WSGR Post-Grant Proceedings Team Secures Victory in Covered Business Method Review Proceeding

On March 26, 2014, the Patent Trial and Appeal Board (PTAB) of the United States Patent and Trademark Office (USPTO) invalidated all claims of the patent at issue in the Markets-Alert Pty Ltd. v. Bloomberg Inc. et al. (CBM2013-00005) post-grant proceeding under the Transitional Program for Covered Business Method Patents ("CBM review"). Attorneys for Wilson Sonsini Goodrich and Rosati secured the victory on behalf of clients Bloomberg L.P., TD Ameritrade, Inc., E*TRADE Financial Corp., and The Charles Schwab Corp. The decision further demonstrates the viability of post-grant review procedures under the America Invents Act for efficiently resolving patent infringement disputes.

Covered Business Method Review

Congress implemented CBM review as part of the America Invents Act to address costly litigation arising from "poor business method patents," especially those issuing from patent applications filed during the dot-com bubble of the late 1990s and early 2000s.

CBM review, which allows the USPTO to reassess the validity of an eligible patent, offers several advantages to an accused infringer. First, it provides defendants with an initial opportunity to challenge the subject patent at a considerably lower cost than in traditional district court litigation. Second, as with the related post-grant review and inter partes review proceedings, CBM review decisions are rendered quickly—typically within 12-18 months of filing. Third, CBM review may include challenges based on the patentable subject matter, written description, and enablement requirements (among others) of 35 U.S.C. §§ 101 and 112, and not merely prior-art-based challenges under Sections 102 and 103. Fourth, estoppel is limited to those grounds actually raised in the proceeding, thereby preserving any unasserted defenses for use in litigation. Fifth, America Invents Act Section 18(b)(1) expressly allows courts to stay litigation during the CBM review and includes, as part of the four-factor test, an inquiry as to whether a stay will "reduce the burden of litigation on the parties and on the court." This factor was intended to "place[] a very heavy thumb on the scale in favor of the stay."

For more detailed information regarding CBM review, please refer to our WSGR Alert, "Federal Court in Delaware Issues First Stay Pending Covered Business Method Review under Section 18(b)(1) of the America Invents Act," which is available at http://www.wsgr.com/WSGR/Display.aspx?SectionName=publications/PDFSearch/wsgralert-covered-business-method-review.htm.

The Markets-Alert Litigation

In June 2012, Markets-Alert Pty. Ltd. filed suit against various online brokerages and financial service providers including WSGR clients TD Ameritrade, E*TRADE, Bloomberg, and Charles Schwab, alleging that the defendants infringed Markets-Alert's U.S. Patent No. 7,941,357. The '357 patent was directed to a particular method of providing alerts based on real-time application of "stock market technical analysis formulae." In October 2012, these defendants filed a petition for CBM review of the Markets-Alert patent.

Shortly after filing the petition, the defendants moved pursuant to Section 18(b)(1) of the America Invents Act to stay Markets-Alert's suit pending the PTAB's resolution of post-grant review. On February 5, 2013, the court granted the defendants' motion and entered the stay.

WSGR attorneys represented the defendants at the oral hearing before the PTAB on December 19, 2013. On March 26, 2014, the PTAB issued a decision invalidating all claims of the '357 patent and denying Markets-Alert's motion to amend the claims, effectively ending the litigation, pending any request for rehearing or appeal.

Implications

Defendants accused of patent infringement should strongly consider post-grant proceedings, including CBM review, as part of their overall defense strategy. The PTAB's speed and efficiency at resolving post-grant patent challenges cannot be ignored, and the Markets-Alert decision further cements the viability of the proceedings as efficient and effective alternatives to traditional patent infringement litigation.

The Wilson Sonsini Goodrich & Rosati team that represented the defendants in this matter includes Michael Rosato, Michael Levin, Brian Range, and Susuk Lim, with assistance from paralegals Jenny Smolen and Ashley Fife.

For more information or any questions regarding any America Invents Act-instituted proceeding (including CBM review, post-grant review, and inter partes review), please contact Michael Rosato at mrosato@wsgr.com or (206) 883-2529 or Michael Levin at mlevin@wsgr.com or (650) 320-4929.