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

News of Health Hoglund joining Sisvel and the Delhi High Court staying a $2.2 million decree in favour of Philips were also among the top talking points
The firm is continuing its aggressive IP hiring streak with the addition of partner Matthew Rizzolo
Pantech counsel Shogo Matsunaga speaks exclusively to Managing IP about how his team proved Google’s unwillingness, and ultimately secured a landmark SEP settlement
New partners, including the firm’s first female head of a department, are eyeing a deeper focus on client understanding
Chunguang Hu of China PAT explains why his ‘insider’ experience as a patent examiner benefits clients and why he wants to debunk the myth that IP has limited value in China
Essenese Obhan shares his expansion plans and vision of creating a ‘one-stop shop’ for clients after Indian firms Obhan & Associates and Mason & Associates joined forces
From AI and the UPC to troublesome trademarks in China, experts name the IP trends likely to dominate 2026
Colm Murphy says he is keen to help clients navigate cross-border IP challenges in Europe
With 2025 behind us, US practitioners sit down with Managing IP to discuss the major IP moments from the year and what to expect in 2026
Large-scale transatlantic mergers will give US entities a strong foothold at the UPC, and could spark further fragmentation of European patent practices
Gift this article