DDR Holdings – Federal Circuit Forges a Sensible Path on Software Patents

Guest post by Bart Eppenauer

Amidst all the angst and uncertainty following the Supreme Court’s decision in Alice Corp. v. CLS Bank (2014), patent owners and inventors in the Information Technology world should be celebrating the decision last week in DDR Holdings v. Hotels.com from the Federal Circuit.  While the Alice decision fell short of ushering in a bright line test with absolute clarity, a vocal minority has grabbed the opportunity to generate headlines suggesting that software patents are all but dead in the water.  This kind of hysteria is not only unfounded, but it sends the wrong message to our policymakers, and to startups and innovative companies of all sizes across all industries.  Perhaps its wishful thinking to expect that DDR Holdings will quell opponents of software patents in any respect, but the decision should send a strong signal that software patents are far from dead.  As I’ve recently urged, the proper course of action at this point is to take a calm, measured and rational approach as we work through the current state of affairs.

As noted by Professor Crouch in his earlier post on DDR Holdings, the DDR ‘399 patent at issue under Section 101 involved an e-commerce syndication system for generating a composite web page that combines selected visual elements of a host website with content of a third-party merchant.  While I can acknowledge the view that the analysis in DDR Holdings could be in tension with the Federal Circuit’s Ultramercial decision, I firmly believe that the DDR patent falls within the contours of patent eligible subject matter.  And I respectfully take issue with the characterization of the DDR patent as a “business method” patent.  In my view, the DDR patent, both in the disclosure and in the claims, sets forth and defines a technical solution to a technical problem through the implementation of computer software in the context of e-commerce.  A cursory review of the specifications and claims of the DDR patent, the representative Alice patent and the Ultramercial patent reveals the stark differences in the level (or absence thereof) of technology-based, software-based disclosure in these patents.

The Alice patents were drawn to an abstract business method for intermediated settlement – i.e., escrow – hardly a new business concept.  The patents contained token references to performing the purported invention on a generic computer.  The patent in Ultramercial involved a business method for allowing consumers to access copyrighted content over the internet in exchange for viewing an advertisement.  In that patent, there is absolutely no disclosure whatsoever of software or computer technology, or of any other technological advancement in the form of computer software or hardware, or anything else.  The Ultramercial patent was simply a business method and nothing more.  In both cases, the now-defunct patents mentioned computers, but did not provide a technological connection between their described method and any kind of actual software innovation.

That connection is exactly what real software enables.  The Supreme Court explicitly stated that the Alice patent claims did not purport to improve the functioning of a computer itself, nor did they advance an improvement in any other technology or technical field.  And contrary to the assertions that the decision threatens all software patents, the Supreme Court specifically acknowledged, as if there was any question to begin with, that many computer-implemented claims (i.e., software) are indeed within the domain of patent-eligible subject matter.  In Ultramercial, the Federal Circuit followed suit in its recognition that at some level all inventions embody or otherwise use abstract ideas or laws of nature, but that they “do not purport to state that all claims in all software-based patents will necessarily be directed to an abstract idea.” Ultramercial at p. 10 (emphasis added).

Turning to the DDR patent, the Federal Circuit justifiably recognized that “the claimed solution is necessarily rooted in computer technology to overcome a problem specifically arising in the realm of computer networks” (DDR at p. 20), whereas the patents from earlier cited decisions claimed nothing more than the performance of abstract business practices on the Internet or using a generic computer.  Just a brief snippet of technical disclosure from the DDR patent illustrates that this is so:

    • The Link Generator allows host to create and maintain the shopping opportunities that they can then place on their site. Each Link is assigned a unique Link ID. The Link ID identifies who the host is, who the merchant is, and what commerce object (catalog, category, product or dynamic selection) is linked to.
    • The first time a host builds a Link to a merchant’s product, category or catalog, an approval of that host for that merchant may be made. Until the host is approved, they cannot see the Link ID that has been assigned to the newly created Link.
    • The code the host embeds on their web site is as follows:
      < !—BEGIN NEXCHANGE LINK—>
      < !—For more information go to http://www.nexchange.com—>
      < !—The following 2 lines MUST NOT BE CHANGED to ensure proper crediting—>
      < IMG BORDER=‘0’ SRC=‘http://www.nexchange.net/img.asp?LinkID=xxxx’>
      < a href=‘http://www.nexchange.net/route.asp?LinkID=xxxx’>
      < !—Substitute your own text or image below—>
      **YOUR TEXT OR IMAGE HERE**</a>
      < !—END NEXCHANGE LINK—>
    • There are several points to note here:
      • The image src (img.asp) is actually an ASP program that returns a single transparent pixel. This is used to track impressions (how many times the link was displayed on the host site).
      • The route.asp page is a page that routes the customer to the shopping page. As additional servers are added, this will become very important for load balancing.
      • The ‘xxxx’ for the LinkID=‘xxxx’ is the Link ID assigned to the Link in the Link Generator.

This, along with many other examples of software-based technical disclosure in the patent specification, supports the Federal Circuit’s conclusion that the DDR patent claims “specify how interactions with the Internet are manipulated to yield a desired result” and “recite an invention that is not merely the routine or conventional use of the Internet.” (DDR at pp. 22-23).  In other words, the DDR patent claims, while relating to a business challenge, are simply not directed to an abstract idea under the Alice test.

So why all the purported confusion surrounding software patents, business method patents, and the differences there between?  After more than two decades in the IP field, I believe it comes down to a fundamental misunderstanding (and sometimes willful disregard to advance an ideology) of the true nature of “software.”

By way of the briefest of explanations, the execution of a typical software program illustrates that software implemented processes perform rapid activation and deactivation of transistors.  Software defined instructions operate on the information stored within transistor elements.  A software program in a modern computer can perform at least hundreds of millions of such operations per second.  In essence, software instructions literally, but temporarily, reconfigure electronic pathways and transform computing hardware to perform real, useful, and physical activity.

When an algorithm is implemented “purely in software,” it necessarily controls hardware components to carry out computerized actions.  I was struck by Professor Crouch’s Halloween report on his 9 year old daughter’s amazingly insightful viewpoint on how software actually transforms computers into different machines and provides very different experiences.  In discussing the differences between using Microsoft Word and playing her WarriorCat game, she explained – “Sure, the box is the same in both situations.  But, Microsoft Word obeys me and the game thwarts my moves. I see them as very different.  Its brain changes.”

Reducing software code to “just math” or sweeping it away as an abstraction is an inaccurate reading of patent case law that could jeopardize the future of innovation in this country.  The vast majority of companies that obtain software patents are manufacturing companies that integrate software into products they manufacture to deliver valuable new advancements.  These inno­va­tions power technologies ranging from modern smartphones to advanced robotic manufacturing, fly-by-wire aircraft systems, artificial retinas, driverless cars, GPS, medical and diagnostic tools, just to scratch the surface.

The past few years have been a time of unprecedented change to patent law.  Clearly there will be many more Section 101 cases to come that land on both sides of the abstract idea line (whatever and wherever that line may be).  While we’re just at the early stages of a post-Alice world, in my view the DDR decision forges a sensible path on software patentability.  With so much at stake in terms of America’s role as an innovation leader and the incredible economic impact that the IT industry fuels, let’s hope that more decisions follow the path of DDR.

Bart Eppenauer is the Managing Partner of the Seattle office of Shook Hardy & Bacon.

About Dennis Crouch

Law Professor at the University of Missouri School of Law. Co-director of the Center for Intellectual Property and Entrepreneurship.

110 thoughts on “DDR Holdings – Federal Circuit Forges a Sensible Path on Software Patents

  1. “The fast-growing ride-sharing service Uber wants to patent a pricing technology that has come under fire from critics who accuse the company of price gouging.

    The technology, which Uber calls “surge pricing,” is among at least 13 patent applications the company has filed with the U.S. patent office, which typically become public 18 months after filing, Bloomberg reports. So far, most of the applications have been initially rejected for “obviousness” or because they were otherwise ineligible, but there’s been no decision yet on the surge pricing technology.” link to time.com

  2. The unresolved question is: what does not constitute an invention? One may take the line of the forces of nature doctrine as the Reichspatentgericht or a abstract matter test but all of this is not helpful when easily circumvented. Good tests are not “just” but set a clear line. The patent system still lacks an idea how to divide general business concepts from inventions, it has no clear idea of the term invention. Open concepts are dangerous in law.

    Imagine you are at the border and ask yourself “What makes this cow different from that cow, this grass different from that grass to justify an exclusion of this territory from my nation”. This is exactly how the patent jurisdictions continue to cross and weaken the legal tests about what constitutes an invention. It is necessary to develop an idea what constitutes a non-invention and recognise the mere instrumental nature of a test.

    Imagine you have a river as the border between two territories. A river is a strong concept to define a border, but where does it end, rivers also move, where is the river, where does the river become the swamp etc. If you pursue an expansionist doctrine you will end up with legal concepts that are historically inconsistent, push the borders, cross the lines. Such as the sophistery to define a general purpose runtime environment for software as a physical transistor interaction, always ready to enter into complicated rather philosophical considerations instead of clear applicable rules.

  3. Reading the dissenting opinion in DDR, it strikes me that a source of much confusion is the Dissent’s improper conflation of “conventional activity” (as discussed in Mayo) with “conventional technology”, a term upon which the Dissent rests much of its argument. I’m not sure where the requirement for non-conventional technology came from, but it doesn’t seem to have come from Alice or Mayo. I would agree with the Alice position that claims that recite “implementing a conventional activity on a computer” are not patent eligible, but changing that test to require “non-conventional technology“, as the Dissent does in DDR, not only misinterprets Mayo and Alice, but also misses the point.

    I think that the Majority in DDR understands the distinction between “conventional activity” and “conventional technology”. I think this because the Majority specifically explains how the problem addressed by DDR is one that “does not arise in the ‘brick and mortar’ context” — e.g., DDR is solving a non-conventional problem (one “specifically arising in the realm of computer networks”) and thus is a non-conventional activity.

    In other words, what DDR claims is not simply a conventional business practice (which, tellingly, the Majority refers to as a “pre-internet” practice) that has been moved to the internet, because — unlike the intermediated settlements in Alice — the problems addressed in DDR did not even exist prior to the invention of the internet. Thus, they could not possibly be “conventional business practices that were simply migrated to the internet”, which would in fact be ineligible subject matter under current law.

    The Dissent seems to conflate “non-conventional activity” with “non-conventional technology”, which is a mistake and which leads to turgid reasoning. I hope I just the word “turgid” correctly…

    I also think that the Majority in DDR is on the right track to mitigate the worst aspects of Alice. Alice is objectionable for a number of reasons, one of the more egregious being that there doesn’t seem to be a clear distinction drawn between “things that we did without computers but now do with computers” and “things that could never be done without computers but now can be done because there are computers”. The former is arguably patent ineligible, but the latter should most definitely be patent eligible, in my opinion. In their attempt to render ineligible the former, the Supreme Court rendered ineligible the latter as well. Whether this was the result of artlessness or deliberate intent I’m not sure.

    In any case the Majority in DDR seems to be attempting to redraw that distinction. I think that this is a good thing.

    1. Jay, could you comment on whether the improvement claimed must be in a machine, a manufacture, a composition or a process that makes or transforms one of these?

      If the improvement is only in something nonstatutory as in improved information like price or reduced risk, then admittedly, everything statutory is old and conventional.

      I read your post and must admit I did not fully understand your point, or and to the extent I did understand it, I saw in it an attempt to justify patenting nonstatutory subject matter by using sophistry.

  4. Flier: requiring programs to be claimed at the hardware level is either (1) stone age thinking or (2) a subversive attempt to outlaw patents that rely on new computer programs for patentability.

    “Subversive”? How so?

    And what’s “stone age” about that thinking?

    Meanwhile, we have Flier’s fellow software patent lover NWPA declaring to the world that “correlations are not abstract”.

    Meanwhile the steamroller is rolling over their feet. And it’s going to continue to do so.

    Is their anarticulate person out there who can discuss some reasonable middle ground and a practical way of examining a claim that would protect new information processing logic? Maybe start with an attempt to formally categorize the different kinds of logic employed by computers to accomplish information processing tasks? And then maybe require applicants to use those terms in their claims so that the “structure” of that logic can be compared to the “structure” of the logic in the prior art?

    Some kind of thoughtful forward-looking foundation would represent a far better solution to the problem then trying to stretch a patent system that was designed to promote “physical age” innovations onto a “technology” that was either never contemplated or never understood by the architects of that patent system.

    I seem to recall that David Stein had some interesting thoughts about what sort of information processing tasks should and should not be in the system. So did patent leather.

    1. You are aware that the patent system was NOT designed to promote “physical age innovations” and that the “reasonable ground” you look for has already been in place with the very expansive words of Congress, right?

      There is nothing reasonable in your quest to find some ‘drop back’ position when the force of law – as written by Congress – already is in accord with software patenting.

  5. “The vast majority of companies that obtain software patents are manufacturing companies that integrate software into products they manufacture to deliver valuable new advancements. ”

    Then why not just let them free for all with other manufacturers with only government granted entitlements on their products as opposed to their software? That is, why not be sans gov intervention on the software side?

    Does that not sound like a decent plan?

    And even if it doesn’t sound like a good plan, why don’t we implement the other plan via legislation instead of judicial fiat?

    1. Software is equivalent to hardware.

      You have to come to grips with that fact, and until you do, you need to realize that you are posting “Belieb” style gibberish.

      You saying “I don’t like that type of innovation” has no rational basis with the purpose of the patent system.

      Software IS a product and a manufacture in its own right.

        1. That’s great 6 – as I never said otherwise.

          Now you just have to realize why “exactly the same as” has never been a part of the conversation here.

          Can you do that, ‘brosefus?’

          1. I’m glad to hear after many years that you agree. Only took you like 8 years to agree on that.

            Still, if it taint the same I win brosefus. The only way you win is if it tis the same.

            1. You are doing that Opposite Day thing again, 6.

              I have been steadfast on my position as long as I have posted on this topic (far less than eight years – you are also confusing the “eight years and running,” as that is how long Malcolm has been hurting the blog).

              Like I said immediately above, “exactly the same” has never been a part of the conversation – because the law does NOT require “exactly the same.”

              That win you see is my win – not yours.

              Your error.

                1. Your grasp of logic is horrific jesse.

                  It is the legal aspect that only equivalence is needed.

                  It is a factual aspect that software IS equivalent to hardware and to firmware.

                  There is no error in my position. I know and understand my terrain. See Sun Tzu.

      1. So why do we used two words instead of one for software and hardware?

        And if the equivalency is not literal, but rather just a legal construct, where is the authority on that?

        And how sustainable is a legal construct (of dubious existence) in the face of the common sense/vernacular that software is written (composed) instructions while hardware is tangible built material that persists in form over time?

        Firmware is equivalent to software indeed- but the mere existence of a concept of firmware should be a clue that there is something importantly different between hardware and software….

        1. Mr. Snyder,

          I cannot derive any meaning from your phrase “if the equivalency is not literal

          You appear to be slipping back into some notion that somehow equivalency must mean “exactly the same as.”

          As far as any legal authority for the application of a factual manner, I would recommend again that you talk to your counsel so that she can be sure that you are truly informed on these matters.

          1. She will be a little too busy this afternoon to waste time on informing PatentlyO onanism, as she has to argue against IBM Kenexa in their infinite trolldom.

            You know I understand the difference between literal equivalence and legal equivalence, but you don’t want to engage much on software because clearly when you spout that software and hardware are the same thing, you are repeating something you want to be true, but is manifestly not true, and you don’t know enough about it to explain your position.

            If they are the same thing, then why not just execute in hardware and get your patent? Oh….because they are not the same thing, are they?

            1. Once again, you are the one exhibit some massive confusion with this odd preoccupation with “same thing.”

              I have never – NEVER – said “same thing,” as that is not only a clear error, it is not what is required under the law.

              Plainly put, equivalence has NEVER been about this mistake you are trying to project about being “exactly the same as.”

              There is no such thing as me wanting “exactly the same as.”

              You and 6 are celebrating your own error here.

              Most odd.

              When you are done, please come back to what I have been saying forever and a day.

              (and by the by, it is always appropriate for your counsel to be sure that she has your informed consent, and any time you spout such nonsense as you do here, you raise a not insubstantial possibility that she does NOT have informed consent from you.

              1. Hey I just do this to try and sharpen my own arguments and informed consent- which I’m sure meets the low bar set by other defendants anon. This goes apace with your desire that your opponents all be sanctioned by their professional bodies or some other source of power and validation. However, I don’t want to talk about your problems, I want to talk about why software, firmware, and hardware are equivalents. They are clearly not the same things, so when I ask why we use different words for them, I am rhetorically inviting you to illustrate why they should be equivalent.

                That they are not the same, nor equivalent, is manifest to virtually everyone else in the world. Explain: how are hardware, software, and firmware the same in regards to patent law?

                Don’t feel bad if you can’t.

                1. Once again you slide back to “are the same.”

                  You claim now that they are not equivalent either?

                  Lol – sorry, but no I will not try to teach someone so opposed to learning.

                  Maybe you can ask your brother about emulated circuits.

    2. …then since you seem to recognize “judicial fiat,” you would do well to recognize the constitutional issue of separation of powers and the difference between statutory law and common law.

      It really does matter how an ends is reached – the ends never justify the means.

      1. “then since you seem to recognize “judicial fiat,” you would do well to recognize the constitutional issue of separation of powers and the difference between statutory law and common law”

        I can live with “judicial fiat” when it is limiting the government’s powers to those traditionally recognized instead of extra-judicially expanding them brosefus. I know you’re the opposite but meh, that’s just how I roll.

          1. “you can “live with” when the trangression aligns with your Beliebs”

            Of course, just like you could “live with” the transgression of SSB because it aligns with your beliefs. That’s how all men are. We don’t like those that go agin the lawl, or against our reading of the law.

            “What part of never do you not grasp?”

            What part of I don’t care about your stu pid maxims/quotes do you not grasp? As I’ve noted before, there are many ends that justify many means. I know you have trouble wrapping your OCPD mind around this but tis so and will remain so regardless of whether you grow up or not.

            1. SSB…?

              You forget the supremecy of the constitution and its direct allocation of authority to only one branch to write patent law there 6.

              You not caring is of no concern to me, as such as zero effect on the veracity of what I say.

              You are not at liberty to change the meaning of the maxim, not its applicability.

              Eppur si muove.

                1. LOL – lacking the ability to respond with logic, you respond with vapid insults.

                  Not able to say anything intelligent, you speak nonetheless.

                  I am not surprised.

  6. “In my view, the DDR patent, both in the disclosure and in the claims, sets forth and defines a technical solution to a technical problem through the implementation of computer software in the context of e-commerce. ”

    Who cares brosef? So did Ultramercial and Benson likewise did similar. All that sht goes in the garbage together.

    “That connection is exactly what real software enables. ”

    Real software enables a “connection”? Wut?

    “supports the Federal Circuit’s conclusion that the DDR patent claims “specify how interactions with the Internet are manipulated to yield a desired result” and “recite an invention that is not merely the routine or conventional use of the Internet.””

    Brosef ASP programming or HTML coding generally is “conventional use of the interbuts”.

    “By way of the briefest of explanations, the execution of a typical software program illustrates that software implemented processes perform rapid activation and deactivation of transistors. Software defined instructions operate on the information stored within transistor elements. A software program in a modern computer can perform at least hundreds of millions of such operations per second. In essence, software instructions literally, but temporarily, reconfigure electronic pathways and transform computing hardware to perform real, useful, and physical activity.”

    I will agree with that. You know what the problem is? The reconfiguration of “electronic” pathways rather than “physical” pathways. Because in this context you literally mean “electron” pathways, not merely “electronic” pathways. For the modern transistor, you’re literally messing around with where electrons (or holes) can go by NOT ADJUSTING/CHANGING the physical apparatus but merely by USING it via adjusting voltages applied hither and thither.

    That is the whole root of the problem. All of these methods are mere using of the machine and not changing the machine. And, since claims lack specificity as to the exact manner of the operation of the transistors and instead use abstractions to describe those processes in terms that make sense to us humans they veer off into abstract ideas.

    1. 6 said, “That is the whole root of the problem. All of these methods are mere using of the machine and not changing the machine. And, since claims lack specificity as to the exact manner of the operation of the transistors and instead use abstractions to describe those processes in terms that make sense to us humans they veer off into abstract ideas.”

      A computer is simply a machine. In the stone age, one had to physically change components to change the machine. The result of changing the components resulted in the old machine becoming a new machine. The new machine may or may not run faster, last longer, or provide a different output. Nevertheless, if the changes to the new machine were new and non-obvious, the new machine was patentable. In the modern computer era, changing a computer can be accomplished without changing the components of the computer. New programming changes the computer into a new machine (see In re Alappat for recognition of this concept in law). The newly programmed computer is not ‘just doing what computers do’ because no computer had ever done what the newly programmed computer is doing. Of course, the changes occur because the computer now physically operates differently (transistor pathways, etc.). But, requiring programs to be claimed at the hardware level is either (1) stone age thinking or (2) a subversive attempt to outlaw patents that rely on new computer programs for patentability. The programming can be adequately described and, thus, claimed in terms of how the programming changes the computer just as, for example, circuit components and mechanical components do. There is no logical reason to differentiate (1) new components in old machine = patentable new machine and (2) new programming in old machine = patentable new machine. Nor is there any logical reason to disallow a new machine to be claimed in terms of operations/functions.

      1. “In the modern computer era, changing a computer can be accomplished without changing the components of the computer.”

        Right but that where the question comes into play: did you really “change” the computer? (no) Or did you just use it? (yes). Those are of course the actual answers, but then you’ll have other ta rds being all like “hur, yeah u did change the machine, hur”. But nah, you didn’t. You just instructed it differently to use it differently. And by IT, I literally mean the old computer that is the same computer as IT was before you used IT.

        The only different things are the actual instructions which you gave it (i.e. information, usually 0’s and 1’s), where voltage was applied, where electrons flowed, and then what signals came out (i.e. how you used IT).
        And you never give us any specifics on those things. Instead you abstract all that out of the entire description, including the claims.

        Nevermind that a lot of those sorts of things would be patent ineligible in and of themselves. And especially nevermind that nearly all patents on such things would be worthless unless you abstract abstract abstract into something worth claiming.

      2. “New programming changes the computer into a new machine (see In re Alappat for recognition of this concept in law). ”

        That’s what Newman announces. And that is another fundamental mistake on her and her court’s part. Though it can sometimes be true for old timey machines like the one in that case it is not the case for most modern computers.

    2. Before you can “execute” and “just use” a program, you first need to change the machine and configure the machine with the program.

      6, your statement of “are mere using of the machine” are f@tally flawed becuase you are once again forgetting a critical concept: anthropomorphication.

      You ignore your failure with the Grand Hall Experiment.

      1. “Before you can “execute” and “just use” a program, you first need to change the machine and configure the machine with the program.”

        That’s your assertion that you’re changing the machine. I’d simply say you’re giving it new instructions in order to “just use” it differently. That is, I simply lump that in with the “just using”. You don’t, I understand.

  7. “t u rds”

    If you’re intentionally modifying the syntax of your post to get around the filters, aren’t you simultaneously admitting that your post should be filtered?

    1. 1) this is something you’ll see many of the most frequent posters do.

      2) No. Knowing what words are filtered is just not the same thing as agreeing that certain words should be filtered.

  8. Turning to the DDR patent, the Federal Circuit justifiably recognized that “the claimed solution is necessarily rooted in computer technology to overcome a problem specifically arising in the realm of computer networks” (DDR at p. 20),

    Except the argument made in Alice was that the claims were necessary for computers as well, because they were needed to achieve trades that were on the order of thousands per second. Were that sufficient, the Court would have sent it back down to determine if that fact was true.

    I believe it comes down to a fundamental misunderstanding (and sometimes willful disregard to advance an ideology) of the true nature of “software.”

    Following this is three paragraphs of how physical actions are taken in response. Well that was true of the Alice software too.

    Reducing software code to “just math” or sweeping it away as an abstraction is an inaccurate reading of patent case law that could jeopardize the future of innovation in this country.

    There are valid software claims, as the article correctly points out nobody has ruled out software as a class. I think the article somewhat gets the point that there must be a technological advancement off of a disclosure.

    There’s a distinction between disclosing an advancement and claiming it though. The claims of DDR certainly aren’t limited to that implementation, and should be found to be abstract ideas.

    1. This. The claims are much more “abstract” and lacking in software specifics than the disclosure cited in the post. Unless we can read the detail from the specification into the claims (seems inappropriate given the claim language), I don’t think it’s a persuasive answer to say that the specification has lots of software detail.

  9. Now, that is the undisputed, irrefutable law. It can be ignored, but it can’t be denied. And yes, it’s worth fighting for.

  10. Bart: In both cases [Alice and Ultramercial], the now-defunct patents mentioned computers, but did not provide a technological connection between their described method and any kind of actual software innovation.

    Please tell everyone where the “actual software innovation” is that is recited in the broadest surviving claim of the DDR patent.

    We know that the “actual software innovation” couldn’t be the display of some information on a screen in response to some other information transmitted and received over the Internet because that technology existed at the time of filing. So what was this “actual software innovation”?

    1. Have you even read the claims, MM?

      It’s right here: “automatically generate and transmit … visually perceptible elements visually corresponding to the source page.” There’s certainly nothing more computerized and technical than automatically generating data. Truly this is new technology that does not just generically claim the use of a computer; “automatically generat[ing]” is a breakthrough that could never have been done before modern internet computer technology was invented by DDR.

      1. The way patent law is supposed to work is that you find prior art and the knowledge of persons of ordinary skill to reject or invalidate claims under 103. Attitude is not helpful.

  11. Bart: Thanks for that sensible dose of perspective. Your views are consistent with the way post-Alice examination is actually shaping up, at least from one practitioner’s experience.

  12. At present, here’s the breakdown of comments:

    19 posts: Substantive discussion of article
    43 posts: Non-substantive banter
    2 posts: Spam

    Very poor signal-to-noise ratio.

    1. The problem is the article is written from one standpoint, by someone with financial benefits for advocating that standpoint. You’re going to get a lot of “non-substantive banter” when you start out from a viewpoint counterpoint to the viewpoints many people here hold.

      I personally agree with most of the article, although I think Alice may have more deleterious effects than what the article implies. I look at claims written by clients overseas and pretty much most of them could be rejected by Alice.

    1. Alex: Why is it that every 101 case that comes down the pipeline seems to deserve a 103 rejection as well?

      In many instances, it’s because there are no unexpected results and the functionally claimed machine (almost always a “computer” or “computer system” or “computer readable media”) is performing the task that it was designed to perform (i.e., processing/storing/transmitting information, or storing instructions for same).

    2. Alex: Why is it that every 101 case that comes down the pipeline seems to deserve a 103 rejection as well?

      The other answer to your question depends on the nature of your “103 rejection.” If your 103 rejection relies on subject matter eligibility principles to remove weight from a particular limitation, then your question answers itself.

      That said, there are plenty of examples of ineligible claims that are not “deserving of 103 rejections.” A typical “determine and infer” claim that is distinguished from the prior art based only on the non-obvious nature of the inference is a classic example of such a claim.

    3. Because most if not all of the claims found ineligible have real-world analogues that pre-existed the claimed computer-implemented application.

      That is certainly a driving force behind the abstract idea doctrine.

    4. You already have some answers here that are relevant. Another factor is that the non-obvious and actually interesting cases that are unlikely to be valid under Alice are fairly rare compared to the avalanche of obvious patents seeking to extort a little cash lately. It’s just a matter of the very large amount of obviously bad patents issued since State Street Bank.

      Those few good but questionable patents are often covered under FRAND agreements and cross licensed or pooled liberally. Examples are audio and video codecs and digital radio encoding math. The ones that aren’t are usually part of large scale cross licensing between large manufacturers. Examples would be microprocessor instruction sets and DSP/GPU parallel computation math. A third category is DNA and diagnostic techniques that are not often litigated because mass cross licensing is better for large capital intense slow moving conservative health care companies that rightly fear uncontrolled litigation.

      You can see the bizarreness and off topic litigation that results from the ineligible §101 patents that might pass §103 by looking at the Motorola v. Microsoft case a couple years ago that ended up being tried in Seattle district court partially under German law and ended up assigning fractions of a penny royalties for ‘essential’ and ‘breakthrough’ patents. (Even those were ridiculously high royalties for the patents involved.) The §101 issues were never discussed in court as far as I can tell.

      So the usual §101 case ends up being a non-operating plaintiff entrepreneurial litigator with a patent that covers business practices that were not original before the patent was filed seeking cash from everyone operating in a broad pre-existing industry his patent encompassed after the fact.

      It might be better for the patent maximalist bar to seek some more charismatic plaintiffs.

  13. Bart: The past few years have been a time of unprecedented change to patent law.

    Bilski, Mayo and Alice are responses to “unprecedented changes”.

    And yes there is more to come.

    In DDR, this particular panel of the Federal Circuit just stepped on the green shoots of CAFC credibility that were starting to pop up. DDR won’t take too long to fix, but it will be fixed. Rest assured.

  14. David Stein: * A claim that includes a formal algorithm can be called “abstract” because it looks like math, and math is abstract (citing the “a human with a calculator could do it” line of reasoning).

    * A claim that includes code can be called “abstract” because it is software per se (citing Nuijten and statutory class stuff, and the “only a draftsman’s trick” / “wax nose” line of reasoning to ignore the parts that don’t look like software).

    * A claim that includes neither can be called “abstract” because it is described at too high a level of abstraction (citing the Alice “a black box that does intermediated settlement” line of reasoning).

    Good points, David.

    It’s important to remember that information processing logic is an essential part of day to day to life, not to mention an essential part of the scientific method and engineering and virtually every kind of non-scientific endeavor with the possible exceptions of meditation and mood-altering drug “trips”.

    Combine that fact with the fact that current law grants wide discretion to claim drafters and it’s surely the case that different information processing claims will be susceptible to attack under different theories, each of which may be equally reasonable. And that’s always going to be true. It’s a feature, not a bug.

      1. Electrons, protons and neutrons are pretty essential too.

        And water is essential for living organisms.

        Fascinating stuff but neither observation has much, if anything, to do with my comment. Perhaps you were imagining some argument that you wanted to make but then you forgot ot make it.

  15. Bart: The vast majority of companies that obtain software patents are manufacturing companies that integrate software into products they manufacture to deliver valuable new advancements. These inno­va­tions power technologies ranging from modern smartphones to advanced robotic manufacturing, fly-by-wire aircraft systems, artificial retinas, driverless cars, GPS, medical and diagnostic tools

    Let’s set aside for the moment the fact that the typical claim to “driverless car technology” is almost surely going to represent the worst of the worst information-processing claims out there (right up there with “musicianless piano playing” “technology” and “chefless cookie baking technology”).

    How does Bart reconcile his statement with the numerous statements on the Internet’s most relentless software expansionist blog that these larger corporations who actually make and sell stuff “don’t innovate”? After all, it’s because these larger corporations “don’t innovate” that we’re supposed to treat the NPE/troll types pounding out patent claims in their basement as some sort of iconic American hero. At least, that’s what we’ve all been told.

    Maybe it’s time to work on that script a bit more.

    Then again, these are the same folks who tell us out of one side of their mouths that making working software is really really really really hard, and out of the other side of their mouths insist that they are entitled to incredibly broad claim scope because all the solutions are enabled by a description of the function.

    Go figure.

    1. >>these are the same folks

      What a load of nonsense. Solutions in software — JUST LIKE EVERY OTHER ART FIELD—are easy once they are figured out. And, a functional claim indicates all those solutions figured out.

      To get those solutions can be very hard.

      This is the nature of all innovation. We can see by your paragraph that you are either a very ignorant person or a person with an agenda.

  16. I think Alice and its progeny handle the most outrageous situations; totally functional method patents based on relationships, status, trivial information processing, etc. – by handle, I mean supply a reasonable test that can be repeated and applied to broadly similar fact patterns.

    I don’t see that kind of test apparent in this particular holding, and I think everyone, pro-software patent and anti-software patent, agrees that such tests would be desirable for the cases that do challenge the Alice smell test. Congress or the Supreme Court or the Fed Circuit are the only places they can come from… it will be interesting to see if this is heard en banc.

    I would like to see software patents per se not allowed by statute, because they inexorably delegitimize the patent system and harm individual businesses in ways that can never be mitigated, but I’ll be pleased if it happens judicially if that’s the only way it can come about.

      1. A telling post – but tells far more than what the author realizes.

        Lookie! “anon” is doing that innuendo thing again.

        So cute. He’s “playing to win.”

        LOL

              1. Does your mind comprehend anything above the nuance of a picture claim?

                Where again is my picture of the drawing entitled “This is not a pipe”…?

                It really is amazing that it is so difficult for you to write a simple declarative sentence.

                1. What’s really amazing is that somehow you think that writing a declarative statement is necessary to make a point.

                  It is not.

                  (that “declarative” enough for you?)

                2. MM, anon is getting the best of you and you are resorting to complaining about his/her punctuation, which is not helpful. There are no “rules” for punctuation, just style suggestions, so quit waste your time trying to claim the high ground. He/She is correct and you are wrong, all inventions are solutions to problems. You may believe the whole patent system has outlived its usefulness, which is defendable, but software patents are fundamentally the same as all the “physical inventions”, you are just having trouble seeing it. I’d pack your bags and find another place to make your mark. You are a twit flapping in the wind and everyone who read these boards knows it, so stop embarrassing yourself.

                3. Here comes the newbie “GA” with his stern lecture:

                  you are resorting to complaining about his/her punctuation

                  No I’m not. I’m complaining about “anon”s endless use of meaningless innuendo to respond to decent comments like Martin’s comment. Try reading the thread for a change.

                  There are no “rules” for punctuation

                  That’s nice. As noted already, I never said otherwise.

                  He/She is correct and you are wrong, all inventions are solutions to problems.

                  I never stated otherwise so I have no idea why you are putting words in my mouth unless you’re simply tr0lling.

                  You may believe the whole patent system has outlived its usefulness, which is defendable

                  I’ve never said that. I’d like to hear your defense of that proposition, however, and I’m sure that “anon” would to. Please oblige everybody.

                  software patents are fundamentally the same as all the “physical inventions”, you are just having trouble seeing it.

                  In fact, functionally claimed information processing inventions are fundamentally different from other physical inventions and you have trouble admitting that because it cuts into your bottom line.

                  I’d pack your bags and

                  The issues don’t go away if I go away. I know you guys would love to turn back the clock so you can get all your dirty work done in secret without anybody watching but those days are long gone. Nice try,though.

                4. because it cuts into your bottom line

                  Gasp – you must be one of those grifter types, believing that patents and having a patent system is a good thing.

                  How dare you.

    1. The problem is that “software” is in everything. Do you use a smartphone to connect to a GPS program, download information, etc.? Software is in the smartphone to connect you to and from the network, modulate and/or encrypt data you send, the base station that receives your info and transmits data in response. Do you drive a car? Software is in the electronics control unit, which controls basically everything the car does. Software is in the user controls that allow you to select a CD, a radio station, etc.

      Do you have a thermostat? Software is there, causing the heating or cooling system to come on and turn off.

      Do you buy anything? Your car was probably made — at least in part — by machines that welded parts, moved parts around, etc., all controlled by software. If you ordered from Amazon or another warehouse facility, you probably got elements selected or retrieved by robots, which are controlled by software. There are CNC machines, water cutting machines, etc., all controlled by software

      Do you have a TV? Software controls many of the functions of TVs.

      Software is everywhere. It’s hard to think of much that isn’t software these days.

      Want your DNA tested? You’re going to need software somewhere to put all the data together.

      Do you want to prevent your data from being hacked or examined? You can thank encryption software for providing a level of protection to your data.

      Want to store your data on the “cloud”? What do you think controls the “cloud” and controls where data is stored, how you access your data, etc.? Software.

      So, when you want to ban “software patents”, you have to be careful, else you’ll ban hundreds or thousands of different fields of technology. Software is ubiquitous.

      1. Software is ubiquitous.

        That’s because information processing logic is ubiquitous. It was also thus and it will always be thus.

        when you want to ban “software patents”, you have to be careful, else you’ll ban hundreds or thousands of different fields of technology.

        There’s a rather enormous difference between “fields of technology” and “patents on software”, Bob. C’mon, man. Keep it real.

        1. Keep it real

          Reminds me of Friend(s) of the Court, Vivika M, Robert, Francis, and the rest of the sockpuppets Malcolm uses to “keep it real” (all the while whining about sockpuppets being ‘the worst thing ever’).

          You want real? Ask Malcolm for a real legal argument and watch him really run away.

  17. Bart’s post was easily the weakest, self-serving pile of malarkey I’ve read on this blog in quite a while. This quote neatly summarizes the major malfunction:

    This, along with many other examples of software-based technical disclosure in the patent specification, supports the Federal Circuit’s conclusion that the DDR patent claims “specify how interactions with the Internet are manipulated to yield a desired result”

    Either the author doesn’t understand the difference between a “patent claim” and “the specification” or the author has no idea why claims that protect software and information-processing logic are generally problematic.

    Should anyone be surprised to find a proponent of software patenting pretending that the amount of technical disclosure in a specification is somehow relevant to eligibility of a patent claim that does not incorporate the specification?

    Reducing software code to “just math” or sweeping it away as an abstraction is an inaccurate reading of patent case law

    Or it’s an attempt to correct very poorly reasoned case law written by short-sighted judges desperate to please a certain class of patent applicants for reasons that we are free to speculate about.

    that could jeopardize the future of innovation in this country.

    That’s highly unlikely. What’s certain, however, is that opening the gates to the lowest form of “innovation” — functional claims completely removed from any level of skill in the art — will create havoc with the patent system and diminish its utility for everybody. How do we know that? Because it’s already happened.

    the DDR decision forges a sensible path on software patentability

    There is nothing “sensible” about DDR, Bart. Certainly you haven’t identified any practically applicable “sensible path” set forth in the decision that is going to stand up to scrutiny. The decision is going to be reversed or rendered moot in short order. There’s no doubt that the Supreme Court would squash the case like a bug.

    There is indeed much more to come and it’s guaranteed that the proponents of software patenting are not going to like it. Be prepared.

    1. Should anyone be surprised to find a proponent of software patenting pretending that the amount of technical disclosure in a specification is somehow relevant to eligibility of a patent claim that does not incorporate the specification?

      Yes, this point defeats the entire post. The disclosure only helps if the courts were to limit the claims beyond the claim language. Unless you have a rule that they are inherently in 112 6th, you won’t have that, and thus you have an abstract idea issue.

  18. Great article. Keep in mind that a thorough, technically enabling disclosure will not save claims laiden with functional, results-oriented language. One needs to claim what the programmer MADE, what the programmer told the computer to do, because that is the brain that is built by a compiled program. Claim it as broadly as possible, but with technically enabling language.

    For the software challenged among us: imagine a lumber yard full of 2×4’s, tens of millions of them. Assembling such physical entities into various combinations by use of nails, screws, hinges, etc, is patentable subject matter is it not? Then by all means assembling tens of millions of transistors into new machines (which can also be reassembled into another machine in a fraction of a second) is patentable subject matter—SO LONG AS YOU CLAIM THE MACHINE, NOT WHAT IT DOES.

    1. Meanwhile, back in reality and what the law allows, a Vast Middle Ground of perfectly valid and patent eligible claims with functional language (but not PURELY functional claiming) survive – as it should be per the words of Congress.

      1. back in reality and what the law allows

        As anybody who’s been paying attention knows very well, you are probably the last person on earth to tell people what’s “reality” and “what the law allows.”

      2. Meanwhile, back in reality and what the law allows, a Vast Middle Ground of perfectly valid and patent eligible claims with functional language (but not PURELY functional claiming) survive – as it should be per the words of Congress.

        I don’t think you’re an authority on what survives. But take the analogy as it is – if you accept that “code that causes a function” is okay, then you should be accepting of “a lumber yard configured to make a machine that does X” is similarly okay.

    2. Reality Gene is that “functional” needs to be interpreted in view of a person of ordinary skill in the art and the disclosure. This nonsense that you better put everything in the disclosure would mean disclosures that encompass the knowledge of the art field.

      I wish this nonsense would stop. This is the latest witch hunt and Lemley won with abstract and so we can count on him and the torch carrying n*t jobs not dropping this. We can’t count on the Google judges at the Federal Circuit to straighten this out either.

      But, this fruity nonsense that the spec better tell a federal circuit judge that has spent its Google life swilling bourbon is absurd.

    3. “LONG AS YOU CLAIM THE MACHINE, NOT WHAT IT DOES”

      Do you mean I can’t claim a new process that involves an old machine?

      1. Two things:

        1) for process claims, new processes involving old machines was explicitly allowed for in the 1952 Act.

        2) inherency needs to be addressed for any view on somehow “old box” – without being changed, no matter how you describe the change, somehow has new capabilities that it previously did not have.

        And yes, this is a simple topic that has been avoided forever and a day by those who cannot seem to realize just what software is: software is a manufacture in its own right and a machine component; it is equivalent (and please note the difference between equivalence and being exactly equal) to hardware and to firmware.

        These are fundamental facts. Until they are recognized and integrated into the dialogue, all that you will have here from the anti’s is drive-by monologues.

  19. The name of the game is the claim. I see from the earlier post that claim 17 is written at a higher level of abstraction than the code included in the post above.

    The difference might be decisive. Whereas the creator of the code is a software writer, the inventor of the subject matter claimed is not.

    We are told that what was claimed was a technical solution to a technical problem. But if the claimed matter is the invention of someone not technical, I doubt it.

      1. Max, you may have hit on something here that no one has ever thought about before.

        I assume that’s sarcasm, Ned.

        In any case, I LOL’d.

    1. > I see from the earlier post that claim 17 is written at a higher level of abstraction than the code included in the post above.

      But consider the options:

      * A claim that includes a formal algorithm can be called “abstract” because it looks like math, and math is abstract (citing the “a human with a calculator could do it” line of reasoning).

      * A claim that includes code can be called “abstract” because it is software per se (citing Nuijten and statutory class stuff, and the “only a draftsman’s trick” / “wax nose” line of reasoning to ignore the parts that don’t look like software).

      * A claim that includes neither can be called “abstract” because it is described at too high a level of abstraction (citing the Alice “a black box that does intermediated settlement” line of reasoning).

      All three of these views have a significant number of cases that can be cited in support.

      Meanwhile, the USPTO appears to be generally ignoring Alice outside of the business method units, and continuing to rely on 102/103 – now more than ever, it seems.

      This is what happens with smell tests: everyone takes the ball and runs with it in a different direction. There is no consistency, no reliability, and no predictability. Everything is a coin flip.

      DDR Holdings does not get us anywhere closer to an answer – e.g., it is impossible to reconcile DDR Holdings with Digitech Image and I/P Engine. It does highlight the mess that Alice has created – but since SCOTUS does not readily admit or correct its mistakes, we’re probably in for at least a few more years of this nonsense.

      1. * A claim that includes a formal algorithm can be called “abstract” because it looks like math, and math is abstract (citing the “a human with a calculator could do it” line of reasoning).

        Sure, any method CAN be called abstract, if your argument is that it doesn’t “look nice” that’s not the best argument, imho.

        * A claim that includes code can be called “abstract” because it is software per se (citing Nuijten and statutory class stuff, and the “only a draftsman’s trick” / “wax nose” line of reasoning to ignore the parts that don’t look like software).

        It’s never been an argument that an otherwise valid software program is also abstract when stored on a non-transitory medium right? Its one thing to claim software per se, it’s another to claim a hard drive containing code (which has generally been allowable) and then further defining the code (which could only make it more allowable).

        * A claim that includes neither can be called “abstract” because it is described at too high a level of abstraction (citing the Alice “a black box that does intermediated settlement” line of reasoning).

        This seems to be where the court has been going.

        DDR Holdings does not get us anywhere closer to an answer – e.g., it is impossible to reconcile DDR Holdings with Digitech Image and I/P Engine.

        DDR is probably wrongly decided for the reasons suggested – it’s one thing to include a non-limiting technological example, its another to claim the technological example.

  20. Does it make any difference if the claim recites an overall business purpose if the claim also claims a new technical implementation?

    I think Alice said it makes no difference. If the claim includes novel technology, that is enough.

    Prometheus was no different, suggesting that had the technical method or drawing and analyzing blood had been new, that would have been enough.

    1. well that didn’t work (which I obviously should have expected)

      The point is the majority of the “code” cited to is actually comments. TWO LINES are actually all the code that’s given, and it’s just to two images one to track (known) and one to make an image a link (known). So what exactly is the technological improvement?

  21. The only path the Federal Circuit has forged in DDR leads straight back to the doors of the Supreme Court.

    1. Good! Their test was poorly-conceived, as evidenced by the differences of opinion among patent examiners, PTO officials, district court judges, Federal Circuit judges, and practitioners. The name of the game is clarity, and they didn’t provide it. Maybe they’ll get their act together the next time around.

    2. LOL – take your pick, apotu:

      1) Because “we” want the Court to write a different law…

      2) Because the only valid patent is one that has not yet appeared before us.

      WAKE UP PEOPLE

      The war has been waging for decades. Calls for “being nice” for “let’s be reasonable” and even (or especially) “find a fallback position” will ALL fail if you do not realize that there is a war to begin with.

      Enough of the Chamberlain mindset. Start playing to win.

      1. “So why all the purported confusion surrounding software patents, business method patents, and the differences there between? ”

        Because you have failed to define business method, and how software method is different and therefore deserving of a patent, while business method is not. Personally I think this offer of business method as a sacrifice to appease the anti patent lobby is a mistake. These fascists are no more going stop at so called business method than Hitler was going stop at Austria.

        What we should be doing is defending the “process” category is an independent legal category of eligible subject matter same as machine, composition, and manufacture. Indeed if any claim in the 4 categories are fully “Integrated” and it’s no evidence its one of the limited Court exceptions, proceed to a utility analysis. And last time I checked the Court had not made business or software methods, exceptions. And in the event that some lower court Judge, erroneously presumes such claims are exceptions then let’s make sure the court proceeds with a preemption inquiry to determine if the alleged exception is “Integrated” to the point the exception is no longer preempted, as the Court said we “must” do.

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