Intellectual Property > IP Newsflash > Inventory-Tracking Claims Held Unpatentable in a Covered Business Method Patent Review
28 Jul '16

In a June 28, 2016 final written decision, the Patent Trial and Appeal Board (PTAB) found all claims at issue unpatentable under § 101 in a Covered Business Method (CBM) review. Petitioner Life Technologies Corp. sought a CBM review of U.S. Patent No. 6,996,538, which relates to methods and systems of electronic inventory tracking by a third party via the Internet. Petitioner argued that the patent is a CBM patent because at least one claim is directed to a financial product or service. Petitioner also relied on the United States Patent and Trademark Office’s classification of the patent, and on claim language, such as “collecting and storing . . . inventory and cost information.” The patent owner, Unisone Strategic IP, argued in response that the patent distinguishes between the act of ordering and paying for the inventory and that as such, it does not recite a CBM. The PTAB agreed with the petitioner and found that the claims only need to be broad enough to cover a financial product or service. Here, at least one claim recites “cost information” and “ordering inventory,” which encompass financial activities.

The PTAB then ruled that the claims at issue are not exempt from the CBM review based on the technological inventions exception.  To qualify for the exception, the claims must both (1) recite a technological feature that is novel and unobvious over the prior art and (2) solve a technical problem using a technical solution. Regarding the first prong, the PTAB found that the technological features, such as the database system, software and computer, were all well-known. Regarding the second prong, the PTAB held that inventory tracking and updating are not technical problems. Further, there is no “technical solution” because the patent provides no improvement on the technical components themselves. Accordingly, the PTAB found that the patent at issue is a CBM patent. 

The PTAB then went on to analyze the issue of unpatentability under § 101. Under the two-prong Alice framework, the PTAB considers (1) whether the claims are directed to a patent-ineligible concept and (2) whether there is an inventive concept that transforms the nature of the claims into a patent-eligible application. The PTAB concluded that the claims are directed to the abstract idea of managing inventory in view of information. Further, the claimed software, database, and computer were all well-known at the time of the invention. Thus, the PTAB found all asserted claims unpatentable under § 101. 

Life Techs. Corp. v. Unisone Strategic IP, Inc., Case CBM2015-00037 (PTAB June 28, 2016). [Bonila (opinion), Jung, and Powell]