PTAB Issues Only Its Third Post-Grant Review Decision to Date, Invalidates Storage Container Tracking Claims Directed to Ineligible Subject Matter

Written by: Dan Smith

On August 2, 2016, the Patent Trial and Appeal Board (PTAB), in proceeding PGR2015-00009, invalidated a patent for storage container tracking and delivery as being directed to patent-ineligible subject matter under 35 U.S.C. 101. The case marks only the third final written decision in a Post-Grant Review (PGR) proceeding issued by the PTAB since such proceedings were introduced under the America Invents Act (AIA) in September 2012.

Petitioner Netsirv LLC had argued that all claims of Boxbee Inc.'s U.S. Patent No. 8,756,166 (entitled "System and method for storage container tracking and delivery") were directed to an abstract idea "preemptive of the entire containerized storage business that has been around for decades," and thus impermissible under the recent interpretation of 35 U.S.C. 101 by the Supreme Court in the Alice case and the subsequent Federal Circuit cases. Boxbee responded that its claims were analogous to those found patent-eligible by the Federal Circuit in the DDR Holdings and Enfish cases.

The Board disagreed and found that the claims were directed to the "long-prevalent economic practice" of "bailment schemes," which it found constitute an abstract idea. The Board also distinguished the claims of the '166 patent from those found patent-eligible by the Federal Circuit in Enfish and DDR Holdings, stating that although those cases "confirmed that not all claims directed to improvements in computer-related technology are abstract," they also held that that claims "for which computers are invoked merely as a tool" are abstract. The claims '166 patent, the Board stated, did not recite "an improvement to computer functionality itself," and instead merely recited "economic or other tasks for which a computer is used in its ordinary capacity."

Post-Grant Review proceedings such as this one are relatively rare, in part due to a requirement that such proceedings must be requested within a nine-month window from the issue date of a patent and in part to their broad estoppel, if unsuccessful. Although the blanket term "post grant" is often used to describe the Inter Partes Review (IPR) and Covered Business Method (CBM) review proceedings offered under the AIA, the Post-Grant Review procedure is distinct from the more widely-used IPR and CBM review procedures.

If you would like to learn more about Post Grant Review proceedings, register today for our upcoming Post-Grant for Practitioners webinar on August 10, Post-Grant Review (PGR) Proceedings are Gaining Momentum.

The case is Netsirv and Local Motion MN v. Boxbee Inc., Case PGR2015-00009, before the Patent Trial and Appeal Board.