Edging towards a bright-line rule for CBM eligibility: Secure Axcess v. PNC Bank

Back in November 2016, the Federal Circuit narrowed the scope of patents eligible for Covered Business Method review. They held that a patent is not eligible for CBM review just because it could involve a financial transaction. Instead, the patent must have a claim that actually contains a financial activity element.

The Federal Circuit’s 2-1 decision in Secure Axcess v. PNC Bank reaffirms that narrowing, and adds that the litigation history of the patent (here targeting financial institutions) is also not relevant:

[A] patent owner’s choice of litigation targets could be influenced by a number of considerations, such as the volume of a particular target’s perceived infringement; the financial condition of the target; which targets are most likely to be willing to settle rather than bear the cost of litigating; available and friendly venues; and so on.

But Judge Lourie dissented, arguing that the patent specification and litigation history clearly described a patent on a “financial product or service,” regardless of whether the claims specifically include a financial transaction.

Will we have a bright-line rule, or an “all the circumstances” test? So far the bright-line rule has the upper hand.

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