America Invents Act

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Transitional Program for Covered Business Method Patents

Source: USPTO

Overview

Section 18 of the America Invents Act creates a specific post-grant review proceeding for covered business method patents. The transitional program for covered business method patents will employ the same standards and procedures as post-grant review. The transitional program aims to give parties an alternative to litigation for business method patents.

A petition for a transitional proceeding may only be filed if the patent claims “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” (AIA § 18(d)(1)). Patents that are for technological inventions do not qualify for the transitional proceeding. The definition of what constitutes a technological invention is still being considered by the Office, but proposed rules (37 C.F.R. § 42.301(b)) specify the determination will be on a case-by-case basis that considers whether the claimed subject matter as a whole (1) recites a technological feature that is novel and non-obvious over the prior art, and (2) solves a technical problem using a technical solution.

A petition can challenge the validity of a patent on any ground raised under 35 U.S.C. §§ 101, 102, or 103 (statutory subject matter, novelty, or obviousness). The prior art that may support such a petition is that which is described in § 102(a) – art showing the invention was known or used by another in this country prior to the invention by the applicant – or prior art that discloses the invention more than one year before the date of the application and would be described by § 102(a) had the disclosure been made before the invention by the applicant. This means petitions are not limited to patents and printed publications, but may also include non-published evidence of knowledge or prior use. If the Director determines it is more likely than not the petitioner will prevail on at least one claim challenged, a proceeding will be instituted. The decision by the Director whether to institute a transitional proceeding is nonappealable.

A third party may only request a transitional proceeding if it, the real party in interest, or a privy has been sued for or charged with infringement under the patent. Also, the petitioner or real party in interest (or privy), after the final written decision by the Patent Trial and Appeal Board, is prohibited from filing a civil action under 28 U.S.C. § 1338 or initiating a proceeding before the International Trade Commission on any ground that the petitioner raised during the transitional proceeding. The petitioner has the right to appeal the decision.

A transitional proceeding can be requested no sooner than nine months after the grant of the patent or issuance of the reissue.

Upcoming Events/Key Dates

The transitional program for covered business method patents became effective on September 16, 2012, and applies to all qualified patents issued before, on, or after that date. The program will expire on September 16, 2020. The USPTO published the final rules regarding the transitional program on August 14, 2012.