Westlake Services, LLC v. Credit Acceptance Corp

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Trials@uspto.gov 	Paper 28
Tel: 571-272-7822 	Entered: May 14, 2015
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE PATENT TRIAL AND APPEAL BOARD
WESTLAKE SERVICES, LLC,
Petitioner,
v.
CREDIT ACCEPTANCE CORP.,
Patent Owner.
Case CBM2014-00176
Patent 6,950,807
Before JUSTIN T. ARBES, DAVID C. MCKONE, and
GREGG I. ANDERSON, Administrative Patent Judges.
MCKONE, Administrative Patent Judge.
ORDER
PATENT OWNER’S MOTION TO TERMINATE
35 U.S.C. § 325(e); 37 C.F.R. § 42.73(d)

CBM2014-00176
Patent 6,950,807
Patent Owner requested authorization to file a motion to terminate
pursuant to 35 U.S.C. § 325(d) and (e)(1) in light of our Final Written
Decision (Paper 66) in CBM2014-00008 (“CBM-008”). Paper 24, 2. We
granted Patent Owner authorization to file a motion pursuant to Section
325(e)(1), but denied authorization to file a motion pursuant to Section
325(d). Id. at 3–4. Pursuant to this authorization, Patent Owner filed its
Motion to Terminate Pursuant to 35 U.S.C. § 325(e)(1) (Paper 25, “Mot.”).
Petitioner, in turn, filed a Response to Patent Owner’s Motion (Paper 26,
“Resp.”). Upon consideration of the Motion and Response, Patent Owner’s
Motion is denied.
In CBM-008, Petitioner petitioned for review of claims 1–42 of U.S.
Patent No. 6,950,807 (“the ’807 patent”). CBM-008, Paper 8. We instituted
a trial as to claims 1–9, 13, and 34–42. CBM-008, Paper 30. After our
institution decision, and after Petitioner had filed a request for rehearing on
other grounds, the Supreme Court issued Alice Corp. Pty. LTD v. CLS Bank
International, 134 S. Ct 2347 (2014) and vacated Ultramercial, Inc. v. Hulu,
LLC, 722 F.3d 1335 (Fed. Cir. 2013) (Ultramercial II) (see WildTangent,
Inc. v. Ultramercial, LLC, 134 S. Ct. 2870 (2014)). Petitioner requested
authorization to file a second request for rehearing in light of Alice. CBM-
008, Paper 40, 2. We ruled that Petitioner had not shown good cause for
filing a second rehearing request, citing the advanced stage of the trial and
noting that the Court’s ruling in Alice did not exist at the time of our
Decision on Institution and, thus, could not have been overlooked or
misapprehended. Id. at 3. We then noted that Petitioner was free to file
another Petition challenging the claims of the ’807 patent. Id.
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Patent 6,950,807
Petitioner then filed the Petition in this case. Paper 1 (later amended,
see Paper 5). Subsequent to the filing of the Petition, the Federal Circuit, on
remand from the Supreme Court, decided Ultramercial, Inc. v. Hulu, LLC,
772 F.3d 709 (Fed. Cir. 2014) (Ultramercial III), finding the claims
ineligible for patent protection, an opposite result to what had been
determined in Ultramercial II. After Ultramercial III and the institution of
this proceeding (as to claims 10–12 and 14–33), we issued a Final Written
Decision (Paper 66) in CBM-008, finding claims 1–9, 13, and 34–42
unpatentable under 35 U.S.C. § 101.
Under Section 325(e)(1),
The petitioner in a post-grant review of a claim in a patent
under this chapter that results in a final written decision under
section 328(a), or the real party in interest or privy of the
petitioner, may not request or maintain a proceeding before the
Office 	with 	respect 	to 	that 	claim 	on 	any 	ground 	that 	the
petitioner raised or reasonably could have raised during that
post-grant review.
To that end, our Rules provide:
A 	petitioner, 	or 	the real 	party in 	interest 	or 	privy 	of 	the
petitioner, 	is 	estopped 	in 	the 	Office 	from 	requesting 	or
maintaining a proceeding with respect to a claim for which it
has obtained a final written decision on patentability in an inter
partes review, post-grant review, or a covered business method
patent review, on any ground that the petitioner raised or
reasonably could have raised during the trial.
37 C.F.R. § 42.73(d)(1). Section 328(a), in turn, provides “[i]f a post-grant
review is instituted and not dismissed under this chapter, the Patent Trial and
Appeal Board shall issue a final written decision with respect to the
patentability of any patent claim challenged by the petitioner.”
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Patent 6,950,807
According to Patent Owner, the language “any patent claim
challenged by the petitioner” means that a final written decision, and hence
estoppel, applies to all claims challenged by a petitioner in a petition—even
claims for which we did not institute a trial. Mot. 2–3. According to Patent
Owner, because of Section 328(a)’s requirement that a final written decision
resolve all challenged claims, it necessarily incorporates the underlying
decision on institution for those claims for which institution is denied. Id.
Patent Owner contends that a contrary reading would undermine goals of the
statute such as securing the just, speedy, and inexpensive review of
proceedings and preventing serial challenges to a patent. Id. at 3–6. Patent
Owner further argues that a narrow reading of the estoppel provision would
undermine 35 U.S.C. § 324(e), which provides “[t]he determination by the
Director whether to institute a post-grant review under this section shall be
final and nonappealable.” Id. at 4.
Petitioner responds that the Patent Office has interpreted Sections
328(a) and 325(e) to apply on a claim-by-claim basis and, thus, estoppel
should not apply to claims not instituted on nor addressed in the Final
Written Decision in CBM2014-00008. Resp. 4–5. Petitioner points to the
Patent Office’s responses to public comments received during the notice and
comment period prior to promulgation of our Rules as evidencing the proper
interpretations of these sections.1 Id. For instance, in comments to
37 C.F.R. § 42.208(b), the Patent Office has stated that “35 U.S.C. 315(e), as
amended, and 35 U.S.C. 325(e) provide for estoppel on a claim-by-claim
basis, for claims in a patent that result in a final written decision,” Response
1 Petitioner mischaracterizes the Office’s responses to comments as “rules,”
which they are not, although they are illustrative of the Office’s positions.
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CBM2014-00176
Patent 6,950,807
to Comment 60 in C HANGES TO I MPLEMENT I NTER P ARTES REVIEW
P ROCEEDINGS , P OST -GRANT R EVIEW P ROCEEDINGS , AND TRANSITIONAL
P ROGRAM FOR COVERED B USINESS METHOD P ATENTS ; F INAL RULE , 77 Fed.
Reg. 48680, 48703 (Aug. 14, 2012), and that
[t]he Board’s determination not to institute an 	inter partes
review, post-grant review, or covered business method patent
review is not a final written decision within the meaning of 35
U.S.C. 318(a), as amended, and 35 U.S.C. 328(a), and thereby
does not trigger the estoppel provisions under 35 U.S.C. 315(e),
as amended, and 35 U.S.C. 325(e).
Response to Comment 66, 77 Fed. Reg. at 48703–04.
We agree with Petitioner that estoppel is applied on a claim-by-claim
basis. By its terms, estoppel is invoked under Section 325(e)(1) as to “a
claim in a patent” that “results in a final written decision under” 35 U.S.C.
§ 328(a). The Final Written Decision in CBM-008 in fact only ruled upon
the patentability of claims 1–9, 13, and 34–42. CBM-008, Paper 66, 35.
Patent Owner offers no persuasive support for its position that the Final
Written Decision in CBM-008 (Paper 66) incorporated portions of the
underlying Decision on Institution (Paper 30) as to non-instituted claims 10–
12 and 14–33. The propriety of our exclusion of claims 10–12 and 14–33
from the Final Written Decision of CBM-008 is not before us in this matter.
On the record before us, claims 10–12 and 14–33 are not claims in a patent
that have resulted in a final written decision under Section 328(a), and thus,
under Section 325(e)(1), estoppel does not apply to those claims.
We note that many of Patent Owner’s arguments, e.g., those directed
to the frustration of the purposes of the America Invents Act and harassment
or abuse of patent owners through serial petitions, more appropriately are
addressed to Section 325(d), which provides for the discretion to “take into
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Patent 6,950,807
account whether, and reject the petition or request because, the same or
substantially the same prior art or arguments previously were presented to
the Office.” See Response to Comment 55, 77 Fed. Reg. at 48702 (stating
that, in response to concern over “efforts by petitioners to avoid estoppel
through successive petitions against different claims within a patent,” the
Office “recognizes these concerns and will exercise its authority under 35
U.S.C. 325(d), where appropriate, to deny petitions that submit the same or
substantially the same prior art or arguments previously presented to the
Office.”). Indeed, Conopco, Inc. v. Procter & Gamble Co., Case IPR2014-
00628 (PTAB Oct. 20, 2014) (Paper 21), on which Patent Owner relies
(Mot. 5–6), addresses the applicability of 35 U.S.C. §§ 314(a) and 325(d),
rather than Section 315(e) or 325(e).
Patent Owner, in its Preliminary Response (Paper 14, 7–10), asked us
to exercise our discretion, under Section 325(d), to deny the Petition. We
considered Patent Owner’s argument and, nevertheless, instituted this trial.
Paper 15, 21–22. Patent Owner did not seek reconsideration of the Decision
on Institution. We specifically denied Patent Owner authorization to reargue
the applicability of Section 325(d) in its Motion to Terminate. Paper 24, 4.
To be clear, in declining to exercise our discretion to deny the Petition
based on Section 325(d), we considered the impact of serial petitions on
patent owners generally and the Patent Owner in this case specifically. We
also considered the nature of the change in the law: here, two Supreme
Court decisions, one of which vacated key precedent on which the CBM-008
Decision to Institute relied, as well as a Federal Circuit decision effectively
reaching a conclusion opposite that of that key precedent. We further
considered the impact of the timing of these cases on Petitioner’s ability to
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CBM2014-00176
Patent 6,950,807
present its arguments, both in CBM-008 and this proceeding. After
weighing these considerations, we determined that it was inappropriate,
under these unique circumstances, to deny the Petition. Paper 15, 21–22.
The issuance of our Final Written Decision in CBM-008 does not change
our view.
In consideration of the foregoing, it is hereby:
ORDERED that Patent Owner’s Motion to Terminate Pursuant to
35 U.S.C. § 325(e)(1) is denied.
PETITIONER:
John van Loben Sels
Ellen Wang
FISH & TSANG, LLP
patents@fishiplaw.com
PATENT OWNER:
Douglas Nemec
James Pak
P. Anthony Sammi
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
smarquez@skadden.com
james.pak@skadden.com
dlp_cac@skadden.com
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