The Patent Trial and Appeal Board (PTAB) has issued a Final Written Decision of the invalidity of an Internet-related patent under the subject matter restrictions of 35 U.S.C. 101.
In Bank of America, N.A., PNC Financial Services Group, Inc. and PNC Bank, N.A, vs. Intellectual Ventures I LLC, the PTAB found claims 1-23 of U.S. Patent No. 7,603,382 B2 (“the ‘382 patent”) to be unpatentable as directed to patent-ineligible subject matter under 35 U.S.C. 101 and Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347, 2355 (2014) as being directed to an “abstract idea.”
A sample claim of the challenged patent is as follows:
- A system for providing web pages accessed from a web site in a manner which presents the web pages tailored to an individual user, comprising:an interactive interface configured to provide dynamic web site navigation data to the user, the interactive interface comprising:a display depicting portions of the web site visited by the user as a function of the web site navigation data; anda display depicting portions of the web site visited by the user as a function of the user’s personal characteristics.
In arriving at its decision, the Board considered the following arguments on the part of the Patent Owner:
- that the claims of the ‘382 patent are not “directed to ‘an idea itself, a mathematical formula or algorithm, a fundamental economic practice long prevalent in our system of commerce, or a method of organizing human activity.'”
- that the claims of the ‘382 patent “do not preempt the alleged abstract idea and are transformed by an inventive concept.” That claims 1-6 and 16-23 user the claimed interactive interface to provide tailored content based upon the user’s personal characteristics and the user’s website navigation data.
- That the ‘382 patent is not a covered business method patent because the claims are directed to a technological invention.
- That Section 101 is not a proper ground upon which a covered business method patent review may be maintained.
The Board based its decision regarding argument 1 on the recent U.S. Supreme Court holding in Alice, setting out a two-step test for patentability of an abstract idea. Key to this step 1 was a statement by the Patent Owner’s expert, who testified that “the patent is described at what may appear to be a fairly high abstract level.” In responding to argument 2, the Board held that the limitations of the claims do not contain an “inventive concept” to “transform” the claimed abstract idea into patentable subject matter. Key to this step was, again, testimony of the Patent Owner’s expert that “the ‘382 patent lacks implementation details because it is written at a ‘fairly high abstract level.’” The Board distinguished the ‘382 patent from the Federal Circuit’s decision in DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014). In responding to argument 3, the Board held that in at least claim 11 “there is no technological feature in that claim that is novel and unobvious.” Finally, in regard to argument 4, the Board held that Section 101 is a proper ground for instituting a Covered Business Method patent proceeding.
[Note: The following post can also be found on my new blog, “Comparative Patent Remedies”, at comparativepatentremedies.blogspot.com. I intend to continue blogging on IntellectualIP on other IP-related topics, and to cross-post on IntellectualIP material from Comparative Patent Remedies that I think would be of interest to IntellectualIP’s readership.]
On March 16, 2013, the United States changes from a “first to invent” country to a “first inventor to file” country for patent applications.
Patent “trolls” or “non-practicing entities” (NPEs) own patents but do not make, use or sell the patented product. Instead, patent trolls have in the past generally followed a business model in which, under the threat of patent litigation, they demand and receive relatively small amounts of revenue from a large number of targets. Each of the targets believes that it is in its best interest to pay the troll a relatively small licensing fee for use of the patent rather than face the possibility of huge, uncertain damages in a patent infringement lawsuit. By owning a large number of patents, a patent troll can have a large potential market. However, section 299 of the AIA, effective as of September 15, 2011, limits the ability of patent trolls to join large numbers of accused infringers in a single patent infringement suit. Thus, the AIA section 299 may drastically change the traditional litigation business strategy used by patent trolls.
However, the AIA also opens up a potential new, non-litigation business strategy for patent trolls.
As of March 16, 2013, 35 U.S.C. 102(a)(2) becomes effective. This section of the patent law states “A person shall be entitled to a patent unless…the claimed invention was described in a patent issued…or in an application published…in which the patent or application…names another inventor and was effectively filed before the effective filing date of the claimed invention.” 35 U.S.C. 102(b)(2), however, contains an exception to the above. It states: “A disclosure shall not be prior art to a claimed invention under subsection (a)(2) if…the subject matter disclosed and the claimed invention, not later than the effective filing date of the claimed invention, were owned by the same person or subject to an obligation of assignment to the same person.”
A picture is worth a thousand words. Take a look at the following example in which B is a patent troll that owns invention B and A is a target company which owns invention A.
Under the AIA, as cited above, if B’s effective filing date is earlier than A’s effective filing date, B will be prior art to A and the disclosure in B may prevent patent A from issuing. However, this result can be avoided if A owns invention B “not later than the effective filing date” of invention A. On or after March 16, 2013 an issued patent or pending patent application that would be prior art to a new application has potential value to the applicant for a new patent. Thus, the date of March 16 can be a “bridge” between the troll’s patent or application having no value to target A and a value that may be large, depending on the significance of the target’s new patent application and the presence/absence of other prior art. If company A believes that invention A is key to its business, company A may be willing to buy application B at a significant price. However, if there is other prior art, company A may only be willing to pay the troll less money for application B.
This strategy has the disadvantage that (probably) the patent troll can only use it against one target at a time, because the troll is selling the leveraging patent, not licensing it to many targets. However, if section 299 of the AIA has the predicted deterrent effect on the joinder of multiple defendants, the strategy may be the only one left to the patent troll.
Note that this strategy will not work before March 16, 2013. Before that date, company A may be able to “swear behind” the filing date of invention B under 37 CFR 1.131 by establishing by oath or declaration that the subject matter of invention A was invented prior to the effective date of invention B. Therefore, it is prudent for company A to file a patent application for invention A prior to March 16, 2013, particularly if it is aware of invention B. By doing this, company A cuts off the troll’s potential market for invention B.