Federal Circuit flips on Ultramercial v. WildTangent

After two trips to the Supreme Court and two remands, the Federal Circuit considered Ultramercial v. WildTangent for the third time—this time with Alice in hand—and ruled that the district court properly dismissed Ultramercial’s suit as failing to state a claim, since its patent (U.S. Pat. No. 7,346,545) does not claim patentable subject matter.

As you almost certainly recall, the patent was directed to a “method for distribution of products over the Internet” whereby a consumer was given access to “a media product” if the consumer viewed an ad. While the claim contained 11 steps, the court boiled it down to “showing an advertisement before delivering free content” or “using advertisement as an exchange or currency.” Under step (1) of the Mayo analysis, this was found to be an abstract idea.

Ultramercial fared no better when the court reviewed the claim for an “inventive concept” or “additional features” and found that the bells and whistles added to the abstract idea were no more than routine steps to implement the concept. The use of the internet was found to be no more than a “technical environment”. The court went on to evaluate the claim in view of the machine or transformation test and found it wanting. In the court’s view, the “Internet” did not even rise to the level of a “machine” and neither did simply adding a computer to otherwise conventional steps. The court viewed the claim as merely reciting a number of transactions that are not “physical objects or machines.”

The claim also failed the “technological arts test” of Alice: “Because the innovative aspect of the claimed invention is an entrepreneurial rather than a technological one, it is patent ineligible.” I predict that this test will become more prominent, and is close to a revival of the useful, concrete and tangible test of State Street Bank, so let’s take one more look at it from this decision:

 “To satisfy the technological arts test, claims must harness natural laws and scientific principles—those ‘truth[s] about the world that have always existed,” [citing Alice]—and use them to solve seemingly intractable problems. The must, moreover, not only describe a technological objective, but set out a precise set of instructions for achieving it. An idea is impermissibly ‘abstract’ if it is inchoate—unbounded and still at a nascent stage of development. It can escape the realm of the abstract only through concrete application. [Citing Mackay Radio]. This concrete application is new technology—taking a scientific principle or natural law and ‘tying it down’ by implementing it in a precisely defined manner.”[Citing the Mayo claims as ‘not confining their reach to particular applications’, then discussing Diehr as involving ‘a particular industrial application’]. At its core, the technological arts test prohibits claims which are ‘overly broad,’ in proportion to the technological dividends they yield.”


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3 Responses to Federal Circuit flips on Ultramercial v. WildTangent

  1. EG says:

    Hey Warren,

    Yet more proof that the Alice test is utterly broken. The Federal Circuit went many steps backward with this remand decision in Ultramercial.

    We frankly need a judge like Mariana Pflaelzer from the CD Cal. to be on the Federal Circuit bench in place of Lourie and Mayer who should be retired. As Pflaelzer correctly said in Caltech v. Hughes Communications, the Royal Nine on patent-eligibility under 35 USC 101 “often confuse more than clarify.” With this remand decision in Ultramercial, she is also correct that Federal Circuit decisions post-Alice “provide either false guidance to district courts, or no guidance at all.”

  2. D says:

    The majority simply applied the 2 part test of Alice and came to the conclusion that it was not patent eligible. As for the “technological arts test” … this is merely part of J. Mayer’s concurring opinion. In my view, this is NOT the test put forth by the SCOTUS in Alice. By my count, this is the second time that J. Mayer has written a concurring opinion emphasizing this “test.” 0-2 persuading other CAFC judges to see it this way.

  3. Paul Cole says:

    As in all these cases it is necessary to ascertain the rule of law which was applied by the court.

    The majority opinion was filed by Judges Lourie and O’Malley. Their opinion was based on a straightforward application of the rule in Alice that a claim that is directed to an abstract idea does not move into § 101 eligibility territory by “merely requir[ing] generic computer implementation.” The claimed ordered combination of steps recites an abstraction — an idea, having no particular concrete or tangible form. Furthermore the addition of merely novel or non-routine components to the claimed idea necessarily turns an abstraction into something concrete. The claims simply instruct the practitioner to implement the abstract ideawith routine, conventional activity. Furthermore the claims satisfied neither prong of the machine or transformation test.

    The passage quoted is from an opinion of Judge Mayer which is concurring as to the outcome but expresses a different chain of reasoning which did not commend itself to the majority. Furthermore, insofar as he purports to derive a technological arts test, he appears to be following the minority opinion of Justice Stevens in Bilski and not the majority opinion which refused to exclude a particular category of subject matter from the patent system. It is possible that other panels might be inclined to follow Judge Mayer, but if the briefs contain a sufficiently reasoned analysis of the Supreme Court jurisprudence that should not happen. As a European I find much that is commendable in the reasoning of Judge Mayer, but under existing US precedent it is, in my submission, straightforwardly and plainly wrong, which is why the other two judges did not follow it.

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