Gov’t Says High Court Should Wait on Business Patent Challenges

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By Tony Dutra

The U.S. Department of Justice recommended that the Supreme Court hold off deciding petitions on challenges to covered business method (CBM) patents until it rules on the constitutionality of a more popular administrative patent-challenge proceeding.

The high court heard arguments Nov. 27 and will decide sometime before the summer, in Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, whether Congress unconstitutionally allowed inter partes review trials to be conducted by an administrative agency—the Patent and Trademark Office—under the 2011 America Invents Act. The petitioners in the case contend that only a court can take away patent rights.

Two parties who lost CBM patents—Linkgine Inc. and TransPerfect Global Inc.—asked for their petitions to be put on hold pending the outcome in Oil States. The AIA enabled both the IPR and CBM proceedings, but there are differences. Most notably, anyone can file an IPR petition, but patent invalidity arguments are limited to non-novelty or obviousness; with CBM petitions, only those facing a lawsuit can file them, but they can also argue that an invention is a patent-ineligible abstract idea or has an inadequate description.

The Justice Department’s Dec. 13 briefs in those cases identified some other differences but ultimately conceded that the Supreme Court’s ruling in Oil States “could inform” whether the CBM proceeding should be declared unconstitutional as well.

The PTO was the only respondent in the two cases. VigLink Inc., the winning challenger to Linkgine’s patents on a method for offering financial incentives to third parties who drive purchasers to commercial websites, waived its right to respond to Linkgine’s petition. TransPerfect, whose patent claims an improved web-based translation system, resolved its dispute with challenger MotionPoint Corp.

However, the successful challenger in a third case is still involved and filed a brief Dec. 11 disagreeing with the Justice Department’s willingness to wait.

Travelers Lloyds of Texas Insurance Co. was successful in killing two patents owned by Integrated Claims Systems LLC on automating insurance claim processing. The PTO agreed that the claims were directed to ineligible abstract ideas.

Travelers said that Oil States will determine whether a patent owner has a right to a jury trial before its patent can be revoked. But, Travelers said, patent law doesn’t give eligibility questions, under 35 U.S.C. §101, to juries. Integrated Claims Systems’ request that its petition also be put on hold should be denied, it said, because the outcome in Oil States won’t matter.

The cases are Linkgine, Inc. v. VigLink, Inc. , U.S., No. 17-558, gov’t brief filed 12/13/17 ; TransPerfect Global, Inc., v. Matal , U.S., No. 17-535, gov’t brief filed 12/13/17 ; Integrated Claims Sys., LLC v. Travelers Lloyds of Texas Ins. Co. , U.S., No. 17-330, respondent brief filed 12/11/17

To contact the reporter on this story: Tony Dutra in Washington at adutra@bloomberglaw.com

To contact the editor responsible for this story: Mike Wilczek at mwilczek@bloomberglaw.com

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