Abstraction as the unpatentability black hole: Ultramercial v. Hulu (FED. CIR. 2014)

Last week, a three judge panel of the US Federal Circuit issued its decision on the Ultramercial v. Hulu and Wildtangent case (1).  The panel found Ultramercial’s US patent 7,346,545 (“the ‘545 patent”) to not claim patent-eligible subject matter (2).  The ‘545 patent contained only method claims.

The fact that the claims “invoked” (alluding to the judges’ language) the Internet, was not enough to dissuade the judges that what was being claimed was in fact the abstract idea of a method of using advertising as an exchange or currency, as had been concluded by the District Court.  The panel went as far as to say that the claimed “ordered combination of steps recites an abstraction, an idea, having no particular concrete or tangible form”, adding that “the majority of the limitations describes only the abstract idea of showing an advertisement before delivering free content” (emphasis added).  The panel qualified the use of the Internet in the method as “an “attempt[] to limit the use” of the abstract idea “to a particular technological environment”, which is insufficient to save the claim”.

The limitations of the claims were found to not transform the abstract idea into patentable subject matter “because the claims simply instruct the practitioner to implement the abstract idea with routine, conventional activity.”  The claims were also found to not be tied to a novel machine or apparatus, only to a general use computer.

This is the third time the Federal Circuit has decided on this case.  The first two times it concluded that the claims were directed to patent-eligible subject matter, based on the complex computer

(1) The opinion can be found at http://www.cafc.uscourts.gov/images/stories/opinions-orders/10-1544.Opinion.11-12-2014.1.PDF

(2) A claim found by the court to be representative of the ‘545 patent is:

1. A method for distribution of products over the Internet via a facilitator, said method comprising the steps of:

a first step of receiving, from a content provider, media products that are covered by intellectual-property rights protection and are available for purchase, wherein each said media product being comprised of at least one of text data, music data, and video data;

a second step of selecting a sponsor message to be associated with the media product, said sponsor message being selected from a plurality of sponsor messages, said second step including accessing an activity log to verify that the total number of times which the sponsor message has been previously presented is less than the number of transaction cycles contracted by the sponsor of the sponsor message;

a third step of providing the media product for sale at an Internet website;

a fourth step of restricting general public access to said media product;

a fifth step of offering to a consumer access to the media product without charge to the consumer on the precondition that the consumer views the sponsor message;

a sixth step of receiving from the consumer a request to view the sponsor message, wherein the consumer submits said request in response to being offered access to the media product;

 a seventh step of, in response to receiving the request from the consumer, facilitating the display of a sponsor message to the consumer;

an eighth step of, if the sponsor message is not an interactive message, allowing said consumer access to said media product after said step of facilitating the display of said sponsor message;

 a ninth step of, if the sponsor message is an interactive message, presenting at least one query to the consumer and allowing said consumer access to said media product after receiving a response to said at least one query;

a tenth step of recording the transaction event to the activity log, said tenth step including updating the total number of times the sponsor message has been presented; and an eleventh step of receiving payment from the sponsor of the sponsor message displayed.

interface that was necessarily associated with the method.  The second decision was on remand from the Supreme Court in view of Mayo.  This time, it was again on remand from the Supreme Court, but in view of Alice.
Judges Lourie and O’Malley were part of the panel all three times.  This time around, Judge Rader, who stepped down from the Federal Circuit earlier this year, was not a part of the panel.  Rader was replaced by Judge Mayer. 
Abstraction continues to be a concept undefined by the courts, although this has not stopped them from using this undefined concept to invalidate numerous software patents.
If this case is appealed to the Supreme Court, the Supreme Court may have an opportunity to reassess the impact of Alice, and make any necessary clarifications.
In the meantime, overcautious claim drafting continues to be a must in software applications.  It is possible to speculate whether the fate of the case may have been a different one, had each of the steps in the claims been tied to the interface of the Internet website, and not only the third step.   The Supreme Court may once again have the last word.

//Isabel Cantallops Fiol