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Transitional Program for Challenging Business Method Patents
August 24, 2012

In recent years, patent disputes relating to business method patent disputes have commanded considerable attention at the USPTO and in the nation's courts—even, most notably in Bilski v. Kappos, at the U.S. Supreme Court.

Such attention demands significant time and resources of the judicial system. To encourage resolution of such disputes at the USPTO rather than in court, the America Invents Act (AIA) includes provisions for transitional post-grant review proceedings that are specifically directed to business method patents.

The AIA defines a business method patent as one that covers a method or machine for data processing or other operations used in financial activities, including tax strategies. Business methods do not include technological inventions.

The newly permissible post-grant review of business method patents can be requested only by entities that have been sued for or accused of patent infringement relating to such a method. The petitioner may obtain a stay of the litigation if certain statutory factors will be met by the post-grant review: for example, whether the burden of litigation will be reduced and whether a stay will simplify the issues and streamline the trial.

While the AIA’s general post-grant review process can only be used against patents filed after September 16, 2013, the transitional program allows petitioners to initiate a post-grant review against any business method patent at any time in the eight-year period between September 16, 2012 and September 16, 2020, assuming the requisite accusation of infringement exists. The post-grant review of a business method patent can cite any grounds for invalidity, including patent eligibility under 35 USC §101 and indefiniteness under 35 USC §112. Should the petitioner choose to further challenge the patent in other proceedings and venues, it cannot raise any of the issues previously raised in the post-grant review.

Prior Art Considerations
The transitional program allows for a broader definition of prior art than is allowed for other USPTO proceedings, and its prior art provisions are more in line with patent law prior to the AIA. In particular, the transitional program allows for non-published evidence of knowledge or use in the U.S. prior to the date of invention, as well as art that disclosed the invention more than one year before the effective filing data of the patent application.

Planning for Transitional Business Method Patent Post-Grant Review

Beginning immediately, companies should anticipate whether any published patents or their own pending patent applications might leave them vulnerable to post-grant review challenges, and should consider taking the following actions:

Before September 16, 2012:
The company should review its pending patent applications to determine whether any involve subject matter that could fall under the definition of “business methods.” If that is a possibility, the company should consider modifying the features and claims of the invention so that it is no longer eligible for the transitional program and would survive other post-grant challenges.

If a company has been accused of infringing a business method patent, counsel should consider whether the company will be able to wait until September 16, 2012, to request a post-grant review of the patent. However, it will need to evaluate whether it will succeed in challenging specific claims of the patent in question.

After September 16, 2012:
If a company is accused of business method patent infringement, post-grant review might be a viable option if the situation meets certain conditions. Most important are whether the company has been accused or charged with infringement and if the company can reasonably argue that the patent is invalid.

Since the transitional program is available only for business method claims, the company should ensure that it is challenging all possible relevant claims in a single proceeding. Toward that goal, counsel should determine whether all the claims in the patent are directed to business methods; whether physical devices are mentioned only by generic names; and whether the claims require no specific technical adaptation of a device.

If these factors are met, a post-grant review of business method patents under the transitional program is likely a feasible alternative to asserting invalidity in court.

If you have any questions or wish to discuss how various aspects of the AIA legislation may affect your organization, please contact your attorney at Brinks Gilson & Lione.

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This Strategy Briefing is intended to provide information of general interest to the public and is not intended to offer legal advice about specific situations or problems. Brinks Gilson & Lione does not intend to create an attorney-client relationship by offering this information and review of the information shall not be deemed to create such a relationship. You should consult a lawyer if you have a legal matter requiring attention. For further information, please contact a Brinks Gilson & Lione lawyer.

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