SAP America, Inc. v. Versata Development Group, Inc., slip op. CBM2012-00001 (PTAB Jan. 9, 2013) (Software Patents)

The America Invents Act (AIA) created a new special transitional procedure for challenging business method patents, which are apparently considered to be more suspect than other patents. The procedure is called the Covered Business Method review procedure.

An issued business method patent, that has gone through a complete review by the U.S. Patent and Trademark Office and that has been allowed by an examiner, and litigated in court, can be reviewed again by the Patent Trial and Appeal Board (Board) of the U.S. Patent and Trademark Office under this procedure if it is a covered business method patent.

Only a person who is sued or charged with infringement of a covered business method patent may petition for a covered business method review of the patent.

Such a person can petition for review of a covered business method patent. A covered business patent is 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, except that the term does not include patents for technological inventions. The AIA does not specify what a patent for a technological invention covers.

According to the U.S. Patent and Trademark Office, the Office will consider the legislative intent and history behind the public law definition and the transitional program itself to interpret whether a business method patent covers a “financial product or service.” For example, the legislative history explains that the definition of covered business method patent was drafted to encompass patents “claiming activities that are financial in nature, incidental to a financial activity or complementary to a financial activity.” This remark tends to support the notion that “financial product or service” should be interpreted broadly.

In this case, the business method patent owner argued that the broadest reasonable definition of financial services or products would exclude its claimed invention.

The business method patent number is 6,553,350. The business method patent relates to a system that organizes various pricing tables and price adjustment tables and various products and purchasing organizations based on “who” (i.e. which purchasing organization) is purchasing “what” (i.e. which product)The system and method organizes various purchasing organizations and products into hierarchical tables. These hierarchical tables are called organizational groups and product groups. Various price adjustments may be specified for each level of the organizational groups and product groups hierarchies.

The Board disagreed with the position that this was not a financial service or product and made clear that the definition of covered business method was to be broadly interpreted.

The business method patent owner also argue that the Petitioner had failed to establish that the patent claims did not recite a technological invention. The patent owner argued that its patent was sufficiently technological, and thus not a covered business method, because the patent discloses and claims a software invention. The Board disagreed and held that the claimed subject matter as a whole neither recited a technological feature nor solved a technical problem using a technical solution, because “no specific, unconventional software, computer equipment, tools or processing capabilities are required.” The Board noted that, instead, the patent “states that its invention may be implemented in any type of computer system or programming or processing environment.”

There is legal precedent for the position that a general purpose computer, when programmed, becomes a specialized machine. That precedent does not seem to persuade this board.