Ultramercial Seeks En Banc Review by Federal Circuit

The “wave of decisions finding software patents ineligible,” brought about by the Alice decision in 2014 continues in 2015.  According to Docket Navigator analytics, 2015 has already seen 13 motions seeking to invalidate patents for ineligible subject matter.  If this rate continues, there could be over ten times that amount by the end of the year – up from just 8 in 2010.  Docket Navigator reports that the success rate of summary judgment motions based on invalidity is 69% so far in 2015, up from 58% in 2014, and just 25% in 2010.

In the midst of this, and in light of the DDR Holdings decision, Ultramercial has pushed back against the November 2014 Federal Circuit decision invalidating its online advertising patent (U.S. Patent 7,346,545).  Ultramercial accused various internet content providers of infringing the ’545 patent.  After several rounds with the Federal Circuit (and the Alice decision), the defendants succeeded with their motion to dismiss on the basis that Ultramercial’s claims were patent-ineligible.  Noting that courts, including the Federal Circuit, are conflicted “as to when computer-implemented inventions are ineligibly abstract under the Alice test,” Ultramercial petitioned the Federal Circuit for an en banc review of the decision (i.e., a review by all the judges of the appeals court).

The petition focuses on the conflict between the outcomes of the Ultramercial  case and DDR Holdings.  The claims in both cases, according to Ultramercial, do not recite fundamental practices from the pre-Internet world, yet opposite decisions were reached in the cases.  This illustrates “a critical issue left open in Alice: whether claims reciting new and useful computer-based innovations, as opposed to merely implementing on a computer known, fundamental, and routine economic or commercial practices, pass the abstractness test.”

In its petition, Ultramercial argues that, like the limitations in DDR, its limitations also “override the routine and contrary sequence of events ordinarily triggered by the click of a hyperlink.”  In Ultramercial, the limitations in the claims (restricting access to a media product with a paired advertisement) were characterized as “insignificant pre-solution activity” by the Court.  However, in DDR, the limitations (creating a hybrid webpage to prevent a user from leaving a website when clicking on an outside ad link) were seen by the Court as limitations that provided an inventive concept, satisfying step two of the Alice/Mayo test.  Ultramercial asks the court to provide some explanation as to when programming-based claim limitations are either insignificant or concrete, in order to prevent “significant confusion for both lower courts and the public.”

The petition concludes by calling on the Court to use this case as a vehicle to address these issues.  In doing so, the Federal Circuit will hopefully provide more insight into what exactly an abstract idea is, or when, as in DDR, “a business challenge . . . is a challenge particular to the Internet,” and when it is not.


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