Recently we hosted an online symposium in anticipation of last week’s sunset of covered business method review (CBMR), proceedings held by the Patent Trial and Appeal Board to review the patentability of claims included in “covered business method” patents. The Federal Circuit, in turn, reviews the PTAB’s judgments in these proceedings. Six authors across four blog posts presented various analyses of CBMR, including arguments for and against allowing the program to sunset, the history of CBMR, and the significance of Federal Circuit opinions reviewing decisions by the PTAB in these proceedings. Here, we wrap up our online symposium by highlighting each contribution and its central premise, before I provide some brief closing remarks reflecting on what we have read.
In the first contribution to our symposium, Joseph Matal and David McCombs argued that Federal Circuit and Supreme Court precedent led to the creation of the CBMR. They maintained that, during the 16 years between the Federal Circuit’s State Street decision and the Supreme Court’s Alice decision, “tens of thousands of now-ineligible business methods patents were issued by the Patent Office (which was legally bound to follow State Street).” Therefore, they argued, “CBM review was part of an effort to put this genie back in the bottle,” in short it was “a cost-effective mechanism for cancelling claims that never should have issued—that are not even directed to things that you can patent.” In their view, “[i]t seems likely that defendants will miss the CBM program once it is gone.”
The CBM Program Should Expire This Week as Provided by Law—Effective Alternatives for Robust Administrative Reviews of Issued Patents Remain
The second contribution to the symposium took the opposite view. Ron D. Katznelson posed five questions in his review of whether to extend rather than sunset CBMR:
- Why did Congress set CBMR to expire on September 16, 2020?
- Should CBMR be extended to permit review of eligibility under Section 101?
- Is the CBMR program abused?
- Do benefits of CBMR justify the administrative burden of keeping it alive?
- What parties actually “delay assertion actions”?
After providing detailed answers to each of these questions, Katznelson concluded that CBMR should sunset:
CBMR is dying off based on its own disuse. It should expire this week as intended and provided by the AIA. Those who wish to challenge CBM patents after that date, can effectively use any of the three alternative administrative proceedings at the PTO that remain available with no sunset expiration.
In our third symposium blog post, Saurabh Vishnubhakat focused on “the design and implementation of [CBMR] and what lessons can be drawn from its eight-year run.” In particular, he analyzed CBMR case law at the Federal Circuit and post grant proceedings statistics. Based on his analysis, he concluded that, “[a]t least somewhat contrary to expectations when the AIA was enacted, the battleground for using patent-eligibility to revoke business method and software-related patents did not shift dramatically away from the federal courts and into the USPTO.” Thus, he explained, while “the AIA did much to relocate patent validity into the administrative process, . . . important elements of the pre-AIA status quo have remained intact.”
Kevin B. Laurence and Matthew C. Phillips presented our fourth blog post in our online symposium. They explained that a (perhaps temporary) “legacy” of the Transitional Program for Covered Business Method Review was the Federal Circuit’s stay jurisprudence. In particular, they analyzed the court’s precedent applying the statutorily-defined “four-factor test a court shall consider when deciding whether to enter a stay in an infringement case pending a CBM review.” The authors noted, however, that “outside the context of CBM-related stay motions, district courts are not bound to follow” this Federal Circuit precedent. On one hand, they maintained, the Federal Circuit’s stay jurisprudence may live on in some district courts where “judges rely on the CBM-related jurisprudence.” On the other hand, “[f]or the district court judges who decline to rely on CBM-related jurisprudence, it will fade to limited historical interest as those judges rely on their own precedents.”
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I want to express publicly my thanks to all six of our contributing authors. I will also note that CBMR did, in fact, sunset last week. As we highlighted, USPTO Director Andre indicated in an interview that CBMR “should be allowed to sunset” and that “[i]t has been the USPTO’s position it should be allowed to sunset,” and anyway Congress did not act to extend it. That said, there is still the possibility that CBMR will experience a, to continue the metaphor, sunrise. Indeed, some are predicting that CBMR will be renewed in upcoming legislation. To the extent the program is renewed, perhaps it will be because of the idea that these proceedings provide a cost-effective opportunity to revisit the eligibility of so-called “business method patent” claims, as argued by Matal and McCombs. But if the program is not renewed, perhaps it will be because of the continued existence of other proceedings (post-grant review, inter partes review, and district court litigation) still available to revisit the patentability of these patent claims, as argued by Katznelson and Vishnubhakat. Either way (whether CBMR is renewed or not), as shown by Vishnubhakat as well as Laurence and Phillips, the impact on the Federal Circuit, and on the law more generally, would seem to be slight.