Addressing petitioner’s urging that the Patent Trial and Appeal Board (PTAB) import the district court “time of filing” rule to institution decisions for covered business method (CBM) reviews, the PTAB once again held that disclaimed claims are to be disregarded when determining whether a patent is CBM eligible. Facebook, Inc., et al. v. Skky, LLC, Case No. CBM2017-00006 (PTAB, Apr. 11, 2017) (Easthom, APJ).

After Skky sued Facebook and Instagram in district court for infringement of numerous patents, including the patent in issue here, Facebook responded by filing both a petition for inter partes review and a petition for CBM review—the latter to advance its ineligible subject matter and insufficient written description attacks that are not permitted in an inter partes review. 

Skky responded to the CBM petition by disclaiming certain dependent claims that recited financial activity, to thereby invoke a line of PTAB decisions holding that patent holders can disclaim claims directed to business methods to avoid CBM review. Facebook countered with various arguments attempting to overturn those holdings.

Facebook first argued that the PTAB should adopt the “time of filing” rule from US district courts whereby a complaint is considered based on the circumstances when it was filed, to prevent a defendant from depriving a plaintiff of its chosen forum by post-filing activity. The PTAB responded by pointing to long-established US Court of Appeals for the Federal Circuit precedent holding that disclaimed claims are treated as having never existed. The PTAB also concluded that the time of filing rule would contravene an America Invents Act provision stating that CBM review is permitted only if the patent “is” a CBM patent, rather than “was” one, and would violate a US Patent and Trademark Office regulation prohibiting institution based on disclaimed claims.

Facebook also attempted to invoke other PTAB decisions that held that disclaimed dependent claims can still be considered to show that the remaining independent claims could involve financial activity by being broad enough to encompass the dependent financial claims, but the PTAB rejected that argument and held that the remaining claims must require financial activity rather than merely contemplate it. The PTAB consequently denied institution.