Internet Patents Corp. v. Active Network, Inc. (Fed Cir. 2015)

Internet Patents Corp. v. Active Network, Inc. (Fed Cir. 2015)
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Internet Patents Corp. v. Active Network, Inc. (Fed Cir. 2015)

Since late last year, the main theme of many 35 U.S.C. § 101 disputes has been whether claims under review are more like those in Ultramercial Inc. v. Hulu LLC or DDR Holdings, LLC v. Hotels.com.  In the former case, the Federal Circuit held that claiming a disembodied method that merely uses general-purpose technology (i.e., the Internet) fails to meet the requirements of § 101, while in later case the Court stated that claims that are necessarily rooted in computer technology (e.g., one that changes the technology itself rather than just using it) are patent-eligible.  Patentees attempt to draw analogies between their claims and those of DDR, while defendants attempt the same with those of Ultramercial.

At first blush, this case seems to restrict the scope of the DDR decision, which would be bad news for patentees.  Upon further review, however, the facts of this case are distinguishable from those of DDR.

Internet Patents Corporation (IPC) filed infringement suits against The General Automobile Insurance Services, Inc., Active Network, Inc., Tree.com, and QuinStreet, Inc., alleging infringement of U.S. Patent No. 7,707,505.  The District Court for the Northern District of California dismissed the complaint on the ground of patent ineligibility under § 101.  IPC appealed.  While the appeal was pending, the Supreme Court decided Alice Corp. v. CLS Bank International, which changed the § 101 analysis.  After supplemental briefing to address Alice, the Federal Circuit panel of Judges Newman, Moore, and Reyna affirmed.

Claim 1 of the ‘505 patent recites:

1. A method of providing an intelligent user interface to an online application comprising the steps of:
    furnishing a plurality of icons on a web page displayed to a user of a web browser, wherein each of said icons is a hyperlink to a dynamically generated online application form set, and wherein said web browser comprises Back and Forward navigation functionalities;
    displaying said dynamically generated online application form set in response to the activation of said hyperlink, wherein said dynamically generated online application form set comprises a state determined by at least one user input; and
    maintaining said state upon the activation of another of said icons, wherein said maintaining allows use of said Back and Forward navigation functionalities without loss of said state.

In a nutshell, the claimed invention is directed to a web browser that stores state representing what a user has typed into a web-based form, even if that information has not yet been submitted.  Then, if the user navigates away from and back to the web-based form, the stored state is usable in the form.  In this way, the user does not have to retype the information.

The District Court stated that the ‘505 patent claimed the abstract idea of “retaining information lost in the navigation of online forms,” but failed to include “elements or combination of elements, sometimes referred to as the inventive concept, sufficient to ensure that the patent in practice amounts to significantly more than a patent upon [the abstract idea].”

On appeal, IPC argued that various limitations, such as “maintaining said state upon the activation of another of said icons, wherein said maintaining allows use of said Back and Forward navigation functionalities without loss of said state” lifted the claim above the level of a mere abstract idea and was a technical advance over the prior art.

The Court began its analysis with a general discussion of § 101, with particular emphasis on the now familiar Alice test.  Notable, Judge Newman, writing for the unanimous Court, noted that “[u]nder step one of Mayo/Alice, the claims are considered in their entirety to ascertain whether their character as a whole is directed to excluded subject matter.”  This is a welcome statement, as defendants and the U.S. Patent and Trademark Office often examine claims at a 30,000-foot level when carrying out this step, ignoring claim elements in the process.

With respect to the second step of Alice, Judge Newman indicated that “[d]etermination of what is an inventive concept favors inquiries analogous to those undertaken for determination of patentable invention . . . a known idea, or one that is routine and conventional, is not inventive in patent terms.”  She further wrote that “[o]ther precedent illustrates that pragmatic analysis of §101 is facilitated by considerations analogous to those of §§102 and 103.”  Once again, the barrier between patent-eligibility, novelty, and non-obviousness is characterized to resemble Swiss cheese.

Thus, Judge Newman focused on what the specification of the ‘505 patent discloses regarding claim elements that were new and those encompassed by the prior art.  Particularly, the ‘505 patent states that “the end result of ‘maintaining the state’ is described as the innovation over the prior art, and the essential, ‘most important aspect'” thereof.  On the other hand, the ‘505 patent describes the “browser Back and Forward button functionality” as “conventional,” “well-known,” and “common.”

In particular, Judge Newman was influenced by the fact that “claim 1 contains no restriction on how the result is accomplished,” and “[t]he mechanism for maintaining the state is not described, although this is stated to be the essential innovation.”  Thus, in her opinion, “IPC’s proposed interpretation of ‘maintaining state’ describes the effect or result dissociated from any method by which maintaining the state is accomplished upon the activation of an icon.”  As a result, the Court ruled the claims to be patent-ineligible.

Not unlike DDR, which claimed an improvement to a web server that fundamentally changed how the server operated, the claims at issue here describe an improvement to a web browser that changed how the browser operated (though not fundamentally).  However, the DDR patent described its key improvement in great detail, but the ‘505 patent did not.

When writing a patent’s specification, the draftsperson should focus on the clever parts — aspects of the invention that are new.  In most cases, however, the draftsperson is not fully aware of which features are truly new versus those that are in or suggested by the prior art.  As a result, it is challenging to identify which of these features might be a candidate “inventive concept” and to pontificate thereon accordingly.  The general rule that many of us follow post-Alice is to draft rich, detailed, technical specifications, and undoubtedly we will double-down on that approach in light of this decision.

Under a more rational regime, IPC’s claims might have been found patent-eligible — after all they do improve the operation of a computer and are clearly technical in nature.  But the Alice test allows claims to be judged based on a subjective view thereof — a “gist” of the claim rather than the claim itself.  While such an approach was discarded earlier courts, it appears to have raised its ugly head once more.

Internet Patents Corp. v. Active Network, Inc. (Fed Cir. 2015)
Panel:  Circuit Judges Newman, Moore, and Reyna
Opinion by Circuit Judge Newman

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