Bottom line: DDR Holdings, LLC v. Hotels.com, L.P. (Fed. Cir. 2014) instructs us that software claims that lean towards being labeled an abstract concept may transition from being an unpatentable to patentable provided that the claims recite the “desired result” (i.e. benefit) and the “how” of achieving the desired result. One claiming approach may be to include the desired result (i.e., benefit) of the invention in the preamble of the claim and the how-to in the body of the claim with the benefit interwoven into one or more of the elements recited in the body of the claim.
DDR Holding appears to be the first appellate case to decide that a software invention was eligible for patent protection since Alice v. CLS (Fed. Cir. 2014). DDR Holding (Patent Owner) held patents directed to systems and methods of automatically generating a composite web page that combines certain visual elements of a “host” website with content from a third party merchant. The problem the invention resolved was that prior art systems redirected internet users to third party websites instead of retaining the internet user on the host website. The host website would lose visitor traffic. To solve this issue, when an internet user clicks on a third party ad, the internet user would be redirected to a newly generated webpage on the host website that displays product information from the third party merchant, but retains the host website’s look and feel. In this way, the host website retained the visitor traffic and still displayed the third party merchant’s product.
The court has rendered a number of opinions (Alice, buySAFE, Accenture, Bancorp, Ultramercial and most recently DDR Holding) related to the patent eligibility of software inventions and other so called abstract ideas. In these opinions, the court centers the discussion on a few topics such as preemption, breadth of the claims, ancient and routine / conventional practices in order to determine whether the invention is eligible for patent protection. For example, in buySafe, the court compared the invention with what was known in ancient times. Merely because a technology is ancient does not make the technology abstract. No one would argue that a wheel being ancient makes the wheel an abstract technology. Rather, for patent attorneys, the wheel would merely be called old, already known in the prior art, or anticipated by the prior art. In this sense, the court appears to be drawing from other areas of patent law such as anticipation (Section 102) and relating the same with eligibility for patent protection (Section 101).
In the instant case, the DDR Holding Court makes strides in defining the contours of an abstract idea and knowing when the claims directed to the abstract idea would move from patent ineligible to eligible status. The court compared the instant case with Ultramercial in order to explain why the claimed invention in DDR Holding is eligible for patent protection and why the invention of Ultramercial is not. The DDR Holding Court used two different terms that help to determine if a claimed invention is patent eligible or not. The Court used the terms “desired result” and “how.” In particular, the Court stated that:
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. (emphasis added).
Sometimes, during an initial client consultation, a prospective client might express a desire to achieve a desired result without any idea of how to achieve that desired result. I explain that you cannot protect a pure desired result. For example, the general concept of space travel cannot be patented. However, apparatuses and methods that enable space travel are eligible for patent protection. The U.S. patent system requires inventors to disclose (e.g., written description and drawings) in the specification enough information that others can make and use (i.e., build) their invention to achieve the desired result so that after the term of patent protection has expired, the public can utilize the invention. In this aspect of the DDR Holding opinion, the court’s reasoning parallels the enablement requirement which relates to the drafting of the specification. In the sentence quoted above in DDR Holding, the Court indicates that the claims are believed to be eligible for patent protection despite being directed to an abstract idea because the claims include the desired result and “how” to achieve the desired result.
A claim merely directed to the desired result would be an abstract idea. It is too broad. It would pre-empt a large section of technology for use by the public. However, if the “how” of achieving the desired result is inserted into the claims then the claims would be limited to the specific ways that enable the desired result. Loosely speaking, the enablement requirement for drafting patent specifications is being applied to the claims for patent eligibility purposes. With the “how” of achieving the desired result in the claims, others could invent other ways or how-tos to achieve the desired result. It would not be too broad. It would not prevent others from inventing within the same area of technology. It would not preempt a large section of technology that should be available for the public to use.
On December 15, 2014, the USPTO released the 2014 Interim Guidance on Patent Subject Matter Eligibility. The Interim Guidance provided a brief summary of the DDR Holding case in which the USPTO cited two different passages from the DDR Holding opinion. The first passage was that the DDR Holding claims were “necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer technology.” The second passage is related to the discussion above regarding the “how” or the specific way of achieving the “desired result.” At least for now, look to this type of language in arguing patent eligibility during patent prosecution.
In a different part of DDR Holding opinion, the Court also recognized the difficulty in identifying the abstract idea or the desired result. The Court stated:
Indeed, identifying the precise nature of the abstract idea is not as straightforward as in Alice or some of our recent abstract cases.
In prior abstract cases, the court appears to use its own definition of the invention. For example, in Ultramercial, the patent owner (Ultramercial) characterized its invention as a user selected advertisement (i.e., active advertisement model) which was a change from existing passive advertising methods. The Ultramercial Court, on the other hand, affirmed the district court’s definition of the invention as use of an advertisement as an exchange or currency. The District Court for Ultramercial significantly watered down and mischaracterized the invention from being an active advertisement model where the user selects the advertisement to being more similar to public TV where the advertisement is passive on the part of the user and imposed on the user. From a reading of the description of the Ultramercial invention as described by the Ultramercial Court, the Ultramercial opinion makes sense. However, when one examines the claims at issue in Ultramercial, the claims were directed to significantly more than just a passive advertisement model that mimicked public TV. The claims were directed to an active advertisement model.
In the instant case, the DDR Holding Court bypassed the first step of determining whether the claims were directed to an abstract idea. Instead, the Court merely indicated that the claims contained “something more” so as to deem the claims eligible for patent protection. Others have noted (click here) that it is difficult to understand how the claims of Ultramercial are ineligible for patent protection while the claims of DDR Holding are eligible. I agree. It is difficult to harmonize the Ultramercial and DDR Holding holdings when one inspects the actual language of the claims at issue. However, the holdings can be harmonized when you ignore the claims and read only the description of the claimed invention by the courts.
In this sense, the beauty of the invention is in the eye of the beholder. As a patent attorney, I’ve come to appreciate that everyone attributes a different value to an invention. One is willing to invest in an invention, while another is not. In an attempt to mitigate any mischaracterization of an invention during the district court litigation, it may be prudent to include the benefit or desired result of the invention in the preamble or other parts of the claim as well as weave the specific way of achieving the desired result with such benefit. The patent owner can point to claim language when construing the invention during the district court litigation.
I invite you to contact me with your patent questions at (949) 716-8178. Please feel free to forward this article to your friends. As an Orange County Patent Attorney, I serve Orange County, Irvine, Los Angeles, San Diego and surrounding cities.