The electronic sale of something, including charging a fee to a party’s account, is a financial activity that is subject to Covered Business Method (CBM) review. Here, for example, the sale of digital audio and video signals for a fee through telecommunications lines was found to be a financial activity falling under CBM review, despite the claimed technical components such as a “first memory,” “second memory,” “telecommunications line,” “transmitter,” and “receiver,” which were all generic hardware devices known in the prior art. “[T]he definition of ‘covered business method patent’ is not limited to products and services of only the financial industry, or to patents owned by or directly affecting activities of financial institutions … [and] the presence of a general purpose computer to facilitate operations through uninventive steps in a patent does not render it a technological invention.” This would be a good case to consult before submitting or addressing a petition for CBM review.
Background / Facts: The patents on appeal here from rejection at the PTO during Covered Business Method (CBM) review are directed to the electronic sale and distribution of digital audio and video signals. Each of the relevant claims requires selling a desired digital video or digital audio signal to a second party for a fee through telecommunications lines.
Issue(s): Whether electronic sales fall under the “technological inventions” exception to the covered business method patent definition.
Holding(s): No. The court agreed with the PTO in concluding that “the electronic sale of something, including charging a fee to a party’s account, is a financial activity, and allowing such a sale amounts to providing a financial service.” Further, while the claims utilize technical components such as a “first memory,” “second memory,” “telecommunications line,” “transmitter,” and “receiver,” those components were all “generic hardware devices known in the prior art.” Because the claims merely recite “known technologies to perform a method” and the “combination” of those technologies would have been obvious, the court agreed with the PTO that the patents did not claim a “technological invention.”