CBM Patent Review Denied for Claims Lacking Financial Subject Matter
By Joseph Herndon —
The PTAB denied institution of a covered business method (CBM) patent review in a case between BMC Software Inc. (Petitioner) v. zIT Consulting GmbH (Patent Owner). Petitioner, BMC Software, Inc., filed a Petition to institute a CBM patent review of claims 1–29 of U.S. Patent No. 8,904,405, owned by zIT Consulting GmbH. While the '405 patent specification mentioned some example usages in the financial sector, because the claims lacked any mention of financial subject matter, the PTAB denied the CBM patent review.
The '405 Patent
The '405 patent, titled "System and Method for Managing Mainframe Computer System Usage," issued on December 2, 2014. The patent relates to managing mainframe computer system usage for large mainframe computers. More particularly, it relates to managing processing limits of logical partitions executed by such computers. The Background of the Invention refers specifically to IBM's System z computing platform. According to the patent, IBM allows System z users to manually set a usage limit, referred to as a Defined Capacity (DC), for each logical partition (LPAR). IBM also allows users to manually set a usage limit for a group of LPARs, referred to as a Group Capacity Limit (GCL).
One objective of the patent is to manage computer system workload performance for System z, and to control costs by managing usage of the system using DCs and GCLs.
The invention thus uses a logically partitioned data processing system, and each running workload task can be classified based on time criticality with groups of logical partitions being freely defined as having processing capacity limits and upon a determination of how much capacity is needed for a time critical workload task, the workload can be balanced between logical partitions to prevent surplus processing capacity being used to run not time critical workloads.
Of the challenged claims, claim 1 is representative and reproduced below:
1. A method for managing mainframe computer system usage comprising:
establishing a first group definition, the first group definition including first and second logical partitions executed by the mainframe computer system;
establishing a first group policy, the first group policy including first and second partition processing capacity limits, and a time criticality level for each of a plurality of workload tasks assigned to the first and second logical partitions, each time criticality level indicating whether the workload task associated therewith is time critical or not time critical;
monitoring performance of the first and second logical partitions in executing the plurality of workload tasks;
determining, based on the performance monitoring and the first group policy, if either of the first and second logical partitions has a capacity deficit or a capacity surplus; and
if one of the first and second logical partitions is determined to have a capacity deficit while the other is determined to have a capacity surplus, automatically balancing the first and second partition processing capacity limits.
Whether the '405 Patent Is a Covered Business Method Patent
The standard for instituting a covered business method patent review is set forth in 35 U.S.C. § 324(a), which states that the petition must demonstrate that it is more likely than not that at least 1 of the claims challenged in the petition is unpatentable.
But a threshold question is whether the '405 patent is a "covered business method patent," as defined by the AIA. The PTAB found that it was not.
A covered 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." AIA § 18(d)(1).
Petitioner argued that the '405 patent meets the requirement of the statute because it claims a method used in the management of a financial product, namely, a method described as being for managing IBM's software licensing contract which is argued to be a "financial product."
The PTAB disagreed. The PTAB noted that the '405 patent describes the Field of Invention as "managing mainframe computer system usage, and more particularly, . . . managing processing capacity limits of logical partitions executed thereby." Consistent with this description, the independent claim preambles each recite, "A method for managing mainframe computer system usage." The PTAB concluded that the patent is not directed to managing a software license contract, but rather to managing the physical usage of a computer system. The mere fact that by managing usage, certain costs may be reduced, does not meet the criteria of the statute. The PTAB stated that saving money is not necessarily a financial activity under the covered business method patent review statute, and if it were, then every patent that led to a cost reduction would qualify for CBM review. In fact, virtually every patented invention is intended to confer a financial benefit on its user, and so, the statute cannot be read to be this broad.
Petitioner secondly argued that the '405 patent targets a tool specifically designed for the financial sector, i.e., System z. Here, the '405 patent states "a trend toward more commercial computer users owning and operating their own computer systems," and lists as examples, very large corporations, and especially financial sector corporations such as banks, exchanges, brokerages and the like. The '405 patent goes on to identify IBM as the preeminent example of a third party provider of computing services, and specifically identifies IBM's System z. From this, Petitioner concluded that in at least these two senses, the claims target a method to manage a financial product.
The PTAB again was unpersuaded by this second argument because the claims are "directed to" managing usage of a computer system. There is nothing in the Specification or claims that requires a particular computer system or industry. By referring to banks, exchanges, brokerages, and the like, the '405 patent does not limit the invention to a particular industry or application.
The Petitioner conceded that the '405 patent claims on their face, do not recite a financial limitation, but attempted to analogize this case to others in which the PTAB found claims to be CBM qualified. While the PTAB in this instance recognized that other panels have considered evidence of the problem addressed in the specification in determining eligibility for CBM review, the PTAB declined to be bound by the particular factors considered in those cases or by the outcomes.
The PTAB then cited to other panels of the Board having similar facts that reached an opposite conclusion from that urged by Petitioner. See, e.g., AT&T Mobility LLC v. Intellectual Ventures II LLC, Case CBM2015-00185 (PTAB May 4, 2016). In AT&T, for example, the Board indicated that statements in the specification that a claimed invention has particular utility in financial applications may weigh in favor of determining that a patent is eligible for a covered business patent review; however, CBM patent review is not necessarily available for patents that claim generally useful technologies that also happen to be useful to financial applications. Thus, focus was on the claims, and what the claims were "directed to", in contrast to possible uses of the claimed invention.
In short, the PTAB was not persuaded by Petitioner's argument that the '405 patent claims are directed to methods for performing data processing or other operations used in the practice, administration, or management of a financial product or service. Thus, the Petition for CBM review was denied.
This is a nice decision by the PTAB here to follow the requirements of the statute that the claims need to be directed to a financial product or service, rather than following prior Board panels that liberally allow CBM review basically in any instance in which the patent mentions something financial.
Before Administrative Patent Judges Justin T. Arbes, Thomas L. Giannetti, and Kerry Begley
Decision by Thomas L. Giannetti
On Thursday, the U.S. Patent and Trademark Office announced the latest winners of the Patents for Humanity program. The Patents for Humanity program, which was launched by the Office in February 2012 as part of an Obama Administration initiative to promote game-changing innovations to solve long-standing development challenges, is a competition recognizing patent owners and licensees who address global challenges in health and standards of living. Entrants are divided into five categories: medicine, nutrition, sanitation, energy, and living standards. The Office noted that in this latest round, for which the application process concluded on December 4, 2015, four of the five categories did not produce honorees. Winners receive accelerated processing of select matters at the USPTO (i.e., a patent application, ex parte reexamination, or an ex parte appeal to the Patent Trial and Appeal Board) in addition to recognition for their work. The latest winners are as follows:
Patent Docs 