Ultramercial, Inc. v. Hulu, LLC
772 F.3d 709
| Fed. Cir. | 2014Background
- Ultramercial sued WildTangent (and others earlier) asserting U.S. Patent No. 7,346,545, which claims an 11-step computer-implemented method for delivering copyrighted media free to consumers in exchange for viewing advertisements (advertising-as-currency).
- WildTangent moved to dismiss under Fed. R. Civ. P. 12(b)(6), arguing the claims are directed to patent-ineligible subject matter under 35 U.S.C. § 101. The district court granted dismissal.
- The Federal Circuit initially reversed, but the Supreme Court vacated and remanded for consideration in light of Mayo and later Alice; the case returned multiple times.
- On this remand the Federal Circuit applied the two-step Alice/Mayo framework: (1) whether the claims are directed to an abstract idea; (2) if so, whether the claim elements add an inventive concept that transforms the idea into patent-eligible subject matter.
- The court concluded claim 1 is directed to the abstract idea of using advertising as an exchange/currency and that the claim elements (including Internet implementation, activity logs, access restrictions, and routine computer steps) are conventional and do not supply an inventive concept.
- The Federal Circuit affirmed the district court’s dismissal for lack of patent-eligible subject matter.
Issues
| Issue | Plaintiff's Argument (Ultramercial) | Defendant's Argument (WildTangent) | Held |
|---|---|---|---|
| Whether the '545 patent claims patent-eligible subject matter under § 101 | Claims are not abstract; they claim a specific, previously unknown method of online advertising/content distribution and are more than routine computer implementation | Claims are directed to the abstract idea of providing free media in exchange for viewing ads; implementing that idea on the Internet is routine and conventional | Held not patent-eligible: claims directed to abstract idea of advertising-as-currency |
| Whether claim limitations supply an "inventive concept" under Alice step two | Novel or non-routine components (e.g., selection logic, activity log) render the claim inventive and patent-eligible | Additional claim steps are conventional (data-gathering, pre-solution activity, generic computer use) and do not transform the abstract idea | Held no inventive concept: limitations are routine/conventional and insufficient to transform the abstract idea |
| Whether invoking the Internet or a generic computer satisfies the machine-or-transformation test | Internet/computer implementation makes the claims tied to a machine/technological environment and thus patent-eligible | Internet/generic computer is ubiquitous and does not meaningfully limit or transform the abstract idea | Held insufficient: generic computer/Internet use does not make claims patent-eligible |
| Whether novelty of implementation (not previously done) saves the claims from § 101 scrutiny | Newness of the method in this art means it is not the type of "routine, long prevalent" idea that Alice targets | Novelty alone does not cure an abstract idea when implemented with conventional computer steps | Held novelty alone does not confer eligibility; novelty is relevant to §§ 102/103, not dispositive under § 101 |
Key Cases Cited
- Alice Corp. v. CLS Bank Int’l, 573 U.S. 208 (2014) (two-step framework for abstract ideas and requiring an inventive concept beyond generic computer implementation)
- Mayo Collaborative Servs. v. Prometheus Labs., 566 U.S. 66 (2012) (requires claims directed to laws of nature/abstract ideas to add significantly more than the ineligible concept)
- Bilski v. Kappos, 561 U.S. 593 (2010) (business-method patents and the machine-or-transformation test as a useful clue)
- Ass’n for Molecular Pathology v. Myriad Genetics, 569 U.S. 576 (2013) (limits on patenting natural phenomena and related principles)
- Diamond v. Diehr, 450 U.S. 175 (1981) (claims applying a mathematical formula in a specific technological process held patent-eligible)
- CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366 (Fed. Cir. 2011) (use of the Internet or generic computer does not make an abstract idea patent-eligible)