Supreme Court Orders Reconsideration Of 'On The Internet' Software Patents

from the getting-warmer... dept

Tue, May 22nd 2012 12:52pm — Mike Masnick

We've been following the "Ultramercial" case for a while. This was about a company that got a patent (7,346,545 that is basically about requiring you to watch an ad before you can watch some content). Ultramercial sued Hulu, YouTube and WildTangent. The case bounced around the court system for a while, with some using the Bilski ruling to reject the patent as an "abstract idea." However, CAFC (the appeals court that handles patent appeals and always seems to have a soft spot for patents) said the concept was perfectly fine. In reading through the details, CAFC's explanation was basically that since the patent described doing this abstract idea "on the internet," suddenly it became patentable. Back in March, we wrote about WildTangent's appeal to the Supreme Court, which pointed out the ridiculousness of saying that as long as you add "on the internet" to an abstract idea that it suddenly becomes patentable.

While it felt like there was a good chance that the Supreme Court would hear the case, there was one other interesting development that happened a week later: the Supreme Court smartly rejected broad patents on medical diagnostics in the Prometheus Laboratories v. Mayo Labs case, noting that such patents are on unpatentable subject matter. Specifically, the ruling held that "A patent, for example, could not simply recite a law of nature and then add the instruction 'apply the law.'"

Many people expected the Supreme Court to use this ruling to get CAFC to reconsider its Myriad ruling that allowed gene patents -- which it did. But the big news coming out this week was that the Supreme Court has accepted the appeal of the Ultramercial case by vacating CAFC's ruling and asking it to reconsider the Ultramercial case in light of the Prometheus ruling:

The petition for a writ of certiorari is granted [G]. The judgment is vacated [V], and the case is remanded [R] to the United States Court of Appeals for the Federal Circuit for further consideration in light of Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. ___ (2012).

This actually makes a lot of sense. The Prometheus ruling makes clear that saying "general idea + apply this idea" is not patentable subject matter. And yet, CAFC's ruling in the Ultramercial case basically said the opposite, noting that "general idea + apply this idea on the internet" is patentable subject matter. So, once again, it appears that CAFC's completely out of touch view of the patent system is getting smacked down by the Supreme Court. CAFC now has these two more chances to get it right and to stop slobbering all over ridiculous expansions of the patent system. Hopefully CAFC gets it right the second time around, and the ruling in Ultramercial is useful in limiting ridiculously overbroad software patents.

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: bilski, cafc, scotus, software patents
Companies: hulu, ultramercial, wildtangent, youtube

21 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

Ima Fish (profile), 22 May 2012 @ 1:07pm

Then let's get rid of eBay's auction on the internet patent. And Amazon's immediately paying after putting one item in your basket on the internet patent. And Microsoft's generating meeting requests and group scheduling on a mobile device patent.

There are probably more. Unfortunately.
[ link to this | view in thread ]
A Guy (profile), 22 May 2012 @ 1:15pm

Sweet, Sweet, Sanity
They better be careful. I'm starting to think the judiciary may not always be completely out of touch and useless anymore.
[ link to this | view in thread ]
6, 22 May 2012 @ 1:26pm

Technically it wasn't remanded for mere reconsideration. It was remanded for further consideration ivo the Mayo decision. There is a difference.

Also it is good to note that the lower court's decision was technically vacated. That means the lower court should not be deciding simply how it did.
[ link to this | view in thread ]
6, 22 May 2012 @ 1:28pm

Re: Sweet, Sweet, Sanity
Don't worry, they won't be careful. And the reason is that the CAFC is completely out of touch and useless and will probably continue to be.
[ link to this | view in thread ]
Anonymous Coward, 22 May 2012 @ 1:30pm

Can't they just send a note
It's clear that the supreme court is trying to get a message across to the CAFC. Can't they just send them a memo, giving them guidelines about what is and is not patentable. They way they communicate now seems slow, expensive, and isn't very fun for the litigants.

(and I'm not sure that the CAFC is even listening - maybe a relationship therapist needs to get involved.)
[ link to this | view in thread ]
Pro Se (profile), 22 May 2012 @ 1:33pm

You said:

"In reading through the details, CAFC's explanation was basically that since the patent described doing this abstract idea "on the internet," suddenly it became patentable."

The CAFC said:

"Nor does this court hold that use of an Internet website to practice such a method is either necessary or sufficient in every case to satisfy � 101."

Your description of the CAFC's holding does not comport with what the CAFC held.
[ link to this | view in thread ]
6, 22 May 2012 @ 1:43pm

Re: Can't they just send a note
nah, court opinions are not advisory. It's an old bah humbug bs nonsensical thing about our legal system.
[ link to this | view in thread ]
Anonymous Coward, 22 May 2012 @ 1:58pm

Re: comport
You've got word power! I had to look that one up. Now I have to go find someone that I comport with so I can start using it.
[ link to this | view in thread ]
Difster (profile), 22 May 2012 @ 2:05pm

Please?
Honestly, I'd rather see the entire patent system negated than to see these petty squabbles keep popping up.
[ link to this | view in thread ]
Aliasundercover, 22 May 2012 @ 2:13pm

CAFC should be shut down.
A large part of the patent problem comes from Congress creating the CAFC in the first place. It should be shut down and appeals distributed to the regional appeals courts just like every other area of law. Different approaches would be taken by different circuits and the Supreme Court would have a chance to learn from those conflicting cases when it acts to unify interpretation of the law. As it stands the Supreme Court must do the whole job because the Federal Circuit has gone batty.

Is it any surprise the specialist court makes rulings which grow the scope and importance of its own domain?
[ link to this | view in thread ]
Pro Se (profile), 22 May 2012 @ 2:37pm

Re: Re: comport
...;)
[ link to this | view in thread ]
Mike Masnick (profile), 22 May 2012 @ 3:03pm

Re:
Your description of the CAFC's holding does not comport with what the CAFC held.

Sure it does and you know it does. CAFC was trying to cover its ass here, but the ONLY thing in this particular case that turned the "abstract idea" into patentable subject matter was the fact that it was "on the internet." You know it, CAFC knows it, and now the Supreme Court knows it.

I know that you love to act like a total superior prick and nitpick words whenever someone calls you on your bullshit, but it's still bullshit. CAFC got this one totally wrong by assuming that it was patentable because it was on the internet.

You might as well admit you were wrong, but you won't.

By the way, we're still waiting for you to answer that question on the Bret Easton Ellis thread about why you assumed he had no fans and hadn't hired a producer.

We're all waiting. Waiting. Waiting.

But you won't answer.
[ link to this | view in thread ]
Pro Se (profile), 22 May 2012 @ 3:53pm

Re: Re:
Perhaps you have a different view, but it is what a court "holds" that is the critical take away from a case. Here the CAFC made it only too clear that "use of the internet" was not a sufficient condition for an invention to meet the judicially defined tests for subject matter eligibility under Section 101 of the patent laws.
[ link to this | view in thread ]
dwg (profile), 22 May 2012 @ 4:10pm

Re: Re: Re:
That's not what the CAFC said. It said that its holding here did not mean that listing the use of the Internet would be "either necessary or sufficient IN EVERY CASE." But...that it was sufficient here. So, as it turns out, the CAFC did hold that HERE, the "use of the Internet" was enough. Comport?
[ link to this | view in thread ]
beastlyone (profile), 22 May 2012 @ 4:14pm

Hoping the CAFC doesn't take the hint
How else will I be able to profit from my idea to replace adding "in bed" with "on the internet" to the pithy sayings from fortune cookies?
[ link to this | view in thread ]
Anonymous Coward, 22 May 2012 @ 4:30pm

Re: Re:
"Sure it does and you know it does. CAFC was trying to cover its ass here, but the ONLY thing in this particular case that turned the "abstract idea" into patentable subject matter was the fact that it was "on the internet." You know it, CAFC knows it, and now the Supreme Court knows it."

Not really bro, if you look into the decision you'll see some nonsense about substantial amounts of programming and a computer interface being required. That is the real basis upon which they held, the interwebs are a side show at best. Although, that is the way the defendants want to frame the question.
[ link to this | view in thread ]
6, 22 May 2012 @ 4:35pm

Re: CAFC should be shut down.
"A large part of the patent problem comes from Congress creating the CAFC in the first place. It should be shut down and appeals distributed to the regional appeals courts just like every other area of law."

It exists to take care of matters involving federal lawl. It just so happens that one such area is patent law.

"Is it any surprise the specialist court makes rulings which grow the scope and importance of its own domain?"

I know right? As it would naturally become less and less important as software "innovations" become the most important "innovations" in terms of dollars they decide to just go ahead and extend their domain over there.
[ link to this | view in thread ]
patent litigation, 28 May 2012 @ 11:57am

begging to be shot down
Certainly, it seems like this and similar patent cases are just begging to be shot down; while it doesn't appear that any of us really knows what an "abstract idea" is exactly, it's increasingly clear to numerous observers that tying a process to the internet should not necessarily transform an abstract process into a patentable invention.
[ link to this | view in thread ]
Anonymous Coward, 30 May 2012 @ 8:48pm

Re: Re: Re:
Irrelevant as the how much work goes into the implementation is not relevant to whether something is patentable.
[ link to this | view in thread ]
Patent Expert, 6 Jul 2012 @ 3:57pm

Re: begging to be shot down
The legal definition of Abstract idea for patent law is something that can be performed entirely within your mind. See CAFC Utramercial, and Cybersource. Since very few if any software programs can be executed entirely within the mind, or business methods performed in the mind , that means most software and business methods are patent eligible
[ link to this | view in thread ]
Patent Expert, 6 Jul 2012 @ 4:01pm

Ultramercial's claims are patent eligible
Ultramercial's claims are patent eligible in view of Prometheus because of the way the steps of the process "integrate" the concept into the process as a whole. The integrated steps transform the process into an inventive application of the concept, and thus are not an abstract idea. That's the law according to the Supreme Court. See Prometheus and the new USPTO guidelines.ttp://www.uspto.gov/patents/law/exam/2012_interim_guidance.pdf
[ link to this | view in thread ]