PTAB

CBM2014-00176

Westlake Services LLC v. Credit Acceptance Corp

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Key Events
Petition
petition

1. Case Identification

2. Patent Overview

  • Title: System and Method for Providing Financing
  • Brief Description: The ’807 patent describes a computerized system and method for providing financing to customers for purchasing products from a merchant's inventory. The system generates prospective financing packages for items in a dealer's inventory based on customer credit information, allowing a dealer to present immediate financing offers.

3. Grounds for Unpatentability

Ground 1: Unpatentable Subject Matter under 35 U.S.C. §101 - Claims 1-42 are unpatentable under Alice Corp.

  • Core Argument: Petitioner argued that all claims of the ’807 patent are directed to patent-ineligible subject matter. This argument was framed under the two-step test established by the Supreme Court in Alice Corp. v. CLS Bank Int'l, which was decided shortly before this petition was filed.
    • Prior Art Mapping: Under step one of the Alice framework, Petitioner asserted the claims are directed to the abstract idea of providing financing. This was characterized as a fundamental economic practice, analogous to the concept of intermediated settlement found to be abstract in Alice. The claims merely recite steps for gathering customer and inventory data, calculating credit scores and financing terms, and presenting an offer, all of which are longstanding commercial practices.
    • Motivation to Combine (for §103 grounds): Not applicable.
    • Expectation of Success (for §103 grounds): Not applicable.
    • Key Aspects: Under step two of the Alice framework, Petitioner argued the claims lack an "inventive concept" sufficient to transform the abstract idea into a patent-eligible invention. The recitation of generic computer components—such as a "database," "server," "user terminal," and "network"—was argued to be nothing more than an instruction to implement the abstract idea on a general-purpose computer. These components perform only their conventional and well-understood functions and do not improve computer technology itself, thus failing to add "significantly more" to the underlying abstract idea.

Ground 2: Indefiniteness under 35 U.S.C. §112, ¶ 2 - Claims 1-42 are indefinite under Nautilus, Inc.

  • Core Argument: Petitioner contended that numerous claim terms are indefinite because they fail to inform a person of ordinary skill in the art (POSITA) about the scope of the invention with the "reasonable certainty" required by the Supreme Court's then-recent decision in Nautilus, Inc. v. Biosig Instruments, Inc.
    • Prior Art Mapping: Petitioner identified several terms in independent claims 1, 14, 25, 34, and 41 that are allegedly indefinite. For example, the term "receiving information from the customer" was argued to be limitless, as it is not restricted to any specific type of information (e.g., financial). The phrase "immediate offer for sale" was asserted to be indefinite because its duration and the starting point for its timing are unclear. Similarly, terms like "credit information," "credit report," and "credit score" were used within the same claim without clear differentiation, creating ambiguity.
    • Key Aspects: The core of this ground was that the new, stricter "reasonable certainty" standard from Nautilus rendered the claims invalid. Petitioner argued that the patent and its prosecution history provide no objective boundaries for these terms, forcing a POSITA to guess their meaning and scope.

Ground 3: Lack of Enablement under 35 U.S.C. §112, ¶ 1 - Claims 1-42 are not enabled.

  • Core Argument: Petitioner argued that the specification fails to enable a POSITA to practice the full scope of the claimed invention without undue experimentation. The patent claimed complex functionality without providing the necessary technical disclosure to achieve it.
    • Prior Art Mapping: The patent described its invention as leveraging "specifically-configured computer components" to perform "complex calculations." However, Petitioner asserted the specification provides only high-level, generalized flowcharts (e.g., Figure 7) and lacks any specific computer programs, code, or detailed algorithms. This disclosure was argued to be insufficient to teach a POSITA how to build the claimed system, particularly for performing functions like generating financing packages for an entire inventory based on various data inputs.
    • Key Aspects: Petitioner also argued that the claims are not enabled for their full scope because they purport to cover financing for "any products," but the Patent Owner had admitted in related proceedings that certain financing types (e.g., mortgages, student loans) do not fall within the claim scope. This admission was used to argue that the patent does not enable the broad "any product" language of the claims.

4. Key Claim Construction Positions

  • Petitioner argued that even under the prior PTAB constructions for "calculation unit" (a computer component configured to calculate) and "financial package generating unit," the terms remain indefinite.
  • The term "computer component" was asserted to be exceptionally general, failing to specify whether it is hardware or software, or internal or external, thus lacking the reasonable certainty required under Nautilus.

5. Arguments Regarding Discretionary Denial

  • Petitioner contended that this petition, although the second one filed against the ’807 patent (following CBM2014-00008), should not be denied under 35 U.S.C. §325(d).
  • The primary justification was that this petition was based on significant, intervening changes in the law, specifically the Supreme Court's decisions in Alice and Nautilus. Petitioner argued these decisions substantially altered the legal standards for patent eligibility and definiteness, presenting arguments that could not have been made in the prior petition.

6. Relief Requested

  • Petitioner requested the institution of a Covered Business Method patent review and the cancellation of claims 1-42 of the ’807 patent as unpatentable.