Ultramercial, Inc. v. Hulu

A patent claim that is directed to an abstract idea does not move into §101 eligibility territory by merely requiring generic computer implementation.

Opinion

Lourie, Circuit Judge

Ultramercial, Inc. ("Ultramercial") owns the ‘545 patent, a method for distributing copyrighted media over the internet where the consumer receives the copyrighted media at no cost in exchange for viewing an advertisement, and the advertiser pays for the copyrighted content. Ultramercial sued Hulu, LLC (“Hulu”), YouTube, LLC (“YouTube”), and WildTangent, Inc. (“WildTangent”), alleging infringement of all claims of the ‘545 patent. Hulu and YouTube were dismissed, but WildTangent moved to dismiss for failure to state a claim, arguing that the ‘545 patent did not claim patent-eligible subject matter. This case was an appeal that has returned to the court following an up and down journey to and from the Supreme Court.

While WildTangent’s petition was pending, the Supreme Court issued its decision in Alice Corp. v. CLS Bank International, which made clear that a patent claim that is directed to an abstract idea does not move into §101 eligibility territory by “merely requir[ing] generic computer implementation.” A §101 analysis begins by identifying whether an invention fits within one of the four statutorily provided categories of patent-eligible subject matter: processes, machines, manufactures, and compositions of matter. Laws of nature, natural phenomena, and abstract ideas are not patentable.

Ultramercial argued that the ‘545 claims are not directed to the type of abstract idea at issue in Alice, and are instead directed to a specific method of advertising and content distribution that was previously unknown and never before employed on the internet. WildTangent responded that the ‘545 claims are directed to the abstract idea of offering free media in exchange for watching advertisements and that the mere implementation of that idea on a computer does not change that fact.

The court agreed with WildTangent. Because the ‘545 patent claims are directed to no more than a patent-ineligible abstract idea, the court concluded that the district court did not err in holding that the ‘545 patent does not claim patent-eligible subject matter. Accordingly, the decision of the district court granting WildTangent’s motion to dismiss was AFFIRMED.