Disclaimer after Petition for CBM Review has been Instituted does not remove Petitioner’s Standing

March 29, 2016

In J.P. Morgan Chase v. Intellectual Ventures (CBM2014-00157), the PTAB held that a patent owner cannot remove the standing of a petitioner in a covered business method (CBM) patent review, and therefore halt the CBM review entirely, by disclaiming all CBM claims after the review has been instituted.

In its Institution Decision, the PTAB determined that Petitioner had standing to file the petition for CBM review on the basis that “at least one claim was directed to a method for performing data processing used in the practice of a financial product or service.” See CBM2014-00157, paper no. 40, at p. 9.  After the CBM review was instituted, Patent Owner disclaimed claim 12, and asserted that, without claim 12, the challenged patent was no longer eligible for CBM review.

Patent Owner analogized the CBM review to a proceeding in a federal court, and cited Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992) and Arris Grp., Inc. v. British Telecomm., 639 F.3d 1368, 1380–81 (Fed. Cir. 2011), asserting that that petitioners before the PTAB must maintain their burden to show standing throughout the proceeding, and that a patent owner may strip the petitioner of standing in the middle of a proceeding, in which case the tribunal must dismiss the proceeding.

The PTAB disagreed that Article III standing requirements apply to proceedings before the Board, stating that, for an agency such as the PTO, standing is conferred by statute, and so the standing determination is controlled by the statute.  The PTAB then discussed AIA §18, and noted that the sections dealing with standing for CBM review only place limitations on who may file CBM review petitions, and on the subject matter for which the reviews may be instituted.   See CBM2014-00157, paper no. 40, at p. 10.  As a result, the PTAB determined that the only relevant standing determination is one made at the “point in time when the petition was filed,” and not at any other point in the proceeding.  See CBM2014-00157, paper no. 40, at pp. 10-11.

Patent Owner also cited Berman v. Housey, 291 F.3d 1345, 1351 (Fed. Cir. 2002), stating that “a party may take actions to strip an agency’s Board of its authority to continue a proceeding.” See CBM2014-00157, paper no. 40, at p. 11.  The PTAB distinguished Berman v. Housey as being a case in which “the Board terminated an interference, which is governed by different statutes, because the sole remaining claim in the interference was time-barred by statute, which rendered the interference non-existent.”  In contrast, in the present CBM patent review, numerous remaining challenged claims remained in the trial even after the disclaimer of claim 12.

The PTAB then reviewed claim 12 and determined that the standing decision was correctly made in the Institution Decision.  See CBM2014-00157, paper no. 40, at p. 10-18.  After determining that there was therefore no reason to halt the CBM review, the PTAB proceeded to find that all of the pending claims were unpatentable as being directed to patent-ineligible subject matter under §101.  See CBM2014-00157, paper no. 40, at p. 34.  It should be noted that the challenged patent had already survived a number of proceedings, including four inter partes reviews.  See CBM2014-00157, paper no. 40, at p. 3.  However, unlike IPRs, which are limited to issues of novelty and obviousness based on patents and printed publications, CBM reviews may consider all grounds of invalidity, including, as in this case, subject matter eligibility.


Thomas A. Negley


Mr. Negley is an associate in the firm’s Electrical/Mechanical Practice Group. He assists clients in the procurement of both U.S. and foreign ‎patents. His experience includes the preparation and prosecution of patent applications in areas including medical imaging, surgical robotics, digital multimedia broadcasting, telecommunication systems, and graphical user interfaces.

Prior to ‎joining Sughrue, Mr. Negley worked as a Patent Examiner at the USPTO, and as an associate at both a large general practice law firm and a small intellectual property boutique.

Admitted in Virginia only. Not a member of the DC Bar. Practice limited to certain matters before ‎federal agencies and courts.