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Ultramercial, Inc. v. Hulu, LLC

Representative Claim

  1. 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.


Appeal from the United States District Court for the Central District of California.

Abstract Idea: Yes

We agree with WildTangent that the claims of the ‘545 patent are not directed to patent-eligible subject matter. Following the framework set out in Alice, we first “determine whether the claims at issue are directed to one of those patent-ineligible concepts.” Id. at 2355 (citing Mayo, 132 S. Ct. at 1296-97). The district court found that the abstract idea at the heart of the ‘545 patent was “that one can use [an] advertisement as an exchange or currency.” Ultramercial, 2010 U.S. Dist. LEXIS 93453, 2010 WL 3360098, at *6. We agree.

We first examine the claims because claims are the definition of what a patent is intended to cover. An examination of the claim limitations of the ‘545 patent shows that claim 1 includes eleven steps for displaying an advertisement in exchange for access to copyrighted media. . . . This ordered combination of steps recites an abstraction—an idea, having no particular concrete or tangible form. The process of receiving copyrighted media, selecting an ad, offering the media in exchange for watching the selected ad, displaying the ad, allowing the consumer access to the media, and receiving payment from the sponsor of the ad all describe an abstract idea, devoid of a concrete or tangible application. Although certain additional limitations, such as consulting an activity log, add a degree of particularity, the concept embodied by the majority of the limitations describes only the abstract idea of showing an advertisement before delivering free content.

Something More: No

The claims of the ‘545 patent, however, are not tied to any particular novel machine or apparatus, only a general purpose computer. As we have previously held, HN8 the Internet is not sufficient to save the patent under the machine prong of the machine-or-transformation test.  [***1756]  CyberSource, 654 F.3d at 1370. It is a ubiquitous information-transmitting medium, not a novel machine. And adding a computer to otherwise conventional steps does not make an invention patent-eligible. Alice, 134 S. Ct. at 2357. Any transformation from the use of computers or the transfer of content between computers is merely what computers do and does not change the analysis.