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CBM Review Appeal to Federal Circuit Results in Complete Victory for Rothwell Figg Client cxLoyalty

February 8, 2021

A February 8, 2021 precedential Federal Circuit decision stemming from an appeal of a covered business method (CBM) review at the PTAB ended a patent infringement row with a complete and total victory for Rothwell Figg client cxLoyalty, Inc. (“cxLoyalty”), a leading provider of loyalty and customer engagement solutions.

In response to a complaint filed by competitor Maritz Holdings, Inc. (“Maritz”) in the District of Delaware alleging cxLoyalty’s infringement of U.S. Patent No. 7,134,087 (“the ’087 patent”), cxLoyalty filed a petition for CBM review at the PTAB asserting that all of the claims of the ’087 patent are invalid as being directed to patent-ineligible subject matter under 35 U.S.C. § 101. The ’087 patent is directed to a computerized system and method for permitting a participant to transact a purchase using awarded points with a vendor system which transacts purchases in currency. The PTAB instituted CBM review and held that original claims 1-15 were ineligible for patenting under section 101, but that the proposed substitute claims 16-23 were patent-eligible. The district court litigation was stayed of the duration of the CBM proceeding.

cxLoyalty appealed the PTAB’s decision regarding the substitute claims to the Federal Circuit, and Maritz cross-appealed both the PTAB’s determination that the ’087 patent is eligible for CBM review and the PTAB’s ruling as to the original claims. In the Federal Circuit’s decision, it determined that it has no authority to consider Maritz’s challenge to the CBM eligibility of the ’087 patent, and dismissed that portion of the appeal. On the merits, it affirmed the PTAB’s decision that the original claims in the Maritz patent are directed to patent-ineligible subject matter under section 101 of the patent statute and that the those claims are therefore invalid. In addition, it determined that the substitute claims of the Maritz patent are also directed to patent-ineligible subject matter (and thus invalid), and therefore reversed the PTAB with respect to the substitute claims.

Rothwell Figg’s Steven Lieberman, Jenny L. Colgate, and D. Lawson Allen represent cxLoyalty in the CBM review (CBM2018-00037), the district court litigation (18-cv-00967), and the appeals to the Federal Circuit (20-1307 and 20-1309).

To view Law360’s coverage of the victory, “Fed. Circ. Won't Let PTAB Save Loyalty Program Patent” on February 8, 2021, please click here.