The Federal Circuit ruled today that the claimed method of monetizing and distributing copyrighted products over the Internet is a patent eligible process in Ultramercial, LLC v. Hulu, LLC.
At issue in the case was claim 1 of U.S. Patent No. 7,346,545:
A method for distribution of products over the Internet via a facilitator, said method comprising the steps of:
a first step of receiving, from a content provider, media products that are covered by intellectual property rights protection and are available for purchase, wherein each said media product being comprised of at least one of text data, music data, and video data;
a second step of selecting a sponsor message to be associated with the media product, said sponsor message being selected from a plurality of sponsor messages, said second step including accessing an activity log to verify that the total number of times which the sponsor message has been previously presented is less than the number of transaction cycles contracted by the sponsor of the sponsor message;
a third step of providing the media product for sale at an Internet website;
a fourth step of restricting general public access to said media product;
a fifth step of offering to a consumer access to the media product without charge to the consumer on the precondition that the consumer views the sponsor message;
a sixth step of receiving from the consumer a request to view the sponsor message, wherein the consumer submits said request in response to being offered access to the media product;
a seventh step of, in response to receiving the request from the consumer, facilitating the display of a sponsor message to the consumer;
an eighth step of, if the sponsor message is not an interactive message, allowing said consumer access to said media product after said step of facilitating the display of said sponsor message;
a ninth step of, if the sponsor message is an interactive message, presenting at least one query to the consumer and allowing said consumer access to said media product after receiving a response to said at least one query;
a tenth step of recording the transaction event to the activity log, said tenth step including updating the total number of times the sponsor message has been presented; and
an eleventh step of receiving payment from the sponsor of the sponsor message displayed.
The district court had dismissed the infringement action holding that the claim was not directed to patent-eligible subject matter. The Federal Circuit acknowledged that it has not provided a definitive rule that a claim be construed by the court prior to the patent eligibility determination, but strongly suggested that it may be helpful for courts to do so.
After once again reviewing the case law on patent eligibility from the Federal Circuit and Supreme Court, Chief Judge Rader, writing for the panel, easily found the claim to be a “process” within the meaning of the Patent Act and thus falls within a § 101 eligibility category. The only issue is whether the claim falls within the abstract idea exception.
In its analysis of whether the claim is directed to an abstract idea, the court gave weight to the patent’s purported improvement of existing technology and that it invokes computers and applications of computer technology. The claim does not merely recite the abstract idea that advertisement can be used as a form of currency, but relates to a practical application of this idea. The various steps likely require intricate and complex computer programming, and specific application of the Internet and cyber-market environment.
Although the claim may not meet the other requirements for patentability under the Patent Act (novelty, non-obviousness, enablement, written description, etc.), it is not ineligible for patenting under § 101.