New Rules to Go Into Effect to Challenge So-Called – Business-Method Patents The United States Patent and Trademark Office (USPTO) recently published proposed-new rules (Rules) for post-grant review of business-method patents in accordance with amendments made to the Patent Statute (Title 35 United States Code) under the American Invents Act. These Rules should take effect 16 September 2012. Under the Rules, a party sued or accused of patent infringement covered by a business-method patent may petition the USPTO’s Patent Trial and Appeal Board (Board) to challenge the patent’s validity. A business-method patent is defined as any patent with claims covering “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,” but not “patents for technological inventions.” According to the Rules, whether a claim covers a “technological invention” is a determination that will be considered on a case-by-case basis. Consequently, what claims cover a “technological invention,” and what claims do not a will be the key determination and consideration before a party petitions for post-grant review. Although the Act incentivizes moving litigation from federal court to the USPTO, there are some restrictions on the party petitioning for post-grant review of a patent that are not imposed on a party in federal court. For instance, the petitioner may only use prior art that shows prior publication, use, or knowledge of the invention as a basis for challenging the patent. On the other hand, the standard for determining whether a claim is unpatentable is only the preponderance of the evidence, which is generally a less restrictive standard than challenging the validity of a patent in a federal district court. Additionally, claims are given their broadest reasonable construction in light of the specification during the proceedings, which may provide more wiggle room than a claim construction determination made by a federal court when construing the same claims. In terms of procedures before Board, the petitioner must identify:

  1. each claim of the patent being challenged;
  2. the basis for challenging each claim;
  3. a proposed claim construction with— and
  4. why the construed claims are unpatentable.

Thus, the Rules offer an alternative forum for challenging the validity of business method patents that may be more suitable than a federal district court in certain cases.