Benefit Funding Systems LLC et al. v. Regions Financial Corp. et al.

Docket No. 2014-1122, -1124, -1125

September 25, 2014

Brief Summary: DC grant of stay in litigation pending PTO review of claims under the Transitional Program for Covered Business Method Patents to determine patentability under 35 U.S.C. § 101 affirmed.

Summary: Benefit Funding Systems filed an interlocutory appeal from the DC stay of litigation pending covered pending PTO business method review of the claims. About ten months into the litigation, U.S. Bancorp filed a petition for post-grant review under the Transitional Program for Covered Business Method Patents (CBM). Finding it to be “more likely than not that the challenged claims are unpatentable” under 35 U.S.C. § 101, the PTAB instituted review. Section 18(b) of the AIA governs litigation stays pending resolution of a CBM review based on whether: 1) a stay, or the denial thereof, will simplify the issues in question and streamline the trial; 2) discovery is complete and whether trial date is set; 3) a stay, or the denial thereof, would unduly prejudice the nonmoving party or present a clear tactical advantage for the moving party; and, 4) a stay, or denial thereof, will reduce the burden of litigation on the parties and court. The DC considered theses factors and granted the stay. The argument on appeal was that the PTAB is not authorized to conduct CBM review based on § 101. Characterizing these grounds as “an impermissible collateral attack”, the FC panel found no error with the DC decision (“[t]he stay determination is not the time or the place to review the PTAB’s decisions to institute a CBM proceeding”). It also explained that it might be appropriate to challenge a final decision of the PTAB in an appeal. Thus, the DC decision was affirmed.

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