Federal Circuit Finds Representative Claim Error Harmless, Affirms Section 101 Dismissal

On July 2, the U.S. Court of Appeals for the Federal Circuit (CAFC) affirmed the dismissal  of Etison LLC d/b/a ClickFunnels’ patent infringement suit against HighLevel Inc., holding the disputed website creation patents claim ineligible subject matter under 35 U.S.C. § 101.

While the CAFC found that the district court erred by treating a single claim as representative of all asserted claims without adequately addressing ClickFunnels’ argument that the two dependent claims at issue contained a distinct limitation,  the panel ultimately concluded that the error was harmless. The opinion found that the dependent claims failed Alice step two, but also explained that district courts should clearly resolve disputes over which claims are, and are not, adequately represented before using a Section 101 ruling across the entirety of a patent.

District Court Ruling

ClickFunnels owns U.S. Patent Nos. 10,846,357 (the ‘357 patent) and 11,361,047 (the ‘047 patent), which share a specification titled “Website Creation System for Creating Websites Having At Least One Series of Directional Webpages and Related Methods.” The patents generally cover website creation systems that provide users with website types and templates to create websites that have a series of directional webpages, or “funnels,” that are meant to guide users through a sequence of interactions leading to purchases or other desired actions.

ClickFunnels sued HighLevel in the U.S. District Court for the District of Delaware in April 2024, alleging that HighLevel’s software-as-a-service (SaaS) website platform infringed its ‘357 and ‘047 patents. After ClickFunnels filed an amended complaint, HighLevel moved to dismiss the lawsuit under Federal Rule of Civil Procedure (FRCP) 12(b)(6), arguing that the patents claim patent-ineligible subject matter under Section 101. After applying the two-step framework established by Alice Corp. v. CLS Bank International,   the district court treated claim 1 of the ‘357 patent as representative of all asserted claims, then concluded at Alice step two that the patents were directed to the abstract idea of “filtering information based on the user preferences to arrive at a final result” and lacked an inventive concept.

Representative Claims Dispute

On appeal, the Federal Circuit first addressed whether the distinct court properly treated claim 1 of the ‘357 patent as representative of all asserted claims. Judge Stark, writing for the panel, explained that district courts may rely on representative claims when resolving Section 101 motions because it promotes efficiency and avoids the need to conduct separate Alice analysis for every asserted claim. However, the Court cautioned that the representative claims:

“carry with them attendant risks. If the district court improperly restricts the number of claims it analyzes, and then extends its conclusions to other claims, it might mistakenly invalidate claims not specifically considered; or, alternatively, it could wrongfully strip a patent challenger of a claim-specific defense.”

The court emphasized guidance from recent precedent that “it is important for courts to resolve any disputes over representativeness and clearly state which claims are, and are not, adequately represented by other claims.”

The court’s opinion also highlighted that the burden-shifting framework governs representative claim disputes. Once a patent challenger makes a prima facie showing that the identified claims are substantially similar and directed to the same abstract idea, the burden shifts to the patentee to present a non-frivolous argument that details why a particular claim contains limitations that warrant separate consideration. If the patentee is successful, the claims containing those limitations fall outside of the representative claim’s umbrella and must be analyzed on their own.

The Federal Circuit, applying the burden-shifting framework, concluded that the district court erred in treating claim 1 as representative of every asserted claim. The court reasoned that ClickFunnels had specifically identified dependent claim 13 of the ‘357 patent and dependent claim 16 of the ‘047 patent, which both recite “one or more triggers” limitations that do not appear in claim 1, and that  HighLevel failed to demonstrate that the asserted distinction was frivolous, though ClickFunnels’ argument before the district court was brief. The Federal Circuit concluded that the district court erred in finding ClickFunnels had “failed to provide any nonfrivolous argument” against representative treatment.

Even so, the error did not alter the outcome of the case. The district court still went on to evaluate the “one or more triggers” limitations as part of its Alice analysis and ultimately concluded that ClickFunnels failed to show an inventive concept.

ClickFunnels also argued that “the district court impermissibly engaged in fact finding about the state of the art and relied on matters other than those contained in the Amended Complaint and the patents-in-suit,” but the CAFC said there was no evidence to support this. The opinion reiterated that the district court was relying on CAFC precedent, “and particularly our holdings as to what may or may not constitute an inventive concept as a matter of law.”  The CAFC added:

“While the district court could have been clearer about what it was doing – and more carefully shown that it credited the well-pleaded factual allegations of the Amended Complaint and read the patents in the light most favorable to ClickFunnels – ClickFunnels has failed to identify any reversible error.”

Ultimately, because the two dependent claims at issue were effectively analyzed despite the court’s incorrect representative claim determination, the Federal Circuit held that the error was harmless and affirmed the district court’s judgment.

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