Wednesday, July 11, 2018

CAFC finds Board applied wrong legal standard in Apple v. ContentGuard

Apple Inc. and Google LLC appeal from the Patent
Trial and Appeal Board’s decision to grant ContentGuard
Holdings, Inc.’s motion to amend in a covered business
method review of U.S. Patent 7,774,280. Because the
Board applied the wrong legal standard to determine
whether the ’280 patent qualified as a covered business
method, we vacate and remand for further proceedings.

As we explained in Unwired Planet, the mere possibility
that a patent can be used in financial transactions is
not enough to make it a CBM patent. 841 F.3d at 1382.
Although the ’280 patent describes embodiments where
the claimed DRM system is used to monetize digital
works, it also explains how the claimed invention can be
used in ways that do not involve financial transactions.
For instance, the specification describes how the claimed
invention can manage healthcare records.


Instead, we hold only that it is not enough for the specification to describe
how the invention could, in some instances, be used to
facilitate financial transactions.
Petitioners and the Patent and Trademark Office, as
intervenors, argue that the Board also determined the
claims are “financial in nature” in its final written decision.
Accordingly, petitioners and the Patent and Trademark
Office maintain that we can sustain the Board’s
determination on that alternative ground. However,
references to the “incidental to” or “complementary to”
standard appear throughout the Board’s final written
decision. See, e.g., J.A. 7–8, 11, 12. On the record before
us, we are unable to discern whether the Board would
have concluded that the ’280 patent qualifies as a CBM
patent had it not applied this standard. On remand, the
Board must determine whether the ’280 patent qualifies
as a CBM patent in the first instance without relying on
the “incidental to” or “complementary to” standard.

Thus, the conclusory "alternative ground" argument was rejected
because the decision seemed to rest on the non-alternative ground.


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