Ddr Holdings, LLC v. hotels.com, L.P.

United States Court of Appeals
for the Federal Circuit
______________________
DDR HOLDINGS, LLC,
Plaintiff-Appellee,
v.
HOTELS.COM, L.P., CENDANT TRAVEL
DISTRIBUTION SERVICES GROUP, INC.,
EXPEDIA, INC., TRAVELOCITY.COM, L.P.,
SITE59.COM, LLC, INTERNATIONAL CRUISE &
EXCURSION GALLERY, INC.,
OURVACATIONSTORE, INC., INTERNETWORK
PUBLISHING CORPORATION, AND ORBITZ
WORLDWIDE, LLC,
Defendants,
AND
NATIONAL LEISURE GROUP, INC. AND
WORLD TRAVEL HOLDINGS, INC.,
Defendants-Appellants,
AND
DIGITAL RIVER, INC.,
Defendant.
______________________
2013-1505
______________________
2 DDR HOLDINGS, LLC v. HOTELS.COM, L.P.
Appeal from the United States District Court for the
Eastern District of Texas in No. 06-CV-0042, Judge J.
Rodney Gilstrap.
______________________
Decided: December 5, 2014
______________________
LOUIS J. HOFFMAN, Hoffman Patent Firm, of Scotts-
dale, Arizona, argued for plaintiff-appellee. On the brief
was IAN B. CROSBY, Susman Godfrey LLP, of Seattle,
Washington.
NORMAN H. ZIVIN, Cooper & Dunham LLP, of New
York, New York, argued for defendants-appellants, Na-
tional Leisure Group, Inc., et al. With him on the brief
was TONIA A. SAYOUR.
______________________
Before WALLACH, MAYER, and CHEN, Circuit Judges.
Opinion for the court filed by Circuit Judge CHEN.
Dissenting opinion filed by Circuit Judge MAYER.
CHEN, Circuit Judge.
Defendants-Appellants National Leisure Group, Inc.
and World Travel Holdings, Inc. (collectively, NLG) ap-
peal from a final judgment of the United States District
Court for the Eastern District of Texas entered in favor of
Plaintiff-Appellee DDR Holdings, LLC (DDR). Following
trial, a jury found that NLG infringes the asserted claims
of U.S. Patent Nos. 6,993,572 (the ’572 patent) and
7,818,399 (the ’399 patent). The jury also found the
asserted claims of the ’572 and ’399 patents are not inva-
lid. The district court denied NLG’s renewed motion for
judgment as a matter of law (JMOL) on, inter alia, nonin-
fringement and invalidity of the asserted patents. The
district court subsequently entered a final judgment
DDR HOLDINGS, LLC v. HOTELS.COM, L.P. 3
consistent with the jury’s findings on infringement, validi-
ty, and damages, and awarded DDR pre- and post-
judgment interest and costs. We affirm the district
court’s denial of NLG’s motions for JMOL of noninfringe-
ment and invalidity of the ’399 patent. Because we con-
clude that the ’572 patent is anticipated as a matter of
law, we reverse the district court’s denial of JMOL on the
validity of the ’572 patent, and remand to the district
court for further proceedings consistent with our decision.
I. BACKGROUND
DDR is the assignee of the ’572 and ’399 patents. The
’572 and ’399 patents are both continuations of U.S.
Patent No. 6,629,135 (the ’135 patent), which has a priori-
ty date of September 17, 1998. Each of these patents is
directed to systems and methods of generating a compo-
site web page that combines certain visual elements of a
“host” website with content of a third-party merchant.
For example, the generated composite web page may
combine the logo, background color, and fonts of the host
website with product information from the merchant.
’135 patent, 12:46–50.
The common specification of the patents-in-suit ex-
plains that prior art systems allowed third-party mer-
chants to “lure the [host website’s] visitor traffic away”
from the host website because visitors would be taken to
the third-party merchant’s website when they clicked on
the merchant’s advertisement on the host site. Id. at
2:26–30. The patents-in-suit disclose a system that
provides a solution to this problem (for the host) by creat-
ing a new web page that permits a website visitor, in a
sense, to be in two places at the same time. On activation
of a hyperlink on a host website—such as an advertise-
ment for a third-party merchant—instead of taking the
visitor to the merchant’s website, the system generates
and directs the visitor to a composite web page that
displays product information from the third-party mer-
4 DDR HOLDINGS, LLC v. HOTELS.COM, L.P.
chant, but retains the host website’s “look and feel.” Id.
at 3:9–21. Thus, the host website can display a third-
party merchant’s products, but retain its visitor traffic by
displaying this product information from within a gener-
ated web page that “gives the viewer of the page the
impression that she is viewing pages served by the host”
website. Id. at 2:56–63, 3:20–22.
Representative claim 13 of the ’572 patent recites:
13. An e-commerce outsourcing system compris-
ing:
a) a data store including a look and feel descrip-
tion associated with a host web page having a
link correlated with a commerce object; and
b) a computer processor coupled to the data store
and in communication through the Internet
with the host web page and programmed, upon
receiving an indication that the link has been
activated by a visitor computer in Internet
communication with the host web page, to serve
a composite web page to the visitor computer
wit[h] a look and feel based on the look and feel
description in the data store and with content
based on the commerce object associated wit[h]
the link.
System claim 13 requires that the recited system pro-
vide the host website with a “link” that “correlate[s]” the
host website with a “commerce object.” The “commerce
object” is the product or product catalog of the merchant.
’135 patent, 3:7–13. After recognizing that a website
visitor has activated the link, the system retrieves data
from a “data store” that describes the “look and feel” of
the host web page, which can include visual elements
such as logos, colors, fonts, and page frames. Id. at 12:46–
50. The claimed system then constructs a composite web
page comprising a “look and feel” based on the look and
DDR HOLDINGS, LLC v. HOTELS.COM, L.P. 5
feel description in the data store along with content based
on product information from the associated merchant’s
product catalog.
The ’399 patent is directed to a similar system with a
greater emphasis on a “scalable [computer] architecture”
to serve “dynamically constructed [web] pages” associated
with multiple host website and merchant pairs. ’135
patent, 3:32–36. Representative claim 19 of the ’399
patent recites:
19. A system useful in an outsource provider serv-
ing web pages offering commercial opportuni-
ties, the system comprising:
(a) a computer store containing data, for each of a
plurality of first web pages, defining a plurality
of visually perceptible elements, which visually
perceptible elements correspond to the plurality
of first web pages;
(i) wherein each of the first web pages belongs
to one of a plurality of web page owners;
(ii) wherein each of the first web pages displays
at least one active link associated with a
commerce object associated with a buying
opportunity of a selected one of a plurality of
merchants; and
(iii) wherein the selected merchant, the out-
source provider, and the owner of the first
web page displaying the associated link are
each third parties with respect to one other;
(b) a computer server at the outsource provider,
which computer server is coupled to the com-
puter store and programmed to:
(i) receive from the web browser of a computer
user a signal indicating activation of one of
6 DDR HOLDINGS, LLC v. HOTELS.COM, L.P.
the links displayed by one of the first web
pages;
(ii) automatically identify as the source page
the one of the first web pages on which the
link has been activated;
(iii) in response to identification of the source
page, automatically retrieve the stored data
corresponding to the source page; and
(iv) using the data retrieved, automatically
generate and transmit to the web browser a
second web page that displays: (A) infor-
mation associated with the commerce object
associated with the link that has been acti-
vated, and (B) the plurality of visually per-
ceptible elements visually corresponding to
the source page.
Similar to claim 13 of the ’572 patent, system claim 19
of the ’399 patent requires that a “data store” hold “visu-
ally perceptible elements” (or “‘look and feel’ elements”)
that “visually . . . correspond” to a host web page. The
host web page must include a link associated with a
“buying opportunity” with a merchant. Once a visitor
activates this link, the claimed system generates and
transmits to the website visitor’s web browser a composite
web page that includes product information of the mer-
chant and the “look and feel” of the host website (i.e., “the
plurality of visually perceptible elements visually corre-
sponding to the [host web] page”).
Claim 19 further requires that the data store must
store “look and feel” descriptions for multiple hosts and
that each link must be associated with a particular mer-
chant’s product catalog. Claim 19 also requires that the
merchant, system operator, and host website be “third
parties with respect to one another.” When a website
visitor activates a link associated with a merchant’s
DDR HOLDINGS, LLC v. HOTELS.COM, L.P. 7
product catalog, the claimed system identifies the host
web page and then transmits a composite web page using
the proper “look and feel” elements of the host website in
the data store and the product information from the
associated merchant.
The ’572 patent issued on January 31, 2006. On the
same day, DDR filed suit against NLG, Digital River, Inc.
(Digital River), and nine other defendants, asserting
infringement of various claims of the ’135 and ’572 pa-
tents. NLG is a travel agency that sells cruises in part-
nership with travel-oriented websites and major cruise
lines through the Internet. DDR’s suit accused NLG of
infringing the ’135 and ’572 patents by providing a system
for cruise-oriented (host) websites that allows visitors to
book cruises on major cruise lines (merchants). Joint
Appendix (J.A.) 261. In particular, when a visitor on one
of these cruise-oriented (host) websites clicks on an adver-
tisement for a cruise, NLG’s system generates and directs
the visitor to a composite web page that incorporates “look
and feel” elements from the host website and product
information from the cruise line (merchant).
DDR’s suit was stayed during the pendency of an ex
parte reexamination of the ’135 and ’572 patents request-
ed by DDR that was based on prior art identified by the
defendants. Shortly after the U.S. Patent and Trademark
Office confirmed the validity of the ’135 and ’572 patents
and the stay was lifted, the ’399 patent issued on October
19, 2010. DDR subsequently amended its complaint to
assert infringement of this patent by several of the de-
fendants, including NLG.
During Markman proceedings, the parties stipulated
to a construction of several terms, including “look and
feel,” which appears in each of the asserted claims of the
’572 patent, and “visually perceptible elements,” which
appears in each of the asserted claims of the ’399 patent.
J.A. 542. For “look and feel,” the parties agreed to a
8 DDR HOLDINGS, LLC v. HOTELS.COM, L.P.
construction of: “A set of elements related to visual ap-
pearance and user interface conveying an overall appear-
ance identifying a website; such elements include logos,
colors, page layout, navigation systems, frames, ‘mouse-
over’ effects, or others elements consistent through some
or all of the website.” Id. For “visually perceptible ele-
ments,” the parties agreed to a construction of: “look and
feel elements that can be seen.” Id. The defendants,
however, expressly reserved their rights to argue that
both the “look and feel” and “visually perceptible ele-
ments” terms are indefinite, but offered the stipulated
constructions “in the alternative.” Id.
Between June 2012 and January 2013, DDR settled
with all defendants except for NLG and Digital River.
The case eventually proceeded to a jury trial in October
2012. At trial, DDR accused NLG and Digital River of
direct and willful infringement of claims 13, 17, and 20 of
the ’572 patent, and accused NLG—but not Digital Riv-
er—of direct and willful infringement of claims 1, 3, and
19 of the ’399 patent. DDR also accused NLG and Digital
River of inducing infringement of claim 17 of the ’572
patent.
The jury found that NLG and Digital River directly
infringed the asserted claims of the ’572 patent and that
NLG directly infringed the asserted claims of the ’399
patent, but that NLG and Digital River’s infringement
was not willful. The jury found that NLG and Digital
River did not induce infringement of claim 17 of the ’572
patent. The jury also found that the asserted claims were
not invalid. The jury determined DDR was entitled to
$750,000 in damages from both NLG and Digital River for
infringing DDR’s patents.
At the conclusion of trial, NLG and Digital River re-
newed motions for JMOL pursuant to Rule 50(b) of the
Federal Rules of Civil Procedure (FRCP) on several
grounds. NLG contended the asserted claims of the ’572
DDR HOLDINGS, LLC v. HOTELS.COM, L.P. 9
and ’399 patents are invalid under 35 U.S.C. § 101 be-
cause the claims are directed to patent-ineligible subject
matter and invalid under 35 U.S.C. § 112 ¶ 2 1 because the
terms “look and feel” and “visually perceptible elements”
are indefinite. NLG also contended that neither the jury’s
finding of infringement nor its award of damages was
supported by substantial evidence. NLG also alleged the
district court made several unfair and prejudicial eviden-
tiary rulings.
Digital River contended that the asserted claims of
the ’572 patent are invalid as either anticipated under 35
U.S.C. § 102, obvious under 35 U.S.C. § 103, or indefinite
under 35 U.S.C. § 112 ¶ 2. Digital River also contended
that the jury’s finding of infringement was not supported
by substantial evidence. Digital River moved for a new
trial pursuant to FRCP 59.
The district court denied NLG and Digital River’s mo-
tions for JMOL and Digital River’s FRCP 59 motion for a
new trial. Over the defendants’ objections, the district
court awarded DDR an additional $284,404 in prejudg-
ment interest pursuant to 35 U.S.C. § 284. The district
court entered a final judgment in favor of DDR, and NLG
and Digital River timely appealed. NLG and Digital
River’s appeals were consolidated and fully briefed. Prior
to oral argument, DDR and Digital River settled, and we
granted Digital River’s motion to terminate its appeal.
D.I. 65, 68. NLG’s appeal continued. We have jurisdic-
tion pursuant to 28 U.S.C. § 1295(a)(1).
1 Paragraph 2 of 35 U.S.C. § 112 was replaced with
newly designated § 112(b) when § 4(c) of the America
Invents Act (AIA), Pub. L. No. 112-29, took effect on
September 16, 2012. Because the applications resulting
in the patents at issue in this case were filed before that
date, we will refer to the pre-AIA version of § 112.
10 DDR HOLDINGS, LLC v. HOTELS.COM, L.P.
II. DISCUSSION
Since the denial of a motion for JMOL is not patent
law-specific, regional circuit law applies. The Fifth Cir-
cuit reviews the denial of a JMOL motion de novo. See,
e.g., Harris Corp. v. Ericsson Inc., 417 F.3d 1241, 1248
(Fed. Cir. 2005). In the Fifth Circuit, JMOL is appropri-
ate if “the facts and inferences point so strongly and
overwhelmingly in favor of one party that the court con-
cludes that reasonable jurors could not arrive at a contra-
ry verdict.” Id. The Court “must presume that the jury
resolved all factual disputes in the [prevailing party’s]
favor.” Transocean Offshore Deepwater Drilling, Inc. v.
Maersk Drilling USA, Inc., 699 F.3d 1340, 1347 (Fed. Cir.
2012) (applying Fifth Circuit law to the review of a dis-
trict court’s grant of JMOL).
A. Anticipation
We turn first to the district court’s denial of Digital
River’s motion for JMOL of invalidity of the ’572 patent
based on 35 U.S.C. § 102(a). A patent claim is anticipated
if a single prior art reference expressly or inherently
discloses every limitation of the claim. See, e.g., Orion IP,
LLC v. Hyundai Motor Am., 605 F.3d 967, 975 (Fed. Cir.
2010). Anticipation challenges under § 102 must focus
only on the limitations actually recited in the claims. See
Constant v. Adv. Micro-Devices, Inc., 848 F.2d 1560,
1570–71 (Fed. Cir. 1988) (finding “limitations [] not found
anywhere in the claims” to be irrelevant to an anticipa-
tion challenge). Whether a reference discloses a limita-
tion is a question of fact, and a jury’s findings on
questions of fact are reviewed for substantial evidence.
See, e.g., Dawn Equip. Co. v. Ky. Farms Inc., 140 F.3d
1009, 1014 (Fed. Cir. 1998). Invalidity by anticipation
must be proven by clear and convincing evidence. See
Microsoft Corp. v. i4i L.P., 131 S. Ct. 2238, 2242 (2011).
On appeal, the parties only dispute whether Digital
River’s prior art Secure Sales System (SSS) satisfies the
DDR HOLDINGS, LLC v. HOTELS.COM, L.P. 11
“look and feel” limitation; DDR does not dispute that the
SSS satisfies every other limitation of the ’572 patent’s
asserted claims. NLG, which adopted Digital River’s
anticipation challenge to the ’572 patent, 2 argues that no
evidence supports the jury’s finding that the SSS does not
disclose the “look and feel” limitation, since it showed the
jury multiple examples of composite web pages generated
by the SSS with a “look and feel” based on a set of “look
and feel” elements from the corresponding host website.
DDR contends that, as the district court determined,
“it is up to the trier of fact to determine whether the
combination of elements making up the overall appear-
2 Even though Digital River terminated its appeal
prior to oral argument, it did not do so until after the
parties had fully completed their briefing. In its own
briefs, although only in footnotes, NLG incorporated by
reference Digital River’s arguments on anticipation.
Appellant’s Br. 43 n.23; Appellant’s Reply Br. 9 n.5. In a
consolidated case such as here, Rule 28(i) of the Federal
Rules of Appellate Procedure (FRAP) permits “any party
[to] adopt by reference a part of another’s brief.” See, e.g.,
Pozen Inc. v. Par Pharm. Inc., 696 F.3d 1151, 1159 n.3
(Fed. Cir. 2012); Aventis Pharma Deutschland GmbH v.
Lupin, Ltd., 499 F.3d 1293, 1294 n.1 (Fed. Cir. 2007).
Compare Microsoft Corp. v. DataTern, Inc., 755 F.3d 899,
910 (Fed. Cir. 2014) (co-parties in non-consolidated ap-
peals cannot use incorporation pursuant to FRAP 28(i) to
exceed word count limits prescribed by FRAP 32(a)(7)).
DDR implicitly concedes that NLG has adequately adopt-
ed Digital River’s anticipation defense as to the ’572
patent, acknowledging that “[NLG] did not adopt Digital
River’s anticipation defense or seek to extend it to prove
anticipation of the ’399 patent, which has claims contain-
ing extra elements not found in the asserted claims of the
’572 patent.” Appellee’s Br. 44 n.10 (emphasis added).
12 DDR HOLDINGS, LLC v. HOTELS.COM, L.P.
ance of a website has a similar ‘look and feel’ as compared
to another website.” DDR Holdings, LLC v. Hotels.com,
L.P., 954 F. Supp. 2d 509, 517 (E.D. Tex. 2013). DDR
contends that the jury reviewed substantial evidence that
Digital River’s SSS did not replicate the host website’s
“look and feel” in terms of “overall appearance” and that
the web pages generated by the SSS did not show “corre-
spondence of overall appearance.” In particular, DDR
argues that the SSS did not satisfy this limitation since it
did not replicate a sufficient number of “look and feel”
elements from the host web page. Appellee’s Br. 45–46.
We find that the record allows only one reasonable
finding: clear and convincing evidence establishes that
Digital River’s prior art SSS anticipates the asserted
claims of the ’572 patent. The record lacks substantial
evidence to support the jury’s finding that the asserted
claims of the ’572 patent are not anticipated. Therefore,
the district court erred by denying the defendants’ motion
for JMOL of invalidity of the ’572 patent under 35 U.S.C.
§ 102(a).
Digital River’s prior art SSS was operational and sold
to its first customer by August 12, 1996. J.A. 6618–23.
By August 1997, more than a year before the filing date of
the provisional application for the ’135 patent, Digital
River’s SSS had attracted its 500th customer. J.A. 6257.
Digital River advertised its SSS as a system for generat-
ing web pages that allowed website visitors to “purchase
and download the digital products of their choice,” but
still “retain[ed] the look and feel of [the host’s] site.” J.A.
6202 (emphasis added). The SSS was activated when
visitors on a host’s website clicked a “web site ‘buy’ but-
ton” hyperlink. J.A. 6320. Digital River’s advertisements
explained that “[w]hen [website visitor] customers want to
purchase, they push the ‘buy’ button and are transferred
immediately and transparently to the Digital River Cen-
tral Commerce Server.” J.A. 6202. This component of the
SSS then generated and served composite web pages to
DDR HOLDINGS, LLC v. HOTELS.COM, L.P. 13
website visitors that incorporated “look and feel” elements
of the host website and product information associated
with the host website’s “web store” in a manner that
“replicate[d] the look and feel of the [host’s] Web site.”
J.A. 6320 (emphasis added). These “look and feel” ele-
ments and this product information content were stored
by Digital River in a data warehouse and retrieved for
incorporation into the generated composite web page
based on a correlation with the “buy” button hyperlink on
the host website. See id. In this way, Digital River’s SSS
would allow “transaction[s to] take[] place in the selling
environment [the host website had] created, surrounded
by the look and feel of [the host website’s] identity. . . .
There [would be] no sensation [for a website visitor] of
being suddenly hustled off to another location.” J.A. 6123
(emphasis added).
During trial, a Digital River witness testified at
length on how the SSS generated composite web pages
with “look and feel” elements from host websites, and
operated the SSS for the jury. Digital River also showed
the jury several composite web pages generated by the
SSS for host websites before the earliest priority date of
the ’572 patent, including a composite web page that
incorporated several elements identified in DDR’s patents
or by DDR’s expert at trial as “look and feel elements”: the
host website’s logo, background color, and prominent
circular icons. J.A. 8856–57 (composite web page), 7502
(host website); see also J.A. 8858–61 (composite web page
incorporating host website logo, colors, fonts), 6122 (ex-
ample web page from host website).
The parties’ stipulated construction of “look and feel”
requires the generated composite web page to include a
set of elements from the host website, each of these ele-
ments being a “look and feel element” described in the
specification that “convey[s] an overall appearance identi-
fying a website.” J.A. 542. Consistent with the specifica-
tion, the stipulated construction defines these “look and
14 DDR HOLDINGS, LLC v. HOTELS.COM, L.P.
feel elements” that “convey an overall appearance identi-
fying a website” to “include logos, colors, page layout,
navigation systems, frames, ‘mouse-over’ effects, or other
elements that are consistent through some or all of a
Host’s website.” Id.; see also ’572 patent, 14:11–14.
Digital River’s SSS clearly satisfies this limitation. For
example, Digital River showed the jury a host website
that included a stylized logo, a particular background
color, and prominent circular icons. J.A. 7502. The SSS
generated a prior art composite web page that incorpo-
rated each of these “look and feel” elements. J.A. 8856–
57; see also J.A. 6172 (host website) and 6171 (SSS-
generated prior art composite web page incorporating
logo, navigational menu, and color “look and feel” ele-
ments). And as explained above, the SSS was consistent-
ly promoted and advertised as creating a composite web
page that retained the “look and feel” of the host website.
E.g., J.A. 6123, 6202, 6320.
Both the district court and DDR introduced a limita-
tion found neither in the ’572 patent’s claims nor the
parties’ stipulated construction. In particular, the district
court introduced a requirement that the generated com-
posite web page have an “overall match” in appearance
with the host website, beyond what is expressly recited by
the claims. DDR Holdings, 954 F. Supp. 2d at 517; see
also Appellee’s Br. 47. There is nothing, however, in the
parties’ stipulated construction of “look and feel,” the
claim language, or the specification that requires the
generated composite web page to match the host website
or to incorporate a specific number, proportion, or selec-
tion of the identified “look and feel” elements on a host
website.
In order to satisfy this limitation, it is sufficient that
“look and feel” elements identifying the host website are
transferred to and displayed on the generated composite
webpage. For example, independent claim 13 of the ’572
patent merely requires that the generated composite web
DDR HOLDINGS, LLC v. HOTELS.COM, L.P. 15
page have a “look and feel based on the look and feel
description in the data store and content based on the
commerce object associated wit[h] the link.” Independent
claim 17 requires only that the generated composite web
page have a “look and feel corresponding to the stored
look and feel description” of the host website. There is no
claim language requiring an “overall match” or a specific
number of “look and feel” elements.
Further, the common specification explains that “[t]he
look and feel is captured by selecting an example page
[from] the host, retrieving the sample page from the host,
identifying the look and feel elements from the sample
page, and saving the identified look and feel elements.”
’572 patent, 14:7–10. Nothing in the common specifica-
tion suggests that satisfaction of the “look and feel” limi-
tation requires more than mechanically identifying “look
and feel elements” from a web page on the host website,
storing these elements in a data store, and using these
stored “look and feel elements” to create the “look and
feel” of the generated composite web page.
The jury’s determination that the SSS does not antic-
ipate claims 13, 17, and 20 of the ’572 patent is not sup-
ported by substantial evidence. Therefore, the district
court erred by denying the defendants’ motion for JMOL
of invalidity of the ’572 patent under 35 U.S.C. § 102(a). 3
B. Patent-eligible subject matter
NLG also contends that the district court erred by
denying its motion for JMOL that the asserted claims of
3 Neither Digital River nor NLG ever argued that
the ’399 patent is invalid as anticipated by or obvious over
prior art. We decline to speculate whether Digital River’s
prior art SSS, either alone or in combination with other
prior art, invalidates the ’399 patent under 35 U.S.C.
§§ 102 or 103.
16 DDR HOLDINGS, LLC v. HOTELS.COM, L.P.
the ’572 and ’399 patents are invalid under 35 U.S.C.
§ 101. Since the ’572 patent is invalid as anticipated
under 35 U.S.C. § 102(a), we focus on NLG’s § 101 chal-
lenge to claims 1, 3, and 19 of the ’399 patent. We con-
clude, as did the district court, that the asserted claims of
the ’399 patent clear the § 101 hurdle.
We review the district court’s determination of patent
eligibility under 35 U.S.C. § 101 de novo. Dealertrack,
Inc. v. Huber, 674 F.3d 1315, 1333 (Fed. Cir. 2012). In
Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132
S. Ct. 1289, 1294 (2012), the Supreme Court set forth an
analytical framework under § 101 to distinguish patents
that claim patent-ineligible laws of nature, natural phe-
nomena, and abstract ideas—or add too little to such
underlying ineligible subject matter—from those that
claim patent-eligible applications of those concepts. First,
given the nature of the invention in this case, we deter-
mine whether the claims at issue are directed to a patent-
ineligible abstract idea. Alice Corp. v. CLS Bank Int’l,
134 S. Ct. 2347, 2355 (2014). If so, we then consider the
elements of each claim—both individually and as an
ordered combination—to determine whether the addition-
al elements transform the nature of the claim into a
patent-eligible application of that abstract idea. Id. This
second step is the search for an “inventive concept,” or
some element or combination of elements sufficient to
ensure that the claim in practice amounts to “significantly
more” than a patent on an ineligible concept. Id.
Distinguishing between claims that recite a patent-
eligible invention and claims that add too little to a pa-
tent-ineligible abstract concept can be difficult, as the line
separating the two is not always clear. At one time, a
computer-implemented invention was considered patent-
eligible so long as it produced a “useful, concrete and
tangible result.” State St. Bank & Trust Co. v. Signature
Fin. Grp., Inc., 149 F.3d 1368, 1373 (Fed. Cir. 1998)
(finding a machine that transformed data by a series of
DDR HOLDINGS, LLC v. HOTELS.COM, L.P. 17
mathematical calculations to a final share price to be
patent-eligible); see also In re Alappat, 33 F.3d 1526, 1544
(Fed. Cir. 1994) (en banc). This understanding rested, in
large part, on the view that such inventions crossed the
eligibility threshold by virtue of being in the technological
realm, the historical arena for patented inventions. See,
e.g., In re Bilski, 545 F.3d 943, 952, 954–56 (Fed. Cir.
2008) (en banc) (concluding that a patent-eligible process
must either be “tied to a particular machine or apparatus”
or transformed into a different state or thing, i.e., the
“machine-or-transformation test”).
While the Supreme Court in Bilski v. Kappos noted
that the machine-or-transformation test is a “useful and
important clue” for determining patent eligibility, 130 S.
Ct. 3218, 3227 (2010), it is clear today that not all ma-
chine implementations are created equal. For example, in
Mayo, the Supreme Court emphasized that satisfying the
machine-or-transformation test, by itself, is not sufficient
to render a claim patent-eligible, as not all transfor-
mations or machine implementations infuse an otherwise
ineligible claim with an “inventive concept.” See 132 S.
Ct. at 1301 (“[S]imply implementing a mathematical
principle on a physical machine, namely a computer, [i]s
not a patentable application of that principle.”) (describ-
ing Gottschalk v. Benson, 409 U.S. 63, 64 (1972)). And
after Alice, there can remain no doubt: recitation of gener-
ic computer limitations does not make an otherwise
ineligible claim patent-eligible. 134 S. Ct. at 2358. The
bare fact that a computer exists in the physical rather
than purely conceptual realm “is beside the point.” Id.
Although the Supreme Court did not “delimit the pre-
cise contours of the ‘abstract ideas’ category” in resolving
Alice, 134 S. Ct. at 2356–57, over the course of several
cases the Court has provided some important principles.
We know that mathematical algorithms, including those
executed on a generic computer, are abstract ideas. See
Benson, 409 U.S. at 64. We know that some fundamental
18 DDR HOLDINGS, LLC v. HOTELS.COM, L.P.
economic and conventional business practices are also
abstract ideas. See Bilski, 130 S. Ct. at 3231 (finding the
“fundamental economic practice” of hedging to be patent
ineligible); Alice, 134 S. Ct. at 2356 (same for intermedi-
ated settlement).
In some instances, patent-ineligible abstract ideas are
plainly identifiable and divisible from the generic com-
puter limitations recited by the remainder of the claim.
For example, the Supreme Court in Alice determined that
the claims at issue “simply instruct[ed] the practitioner to
implement the abstract idea of intermediated settlement
on a generic computer.” 134 S. Ct. at 2359. In Ultramer-
cial, Inc. v. Hulu, LLC, ___ F.3d ___, 2014 WL 5904902, at
*5 (Fed. Cir. Nov. 14, 2014), the claims merely recited the
abstract idea of using advertising as a currency as applied
to the particular technological environment of the Inter-
net. In buySAFE, Inc. v. Google, Inc., 765 F.3d 1350, 1355
(Fed. Cir. 2014), the claims recited no more than using a
computer to send and receive information over a network
in order to implement the abstract idea of creating a
“transaction performance guaranty.” In Accenture Global
Servs., GmbH v. Guidewire Software, Inc., 728 F.3d 1336,
1344–45 (Fed. Cir. 2013), the claims merely recited “gen-
eralized software components arranged to implement an
abstract concept [of generating insurance-policy-related
tasks based on rules to be completed upon the occurrence
of an event] on a computer.” And in Bancorp Servs.,
L.L.C. v. Sun Life Assur. Co. of Canada (U.S.), 687 F.3d
1266, 1278 (Fed. Cir. 2012), the claims recited no more
than the use of a computer “employed only for its most
basic function, the performance of repetitive calculations,”
to implement the abstract idea of managing a stable-value
protected life insurance policy. Under Supreme Court
precedent, the above claims were recited too broadly and
generically to be considered sufficiently specific and
meaningful applications of their underlying abstract
ideas. Although many of the claims recited various com-
DDR HOLDINGS, LLC v. HOTELS.COM, L.P. 19
puter hardware elements, these claims in substance were
directed to nothing more than the performance of an
abstract business practice on the Internet or using a
conventional computer. Such claims are not patent-
eligible.
Against this background, we turn to the ’399 patent’s
asserted claims. We begin our § 101 analysis at
Mayo/Alice step one: determining whether the computer-
implemented claims at issue here are “directed to” a
patent-ineligible abstract idea. 4 Here, we note that the
’399 patent’s asserted claims do not recite a mathematical
algorithm. Nor do they recite a fundamental economic or
longstanding commercial practice. Although the claims
address a business challenge (retaining website visitors),
it is a challenge particular to the Internet.
Indeed, identifying the precise nature of the abstract
idea is not as straightforward as in Alice or some of our
other recent abstract idea cases. NLG’s own varying
formulations of the underlying abstract idea illustrate
this difficulty. NLG characterizes the allegedly abstract
idea in numerous ways, including “making two web pages
look the same,” “syndicated commerce on the computer
using the Internet,” and “making two e-commerce web
pages look alike by using licensed trademarks, logos, color
schemes and layouts.” See, e.g., Appellant’s Br. 18–20.
The dissent characterizes DDR’s patents as describing the
entrepreneurial goal “that an online merchant’s sales can
be increased if two web pages have the same ‘look and
feel.’” Dissenting Op. 2. But as discussed below, under
4 The parties do not dispute that the asserted sys-
tem and method claims of the ’399 patent, for the purpos-
es of § 101, are no different in substance. See Appellee Br.
63; Appellant Br. 24. Thus, the form of the asserted
claims (system or method) does not affect our analysis of
their patent eligibility. See Alice, 134 S. Ct. at 2360.
20 DDR HOLDINGS, LLC v. HOTELS.COM, L.P.
any of these characterizations of the abstract idea, the
’399 patent’s claims satisfy Mayo/Alice step two.
As an initial matter, it is true that the claims here are
similar to the claims in the cases discussed above in the
sense that the claims involve both a computer and the
Internet. But these claims stand apart because they do
not merely recite the performance of some business prac-
tice 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 tech-
nology in order to overcome a problem specifically arising
in the realm of computer networks.
In particular, the ’399 patent’s claims address the
problem of retaining website visitors that, if adhering to
the routine, conventional functioning of Internet hyper-
link protocol, would be instantly transported away from a
host’s website after “clicking” on an advertisement and
activating a hyperlink. For example, asserted claim 19
recites a system that, among other things, 1) stores “visu-
ally perceptible elements” corresponding to numerous
host websites in a database, with each of the host web-
sites displaying at least one link associated with a product
or service of a third-party merchant, 2) on activation of
this link by a website visitor, automatically identifies the
host, and 3) instructs an Internet web server of an “out-
source provider” to construct and serve to the visitor a
new, hybrid web page that merges content associated
with the products of the third-party merchant with the
stored “visually perceptible elements” from the identified
host website. See supra 5.
In more plain language, upon the click of an adver-
tisement for a third-party product displayed on a host’s
website, the visitor is no longer transported to the third
party’s website. Instead, the patent claims call for an
“outsource provider” having a web server which directs
the visitor to an automatically-generated hybrid web page
DDR HOLDINGS, LLC v. HOTELS.COM, L.P. 21
that combines visual “look and feel” elements from the
host website and product information from the third-party
merchant’s website related to the clicked advertisement. 5
In this way, rather than instantly losing visitors to the
third-party’s website, the host website can instead send
its visitors to a web page on the outsource provider’s
server that 1) incorporates “look and feel” elements from
the host website, and 2) provides visitors with the oppor-
tunity to purchase products from the third-party mer-
chant without actually entering that merchant’s website.
The dissent suggests that the “store within a store”
concept, such as a warehouse store that contains a kiosk
for selling a third-party partner’s cruise vacation packag-
es, is the pre-Internet analog of the ’399 patent’s asserted
claims. Dissenting Op. 4. While that concept may have
been well-known by the relevant timeframe, that practice
did not have to account for the ephemeral nature of an
Internet “location” or the near-instantaneous transport
between these locations made possible by standard Inter-
net communication protocols, which introduces a problem
that does not arise in the “brick and mortar” context. In
particular, once a customer enters a physical warehouse
store, that customer may encounter a kiosk selling third-
5 On a fundamental level, the creation of new com-
positions and products based on combining elements from
different sources has long been a basis for patentable
inventions. See, e.g., Parks v. Booth, 102 U.S. 96, 102
(1880) (“Modern inventions very often consist merely of a
new combination of old elements or devices, where noth-
ing is or can be claimed except the new combination.”);
KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 418–19 (2007)
(“[I]nventions in most, if not all, instances rely upon
building blocks long since uncovered, and claimed discov-
eries almost of necessity will be combinations of what, in
some sense, is already known.”).
22 DDR HOLDINGS, LLC v. HOTELS.COM, L.P.
party cruise vacation packages. There is, however, no
possibility that by walking up to this kiosk, the customer
will be suddenly and completely transported outside the
warehouse store and relocated to a separate physical
venue associated with the third-party—the analog of what
ordinarily occurs in “cyberspace” after the simple click of
a hyperlink—where that customer could purchase a cruise
package without any indication that they were previously
browsing the aisles of the warehouse store, and without
any need to “return” to the aisles of the store after com-
pleting the purchase. It is this challenge of retaining
control over the attention of the customer in the context of
the Internet that the ’399 patent’s claims address.
We caution, however, that not all claims purporting to
address Internet-centric challenges are eligible for patent.
For example, in our recently-decided Ultramercial opin-
ion, the patentee argued that its claims were “directed to
a specific method of advertising and content distribution
that was previously unknown and never employed on the
Internet before.” 2014 WL 5904902, at *3. But this alone
could not render its claims patent-eligible. In particular,
we found the claims to merely recite the abstract idea of
“offering media content in exchange for viewing an adver-
tisement,” along with “routine additional steps such as
updating an activity log, requiring a request from the
consumer to view the ad, restrictions on public access, and
use of the Internet.” Id. at *5.
The ’399 patent’s claims are different enough in sub-
stance from those in Ultramercial because they do not
broadly and generically claim “use of the Internet” to
perform an abstract business practice (with insignificant
added activity). Unlike the claims in Ultramercial, the
claims at issue here specify how interactions with the
Internet are manipulated to yield a desired result—a
result that overrides the routine and conventional se-
quence of events ordinarily triggered by the click of a
hyperlink. Instead of the computer network operating in
DDR HOLDINGS, LLC v. HOTELS.COM, L.P. 23
its normal, expected manner by sending the website
visitor to the third-party website that appears to be
connected with the clicked advertisement, the claimed
system generates and directs the visitor to the above-
described hybrid web page that presents product infor-
mation from the third-party and visual “look and feel”
elements from the host website. When the limitations of
the ’399 patent’s asserted claims are taken together as an
ordered combination, the claims recite an invention that
is not merely the routine or conventional use of the Inter-
net.
It is also clear that the claims at issue do not attempt
to preempt every application of the idea of increasing
sales by making two web pages look the same, or of any
other variant suggested by NLG. Rather, they recite a
specific way to automate the creation of a composite web
page by an “outsource provider” that incorporates ele-
ments from multiple sources in order to solve a problem
faced by websites on the Internet. As a result, the ’399
patent’s claims include “additional features” that ensure
the claims are “more than a drafting effort designed to
monopolize the [abstract idea].” Alice, 134 S. Ct. at 2357.
In short, the claimed solution amounts to an inventive
concept for resolving this particular Internet-centric
problem, rendering the claims patent-eligible.
In sum, the ’399 patent’s claims are unlike the claims
in Alice, Ultramercial, buySAFE, Accenture, and Bancorp
that were found to be “directed to” little more than an
abstract concept. To be sure, the ’399 patent’s claims do
not recite an invention as technologically complex as an
improved, particularized method of digital data compres-
sion. But nor do they recite a commonplace business
method aimed at processing business information, apply-
ing a known business process to the particular technologi-
cal environment of the Internet, or creating or altering
contractual relations using generic computer functions
and conventional network operations, such as the claims
24 DDR HOLDINGS, LLC v. HOTELS.COM, L.P.
in Alice, Ultramercial, buySAFE, Accenture, and Bancorp.
The claimed system, though used by businesses, is patent-
eligible under § 101. 6 The district court did not err in
denying NLG’s motion for JMOL of invalidity under 35
U.S.C. § 101 as to these claims.
C. Indefiniteness
In its motion for JMOL of invalidity, NLG also sought
to invalidate the asserted claims of the ’572 and ’399
patents on the ground that the terms “look and feel” and
“visually perceptible elements” render the claims indefi-
nite because they are impermissibly subjective and fail to
notify the public of the bounds of the claimed invention. 7
On appeal, NLG contends that the district court erred by
denying its motion. We disagree.
Since the ’572 patent’s asserted claims are invalid un-
der 35 U.S.C. § 102(a), we need not decide NLG’s indefi-
niteness challenge to the patent based on the term “look
and feel.” We thus focus our analysis on the term “visual-
ly perceptible elements” in the ’399 patent’s asserted
claims. The parties stipulated to a construction of the
6 Of course, patent-eligible does not mean patenta-
ble under, e.g., 35 U.S.C. §§ 102 and 103. As discussed in
footnote 3 supra, the patentability of the ’399 patent’s
asserted claims is not before us.
7 Though NLG contended that the term “look and
feel” is indefinite before the district court, on appeal NLG
shifts its focus to “look and feel description.” “Look and
feel” and “look and feel description,” while related, are
recited as separate terms within the asserted claims.
E.g., ’572 patent, claim 13 (“. . . a look and feel based on
the look and feel description in the data store . . .”). NLG
provides no explanation or justification for its shift in
focus. As does DDR in its briefing, we focus our analysis
on the term “look and feel.”
DDR HOLDINGS, LLC v. HOTELS.COM, L.P. 25
term as “‘look and feel’ elements that can be seen.” J.A.
542. NLG argues that the term “is effectively the same as
‘look and feel description,’” and therefore lacks definite-
ness for the same reasons. Appellant’s Br. 30 n.12.
Indefiniteness is a question of law we review de novo.
Wellman, Inc. v. Eastman Chem. Co., 642 F.3d 1355,
1365–66 (Fed. Cir. 2011). The definiteness requirement is
set forth in 35 U.S.C. § 112 ¶ 2, which states that “[t]he
specification shall conclude with one or more claims
particularly pointing out and distinctly claiming the
subject matter which the applicant regards as his inven-
tion.” The definiteness requirement focuses on whether
“a patent’s claims, viewed in light of the specification and
prosecution history, inform those skilled in the art about
the scope of the invention with reasonable certainty.”
Nautilus, Inc. v. Biosig Instruments, Inc., 134 S. Ct. 2120,
2129 (2014). The inquiry “trains on the understanding of
a skilled artisan at the time of the patent application.”
Id. at 2130.
When a claim term “depend[s] solely on the unre-
strained, subjective opinion of a particular individual
purportedly practicing the invention,” without sufficient
guidance in the specification to provide objective direction
to one of skill in the art, the term is indefinite. Datamize,
LLC v. Plumtree Software, Inc., 417 F.3d 1342, 1350 (Fed.
Cir. 2005) (finding “aesthetically pleasing” to be indefinite
because the specification lacked any objective definition of
the term). For some facially subjective terms, the defi-
niteness requirement is not satisfied by merely offering
examples that satisfy the term within the specification.
See Interval Licensing LLC v. AOL, Inc., 764 F.3d 1364,
1371–73 (Fed. Cir. 2014) (finding a single example of the
term “unobtrusive manner” in the specification did not
outline the claims to a skilled artisan with reasonable
certainty). For other terms like, for example, terms of
degree, specific and unequivocal examples may be suffi-
cient to provide a skilled artisan with clear notice of what
26 DDR HOLDINGS, LLC v. HOTELS.COM, L.P.
is claimed. See Enzo Biochem, Inc. v. Applera Corp., 599
F.3d 1325, 1334–35 (Fed. Cir. 2010) (finding the phrase
“not interfering substantially” to be definite where intrin-
sic evidence provided multiple examples that would allow
a skilled artisan to determine whether a particular chem-
ical bond linkage group would “interfer[e] substantially”
with hybridization).
Here, though NLG attempts to characterize “look and
feel” as purely subjective, the evidence demonstrates 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. The specification
explains that “the look and feel is captured by selecting an
example page [from] the host, retrieving the sample page
from the host, identifying the look and feel elements from
the sample page and saving the identified look and feel
elements.” ’399 patent, 13:5–9. “Look and feel elements”
are described as “includ[ing] logos, colors, page layout,
navigation systems, frames, ‘mouse-over’ effects, or other
elements that are consistent through some or all of a
Host’s website.” Id. at 13:9–12. DDR’s expert on in-
fringement testified that a skilled artisan would interpret
these “other elements” as elements such as headers,
footers, fonts, and images. J.A. 3584.
These examples are consistent with the established
meaning of the term “look and feel” in the art, as demon-
strated by Digital River’s own evidence at trial. For
example, as discussed in Section II. A., Digital River
advertised its prior art SSS as generating composite web
pages that displayed third-party merchandise but also
replicated the “‘look and feel’ of the [host website’s] identi-
ty.” J.A. 6123. Digital River also explained that the
composite web pages generated by its SSS “retain[ed] the
look and feel of the [host’s web]site.” J.A. 6202. At trial,
Digital River conceded that it understood the meaning of
“look and feel.” J.A. 4146–47 (“Q. And Digital River
understood what it meant when it said: we’ll match your
DDR HOLDINGS, LLC v. HOTELS.COM, L.P. 27
look and feel, right? A. Yes, sir.”). Digital River also
admitted that its customers understood the meaning of
“look and feel.” J.A. 4199 (“Q. . . . [S]omebody who is
reading Digital River’s [advertising] document should
understand what Digital River means when it says
matching look and feel, right? . . . A. Yes, sir.”).
In sum, “look and feel” is not a facially subjective term
like “unobtrusive manner” in Interval or “aesthetically
pleasing” in Datamize. Rather, as demonstrated by
Digital River’s own advertisements for its prior art SSS
and its admissions at trial, the term had an established
meaning in the art by the relevant timeframe. The exam-
ples of “look and feel” elements disclosed in the specifica-
tion are consistent with the term’s established meaning.
In short, the term “visually perceptible elements,” or
“‘look and feel’ elements that can be seen,” viewed in light
of the specification and prosecution history, informed
those skilled in the art about the scope of the ’399 patent’s
claims with reasonable certainty. The district court did
not err by denying NLG’s motion for JMOL of invalidity of
the ’399 patent under 35 U.S.C. § 112 ¶ 2.
D. Infringement
NLG also contends that the district court erred by
denying its motion for JMOL of noninfringement as to
both the ’572 and ’399 patents. Since the ’572 patent is
invalid under 35 U.S.C. § 102(a), we address only NLG’s
noninfringement appeal of the ’399 patent. We find, as
did the district court, that the jury was presented with
substantial evidence on which to base its finding that
NLG infringes the asserted claims of the ’399 patent.
NLG argues that the jury’s finding that NLG’s ac-
cused websites satisfy the “visually perceptible elements”
limitation of the asserted claims is unsupported. NLG
further argues that DDR failed to introduce evidence that
NLG’s accused system automatically identifies or recog-
nizes the source web page as required by claims 1 and 19
28 DDR HOLDINGS, LLC v. HOTELS.COM, L.P.
of the ’399 patent. NLG also argues that DDR only
showed the jury screenshot images of the accused web-
sites running NLG’s e-commerce system on a single day,
and thus did not provide evidence of NLG’s alleged in-
fringement throughout the entire damages period.
The record tells a different tale. For the “visually per-
ceptible elements” limitation, the jury viewed screenshot
images from nine NLG-partner host websites and their
corresponding accused NLG-operated composite web
pages. DDR’s expert on infringement also presented the
jury with lists of the “look and feel elements” from each
host website allegedly incorporated in a corresponding
NLG-generated composite web page and opined that the
accused composite web pages satisfied the limitation. The
jury was free to use this proffered evidence and testimony
to form its own conclusions as to whether NLG’s accused
composite web pages satisfied the “visually perceptible
elements” limitation of the asserted claims.
As for the other contested limitations of the ’399 pa-
tent’s asserted claims, DDR’s expert on infringement
testified that on activation of a link on an NLG-partner
host website corresponding to an NLG-generated compo-
site web page, a keyword identifier is sent to NLG’s e-
commerce web server (e.g., “OBWEB” for Orbitz’s host
website), and a processor therein determines the location
and identity of the host website (e.g., Orbitz). The jury
was free to credit this testimony as evidence that NLG’s
accused e-commerce system “automatically . . . recog-
niz[es]” or “automatically identif[ies]” the source page “on
which the link has been activated.”
NLG’s argument that DDR provided the jury with
screenshot images of NLG’s accused composite web pag-
es—and thus evidence of infringement—for only one day
appears to be more relevant to damages than to infringe-
ment. Regardless, NLG’s contention is without merit.
DDR’s expert testified that he had examined NLG’s
DDR HOLDINGS, LLC v. HOTELS.COM, L.P. 29
accused system throughout the entire period of alleged
infringement, including any changes in its software
source code, deposition testimony on its operation, and,
via the Internet Archive, prior versions of accused compo-
site web pages. Based on his review, DDR’s expert testi-
fied that nothing about NLG’s accused system “had
changed in any substantial way” during this period. J.A.
3751–52. Substantial evidence supports the jury’s finding
that NLG’s accused system infringes the ’399 patent, and
thus the district court did not err in denying NLG’s mo-
tion for JMOL of noninfringement.
E. Damages
DDR sought $6.04 million in damages for NLG’s in-
fringement of the ’572 and ’399 patents; NLG countered
with $375,000. The parties agreed on a verdict form that
instructed the jury to award a single sum to compensate
DDR for NLG’s infringement of the asserted claims found
to be infringed and not invalid. J.A. 3080. The jury
awarded DDR $750,000 in damages for NLG’s infringe-
ment, without specifying how this award was apportioned
between the ’572 and the ’399 patents.
Because we find the ’572 patent invalid as anticipat-
ed, we vacate the damages award. This could warrant a
new trial on damages. See Verizon Servs. Corp. v. Vonage
Holdings Corp., 503 F.3d 1295, 1310 (Fed. Cir. 2007).
NLG did not, however, move for a new trial under FRCP
59 and may not have preserved its recourse to this option.
DDR Holdings, 954 F. Supp. 2d at 522 (“Interestingly
however, NLG does not move for a new trial pursuant to
Rule 59.”). We remand to the district court to determine
the effect—if any—of our invalidation of the ’572 patent
on the jury’s damages award. 8
8 We note that NLG’s contention that the jury’s
damages award was “grossly excessive” because its ac-
30 DDR HOLDINGS, LLC v. HOTELS.COM, L.P.
F. Prejudgment Interest
The district court also awarded DDR prejudgment in-
terest. NLG contends that DDR should not be entitled to
any prejudgment interest because it is a non-practicing
entity and at a minimum, DDR should not be entitled to
any prejudgment interest during a four-year stay in
litigation since the stay was the result of DDR’s request
for ex parte reexamination of the ’135 and ’572 patents.
We review the district court’s award of prejudgment
interest for an abuse of discretion. See Telcordia Techs.,
Inc. v. Cisco Sys., Inc., 612 F.3d 1365, 1377 (Fed. Cir.
2010); see also Gen. Motors Corp. v. Devex Corp., 461 U.S.
648, 657 (1983) (“[A] decision to award prejudgment
interest will only be set aside if it constitutes an abuse of
discretion.”). Under 35 U.S.C. § 284, after a finding of
infringement, the court “shall award . . . damages . . .
together with interest and costs.” (emphases added).
Prejudgment interest should ordinarily be awarded
absent some justification for withholding such an award.
Gen. Motors, 461 U.S. at 657; see also Energy Transp.
Grp., Inc. v. William Demant Holding A/S, 697 F.3d
1342, 1358 (Fed. Cir. 2012) (“The award of pre-judgment
interest is the rule, not the exception.”) (quotation and
citation omitted).
NLG cites no case law suggesting that prevailing non-
practicing entities are not entitled to prejudgment inter-
est. We decline to create such a statutory exception. See
Energy Transp., 697 F.3d at 1358 (“The district court did
cused websites infringed for only one day is based on a
flawed premise and is without merit. As the district court
explained, NLG cannot attempt to “reverse engineer the
jury’s math . . . and use its substituted, and purely specu-
lative, analysis to call the award excessive.” DDR Hold-
ings, 954 F. Supp. 2d at 530.
DDR HOLDINGS, LLC v. HOTELS.COM, L.P. 31
not abuse its discretion in this case by following the
standard rule of awarding pre-judgment interest.”).
However, since the ’572 patent is invalid, the district
court must recalculate its award of prejudgment interest
so that it is tied solely to NLG’s infringement of the ’399
patent, which issued in 2010, more than four years after
issuance of the ’572 patent. Nickson Indus., Inc. v. Rol
Mfg. Co., 847 F.2d 795, 800 (Fed. Cir. 1988) (“Generally,
prejudgment interest should be awarded from the date of
infringement to the date of judgment.”). Since the ’399
patent did not issue until after the stay was lifted in 2010,
we need not determine whether DDR is entitled to pre-
judgment interest during the pendency of the contested
stay.
We have considered the parties’ remaining arguments
and find them unpersuasive.
III. CONCLUSION
In large part, we affirm the district court. The assert-
ed claims of the ’572 patent, however, are anticipated by
Digital River’s prior art Secure Sales System under 35
U.S.C. § 102(a), and no substantial evidence supports the
jury’s contrary finding. As such, the district court erred
in denying defendants’ motion for JMOL of invalidity as
to the ’572 patent. We vacate the award of damages and
prejudgment interest to DDR based on NLG’s infringe-
ment of the ’572 and ’399 patents and remand to the
district court in order to determine the damages and
prejudgment interest attributable solely to NLG’s in-
fringement of the ’399 patent.
AFFIRMED IN PART, REVERSED IN PART, AND
REMANDED
COSTS
No costs.
United States Court of Appeals
for the Federal Circuit
______________________
DDR HOLDINGS, LLC,
Plaintiff-Appellee,
v.
HOTELS.COM, L.P., CENDANT TRAVEL
DISTRIBUTION SERVICES GROUP, INC.,
EXPEDIA, INC., TRAVELOCITY.COM, L.P.,
SITE59.COM, LLC, INTERNATIONAL CRUISE &
EXCURSION GALLERY, INC.,
OURVACATIONSTORE, INC., INTERNETWORK
PUBLISHING CORPORATION, AND ORBITZ
WORLDWIDE, LLC,
Defendants,
AND
NATIONAL LEISURE GROUP, INC. AND
WORLD TRAVEL HOLDINGS, INC.,
Defendants-Appellants,
AND
DIGITAL RIVER, INC.,
Defendant.
______________________
2013-1505
______________________
2 DDR HOLDINGS, LLC v. HOTELS.COM, L.P.
MAYER, Circuit Judge, dissenting.
I respectfully dissent. The claims asserted by DDR
Holdings, LLC (“DDR”) fall outside 35 U.S.C. § 101 be-
cause they simply describe an abstract concept—that an
online merchant’s sales can be increased if two web pages
have the same “look and feel”—and apply that concept
using a generic computer.
I.
The common specification of DDR’s patents notes that
an online merchant will often lose customers when those
customers click on an advertisement from a third-party
vendor that has been displayed on the original merchant’s
web page. See U.S. Patent No. 6,993,572 (the “’572 pa-
tent”) col.2 ll.30–33. The specification explains, however,
that the original merchant could potentially avoid “the
loss of hard-won visitor traffic,” id. col.2 ll.64–65, if he
were able to dupe customers into believing that they were
still on the merchant’s web page even when they were
actually viewing goods from a third-party vendor, id. col.2
ll.26–65. Notably, though, DDR’s patents are very vague
as to how this duping is to occur, indicating only that the
web page of the original merchant and that of the third-
party vendor should be made to look alike using “visually
perceptible elements.” See U.S. Patent No. 7,818,399 (the
“’399 patent”) col.28 ll.31–32 (requiring the use of a “plu-
rality of visually perceptible elements visually corre-
sponding to the [original merchant’s web] page”). DDR’s
patents fail to meet the demands of section 101 because
they describe a goal—confusing consumers by making two
web pages look alike—but disclose no new technology, or
“inventive concept,” Mayo Collaborative Servs. v. Prome-
theus Labs., Inc., 132 S. Ct. 1289, 1294 (2012), for achiev-
ing that goal. See O’Reilly v. Morse, 56 U.S. (15 How.) 62,
120 (1854) (rejecting a claim which covered “an effect
produced by the use of electro-magnetism distinct from
the process or machinery necessary to produce it”); In re
DDR HOLDINGS, LLC v. HOTELS.COM, L.P. 3
Brooks, 90 F.2d 106, 107–08 (CCPA 1937) (“It is for the
discovery or invention of some practicable method or
means of producing a beneficial result or effect, that a
patent is granted, and not for the result or effect itself.”
(emphasis added) (citations and internal quotation marks
omitted)).
DDR’s patents are long on obfuscation but short on
substance. Indeed, much of what they disclose is so
rudimentary that it borders on the comical. For example,
the patents explain that two web pages are likely to look
alike if they are the same color, have the same page
layout, and display the same logos. See ’572 patent col.14
ll.5–18. The recited computer limitations, moreover, are
merely generic. The claims describe use of a “data store,”
a “web page having a link,” and a “computer processor,”
id. col.29 ll.1–13, all conventional elements long-used in e-
commerce. Because DDR’s claims, like those at issue in
Alice Corporation v. CLS Bank International, “simply
instruct the practitioner to implement [an] abstract
idea . . . on a generic computer,” they do not meet section
101. 134 S. Ct. 2347, 2359 (2014); see id. at 2360 (reject-
ing claims requiring a “data processing system’” with a
“communications controller” and a “data storage unit” as
“purely functional and generic” (citations and internal
quotation marks omitted)); Accenture Global Servs.,
GmbH v. Guidewire Software, Inc., 728 F.3d 1336, 1344
(Fed. Cir. 2013) (rejecting claims requiring “a combination
of computer components including an insurance transac-
tion database, a task library database, a client compo-
nent, and a server component, which include[d] an event
processor, a task engine, and a task assistant”).
II.
The court concludes that the asserted claims of
DDR’s ’399 patent fall within section 101 because “they do
not merely recite the performance of some business prac-
tice known from the pre-Internet world along with the
4 DDR HOLDINGS, LLC v. HOTELS.COM, L.P.
requirement to perform it on the Internet.” Ante at 20.
This is incorrect. DDR’s claims do, in fact, simply take a
well-known and widely-applied business practice and
apply it using a generic computer and the Internet. The
idea of having a “store within a store” was in widespread
use well before the dawn of e-commerce. For example,
National Leisure Group, Inc. (“NLG”), one of the defend-
ants here, previously “sold vacations at . . . BJ’s Whole-
sale Clubs through point of purchase displays in the 45
BJ’s Clubs along the Eastern Seaboard.” Br. of Defend-
ants-Appellants National Leisure Group, Inc. and World
Travel Holdings, Inc. at 4. DDR’s patents are directed to
the same concept. Just as visitors to BJ’s Wholesale
Clubs could purchase travel products from NLG without
leaving the BJ’s warehouse, the claimed system permits a
person to purchase goods from a third-party vendor, but
still have the visual “impression that she is viewing pages
served by the [original host merchant].” ’399 patent col.3
ll.23–24; see ante at 3 (explaining that DDR’s claimed
system “permits a website visitor, in a sense, to be in two
places at the same time”). Indeed, any doubt as to wheth-
er the claimed system is merely an Internet iteration of
an established business practice is laid to rest by the fact
that one of the named inventors acknowledged that the
innovative aspect of his claimed invention was “[t]aking
something that worked in the real world and doing it on
the Internet.” J.A. 03208.
Alice articulated a technological arts test for patent
eligibility. 134 S. Ct. at 2359 (explaining that the claimed
method fell outside section 101 because it did not “im-
prove the functioning of the computer itself” or “effect an
improvement in any other technology or technical field”).
Here, the court correctly recognizes Alice’s technological
arts standard, but applies it in a deficient manner. Ac-
cording to the court, DDR’s claims fall within section 101
because the “solution” they offer “is necessarily rooted in
computer technology in order to overcome a problem
DDR HOLDINGS, LLC v. HOTELS.COM, L.P. 5
specifically arising in the realm of computer networks.”
Ante at 20 (emphasis added). The solution offered by
DDR’s claims, however, is not rooted in any new computer
technology. Its patents address the problem of preventing
online merchants from losing “hard-won visitor traf-
fic,” ’572 patent col.2 ll.64–65, and the solution they offer
is an entrepreneurial, rather than a technological, one.
DDR has admitted that it did not invent any of the gener-
ic computer elements disclosed in its claims. J.A. 3311–
16. There is no dispute, moreover, that at the time of the
claimed invention the use of hyperlinks to divert consum-
ers to particular web pages was a well-understood and
widely-used technique. See ’399 patent col.1 ll.29–52.
While DDR’s patents describe the potential advantages of
making two web pages look alike, they do not disclose any
non-conventional technology for capturing the “look and
feel” of a host website or for giving two web pages a simi-
lar appearance. See Alice, 134 S. Ct. at 2360 (“[W]hat
petitioner characterizes as specific hardware . . . is purely
functional and generic.”); Accenture, 728 F.3d at 1345
(rejecting claims that contained no “detailed software
implementation guidelines”). DDR’s patents fall outside
section 101 because they simply “tak[e] existing infor-
mation”—the visual appearance of a host merchant’s
website—and use conventional technology to “organiz[e]
this information into a new form.” Digitech Image Techs.,
LLC v. Elecs. for Imaging, Inc., 758 F.3d 1344, 1351 (Fed.
Cir. 2014); see Mayo, 132 S. Ct. at 1298 (emphasizing that
reciting “well-understood, routine, [or] conventional
activity” does not impart patent eligibility).
In concluding that DDR’s claims meet the demands of
section 101, the court focuses on the fact that “they recite
a specific way to automate the creation of a composite web
page . . . .” Ante at 23 (emphasis added). The Supreme
Court, however, has emphatically rejected the idea that
claims become patent eligible simply because they dis-
close a specific solution to a particular problem. See
6 DDR HOLDINGS, LLC v. HOTELS.COM, L.P.
Bilski v. Kappos, 561 U.S. 593, 599–601 (2010) (conclud-
ing that claims fell outside section 101 notwithstanding
the fact that they disclosed a very specific method of
hedging against price increases); Parker v. Flook, 437 U.S.
584, 593 (1978) (rejecting the argument “that if a process
application implements a principle in some specific fash-
ion, it automatically falls within the patentable subject
matter of § 101”). Indeed, although the claims at issue in
Alice described a very specific method for conducting
intermediated settlement, the Court nonetheless unani-
mously concluded that they fell outside section 101. 134
S. Ct. at 2358–60.
Nor is the fact that the claims address an “Inter-
netcentric problem,” ante at 23, sufficient to render them
patent eligible. The Supreme Court has repeatedly made
clear that “limiting the use of an abstract idea to a partic-
ular technological environment” is insufficient to confer
patent eligibility. Alice, 134 S. Ct. at 2360 (citations and
internal quotation marks omitted); see also Mayo, 132 S.
Ct. at 1294; Bilski, 561 U.S. at 610. Accordingly, the fact
that DDR’s system operates “in the context of the Inter-
net,” ante at 22, does not bring it within patentable sub-
ject matter.
The potential scope of DDR’s patents is staggering,
arguably covering vast swaths of Internet commerce.
DDR has already brought infringement actions against
ten defendants, including Digital River, Inc., Expedia,
Inc., Travelocity.com, L.P., and Orbitz Worldwide, LLC.
See J.A. 255–63; ante at 7. DDR’s claims are patent
ineligible because their broad and sweeping reach is
vastly disproportionate to their minimal technological
disclosure. See Mayo, 132 S. Ct. at 1303 (In assessing
patent eligibility, “the underlying functional concern . . . is
a relative one: how much future innovation is foreclosed
relative to the contribution of the inventor.”).
DDR HOLDINGS, LLC v. HOTELS.COM, L.P. 7
Alice made clear that claims untethered to any ad-
vance in science or technology do not pass muster under
section 101. 134 S. Ct. at 2359. Viewed as a whole,
DDR’s claims contain no more than an abstract idea for
increasing sales implemented via “some unspecified,
generic computer,” id. at 2360. The inventive concept, if
any, embedded in DDR’s claims is an idea for “retaining
control over the attention of the customer,” ante at 22.
Because this purported inventive concept is an entrepre-
neurial rather than a technological one, DDR’s claims are
not patentable.