June 21, 2013 | By Julie Samuels

Federal Circuit gets Ultramercial wrong, again. Supreme Court needs to step in, again.

Well, here we go.

The tortured history of Ultramercial v. Hulu continues, with a new ruling from the Federal Circuit upholding one of our favorite, most absurd patents: one that claims a process for doing no more than viewing ads online before accessing copyrighted content. How could that be patentable, you might ask. To which we might answer, good question.

Let's start with section 101 of the Patent Act, which says

Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.

Courts have long interpreted this to mean that one cannot patent "laws of nature, natural phenomena, and abstract ideas." The Supreme Court has recently weighed in, issuing two unanimous rulings on what is and what isn't a law of nature.

First, in Mayo v. Prometheus, the Supreme Court invalidated a patent covering a medical diagnostic test. There, the Court held that a method cannot be patented where it adds “nothing specific to the laws of nature other than what is well-understood, routine, conventional activity, previously engaged in by those in the field.” More recently, in AMP v. Myriad, the Supreme Court stuck with this theme, holding that Myriad could not patent genes that occur in nature and stating that "Myriad did not create anything. To be sure, it found an important and useful gene, but separating that gene from its surrounding genetic material is not an act of invention."

Of course, this makes sense. As the Supreme Court itself said in Myriad,

without this exception, there would be considerable danger that the grant of patents would "tie up'" the use of such tools and thereby "inhibit future innovation premised upon them." This would be at odds with the very point of patents, which exist to promote creation.

We applaud these decisions that clarify when an invention is unpatentable as a law of nature. Unfortunately, no similar guidance exists when it comes to abstract ideas.

Which brings us back to Ultramercial.

We first wrote about this case in 2011 (yes, that's right—2011). Shortly after we filed a brief urging the Federal Circuit to rehear (and reverse) its dangerous ruling upholding the patent. At the time we said

This outcome is incredibly troubling, not least of all because everyday we conduct more and more of our lives online. Merely filing a patent application covering an idea that takes place on the Internet (especially without explaining any of the programming steps) does not somehow make an abstract idea (which is unpatentable) somehow not abtract (so it is patentable).

Since then we've heard from the Supreme Court—twice. In addition, the Supreme Court explicitly told the Federal Circuit to rehear Ultramercial in light of the Prometheus ruling. But in the meantime, the Federal Circuit went ahead and made an even bigger mess of the question of patentable subject matter as it relates to software in CLS Bank, where it issued an infamous 135-page opinion of which the justices could only agree on 55 words.

And now this latest missive, again upholding the Ultramercial patent. Instead of faithfully applying Prometheus (and now, Myriad, too), the Federal Circuit relies on cases such the 20-year-old In re AlappatIn fact, in a concurring opinion, Judge Lourie rightly noted the Court's failure to follow Supreme Court precedent:

It is our obligation to attempt to follow the Supreme Court’s guidance in Mayo rather than to set forth our own independent views, however valid we may consider them to be.

We don't agree with much else (if anything) in the latest ruling, except for the broad statement that, "After all, the purpose of the Patent Act is to encourage innovation...". Apparently, however, we disagree with some judges at the Federal Circuit about what actually would accomplish that task. Patents on abstract ideas, for instance, won't do the trick. And, adding "do it on the Internet" won't make an abstract idea concrete.

It's time for the Supreme Court to step in and tell the Federal Circuit once and for all that abstract ideas—such as a process for viewing ads before accessing copyrighted content—are unpatentable.

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