Credit Acceptance Corp. v. Westlake Services
859 F.3d 1044
| Fed. Cir. | 2017Background
- Credit Acceptance Corp. (CAC) owns U.S. Patent No. 6,950,807, which claims systems/methods for generating financing packages for customers purchasing products (e.g., vehicles) from a dealer using a database, user terminal, and server.
- Westlake Services, LLC filed two Covered Business Method (CBM) petitions challenging various claims of the ’807 patent under 35 U.S.C. § 101; the PTO/Board instituted the first petition on some claims but declined to institute on claims 10–12 and 14–33.
- After Alice and later Ultramercial III changed § 101 law, Westlake filed a second CBM petition challenging claims 10–12 and 14–33; the Board instituted and later issued a final written decision that those claims are § 101 ineligible.
- CAC argued Westlake was estopped under 35 U.S.C. § 325(e)(1) from pursuing the second CBM because of the first CBM; the Board rejected that estoppel argument and CAC appealed both estoppel and § 101 rulings to the Federal Circuit.
- The Federal Circuit affirmed: (1) Westlake was not estopped from maintaining the second CBM as estoppel applies claim-by-claim only to claims actually decided in a final written decision, and (2) the challenged claims are directed to an abstract idea and lack an inventive concept under Alice, so are patent-ineligible.
Issues
| Issue | Plaintiff's Argument (CAC) | Defendant's Argument (Westlake) | Held |
|---|---|---|---|
| Jurisdiction to review Board's estoppel determination | Court lacks jurisdiction only to review institution decisions; CAC contends § 325(e)(1) estoppel should be reviewable | Westlake/PTO argued estoppel/order denying termination is nonappealable as an institution-related decision | Court held it has jurisdiction to review the estoppel issue and proceeded to the merits |
| Scope of § 325(e)(1) estoppel | A final written decision that addresses some challenged claims triggers estoppel for all claims challenged in the petition (instituted or not) | Estoppel applies claim-by-claim only to claims actually instituted and finally decided | Held estoppel does not apply to non-instituted claims; Westlake not estopped from second CBM |
| Patent eligibility under 35 U.S.C. § 101 (step 1) | Claims are improvements in computer functionality, not abstract | Challenged claims are directed to processing financing applications — an abstract fundamental economic practice | Held claims are directed to an abstract idea (processing financing applications) |
| Patent eligibility under 35 U.S.C. § 101 (step 2) | Combination of database, server, user terminal and ordered arrangement provides inventive concept | Claim elements are generic computer components that merely automate a known manual process | Held no inventive concept: recited generic computer elements do not transform the abstract idea into significantly more; claims are ineligible |
Key Cases Cited
- Cuozzo Speed Technologies, LLC v. Lee, 136 S. Ct. 2131 (2016) (appealability limits on PTO institution decisions and related issues)
- Alice Corp. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014) (two-step framework for § 101 and abstract-idea doctrine)
- Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709 (Fed. Cir. 2014) (post-Alice § 101 analysis holding claims ineligible)
- Synopsys, Inc. v. Mentor Graphics Corp., 814 F.3d 1309 (Fed. Cir. 2016) (Board may institute review claim-by-claim; final decision addresses only instituted claims)
- Enfish, LLC v. Microsoft Corp., 822 F.3d 1327 (Fed. Cir. 2016) (when claims focus on specific improvement to computer functionality, they may be § 101-eligible)
- Elec. Power Group v. Alstom S.A., 830 F.3d 1350 (Fed. Cir. 2016) (collecting/analyzing data and presenting results is abstract)
- Mortg. Grader, Inc. v. First Choice Loan Servs. Inc., 811 F.3d 1314 (Fed. Cir. 2016) (data processing to facilitate financing is abstract)