SAP v Versata decision threatens business method patents

Managing IP is part of Legal Benchmarking Limited, 1-2 Paris Gardens, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2026

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

SAP v Versata decision threatens business method patents

uspto-seal-45.gif

Business method patent owners were dealt a blow this week after the PTAB confirmed it will assume the “broadest reasonable interpretation” of a patent when considering if its claims are too far-reaching under new post-grant challenge proceedings

In the first-ever covered business method (CBM) review trial, the USPTO’s Patent Trial and Appeal Board (PTAB) found all five challenged claims in SAP v Versata invalid.

uspto-seal-200.gif

The PTAB concluded that Versata’s claims relating to a method and apparatus for pricing products and services are ineligible for patent protection under Section 101. Versata’s system arranges customers and products into a hierarchy and applies pricing adjustments to different groups.

The CBM review trial is a new post-grant patent challenge proceeding created under the AIA. Designed to reduce the number of overly broad business method patents, it allows those accused of infringing a patent covered under Section 18 of the AIA to challenge its validity through the USPTO’s appeals procedure rather than through the court system.

CBM review was introduced in September 2012. The USPTO will not accept any new petitions for CMB review on or after September 16, 2020.

Versata had argued that the terms for judging the validity of the claims should be based on a district court interpretation standard. But Administrative Patent Judges Sally Medley, Michael Tierney and Rama Elluru disagreed.

“The use of the broadest reasonable interpretation encourages patent owners to remove ambiguities and to narrow their claims by amendment, such that the inventor’s contribution to the art is expressed in clear, precise and unambiguous terms,” they said.

The dispute began in 2007, when Versata sued for infringement of US patent 6,553,350. A district court jury found that SAP had infringed the patent and awarded damages.

Both parties appealed to the Federal Circuit in October 2011. The appellate court affirmed the jury’s verdict and damages.

In September 2012, SAP filed a petition with the USPTO challenging claims 17 and 26 to 29 as being ineligible for patent protection. Versata claimed that SAP had failed to meet all three criteria for seeking a CBM review, but in February this year the PTAB disagreed and ordered that the review should go ahead.

more from across site and SHARED ros bottom lb

More from across our site

Top talking points also included news of an appellate ruling concerning ‘Pisco’ and Indian drugmakers gearing up to launch generic versions of Ozempic as Novo Nordisk’s patent expires
The government’s keenly awaited view on AI and copyright has positive themes but leaves rights owners wanting, says Rebecca Newman at Addleshaw Goddard
While IP Australia’s updated manual could be favourable to computer-implemented inventions, stakeholders would like to see whether a consistent and reliable standard is followed during actual examination
UKIPO will remain a competitive option as long as efficient service continues
A future opt-out has not been ruled out, but practitioners warn that the UK could fall behind in the AI race
US patent lawyers say they are increasingly advising clients on China strategies as corporations seek to gain leverage in enforcement, licensing, and supply chain management
Mike Rueckheim reunites with 12 of his former Winston & Strawn colleagues as King & Spalding continues aggressive hiring streak
As global commerce continues to expand through e-commerce platforms and digital marketplaces, protecting brands has become a growing challenge for organisations worldwide. Counterfeiting, intellectual property infringement, and online brand abuse are increasing across industries, making brand protection strategies a critical priority for businesses.
Henrik Holzapfel and Chuck Larsen of McDermott Will & Schulte explain why a Court of Appeal ruling could promote access to justice and present a growth opportunity for litigation finance
A co-partner in charge says the UK prosecution teams are a ‘vital’ part of the firm’s offering, while praising a key injunction win
Gift this article