In Ultramercial, LLC v. Hulu, LLC, 657 F.3d 1323 (Fed. Cir. 2011), the Federal Circuit further refined patentable subject matter, and the ineligibility of “abstract principles,” by stating it “does not presume to define ‘abstract’ beyond the recognition that this disqualifying characteristic should exhibit itself so manifestly as to override the broad statutory categories of eligible subject matter and the statutory context that directs primary attention on the patentability criteria of the rest of the Patent Act.”
The underlying dispute involved U.S. Patent No. 7,346,545 which claims a method for distributing copyrighted content over the Internet. The District Court for the Central District of California granted a motion to dismiss on grounds that the ‘545 patent did not claim patentable subject matter.
On appeal, the Federal Circuit reversed the district court’s decision. The Federal Circuit discussed Bilski v. Kappos, --- U.S. --- (2011) and highlighted the Supreme Court and the Federal Circuit’s difficulty in providing a precise formula or definition for the judge-made ineligible category of abstractness. Citing Research Corp. Techs., Inc. v. Microsoft Corp, 627 F.3d 859 (Fed. Cir. 2010), the court stated that it “does not presume to define ‘abstract’ beyond the recognition that this disqualifying characteristic should exhibit itself so manifestly as to override the broad statutory categories of eligible subject matter and the statutory context that directs primary attention on the patentability criteria of the rest of the Patent Act.”
Relying on Gottschalk v. Benson, 409 U.S. 63 (1972), the Federal Circuit held that although abstract principles are not patentable, an application of an abstract idea may be. Citing Research Corp., the court observed that “inventions with specific applications or improvements to technologies in the marketplace are not likely to be so abstract that they override the statutory language and framework of the Patent Act.” According to the court, the ‘545 patent sought to remedy problems with prior art banner advertising, i.e. it purported to improve existing technology in the marketplace. The Federal Circuit further noted that many of the steps disclosed in the ‘545 patent were likely to require intricate and complex computer programming and that the invention involved an extensive computer interface. The court also went out of its way to distinguish its recent decision in CyberSource Corporation v. Retail Decisions, Inc., 654 F.3d 1366 (Fed. Cir. 2011) by stating that the ‘545 patent (unlike the patent at issue in CyberSource) did not claim a series of steps that could be performed mentally.