Federal Circuit Holds that Claimed Computing System Contains Patent Eligible Subject Matter

By Condo Roccia Koptiw LLP // December 8th, 2014

In DDR Holdings, LLC v. Hotels.com, L.P., No. 2013-1505 (Dec. 5, 2014 Fed. Cir.), the Federal Circuit held that claims directed towards solving the problem of website merchants having their users lured to other websites by clicking on advertising links on the merchant’s website claimed patent-eligible subject matter.  The claimed invention solved this problem by in response to a click on the merchant web site, creating a new web page that has the original web site’s overall “look and feel,” but also included content for the product advertised in the clicked link.  By creating this web page, the merchant would not “lose” its user to the advertised product’s website.

A representative claim set forth two elements, a “data store,” and a “computer processor” that had limitations related to the invention.  The Federal Circuit noted that although the claims involve a computer and the internet and are therefore similar to many of the claims in the Alice line of cases that have been struck down, the present 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.”  According to the Court, the distinction is that the “claimed solution is necessarily rooted in computer technology.”  The Court reasoned that the invention was beneficial because it permitted the host web site to have advertisements with links without having the host web site lose its user to another web site when the user clicks on a link.  In addition, the Court found that the claims specified “how interactions with the Internet are manipulated to yield a desired result.”  In distinguishing the prior case law, the Court stated that the claims do not recite any of the following:

  • “a commonplace business method aimed at processing business information;”
  • “applying a known business process to the particular technological environment of the Internet;” and
  • “creating or altering contractual relations using generic computer functions and conventional network operations.”

In contrast to the majority’s approach, the dissent found the claims “rudimentary” and “comical.”  Applying Alice, the dissent argued that the claims did not contain patent-eligible subject matter because the inventive concept “if any” was “retaining control over the attention of a customer.”  According to the dissent, this concept was an “entrepreneurial rather than a technical one.”


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