In two separate decisions involving the same parties,[1] the Federal Circuit affirmed the PTAB’s determination that claims challenged in a CBM proceeding are eligible for CBM review and are unpatentable under 35 U.S.C. § 101.  A patent is eligible for CBM review if it “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.”[2] In its opinions, the Court elaborated on the “technological invention” exception to CBM review.[3]

The USPTO regulation implementing the “technological invention” exception states that: [4]

In determining whether a patent is for a technological invention solely for purposes of the Transitional Program for Covered Business Methods (section 42.301(a)), the following will be considered on a case-by-case basis: whether the claimed subject matter as a whole recites a technological feature that is novel and unobvious over the prior art; and solves a technical problem using a technical solution.

In Versata v. SAP, the Federal Circuit criticized this regulation as not being sufficiently detailed, but did not set forth guidance on what constitutes a “technological invention.”[5] Later, the Federal Circuit created a two prong test for interpreting the USPTO regulation. According to this two prong test, a “technological invention” is present only if a claim 1) recites a “technological feature”; and 2) “solves a technological problem using a technical solution”.[6]

The Court provided further guidance on the “technological invention” exception in the two cases discussed here.  The claims at issue were directed to a graphical user interface (GUI) for displaying market information to traders.[7]  In the first case – TT v. IBG (April 18, 2019), TT argued the claimed inventions addressed technical problems in the way prior art GUI tools were constructed and operated. TT argued that the ’999 patent addressed problems related to speed, efficiency, and usability of the GUI, and the ’056 patent addressed problems related to intuitiveness, visualization, and efficiency of the GUI.[8] Therefore, TT asserted that the invention provided technical solutions to the technical problems associated with prior art GUI tools, and thus are not eligible for CBM review.[9] Similarly, in the second case – TT v. IBG (April 30, 2019), TT asserted that the claims recite a GUI that improves usability, visualization, and efficiency, which is a technical solution to the technical problems associated with the prior art GUI tools.[10]

The Federal Circuit disagreed with TT in both cases and concluded that these are not technical solutions to technical problems because these inventions helped the human trader—not the computer—process information more quickly.[11] In support of its conclusion, the Federal Circuit cited the patent specification, which states that a successful trader anticipates the market to gain an advantage,[12] but doing so is difficult because it requires assembling data from various sources and processing that data effectively.[13] The invention solves this problem by displaying trading information “in an easy to see and interpret graphical format.”[14] The specification makes clear that the invention simply displays information that allows a trader to process information more quickly.[15]As such, the Court determined that the claimed GUI that allows users to select and move icons on a screen is eligible for review in a CBM because it does not fall under the “technological invention” exception, and affirmed the PTAB’s finding of invalidity under § 101.

Although the transitional program for CBM review is planned to sunset in September 2020, CBM reviews are still a viable option for entities sued for infringement of a financial product/service patent.  Petitioners considering the CBM route should consider whether the challenged claims fall under the “technological invention” exception to CBM review.

 

[1] Trading Technologies International, Inc. v. IBG LLC, Interactive Brokers, LLC (Fed. Cir. April 18, 2019); and Trading Technologies International, Inc. v. IBG LLC, Interactive Brokers, LLC (Fed. Cir. April 30, 2019).

[2] 35 U.S.C. § 18.

[3] CBM review is available for “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…”  America Invents Act, § 18(a)(1)(E).  However, this mechanism comes with an important caveat: it does not include patents for technological inventions. Id.

[4] 37 C.F.R. § 42.301(b).

[5] Versata v. SAP, 793 F.3d 1306, 1326-27 (Fed. Cir. 2015).

[6] Apple v. Ameranth, 842 F.3d 1229, 1240 (Fed. Cir. 2016).

[7] See April 18, 2019 Slip Op. at 3, and April 30, 2019 Slip Op. at 4.

[8] April 18, 2019 Slip Op. at 9.

[9] Id.

[10] April 30, 2019 Slip Op. at 9.

[11] Id.

[12] 7,212,999 patent at 1:20–26.

[13] Id. at 1:51–54.

[14] Id. at 2:3–6.

[15] April 18, 2019 Slip Op. at 9.