Westlake Servs., LLC v. Credit Acceptance Corp.

Addressing the issue of whether standing must be maintained throughout a covered business method (CBM) proceeding under the America Invents Act (AIA), the U.S. Patent and Trademark Office's (PTO's) Patent Trial Appeal Board (PTAB or Board) answered in the negative, holding that there is no continuous standing requirement during a CBM proceeding. Westlake Servs., LLC v. Credit Acceptance Corp., Case No. CBM2014-00176 (PTAB, Sept. 3, 2015) (McKone, APJ).

Westlake filed a petition seeking a CBM review of a patent related to a method of providing financing to customers. In a related litigation, patent owner Credit Acceptance provided Westlake a covenant not to sue, and the district court granted Credit Acceptance's motion to voluntarily dismiss with prejudice. Credit Acceptance then requested a conference call with the Board seeking authorization to file a motion to terminate, which Westlake opposed. The Board declined to grant authorization.

Credit Acceptance contended that § 18(a)(1)(B) of the AIA and 37 CFR § 42.302(a) provide the basis for its motion to terminate. Both statute and rule require that a petitioner for a CBM proceeding must either have been sued for or charged with infringement of the patent. Credit Acceptance argued the Board can no longer maintain the CBM proceeding now the underlying infringement controversy had been resolved.

As the Board explained, the starting point for a standing determination before an administrative agency, including the PTO, is not Article III but the statute that confers standing before that agency. In this case, the appropriate statute is §18(a)(1)(B) of the AIA. Any Article III standing analysis is inappropriate. The Board found no ambiguity in the plain language of § 18(a)(1)(B), holding that it restricts only who may "file" a petition. Whether the underlying litigation resolves itself during the CBM proceeding is irrelevant to standing. Credit Acceptance provided no contrary authority.

As a final argument, Credit Acceptance argued 35 U.S.C. § 327 provided a basis for termination. However, § 327 requires a joint request of termination by petitioner and patent owner, and no remaining petitioners. Further, it does not require termination but only grants the Board the discretion to terminate. The Board found this section inapplicable since Westlake opposed termination.

Standing For CBM Proceeding Only Necessary At Time Of The Petition

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.