PTAB First! CBM Review Denied on Jurisdictional Grounds
Written by John Phillips
Experian Marketing Solutions, Inc. v. RPOST Communications Ltd, CBM2014-00010, Paper No. 20 (PTAB Apr. 22, 2014)
In a first for the Patent Trial and Appeal Board (“PTAB”), the Board found a patent challenged under the Covered Business Method (“CBM”) Review procedure to be ineligible for review because Petitioner failed to establish that the challenged patent did not claim a “technological invention.” This decision is notable because it marks the first time in 69 CBM institution decisions from inception of CBM review to date that the Board has found a challenged patent ineligible for CBM review.
By statute, a patent is eligible for CBM review only if the following jurisdictional prerequisites are established by the CBM Review Petitioner (i.e., the party seeking CBM Review): (1) the patent claims are directed to “financial products or services,” and (2) the patent claims do not recite a “technological invention.” Here, the Board found that Petitioner had sufficiently established that the patent satisfied the “financial” prong of the jurisdictional inquiry but failed to establish that the patent did not claim a “technological invention.”
More specifically, the challenged patent, titled “System and method for verifying delivery and integrity of electronic messages,” included a claim, designated as “illustrative” by the Board, that recited a “method of transmitting a message from a sender to a recipient through a server acting as a Mail Transport Agent.” The claim recited two steps: (i) transporting the message to the recipient’s Mail Transport Agent in either an SMTP or ESMTP protocol, and (ii) recording at a server some portion of the selected protocol dialogue between the server and the recipient.
In finding that the “financial” prong of the jurisdictional inquiry was satisfied, the Board noted that the specification of the patent disclosed “e-commerce embodiments  directed to the buying and selling of products or service over electronic systems, such as the Internet.”
In finding that Petitioner had failed to establish the “non-technological” prong, the Board acknowledged that Petitioner cited the correct standards – namely, that a claim is not directed to a technological invention if, among other things, it merely recites known technologies applied in a well-known manner to perform a well-known task and does not solve a technical problem – but found that Petitioner’s attempt to apply those standards was conclusory and unsupported by persuasive evidence. Rather, the Board agreed with Patent Owner that Petitioner failed to establish that the second claim step – recording at a server a portion of the selected protocol dialogue – was known at the time of the invention of the challenged patent.
Although this decision provides only a single data point about what it takes to defeat CBM jurisdiction, it arguably provides the following guidance for Petitioners and Patent Owners alike:
- Even if the claims fail to mention financial, monetary, or even commerce-related terms, as long as the patent specification indicates that the invention has potential usage in such fields, the patent may be deemed sufficiently “financial” to satisfy the first jurisdictional prong for CBM Review.
- To defeat CBM jurisdiction on the “non-technological” prong, a Patent Owner may be successful by identifying at least one method step (or apparatus element) that, while representing well-known technology, is being used (or combined) in a manner that was not known in the prior art. Conversely, Petitioners should take extra care to make sure that they treat each and every claim limitation in a non-conclusory manner (and, importantly, supported by declaration evidence), establishing that such limitation not only represents well-known technology, but also that it is being used in a manner that was known in the prior art.