Digest of DDR Holdings, LLC v. Hotels.com L.P., No. 2013-1505 (Fed. Cir. Dec. 5, 2014) (precedential). On appeal from E.D. Tex. Before Wallach, Meyer, and Chen.

Procedural Posture: Defendants “NLG” appealed from a district court’s final judgment in favor of DDR. A jury found that NLG infringes the asserted claims of two DDR patents directed to systems for retaining website visitors on a merchant’s webpage, that these claims are not invalid, and awarded damages to DDR. The district court denied NLG’s JMOL motions of noninfringement and invalidity, including the motion that DDR’s claims are invalid under 35 U.S.C. § 101 because they are directed to patent-ineligible subject matter. CAFC affirmed district court’s findings as to one patent, reversed as to the other, and remanded.

  • Anticipation: CAFC held that the district court erred by denying defendants’ motion for JMOL of invalidity of the ’572 patent under 35 U.S.C. § 102(a). There was no substantial evidence in the record to support the jury’s finding of no anticipation, as the evidence introduced at trial clearly established that the prior art “Secure sale system” met the disputed “look and feel” limitation. The district court erred by introducing a limitation “found neither in the ’572 patent’s claims nor the parties’ stipulated construction” of the “look and feel” limitation.
  • Patent-Eligible Subject Matter under § 101: CAFC held that the district court did not err by denying NLG’s motion for JMOL of invalidity under § 101. Analyzing the claims using the framework of Bilski, Mayo and Alice Supreme Court precedent, CAFC held that “the asserted claims of the ’399 patent clear the § 101 hurdle.” Although the claims addressed “a business challenge,” they were “unlike the claims in Alice, Ultramercial, buySAFE, Accenture, and Bancorp that were found to be ‘directed to’ little more than an abstract concept.” DDR’s 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.” CAFC cautioned that “not all claims purporting to address Internet-centric challenges are eligible for patent;” such determination must be made on a case by case basis. Here, “taken together as an ordered combination,” the claims recite an invention that is more than the routine Internet usage. The claims did not preempt every application of the idea but “recite a specific way” to resolve a “particular Internet-centric problem.”
  • Indefiniteness: CAFC held that the district court did not err by finding that the term “visually perceptible elements,” which the parties stipulated to construe as “‘look and feel’ elements that can be seen,” is not indefinite. The evidence, including that introduced by defendants, showed that “look and feel” had an established, sufficiently objective meaning in the art, and that the ’399 patent used the term consistent with that meaning.
  • Infringement: CAFC found that the jury “was presented with substantial evidence” to support its infringement finding.
  • Damages: CAFC vacated the damages award because it found the ’572 patent invalid as anticipated, and the jury’s damages award was not apportioned between the two asserted patents. Since defendants did not move for a new trial on damages, CAFC remanded to the district court for determination of the effect of the ’572 patent invalidity on the jury’s damages award.
  • Prejudgment Interest: CAFC held that the district court’s award of prejudgment interest was not an abuse of discretion, declining to create a statutory exception urged by defendants that “prevailing nonpracticing entities are not entitled to prejudgment interest.”

Mayer, dissenting:

  • Patent-Eligible Subject Matter under § 101: DDR’s claims are not directed to patentable subject matter of section 101. The claims “simply describe an abstract concept” that was known in the pre-Internet days, and “apply that concept using a generic computer” and are not tethered to any advance in science or technology.