Publications & News

Supreme Court Vacates Federal Circuit Decision Defining the Scope of CBM Review

May 16, 2018

By Gregory H. Lantier, Brittany Amadi

On May 14, 2018, the Supreme Court granted WilmerHale client PNC Bank National Association's (PNC Bank) petition for writ of certiorari and vacated a decision of the US Court of Appeals for the Federal Circuit restricting the availability of covered business method (CBM) review.

In the proceedings below, a divided panel of the Federal Circuit had reversed the Patent Trial and Appeal Board's (Board) determination that a patent owned by patent assertion entity Secure Axcess, LLC was eligible for CBM review. PNC Bank Nat'l Ass'n v. Secure Axcess, LLC, 848 F.3d 1370 (Fed. Cir. 2017). In doing so, the panel majority restrictively interpreted the statutory definition of “covered business method patent” set forth in Section 18(d)(1) of the Leahy-Smith America Invents Act, Pub. L. No. 112-29, 125 Stat. 284 (2011), which defines a CBM patent as one “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.” The panel majority determined that “the statutory definition of a CBM patent requires that the patent have a claim that contains, however phrased, a financial activity element.” PNC Bank, 848 F.3d at 1381. The Federal Circuit denied rehearing en banc by a vote of 6-5. Secure Axcess, LLC v. PNC Bank Nat'l Ass'n, 859 F.3d 998 (Fed. Cir. 2017).

Following the Federal Circuit's decision, WilmerHale filed a petition for writ of certiorari on behalf of PNC Bank presenting two questions: (1) whether the Federal Circuit's judgment in PNC Bank, 848 F.3d 1370, should be vacated and the case remanded with instructions to dismiss the appeal as moot, in accordance with United States v. Munsingwear, Inc., 340 US 36 (1950); and (2) if the case is not moot, whether the Federal Circuit erred in holding that the statutory definition of a CBM patent requires that the patent include claims that recite “a financial activity element.” The petition explained that Munsingwear provides for vacatur of the decision below where the case becomes moot while on appeal, and that the case became moot when the Federal Circuit affirmed the Board's decision invalidating the claims of the Secure Axcess patent in a separate inter partes review (IPR) proceeding.

In PNC Bank National Association v. Secure Axcess, LLC (No. 17-350), the Supreme Court granted the petition for writ of certiorari. The Court agreed with petitioners that the case was moot and vacated the judgment of the Federal Circuit, citing Munsingwear, 340 U.S. 36.

WilmerHale also represented the petitioner in Secure Axcess' separate appeal of the Board's decision invalidating all asserted claims of the challenged Secure Axcess patent in the IPR proceeding. The Federal Circuit affirmed.