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Nathan Myhrvold
Nathan Myhrvold

The U.S. Court of Appeals for the Federal Circuit has ruled against Intellectual Ventures in a dispute with Capital One Financial, finding that two of the company’s patents were based on “unpatentable abstract ideas,” and upholding a lower court’s reading of a third patent in Capital One’s favor.

The decision, issued Monday, is a setback for Intellectual Ventures, the Bellevue, Wash.-based patent holding company and invention lab run by former Microsoft technology chief Nathan Myhrvold. The company has filed a series of patent suits against Capital One and other large financial institutions as part of its broader legal strategy.

The ruling is also an indication of the uphill climb facing IV and many other patent holders following the U.S. Supreme Court’s closely watched decision in Alice Corp. v. CLS Bank, last year. The appeals court based its ruling this week largely on the determination in the Alice case that “abstract ideas are not patentable.”

For example, one of the patents on which IV based its case against Capital One was U.S. Patent 7603382, “Advanced internet interface providing user display access of customized webpages.” As explained by the appeals court, the patent “generally relates to customizing web page content as a function of navigation history and information known about the user.”

This is one of the examples used by the court to explain why it considered the approach too abstract to patent.

“At oral argument, Intellectual Ventures did not challenge the conclusion that tailoring content based on the time of day at which the user viewed the content is within the scope of the claim limitation. Tailoring information based on the time of day of viewing is also an abstract, overly broad concept long-practiced in our society. There can be no doubt that television commercials for decades tailored advertisements based on the time of day during which the advertisement was viewed. For example, a television channel might choose to present a commercial for children’s toys during early morning cartoon programs but beer during an evening sporting event.”

Here’s the full text of the court’s ruling. We’ve contacted Intellectual Ventures seeking comment.

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