Special Interest Group Implores Congress to Extend CBM Program

By Eileen McDermott
September 3, 2020

“If these patents are asserted without the CBM program in place, the end result will be a tax on our economy at a time when many of our members are fighting to recover from the devastating economic impact of the COVID-19 pandemic.” – Quality Patents Coalition draft letter

https://depositphotos.com/242672502/stock-photo-united-states-government-deadline-congress.htmlTwo weeks before the Transitional Program for Covered Business Method Patents (CBM) Program implemented in 2012 under the America Invents Act (AIA) is set to expire, a special interest group dubbed the “Quality Patents Coalition”, is reportedly urging Congress to extend the program for one year. The CBM program is currently scheduled to expire on September 16, 2020.

In June, in response to reports of the imminent request for an extension, a number of organizations submitted a letter to Senator Thom Tillis (R-NC) arguing that “CBM should expire of disinterest, if not to eliminate a proceeding of questionable use, of illegitimate vintage, and of unjust intent.”

Draft Letter and Signatories

The Quality Patents Coalition letter, a draft of which IPWatchdog has obtained, cites the controversial Perryman Group study on the AIA/ Patent Trial and Appeal Board’s impact on the U.S. economy as proof that CBM has been working, claiming that “the AIA and its collective review programs have ‘saved U.S. jobs and helped drive substantial economic gains over the past decade’ including an estimated $2.95 billion in GDP growth between 2014-2019.”

Many have questioned the accuracy of these figures, as outlined in IPWatchdog’s recent analysis of the study.

The letter goes on to warn that data suggests some patent owners are waiting until after September 16 to assert their business method patents, and that non-practicing entities (NPEs) are actually stockpiling business method patents:

Secondary market activity is up 12.6% and the number of patents sold is up 69% (Q1 2020 v. Q1 2019). If these patents are asserted without the CBM program in place, the end result will be a tax on our economy at a time when many of our members are fighting to recover from the devastating economic impact of the COVID-19 pandemic.

The signatories to the letter include the following financial services and retail companies and organizations:

American Bankers Association
American Transaction Processors Coalition
Bank Policy Institute
Credit Union National Association
The Clearing House
Electronic Transactions Association
Independent Community Bankers of America
Innovative Payments Association
National Retail Federation
Retail Industry Leaders Association

Opposition

In an August article for IPWatchdog, James Edwards of the Eagle Forum Education & Legal Defense Fund recalled that, in 2015, a bipartisan majority of the House voted down an amendment by then-Congressman Darrell Issa (R-CA), who chaired the House Judiciary IP Subcommittee at the time, to extend CBM. Edwards wrote: “Then-Ranking Member John Conyers (D-MI) pointed out in leading the opposition [to the amendment] that the USPTO had expanded CBM’s reach beyond financial services business methods. He said this exceeding of its statutory limitations made CBM ‘a new tool for infringers to drain legitimate patent holders of resources.’”

The CBM program was framed as “transitional” when initially created, as one of the many compromises made for certain sectors in order to reach consensus on the AIA. Opponents of extending the program include the IEEE-USA, the Innovation Alliance, Licensing Executives Society, the National Small Business Association and US Inventor, among others.

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The Author

Eileen McDermott

Eileen McDermott is the Editor-in-Chief of IPWatchdog.com. Eileen is a veteran IP and legal journalist, and no stranger to the intellectual property world, having held editorial and managerial positions at several publications and industry organizations. She has acted as editorial consultant for the International Trademark Association (INTA), chiefly overseeing the editorial process for the Association’s twice-monthly newsletter, the INTA Bulletin. Eileen has also served as a freelance editor for the World Intellectual Property Organization (WIPO); as senior consulting editor for the Intellectual Property Owners Association (IPO) from 2015 to 2017; as Managing Editor and Editor-in-Chief at INTA from 2013 to 2016; and was Americas Editor for Managing Intellectual Property magazine from 2007 to 2013.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author as of the time of publication and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 6 Comments comments. Join the discussion.

  1. Pro Say September 3, 2020 7:12 pm

    Transitional means transitional means transitional.

    The letter to the Honorable Senator Tillis says it all:

    “CBM should expire of disinterest, if not to eliminate a proceeding of questionable use, of illegitimate vintage, and of unjust intent.”

    The time is up for this innovation albatross.

    Let it die the unceremonious death it justly deserves.

  2. Moocow September 4, 2020 10:21 am

    The “stockpiled patents” story must be one of the lamest arguments yet. Even if there are such stockpiled patents, IPR proceedings are still available to challenge them all. Petitioners wouldn’t even have to wait until they’re sued for infringement. And to the extent they believe such patents are invalid under Section 101 (which is unavailable in IPR), they can invalidate such patents more quickly and cheaply in district court than in CBM proceedings.

  3. Jack Copper September 4, 2020 12:12 pm

    Isn’t the link in the sentence beginning “Many have questioned…” intended to go to an IPWatchdog analysis? The link now goes to the original Perryman report.

  4. Eileen McDermott September 4, 2020 12:58 pm

    yes, that’s fixed, thanks.

  5. Anon September 4, 2020 6:43 pm

    Extend one year…?

    Is this to be some Mickey Mouse type of RE-extension in one year less one day (ad infinitum)?

  6. Deda Grishaj September 20, 2020 5:54 am

    Great news for everyone.

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