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Summary:

Opponents of software patents suffered a setback as the Federal Circuit today said a patent for displaying content before a video should not be considered an abstract idea.

Pre-roll patent screenshot

The country’s top patent court has ruled that playing an ad before someone watches a piece of content on the internet is not an abstract idea, but is the subject of a valid patent.

The decision, issued on Friday by the Court of Appeals for the Federal Circuit, could spell trouble for the online video industry, which relies on advertising to make money. The patent in question is held by a company called Ultramercial that sued Hulu, YouTube and others, claiming they had a monopoly on pre-roll ad technology. The technology looks like this (note the $ signs and the 5″ floppy) :

Pre-roll patent

The case has bounced up and down the court system for years and eventually landed at the Supreme Court, which in March vacated the patent court’s earlier ruling upholding the patent. The Supreme Court gave instructions to reconsider the issue in light of a decision called Mayo, which set out new limits on what can patented.

Groups like the EFF took the Supreme Court ruling as a signal to the patent court to rein in software patents — or the idea that abstract ideas (like using advertising as currency) shouldn’t be patentable simply because they’re on the internet.

The patent court, however, today said the pre-roll video patent was not abstract because:

The ’545 patent seeks to remedy problems with prior art banner advertising over the Internet, such as declin- ing click-through rates, by introducing a method of product distribution that forces consumers to view and possibly even interact with advertisements before permitting access to the desired media product. [...]

Further, and even without formal claim construction, it is clear that several steps plainly require that the method be performed through computers, on the internet, and in a cyber-market environment. One clear example is the third step, “providing said media products for sale on an Internet website.”

The decision comes a day after the head of the FTC decried a patent system overrun by trolls, and a week after an important Supreme Court decision that limited patentable subject matter in the case of genes. The patent court’s pre-roll ruling, therefore, could provide further fuel to critics who accuse if of going “rogue” and protecting its bureaucratic turf rather than fostering innovation.

As for the case itself, it will go back to the California district court that initially rejected the patent. Hulu and YouTube have been dropped from the case and it is now on the shoulders of a company called Wildtangent to keep up the litigation. In a possible sign of hope, the Federal Circuit did not rule out the patent being invalidated on the grounds of anticipation or obviousness.

You can read the ruling for yourself here. The bulk of it involves the judges explaining why patentable subject matter should be as broad as possible; the discussion of the pre-roll patent starts on page 25.

Ultramercial v Hulu

  1. Tetracycloide Friday, June 21, 2013

    Wow, I thought ‘on the internet’ was just part of a joke about how lax the patent system had become but apparently I was wrong. Never expected the phrase to literally appear in a ruling like that. I wonder if they have any conception of how bad that sounds.

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    1. Renee Marie Jones Friday, June 21, 2013

      They have a mindless ideology that every patent issued is a good thing and any patent denied destroys an industry. They just take whatever nonsense the pro-patent lawyers feed them and rewrite the law accordingly.

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  2. Then the patent should go to the TV people because they’ve been doing pre-roll ads for over 50 years already, meaning the patent has expired and we’re back to common knowledge.

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  3. Renee Marie Jones Friday, June 21, 2013

    If the judges are so stupid as to think that this is a brilliant invention, deserving of a government-sponsored monopoly, then we need to start requiring IQ tests for federal judges.

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  4. Dritan Suljoti Friday, June 21, 2013

    Not sure how this patent could be valid . There was prior art commercially in the market, before the company filed provisional patent in May 2000:

    – Microsoft introduced and documented the ability of inserting inline pre-roll ads in 1998 with the launch of ASX 2.0
    – shortly after in 1998 Real Networks introduced Real Player g2 and launched SMIL 1.0 which was an approved specification by W3C (and later support by internet explorer as HTML + TIME)

    DoubleClick’s ad serving system (now owned by Google) had the ability to deliver pre/mid/post-roll advertisements for both Windows Media Player and Realplayer end of 1998 and early 1999. The solution was provided/marketed/sold and the company worked closely with Microsoft, Real, and later Apple and Macromedia to make sure streaming players had viable ways to deliver ads.

    Here is a link from Real Networks, copyrighted 1998 detailing the basic support for ads (and also you could sync up video ad with image)
    http://service.real.com/help/library/guides/production/htmfiles/ads.htm#12177
    SMIL 1.0 Article http://www.informit.com/articles/article.aspx?p=131304&seqNum=3

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  5. Patrick Hurley Thursday, June 27, 2013

    When I was in charge of Bus Ops at Salon.com years ago, we partnered with Ultramercial to introduce a Day Pass option — be exposed to an ad and, in return, get free access to the content for 24 hours. I remember them talking about patenting the concept and I found it to be rather far fetched. I still do.

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  6. Neither of you clearly read a word of the opinion. The case is about patent eligibility specifically not that all patents issue based on this analysis alone. Because you are lazy, read the last sentence of Rader’s opinion. It might provide you some insight into how the patent could still be invalid. Rather than generaliinzg and hating on the patent system, you should probably begin to understand it. This is one of the best opinions written about a patent topic in a long while in my opinion….no hand-waving and more real analysis.

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