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Posts Tagged ‘ ultramercial ’

CLS Bank International: A Fractured Landscape of Patent Eligibility for Business Methods and Systems*

Posted: Thursday, Jul 12, 2012 @ 7:30 am | Written by Eric Guttag | 28 comments
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Posted in: Bilski, Business Methods, Computers, Eric Guttag, Federal Circuit, Guest Contributors, IP News, IPWatchdog.com Articles, Patentability, Patents

After the Supreme Court ruled in Bilski v. Kappos that a claimed method for managing (hedging) the risks associated with trading commodities at a fixed price was patent-ineligible under 35 U.S.C. § 101, the Federal Circuit has gone “hither and yonder” in trying to determine when other business methods and systems reach (or don’t reach) the patent-eligibility zone.  At the patent-ineligible end is CyberSource Corporations v. Retail Decisions, Inc. where Judge Dyk (joined by Judges Bryson and Prost) ruled that a method and system for detecting credit card fraud in Internet transactions was patent-ineligible under 35 U.S.C. § 101.  At the patent-eligible end is Ultramercial, LLC v. Hulu, LLC (recently vacated and remanded by the Supreme Court for reconsideration by the Federal Circuit) where Chief Judge Rader (joined by Judges Lourie and O’Malley) ruled that a claimed method for monetizing and distributing copyrighted products over the Internet was patent-eligible.  See Throwing Down the Gauntlet: Rader Rules in Utramercial that Breadth and Lack Specificity Does Not Make Claimed Method Impermissibly Abstract.

These polar opposite decisions in CyberSource and Ultramercial illustrate how fractured the Federal Circuit’s patent-eligibility landscape has now become for business methods and systems.  The most recent split decision in CLS Bank International v. Alice Corp. Pty. Ltd. where a claimed trading platform for exchanging business obligations survived a validity challenge under 35 U.S.C. § 101 epitomizes this problem.  As CLS Bank International unfortunately shows, an objective standard for judging the patent-eligibility of business methods and systems remains elusive, subject to an ever growing “tug-of-war” between the “inclusive” and “restrictive” patent-eligibility factions of the Federal Circuit.  In particular, after CLS Bank International, we are no closer to having a judicially accepted definition of what is (or is not) an “abstract idea” when it comes to claiming business methods and systems.



Throwing Down the Gauntlet: Rader Rules in Utramercial that Breadth and Lack Specificity Does Not Make Claimed Method Impermissibly Abstract*

Posted: Friday, Sep 16, 2011 @ 10:10 am | Written by Eric Guttag | 25 comments
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Posted in: Biotechnology, Business Methods, Computers, Copyright, Federal Circuit, Gene Patents, Internet, IPWatchdog.com Articles, Patent Litigation, Patentability, Patents, Software, Technology & Innovation
Chief Judge Rader

In CyberSource Corporations v. Retail Decisions, Inc., Judge Dyk (joined by Judges Bryson and Prost) ruled that a  method and system for detecting credit card fraud in Internet transactions was  patent-ineligible under 35 U.S.C. §101.  But in Ultramercial, LLC v. Hulu, LLC, Chief Judge Rader (joined by  Judges Lourie and O’Malley) just ruled that a claimed method for monetizing and  distributing copyrighted products over the Internet was patent-eligible.  In fact, our good Chief Judge has “thrown down  the gauntlet” at his Federal Circuit colleagues by stating “breadth and lack of specificity does not render the claimed subject matter impermissibly abstract.”  Wow!  That “judicial donnybrook” I mentioned in my recent article on the remand  decision in Classen Immunotherapies, Inc. v. Biogen IDEC (see CAFC on Patent-Eligibility: A Firestorm of Opinions in Classen ) on what the standard is (or should be) for patent-eligibility under 35 U.S.C. §101 has now broken out.

In Ultramercial, the patentee (Ultramercial) asserted that U.S. Pat. No. 7,346,545 (the ‘545 patent) was  infringed by Hulu, LLC (“Hulu”), YouTube, LLC (“YouTube”), and WildTangent,  Inc. (“WildTangent”).  The ‘545 patent,relates to a method for distributing copyrighted products (e.g., songs, movies,  books, etc.) over the Internet for free in exchange for viewing an advertisement with the advertiser paying for the copyrighted content.  What is interesting in this case is that Claim 1 of the ‘545 patent that is allegedly infringed by Hulu, YouTube, and  WildTangent recites a method having not one, not two, but eleven total steps.  (Side note:  One might wonder how anyone can infringe an eleven step method.)  WildTangent’s motion to dismiss for failure to state a claim was granted by the district  court based on the claimed method being patent-ineligible under 35 U.S.C. § 101.  (Hulu and YouTube were dismissed from the  case apparently for other reasons.)