Will Ultramercial Patent Set Up an Ultra Supreme Court Appeal?

In late June, the Federal Circuit again decided Ultramercial v Hulu – a case brought by Ultramercial claiming infringement of their patent for serving online media preceded by advertising. Ultramercial’s patent has been widely criticized by many commentators who view the patent as one describing an abstract concept, and believe the decision is destined for a Supreme Court appeal.

History

The case by Ultramercial against Hulu and other defendants was first decided by the Federal Circuit back in 2011, where Ultramercial’s patent was upheld and not deemed “too abstract.” Following that decision, the defendants appealed to the Supreme Court, who vacated the decision and remanded it back to the Federal Circuit to re-interpret case law in light of SCOTUS’ recent decision in Mayo v Prometheus. The Federal Circuit then reheard the case, and again upheld the patent even when considering the Supreme Court’s guidance in Mayo and the more recent case of Myriad Geneticswhich also saw the Supreme Court scale back the extent of patent protection. (For further analysis of those cases, see IPilogue’s coverage on Myriad and Mayo.)

What is Patented?

Patent no. 7,346,545 was granted in 2008, and covers a method of payment for distributing products covered by intellectual property by means of users viewing advertisements before gaining access to the protected content. The patent further describes the method as operating over a telecommunications network, and the various parties and interactions involved to facilitate the system. The issue which has split commentators and courts alike is if the patent is in essence an abstract concept, or an implemented invention.

Abstract concepts alone are not patentable under American law. Those arguing that Ultramercial’s patent falls into this category see the patent as attempting to claim protection for the concept of playing advertisements prior to copyright-protected content. Others see the patent as covering the concept that advertisement impressions can be commoditized, and used as currency for compensation to access copyright-protected materials. Additionally, they see the patent claims as covering a specific implementation over a computer network. Critics retort that this is a thinly veiled attempt to patent an abstract concept by “doing it on the internet.”

Commentary

While a unanimous decision, some argue the Federal Circuit failed to properly follow the decisions in Mayo and Myriad. They further suggest that this could once again set up the case for a Supreme Court appeal. It appears that the main rift between the two courts is on the extent of patentable material. In the very recent cases of Mayo and Myriad, the Supreme Court has set clear precedent scaling back the extent of patent protection. Given the developing pattern of retrenching patentable subject matter in those two cases, many question the Federal court’s reasoning of the validity of the patent.

Others see the precedent in Mayo and Myriad as limited to medical diagnostics and life sciences respectively. They argue those decisions are distinct from the subject matter of Ultramercial’s patent, which is characterized as primarily software and business process. In light of this, the Federal Circuit was valid to decide as it did, and the decision could be upheld if appealed to the Supreme Court.

Going Forward

The Ultramercial patent is not the first – nor is it likely to be the last – patent to raise this discussion. Not only is there debate over the characterization of the patent itself, but a much broader and ongoing discussion of what should be patentable subject matter. This broader issue has attracted a great deal of attention in America, with comments by Obama and other law makers concerning the future of patents. Even if the Federal Circuit’s decision is appealed and heard by the Supreme Court, law makers will still have to decide what kind of patent system they want, and draw the line between patentable and un-patentable subject matter.

Alex Buonassisi is an IPilogue Editor and a JD Candidate at Thompson Rivers University.

One Comment
  1. There are a lot of opinions based upon the “abstract” of the patent but you have to read the patent and consider its application to understand that it is not “too abstract”.

    The purpose of the method is to allow viewers to purchase premium content with their attention, rather than subscriptions. The exonomics of letting a viewer choose to watch an ad in exchange for premium content was not only unique at the time the patent was applied for, the resulting economics of the method were surprisingly beneficial for advertisers paying an extraordinary premium.

    The patent does not interfere with the preroll ad units that a viewer has not choice to sit through.

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