On September 15, 2011, the U.S. Court of Appeals for the Federal Circuit issued another decision on patent eligibility under 35 U.S.C. § 101 in Ultramercial, LLC v. Hulu, LLC, No. 2010-1544, 2011 U.S. App. LEXIS 19048 (Fed. Cir. Sept. 15, 2011). This decision, authored by Chief Judge Rader, shows the Federal Circuit’s commitment to continue to clarify that in order for claims to be patent-eligible under Section 101, they need only pass through a “coarse eligibility filter.”
The claims at issue in Ultramercial concerned a method for monetizing and distributing copyrighted material over the Internet. The district court found that the claims at issue were invalid because they did not claim patent-eligible subject matter. See Ultramercial, LLC v. Hulu, LLC, No. CV-09-06918, 2010 U.S. Dist. LEXIS 93453, at *1 (C.D. Cal. Aug. 13, 2010). Despite references in the claim to the “internet,” the district court found that the claims were not tied to a “machine” and did not “transform” an article to a different state or thing. Rather, the district court found that the claims at issue were directed to the “abstract” idea “that one can use advertisement as an exchange or currency.” Id. at *17.
On appeal, applying the “coarse” filter test set forth in Research Corp. Techs. Inc. v. Microsoft, 627 F.3d 859, 869 (Fed. Cir. 2010), the Federal Circuit reversed the district court finding, and concluded that the claims at issue were patent-eligible subject matter.
Relying upon the Supreme Court’s admonitions in Bilski v. Kappos, 130 S. Ct. 3218, 3227-28 (2010), Ultramercial rejected efforts to limit the Section 101 analysis to the “machine-or-transformation test”:
Ultramercial, 2011 U.S. App. LEXIS 19048, at *9-10.
In determining whether the claimed invention, a method for monetizing and distributing copyrighted material over the Internet, was directed to abstract ideas under Section 101, the Court reemphasized that (a) inventions with specific applications or improvements to technologies in the marketplace and (b) inventions that disclose practical applications of ideas are likely to be patentable. In so doing, Ultramercial reiterated the “manifestly abstract” test set forth in Research Corp. Technologies:
Ultramercial, 2011 U.S. App. LEXIS 19048, at *10-11.
Finally, the Federal Circuit distinguished the claims of Ultramercial with its prior precedent in Cybersource. Here, the Court found the claims at hand patent eligible because the claims specified a number of steps “likely to require intricate and complex computer programming” and they necessarily involved interaction with others on “the Internet and [in] a cyber-market environment.” Ultramercial, 2011 U.S. App. LEXIS 19048, at *14. Thus, “[u]nlike the claims in CyberSource [Corp. v. Retail Decisions, Inc., No. 2009-1358, 2011 U.S. App. LEXIS 16871 (Fed. Cir. Aug. 16, 2011)], the claims here require, among other things, controlled interaction with a consumer via an Internet website, something far removed from purely mental steps.” Ultramercial, 2011 U.S. App. LEXIS 19048, at *18.
We will continue to monitor and report on Section 101 cases, and encourage you to review the publications and events page of our firm website (www.arelaw.com) for more information. Also, please feel free to contact one of our firm’s attorneys to learn more.
*Charles R. Macedo is a Partner and David P. Goldberg is a law clerk at Amster, Rothstein & Ebenstein LLP. Their practice specializes in intellectual property issues including litigating patent, trademark and other intellectual property disputes. They may be reached at [email protected] and [email protected].
Charles R. Macedo is author of The Corporate Insider's Guide to US Patent Practice, published by Oxford University Press in 2009.
View all ARELaw Alerts