Federal Circuit Clarifies Limits on Patent-Eligibility of Software Patents

Ultramercial v. Hulu (decided 9/15/11)

By: Melissa A. Beede

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What This Means to You

  • Consider claiming a practical application of a software invention (e.g., a specific Internet-based advertising method).
  • In claiming software methods, recite meaningful steps requiring hardware and/or programming complexity. 

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Overview

After its CyberSource decision (reviewed here) suggesting a high bar for patenting software, the US Court of Appeals for the Federal Circuit (Federal Circuit) distinguished CyberSource in Ultramercial, LLC v. Hulu, LLC.  

In Ultramercial, the court clarified that the limits on the patent-eligibility of software methods are narrowly drawn to claims reciting purely mental steps, in contrast to claims that require hardware. In particular, the Federal Circuit held that an Internet-based method of offering free access to media products on the condition that a consumer view advertising is patent-eligible. 

Case Background

Ultramercial sued Hulu and WildTangent for infringement of a patent directed to a method of allowing a customer to access copyrighted media content for free in exchange for the customer viewing an advertisement. WildTangent filed a motion to dismiss on the grounds the patent did not claim patent-eligible subject matter. The district court granted the motion, and Ultramercial appealed to the Federal Circuit.

Decision Analysis

The Federal Circuit reversed the decision of the district court, holding that Ultramercial’s patent did, in fact, claim patent-eligible subject matter. In reaching its conclusion, the Federal Circuit focused on the facts the claimed method: (1) related to a specific Internet-based application; and (2) required complex computer programming. 

The Federal Circuit declined to articulate a test for determining patent-eligibility, but distinguished the CyberSource decision on the basis that the software method considered in that case recited purely mental steps. The Federal Circuit also stressed that subject matter eligibility analysis should be a coarse filter, and not a substitute for other requirements for patent-eligibility (e.g., novelty and non-obviousness).

Takeaways

This case highlights the importance of careful drafting of claims directed to software methods to best position such claims from a patent-eligibility standpoint We recommend considering drafting claims to a practical application of a software invention, rather than a more general concept. In addition, we recommend reciting, where possible, meaningful steps that require hardware and/or programming complexity.