A Covered Business Method (“CBM”) review is a type of proceeding that will only be available until September 15, 2020.  It is similar to a Post-Grant Review (“PGR”) in that it is a trial proceeding conducted at the Patent Trial and Appeal Board (“PTAB”) to challenge the validity of one or more claims in a patent.  Essentially, a CBM review is a Patent Office trial on whether a patent is valid, and we employ our flexible and agile litigation approach to these proceedings as well.

What is a CBM review?

CBM proceedings are relatively new, and are available to challenge the validity of a claim based on lack of novelty or non-obviousness, insufficient written description, lack of enablement, indefiniteness or ineligible subject matter, but only within the first nine months after issuance of the patent.  CBM review is limited to claims directed to methods or corresponding systems for performing data processing or other operation in the practice, administration, or management of a financial product or service.  A CBM review begins with third party challenger (a person who is not the owner of the patent) filing a petition, which sets forth all of the claims the challenger contends are invalid, the specific bases for the challenger’s contentions and all supporting evidence.  The patent owner may file a preliminary response to the petition. 

A CBM review may be instituted upon a showing that it is more likely than not that a claim will be deemed unpatentable.  Once instituted, the parties may take discovery, typically from at least experts and inventors, to support their cases prior to oral arguments before the PTAB. 

How much does a CBM review cost?

The government fees associated with a CBM review are as follows:

  • $16,000 - PGR request fee (up to 20 claims);
  • $22,000 - PGR post-institution fee (up to 15 claims);
  • $375/claim - PGR request fee for each claim over 20; and
  • $825/claim – PGR post-institution fee for each claim over 15.

Potential Advantages over Federal Court Litigation

A CBM review can offer advantages over challenging a patent in Federal court.  Most notably, in a CBM proceeding, the challenged patent is not presumed valid and the claim terms are given their broadest reasonable interpretation, unlike in a Federal court validity dispute.  Discovery in a CBM also tends to be much more limited in scope than in Federal court litigation, resulting in significant cost savings.  There is, however, one significant potential disadvantage for patent challengers who pursue a CBM review— in any ITC proceeding or Federal Court proceeding, the patent challenger in a CBM review will be estopped from asserting any ground that it raised in the CBM.  In addition, the challenger is also estopped from asserting in any Patent Office proceeding any ground that it reasonably could have been raised in the CBM.

Comparison with Post-Grant Review

A CBM review is similar to a PGR, with a few notable differences:

  • A CBM review is limited to challenging patents directed to data processing in relation to financial products or services;
  • A CBM review is only available to a party charged with infringement; and
  • CBM review can be filed only when a PGR is unavailable—more than nine months after the patent’s issuance.

If someone has challenged your patent in a CBM proceeding, of if you would like to explore the possibility of challenging the validity of another’s patent (either in Federal court or before the PTAB), we can help find the solution that is best for you.