Claims Were Patent-Eligible Where They Solved a Problem Unique to the Internet By Requiring Interactions That Differed from Routine Internet Usage

DDR Holdings, LLC v. Hotels.com, L.P., __ F.3d ___ (Fed. Cir. Dec. 5, 2014) (Wallach, Mayer (dissent-in-part), CHEN) (E.D. Tex.: Gilstrap) (5 of 5 stars)
Federal Circuit reverses a denial of JMOL of anticipation on one patent but affirms a judgment that second patent is eligible subject matter under section 101, not indefinite, and infringed. The patents covered a system and method that allows a host website to include links to a composite webpage that has the same "look and feel" as the host's page but includes information about a third party's products.
Anticipation: One patent was anticipated because the evidence showed a prior art reference disclosed the only disputed limitation, and the district court had denied JMOL by relying on an additional phantom requirement that did not appear in either the claim language or the parties' stipulated construction of the limitation.
Section 101: The second patent passed scrutiny under the two-step Mayo/Alice test. It was difficult to identify a precise "abstract idea" to which the claims might be directed. They did not recite an algorithm or fundamental economic practice. Although the claims involved the Internet, "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." Slip op. at 20. The claims were not a mere extension of old techniques used with physical stores, but instead addressed a challenge unique to the Internet—a customer's attention could be transported away from one provider to another by clicking a link, without any need to return. The claims also did not claim a conventional use of the Internet: "Unlike the claims in Ultramercial, the claims at issue here specify how interactions with the Internet are manipulated to yield a desired result—a result that overrides the routine and conventional sequence of events ordinarily triggered by the click of a hyperlink." Id. at 23. Nor did they preempt every application of the idea of making two web pages look the same; they were limited to creation of a composite webpage in a particular manner.
Indefiniteness: The term "visually perceptible elements," which had a stipulated construction of "'look and feel' elements that can be seen," was not indefinite. There was an objective meaning for "look and feel" in the art, and the patent used the term consistent with that meaning. The specification's examples of "look and feel" were consistent with how the defendant's own prior art documents from the time used the same term, and the defendant's admissions showed it was not a facially subjective term.
Infringement: Substantial evidence, including webpages from the defendant's site and expert testimony, supported the jury's infringement finding. Moreover, the expert testified the accused system was unchanged throughout the period of infringement, so it did not matter the screenshots were from only one day.
Damages/Interest: The damages award—a lump sum unapportioned between the two patents—was vacated and remanded for reconsideration now that only one patent remained valid and infringed. The patentee was entitled to pre-judgment interest despite being an NPE, but the amount was vacated given the vacatur of the damages award.
Dissent: Judge Mayer thought the claims invalid under section 101 "because they simply describe an abstract concept—that an online merchant's sales can be increased if two web pages have the same 'look and feel'—and apply that concept using a generic computer." Dissent at 2. "The idea of having a 'store within a store' was in widespread use well before the dawn of e-commerce." Id. at 4. Indeed, an inventor admitted the invention as "taking something that worked in the real world and doing it on the Internet." Id. "Alice made clear that claims untethered to any advance in science or technology do not pass muster under section 101." Id. at 7. The patent here did not propose any new technology for making two webpages look alike. The only possible inventive concept—keeping a customer's attention—was entrepreneurial, not technological.

Author: Craig Countryman