Software Patents Considered: DDR HOLDINGS, LLC v. HOTELS.COM, LP NO. 2013-1505 (Fed. Cir. 2014)

This case is increasingly being seen as a keystone case for US patent patent eligible subject matter law. I post on it again, in more detail.

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DDR HOLDINGS, LLC v. HOTELS.COM, LP NO. 2013-1505 (Fed. Cir. 2014)
US 7,818,399

Summary

Claims of US patent 7,818,399 in the name of DDR Holdings, LLC were found to be patent eligible subject matter under 35 USC 101 because the claimed solution is necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer networks.

Lesson

Broad description of the invention

The patent is directed to systems and methods of generating a composite web page that combines certain visual elements of a “host” website with content of a third-party merchant. For example, the generated composite web page may combine the logo, background colour, and fonts of the host website with product information from the merchant. The specification explains that prior art systems allows third-party merchants to lure the host website’s visitor traffic away from the host website because visitors would be taken to the third-party merchant’s website when they clicked on the merchant’s advertisement on the host site. The patent discloses a system that provides a solution to this problem (for the host) by creating a new web page that permits a website visitor, in a sense, to be in two places at the same time. On activation of a hyperlink on the host website – such as an advertisement for a third-party merchant – instead of taking the visitor to the merchant’s website, the system generates and directs the visitor to a composite web page that displays product information from the third-party merchant, but retains the host website’s “look and feel”. Thus, the host website can display a third-party merchant’s products, but retain its visitor traffic by displaying this product information from within a generated web page that gives the viewer of the page the impression that she is viewing pages served by the host.

Characteristic Claim

The characteristic claim requires that a data store must store “look and feel” descriptions for a multiple hosts.

19. A system useful in an outsource provider serving web pages offering commercial opportunities, the system comprising:

Details

Their Honours considered patent eligibility of claims 1,3 and 19 by applying the analytical framework of the US Supreme Court decisions Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289, 1294 (2010) and Alic Corp. v. CLS Bank Int’l 134 S. Ct. 2347, 2355 (2014). In a first step of a two-step test, given the nature of the invention it is determined whether the claims at issue are directed to a patent ineligible abstract idea. If so, in a second step of the test, the elements of each claim are considered – both individually and as an ordered combination – to determine whether the additional elements transform the nature of the claim into a patent-eligible application of that abstract idea. The second step is the search for an “inventive concept,” or some element or combination of elements sufficient to ensure that the claims amount to “significantly more” than a patent on an ineligible concept. The majority were of the view that after Alice, there can be no doubt that recitation of generic computer limitations does not make an otherwise ineligible claim patent-eligible. A mathematical algortithm, including those executed on a generic computer, are abstract ideas (Benson, 409 U.S. at 64). Some fundamental economic and conventional business practices are also abstract ideas (hedging in the case of Bilski, 130 S. Ct at 3231, intermediated settlement in the case of Alice, 134 S. Ct. at 3246). The majority noted that Ultramercial, Inc v Hulu, LLC, _F.3d_, 2014WL5904902 (Fed. Cir. 2014), buySafe, Inc. v. Google, Inc., 765 F.3d 1350, 1355 (Fed. Cir. 2014), Accenture Global Servs., GmbH v Guidewire Software, Inc., 728 F .3d 1336, (Fed. Cir. 2013), and Bancorp Servd., L.L.C. v. Sun Life Assure. Co of Canada (U.S.), 687 F.3D 1255, 1278 (Fed. Cir. 2012) considered claims that recited various computer hardware elements but where in substance directed to nothing more than the performance of an abstract business practice on the Internet or using a conventional computer, and that such claims are not patentable. The bare fact that a computer exists in the physical rather than purely conceptual realm “is besides the point”. Under supreme court precedent, the claims of these cases where recited too broadly and generically to be considered sufficiently specific and meaningful applications of their underlying abstract ideas [emphasis added].

The majority noted that the claims do not recite a mathematical algorithm, a fundamental economic or longstanding commercial practice. In their view, although the claims address a business challenge (retaining website visitors), it is a challenge particular to the internet that is not abstract. Consequently, step one was not satisfied and the invention was not of the judicially created exception of patent-ineligible abstract ideas, in the view of the majority.

While the claims involve both a computer and the internet, the claims stand apart because they do not merely recite the performance of some business practice known from the pre-internet world along with the requirement to perform it on the internet. Instead, the claimed solution is necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer networks [emphasis added].

The dissenting Judge, however, was of the view that the invention related to the step-one abstract idea of the patent as “an online merchant’s sales can be increased if two web pages have the same “look and feel”. The dissenting Judge suggested that the concept of a “store within a store” is the pre-internet analogue. The majority considered that a store within a store did not have to account for the ephemeral nature of an internet location or the near instantaneous transport between these locations made possible by standard internet communication protocols, which introduces a problem that does not arise in the “brick and mortar” context. There is no possibility that by walking up to a store within a store (kiosk in a warehouse store, for example), the customer will be suddenly and completely transported outside the warehouse store and relocated to a separate physical venue. Unlike Ultramercial, the claims do not broadly and generically claim “use of the internet” to perform an abstract business process.

The claims do not attempt to pre-empt every application of the idea of increasing sales by making two web pages look the same. Rather, they recite a specific way to automate the creation of a composite web page. The claims include additional features that ensure the claims are more than a drafting effort designed to monopolise the [abstract idea] Alice, 134 S. Ct. at 2357.