Ultramercial v. WildTangent: On Second Remand, Federal Circuit Invalidates Patent | Practical Law

Ultramercial v. WildTangent: On Second Remand, Federal Circuit Invalidates Patent | Practical Law

On remand for the second time from the US Supreme Court, the US Court of Appeals for the Federal Circuit affirmed the US District Court for the Central District of California’s decision in Ultramercial, Inc. v. WildTangent, Inc., holding that Ultramercial’s patent, directed to a method for distributing copyrighted material over the internet, is not patent-eligible subject matter under Section 101 of the Patent Act.

Ultramercial v. WildTangent: On Second Remand, Federal Circuit Invalidates Patent

Practical Law Legal Update 6-588-7425 (Approx. 3 pages)

Ultramercial v. WildTangent: On Second Remand, Federal Circuit Invalidates Patent

by Practical Law Intellectual Property & Technology
Published on 17 Nov 2014 • USA (National/Federal)
On remand for the second time from the US Supreme Court, the US Court of Appeals for the Federal Circuit affirmed the US District Court for the Central District of California’s decision in Ultramercial, Inc. v. WildTangent, Inc., holding that Ultramercial’s patent, directed to a method for distributing copyrighted material over the internet, is not patent-eligible subject matter under Section 101 of the Patent Act.
On November 14, 2014, in Ultramercial, Inc. v. WildTangent, Inc., the US Court of Appeals for the Federal Circuit affirmed the US District Court for the Central District of California’s grant of WildTangent’s motion to dismiss because Ultramercial’s patent was not patent-eligible subject matter under Section 101 of the Patent Act (No. 2010-1544, (Fed. Cir. Nov. 14, 2014)). The patent at issue, Ultramercial’s US Patent No. 7,346,545 (the ‘545 patent) concerned a method for distributing copyrighted material over the internet that allowed users to view copyrighted material for free if they watched sponsored ads.
The Federal Circuit’s two earlier decisions had been vacated and remanded by the US Supreme Court in light of its decisions in Mayo v. Prometheus and Alice Corp. v. CLS Bank International. On remand for the second time, the Federal Circuit concluded that, contrary to its earlier decisions, the disputed claims of Ultramercial’s ‘545 patent were patent ineligible under Section 101 of the Patent Act because they are directed to an abstract idea (35 U.S.C. § 101).
The Federal Circuit's decision used the two-step framework from the Supreme Court's Alice decision (Alice Corp. Pty. Ltd. v. CLS Bank Int'l, No. 13-298, (S. Ct. June 19, 2014)). Specifically, the court:
  • Determined that Ultramercial's claimed steps, viewed individually and in combination, are directed to the abstract idea of showing an ad before delivering free content.
  • Concluded that the disputed claims do no more than simply describe the abstract method and do not add any meaningful limitations. The court explained that:
    • including additional routine and conventional steps does not transform the abstract idea into patent-eligible subject matter;
    • the use of the internet in the claimed method is not sufficient to save it from being patent-ineligible subject matter; and
    • the claims are not patent eligible merely because some of the claimed steps were not previously used in the art.
The Federal Circuit additionally stated that the machine-or-transformation test, though not the sole test, could provide a useful clue in the second step of the Alice framework. The court noted that the claims are not tied to any novel machine or apparatus, just a general purpose computer. This, coupled with its holding that the internet is not sufficient to save the patent, confirmed the Federal Circuit's decision.
For additional analysis on this case, see Practice Note, In Dispute: Ultramercial v. Wildtangent.