Covered Business Method (CBM)

A “covered business method patent” is “a patent that 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, except that the term does not include patents for technological inventions.”  CBM review is not limited to patents in the financial or banking fields, but encompasses patents claiming activities that are financial in nature, incidental to a financial activity or complementary to a financial activity.  Apple Inc. v. Smartflash LLC, CBM 2014-00104 (PTAB Sept. 30, 2014).  A “technical invention” is determined on a case-by-case basis, but generally involves “whether the claimed subject matter as a whole recites a technological feature that is novel and unobvious over the prior art; and solves a technical problem using a technical solution.”  A patent need have only one claim directed to a CBM to be eligible for CBM review. 


To file for CBM review, the challemger must have been sued or charged with infringement of a patent that claims a CBM.  A cease-and-desist letter received from a patent owner is typically enough to. CBM review may not proceed if the challenger filed an earlier civil suit challenging the patent’s validity.  A CBM petition may challenge the validity of a patent on the basis of patentable subject matter under Section 101, indefiniteness and written description under Section 112, and novelty and obviousness under Sections 102/103, with certain exceptions for first-to-invent patents. 

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