Federal Circuit Rejects PTAB Test For Determining Whether Patent Is "Covered Business Method"

In Unwired Planet, LLC v. Google Inc., the Federal Circuit recently held that the Patent Trial and Appeal Board's (PTAB) definition of a "Covered Business Method" (CBM) was inconsistent with the statutory language of the America Invents Act (AIA).  In vacating and remanding the PTAB's decision, the Court explained that the PTAB's analysis of whether patent claim activities were "incidental to" or "complementary to" a financial activity was insufficient to determine whether the challenged patent met the statutory definition of a CBM patent. 

The AIA defines a CBM patent as "a patent that claims a method or corresponding apparatus for performing data processing or other operations 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."  The PTO adopted this definition without further elaboration.