By Bruce Sunstein. A member of our Patent Practice Group
A recent decision by the Federal Circuit, DDR Holdings, LLC v. Hotels.com, L.P, offers a glint of hope for protecting some software inventions after the same court’s discouraging decision in Ultramercial Inc. v. Hulu, Inc. (our article here), which in turn followed the negative decision of the Supreme Court in Alice Corp. v. CLS Bank (our article here). Ultramercial and Alice held that computer programs that are deemed directed to an abstract idea are not eligible to be patented, and the decisions ruled that the patents in question were invalid.
If the decisions in Ultramercial and Alice were not bad enough, they followed two other Supreme Court decisions holding patents invalid: Mayo v. Prometheus (involving medical diagnostics), about which we wrote here, and Ass’n for Molecular Pathology v. Myriad (involving biotechnology; our article here). All of these rulings have furthered the judicial trend of narrowing the scope of 35 U.S.C. § 101, the provision by which Congress defined a vast universe of patent-eligible subject matter.
In DDR Holdings, the Federal Circuit ruled that the abstract-idea exception to patent eligibility created by the Supreme Court did not apply to the software inventions that were the subject of the litigation. The court reached this result even though the software patents—like the patents in Ultramercial and Alice—concerned a business method practiced over the Internet. The technology at issue has applicability to a host website that is made available to third party merchants, each of whom would place a link to its own site on the host website, allowing a user of the host website to conduct business with the merchant.
The concern of the host website owner is that when the user seeks to do business on the merchant site, the user experiences a shift away from the host website, and thus the host website loses the attention of the user. The solution offered by the patents at issue in DDR Holdings was that “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.’”
The court held:
The court distinguished these claims from those in Ultramercial as not “broadly and generically” claiming “‘use of the Internet’ to perform an abstract business practice (with insignificant added activity).” “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.” (More)
If the decisions in Ultramercial and Alice were not bad enough, they followed two other Supreme Court decisions holding patents invalid: Mayo v. Prometheus (involving medical diagnostics), about which we wrote here, and Ass’n for Molecular Pathology v. Myriad (involving biotechnology; our article here). All of these rulings have furthered the judicial trend of narrowing the scope of 35 U.S.C. § 101, the provision by which Congress defined a vast universe of patent-eligible subject matter.
In DDR Holdings, the Federal Circuit ruled that the abstract-idea exception to patent eligibility created by the Supreme Court did not apply to the software inventions that were the subject of the litigation. The court reached this result even though the software patents—like the patents in Ultramercial and Alice—concerned a business method practiced over the Internet. The technology at issue has applicability to a host website that is made available to third party merchants, each of whom would place a link to its own site on the host website, allowing a user of the host website to conduct business with the merchant.
The concern of the host website owner is that when the user seeks to do business on the merchant site, the user experiences a shift away from the host website, and thus the host website loses the attention of the user. The solution offered by the patents at issue in DDR Holdings was that “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.’”
The court held:
[T]hese 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. In particular, the ‘399 patent’s claims address the problem of retaining website visitors that, if adhering to the routine, conventional functioning of Internet hyperlink protocol, would be instantly transported away from a host’s website after “clicking” on an advertisement and activating a hyperlink.
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