In a February 26, 2014 order, District Judge Schiltz of Minnesota1 penned a brief primer on the America Invents Act (AIA) Covered Business Method review process, litigation stays, and unpatentable subject matter.
In April 2010, Transunion sued Search America for infringing its patents which “are directed to a computer-implemented method used to assess a patient’s eligibility to receive financial assistance for healthcare services.” In July 2013, Search America submitted a Petition for Covered Business Method Patent Review to the USPTO. The Leahy-Smith America Invents Act created the Covered Business Method (CBM) review process by which a party sued for infringing a CBM patent may petition the USPTO to review the validity of the patent. Often, the alleged infringer will seek a stay of the underlying litigation if the USPTO grants its petition for review.
In determining whether to grant or deny a stay of the litigation, the court is directed to consider factors set out in § 18(b)(1) of the AIA:
(A) whether a stay, or the denial thereof, will simplify the issues in question and streamline the trial;
(B) whether discovery is complete and whether a trial date has been set;
(C) whether a stay, or the denial thereof, would unduly prejudice the nonmoving party or present a clear tactical advantage for the moving party; and
(D) whether a stay, or the denial thereof, will reduce the burden of litigation on the parties and on the court.
The court found that a stay was warranted—finding that all four factors favored a stay. The court first reasoned that a stay would simplify and streamline the issues for trial, because it was likely that at least some of the claims of the patents-in-suit would be found invalid.
Regarding simplification of issues in question, the court expressed “grave doubts about the validity of Transunion’s patents” which use a computer to assist hospitals to investigate whether a person seeking medical services is eligible for public or private assistance through many available programs.
If the USPTO finds all of the claims invalid, no trial will be necessary. If some of the claims survive review, then Transunion would be estopped (prevented) from raising in the underlying litigation invalidity arguments it raised or could have reasonably raised in the review process which would reduce issues in the district court case. Continue reading “"Hey — let's use a computer to do this!"”