Ultramercial Patent Claims Invalid as Abstract Ideas

By Gene Quinn
November 16, 2014

On Thursday, November 14, 2014, the United States Court of Appeals for the Federal Circuit issued its latest decision in Ultramercial v. Hulu, which deals with the patent eligibility of software related patent claims. The district court originally held that U.S. Patent 7,346,545 (the “’545 patent”), the basis for the complaint filed by Ultramercial, does not claim patent-eligible subject matter under 35 U.S.C. § 101. This decision was appealed to the Federal Circuit, which reversed, concluding that the district court erred in granting WildTangent’s motion to dismiss for failing to claim statutory subject matter. WildTangent filed a petition for certiorari with the Supreme Court, which was granted. The Supreme Court vacated the Federal Circuit decision, and remanded the case for further consideration in light of its decision in Mayo Collaborative Services v. Prometheus Laboratories, Inc.

On remand the Federal Circuit once again found that the claims asserted by Ultramercial defined patent eligible subject matter. WildTangent again filed a petition for certiorari with the Supreme Court. While WildTangent’s petition was pending, the Supreme Court issued its decision in Alice Corp. v. CLS Bank International. Ultimately, the Supreme Court once again granted WildTangent’s petition for a writ of certiorari, vacated the Federal Circuit decision, and remanded the case for further consideration, this time in light of Alice.

Ultramercial’s Federal Circuit luck has now run out. Gone from the original panel was Chief Judge Rader who retired and was replaced by Judge Mayer, which does not bode well for any patent owner. This time in an opinion written by Judge Lourie the Ultramercial claims were found to be patent ineligible because they constitute nothing more than an abstract idea. If Judge Lourie were trying to predict what the Supreme Court would do when faces with patent claims that are clearly NOT abstract, his decision makes sense. Still, it is extraordinarily troubling that patent claims are being invalidated left and right based upon the so-called “abstract idea doctrine,” where the critical term “abstract idea” has never been defined by the Supreme Court or the Federal Circuit.

We continue to be left guess what “abstract idea” means, but can reliably predict that claims deemed to cover computer implemented inventions (i.e., software) will be proclaimed to cover nothing more than an abstract idea regardless of the factual reality to the contrary. It is in this bizarro way that we seem to have entered a variety show episode that pays homage in equal parts to the Twilight Zone and Monty Python. The lack of logic, or circular logic, would be even too much for an episode of Get Smart, although it does sometimes feel like pro-patent advocates are in some Cone of Silence hell. At the end of the day these and other similar claims are deemed abstract simply because! Court don’t even pretend to define the terms, which would only prevent them from doing whatever they want, which is invalid any and all patent claims in this genre whenever they appear. They are abstract because we know abstract when we see it, and these are abstract because we see it.

The Claims

Claim 1 of the ’545 patent was deemed to be representative. It reads as follows:

A method for distribution of products over the Internet via a facilitator, said method comprising the steps of:

a first step of receiving, from a content provider, media products that are covered by intellectual property rights protection and are available for purchase, wherein each said media product being comprised of at least one of text data, music data, and video data;

a second step of selecting a sponsor message to be associated with the media product, said sponsor message being selected from a plurality of sponsor messages, said second step including accessing an activity log to verify that the total number of times which the sponsor message has been previously presented is less than the number of transaction cycles contracted by the sponsor of the sponsor message;

a third step of providing the media product for sale at an Internet website;

a fourth step of restricting general public access to said media product;

a fifth step of offering to a consumer access to the media product without charge to the consumer on the precondition that the consumer views the sponsor message;

a sixth step of receiving from the consumer a request to view the sponsor message, wherein the consumer submits said request in response to being offered access to the media product;

a seventh step of, in response to receiving the request from the consumer, facilitating the display of a sponsor message to the consumer;

an eighth step of, if the sponsor message is not an interactive message, allowing said consumer access to said media product after said step of facilitating the display of said sponsor message;

a ninth step of, if the sponsor message is an interactive message, presenting at least one query to the consumer and allowing said consumer access to said media product after receiving a response to said at least one query;

a tenth step of recording the transaction event to the activity log, said tenth step including updating the total number of times the sponsor message has been presented; and

an eleventh step of receiving payment from the sponsor of the sponsor message displayed.

I’ve taken the liberty of placing emphasis on all of the items in the previous claim that are identifiable, defined, real and NOT abstract in any way, shape or form. You might notice that nearly half of the claim has emphasis added.

There is no intellectual honest way to conclude that this claim covers an abstract idea. Aside from all of the clearly identifiable items that clearly tether the claim to something that is tangible and limited, it is laughable that anyone could find this claim abstract regardless of predisposition. Those who are hopelessly ideologically compromised will try and argue that a media product, such as a video, isn’t real and is abstract. I’m sure any young child who wants to watch their favorite movie for the 50th time would disagree. While there can be disingenuous arguments made about the abstractness of a media product or a sponsor message, who in their right mind could ever even suggest that “an Internet website” is abstract?

Is “an Internet website” abstract? Is the “general public” abstract? Is a consumer abstract? Contemplate these questions as you, a member of the general public continues to read this article on this Internet website! We apparently have jumped the shark and turned the law of software patent claims into a useless, ridiculous philosophy assignment that asks whether something that clearly exists doesn’t exist. So are you, a consuming member of the general public who reads Internet websites real, or are you abstract?

The Abstract Idea Doctrine

The abstract idea doctrine, back when it actually made sense, meant that a claim to a computer implemented process could not be patented if the claim would prevent all uses of idea. In Diamond v. Diehr, the United States Supreme Court explained that the claim in question was not abstract and that there was nothing wrong with allowing a claim that utilized a particular mathematical equation. The Court explained that only a single use of the equation within the context of the specific, overall method was being patented. This understanding in part lead the Federal Circuit sitting en banc in Bilski to come up with the machine-or-transformation test, which explained that a computer implemented method would be patent eligible if the method was tethered to a machine in more than merely a tangential way.

Of course, the Supreme Court didn’t like the exclusivity of the machine-or-transformation test, later calling it an important clue to patent eligibility but not the sole test. Thus, after the Supreme Court’s decisions in Bilski and Alice we know that business methods are patent eligible, there is no specific requirement to have claims be tethered to a machine in order to be patent eligible, but that software patent claims that are unquestionably require a machine to perform the process steps are nothing more than an abstract idea. The irony is thick. By conflating 101 with 102 and 103 in Mayo the Supreme Court has walked us down a path where based on their own precedent it is possible to obtain a patent claim on a purely mental business method, but it is not possible to obtain a patent claim on a computer implemented process (i.e., software) if the software happens to run on equipment that is well known.

But what do you expect from a Supreme Court that doesn’t even use e-mail? Obviously the technophobic Judges on the Supreme Court don’t understand software at all. They exalt hardware over software and actually punish software because it can operate across platforms, across a variety of different machines, and because they can’t see it. One has to wonder whether the Justices on the Supreme Court understand that the modern device called an “automobile,” which they no doubt sometimes use to get from place to place, wouldn’t work without software. Sure, we can talk about the gears, wheels, hinges and other things that tangibly comprise an automobile, but without software all those pieces and parts simply won’t operate. In the modern world pieces and parts won’t work without software. It is ridiculous to pretend that the hardware is what makes modern technology and innovation special. What makes something different, new and extraordinarily desirable is the software.

But what do you expect from a Court where the Judges seem to believe that software is so easy to write that any second year engineering student could write it over a long weekend? That is what Justice Kennedy said during oral argument in Alice. Sadly, the attorney representing the patent owner agreed. So I guess in some ways we cannot really blame the Supreme Court if patent owners are going to refuse to explain the reality. But let’s clear one thing up right here and right now. Writing software takes a lot of time, money and energy. The fact that this even needs to be stated is depressing. It should be self evident to anyone and everyone who has ever used a computer, but sadly it isn’t.

Software Isn’t Abstract, and It Isn’t Trivial

The invention at issue in the ‘545 patent, in the words of the patent itself, “offers people a legitimate and cashless way to obtain copyrighted music or other forms of intellectual property, while still delivering a royalty to the intellectual property rights holder.” This type of content distribution over the Internet in a content producer world that requires digital rights management in order to prevent copying (i.e., stealing content) isn’t trivial. It also wasn’t cheap or easy to create, despite the popular mythology that wants to pretend that anyone can write software. If everyone can write software, and it is so easy, why doesn’t it every work? Why do you have to download fixes and patches on a weekly basis for practically every software product you use? If security is so easy to pull off in a convenient, consumer-friendly way then why couldn’t companies like Target and Home Depot figure it out? The answer is that none of this is easy.

Decision makers who think software is trivial to product are ignorant, and those who aren’t ignorant with respect to the key issues have an ideological agenda that drives their anti-patent positions. It may be easy enough to create a simple iPhone app that doesn’t do anything particularly taxing, or to create a simple WordPress plugin, but those things aren’t patented. The software that the Courts are killing isn’t trivial, it is time consuming and resource intense. What makes software unique and valuable it the fact that it can run across platforms and devices. Getting software to do that isn’t trivial given the plethora of devices and platforms, which themselves are constantly being updated, but one of the things that makes software so valuable and so tricky oddly contributes to it being patent ineligible. Courts want software patents to cover software that can only run on a specific purpose machine. What in god’s name is that? Distinguishing between specific purpose machines and general purpose machines is the tell tale sign of someone who doesn’t have a clue. They make the distinction purely because they want to exalt the hardware (i.e., specific purpose machine) over the software.

I’m not sure what hope innovators in the software space have. Sure, there are ways to attempt to draft patent claims that would test even the reluctance of the most ideological decision maker, but what about all those patent applications that were filed at a time when the Supreme Court and Federal Circuit were allowing software patent claims? There are fixes that can be employed for some of those patents that have already issued, particularly if there are parallel applications still pending, but an awful lot of assets are now simply worth less, if not worthless.

Conclusion

I am not optimistic over the short-term, but over the intermedia and long term I am optimistic. Eventually as jobs are lost and high-tech start-ups close their doors Congress will realize that the Supreme Court and the Federal Circuit have marched the U.S. economy straight off the cliff. It is hardly news that our policy makers have no desire to implement policies that would revitalize American manufacturing, so that means innovation is really our domestic industry. Making is impossible, or at least extremely expensive, to patent software will cause extraordinary damage, particularly given that upwards of 50% of all patents in one way or another relate to software according to the independent Government Accountability Office.

It will be a while before we see the pendulum swing back in favor of innovators and patent owners and job creators. Judge Mayer in his concurrence stated that patent claims are not presumed valid insofar as patent eligibility is concerned. That is, of course, wrong. The law is clear. Patents are presumed valid and the Supreme Court just reinforced that ruling in one of the few pro-patent rulings during the Roberts era. So regardless of what Judge Mayer thinks or says, patents are supposed to be presumed valid even though it doesn’t feel that way any more.

The Author

Gene Quinn

Gene Quinn is a Patent Attorney and Editor and founder of IPWatchdog.com. Gene is also a principal lecturer in the PLI Patent Bar Review Course and an attorney with Widerman Malek. Gene’s specialty is in the area of strategic patent consulting, patent application drafting and patent prosecution. He consults with attorneys facing peculiar procedural issues at the Patent Office, advises investors and executives on patent law changes and pending litigation matters, and works with start-up businesses throughout the United States and around the world, primarily dealing with software and computer related innovations. is admitted to practice law in New Hampshire, is a Registered Patent Attorney and is also admitted to practice before the United States Court of Appeals for the Federal Circuit. CLICK HERE to send Gene a message.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 49 Comments comments.

  1. step back November 16, 2014 1:15 pm

    Gene,

    Talking truth to Medieval mindlessness just doesn’t work.
    Galileo tried it and was banished for his audacity.

    Just face it.
    We no longer live in enlightened and rational times.
    The alchemists of mind manipulation have taken over.
    Reality is no longer real. The words in the statute (101, 112) mean nothing.
    Judges can now weave their own laws and notions out of illusionary cloth.

    Tear hair out of your scalp much as you like, but I think you nailed it at the very start of your analysis by noting that Rader is out and Lourie is in. Welcome back to the Twilight Zone.

  2. Gary Dell November 16, 2014 5:05 pm

    Thanks, Gene. Very well written.

    Mayer’s ignorance re there is no presumption of eligibility for an issued patent completely throws 35 USC 282 out the window. As a litigator, now I know that it’d be a huge risk to bring a software/bm patent right now. I feel worse for the prosecutors. What the hell do you tell your client? I suppose a hope and a prayer is the best answer.

  3. anon5 November 16, 2014 7:36 pm

    Gene – If the high-tech economy doesn’t collapse will you accept you’ve been living in a fantasy land all these years?

  4. Gene Quinn November 16, 2014 10:23 pm

    anon5-

    Why would you ask such a ridiculous thing? The tech industry is collapsing, at the the innovative part of the community. The companies in the forefront just copy others, which is why they get sued so frequently. With the laws the way they are the true innovators are getting clobbered, which is known by anyone and everyone seriously involved in the innovative community.

    Why do you think Apple, Microsoft and others have finally split away from the Google narrative and formed the Partnership for American Innovation. PAI is signing the praises of patents and how they are necessary for innovation. Odd after so many years of vilifying patent owners. I guess they finally woke up and realized their patents aren’t worth much now either. That is why Silicon Valley isn’t really worried about patent trolls any more. The big concerns are immigration policy, government over regulation and Chinese companies. The Chinese should be the biggest concern for Silicon Valley companies and anyone who owns stock in those companies. Without patents there is nothing to stop Chinese companies from coming into the marketplace and knocking off US companies, which is already starting to happen.

    So, if you actually are at all familiar with the industry you would know that I am not only right, but that I am being proven correct at present time. If you knew anything about me you would also know that I have an extraordinary track record with predictions. And I’m also not afraid to put my name to what I say.

    -Gene

  5. Curious November 16, 2014 11:42 pm

    In the context of the internet, both the “response” and “request” are more than “abstract ideas” as well.

    The Alice decision didn’t bother me too much — I’ll keep saying (until SCOTUS gives us something different) that the 6 justices supporting the main decision intended to stay very close to Bilski. However, both the USPTO and Federal Judges have taken great liberties to read into Alice a lot that just isn’t there.

  6. Curious November 17, 2014 12:15 am

    Eventually as jobs are lost and high-tech start-ups close their doors Congress will realize that the Supreme Court and the Federal Circuit have marched the U.S. economy straight off the cliff.
    I would call it more a long slide than a cliff, but you still get in the same spot.

    I think the problem lies in the (very) short-sightedness of the nouveau tech companies (i.e., those that sprang from nothing within the last decade or so). They built their business on some of their own technology, a lot of other people’s technology, and a lot of luck/good timing. However, they believe they can do no wrong and their companies can dominate the market without the use of patents. The more mature companies, however, know better.

    The Chinese (and others) can (and will) reproduce whatever you make (or provide whatever service you provide) for a cheaper price. Eventually, people will lose their brand loyalty (particular when the products/services are generic) and then focus on cost. Eventually, these high tech companies will be facing competition left and right and asking their attorneys “these guys are stealing our technology, can’t we stop them?” Their attorney’s response will be … “We told you to get patents and we did get some. However, you also told us to burn down the patent system, and we were able to do that as well, but now your patents aren’t worth the paper they are printed on. There isn’t much we can do now.”

  7. wow November 17, 2014 4:28 am

    gene,

    you are right I agree.

  8. step back November 17, 2014 5:00 am

    Gene,

    Do you want to know how bad things have gotten?

    Number one movie at the box office this week was “Dumb and Dumber 2” (which BTW is just the alternate title for Ultramercial):

    http://www.huffingtonpost.com/2014/11/16/dumb-and-dumber-to-box-office_n_6167404.html

  9. step back November 17, 2014 5:04 am

    Gene,

    I just contacted Giles Rich by way of my Ouija board.

    He says there is good news and bad news.

    The good news is that you are right.

    The bad news is that …..





    you are right.

  10. Mark Summerfield November 17, 2014 5:43 am

    Gene,

    Your courts have gone completely mad.

    Sadly, Australia’s courts are following suit: http://blog.patentology.com.au/2014/11/australias-alice-appeals-court-denies.html

    We did so well with Myriad, it’s a huge disappointment that three experienced judges of our Federal Court could not find a better way to reach what may well have been the correct conclusion in this case.

    Mark

  11. Alan Stewart November 17, 2014 7:57 am

    Gene:

    I agree with your premise although, as usual on this topic, I still see your approach as being a little too tilted toward Chicken Little. Regardless of the delivery, I wondered how far toward the absurd this sort of approach by the courts can go. What happens when this approach is applied to other forms of IP? Are we going to reach the point that Copyright is going to require that electronic works be printed out or transformed into analog? I mean, really, the transitory nature of digital signals and bits and bytes stored in memory or on a hard drive is such that the capturing in a tangible format can’t really be maintained for merely digital works, right? If it is not stored on a magnetic tape, or recorded in grooves on a plastic disc, it can’t really be said to be captured, right? I know you captured that photograph on a digital backplane and manipulated the data with software to create the desired visual impact, but you have to print it out to register it.

    How far down the rabbit hole of Alice do we have to go before someone in Washington, DC, with a great legal brain and a black robe finally realizes we have gone too far?

    ars

  12. Mark Nowotarski November 17, 2014 8:10 am

    “I’m not sure what hope innovators in the software space have. ”

    I think the answer is that ugly word “politics”.

  13. Benny November 17, 2014 8:16 am

    Gene at 4,
    You say, “The tech industry is collapsing, at the the innovative part of the community”. I work in the tech industry, and I haven’t noticed that. I will tell you, though, what is holding back innovation in my particular corner of the industry – the fact that I cannot produce an innovative product without using someone else’s patent as a stepping stone, and I can’t get a reasonable license. A product which combines the best patented features of my own and my competitors’ products would be innovative, but you aren’t going to see that on the market anytime soon.

  14. Curious November 17, 2014 8:31 am

    I cannot produce an innovative product without using someone else’s patent as a stepping stone.
    Not that I’m advocating you infringe someone else’s patents, but I don’t think the pre-existence of patents stopped (or placed even a small speed bump) in the way of today’s tech companies.

    If you have a great product, build it and put it in the marketplace. If it isn’t making any money, no one will care what patents you may be infringing. Even if they did, the amount of money they could receive for a license doesn’t justify a lawsuit. If you are generating sufficient revenues to capture a patent owner’s attention, congratulations — you’ve made it already.

    A product which combines the best patented features of my own and my competitors’ products would be innovative, but you aren’t going to see that on the market anytime soon.
    Perhaps your competitor would like to compete based upon product differentiation? If everybody had access to everybody else’s technology, then competition would be based upon who could provide the cheaper product because all the products would be the same. In that sense, the patent system would be incentivizing the best copiers. I like today’s (yesterday’s??) patent system that incentivized innovation.

  15. Mark Annett November 17, 2014 8:42 am

    I didn’t read the decision so I continue to read these cases and try and put my own logic to them.

    So if you you assume for a second the court is right that this is an abstract idea then what is it? The abstract idea as I read it is that if you do a sponsors activity you will get something for free rather than having to pay for it (e.g. The first 25 people that walk through the door wearing a Yankee’s Jersey will get a free _____ or mail in this card with your name and address and we will send you a free box of ______. As claimed, is there really anything fundamentally different than previous promotional activities, such as those just mentioned or anything special about the way it is implemented such that it can only feasibly do it via the internet or by computer?

    Gene pointed to the following text in the specification, “a legitimate and cashless way to obtain copyrighted music or other forms of intellectual property, while still delivering a royalty to the intellectual property rights holder” to support why this isn’t trivial, to which I agree.

    However, one has to wonder if the claimant had started out with those exact words (or better yet with the words “intelectual property” replaced with “digital media”) as a pre-amble for their claim if they would have prevailed. Because if they had then it would have been at least been something special that that you can only feasibly do via the internet or by computer.

    While lamenting the action of the Supreme Court and mocking them can be fun, I don’t think it is very constructive. By the way, I don’t want to imply that whether or not there there is something special in the claims that make it only feasibly do it via the internet or by computer is the only path to patentability, just that it is one path right now and a better path than most. At least that continues to be my take away, except in the case of the animation syncing, which totally defies logis to me. At least in this case, I can read my own logic into the decision and learn from it for the future.

  16. Benny November 17, 2014 8:56 am

    Curious,
    I’ll explain it in simple terms.
    My competitors want to see us go bust. We want our competitors products out of the shops and off the shelves.
    If our customers want knurled flange brackets on the product, it does no one any good to say “product differentiation” and sell our products without them.

    ” I don’t think the pre-existence of patents stopped (or placed even a small speed bump) in the way of today’s tech companies”. Try in with one of our patents. We’ll see you in court.

    ” If everybody had access to everybody else’s technology, then competition would be based upon who could provide the cheaper product because all the products would be the same”
    Been to Target or Best-buy lately? Had difficulty choosing between one dishwasher and another? Did you choose on the basis of price, because all the models looked the same? That’s reality in the manufacturing sector.

  17. Curious November 17, 2014 10:31 am

    We want our competitors products out of the shops and off the shelves.
    Do you have patents? Are they infringing? If the answer is yes, then you once could get an injunction to stop them (it is easier today if they are imported products and you have a domestic industry).

    Try in with one of our patents. We’ll see you in court.
    You say that, and then you complain “what is holding back innovation in my particular corner of the industry – the fact that I cannot produce an innovative product without using someone else’s patent as a stepping stone, and I can’t get a reasonable license.” What is it you want? A reasonable license or a roadblock? BTW — saying that you want a reasonable license for your competitor’s patents but want to use your patents as a roadblock is not an acceptable answer.

  18. Benny November 17, 2014 10:43 am

    Curious,
    You are losing sight of the wood, for all the trees in the way.
    For manufacturers, patents are a tool, not an end in themselves. They are a tool that can be used to restrict competition, and so increase profits. If I sell more knurled flange brackets than my competitor, I get a bigger Christmas bonus. It doesn’t get much more complicated than that. What do I want? I want to have my cake, eat it, and save the cherry on top for later, essentially I am trying to increase my market share and block my competitors, and they are doing the same.

  19. step back November 17, 2014 1:39 pm

    and you, Benny @18

    Are losing sight of the fact that before it could be manufactured, the knurled flange bracket had to be designed.

    Someone had to have the vision of a new and improved bracket to replace the older more traditional design.

    If not for that, we would all still be using the old and never improved buggy whip for our two horse power transportation vehicles.

    (And Malthus would have been right much sooner.)

  20. Norb November 17, 2014 4:24 pm

    Gene
    Depressing. Very, very depressing.
    The tri-cornered hat, blunderbuss crowd is in control.

  21. American Cowboy November 17, 2014 4:35 pm

    Benny, you have said that you can’t get a “reasonable” license. What makes the license offered unreasonable?

    If the patent is not on anything critical, why not leave it out?
    Or, better yet, come up with a better design and get a patent on your better design?

  22. Benny November 18, 2014 1:55 am

    Step Back,
    I can design the new improved flange bracket, but I can’t market it if Curious has the patent to the old one which it builds on. Curious won’t grant me a license so that I don’t cut into his sales.
    Cowboy,
    The cost of a license will eventually be borne by the end customer. If licensing pushes the price of the product over and above the competition, the product won’t sell and there is no profit. In the real world, our competitors have no incentive to license their patents because it would only serve to increase our sales at the expense of theirs. Our preferred strategy si cross-licensing, where possible.

  23. Curious November 18, 2014 10:05 am

    I can design the new improved flange bracket, but I can’t market it if Curious has the patent to the old one which it builds on. Curious won’t grant me a license so that I don’t cut into his sales.
    I don’t give him a license because when we mentioned we were going to produce X product with a feature that he had as patent on, he told me “Try in with one of our patents. We’ll see you in court.”

    our competitors have no incentive to license their patents because it would only serve to increase our sales at the expense of theirs
    Maybe, maybe not. You are assuming that the existence of the feature will change the number of sales. Maybe it will, maybe it won’t. However, even if you lose sales by licensing to a competitor, will you be earning enough $$ in return to offset the loss of sales?

    Our preferred strategy si cross-licensing, where possible.
    That is the strategy of many, mature tech companies.

  24. American Cowboy November 18, 2014 10:06 am

    Well, Benny, if your competitors invented it first and got the patent that keeps you from selling your product, that is the way the system works.

    You lose for being second.

    Get over it.

  25. Brian November 18, 2014 10:07 am

    There is a reason the courts never define “abstract idea”. The literal meaning of those words have little to do with how they are used by the courts. As used by the courts, “abstract idea” means “one of several types of claims that we want to be able to invalidate without a full-blown prior-art analysis.” As such, whole abstract/non-abstract distinction that you focus on is really irrelevant to their analysis (which you clearly point out). For example, Benson, which started it all, is a model of a real (not-abstract) invention.

    With that in mind, one of the types of claims the courts reject under the label of “abstract idea” are claims that they think are obvious implementations of obvious ideas. That is the case here. The idea they consider obvious is to use ad exposure as payment to obtain something, and the obvious way to do that on the internet is by doing exactly what they claimed.

    Mind you, I don’t endorse in any way what the court is doing. I abhor the notion of using 101 as a shortcut for what should have been a 103. Judges are not competent to decide, without hearing arguments or analyzing prior art, what inventions are obvious.

    My point is, if you want to understand these cases, treat “abstract idea” as a mere label the same way the courts are. They may be obliged to pretend that the label is meaningful, but to best advise clients we need to look through it to what they are really doing.

  26. Benny November 18, 2014 10:18 am

    Cowboy at 24,
    Yes, I lose for being second (or win when I am first), but you, the consumer or end user, also lose, because there is no direct competition to drive prices down, nor can I sell you my improved design. Of course, after the patents lapse, everything goes cheap and cheerful.

    Curious, you ask ” However, even if you lose sales by licensing to a competitor, will you be earning enough $$ in return to offset the loss of sales” – simple arithmetic will show that the answer is “No”, at least not while the license is profitable to my competitor.

  27. Anon November 18, 2014 11:50 am

    Benny,

    Your post at 26 is one of the clearest examples yet that you do not “get” the patent system.

    The period of exclusivity in the Quid Pro Quo deal is NOT a loss for the consumer. You are operating under the false impression that “but for” the patent right, the consumer would have all of the benefits.

    That is an errant view, and does not accord with why the patent system exists in the first place. Such is a logical corollary to the equally fallacious view that patents should ONLY be granted for those things that would not exist “but for” a patent system in place.

    “But for” is one – but only one of the justifications for patent systems.

    Direct competition to drive down the prices is not the only benefit to the consumer that you should be looking at.

  28. Curious November 18, 2014 12:20 pm

    There is a reason the courts never define “abstract idea”. The literal meaning of those words have little to do with how they are used by the courts. As used by the courts, “abstract idea” means “one of several types of claims that we want to be able to invalidate without a full-blown prior-art analysis.” As such, whole abstract/non-abstract distinction that you focus on is really irrelevant to their analysis (which you clearly point out). For example, Benson, which started it all, is a model of a real (not-abstract) invention
    Bingo … well said.

  29. Curious November 18, 2014 12:31 pm

    Yes, I lose for being second (or win when I am first), but you, the consumer or end user, also lose, because there is no direct competition to drive prices down, nor can I sell you my improved design.
    Innovation doesn’t come free (something many judges apparently don’t realize). They see an invention, and say … oh, a grad student could come up with that over a weekend. However, what they don’t see is the number of failed attempts that never get patented (or get patented but never get asserted because the technology didn’t go anywhere). Several well-known inventors have made statements to the effect of ‘if you want to have good ideas, have lots of ideas’ with the point being that the process of invention involves a lot of wrong turns. Regardless, the cost of innovation (including paying for the mistakes) need to be recouped. Yes, the consumer will pay for it, but they will also realize the benefit of having a product that otherwise might not have been invented had there not been an incentive to do so. While some people may invent without a patent system whatsoever, altruism is a poor business model that does a poor job of incentivizing innovation.

    simple arithmetic will show that the answer is “No”
    Not always.

  30. Charles M November 18, 2014 1:36 pm

    What about re-issue as a mechanism to save some existing patents on “software” that were granted pre-Alice?

    Seems to me these patent owners would have a strong argument that their patents had become “wholly or partially inoperative” in view of Alice and thus qualify for re-issue. Assuming that specification support could be found for “improving the computer itself” via a clever algorithm it seems a number of patents could be saved in re-reissue.

    Ultimately the “abstract idea” doctrine is utterly subjective and unworkable, as Ultramercial now shows. Congress will need to step in and take power out of the hands of these insulated judges, who have simply careened down a rabbit hole of their own making. Mayer is openly saying what the rest of them are too cowardly to say – that there is now an unspoken “technological arts” standard that excludes anything implemented on digital devices that could remotely be defined to cover any form of economic activity or monitization of resources. That’s not something you will find in the statutes anywhere, they just made it up. Of course one can find “economics” in almost anything if it suits the outcome you want. The CAFC as presently composed without Rader appears openly hostile to computer implemented inventions and eager to aggressively apply Alice to invalidate many if not most of them.

  31. t November 18, 2014 4:23 pm

    Of course, one of the major problems with the CAFC (not to mention Scotus) is the lack of technologists – not to mention the almost absolute lack of people who have actually practiced patent prosecution. I believe Newman and Lourie are the only ones remaining who have sat on the practitioner side of the table (although Chen at least has experience at the PTO). It is easy to see how a lack of familiarity and training in both technology and the real world aspects of preparing and prosecuting patents lead to a somewhat skewed view of the practical effect of their decisions.

    That being said, I fear a long, hard road due to the political climate in the legislature before anything gets done. In all probability, it may take some catastrophic event (or a whole lotta big tech companies throwing around $$$ the other way) before anything gets done legislatively.

  32. Gene, but not Gene Q November 19, 2014 11:58 am

    “Is “an Internet website” abstract? Is the “general public” abstract? Is a consumer abstract?”

    uhm, yes. see definition below.

    as a second point, list all your bolded terms and ask yourself if the inventor invented any of these. ans: no.

    as a third point, list all the gerunds in this method claim and ask yourself how many ways are there to perform the function of the gerund. ans: thousands, but being conservative, lets say hundreds.

    as a fourth point, does the claim specify which of these millions of ways (combination of hundreds of ways per each step) to perform the method are specifically called out? no, so the claim is an abstraction.

    ABSTRACTION:
    noun
    1. an abstract or general idea or term.
    2. the act of considering something as a general quality or characteristic, apart from concrete realities, specific objects, or actual instances.

  33. Anon November 19, 2014 12:17 pm

    Gene, but not Gene Quinn,

    Your reasoning suffers from one critical error: you confuse the definition of 1. with the definition of 2. and do not apply the correct reasoning in the context of patent law.

    Your reasoning is equivalent to only permitting exacting picture claims – a position that has shown to be a false understanding of the law.

  34. Charles M November 19, 2014 12:33 pm

    Responding to Gene (not Gene Q);

    The problem Gene is that drawing the line between an “abstraction” (see your definition) and “concrete” is arbitrary. Is a “database” an abstraction? Is a “server” an abstraction? These things are clearly physical in nature, yet possibly abstract under your definition.

    If the courts and these judges are going to step in and create judicial doctrines on things “made by man” that can’t be patented, they have an obligation to set guidelines that are sufficiently objective. The “abstract idea” doctrine fails miserably in that respect.

    They ought to just come out and admit (as they almost do in the opinion) that they have now ‘invented’ a new class of things made by man (as Ultramercial’s method clearly and indisputably is) that they won’t enforce patents on, as a matter of “public policy” because the patents are ‘too broad’. This ‘abstract idea’ doctrine is lazy cover for judicial usurpation of power to decide what patents they will enforce as a matter of ‘public policy’. The opinion says as much – doesn’t matter if it’s new and inventive, we don’t even need to consider the prior art or presume validity, we just need to decide right offhand if we will invalidate the patent as a matter of public policy.

  35. step back November 19, 2014 1:28 pm

    Responding to Gene (not Gene Q) @32

    Of course “the claim” (which is just a bunch of words) is an abstraction!

    That has never been the issue at question.
    You sir apparently never understood the French painting “This is not a pipe” which shows a smoker’s pipe and a sign right below it proclaiming “This is not a pipe” (in French). Of course it’s not a pipe. It is a painting of a pipe.

    The word “internet” is an abstraction.
    But the internet itself is a very real thing composed of an enormously complex amalgamation of server computers, routers, fiber optics, serial to parallel converters, decoders, and so forth. The judges don’t have a clue and neither do you.

    Every inventor makes things out of old stuff.
    The elements of the Periodic table were here long before the human species appeared on this 3rd orbiting rock adjacent to the nearby star. Get real. (Or go hide on some other abstract rock.)

  36. Curious November 19, 2014 4:44 pm

    Is the “general public” abstract? Is a consumer abstract?”
    The law discusses “abstract ideas” — not just abstractions. Using your definitions, a “tree” or an “automobile” can be abstract since they describe a general thing and not any specific quality. Of course, what is a “specific quality” is in the eyes of the beholder.

    as a second point, list all your bolded terms and ask yourself if the inventor invented any of these. ans: no.
    “virtually all [inventions] are combinations of old elements.” In re Rouffet, 149 F.3d 1350, 47 USPQ2d 1453 (Fed. Cir. 1998) (quoting Environmental Designs, Ltd. v. Union Oil, 713 F.2d 693, 218 USPQ 865 (Fed. Cir. 1993)).

    as a third point, list all the gerunds in this method claim and ask yourself how many ways are there to perform the function of the gerund. ans: thousands, but being conservative, lets say hundreds
    I claim a method of heating a combination of various element to form an alloy using a specific temperature profile. How many different ways are there to do that? Thousands, perhaps? But so what? I claim attaching a widget to an arm with a screw. How many different types of screws are capable of doing that? Tens of thousands? The point being … so what?

    as a fourth point, does the claim specify which of these millions of ways (combination of hundreds of ways per each step) to perform the method are specifically called out? no, so the claim is an abstraction
    This last statement identifies you as a non-attorney or one that doesn’t understand the difference between the first and second paragraphs of 35 USC 112. Claims distinguish the invention over the prior art. The specification enables one having ordinary skill and art to make and/or use the invention.

    so the claim is an abstraction
    So is the English language, which is the (imperfect) tool we have to use when claiming something.

  37. Gene Quinn November 20, 2014 12:33 pm

    Alan-

    That is the $64,000 question… how far down the rabbit hole do we have to go before our leaders wake up?

    I understand what you are saying about Chicken Little, but this case sure has to make one wonder whether over the short-term the sky really is falling. This claim is clearly not abstract, was judged repeatedly not to be abstract, and without much analysis more than saying “see Alice” is now abstract. If this claim to a real innovation that is really in use covers an “abstract idea” I don’t know exactly what innovation can be protected presently. Sure, there are still claim strategies that we can use (and need to start using more) but if the Courts are going to look past the claim language and to try and figure out what the invention is where is the limiting principle? I don’t see one.

    Like always the patent laws will snap back. I don’t think it will happen over the short-term though. So I think we are in for at least a few years of a dark winter. In the meantime patent attorneys need to realize that the sky is potentially falling and move forward strategically knowing that at some point the sun will rise, the winter will be over and the sky will revert. In this space it is trivially easy to keep applications pending for many years. I think that has to be a piece of the strategy.

    -Gene

  38. Anon November 20, 2014 1:12 pm

    Gene (Quinn),

    Perhaps trying to find a “comfortable ground” is a mistake.

    As we have discussed previously, maybe it is time to stamp that gas pedal to the floor and make the courts face the logical conclusions that their (il) logic naturally take us to.

    I remember a few years back when a certain Dr. Tafas refused to give an inch…

  39. Gene Quinn November 20, 2014 1:36 pm

    Anon-

    I agree with you. I’ve suggested that people disclaim method claims and computer-readable medium claims, particularly where there is a portfolio of patents. Pick one and get rid of everything but the system claims. Consider going back into an accelerated reissue and change the language of the claim in the preamble from “system” to “machine.” Let’s have the conversation about whether machines remain patent eligible in the United States. The courts will likely look beyond the claim and say that what you are trying to cover is abstract. Let’s have the Supreme Court rule that a machine that has a tangible real-world deployment is just an abstract idea. Let’s see how far the emperor is willing to strip down.

    Once the Courts go to the extreme and start saying that machines are not patent eligible that should wake up real world companies. Of course, SCOTUS and the CAFC have already said that machines (i.e., systems with tangible parts and a real world application/deployment) are only abstract ideas.

    Put the pedal to the floor and expose this nonsense for what it really is!

    -Gene

  40. step back November 20, 2014 5:42 pm

    Anon @ 38

    +1

    I agree.
    It is time to take on these traitors and sycophants head on.

    Why are they traitors?
    Because they give away American inventions for free by publishing them before the inventor has any theoretical rights of exclusivity.

    Why are they traitors?
    Because they take away in practice the rights of exclusivity which the US Constitution promises.

    Why are they sycophants?
    Because they accept as unquestionable, the total BS that the frenemy “amici” of court shovel over to them.

    We live in dark times because we have weak minded judges
    and too many spineless court jesters who genuflect in front of their so-called Supremeness.

  41. Curious November 21, 2014 10:28 am

    We live in dark times because we have weak minded judges
    One of why says is “don’t attribute to malice that what can be attributed to incompetence.” However, I don’t think it applies here. I think the judges are less “weak minded” and more just personally against patents. Perhaps those positions may have been based, in part, upon misinformation, but I think these know what they are doing and have a purpose in mind.

  42. Anon November 21, 2014 11:13 am

    Curious,

    I think that there are many purposes in mind, creating a tapestry of varying shades of grey instead of some of the black and white as pictured here.

    One of those purposes of which impact this playing field is one that I have shared before: the power tug of war over who gets to write patent law. I believe that much of the trouble can be easily traced to a reticent Congress that from the very beginning did not – and would not – firmly grasp their authority as provided by the constitution. Early patent law, as written by Congress, skirted the difficulty then viewed of defining “invention.” Our early Congress punted on this matter, and gave permission to the Judiciary to define “invention” through the mechanism of evolutionary common law development.

    That experiment though ended in 1952.

    Unfortunately, power to set law is addictive. Such power is just not easily set aside. Such power enables a person or group to realize a philosophical end that otherwise is difficult or perhaps impossible to reach. One only has to look at the Prometheus decision – at the words used by the Court there – to recognize that this Court is more interested in not losing that power than it is in accurately interpreting the words and history of Congress.

    Sadly, our captured and dysfunctional Congress is not capable of understanding the power grab of that branch of the government. Leastwise, not yet, or not fully.

    As Gene Quinn has noted in relation to 103 discussions, Congress does appear to need to tell the judiciary that “We really mean it.” I have seen the idea at PatentDocs as to exactly how Congress can sent that message: take the appeal of patent law cases away from the Supreme Court. This is in fact one of the constitutional powers of Congress. But like the poster at PatentDocs, I too am skeptical that our Congress has the necessary gumption to take that step.

  43. Curious November 21, 2014 12:28 pm

    the power tug of war over who gets to write patent law
    This is why SCOTUS abhors bright-line rules and the Federal Circuit (traditionally) looked for them. Bright-line rules don’t give the judiciary much room to “tweak” the law, and by eliminating these bright-line rules SCOTUS always has a foot in the door.

    Sadly, our captured and dysfunctional Congress is not capable of understanding the power grab of that branch of the government.
    I think it is more that Congress is being pulled in different directions and therefore has no real impetus to change the status quo. Patent law is being dictated by the lobbyists of the large corporations. Some believe in strong patent rights, while others do not (particularly those newly-minted companies built on the backs of technology that they did not invent). With these two competing (and well-funded) interests, Congress can use the issue for fund-raising without implementing real change one way or the other. The latest “patent reforms” for all intents and purposes have been pretty watered down. First to invent for first to file [shrug] — not particularly worrisome (at least to me). Post-issuance review? Meh … makes it a little harder on the little guys but nothing earthshattering. Litigation reform — hasn’t meaningfully changed the landscape. While Congress keeps doing patent “reform” it is little more than patent “minor tweaking.”

    While I think patent law should be out of the hands of SCOTUS, I doubt that will ever happen. Moreover, given the anti-patent bent of the Federal Circuit, that may be a good thing. The Alice decision from SCOTUS was nowhere near as bad as it could have been, and the Federal Circuit’s recent decisions have been much worse.

  44. step back November 21, 2014 1:50 pm

    Curious @41

    The last time I studied the issue, I was surprised to discover that less than about 2% of the USA population has any form of rigorous education in science.

    Of course, if you survey the population of patent practitioners, the statistic inverts and a good 90% will claim to have rigorous education in science. (Although I’m not sure what the schools teach to those who claim a degree in “computer science”.)

    Judges for the most part will have degrees in poetry and political “science”, which as most know, is not a science at all just like economics is no “dismal” science and many other disciplines that have usurped the word science are in fact quite the opposite.

    Given that, I do not believe the judges know what they are doing. They are reverting back to their school day habit of copying off those whom they believe are the smart kids in the class (the amici curie).

    Professional lobbyists have discovered that they can lob almost any kind of mumbo jumbo over the wall and the don’t-know-any-better courts will accept it as long as it appears to come from a “reputable” source.

    So now we have supposedly, learned-hand judges parroting ridiculous phrases (worthy of ridicule) like “generic computer”. The word “computer” is by itself is generic. So WTF is a “generic computer”?

    When the tailor’s threads are so fine that only the truly smart and loyal can see it, it’s time for a parade, with the Emperors of the judiciary prancing at the front.

  45. Anon November 21, 2014 2:55 pm

    step back,

    I just had lunch – do I really need to watch that parade?

  46. step back November 21, 2014 4:17 pm

    Anon

    You already ARE watching the parade: Ultramercial, Myriad, Alice, Bilski, …

    It may be subtitled as Rise of the Planet of the Science-illiterate Apes

  47. Curious November 21, 2014 4:31 pm

    So now we have supposedly, learned-hand judges parroting ridiculous phrases (worthy of ridicule) like “generic computer”. The word “computer” is by itself is generic. So WTF is a “generic computer”?
    I don’t think that many judges realize that the “smart phone” they carry around in their pocket and upon which they can do very trivial (e.g., play a game) and nontrivial things (along with the system in which that smart phone operates) is likely the most sophisticated piece of engineering on this planet. To completely explain how every function of that smart phone (and the system it operates within) works would take many, many lifetimes.

    I suspect that there are a few judges that think a computer is little more than a glorified typewriter. Luckily those that think so are not likely to be long on the bench. However, we are going to see (if we haven’t already) the rise of “information should be free” crowd that doesn’t believe in intellectual property rights whatsoever. This crowd scares me more because whereas the first issued bad decisions out of ignorance, the second will issue bad decisions with an intent to take down the system. Because they know they are taking down the system, I’m sure they’ll be more subtle with their approach.

  48. step back November 21, 2014 6:00 pm

    Curious,

    I think from your comment @47 that you are coming into alignment with my comment @1.

    We are entering an era of mindless masses who believe in magic and “free” flying ideas and saucers that fly equally well.

    Yes they scare me.

    Especially when some of them are supposed to be “appeal” level court judges and they happen to sit on the bench of the CAFC.

    See Ron Laurie’s post of today.

  49. m88 April 13, 2015 11:43 am

    There’s definately a lot to find out about this topic.
    I love all of the points you’ve made.