May 22, 2012 | By Julie Samuels

Supreme Court to Federal Circuit: Fix Ultramercial Decision

This week, the Supreme Court put to rest any doubt that when it invalidated a patent that added nothing novel to an otherwise unpatentable idea back in March, it was talking about software patents, too. In that case, Mayo v. Prometheus, the Court reviewed the three types of inventions that cannot be patented: laws of nature, natural phenomena, and abstract ideas and held that the patent at issue there—one covering diagnostic testing—represented nothing more than a law of nature, with “conventional steps, specified at a high level of generality,” appended. At the time, we commented that this ruling should likewise apply to software patents, so that merely adding a "conventional step" to an otherwise abstract idea would not make that abstract idea patentable (which is exactly what happened in the Ultramercial v. Hulu case). On Monday, the Supreme Court told the Federal Circuit to reconsider its Ultramercial ruling in light of Mayo, which sounds a lot like an endorsement that Mayo's limitations on patentable subject matter should extend to software, too.

When Mayo was first decided, we were pleased to see that the Supreme Court’s language included abstract ideas in its analysis. Of course, many consider most software, and the algorithms that form its basis, abstract ideas that should not be patented. So you can see why the Mayo ruling, applied to abstract ideas, would have the potential to limit some of the worst software patents we’ve seen. 

Case in point: Ultramercial.  We’ve written about this dangerous ruling before (here and here), but, in case you missed it, there the Federal Circuit upheld a patent that merely claimed a process for doing no more than viewing ads online before accessing copyrighted content. The court claimed that the patent was not abstract because the steps were completed on the Internet, despite the fact that the underlying idea—viewing ads in exchange for content—was indeed abstract. Essentially, if more courts and the Patent Office follow Ultramercial, the mere act of performing an abstract idea on the Internet would somehow make that otherwise abstract idea no longer abstract. Given the myriad ways in which the world is moving online, you can see just how badly this could go. 

Lately, many have argued about whether the Mayo ruling would apply to software, too. We think it clearly should, and does. It seems the Supreme Court thinks so, too. We hope the Federal Circuit will get it right this time and strike Ultramercial from the books. 

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