INTERNATIONAL BUSINESS MACHINES CORPORATION v 
THE PRICELINE GROUP INC.

Links
INTERNATIONAL BUSINESS MACHINES CORPORATION v THE PRICELINE GROUP INC. Civil Action No. 15-137-LPS-CJB 
US 7,631,346
US 5,961,601
US 5,796,967 
US 7,072,849
Summary
Claims of US patent 5,961,601 in the name of International Business Machines were found to be patent eligible subject matter under 35 USC 101 because the heart of the invention is a specific concept of recursively embedding state in continuations, that has no “bricks and mortar” analogy.  For similar reasons, the claims of the other considered patents were found to be patent eligible subject matter.
Comments

Broad description of the invention

The '601 patent is entitled "Preserving State Information in a Continuing Conversation Between a
Client and Server Networked Via a Stateless Protocol" and was issued on October 5, 1999. It
describes an invention meant to allow computers to preserve state while communicating over
networks (such as the Internet) using stateless protocols (such as HyperText Transfer Protocol (or
"HTTP")). ('601 patent, Abstract; see also id., col. 1:8-15)

Characteristic Claim
1. A computerized method for preserving state information in a conversation between a client adapted to request services from one or more servers which are networked via a stateless protocol to the client, said services including one or more of data and programs which the client may request, wherein the conversation is a sequence of communications between the client and one or more servers for said services wherein each response from the server includes one or more continuations which enable another request for said services and wherein the client must invoke one of the continuations to continue the conversation, the method comprising the steps of:
[(1)] the client initiating the conversation with the server using the stateless protocol;
[(2)] detecting when the request for a service requires preservation of the state information;
[(3)] performing said service and identifying all continuations in an output from said service, in response to said step of detecting;
[(4)] recursively embedding the state information in all identified continuations; and
[(5)] communicating the output to the client, in response to said step of embedding; wherein the state information is preserved and provided to all services for the duration of the conversation.
Details
Single representative claim analysis
The court considered claim 1 as being representative.  The analysis was thus cofined to claim 1 and the outcome subsequently applied to all other claims.  In Cronos Techs., LLC v. Expedia, Inc., C.A. No. 13-1538-LPS, C.A. No. 13-1541-LPS, C.A. No. 13-1544-LPS, 2015 WL 5234040 (D.Del. Sept. 8, 2015), our Court noted "several considerations relevant to deciding a Rule 12 motion that challenges the patent eligibility of multiple patent claims based on analysis of a single representative claim." 2015 WL 5234040, at *2. The Cronos Court set out these considerations as follows:
First, are all non-representative claims adequately represented by the representative claim (i.e., do all of the challenged claims relate to the same abstract idea and do any of the non-representative claims add one or more inventive concepts that would result in patent eligibility)? Second, are there issues of claim construction that must be decided before resolving the motion? Finally, is there any set of facts that could be proven relating to preemption, questions of patentability, or whether the claims "solve a technological problem," that would result in a determination that one[] or more of the claims are patent-eligible?
Id. (citations and footnotes omitted) (emphasis in original); see also Execware, 2015 WL 5734434, at *2.
Assessing Patentable Subject Matter
Patent-eligible subject matter is defined in Section 101 of the Patent Act:
Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.
35 U.S.C. § 101. In choosing such expansive terms "modified by the comprehensive `any,' Congress plainly contemplated that the patent laws would be given wide scope." Diamond v. Chakrabarty, 447 U.S. 303, 308 (1980).
Yet while the scope of Section 101 is broad, there is an "important implicit exception [to it]: [l]aws of nature, natural phenomena, and abstract ideas are not patentable." Alice Corp. Pty. Ltd. v. CLS Bank Int'l, 134 S.Ct. 2347, 2354 (2014) (citation omitted); see also Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S.Ct. 1289, 1293 (2012). "Phenomena of nature, though just discovered, mental processes, and abstract intellectual concepts are not patentable, [because] they are the basic tools of scientific and technological work." Prometheus, 132 S. Ct. at 1293 (quoting Gottschalk v. Benson, 409 U.S. 63, 67 (1972)).
The Supreme Court of the United States has also recognized, however, that "too broad an interpretation of this exclusionary principle could eviscerate patent law." Id.; see also Alice, 134 S. Ct. at 2354. This is because "all inventions at some level embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas." Prometheus, 132 S. Ct. at 1293; see also Alice, 134 S. Ct. at 2354. To that end, it has explained that "an application of a law of nature, [natural phenomena or abstract idea] to a known structure or process may well be deserving of patent protection." Diamond v. Diehr, 450 U.S. 175, 187 (1981) (emphasis in original).
In terms of the process used to analyze patent eligibility under Section 101, the Federal Circuit has explained that a court should first identify whether the claimed invention fits within one of the four statutory classes set out in the statute: processes, machines, manufactures, and compositions of matter. Ultramercial III, 772 F.3d at 713-14. The court must then assess whether any of the judicially recognizable exceptions to subject matter eligibility apply, including whether the claims are to patent-ineligible abstract ideas. Id. at 714.[2]
In Alice Corp. Pty. Ltd. v. CLS Bank Int'l, 134 S.Ct. 2347 (2014), the Supreme Court confirmed the framework to be used in order to distinguish patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts:
First, we determine whether the claims at issue are directed to one of those patent-ineligible concepts. . . . If so, we then ask, "[w]hat else is there in the claims before us?" . . . To answer that question, we consider the elements of each claim both individually and "as an ordered combination" to determine whether the additional elements "transform the nature of the claim" into a patent-eligible application. . . . We have described step two of this analysis as a search for an "`inventive concept'" — i.e., an element or combination of elements that is "sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself."
Alice, 134 S. Ct. at 2355 (quoting Prometheus, 132 S.Ct. at 1294-98) (citations omitted; alterations in original); see also Parker v. Flook, 437 U.S. 584, 594 (1978). Since Alice, the Federal Circuit has recognized that "[d]istinguishing between claims that recite a patent-eligible invention and claims that add too little to a patent-ineligible abstract concept can be difficult, as the line separating the two is not always clear." DDR Holdings, LLC v. Hotels.com. L.P., 773 F.3d 1245, 1255 (Fed. Cir. 2014).
1. The Invention
The patent's specification explains that network protocols provide standard methods that permit computers to communicate with each other by indicating how data should be formatted for receipt and transmission across networks (such as between, for example, clients and servers). (Id., col. 3:15-18) Some network protocols are stateless, meaning that every communication between a client and server is treated independently, such that the server does not maintain a record of previous communications. (Id., cols. 2:25-28, 3:66-4:3) One such stateless protocol is HTTP, which the patent describes as "[t]he most common method of communicat[ion]" between users and website servers. (Id., cols. 2:25, 4:32-33) Webpage documents (which make up websites) that use HTTP are formatted with a language known as HyperText Markup Language ("HTML"). (Id., col. 4:45-59) An internet user can switch among different webpages by clicking on highlighted words or phrases known as hyperlinks. (Id., col. 1:51-54) These clickable links are examples of "continuations" — a new request that a client sends to the server, with the server responding with one or more continuations. (Id., col. 2:48-52) Therefore, through the process of clicking through different hypertext links, a client engages in a conversation with a server. (Id., cols. 2:48-63, 7:8-10)
Because HTTP is stateless, there is no inherent way for computers to keep track of the state of an ongoing series of communications between a client and a server utilizing HTTP. (Id., col. 7:32-40) Thus, for instance, if a client requests a page numerous times, the server does not maintain any history or knowledge of the previous connections. (Id., col. 7:32-34) And when a client clicks on a hyperlink, there is no way for the client to communicate additional information with the request. (Id., col. 7:34-36) While usage of stateless protocol provides for simple and efficient communication between computers, there are circumstances in which it is desirable to preserve state information during communications. (Id., cols. 4:3-6, 7:37-39) For example, a server handling business transactions using HTTP needs state information (such as the client's user ID and the transaction number) in order to effectively process orders. (Id., col. 7:41-45; see also D.I. 1 at ¶ 20 (explaining that "online merchants can use state information to keep track of a client's product and service selections while the client is shopping and then use that information when the client decides to make a purchase"))
The patent describes several "[c]urrent [m]ethods for [h]andling [s]tate on the [w]eb." ('601 patent, col. 7:49) One such method is for a client to pass arguments to a Common Gateway Interface ("CGI") program, but it can be cumbersome for a client to follow the exact command syntax required to utilize this method. (Id., cols. 4:33-36, 7:50-57) An easier, more convenient way for a client to invoke a CGI program is to allow the user to input arguments via HTML "forms" — the user fills in the appropriate fields and clicks the "send" button to send the information to the server. (Id., col. 7:57-66) These forms may include hidden variables containing state which are not displayed to clients but which are passed to the server when the client sends the form. (Id., col. 8:3-6) The client and server pass state information back and forth, with the server creating HTML forms on the fly and embedding the state information in hidden fields, and with the client completing and submitting the forms back to the server. (Id., col. 8:20-32) The drawback to this approach is that if a client wishes to browse different HTML files in the middle of a session, the state information will be lost as soon as the client switches to a different HTML file. (Id., col. 8:33-46) Another solution in the prior art, utilized by Netscape Communications, entailed the use of "cookies": small files stored at the client's computer that keep track of state information. (Id., cols. 8:66-9:10) The cookie approach has several disadvantages, however — it is cumbersome to maintain, it is only compatible with certain clients and servers, and it renders it difficult to keep track of state information relating to multiple conversations on the same computer. (Id., col. 9:11-27)
The invention purports to claim a mechanism for preserving state in a stateless protocol that overcomes the drawbacks of these prior art solutions. (Id., cols. 7:37-40, 8:47-49, 9:28-43) The patentee's claimed method and system entails the preservation of state by "recursively embedding" the state information in continuations, such as hypertext links, during a conversation. (Id., Abstract & cols. 9:57-10:3)
Alice's step one
Under step one of Alice, "the claims are considered in their entirety to ascertain whether their character as a whole is directed to excluded subject matter" (here, an abstract idea). Internet Patents Corp. v. Active Network, Inc., 790 F.3d 1343, 1346 (Fed. Cir. 2015); see also Execware, LLC, 2015 WL 5734434, at *4; Gammino v. Am. Tel. & Tel. Co., ___ F.Supp. 3d ___, C.A. No. 12-666-LPS, 2015 WL 5234028, at *5 (D.Del. Sept. 8, 2015).[5] "The `abstract ideas' category embodies `the longstanding rule that [a]n idea of itself is not patentable.'" Alice, 134 S.Ct. at 2355 (quoting Gottschalk, 409 U.S. at 67). The abstract idea can be, but need not amount to, a "preexisting, fundamental truth" about the natural world "that has always existed," or a "method of organizing human activity" (such as a "longstanding commercial practice"). Id. at 2356 (citations omitted); see also DDR Holdings, 773 F.3d at 1256-57; cf. CLS Bank, 717 F.3d at 1286 (explaining that a claim directed to an abstract idea is one directed to a `"disembodied concept' . . a basic building block of human ingenuity, untethered from any real-world application") (citation omitted). Beyond that, the concept of an "abstract idea" has not been crisply defined. Alice, 134 S.Ct. at 2357 (declining to "labor to delimit the precise contours of the `abstract ideas' category"); Versata Dev. Grp., Inc. v. SAP Am., Inc., 793 F.3d 1306, 1331 (Fed. Cir. 2015) (recognizing that application of the abstract idea concept can be difficult, "a problem inherent in the search for a definition of an `abstract idea' that is not itself abstract").
In Internet Patents Corp. v. Active Network, Inc., 790 F.3d 1343 (Fed. Cir. 2015), in order to ascertain the basic character of the claimed subject matter at step one, the Federal Circuit examined the specification of the patent at issue. In doing so, it cited to what the patentee had described as "the innovation over the prior art" and "the essential, `most important aspect'" of the patent. Internet Patents, 790 F.3d at 1348;[6] see also Execware, LLC, 2015 WL 5734434, at *4 (explaining at step one of Alice that "the `character as a whole' [of the relevant claim] is clear from reading the specification"). In attempting to pinpoint a claim's "character as a whole" at step one, courts should be conscious to "avoid overgeneralizing, [and yet should also be] cautious of hypersensitivity to technical language" — the inquiry "is one of discerning the heart of the patented invention/true nature of the claim." Intellectual Ventures I LLC v. Erie Indem. Co., ___ F.Supp. 3d ___, Civil Action Nos. 1:14-cv-00220, 2:14-CV-01130, 2:14-CV-01131, 2015 WL 5686643, at *13 (W.D. Pa. Sept. 25, 2015) (citing cases); see also Alice, 134 S. Ct. at 2354; SimpleAir, Inc. v. Google Inc., ___ F.Supp. 3d ___, Case No. 2:14-cv-00011-JRG, 2015 WL 5675281, at *4 (E.D. Tex. Sept. 25, 2015) (explaining that the inquiry at step one of the Alice test "is not whether the Court is able [to] reach into a patent and extract an abstract idea from which to determine patent-eligibility . . . . [i]nstead the Court is directed to examine the [asserted patent] and to determine whether [it is] directed to an abstract idea").
Here, Defendants contend that the claims of the '601 patent "attempt to monopolize an abstract idea[,]" which they articulate as "keeping track of prior communications during a conversation between computers." (D.I. 19 at 14-15; D.I. 25 at 8; Tr. at 90-91) Plaintiff responds that this "over simplification glosses over important differences between the claimed inventions and alternative mechanisms," and that the patent is eligible under step one of Alice because it "is directed to a discrete solution to [a] computer-specific problem[.]" (D.I. 23 at 14; see also Tr. at 109-10) For a number of reasons, the Court agrees with Plaintiff that Defendants' articulation does not capture the true character of the '601 patent's invention.
An initial problem with Defendants' approach is that their primary focus here was not on the words of the patent; instead, Defendants focused largely on allegations in Plaintiff's Complaint. (See, e.g., D.I. 25 at 8 ("Again, . . . it is Plaintiff's Complaint . . . that is the source of the abstract idea articulation."); see also D.I. 19 at 15) Worse, Defendants misread those allegations in a manner that leads to an overly broad assertion as to what is the abstract idea at the heart of the patent's claims. Specifically, Defendants claim that Paragraph 20 of Plaintiff's Complaint "describ[es] the invention as `allow[ing] clients and servers to keep track of prior communications during a conversation[.]'" (D.I. 25 at 8 n.17; see also D.I. 19 at 15) But the Complaint clearly does not use this phraseology to describe the basic character of the invention in the '601 patent. Rather, Plaintiff introduces the field of the invention by explaining that, as a general matter, "[s]tate information allows clients and servers to keep track of prior communications during a conversation." (D.I. 1 at ¶ 20) Importantly, though, Plaintiff's Complaint goes on to describe the actual invention here by stating that it is directed to "a better technique of preserving state information in Internet communications" — i.e., to "novel methods of recursively embedding state information into communications between clients and servers." (Id. at ¶¶ 20-21 (emphasis added); see also Tr. at 110 (Plaintiff's counsel explaining that "you can't look at [claim 1 of the '601 patent] and say this claim is directed to just preserving state information because the meat of the claim is about how to do it. This claim is directed to recursively embedding state information in all continuations. . . . The rest of the claim isn't the invention. The invention is the recursively embedding."))
That claim 1 is not directed to the alleged abstract idea put forward by Defendants is confirmed by looking at the '601 patent's specification. For example, the patent's Abstract explains that what is disclosed is:
A method and system for preserving state in computers communicating over networks . . . using stateless protocols. . . . State is preserved in a conversation . . . by performing the service and identifying all continuations (hyperlinks) in an output from the service; recursively embedding the state information in all identified continuations in the output sent to the client.
('601 patent, Abstract (emphasis added)) The specification goes on to provide great detail about certain then-current methods for preserving state (and their drawbacks), (id., cols. 7:49-9:37), before again noting the inventors' claimed solution: "the embedding of state information" in communications between computers using stateless protocols, (id., col. 10:4-5). Time and again, when referring to the "present invention," the specification describes it as "the present invention for embedding state information[.]" (Id., col. 10:38, 42-43, 47; see also id., col. 16:1-4)[7] Indeed, many of the patent's figures — and all of the figures that do not depict prior art mechanisms for preserving state — work to illustrate the "recursively embedding" concept claimed by the patent. (Id., FIGS. 4-9c) The "innovation over the prior art" described in the patent's specification, then, is not simply "keeping track of prior communications during a conversation between computers." Instead, it is to a new way of accomplishing that — an assertedly better method than existed in the prior art.
Unsurprisingly, the "basic character" of the claim can not only be ascertained by reading the specification — it can be found in the text of claim 1 itself. This is seen in step 4's requirement of "recursively embedding the state information in all identified continuations" and in step 5's requirement that as to subsequent communications between the server and client, state information is preserved and provided in just this way. (Id., col. 18:18-23) In describing their view as to these portions of claim 1, Defendants suggest that the claim "merely deconstructs [the] task [of keeping track of the items in a current purchase] into its constituent and inherent steps." (D.I. 19 at 16) Yet that assertion simply ignores the elephant in the room — the claim's "recursively embedding" -related limitations. The "recursively embedding" concept is clearly not an "inherent" step for keeping track of state, as confirmed by the patent's detailed descriptions of the various prior art methods used to accomplish this task.
In arguing that the claim fails step one's test, Defendants placed significant stock in their assertion that the claim's steps can be easily implemented in a "non-computerized `brick and mortar'" context: that of a customer's placement of a telephonic order with a merchant. (Id. at 17-18; D.I. 25 at 9; Tr. at 95); see also Symantec Corp., 100 F.Supp. 3d at 383 ("[One] helpful way of assessing whether the claims of [a] patent are directed to an abstract idea is to consider if all of the steps of the claim could be performed by human beings in a non-computerized `brick-and-mortar' context."). Defendants' analogy (as revised in their reply brief) related to a telephone conversation between  a customer and a merchant, the details of which are set out in a table in the decision, linked above.
The role of the brick and mortar analogy in the Section 101 inquiry, as even Defendants acknowledge, is to illustrate that the invention at issue "simply take[s] a well-known and widely applied business practice and appl[ies] it" using generic computers and/or the Internet. DDR Holdings, 773 F.3d at 1264 (Mayer, J., dissenting); (see also D.I. 19 at 10-11 ("Where a claim's limitations simply lay out an interaction that can be and routinely is performed by humans, this demonstrates that the claim is directed to an abstract idea and not rooted in computer technology.") (emphasis added); Tr. at 72 (Plaintiff's counsel explaining that "the idea of a brick-and-mortar analogy is supposed to be . . . looking at what humans were already doing. They were going to the supermarket. They were buying low and selling high. They were advertising in the newspaper. And those steps are just being done now on the Internet")). In other words, if the heart of a patent claim has a pre-computer or pre-Internet real-world analog, that might help to crystallize the abstractness of a claim that in some way implicates the use of computer technology. That is, it may help to demonstrate that such technology simply amounts to an insignificant "add" to the claim — one meant, for example, only to allow the abstract idea to be implemented more quickly via a different (i.e., computerized) medium. See, e.g., Parus Holdings, Inc. v. Sallie Mae Bank, ___ F.Supp. 3d ___, Civ. No. 14-1427-SLR, Civ. No. 14-1428-SLR, Civ. No. 14-1429-SLR, 2015 WL 5886179, at *3-4, *9 (D. Del. Oct. 8, 2015) (finding that the claim was directed to an abstract idea where the defendant was able to point to "pre-internet analogs" to the patent claims, suggesting that the claims were drawn to methods of organizing human activity, not to a solution to problems arising in the realm of computer technology).
After considering Defendants' proffered brick and mortar scenario, the Court finds it to be inapplicable and thus unpersuasive. This is so for at least two reasons.
First, as Plaintiff notes, a telephone conversation between two individuals is not a "stateless protocol" — at least according to the proposed construction for that term put forward by Plaintiff. (D.I. 23, ex. K (Plaintiff's proposed construction of "stateless protocol" as "a protocol where every request from a client to a server is treated independently of previous connections")) Instead, the customer and the merchant taking part in this phone call can both use their memory to recall information that was communicated earlier in the conversation — something that is simply not an option in computer communications that utilize stateless protocols (such as HTTP). (D.I. 23 at 15; Plaintiff's Presentation, Slide 52) And so the two scenarios are not really "analogs" at all: the claimed scenario (a computer-based conversation involving a stateless protocol) lacks something important (the ability to retain the "state" of the conversation) that the brick-and-mortar scenario inherently includes (the ability of the party on the receiving end of the communication to recall the "state" of the conversation). Put differently, the very core of the problem that claim 1 is attempting to address — how to retain state in computer-based communications that would not otherwise be able do so — is not necessarily even a problem at all in Defendants' proposed brick and mortar scenario.
Second, as a practical matter, it would be hard to describe Defendants' scenario as involving the application of a "well-known and widely applied business practice" to the computer realm. It is obviously possible, of course, for a merchant to repeat back all of the information a customer has previously shared with him, each time the customer seeks to order an additional item from the merchant. But it is hard to argue that this is the way that humans typically communicate in the real world. If it were, conversations lasting beyond a short period of time would become unworkable, and merchants would have quite a few annoyed customers on their hands. (Tr. at 112-15)
In sum, the heart of the invention is more particular than simply "keeping track of communications" amongst computers — it is the specific concept of recursively embedding state in continuations, in order to keep track of that content. By oversimplifying (and thus misidentifying) the basic character of claim 1 of the '601 patent, Defendants have failed to meet their burden of demonstrating that the claim is directed to an abstract idea. Cf. Symantec Corp., 100 F. Supp.3d at 402-03 (finding the defendants' brick and mortar hypotheticals to be "unpersuasive" and concluding that "[t]he concept of detecting a computer virus in installed data (and doing so in a telephone network) does not make sense outside of a computer context" and that the defendants failed to prove the claim at issue was directed to an abstract idea).
Alice's step two
Although it need not do so in light of its conclusion as to step one, for the sake of completeness, the Court will next proceed to assess the patent's eligibility under Alice's step two.
Claims of a patent drawn to an abstract idea may still be patent eligible if they contain an "inventive concept" sufficient to "ensure that the patent in practice amounts to significantly more" than a patent upon the ineligible concept itself. Alice, 134 S. Ct. at 2355 (citation omitted). There is no such "inventive concept" if a claim only recites an abstract idea implemented using "generic" technology to "perform well-understood, routine, and conventional activities commonly used in [the] industry." Content Extraction, 776 F.3d at 1348. Neither "limiting the use of an abstract idea `to a particular technological environment[,]'" nor simply stating an abstract idea and adding the words "apply it[,]" will transform an abstract idea into a patent-eligible invention. Alice, 134 S. Ct. at 2358 (citations omitted). Pursuant to these principles, a software patent can be patent eligible under Section 101 when its claims "describe a problem and solution rooted in computer technology, and the solution [is] (1) specific enough to preclude the risk of preemption; and (2) innovative enough to `override the routine and conventional' use of the computer." Intellectual Ventures I, LLC v. Canon Inc., ___ F. Supp. 3d ___, Civ. No. 13-473-SLR, 2015 WL 6872446, at *21 (D. Del. Nov. 9, 2015) (quoting DDR Holdings, 773 F.3d at 1258-59).
Even were the Court to assume arguendo that Defendants are correct about the outcome at Alice's first step (meaning that claim 1 would be found to be directed to the abstract idea of "keeping track of prior communications during a conversation between computers"), Plaintiff's argument that claim 1 contains an inventive concept would be sufficient at this stage to withstand Defendants' Motion. As the Court will explain below, it is plausible that the "recursively embedding" limitation amounts to a concrete application of the asserted abstract idea. A more robust record would also be needed on the subjects of preemption and innovation, which could impact the subject matter eligibility of the claim.
a. Claim 1 discloses a specific solution
In their initial argument that claim 1 of the '601 patent was devoid of an inventive concept, Defendants again appeared to completely overlook Claim 1's "recursively embedding" limitation. Their opening brief asserted that the claim "seeks to monopolize every concrete application of keeping track of prior communications during a conversation between computers[.]" (D.I. 19 at 19; see also id. at 18 (contending that claim 1 "amounts to `nothing significantly more than an instruction to apply the abstract idea' of keeping track of prior communications during a conversation between computers by `using some unspecified, generic' computer hardware") (citations omitted)) But as Plaintiff accurately retorted, the patent's specification actually details several examples of prior art mechanisms to preserve state information such as state-aware protocols, cookies, and HTML forms. (D.I. 23 at 17-18) It then goes on to disclose a purportedly novel, additional way of accomplishing this goal: the concept of recursively embedding state information in continuations. (See, e.g., '601 patent, cols. 9:57-10:3)[9]
This disclosure sets the '601 patent apart from other patents that have flunked step two of Alice at the pleading stage. A helpful case to assess in this regard is the decision in Internet Patents, which involved claims that failed both prongs of Alice. There, the Federal Circuit concluded at step one that the invention was directed to the abstract idea of retaining information in the navigation of online forms (i.e., of maintaining state). Internet Patents, 790 F.3d at 1348. At step two, the Court found no inventive concept in the claims because they "contain[ed] no restriction on how the result is accomplished[;] [t]he mechanism for maintaining the state is not described, although this is stated to be the essential innovation." Id. The patentee's proposed construction of "maintaining state" did not help matters, as it described "the effect or result dissociated from any method by which maintaining the state is accomplished upon the activation of an icon." Id. (emphasis added). Thus, the Federal Circuit concluded that the claims were patent ineligible. Id. at 1348-49. Here, in stark contrast, the '601 patent does recite a particular mechanism for preserving state. (See Tr. at 117 (Plaintiff's counsel distinguishing the Internet Patents decision))
By the time of oral argument, Defendants' step two argument shifted a bit. Defendants' counsel acknowledged that the patent's disclosure of the recursively embedding concept provides "another way to [preserve state information]." (Id. at 125) But Defendants contended that claim 1 fails at step two because "it doesn't really tell you how" to recursively embed and, therefore, does not amount to something "significantly more than [an] abstract idea." (Id. at 122-25 (emphasis added); see also id. at 93-94) 
Defendants' argument raises the question of how much "how" must exist in a patent's claim, in order to elevate the claim from the realm of abstraction to that of patent eligibility. In DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir.2014), the Federal Circuit found the patent at issue to satisfy Section 101 where the claims did not simply recite the performance of a known business practice applied to the Internet, but instead provided a solution "necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer networks." DDR Holdings, 773 F.3d at 1257. The patent disclosed a system for generating a composite web page when a user clicked on a third-party merchant's advertisement hyperlink that combined the visual elements of the "host" website with the content of the third-party merchant. Id. at 1248-49. In deeming the patent satisfactory under Section 101, the Court cautioned that "not all claims purporting to address Internet-centric challenges" will be eligible for patent. Id. at 1258. The Court explained that the patent before it was eligible, however, because "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 sequence of events ordinarily triggered by the click of a hyperlink." Id. (emphasis added). More specifically, the claims set out the sequence by which the claimed system directed users to a "hybrid" web page that maintained the "look and feel" of the host website, instead of sending the user to a completely different third-party site. Id. at 1249, 1259. By claiming only a "specific way" of performing the task, the claims at issue did "not attempt to preempt every application of the idea . . . of making two web pages look the same[.]" Id. at 1259.  
When assessing whether claims contain an inventive concept, courts have emphasized this finding of the DDR Holdings Court. See, e.g., Source Search Techs., LLC v. Kayak Software Corp., 111 F.Supp.3d 603, 617 (D.N.J.2015) ("DDR Holdings tells us that when a patent holder seeking to establish [Section] 101 eligibility for an otherwise abstract idea points to a particular element of a patent's claims as solving a computer-centric problem, the claims must specify how that solution works. That specificity removes the claims from the abstract realm.") (emphasis in original). An inventive concept will not be found where (unlike the claims at issue in DDR Holdings) the claim fails to disclose how an interaction with the Internet (or among computer systems) is manipulated.[10] On the other hand, where claims recite specific, unconventional methods directed to solving the problem identified by the patent, district courts have tended to find that such patents pass muster under Alice's second step.[11]
Here, claim 1 clearly discloses, at minimum, one level of "how," in reciting a specific solution to the patent's identified problem. That is, claim 1 has an answer to the question "How will the patentee preserve state in conversations between computers communicating via stateless protocols?": by recursively embedding the state information in continuations, such as hyperlinks. It is true that the claim does not explicitly provide additional layers of "how." It does not further include, for example, a set of rules dictating how exactly the server must accomplish the "recursively embedding" step.[12] But at this stage, the claim's clear recital of a specific way to preserve state is a factor suggesting that it would be inappropriate to grant Defendants' Motion. Cf. Messaging Gateway Solutions, 2015 WL 1744343, at *3, *5-6 (finding that a method claim directed to the translation of an SMS text message in a way that allows the computer to receive and understand the message contained an inventive concept, where the translation limitation recited "the computer system inserting at least a message body of the text message into an Internet Protocol (IP) message" but did not further specify how that translation from text message to IP message is to occur); Intellectual Ventures I, LLC v. Motorola Mobility LLC, 81 F. Supp. 3d 356, 369 (D. Del. 2015) (finding, in resolving a post-trial motion seeking summary judgment, that the claims of an asserted patent relating to the allocation of wireless bandwidth based on packet contents were directed to patent-eligible subject matter, explaining at step two that "[e]ven though claim 1 itself does not provide a detailed explanation of how packet headers are used to allocate the bandwidth, the inventive concept lies in the limitation of using packet headers to allocate bandwidth, not in the details of implementation").
Innovation and Preemption
The Court further finds that isues relating to innovation and preemption — additional important considerations in the step two inquiry — would need to be further fleshed out prior to a final decision on the eligibility of claim 1.
In order to amount to an inventive concept, a claim's limitations must "recite an invention that is not merely the routine or conventional use of" computer technology and/or the Internet. DDR Holdings, 773 F.3d at 1259. Plaintiff asserts that the recursively embedding limitation "[i]s a total change [from] the way the Internet hyperlinks worked before this patent." (Tr. at 108; see also id. at 116-17; D.I. 1 at ¶ 21 ("The inventor [of the '601 patent] . . . . developed novel methods of recursively embedding state information into communications between clients and servers.")) For their part, even Defendants acknowledge that it is "arguabl[e]" that the "rescursively embedding" limitation in claim 1 is something other than a "conventional step[]." (Tr. at 92) Further factual development — as to just how unconventional or innovative this solution was at the time — might impact the Section 101 inquiry.
So too would factual development as to the question of preemption. Defendants assert that "[p]rofound preemption concerns are inherent because Claim 1 . . . fails to impose any significant limitations on the implementation of the abstract idea of keeping track of a prior communication in a conversation[,]" and "[t]he few remaining options in the field offered by Plaintiff (using state-aware protocols, i.e., not HTTP, or using small files containing state information stored at the client computer) demonstrate the over-breadth of the claim." (D.I. 25 at 11) Plaintiff, to the contrary, argues that the patent "does not monopolize the industry in any way" — pointing to the additional methods the patent discusses for preserving state information. (Tr. at 119)
The Supreme Court has identified "the concern that drives th[e] exclusionary principle [set out in Section 101] as one of pre-emption." Alice, 134 S. Ct. at 2354. The inquiry with respect to preemption is whether the patent "would risk disproportionately tying up the use of the underlying ideas[.]" Id. (internal quotation marks and citation omitted). On this record, it is still an open question as to whether: (1) the additional specific methods identified in the patent were the only remaining options in the field for preserving state information in conversations between a client and a server; and (2) if they were not (or even if they were), to what extent could claim 1's content be said to tie up too much of the use of the underlying asserted abstract idea. See, e.g., Cronos Techs., 2015 WL 5234040, at *3 (explaining that if there are any set of facts that could be proven relating to preemption that could render a claim patent eligible, then a court should deny a Rule 12 motion brought on Section 101 grounds); Mirror Worlds Techs., LLC v. Apple Inc., CAUSE NO. 6-13-CV-419 (LEAD CASE), 2015 WL 6750306, at *10 (E.D. Tex. July 7, 2015) (denying defendants' Section 101 motions for judgment on the pleadings without prejudice because, inter alia, "the Court cannot conclude at the pleading stage that claim 13 uses conventional and generic computer functions to disproportionately preempt the abstract idea"). The answers to those disputed questions could inform whether a Section 101 motion is ultimately well-taken, all of which further militates against grant of Defendants' Motion. (Cf. Tr. at 104 (Defendants' counsel acknowledging that there "could be" disputed fact questions regarding the number of additional solutions that exist for preserving state information in communications between computers, specifically as to the significance or scope of any such alternative solutions))

In sum, under the current procedural posture of the case, Defendants have failed to meet their burden of demonstrating that claim 1 of the '601 patent is patent-ineligible. The Court thus recommends that Defendants' Motion be denied without prejudice as to this patent.