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Post-Grant Review of Business Method Patents Under the America Invents Act

January 6, 2012

The recently-approved Leahy-Smith America Invents Act includes expanded procedures for challenging patents administratively, rather than through the courts.  One of the new vehicles for challenging an issued patent is called “post-grant review.”  This new post-grant review procedure will apply to patents having a priority date later than March 13, 2013.  Additionally, the Act creates a sort of super post-grant review for some business method patents that goes into effect September 13, 2012.

Post-grant Review

Post-grant review permits any person who is not the patent owner to initiate a review of the patent to determine if any of its claims should be cancelled as being unpatentable.  Unlike current reexamination proceedings, the new post-grant review is not limited to invalidity based on printed prior art.  Any ground that supports unpatentability, including failure to satisfy § 101, lack of written description, or prior sales or public use, can be used to cancel claims in a post-grant review proceeding.

A post-grant review must be initiated within nine months of the issuance of the patent.  After the nine-month deadline, a person wishing to administratively challenge the patent will need to rely on the more limited inter partes review or ex parte reexamination.  In particular, after the nine-month deadline, administrative challenges will be limited to printed publications as prior art.

A significant detriment to using the post-grant review is that the party initiating the post-grant review will be estopped from raising any ground that was or reasonably could have been raised in the post-grant review.  Therefore, potential defendants will severely limit their ability to defend against a patent infringement charge if the post-grant review is not successful.

This new post-grant review procedure will only apply to patents that are subject to the new first-to-file prior art standard.  The new first-to-file standard only applies to patents with a priority date later than March 16, 2013.  Therefore, this option will not be available for use until patents filed after March 16, 2013 start issuing.

Special Post-grant Review Treatment for Business Method Patents

The new Act includes a special “transitional program” for business method patents.  This transitional program permits post-grant review of business method patents, without some of the less attractive features of the post-grant review as applied to other patents.

The circumstances that permit use of this transitional program are somewhat limited.  In order to qualify for the special treatment of the transitional program the patent must be a “covered business method patent,” which the Act defines as:

a patent that claims a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service, except that the term does not include patents for technological inventions.

Furthermore, the person challenging the covered business method patent must have been sued for infringement or have been charged with infringement under the patent.  There may be some ambiguity as to what the Act means by “charged with infringement.”  Most likely it will require at least some sort of assertion by the patent owner that the party initiating the proceeding has infringed the patent.

The transitional program includes the same benefits as post-grant review in that the challenger may raise any ground that would make a claim unpatentable.  However, the estoppel that results from an unfavorable final ruling only applies to the grounds actually raised in the proceeding, and does not extend to issues that could have been, but were not raised.  That is a significant advantage for potential defendants who can reserve many of their defenses for the judicial proceedings.

The transitional program for business method patents is not limited to patents covered by the new prior art rules, and may be used on any patent, even patents issued before the effective date of the Act.  Additionally, the nine-month time limit for initiating the proceeding does not apply to covered business method patents.  One wrinkle is that if post-grant review is available, the transitional proceeding may not be used.  Therefore, after the post-grant review provisions take effect (e.g., on patents that have an effective filing date after March 13, 2013), a person who wishes to challenge a covered business method patent may wish to wait until more than nine-months after the issuance of the patent and file under the transitional program in order to get the beneficial estoppel rules.

The Patent Office should make the transitional program for business method patents available beginning September 13, 2012.  The Act includes a sunset provision that eliminates the transitional program eight years after it goes into effect.


The standard post-grant review and the transitional post-grant review of business method patents procedures are new tools that will permit the administrative challenge of patents.  The special provisions related to business method patents, especially the limited scope of the estoppel, may make that option attractive for those that have been accused of infringing financial services related patents.  The post-grant review procedure will require close watching of issued patents as they are published in order to avoid missing the nine-month filing deadline.

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