The covered business method (CBM) patent review program instituted by the America Invents Act completed its first practical application this month as tech giant SAP was able to disprove the patentability of proprietary processes formerly claimed by Versata Software. As a result of the patent review board decision, SAP may have new leverage in an infringement dispute that the two parties have taken to federal appeals court.
The saga began in 2007 as Versata sued SAP for infringement of its patent dynamic pricing technology, according to The American Lawyer, citing significant financial hardships following SAP's entrance into the same software market segment. The court sided with Versata at the time, and SAP's appeal was dismissed in May 2013.
At the same time, SAP became one of several dozen litigants to turn to the new CBM review program. This week that move paid dividends as examiners ruled that Versata's previously awarded patents sought to cover mental processes as opposed to tangible inventions. As a result, SAP could potentially reopen its initial appeal with Versata which currently has approximately $345 million in damages hanging in the balance.
Steve Baughman, an attorney involved with 15 of the 28 CBM cases still standing before the board, told Bloomberg that the SAP example could be a crucial litmus test for the new AIA mechanism. The participation rate has been lower than USPTO officials had predicted, but Congress is currently weighing an addendum which would extend the program beyond the realm of financial services software.