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Monday, August 12, 2013

America Invents Act Delivers: Quick Administrative Decision On Patent Challenge Brings Hope to Accused Infringers

Kerry L. Timbers

By Kerry Timbers. Co-Chair of our Litigation Practice Group

When the America Invents Act (AIA) was enacted last year to overhaul the patent laws, one of its goals was to provide cheaper and faster ways to attack patents, relative to the multimillion-dollar patent lawsuits that seem to take forever to resolve.

One of these new procedures, the Covered Business Method (CMB) review procedure, provides a relatively quick way to attack method patents in the financial and banking areas. This month, the first party to pursue the challenge was rewarded with a ruling from the Patent Trial and Appeal Board (PTAB) invalidating the patent asserted against it in a pending district court lawsuit.

SAP America has been in a multi-year infringement battle with patent owner Versata Development Group over a software-based patent for determining pricing based on which customer, from which geographic region, is buying which product. Versata claimed great success with its software until the much larger SAP introduced a competing product which, according to Versata, destroyed Versata’s customer base.

Versata sued for patent infringement and in late 2011 won a jury verdict of over $330 million. While this case was being appealed, CBM reviews became available under the AIA on September 16, 2012, and SAP took advantage of it on the very day the law took effect.

CBM reviews are available only to parties being sued or threatened on a patent involving a financial product or service. Unlike prior post-issuance reviews of patents, CBMs allow attacks on a patent not only on the basis of prior art, but also on the basis of lack of written description, lack of enablement, and indefiniteness, as well as whether the patent’s subject matter is even eligible for patenting. (More)

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