A company called Ultramercial has for years claimed a monopoly over an “invention” for showing pre-roll ads on the internet, and sued the likes of Hulu and YouTube for royalty payments. Shockingly, the company — whose patent covers the basic idea of advertising — got a favorable reception at the country’s top patent court, the Federal Circuit, which repeatedly defied the Supreme Court and found the patent to be valid.
Now, the madness is finally over. The patent appeals court has at last heeded the Supreme Court’s instructions, and come to an obvious conclusion: advertising is an abstract idea that cannot be patented, and adding phrases like “on the internet” to a patent claim doesn’t change that fact:
The majority of those steps comprise the abstract concept of offering media content in exchange for viewing an advertisement. Adding routine additional steps such as updating an activity log, requiring a request from the consumer to view the ad, restrictions on public access, and use of the Internet does not transform an otherwise abstract idea into patent-eligible subject matter.[…]
The claims’ invocation of the Internet also adds no inventive concept. As we have held, the use of the Internet is not sufficient to save otherwise abstract claims from ineligibility under § 101. [emphasis mine]
This outbreak of commonsense appears to be the latest fall-out from the Supreme Court’s seminal Alice ruling this summer, a 9-0 decision that seriously curtailed the times when a software-related “invention” can be eligible for a patent. The ruling (you can see a graphic from Ultramercial’s patent at right — note the floppy discs!) has not only led courts to declare more patents ineligible, but has also seen many software patents — a favorite weapon of patent trolls — get cut down at the Patent Office.
The Ultramercial ruling comes after the Supreme Court told the Federal Circuit to reconsider the case for a second time in June. The Federal Circuit also appears to be showing more deference to the top court since the departure of former Chief Justice Randall Rader, who quit following an ethics scandal earlier this year.
More broadly, despite the recent invalidation of certain software patents, the U.S. patent system as a whole remains a mess, following the failure of a popular reform bill last spring. As a result, patent trolls like Intellectual Ventures remain active and are even poised to bring their business model, which amounts to legal extortion, to new fields like wearable computing.
Here’s a copy of the Ultamercial ruling with some of the relevant parts underlined: