Open for business: the PTO offers a fast and low-cost shot at invalidating business method patents

A new procedure called the Covered Business Method Review (CBM) was created by the America Invents Act, and it allows companies to challenge issued business method patents in the Patent Office.  Claims must relate to a “financial product or service” (construed expansively), but not claim a “technological invention.”  Qualifying technology includes electronic movement of money between financially distinct entities; the electronic sale of something, including charging a fee to a party’s account; adjudicating an insurance claim and processing for that claim; and e-commerce transactions that are “complementary to a financial activity” and “relate to monetary matters.”

The procedure is fast, usually about 11 months, and allows petitioners to prove invalidity by a mere preponderance of the evidence rather than the more stringent clear and convincing evidence standard used in federal district court.

Have good grounds for invalidating a competitor’s patent? Is it worth it? Definitely. The PTO has invalidated nearly every business method patent claim reviewed under CBM.