The America Invents Act (AIA), created a transitional program for post-grant review of certain patents claiming subject matter referred to as covered business methods (“CBM”). As defined by AIA § 18(d)(1) and 37 C.F.R. § 42.301, a CBM is “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.” 37 C.F.R. § 42.301 does, however, provide an exception for technological inventions. Whether a claim recites a technical feature is determined based on whether the claim is “novel and unobvious over the prior art; and [whether the claim] solves a technical problem using a technical solution.” Id.

The CBM post-grant review is a trial proceeding conducted before the Patent Trial & Appeal Board (hereinafter “the Board”) over a period of roughly 18 months. The procedure for the trial is outlined in the Office Patent Trial Practice Guide, 77 Fed. Reg. 48756. As an overview, the trial proceeding is initiated upon filing of a petition for covered business method challenge, which identifies the claims challenged and the grounds and supporting evidence on a claim-by-claim basis. The patent owner may file a preliminary response within three months of the petition. Within three months of the patent owner’s preliminary response, the Board makes a determination whether to institute review of the patent claims. The Board’s decision is followed by a three-month discovery period for the patent owner culminating in the filing of the patent owner’s response and possibly a motion to amend the claims. A subsequent three-month discovery period concludes with the petitioner’s reply to the patent owner’s response and any opposition to the patent owner’s amendments. The patent owner is then allowed an additional one-month discovery period before filing a reply to the petitioner’s opposition to the amendments. Both parties are permitted to file motions to exclude opponent’s evidence as inadmissible. An oral hearing is then set on request, and the trial process culminates with the issuance of a written opinion within 12 months of the Board’s decision to institute review.

On January 9, the Board ordered the first such patentability trial under the AIA. Back in September, German software company SAP petitioned for a Covered Business Method Patent Challenge, challenging Versata Development Group’s U.S. Patent No. 6,553,350 (“the ’350 patent”). Versata subsequently filed a patent owner preliminary response opposing the institution of review.

According to the Board’s Trial Order, SAP had demonstrated that it was more likely than not that the claims of the ’350 patent were unpatentable under 35 U.S.C. §§ 101 and 102. The Board also issued a Scheduling Order stating that an oral hearing be conducted by October 1, 2013. Accordingly, the schedule should provide a written decision by the Board in about one year from the January 9, 2013 Trial Order, as mandated by statute.

Gibbons will continue to monitor developments and to provide counsel in this emerging area of patent law practice.