In the case of Square, Inc. v. Unwired Planet, LLC (CMB2015-00148), the PTAB held that the grounds raised by Square, Inc. (Petitioner) to challenge the validity of claims 1-4 of Unwired Planet’s U.S. Patent No. 7,711,100 could have been raised in a previous petition filed by Square, Inc. against the same patent, and hence denied the institution of a covered business method (CBM) review. In particular, the Board relied on the estoppel provision of 35 USC 325(e)(1), to deny the institution of a CBM review. This portion of section 325 mandates that the petitioner, or the real party in interest or privy of the petitioner, in a post-grant review of a claim that results in a final written decision “may not request or maintain a proceeding before the Office with respect to that claim on any ground that the petitioner raised or reasonably could have raised during that post-grant review.”

The Petitioner had previously filed a CBM petition challenging claims 1-4 of the ‘100 patent (CBM2014-00156), which relates to methods for coordinating financial transactions via a wireless network, such as a wireless telephone network. In that proceeding, the petitioner argued that the claims at issue were invalid under 35 U.S.C. §101 as drawn to patent ineligible subject matter as well as invalid under 35 U.S.C. §102 and 103 as either anticipated or rendered obvious by a prior art reference (a thesis by Vazvan). The PTAB initiated a trial on the §101 ground but declined to include the §102 and 103 grounds in the trial because it found the evidence of public availability of the Vazvan thesis deficient. Ultimately, in a final written decision, the PTAB held that the challenged claims were not eligible for patenting pursuant to 35 U.S.C. §101.

Not satisfied with the decision invalidating the claims as patent ineligible subject matter, Square, Inc. filed a second petition arguing that claims 1-4 were invalid under 35 U.S.C. §102 and 103 as anticipated or rendered obvious by a different prior art reference (U.S. Patent No. 5,579,535 of Orlen).

As an initial matter, the Petitioner argued that the section 325 estoppel provision did not apply to covered business method patent reviews. The Board gave a short shrift to this argument and pointed out that when Congress established the Transitional Program for Covered Business Method Patents, it provided that the transitional proceeding shall employ the standards, and procedures, of a post-grant review.

The Petitioner further argued that it could not have raised the Orlen reference in the first proceeding because multiple searches, including those performed by three separate search firms, had not uncovered this reference. The Board was not persuaded by this argument and stated that “[a]t most Petitioner shows that Orlen was not discovered prior to the filing of the Petition in CBM2014-00156, not that Orlen reasonably could not have been discovered earlier and raised.” The Board emphasized that “[t]he issue is not whether Petitioner knew about Orlen, but whether Petitioner reasonably could have discovered Orlen and raised the newly asserted grounds at the time of the earlier petition.”

The Petitioner also argued that it could not have foreseen that Board would find the evidence of the public availability of the Vazvan thesis as deficient. The Board did not find this argument persuasive and pointed out that the law on the prior art status of theses has existed for nearly thirty years. The Board also noted that the Petitioner itself had realized the potential problem with its showing of Vazvan’s prior art status because it did obtain, but did not attempt to file, a declaration from a Finnish librarian attempting to demonstrate Vazvan’s public availability.