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

By Michael Borella --

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.  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

Comments

[EG]

Michael,

Another sad instance of application of the broken Alice test for determining patent-eligibility. But what truly boggles my mind is that Newman has now apparently embraced this broken test. Why she did so (without any protest like Linn did in the Sequenom case) frankly leaves me scratching my head.

[Skeptical]

As EG notes, another sad instance (of an item that I can remind Paul Cole of "I told you so")...

Perhaps a better question: where will this end?

[Mike Borella]

Yes, this opinion is surprising coming from Newman, as her Alice dissent / concurrence was the only part of the en banc opinion that made sense.

[Genghis]

While we are bashing patent drafters let us not forget that clients are also to blame for pushing drafters to write maximally broad claims. If the law had been clear upfront then I’m sure patent applications would have been more detailed and patent claims would have been more focused.

Many of these recent decisions have told us what is not patentable. Is there anything that is before the Fed. Cir. or that is making its way to the Fed. Cir. that might tell us what is patentable?

What about the Planet Blue case? There was a lot of noise when those claims were rejected. Are the claims in that case pretty much dead in view of the recent decisions?

[Genghis]

Following up on my previous post about Planet Blue.

I guess the question now is whether or not the steps of “generating an output morph weight set stream by applying said first set of rules to each sub-sequence of said plurality of sub-sequences of timed phonemes” and “applying said output morph weight set stream to an input sequence of animated characters to generate an output sequence of animated characters with lip and facial expression synchronized to said audio sequence” provide sufficient details of the method by which whatever was supposed to be accomplished by the claim is accomplished?

I have no idea how the Fed. Cir. plans to define the boundary (if indeed this is what they are planning to do) that separates valid software patents from invalid ones based on the level of algorithmic detail.

[Mike Borella]

I suspect that Planet Blue will be decided on different grounds, namely whether the claimed invention goes beyond merely automating known human activity. We are writing a post on that case, as the plaintiff's brief is now available.

[Genghis]

Thanks Mike - I look forward to the post.

[Paul Cole]

I comment more on natural products because the result in that field are at variance with what happens in Europe, whereas in software/business methods the trend is to converge towards what happens in Europe.

In this particular case, the description is quite detailed so that the outcome is a little surprising. The invention appears to reside in the idea of providing improved functionality rather than its implementation, and EPO practice recognises invention in identifying the problem to be solved as well as in identifying the solution. Possibly the invention here is the implementation of a design choice which had not been implemented before, but which was nevertheless obvious to implement. If in Patent Docs you are half way through entering a comment and navigate away from the page, then your comment is lost, which can be very irritating, and a software implementation that does not suffer from that problem has obvious benefits.

A European view on Sequenom calls for a guest posting rather than a comment, and I am currently working on this.

[gene]

if a mechanical-machine patent claimed "receiving a penny inserted by a user into a slot of a black box; imprinting an image of the user onto the penny and delivering the imprinted penny through another slot of the black box" without describing what's in the black box and how that is accomplished, you'd all protest that that is an invalid patent. yet, something is wrong with this absolutely correct decision? mind boggling, indeed. if such basic, fundamental requirements are "rich, detailed, technical specifications" well, good luck to ya!

[scientist]

Lets take a typical drug patent claim:

1) A method of treating X disease with a known drug.

Applying the rationale of court, "claim 1 contains no restriction on how the result is accomplished,", considering that it is a known drug and hence does not provide novelty and hence ignored like the court did, the claim does not include how Known Drug is treating X disease hence is not eligible too.

This logic makes majority, if not 90% of drug patents invalid as they don't tell you how the drug gives the specific effect in the body! Are we now supposed to include the biochemistry into the drug method claims? Are we going to have biochemists arguing in court which enzyme is responsible for the effect of the drug for patent eligibility?

[Paul Cole]

@ Scientist

I think you will find postings of mine on Prometheus v Mayo making this very point. The example I used was nitroglycerin and a nitroglycerin composition for treatment of angina.

The rationale is that the effectiveness of nitroglycerin against angina is a rule of nature and the formulation into a pharmaceutically acceptable form is routine post-solution activity. However, you will also see a statement in the Prometheus opinion that there is no intention to disturb pharmaceutical patents generally and the opinion ends with a warning that it is fairly fact-specific and may not be general.

The conclusion I reached at the time (see postings and an article in the CIPA journal (copies on request) is that there is no workable rule of law derivable from the Prometheus opinion.

The difficulty in my submission is the taking of statements out of the whole context of the opinion and their application to factual situations and with a severity that was not intended. Not every Supreme Court case deals with fundamentals such as health care and there is a tendency to exaggerate ("gold plate" as we say in the UK) opinions and regulations which were originally intended to be narrow and specific.

[Skeptical]

Mr Cole, dare I remind you...?

[Paul Cole]

@ Skeptical

I am well aware of your views, as you are of mine, and I need no reminding.

There is, unfortunately, no other furrow to plough since an amendment to 35 USC or a favourable case going to the Supreme Court is at best a medium-term event and does not affect the here and now.

Believe me, although it is interesting and educational there are many things I would rather do than prepare detailed comments on US opinions. But the US issues are existential for some of our clients and some members of our profession, and we owe it to ourselves and our colleagues to argue for a more moderate and reasoned approach both by the courts and by the USPTO.

There is, unfortunately, my paradigm decision interpreter who is a contributor to the New York Times with a degree in economics (and hence a detailed understanding neither of technology nor of law), who has become very active in the last few years, and who seems have wandered into law rather than mere journalism. If we can raise the level of understanding and interpretation we may be able to influence future cases in the right direction.

[Skeptical]

Mr.Cole,

The reason why I remind you is that your attempts at "more moderate and reasoned approaches" will fail - precisely because the approach you want to take is flawed.

To be perfectly blunt, your approach is too Pollyanna.

You want to act as if there are no other forces trying to bend patent law to different ends. You just won't succeed by ignoring the fact that others are occupying the attention span of those making the decisions on the front lines.

Trust me, I am ALL for your approach of reason and restraint, and I trust that my own level of understanding and interpretation of law and history are on at least a parallel with yours.

Sadly, that just wont be enough.

This is - and has been for a very long time - a soundbyte war, where the guerrilla tactics of propaganda and mindless repetition simply are more effective than the invitation to be thoughtful and exert careful mental effort.

It is NOT that I disagree with your goals, kind sir. Rather, I question the efficacy and sufficiency of merely inviting others to "think."

The reason why guerrilla tactics and propaganda are employed is because those things WORK. Perhaps some level of thought should be aimed at that, and not just at our understanding and respect of having a patent system.

You speak of duty and "owing," and I fully agree that there is a duty present. I wonder though if anyone agrees as to what that duty is when it comes to the different philosophies at play in shaping patent law.

[Paul Cole]

@ Skeptical

I do not think we differ much.

Unfortunately the only weapons that I have are the weapons that I am using - detailed study and reasoned analysis, and these I intend to continue using with all the resources of time and energy that I can find for the task (I do also have other things to do).

I cannot join the sound byte war firstly because I do not have the knowledge and connections and secondly because that is not what I do. However, if a more reasonable approach is to be found it will be the result of the contributions of many people, and if what I am doing helps others in their task, that is more than enough.

[Skeptical]

Mr. Cole,

More than enough? Verily, that is simply not so.

One difference we do have: one of us embraces Pollyanna-ism and the other accepts the reality that there exists opposing forces that are perfectly willing to trounce "detailed study and reasoned analysis."

It is more than just a bit of hubris then to consider that what you do - as noble and correct as it may be in and of itself - as "more than enough" when (and as my words ring out: I told you so), they are clearly NOT enough.

I will recognize that you have limited bandwidth and have limited your choice of methodologies. That is your prerogative. However, to continue to post as if your choice will lead to the proper conclusions, and to embrace this sense of "more than enough" when it is so evident that it is not near enough is to knowingly fail. It is not a failure of attempt, but a failure of recognizing - and adapting - to what is necessary.

At the very least then, perhaps in addition to your words of wisdom (which status I can agree to), perhaps then you would add the simple caveat that more than just your view is needed to effect the aim of your view. Yes, your view is important, and yes (here), recognizing that it is one piece and that contributions by others (and contributions along the spectrum of response that I point out BEING one of those "others") is a step in the right direction, but all too often your writings do NOT exhibit this "enough-ness." All too often, your writings - as sound and as true as they are - merely are presented as being "enough." Bullets without guns, let alone bullets and guns without people with the fortitude to use them.