PTAB

CBM2015-00115

Carfax Inc v. Red Mountain Technologies LLC

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Key Events
Petition
petition

1. Case Identification

2. Patent Overview

  • Title: System and Method for Analyzing and Using Vehicle Historical Data
  • Brief Description: The ’977 patent discloses systems and methods for determining insurance risk for a vehicle. The methods involve obtaining vehicle history data, selecting and weighting variables from that data, analyzing the data, and generating a risk score for use in underwriting insurance policies or other financial products.

3. Grounds for Unpatentability

Ground 1: Patent Ineligibility under §101 - Claims 1-19 are unpatentable under 35 U.S.C. §101

  • Core Argument for this Ground: Petitioner argued that all challenged claims are directed to patent-ineligible subject matter under 35 U.S.C. §101, applying the two-step framework from Alice Corp. v. CLS Bank Int'l.
    • Step 1 (Abstract Idea): Petitioner asserted that the claims are directed to the abstract idea of determining and mitigating risk, specifically the fundamental economic practice of determining insurance risk for a vehicle using historical data. It was argued that this concept is a long-standing practice in the insurance industry that can be performed mentally or with pen and paper. Independent claims 1 and 17, which recite steps like obtaining data, selecting variables, assigning weights, analyzing data, and generating a risk score, were presented as merely describing this abstract financial practice. Petitioner noted that the Patent Owner itself had previously argued in a related court case that "mitigating vehicle insurance risk using vehicle history data" is a patent-ineligible abstract idea.
    • Step 2 (Inventive Concept): Petitioner contended that the claims lack an inventive concept sufficient to transform the abstract idea into a patent-eligible application. The claims' recitation of generic computer components—such as a "computerized vehicle history database," a "user's computer system," and "electronic non-transitory memory storage media"—were argued to be nothing more than well-understood, routine, and conventional activities. Petitioner asserted that these elements do not improve the functioning of the computer itself but merely use a computer as a tool to perform the abstract idea. The petition emphasized that the claims do not recite any specific, non-conventional technological implementation.
    • Key Aspects: Petitioner highlighted that the ’977 patent was allowed by the USPTO before the Supreme Court's decision in Alice. The amendments made during prosecution to add generic computer implementation, which secured the patent's allowance under the pre-Alice standard, were argued to be precisely the type of "wholly generic computer implementation" that Alice subsequently found insufficient to confer patent eligibility. Therefore, the very basis for the patent's allowance was argued to be invalid under the current legal framework.

4. Arguments Regarding Discretionary Denial

  • Petitioner presented extensive arguments for why it had standing to file the Covered Business Method (CBM) patent review and why the petition should not be denied.
  • The core argument centered on the statutory language permitting a CBM petition if the petitioner "has been charged with infringement." Petitioner argued that threats made by the Patent Owner against one of Petitioner's customers (Progressive) constituted a charge of infringement sufficient to create standing for a declaratory judgment action, which was already pending.
  • Petitioner further argued that a subsequent "irrevocable and unconditional covenant not to sue" from the Patent Owner did not extinguish standing. The use of the past-tense phrase "has been charged" in the statute was interpreted to mean that a past charge is sufficient, regardless of whether the threat is ongoing at the time of filing. Petitioner also asserted the covenant was ambiguous and did not fully resolve the controversy.

5. Relief Requested

  • Petitioner requested institution of a Covered Business Method patent review and cancellation of claims 1-19 of the ’977 patent as unpatentable under 35 U.S.C. §101.