IN THE UNITED STATES DISTRICT COURT 

WESTERN DISTRICT OF TEXAS 

WACO DIVISION 

ECREDIT SOLUTIONS LLC, §

§

Plaintiff, § Case No. 6:20-cv-304-ADA

§

v. §

§

VYZE, INC., § JURY TRIAL DEMANDED

§

Defendant. §

§

§

PLAINTIFF’S RESPONSE IN OPPOSITION TO DEFENDANT VYZE, INC.’S RULE 

12(b)(6) MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM 

Case 6:20-cv-00304-ADA Document 12 Filed 05/28/20 Page 1 of 24
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TABLE OF CONTENTS 

I. INTRODUCTION ................................................................................................................................ 5 

II. AUTHORITY ....................................................................................................................................... 7 

A. Motions to Dismiss under Fed. R. Civ. P. 12 .................................................................................... 7 

B. Patent Eligibility under 35 U.S.C. § 101 ........................................................................................... 9 

C. Presumption of Validity Applies to § 101 and Patent Ineligibility Must Be Proven by Clear and 

Convincing Evidence .............................................................................................................................. 11 

III. ARGUMENT ...................................................................................................................................... 12 

A. Claim 1 is not directed to the abstract idea of extending financing to customer ............................ 12 

B. Defendant’s Motion Must Be Denied Because Claim Construction is Necessary and Fact Issues 

Exist, Which Cannot Be Resolved Under Rule 12 ................................................................................. 15 

C. As Defendant Fails to Consider Any Claim from the Perspective of a Person Having Ordinary 

Skill in the Art, the Motion is Deficient on Its Face ............................................................................... 16 

D. Defendant Fails to Clearly and Convincingly Demonstrate That Any of the Claims are Invalid 

under § 101 ............................................................................................................................................. 17 

i. Dependent Claims ....................................................................................................................... 19 

E. Defendant’s reliance on Credit Acceptance is misplaced ............................................................... 20 

F. Defendant’s § 101 Defense is Barred by § 282(b), Which Is Not a Permitted Litigation Defense as 

§ 101 is not “Specified in Part II as a Condition for Patentability” ........................................................ 22 

VI. CONCLUSION ................................................................................................................................... 23 

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TABLE OF AUTHORITIES 

Cases

Aatrix Software, Inc. v. Green Shades Software, Inc., 882 F.3 d 1121 (Fed. Cir. 2018) .............................. 9 

Aeritas, LLC v. Sonic Corp., No. 6:20-cv-00103-ADA (Mar. 13, 2020)...................................................... 9 

Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S. , 134 S. Ct. 2347 (2014) .............. 10, 11, 17, 18 

Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937 (2009) ............................................................................. 8 

Bilski v. Kappos, 130 S. Ct. 1328 (2010) .................................................................................... 9, 10, 11, 18 

Card Verification Solutions, Inc. v. Citigroup, No. 13-C-6339, 2014 U.S. Dist. LEXIS 137577 (N.D. 

Ill. Sept. 29, 2014) ................................................................................................................................ 12 

CLS Bank Int’l v. Alice Corp. Pty. Ltd., 717 F.3d 1269 (Fed. Cir. 2013) ................................................... 12 

Credit Acceptance Corp. v. Westlake Services, 859 F.3d 1044 (Fed. Cir. 2017) ................................. 20, 22 

Diamond v. Chakrabarty, 447 U.S. 303 (1980) ............................................................................................ 9 

Diamond v. Diehr, 450 U.S. 175 (1981) ..................................................................................... 9, 10, 11, 22 

Freeny v. Murphy Oil Corp., No. 2:13-CV-791-RSP, Dkt. No. 143 (E.D. Tex. May 22, 2015) ............. 12 

Helios Software, LLC v. Spectorsoft Corp., No. 12-cv-081-LPS, 2014 U.S. Dist. LEXIS 135379 (D. 

Del. Sept. 18, 2014) ................................................................................................................................ 17 

In re Chinese Manuf. Drywall Prods. Liab. Lit., 759 F. Supp. 2d 822 (E.D. La. 2010)............................... 8 

In re Katrina Canal Breaches Lit., 495 F.3d 191 (5th Cir. 2007) ................................................................ 8 

Lone Star Fund V (U.S.) L.P. v. Barclays Bank PLC, 594 F.3d 383 (5th Cir. 2010) ................................. 8 

Markman v. Westview Instruments, Inc., 52 F.3d 967 (Fed. Cir. 1995) (en banc), aff’d, 517 U.S. 370 

(1996) ...................................................................................................................................................... 16 

Martin K. Eby Constr. Co. v. Dallas Area Rapid Transit, 369 F.3d 464 (5th Cir. 2004) ....................... 8 

Mayo Collaborative Servs. v. Prometheus Labs., 132 S. Ct. 1289 (2012) ........................................... 10, 11 

Microsoft Corp. v. i4i Ltd P’ship, 131 S. Ct. 2238 (2011) ........................................................................ 11 

MyMail, Ltd. v. ooVoo, LLC, 934 F.3d 1373 (Fed. Cir. 2019) ..................................................................... 9 

Case 6:20-cv-00304-ADA Document 12 Filed 05/28/20 Page 3 of 24
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PNC Bank v. Secure Axcess, LLC, Case No. CBM2014-00100, 2014 WL 4537440 (P.T.A.B. Sept. 9, 

2014) ....................................................................................................................................................... 17 

Ramming v. US, 281 F.3d 158 (5th Cir. 2001) ............................................................................................. 8 

Slyce Acquisition v. Syte – Visual Conception, No. W-29-cv-00257-ADA, 2020 U.S. Dist LEXIS 9451 

(W.D. Tex. Jan. 10, 2020) ................................................................................................................ passim 

U.S. Bancorp v. Solutran, Inc., Case No. CBM2014-00076, 2014 WL 3943913 (P.T.A.B. Aug. 7, 2014)

 ................................................................................................................................................................ 17 

Statutes

35 U.S.C. § 282 ............................................................................................................................. 22 

35 U.S.C. § 282(a) ........................................................................................................................ 11 

35 U.S.C. Part II, §§ 100-212 ..................................................................................................... 22 

Other Authorities

H r i c i k , D . , Are the Courts Correct in Their Assumption that a Patent Issued on Nonpatentable Subject Matter is Invalid?, located at http://patentlyo.com/patent/2012/08/are-thecourts-correct-in-their-assumption-that-a-patent-issued-on-non-patentable-subject-matter-isinvalid.html (Aug. 27, 2012) ..................................................................................................... 23 

https://vyze.com/consumer-financing/online-financing/, last accessed on May 26, 2020 ........... 14 

Rules

Fed. R. Civ. P. 8(a) ........................................................................................................................ 7 

Regulations

37 C.F.R. §74622-24 ................................................................................................................................... 10 

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I. INTRODUCTION 

 Despite authority from this Court stating that most § 101 motions are only appropriate 

after claim construction has been completed, it is now commonplace for nearly every patent 

defendant to file premature § 101 motions to dismiss, regardless of the merit of the assertions. 

This Motion is yet another example of this, and only serves to delay adjudication of Plaintiff’s 

claims. 

 The ‘353 Patent, as understood by a Person Having Ordinary Skill in the Art 

(“PHOSITA”), generally relates a method for extending credit to a purchaser at a point-of-sale 

terminal that involves a method when various thresholds for creditworthiness and risk factors are 

exceeded. A PHOSITA would generally understand that practicing the claims of the ‘353 Patent 

requires specially programmed point-of-sale terminals, computers, servers, and websites (and 

components thereto). Thus, the ‘353 Patent covers eligible subject matter. 

 Claim construction is required here to determinate the appropriate scope of the claims. 

A proper claim construction and even a basic analysis of the Claim would show that “registering 

by a processor,” “receiving by the processor,” “sending by the processor,” “determining by the 

processor” and “authorizing by the processor” are all steps done by a computer processor as part 

of the point-of sale terminal technology. Thus, the claim satisfies the machine-or-transformation 

test. In its cursory analysis, Defendant ignores key portions of the specification that, under 

fundamental principles of claim construction, shed light on the scope of the claims. Defendant’s 

motion is, at best, premature. 

Furthermore, in its Motion, Defendant fails to analyze (let alone mention the standard) 

the claims from the perspective of a PHOSITA, which is required under the law. Defendant’s 

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motion, thus, should be summarily dismissed for failing to address this highly relevant standard 

to the analysis it wishes the Court to conduct. 

 Even if there was some merit to Defendant’s motion, Defendant has not shown that the 

claims are invalid under § 101 by clear and convincing evidence. Because Defendant’s 

characterization of the claims “does not tie adequately the claim language to the purported 

abstract concept,” Defendant has failed to meet its burden to show that any claim is directed to 

an abstract idea. Even if the claims were directed to the purported abstract idea—which they 

clearly are not—Defendant provides no evidence that the purported abstract idea is a 

“fundamental truth[] or fundamental principle[] the patenting of which would pre-empt the use 

of basic tools of scientific and technological work.” 

 The only evidence cited by Defendant—the ’353 Patent itself—shows that the claims are 

drawn not to an abstract idea, and rather are specific improvements to existing technology in the 

field of point-of-sale terminals, and extending credit to purchasers thereon, when certain 

thresholds are exceeded. The very inventive concept of the ‘353 Patent is touted by Defendant on 

its own website. Improvements upon existing technology are patent eligible under § 101. 

When the claims are properly construed, they cover specialized hardware and software 

designed to implement the claims of the ’353 patent and satisfy the machine-or-transformation 

test. Such specialized point-of-sale terminal technology, and methods involving same and 

extending credit at same when certain thresholds are exceeded, around the invention date (2012) 

were neither conventional, nor generic. 

Defendant’s reliance on the Credit Acceptance case is woefully misplaced because that 

case involves different patents with different claims and a different specification. Even if the 

claims in Credit Acceptance were identical to the ‘353 Patent (which they are not), the differing 

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specifications means that in claim construction, the claims would necessarily be construed 

differently. Invalidity under § 101 is analyzed on a case-by-case basis examining the patent-insuit and only the patent-in-suit (from the eyes of a PHOSITA). The Motion reads as if 

Defendant is trying to shoehorn the patent-in-suit into the Credit Acceptance patents. This Court 

should reject this now routine tactic amongst defendants of attempting to compare the claims of a 

patent-in-suit to a completely unrelated patent that has been invalidated for ineligible subject 

matter and affirmed by the Federal Circuit. Unless the specification and claims are identical, the 

comparison is not a proper § 101 analysis, and has never been the law in this regard. 

 Finally, Defendant Vyze, Inc. (“Defendant”)’s § 101 defense is barred by 35 U.S.C. § 

282(b), which is not a permitted litigation defense as § 101 is not “Specified in Part II as a 

Condition for Patentability.” Alice does not mention § 282(b) and did not change this analysis. 

This Court should, thus, not “jump on the bandwagon” and ignore the statutory text and 

Congressional intent of § 282(b). 

Plaintiff respectfully submits that the Court should deny the motion in its entirety. 

Alternatively, the Court should deny the motion as premature as having been filed prior to the 

issuance of a claim construction order. 

II. AUTHORITY 

A. Motions to Dismiss under Fed. R. Civ. P. 12 

“[B]ecause a patent is presumed valid and requires clear and convincing evidence to 

prove its invalidity, a Rule 12(b) motion to dismiss is a procedurally awkward place for a court 

to resolve a patent’s § 101 eligibility.” Slyce Acquisition v. Syte – Visual Conception, No. W-29-

cv-00257-ADA, 2020 U.S. Dist LEXIS 9451, at *14 (W.D. Tex. Jan. 10, 2020). To defeat a 

motion to dismiss under Rule 12(b)(6), a complaint merely needs to state “[a] short and plain 

statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a). A 

Case 6:20-cv-00304-ADA Document 12 Filed 05/28/20 Page 7 of 24
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court must “accept[] all well-pleaded facts as true, viewing them in the light most favorable 

to the plaintiff” when deciding a motion under Rule 12(b)(6). In re Katrina Canal Breaches 

Lit., 495 F.3d 191, 205 (5th Cir. 2007) (quoting Martin K. Eby Constr. Co. v. Dallas Area 

Rapid Transit, 369 F.3d 464, 467 (5th Cir. 2004)). “The court’s task is to determine whether 

the plaintiff has stated a legally cognizable claim that is plausible, not to evaluate the plaintiff's 

likelihood of success.” Lone Star Fund V (U.S.) L.P. v. Barclays Bank PLC, 594 F.3d 383, 387 

(5th Cir. 2010) (citing Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 1949 (2009)) 

(emphasis added).

The court may only consider “the complaint, any documents attached to the complaint” 

and cannot consider extrinsic evidence. Id. “In other words, a motion to dismiss an action for 

failure to state a claim admits the facts alleged in the complaint, but challenges plaintiff's rights 

to relief based upon those facts.” Ramming v. US, 281 F.3d 158, 162 (5th Cir. 2001) (quotations 

and citations omitted). “The moving party bears the burden of showing that plaintiff can prove 

no set of facts consistent with the allegations in the complaint which would entitle it to 

relief.” In re Chinese Manuf. Drywall Prods. Liab. Lit., 759 F. Supp. 2d 822, 828 (E.D. La. 

2010) (quotations and citations omitted). “[T]o prevail on a Rule 12(b) motion to dismiss, the 

movant needs to overcome both a factual deck stacked against it and a heightened burden of 

proof.” Slyce Acquisition, 2020 U.S. Dist LEXIS 9451, at *13. (emphasis in original). 

Defendant’s motion mischaracterizes a text order from this Court. Defendant states in the 

Motion, “[t]his case, however, ‘is one of the rare cases where it is appropriate to resolve the 

Section 101 eligibility of the patent[]-in-suit as a Rule 12(b) motion to dismiss.’ See, e.g., 

Aeritas, LLC v. Sonic Corp., No. 6:20-cv-00103-ADA (Mar. 13, 2020) (text order denying 

Defendants’ motions to dismiss without prejudice).” Motion at 1. 

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The Court’s actual text order in the Aeritas case is as follows: 

Text Order DISMISSING 7 Motion to Dismiss for Failure to State a Claim 

entered by Judge Alan D Albright. In light of the Court's order in Slyce v. Syte, 

No. 6:19-cv-257-ADA, 2020 WL 278481 (W.D. Tex. Jan. 10, 2020), the Court 

does not believe this is one of the rare cases where it is appropriate to resolve the 

Section 101 eligibility of the patents-in-suit as a Rule 12(b) motion to dismiss. It 

is therefore ORDERED that Defendants' motion is dismissed WITHOUT 

PREDJUDICE. Defendants may refile their motion after the opening of fact 

discovery. Should Defendants elect to refile their motion at that time, the Court 

orders Defendants to brief the patent ineligibility of each asserted claim, i.e., not 

just representative claims. The Court will grant any reasonable request to extend 

the page limits for such a motion. 

To be clear, the Court takes no position on whether claim construction is 

necessary for any of the asserted claims. See MyMail, Ltd. v. ooVoo, LLC, 934 

F.3d 1373, 1379 (Fed. Cir. 2019). Furthermore, the Court takes no position on 

whether there are any factual disputes that preclude dismissal at the pleadings 

stage. See Aatrix Software, Inc. v. Green Shades Software, Inc., 882 F.3 d 1121, 

1128-30 (Fed. Cir. 2018).(This is a text-only entry generated by the court. There 

is no document associated with this entry.) (jy) (Entered: 03/14/2020) 

Aeritas, LLC v. Sonic Corp., No. 6:20-cv-00103-ADA (Mar. 13, 2020). 

B. Patent Eligibility under 35 U.S.C. § 101 

Section 101 of the Patent Act defines the four broad categories of patentable subject

matter as “any new and useful process, machine, manufacture, or composition of matter.” 

35 U.S.C. § 101. “In choosing such expansive terms . . . modified by the comprehensive 

word ‘any,’ Congress plainly contemplated that the patent laws would be given a wide scope.” 

Bilski v. Kappos, 130 S. Ct. 1328, 1332 (2010) (quoting Diamond v. Chakrabarty, 447 U.S. 303, 

308 (1980)); Diamond v. Diehr, 450 U.S. 175, 180 (1981) (“Congress intended statutory subject 

matter to ‘include anything under the sun that is made by man.’” (quoting Congressional 

Committee Report)). However, to avoid permitting an overly broad grant of rights that could 

“pre-empt use of [an] approach in all fields and [] effectively grant a monopoly over an abstract 

idea,” “[l]aws of nature, natural phenomena, and abstract ideas” are non-patentable exceptions to 

§ 101. Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S. , 134 S. Ct. 2347, 2354 

Case 6:20-cv-00304-ADA Document 12 Filed 05/28/20 Page 9 of 24
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(2014). The Supreme Court has acknowledged that the analysis is inherently flawed, because 

“[a]t some level, ‘all inventions embody, use, reflect, rest upon, or apply laws of nature, natural 

phenomena, or abstract ideas.’” Id. at 2354 (quoting Mayo Collaborative Servs. v. Prometheus 

Labs., 132 S. Ct. 1289, 1293 (2012)). Yet, they are not patent-ineligible “simply because [an 

invention] involves an abstract concept.” Id. at 2354 (quoting Diehr, 450 U.S. at 187). 

Accordingly, the exception for abstract ideas is narrow, “lest it swallow all of patent law.” Id. at 

2354. 

A proper § 101 analysis is a fact-intensive process that requires a court to interpret the 

claims of a patent from the eyes of a PHOSITA. The § 101 analysis requires the application of a 

two-step process to determine whether the claims at issue are a patent-ineligible concept, 

which in this case Defendant alleges is an “abstract” idea. Alice Corp. Pty. Ltd. v. CLS Bank 

Int’l, 573 U.S. , 134 S. Ct. 2347, 2355 (2014). The Supreme Court has not expressly defined 

an “abstract” idea. Id. at 2357 (“[W]e need not labor to delimit the precise contours of the 

‘abstract ideas’ category.”). But, the dictionary definition of abstract is: “[e]xisting in thought or 

as an idea but not having a physical or concrete existence.”1 The first step in the analysis is to 

“determine whether the claims at issue are directed to one of those patent-ineligible concepts” 

(also referred to as judicial exceptions), e.g., “a fundamental economic practice long prevalent in 

our system of commerce.” Alice, 134 S. Ct. at 2355-56.2 If the court finds that the patent is 

not directed to a judicial exception, i.e., the patented invention is not an abstract idea, then the 

analysis ends there, and the motion to dismiss under § 101 must be denied. 

 

1 See also Bilski, 130 S. Ct. at 609-10 (“[A] principle, in the abstract, is a fundamental truth; an 

original cause; a motivation.” (citations, quotations, and alterations omitted)). 

2 See also 2014 Interim Guidance on Patent Subject Matter Eligibility, 37 C.F.R. §74622-24 

(requiring patent examiners to identify the judicial exception as it is recited in the claims). 

Case 6:20-cv-00304-ADA Document 12 Filed 05/28/20 Page 10 of 24
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 If, however, the court finds that the patented invention is directed to a patent ineligible 

concept, then the Court turns to the second step in the analysis and “examine[s] the elements of 

the claim to determine whether it contains an ‘inventive concept’ sufficient to ‘transform’ the 

claimed abstract idea into a patent-eligible application.” Alice Corp., 134 S. Ct. at 2357 (citing 

Mayo Collaborative Serv. v. Prometheus Labs., Inc., 566 U.S. 10, 132 S. Ct. 1289, 1294, 1298 

(2012)). Under the second step, even if an invention recites an abstract idea, the invention is 

patentable if it has additional features to ensure that the claim is more than drafted to 

monopolize, or preempt, the abstract idea. Id. When considering the inventive concept of claim 

limitations, the limitations are considered both individually and as an ordered combination. Id. 

at 2355. This approach requires that “claims ‘must be considered as a whole.’” Id. at 2355, fn. 3 

(quoting Diehr, 450 U.S. at 188) (emphasis added).

One useful and often dispositive test for analyzing patentability under § 101 is the 

“machine-or-transformation test.” Bilski, 130 S. Ct. at 3227. A method is patentable under this 

test if “(1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article 

into a different state or thing.” Id. at 3226-27 (citing In re Bilski, 545 F.3d 943, 954 (Fed. 

Cir. 2008)) (the method claims in Bilski were directed to the concept of hedging risk and failed 

the machine-or-transformation test).

C. Presumption of Validity Applies to § 101 and Patent Ineligibility Must Be 

Proven by Clear and Convincing Evidence 

A patent and its claims enjoy a presumption of validity that can only be overcome by 

clear and convincing evidence. 35 U.S.C. § 282(a); Microsoft Corp. v. i4i Ltd P’ship, 131 S. 

Ct. 2238, 2242 (2011) (holding that the clear and convincing standard applies even when 

the ultimate question is one of law). This presumption of validity applies to the § 101 

analysis. E.g., Freeny v. Murphy Oil Corp., No. 2:13-CV-791-RSP, Dkt. No. 143, at 4 (E.D. 

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Tex. May 22, 2015) (denying motion for summary judgment based on § 101 because defendant 

failed to clearly and convincingly show the patent was ineligible).3

III. ARGUMENT 

A. Claim 1 is not directed to the abstract idea of extending financing to 

customer 

Defendant contends that “Claim 1 is directed to the abstract idea of making lending 

decisions based on creditworthiness and risk factors.” Motion at 8. This is a gross 

mischaracterization of Claim 1. First, Claim 1 is drawn to a method for when various thresholds 

for creditworthiness and risk factors are “exceeded.” In other words, unlike the art compared by 

Defendant to the ‘353 Patent, the claims are drawn to making lending decisions at a point-of-sale 

when a potential customer would not qualify for lending. See ‘353 Patent at 5:8-14 (“In an 

embodiment, a financing request from an individual that exceeds an established lending limit 

would be “Rejected” rather than “Declined” and so signified in a response from the host 102 to 

the POS terminal or computer from which the request was initiated.”); 6:25-38 (“In still another 

embodiment, the host 102 may further determine whether the credit worthiness of the purchaserborrower exceeds a financing request limit (or threshold) for that purchaser-borrow and whether 

the requested sale exceeds limits imposed at a particular merchant's location. As described 

above, a threshold limit may be established on an individual purchaser-borrower basis to reflect 

the current credit-worthiness of that purchaser-borrower. Thus, a known purchaser (that is, a 

 

3 See also, e.g., CLS Bank Int’l v. Alice Corp. Pty. Ltd., 717 F.3d 1269, 1304-05 (Fed. Cir. 2013) 

aff’d Alice, 134 S. Ct. 2347 (2014); Card Verification Solutions, Inc. v. Citigroup, No. 13-C6339, 2014 U.S. Dist. LEXIS 137577, at *6 (N.D. Ill. Sept. 29, 2014) (It is “rare that a 

patent infringement suit can be dismissed at the pleading stage for lack of patentable subject 

matter because every issued patent is presumed to have been issued properly, absent clear and 

convincing evidence to the contrary.” Dismissal is appropriate “solely when the only plausible 

reading of the patent is that there is clear and convincing evidence of ineligibility.”). 

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purchaser-borrowers with a record in the purchaser-borrower datastore 108), may have threshold 

limits that differ from limits imposed on an unknown purchaser borrower, and the known 

purchaser borrower's threshold may vary over time depending on the payment history of the 

purchaser borrower.”). In the embodiment covered by the claims, the credit transaction is 

approved despite two different thresholds being exceeded, one for “creditworthiness” and 

another for a “risk factor.” In accordance with claim 1, and unlike the prior art, the transaction is 

still authorized by a lending institution. See ‘353 Patent at 7:55-59 (“In this embodiment, the 

host 102 authorizes payment of the merchant in full for the goods or services elected for 

purchase by the purchaser-borrower when the purchaser-borrower when both the first and second 

thresholds are exceeded.”). 

 As set forth in the specification, this is a major improvement in the prior art, since 

previously “[o]ne option that is not available at the POS is the creation of a financing instrument 

that establishes a purchaser's obligation to pay for goods and/or services in installments while 

providing a merchant payment in full. Typically, such financing instruments, if available at all, 

are separately negotiated. While a purchaser may authorize a merchant to draw money from a 

purchaser's account or charge a purchaser's credit card on a recurring basis, the merchant is not 

paid in full until the payment cycle is completed. Separately negotiated installment instruments 

may also result in the merchant receiving less than full payment for the goods and services 

provided.” 1:38-49. The ‘353 Patent then solves this specific problem with a specific machine, 

not a mere abstract solution. Indeed, it is a solution that Vyze itself touts heavily over the prior 

art. As explained on the Vyze website: 

How it works 

Jack is ready to checkout online. He sees an attractive credit offer and decides to 

apply by filling out just a few quick personal details. 

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Jack’s application is automatically sent to the first lender in the retailer’s selected 

group of lenders, the application will flow through the waterfall of lenders to 

identify a suitable offer for Jack. 

In seconds, the matching credit offer is presented to Jack for his review. 

Jack reviews and accepts the offer and can now use his new purchasing power to 

complete his purchase. 

Jack returns the following week, to make another purchase with the account he 

opened last week. 

https://vyze.com/consumer-financing/online-financing/, last accessed on May 26, 2020. 

 Thus, Vyze itself touts the superior properties of the invention as well as the distinction 

of the claims of the ‘353 Patent from the prior art, explaining that the application will flow 

through a “waterfall” of lenders, meaning that they will offer credit to Jack even though he has 

exceeded various credit and risk thresholds for other lenders. This is far superior to prior art 

methods where Jack would see “declined” if he exceeded either threshold of any lender. 

Moreover, Jack might have to fill out multiple forms in order to receive credit, instead of using a 

method that approved his credit despite failing multiple thresholds. Claim 1, and in fact all of 

the claims, describe an improvement to how point-of-sale terminals operate and can be used by 

merchants. 

 Instead of aptly characterizing the claims, Defendant appears to focus their argument on 

the use of the term “velocity data.” As an initial matter, the term “velocity data” needs a proper 

claim construction before fully making a § 101 analysis. Nevertheless, Defendant claims that the 

patent-in-suit imposes no limitations on what “velocity data” may be other than the traditional 

factors evaluated by financial institutions to evaluate credit risk, and cites to one passage, 5:15-

18, in the specification, to support Defendant’s argument. Defendant completely ignores the 

separately claimed exceeded threshold for the “risk factor” as mentioned above. 

 Defendant also mischaracterizes a phrase of Claim 1. This particular phrase reads, 

“determining by the processor from the velocity data whether a risk factor exceeds a second 

Case 6:20-cv-00304-ADA Document 12 Filed 05/28/20 Page 14 of 24
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threshold.” Before a § 101 analysis can be properly done on this phrase, “determining”, 

“processor”, “risk factor,” “exceeds” and “second threshold” need a proper claim construction. 

Nevertheless, the specification clearly provides support for not only what “velocity data” is, but 

also how this particular step is performed in the invention. 6:16-24 (“...the host processor 120 

of host 102 dynamically establishes velocity thresholds for each purchaser-borrower. For 

example, the host 102 may be configured with an initial frequency threshold and an initial 

aggregate outstanding borrowing threshold. As a purchaser-borrow[er] acquires a history with 

the host 102, the processor 120 may dynamically adjust a current frequency threshold and 

balance threshold to reflect the purchaser-borrow[er] current credit-worthiness at a point in time 

as measured by the host 102.”). Defendant’s rudimentary analysis conveniently ignores this and 

other support concerning this element. 

B. Defendant’s Motion Must Be Denied Because Claim Construction is 

Necessary and Fact Issues Exist, Which Cannot Be Resolved Under Rule 12 

Defendant makes several assertions that § 101 determinations do not need claim 

construction. See Motion at 19-20. Defendant, however, fails to articulate why claim 

construction is not needed with respect to the patent-in-suit. “[B]ecause claim construction can 

affect—and perhaps, in most cases, will affect—a court’s §101 eligibility analysis, the Court 

believes that it is generally wiser—and more efficient—to wait to determine a patent’s § 101 

eligibility until after issuing its claim construction order.” Slyce Acquisition, 2020 U.S. Dist 

LEXIS 9451, at *16. Indeed, Defendant completely mischaracterizes the claims in part because 

it failed to engage in any meaningful claims construction. This is not surprising, since Defendant 

filed their motion a mere twenty-one days from service of the complaint. 

 As noted above, Defendant claims that Claim 1 is merely directed to the idea of making 

lending decisions based on creditworthiness and risk factors. See Motion at 1. Defendant is 

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guilty here of only considering the claim terms in a vacuum. A proper claim construction and 

even a basic analysis of the Claim would show that “registering by a processor,” “receiving by 

the processor,” “sending by the processor,” “determining by the processor” and “authorizing by 

the processor” are all steps done by a computer processor as part of the point-of sale terminal 

technology. Thus, the claim satisfies the machine-or-transformation test. This is clearly 

supported by the specification, see, e.g., 2:32-3:23; 3:24-31; 3:32-40; 3:41-53; 3:61-4:3; 4:16-34; 

4:62-6:51; 6:59-7:50, which Defendant conveniently omits in order to support its argument. See 

Motion at 15. 

 Thus, when Defendant states that the claims “merely recite generic components,” Motion 

at 17, Defendant does so in a manner that completely disregards how the claims would be 

construed in light of the intrinsic evidence. A patent’s claims must be read in view of the 

specification, of which they are a part. See Markman v. Westview Instruments, Inc., 52 F.3d 

967,979 (Fed. Cir. 1995) (en banc), aff’d, 517 U.S. 370 (1996) (emphasis added). For claim 

construction purposes, the description may act as a sort of dictionary, which explains the 

invention and may define terms used in the claims. See id. 

 Accordingly, because claim construction is needed to properly demonstrate the scope of 

the claims, the Court should respectfully deny Defendant’s motion as premature.

C. As Defendant Fails to Consider Any Claim from the Perspective of a Person 

Having Ordinary Skill in the Art, the Motion is Deficient on Its Face 

Claims must be considered from the viewpoint of a person having ordinary skill in the art 

(“PHOSITA”). This fundamental standard is not mentioned at all by Defendant in their motion. 

Having failed to address this fundamental issue in its motion, Defendant should be estopped 

from raising it in the first time on reply. Moreover, the Court should respectfully deny 

Defendant’s motion for having failed to address this key standard. 

Case 6:20-cv-00304-ADA Document 12 Filed 05/28/20 Page 16 of 24
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Even putting aside, arguendo, Defendant’s lack of argument considering PHOSITA, 

“insufficient discovery is another factor that can effect a court’s analysis because ‘whether 

something is well-understood, routine, and conventional to a skilled artisan at the time of the 

patent is a factual determination . . . [t]hus, like claim construction, fact discovery can also affect 

a § 101 analysis.” Slyce Acquisition, 2020 U.S. Dist LEXIS 9451, at *16. 

D. Defendant Fails to Clearly and Convincingly Demonstrate That Any of the 

Claims are Invalid under § 101 

Defendant’s characterization of the patent-in-suit leaves out the crux of the invention that 

is found even in the abstract—that is, the “system and method for extending credit to a purchaser 

at a point-of-sale terminal.” Because Defendant’s characterization of the claims “does not tie 

adequately the claim language to the purported abstract concept,” Defendant has failed to meet 

its burden to show that any claim is directed to an abstract idea. See PNC Bank v. Secure Axcess, 

LLC, Case No. CBM2014-00100, 2014 WL 4537440, at *12 (P.T.A.B. Sept. 9, 2014); U.S. 

Bancorp v. Solutran, Inc., Case No. CBM2014-00076, 2014 WL 3943913, at *8 (P.T.A.B. Aug. 

7, 2014). 

Moreover, even if the claims were directed to the purported abstract idea—which they 

clearly are not—Defendant provides no evidence that the purported abstract idea is a 

“fundamental truth[] or fundamental principle[] the patenting of which would pre-empt the use 

of basic tools of scientific and technological work.” Alice, 134 S. Ct. at 2355.4 Nor has 

Defendant set forth any evidence that the purported abstract idea is “a fundamental economic 

 

4 See also Helios Software, LLC v. Spectorsoft Corp., No. 12-cv-081-LPS, 2014 U.S. Dist. 

LEXIS 135379, at *53-*54 (D. Del. Sept. 18, 2014) (“Although [the claims may be drawn to] 

principles fundamental to the ubiquitous use of the Internet or computers generally, [defendant] 

has provided no support for that position. As such, the Court cannot agree with [defendant] that 

the patents-in-suit are drawn to an abstract idea.”). 

Case 6:20-cv-00304-ADA Document 12 Filed 05/28/20 Page 17 of 24
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practice long prevalent in our system of commerce.” Bilski, 561 U.S. at 611. Unlike in Alice, 

where the Court referred to books and journal articles discussing the use of a third-party 

intermediary to reduce settlement risk, or in Bilski, where the Court relied on multiple textbooks 

discussing the fundamental economic concept of hedging risk, Defendant here points to no 

equivalent clear and convincing evidence. See Alice, 134 S. Ct. at 2356; Bilski, 561 U.S. at 611. 

In fact, as noted above, there is absolutely no evidence that the prior art taught extending credit 

when the purchaser-borrower exceeds not one, but multiple thresholds. 

The only evidence cited by Defendant—the patent-in-suit itself—shows that the claims 

are drawn not to an abstract idea, and rather are specific improvements to existing technology in 

the field of point-of-sale terminals, namely a system and method for extending credit to a 

purchaser at said terminal. Improvements upon existing technology are patent eligible under § 

101. Alice, 134 S. Ct. at 2358. 

 As to the “inventive concept,” the entire patent—from the abstract, to the specification, to 

the claims (as they would be construed in view of the intrinsic evidence)—is drawn to the steps 

for extending credit to a purchaser at a point-of-sale terminal when various thresholds for 

creditworthiness and risk factors are “exceeded.” Prior to the date of invention, point-of-sale 

terminals were “dumb” terminals that could only process sales transactions. The invention of the 

patent-in-suit describes a system and method by which a purchaser can obtain credit for a 

purchase, in real time, at a point-of-sale terminal, when various thresholds are exceeded. The 

invention, as explicitly described in the specification and claims, is obviously an improvement 

on point-of-sale terminal technology, and is, thus, not merely an “abstract idea.” 

 Notably, Defendant’s Motion contains no analysis whatsoever of the term “exceeded” as 

it used in the context of the claims, and how it has an impact on what the invention actually is. 

Case 6:20-cv-00304-ADA Document 12 Filed 05/28/20 Page 18 of 24
19 

Defendant should be estopped from raising argument concerning the “exceeded” term for the 

first time in its reply. 

i. Dependent Claims 

Defendant’s arguments regarding the dependent claims fail for the same reasons that its 

arguments fail as to independent claim 1. Claim 2 adds the requirement “where the velocity data 

are selected from the group consisting of a frequency of requests from the purchaser-borrower, a 

count of rejected requests, a count of approved requests, and a cumulative total of combined 

borrowings by the purchaser-borrower.” Again, the term “velocity data” requires claim 

construction. 

Claim 3-6 add limitations concerning the “financial information” term of Claim 1. As 

Claim 1 is not directed to an abstract idea, these claims are, necessarily, not directed to an 

abstract idea as well. 

Claim 7 adds a limitation to Claim 1, “further comprising pre-authorizing payment of 

sums due under the installment purchase agreement from an account of the purchaser-borrower 

when the purchaser-borrower is credit worthy as determined from the financial information.” 

This limitation simply adds to the already non-abstract Claim 1, a further limitation that can be 

implemented in the point-of-sale terminal, hence it is another feature of the invention. 

Claim 9 adds a limitation where the merchant can be a physical store or a web based 

merchant. Claim 10 adds a limitation that the term “services” from Claim 1 can include medical 

services. Claim 11 adds a limitation concerning a request for an installment purchase agreement 

being received prior to the purchase. Claim 12, which depends on Claim 11, adds a limitation to 

the point-of-sale terminal, wherein it can be a terminal or a computer located at a kiosk and a 

computer operated by the purchaser-borrower. Claim 13 adds further limitations of receiving a 

Case 6:20-cv-00304-ADA Document 12 Filed 05/28/20 Page 19 of 24
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payment history of the purchaser-borrower and establishing by the processor the first threshold 

using the payment history. 

When the claims are properly construed, no claim of the patent-in-suit covers purely 

general business methods, but instead covers specialized hardware and software designed to 

implement the claims of the patent-in-suit and satisfy the machine-or-transformation test. Such 

specialized point-of-sale terminals around the invention date (2012) was neither conventional, 

nor generic. Specialized software is commercially available today that implements the claims of 

the patent-in-suit, and the existence of such tangible products evidences that the patent-in-suit is 

not directed to an abstract idea. Retailers do not invest in merely “abstract” technologies that fail 

to provide any tangible, concrete benefits or fail to improve their existing sale channels. 

Because Defendant has failed to set forth any evidence, let alone clear and convincing 

evidence, that any claim—when properly considered in light of the intrinsic evidence—is drawn 

to an abstract idea, the §101 inquiry ends here, and the motion to dismiss should be denied. 

E. Defendant’s reliance on Credit Acceptance is misplaced 

Defendant relies primarily on Credit Acceptance Corp. v. Westlake Services, 859 F.3d 

1044 (Fed. Cir. 2017) for the proposition that, the patent-in-suit, like, allegedly, the patent in 

Credit Acceptance, “claims no more than performing ordinary steps in the financing process like 

‘obtaining financial information about a customer from a user, combining these two sources of 

information to create a financing package for each of the inventories items, and presenting the 

financing packages to the user.’” See Motion at 2. 

However, this is because Defendant completely and conveniently ignores the claim 

limitations that distinguish the patent-in-suit from the patent involved in Credit Acceptance. The 

Case 6:20-cv-00304-ADA Document 12 Filed 05/28/20 Page 20 of 24
21 

patent in Credit Acceptance contained none of the limitations found in the last three steps of 

Claim 1: 

“determining by the processor from the financial information received from the 

purchaser-borrower whether the credit worthiness of the purchaser-borrower exceeds a first 

threshold; 

determining by the processor from the velocity data whether a risk factor exceeds a 

second threshold; and 

authorizing by the processor payment of the registered merchant in full by the lending 

financial institution for the goods or services elected for purchase by the purchaser-borrower 

when both the first and second thresholds are exceeded.” 

There is no claims construction given by Defendant for “whether the credit worthiness of 

the purchaser-borrrower exceeds a first threshold”; “determining by the processor from the 

velocity data whether a risk factor exceeds a second threshold” much less “authorizing by the 

processor payment ... when both the first and second thresholds are exceeded.” None of these 

limitations were contained in the patent claims at issue in Credit Acceptance, and even if they 

were, they would have to be interpreted in light of a completely different specification and 

prosecution history. 

Moreover, there is absolutely no evidence that any of the above claim limitations would 

have been considered “well-understood, routine, and conventional to a skilled artisan at the time 

of the patent” because none of these claim limitations were considered in Credit Acceptance. 

Instead, Defendant simply seeks to strip out all of the relevant and different claim limitations of 

the patent-in-suit in order to try to shoehorn the present case into the much broader and far more 

generic claims at issue in Credit Acceptance, without so much as even bothering to try to explain 

Case 6:20-cv-00304-ADA Document 12 Filed 05/28/20 Page 21 of 24
22 

the majority of the claim terms. Far from clear and convincing evidence, Defendant has cited no 

evidence at all. Indeed, in Credit Acceptance, the patent owner failed to even recite an inventive 

concept. 859 F.3d at 1056. Here, not only does the patent owner tout an inventive concept 

ignored by counsel for the Defendant, but the Defendant touts that same inventive concept on its 

own website. 

Further, nowhere in federal statute or case law on invalidity under § 101 has it been 

expressed that comparing the claims of the patent to an unrelated patent with a different 

specification is a factor in a § 101 analysis. Invalidity under § 101 is analyzed on a case-by-case 

basis examining the patent-in-suit and only the patent-in-suit (from the eyes of a PHOSITA). 

Thus, Defendant’s reliance on Credit Acceptance and similar cases is not only misplaced, but 

indicative of the lack of merit in its Motion. 

F. Defendant’s § 101 Defense is Barred by § 282(b), Which Is Not a Permitted 

Litigation Defense as § 101 is not “Specified in Part II as a Condition for 

Patentability” 

Pursuant to 35 U.S.C. § 282, a patent is presumed valid and invalidity defenses in 

litigation are expressly limited to those “specified in part II as a condition for patentability,” 

among others. 35 U.S.C. § 282. Section § 101 is not specified as “a condition for patentability” 

or any other permitted defense. 35 U.S.C. Part II, §§ 100-212 (only listing §§ 102 and 103 as 

“Conditions for patentability”); see also Diehr, 450 U.S. at 182 and at 189-191 (thoroughly 

analyzing the legislative history of § 101 and stating that “Congress intended statutory 

subject matter to ‘include anything under the sun that is made by man’” and that “Section 101, 

however, is a general statement of the type of subject matter that is eligible for patent protection 

‘subject to the conditions and requirements of this title.’ Specific conditions for patentability 

Case 6:20-cv-00304-ADA Document 12 Filed 05/28/20 Page 22 of 24
23 

follow and § 102 covers in detail the conditions relating to novelty.” (emphasis added, citations 

omitted)).5

Commentators have also thoroughly analyzed this issue, including, inter alia, the 

statutory text, recent case law, and legislative history. See, e.g., H r i c i k , D . , Are the 

Courts Correct in Their Assumption that a Patent Issued on Non-patentable Subject Matter is 

Invalid?, located at http://patentlyo.com/patent/2012/08/are-the-courts-correct-in-theirassumption-that-a-patent-issued-on-non-patentable-subject-matter-is-invalid.html (Aug. 27, 

2012). That analysis supports the conclusion that the recent trend allowing § 101 challenges in 

litigation is contrary to the plain text of § 282(b), Congress’ intent to eliminate § 101 defense in 

litigation, and Supreme Court precedent requiring adherence to enacted statutory text. 

Alice does not mention § 282(b) and did not change this analysis. This Court should 

not “jump on the bandwagon” and ignore the statutory text and Congressional intent of § 

282(b). 

VI. CONCLUSION 

 Defendant’s motion not only fails to show, by clear and convincing evidence, that the 

patent is invalid under § 101, but fails to provide any discussion or analysis of the relevant 

standard for analyzing claims, i.e., analyzing claims from the viewpoint of a PHOSITA. Thus, 

the motion should respectfully be denied in its entirety. Alternatively, Defendant’s motion is 

premature because claim construction for this patent would be particularly helpful before making 

any § 101 determination, and should, at the very least, be denied without prejudice to re-file 

following claim construction. 

 

5 Graham v. John Deere Co., 383 U.S. 1, 12-13 (1966) (stating that the Patent Act of 1952 sets 

out “three explicit conditions” for patentability, none of which are patent eligibility). 

Case 6:20-cv-00304-ADA Document 12 Filed 05/28/20 Page 23 of 24
24 

“[B]ecause an issued patent enjoys the presumption of validity which requires clear and 

convincing evidence to prove otherwise, because claim construction and fact discovery 

completely change the Court’s § 101 analysis, and because the Court gains a great understanding 

of the patents and the technology by delaying the resolution of eligibility, the Court believes that 

delaying the determination of a patents § 101 eligibility is the wisest course of action.” Slyce 

Acquisition, 2020 U.S. Dist LEXIS 9451, at **21-22. 

 Respectfully Submitted, 

ECREDIT SOLUTIONS LLC 

 /s/ Papool S. Chaudhari 

Dated: May 28, 2020 By: __________________________ 

 Papool S. Chaudhari 

 Texas State Bar No. 24076978 

 Chaudhari Law, PLLC 

 P.O. Box 1863 

 Wylie, Texas 75098 

 Phone: (214) 702-1150 

 Fax: (214) 705-3775 

 Papool@ChaudhariLaw.com

ATTORNEY FOR PLAINTIFF 

ECREDIT SOLUTIONS LLC 

CERTIFICATE OF SERVICE 

The undersigned certifies that the foregoing document was filed electronically in compliance 

with Local Rule. As such, the foregoing was served on all counsel of record who have consented 

to electronic service. Pursuant to Fed. R. Civ. P. 5(d) and Local Rule, all others not deemed to 

have consented to electronic service will be served with a true and correct copy of the foregoing 

via e-mail this 28th day of May, 2020. 

 /s/ Papool S. Chaudhari

_________________ 

 Papool S. Chaudhari 

Case 6:20-cv-00304-ADA Document 12 Filed 05/28/20 Page 24 of 24