Post-Institution Disclaimer Insufficient to Avoid CBM Review

The PTAB has determined that a patent owner may not moot a CBM proceeding by disclaiming claims post-institution. Emerson Elect ric Co. v. SIPCO, LLC, CBM2016-00095, Paper 39 (P.T.A.B. Jan. 16, 2018).

Emerson Electric Company (“Emerson”) requested CBM review of a patent owned by SIPCO, LLC (“SIPCO”). Emerson asserted that SIPCO’s patent was eligible for CBM review because claims 3 and 4 related to a vending machine and an automated teller machine. The PTAB determined that these claims were financial in nature and instituted CBM review on claims 3 and 4 and on other claims.

Post-institution, the Patent Owner filed a statutory disclaimer that disclaimed claims 3 and 4. The Patent Owner argued that the disclaimed claims could not form the basis of a CBM review because they should be treated as though they never existed. In other cases where patent owners have disclaimed claims prior to institution, the PTAB has declined to institute CBM review. See, e.g., Great West Casualty Co. v. Intellectual​ Ventures II LLC, CBM2015-00171, Paper 10 (P.T.A.B. Feb. 9, 2016).

Here, however, the PTAB held that a post-institution disclaimer does not affect the patent’s eligibility for CBM review. Rather, eligibility for CBM review is determined based on the claims of the challenged patent as they existed at the time of the institution decision. As such, SIPCO’s attempt to disclaim claims 3 and 4—after the CBM had already been instituted—did not moot the CBM proceeding. The PTAB noted that treating the disclaimed claims as if they never existed would unfairly prejudice Emerson. In particular, if SIPCO had filed the disclaimer earlier, Emerson would have had time to file an IPR prior to the one-year deadline from service of SIPCO’s complaint.

In view of the foregoing, the PTAB found that the patent was eligible for CBM review. The PTAB also found the remaining claims unpatentable for lack of subject matter eligibility and for obviousness.

Written By: Scott Raevsky and Scott R. Seeley