The Court of Appeals for the Federal Circuit issued a decision in Blue Calypso, LLC v. Groupon, Inc., Nos. 2015-1391 et al., 2016 U.S. App. LEXIS 3728 (Fed. Cir. March 1, 2016), which involved an appeal from final decisions resulting from five covered business method patent reviews conducted by the Patent Trial and Appeal Board of the U.S. Patent Office. The reviews resulted in the invalidation of various claims of five patents owned by Blue Calypso as being anticipated by the prior art under 35 U.S.C. § 102, lacking written description support in the as-filed specification under 35 U.S.C. § 112, and directed to ineligible subject matter under 35 U.S.C. § 101. In addition to appealing the merits of the claim invalidations, Blue Calypso appealed the application of covered business method patent review against its patents, arguing that the patents did not fall within the definition of a covered business method patent. Broadly speaking, its patent claims were directed to matching a user’s demographic information to an advertiser’s advertisement and subsidy, and sending the advertisement and corresponding subsidy to a client device.
To qualify for covered business method patent review, a patent must “claim 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.” AIA § 18(d)(1). Blue Calypso argued that its patents did not relate to managing a financial product or service because they were directed to managing and distributing advertising content. The Court rejected this argument, relying on its previous interpretation of the term “financial product or service” as encompassing activities that are financial in nature, incidental to a financial activity, or complementary to a financial activity. Blue Calypso, 2016 U.S. App. LEXIS 3728 at *9–10 (citing Versata Dev. Grp., Inc. v. SAP Am., Inc., 793 F.3d 1306, 1318–23 (Fed. Cir. 2015); SightSound Techs., LLC v. Apple Inc., 809 F.3d 1307 (Fed. Cir. 2015)).
In addition, Blue Calypso argued that its claims were a technological invention not subject to covered business method patent review because they were computer-implemented, and required hardware, software, a network, and communication devices to accomplish their claimed steps. The Court also rejected that argument, holding that the use of a computer does not automatically render the claimed subject matter a technological invention. Blue Calypso, 2016 U.S. App. LEXIS 3728 at *10–12. The Court’s reasoning was reminiscent of the reasoning frequently applied to reject claims as being directed to ineligible subject matter under 35 U.S.C. § 101, as interpreted by the Mayo and Alice Supreme Court decisions. Under that framework, explicitly requiring that a computer carry out a claimed process is often, though not always, insufficient to save the process from being characterized as an ineligible abstract idea. See, e.g., Alice Corp. v. CLS Bank Int’l, 134 S. Ct. 2347, 2350–51 (2014); but see DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014) (holding that claims requiring only generic computer implementation were patent-eligible because they addressed a computer-centric problem in a way that deviates from normal operation). Accordingly, the Court hold that the Board had correctly concluded that the patents qualified for covered business method patent review.
The broad definition of the term “financial product or service” coupled with the lack of a definition for the term “technological invention” and the propensity of the Board and the courts to disregard computer implementation has the potential of rendering a broad swath of patents eligible for challenge under covered business method patent review. Taking such interpretations to their logical limit, for example, could possibly render all patents with computer-implemented method claims subject to covered business method patent review because method patent claims are almost exclusively directed to commercially valuable activity that is “incidental” or “complementary” to the sale of that activity (i.e., a financial product or service) and computer implementation is often disregarded. Patent challengers, patent owners, patent applicants, and patent practitioners should consider scrutinizing the ongoing developments in this area as they seek to invalidate patents, obtain valuable patent protection, and enforce patent claims.
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