U.S. Patent and Trademark Office:

Observations on the Covered Business Method Patent Review Program

GAO-18-451T: Published: Mar 20, 2018. Publicly Released: Mar 20, 2018.

Additional Materials:

Contact:

John Neumann
(202) 512-3841
neumannj@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

Entities facing lawsuits for infringing on a certain type of patent can challenge the validity of the patent through a U.S. Patent and Trademark Office program. This can be done for a fraction of the time and money that would be spent in court.

Under the program, the Patent Trial and Appeal Board decides whether patents are valid. In the report on which this testimony is based, we recommended that the Patent Office develop guidance for reviewing its decisions.

The program is set to expire in September 2020, but stakeholders say it has reduced lawsuits and that aspects of the program should be included in other Patent Office programs.

 

Photo of the U.S. Patent and Trademark Office.

Photo of the U.S. Patent and Trademark Office.

Additional Materials:

Contact:

John Neumann
(202) 512-3841
neumannj@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

What GAO Found

From September 2012 through September 2017, entities facing patent infringement lawsuits filed 524 petitions challenging the validity of 359 patents under the U.S. Patent and Trademark Office's (USPTO) covered business method (CBM) program, resulting in decisions against about one-third of these patents. The CBM program provides entities facing infringement lawsuits an opportunity to challenge the validity of a business method patent by demonstrating that it did not meet requirements for patentability. Business method patents focus on ways of doing business in areas such as banking or e-commerce. The rate of filing petitions over this period has fluctuated but has generally declined since 2015, and none were filed in August or September 2017.

Number of Petitions Filed per Month Challenging Business Method Patents at the U.S. Patent and Trademark Office, September 2012 through September 2017

Number of Petitions Filed per Month Challenging Business Method Patents at the U.S. Patent and Trademark Office, September 2012 through September 2017

USPTO has taken several steps to ensure the timeliness of trial decisions, review past decisions, and engage with stakeholders to improve proceedings under the program:

Timeliness: USPTO regularly informs relevant parties about paperwork requirements and due dates throughout trials. According to program data, as of September 2017, all 181 completed trials were completed within statutorily required time frames.

Decision review: USPTO has taken several steps to review its decisions and has monitored the rate at which the Court of Appeals for the Federal Circuit affirms or reverses them. However, USPTO does not have guidance, such as documented procedures, for reviewing trial decisions, or the processes leading to decisions, for consistency. Without guidance, such as documented procedures, USPTO cannot fully ensure that it is meeting its objective of ensuring consistency of decisions.

Stakeholder engagement: USPTO judges have engaged with stakeholders by participating in public roundtables and webinars, and attending judicial conferences, among other things.

Stakeholders GAO interviewed generally agreed that the CBM program has reduced lawsuits involving business method patents in the federal courts. While many stakeholders favored maintaining aspects of the program, there was not strong consensus among stakeholders for how future trials should be designed.

Why GAO Did This Study

This testimony summarizes the information contained in GAO's March 2018 report, entitled U.S. Patent and Trademark Office: Assessment of the Covered Business Method Patent Review Program (GAO-18-320).

For more information, contact John Neumann at (202) 512-3841 or neumannj@gao.gov.

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