Federal Circuit Identifies Software as Patentable Subject Matter (post Alice)

By Stephen B. Schott
Software has been patentable subject matter for a long time but following this summer’s Supreme Court Alice v. CLS Bank decision, exactly when software crosses into patentable subject matter territory has been in flux. Last week, the Federal Circuit’s DDR Holdings, LLC v. Hotels.com, L.P. et al. decision provided some guidance on this point.
The patent in dispute describes what seems commonplace technology today: Sometimes when you go to a website, you’ll click a link and instead of the link taking you to a new web page, the link opens a window within the website you’re currently on. When this application was filed in 1998, it was a new idea. The inventors claimed their invention as follows:

19. A system useful in an outsource provider serving web pages offering commercial opportunities…comprising:
(a) a computer store containing data, for each of a plurality of first web pages, defining a plurality of visually perceptible elements… (ii) wherein each of the first web pages displays at least one active link associated with a commerce object associated with a buying opportunity…
(b) a computer server at the outsource provider, which computer server is coupled to the computer store and programmed to: (i) receive from the web browser of a computer user a signal indicating activation of one of the links displayed by one of the first web pages; …
using the data retrieved, automatically generate and transmit to the web browser a second web page that displays: (A) information associated with the commerce object associated with the link that has been activated, and (B) the plurality of visually perceptible elements visually corresponding to the [first] page.

Facing the question about whether this claim recited patent-eligible subject matter, the court looked to the Supreme Court’s Alice two part test: (1) Determine if the claimed invention covers an abstract idea, and if (1) is satisfied, (2) determine if the claim amounts to “significantly more” than a patent on an ineligible concept.
Turning to the first part of the test regarding whether the claims recite a patent-ineligible abstract idea, the court pointed out that even the patent’s owner struggled to define the abstract idea and in the end, suggested several ways “including ‘making two web pages look the same,’ ‘syndicated commerce on the computer using the Internet,’ and ‘making two e-commerce web pages look alike by using licensed trademarks, logos, color schemes and layouts.’”
Rather than identify which of these was the abstract idea itself, the court determined that no matter which of these characterizations it chose, the second test prong requiring “something more” would be satisfied.
The Big Money Quote. The court distinguished the website-within-a-website claims as “something more” than what had come before with the following reasoning that should be quoted in every software prosecution before the US Patent and Trademark Office for the foreseeable future: “[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.”
The court also approvingly noted that the claimed additional features “ensure the claims are ‘more than a drafting effort designed to monopolize the [abstract idea]’…In short, the claimed solution amounts to an inventive concept for resolving this particular Internet-centric problem, rendering the claims patent-eligible.”
The court’s rationale is not without at least one problematic aspect. The three judge Federal Circuit appellate panel that decided the case split 2-1, with the dissenting judge arguing that the claims merely captured an earlier concept and performed it on a general computer. Dissenting Judge Mayer compared website-within-a-website technology to, of all things, branded brick and mortar vendors housed within big box stores. That Judge Mayer, a patent serial killer, could blithely compare a brick and mortar construction with website programming, shows some questionable rationale that is hopefully limited to just him.
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