Westlake Services, LLC v. Credit Acceptance Corp.; Regions Financial Corporation, Advance America, Cash, et al. v. Retirement Capital Access Management Company LLC

In two separate decisions involving an § 101 analysis of subject-matter eligibility of business methods patents (CBMs), the U.S. Patent and Trademark Office’s Patent Trial and Appeal Board (PTAB or Board) found that the challenged patents were directed to non-eligible subject matter in light of Alice.  Westlake Services, LLC v. Credit Acceptance Corp., Case No. CBM2014-00008 (PTAB, Mar. 24, 2015) (Anderson, APJ); Regions Financial Corporation, Advance America, Cash, et al. v. Retirement Capital Access Management Company LLC, Case No. CBM2014-00012 (PTAB, Mar. 23, 2015) (Ward, APJ).

In Westlake Services v. Credit Acceptance, the petitioners challenged a patent that “describes a system and method for providing financing to the customers of a dealer to allow the customers to purchase products from the dealer’s inventory.”

The patent owner argued that the challenged claims “do not monopolize any abstract ideas” and “merely involve, but do not manifestly describe, the abstract idea of ‘providing financing.’”  The patent owner argued that because the claims “do not ‘explain the basic concept’ of financing and add ‘apply it to a computer,’ they are not directed to an abstract idea.”  The patent owner also argued that because “a specific practical application of the abstract idea of providing financing for purchase of a product … ‘did not exist in prior art’” and “the step of generating financing packages … requires a computer,” the claims are patent-eligible.

The PTAB applied the two-step test required by Alice (IP Update, Vol. 17, No. 7) to determine whether the challenged claims were patent-eligible.  In applying the first threshold step, the Board analyzed whether the claims were directed to an abstract idea and concluded that they were directed to the abstract idea of speeding up with a computer that which could be done by a human.

Having determined that the claims were directed to an abstract idea, the Board moved on to the second step and analyzed whether the claims include an “inventive concept” that would render the claimed subject matter patent-eligible.  The PTAB concluded that although the claimed steps require a computer, there was insufficient evidence “to conclude that the computer is being utilized for anything beyond routine or conventional use . . . and did not contain “enough to meet the inventive step of Alice.”  Thus, the Board concluded that the challenged claims were not patent-eligible.

In Regions Financial v. Retirement Capital Access Management, the petitioners challenged a patent that “generally relates to a method for enabling recipients of Social Security payments to convert a designated portion of future payments into currently available financial resources.”

The patent owner argued that the claims had “meaningful and substantive limitations that cause the claims to cover less than the identified concept.”  The patent owner further argued that a computer limitation is integral to the challenged claims.

Again applying the two step framework of Alice, the PTAB first determined that the claims were concededly directed to an abstract idea and so analyzed whether there was an “element or combination of elements that is ‘sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself.’”  The Board explained that the recitation of “computerized method” was not a meaningful limitation to the claims and concluded that the challenged claims were not patent-eligible.