E Credit Express Inc v. Autogravity Corp

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: E Credit Express, Inc. (Michigan)
  • Defendant: AutoGravity Corporation (Delaware)
  • Plaintiff’s Counsel: Stamoulis & Weinblatt LLC
• Case Identification: 1:18-cv-00783, D. Del., 05/23/2018
• Venue Allegations: Plaintiff alleges venue is proper in the District of Delaware because Defendant has committed acts of patent infringement in the district and maintains a regular and established place of business there.
• Core Dispute: Plaintiff alleges that Defendant’s online vehicle financing platform infringes a patent related to a system and method for expedited credit and loan processing.
• Technical Context: The technology concerns electronic platforms for indirect lending (e.g., auto loans) that aim to streamline the process by pre-qualifying applicants before conducting a full credit history review.
• Key Procedural History: The complaint does not mention any prior litigation, Inter Partes Review (IPR) proceedings, or licensing history related to the patent-in-suit.

Case Timeline

II. Technology and Patent(s)-in-Suit Analysis

U.S. Patent No. 8,909,551 - "System and Method of Expedited Credit and Loan Processing"

The Invention Explained

• Problem Addressed: The patent’s background section identifies conventional credit approval processes as slow, inefficient, and costly, noting they can adversely affect a consumer's credit score due to multiple "pulls" of the consumer's credit by different potential lenders (Compl. ¶11; ’551 Patent, col. 2:18-25).
• The Patented Solution: The invention is a multi-stage, computer-implemented method that aims to make credit determinations earlier in the loan process. It first verifies an applicant's identity without performing a "hard" credit pull, then uses pre-screen questions and applicant-stated financial data to pre-qualify the applicant against lender criteria. Only after this initial pre-qualification does the system proceed to a full credit check and loan structuring, thereby reducing unnecessary credit inquiries ('551 Patent, Abstract; col. 2:31-36).
• Technical Importance: This phased approach sought to protect consumer credit scores while reducing administrative costs and wasted effort for lenders in the high-volume online and indirect lending markets ('551 Patent, col. 2:31-36).

Key Claims at a Glance

• The complaint asserts infringement of at least independent claim 1 (Compl. ¶13).
• The essential elements of independent claim 1 include:
  • Providing a processing software program on a computer that accesses at least one "seller-selected consideration criterion", where the seller possesses a "collateralizable article".
  • Populating information fields with an applicant's information under the control of a seller.
  • "Verifying" the applicant's information and generating a verification or non-verification signal.
  • Upon receiving a verification signal, analyzing the information against "qualification parameters" and generating an "output solution" for a credit transaction that is "assignable by the seller to a financial institution".
• The complaint does not explicitly reserve the right to assert dependent claims.

III. The Accused Instrumentality

Product Identification

• The accused instrumentality is the "AutoGravity" platform, which is available as a program, mobile application, and website (Compl. ¶¶13-14).

Functionality and Market Context

• The AutoGravity platform allows a user to search for vehicles at local dealerships, apply for financing from various lenders, and receive and select loan offers (Compl. ¶¶13-17). The complaint alleges the platform connects users with dealerships that possess the cars being searched for (Compl. ¶14). A screenshot in the complaint shows the platform's mobile interface for finding local dealerships on a map (Compl. Figure 2, p. 5). The platform is also alleged to allow users to input desired financing terms and to verify their identity by scanning a driver's license (Compl. ¶¶15-16).

IV. Analysis of Infringement Allegations

'551 Patent Infringement Allegations

• Identified Points of Contention:
  • Technical Question: The patent specification describes the "verifying" step as a "soft" credit pull that explicitly "verifies the applicant identification without pulling credit" ('551 Patent, Abstract; col. 9:36-43). The complaint alleges verification occurs via a driver's license scan (Compl. ¶16). A central evidentiary question may be whether the accused platform's verification process operates as a "soft" identity check consistent with the patent's disclosure, or if it constitutes an immediate "hard" credit pull, which could suggest a technical mismatch with the patented method.
  • Scope Questions: Claim 1 requires the system to access "seller-selected consideration criterion". The complaint alleges AutoGravity's platform connects users with dealerships (sellers) (Compl. ¶14). The infringement analysis may raise the question of whether the qualification parameters used by the AutoGravity platform are in fact "selected" by the dealerships, or if they are dictated exclusively by third-party financial institutions. The distinction could be critical to satisfying this claim limitation.

V. Key Claim Terms for Construction

• The Term: "verifying the application-relevant information"

• Context and Importance: This term is central because the patent’s solution to the stated problem hinges on a specific type of verification that avoids a premature hard credit pull. The construction of "verifying" could determine whether the accused system, which might perform a hard credit pull early in its process, falls within the scope of the claim.

• Intrinsic Evidence for Interpretation:

  • Evidence for a Broader Interpretation: The plain language of the claim term itself does not explicitly limit the method of verification or forbid a hard credit pull.
  • Evidence for a Narrower Interpretation: The Abstract states the invention "verifies the applicant identification without pulling credit." The specification further describes a "soft" credit pull that "merely verifies that the identification information provided is accurate using publicly available information" and "does not involve accessing a credit reporting agency that maintains credit reports" ('551 Patent, col. 9:36-43). This language may support an argument that "verifying" should be construed more narrowly to mean an identity check that is distinct from, and precedes, a full credit report inquiry.

• The Term: "seller-selected consideration criterion"

• Context and Importance: Practitioners may focus on this term because infringement depends on the "seller" (i.e., the car dealership) being the entity that "selects" the qualification criteria. If the criteria are shown to be selected exclusively by third-party lenders without input or control from the dealership, this element may not be met.

• Intrinsic Evidence for Interpretation:

  • Evidence for a Broader Interpretation: The specification describes an indirect sales situation where the "seller may transmit the completed application to one or more lenders for evaluation" ('551 Patent, col. 1:51-53), which could suggest that a seller's decision to work with certain lenders constitutes an adoption, and therefore "selection," of those lenders' criteria.
  • Evidence for a Narrower Interpretation: The claim’s use of "seller-selected" is specific. The patent also distinguishes between the "seller" and other entities like the "lender/dealer/financial source" ('551 Patent, col. 4:29-30), which may suggest that the patentee viewed the "seller" as a distinct entity whose "selection" is a required step, separate from the criteria originating from a financial source.

VI. Other Allegations

• Indirect Infringement: The complaint alleges induced infringement, stating that AutoGravity provides "support for, training and instructions" to its customers, including merchants and end-users, to use the accused products in a manner that infringes the ’551 Patent (Compl. ¶18).
• Willful Infringement: The prayer for relief requests treble damages for willful infringement (Compl. ¶D, p. 9). The complaint does not contain factual allegations of pre-suit knowledge of the patent, suggesting the willfulness claim may be based on conduct occurring after the complaint was filed.

VII. Analyst’s Conclusion: Key Questions for the Case

• A core issue will be one of operational sequence: does the accused AutoGravity platform perform a "soft" identity verification that precedes a full credit inquiry, as described in the ’551 patent's specification? Or does its verification process involve an immediate "hard" credit pull, which would raise an evidentiary question about its equivalence to the patented method.
• The case may also turn on a question of definitional control: can the term "seller-selected consideration criterion" be met if the qualification rules used in the accused platform are shown to be determined exclusively by third-party financial institutions rather than by the car dealerships (the "sellers") themselves?