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Limiting the Scope of CBM Eligibility: Unwired Planet, LLC v. Google Inc. (Fed. Cir. Nov. 21, 2016)

In the recent opinion in Unwired Planet, LLC v. Google Inc., the Federal Circuit has limited the reach of covered business method (CBM) reviews.  The Board had framed its CBM eligibility standard as asking “whether the patent claims activities that are financial in nature, incidental to a financial activity, or complementary to a financial activity.”  While the Federal Circuit had endorsed the “financial in nature” portion of the Board’s standard earlier this year in Blue Calypso, LLC v. Groupon, Inc., in Unwired Planet the court rejected the “incidental” and “complementary” prongs of the same standard, finding the board’s expansive interpretation of CBM eligibility to be inconsistent with congressional intent.  In doing so, the Court vacated the Board’s decision that had found a patent claiming “a system and method for restricting access to a wireless device’s location information” to be eligible for CBM review.

The Federal Circuit emphasized that the Board’s standard had no logical limiting principle, noting that “[a]ll patents, at some level, relate to potential sale of a good or service.”  It therefore “cannot be the case that a patent covering a method and corresponding apparatuses becomes a CBM patent because its practice could involve a potential sale of a good or service.”  The Court noted that “[t]he patent for a novel lightbulb that is found to work particularly well in bank vaults does not become a CBM patent because of its incidental or complementary use in banks,” and “an apparatus for digging ditches” does not become eligible for CBM review due to “the sale of the dirt that results” from its use.

This holding is likely to focus the CBM eligibility analysis on what is actually claimed in a given patent.  Previously, a petitioner could argue in favor of instituting CBM review by pointing to disclosed but unclaimed applications relating to financial activities, and submitting that the claimed invention was “incidental” or “complementary” to those activities.  The Court’s holding in Unwired Planet should curtail such arguments, bringing greater clarity and consistency to the CBM eligibility analysis.