent existed at the time the Petition here was filed, we must now treat the '967 patent as if it had never included those claims.  Under this legal rubric, claims 13 and 16 cannot provide the basis for the '967 patent's CBM eligibility.

Claims Remaining After the Statutory Disclaimer

With respect to the claims of the '967 patent left after Patent Owner's statutory disclaimer, Petitioner presented CBM eligibility arguments only as to claim 1.  Specifically, Petitioner argued that, because claim 1 recites a "method for presenting interactive applications" and "generating at least a first partition for presenting applications," and because those applications may be financial in nature, claim 1 is financial in nature.

However, the Board noted that it is not enough that a claim of general applicability has some scope that may be described as finance-related.  Rather, to find CBM eligibility, the Board should focus on the claim language at issue and determine whether there is anything explicitly or inherently financial in the construed claim language.  Under Unwired Planet and Blue Calypso, LLC v. Groupon, Inc., to provide CBM eligibility, a claim must be limited, explicitly or inherently, to "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."  AIA § 18(d)(1).  The fact that a claim is broad enough to encompass a finance-related activity does not necessarily mean that the claim, as a whole, is limited to that finance-related activity.

The Board noted that the Example depicted in Figure 3b of the patent is financial in nature, since it gives the user the option to purchase apples and that it is described as presenting advertising to the user.  But the presence of a financial application in the specification of the '967 patent does not limit the claims of the '967 patent to financial applications.  As noted above, the Board must examine the language of the claims, not merely the specification, for any explicit or inherent limitation to finance-related activity.

Claim 1 contains limitations that recite "[a] method for presenting interactive applications" and "generating at least a first partition for presenting applications."  As demonstrated by the application depicted in Figure 3b of the '967 patent and discussed above, the "applications" in question may be financial.  But the question that Blue Calypso requires the Board to answer is not whether the applications may be financial, but rather whether they must be financial.

Here, the record demonstrates that the "applications" recited in claim 1 may be non-financial.  First, the specification of the '967 patent describes several non-financial applications in addition to the financial application depicted in Figure 3b.  These other applications include the display of information such as "movie reviews" and "the latest news."  Other types of information that can be displayed by applications include "hobbies and cultural interests," as well as "weather".

In addition, the applications that claim 1 recites displaying are not limited to those that have financial purposes or operate in a financial context.  As noted, "provid[ing] requested information" can constitute providing information about news, weather, movie reviews, and hobbies and cultural interests, none of which has been shown by Petitioner to be either explicitly or inherently financial.  Given the failure of Petitioner to establish that any claim of the '967 patent is explicitly or inherently limited to financial contexts, the Board concluded that the claims of the '967 patent are claims of general utility.

The Board noted that several earlier non-binding Board decisions have determined that a patent is not CBM eligible when it has only claims of general utility with no explicit or inherent finance-related terminology or limitations.

Thus, claims of general utility are not converted into finance-related claims merely because the specification of the challenged patent suggests that the scope of the claims is broad enough to encompass some finance-related activities.

Here, other than the disclaimed claims discussed above, Petitioner has not alleged that any claim of the '967 patent is anything other than a claim of general utility, so the mere fact that the specification contains some discussion of financial activities is of little moment.

The Board noted that if the specification were to make clear that the claims should be interpreted as limited to finance-related contexts, the presence of general-utility claim language would not preclude a finding of CBM eligibility.  Because the claims are of general utility with no explicit or inherent finance-related terminology or limitations, the Board concluded that Petitioner has not established that the '967 patent is a covered business method patent under AIA § 18(d)(1).

Kayak Software Corp. v. International Business Machines Corp. (PTAB 2016)
Before Administrative Patent Judges Michael W. Kim, Christopher, M. Kaiser, and Kevin W. Cherry
Opinion by Administrative Patent Judge Kaiser
Concurring Opinion filed by Administrative Patent Judge Kim