What if I said I had invented a system where someone could watch copyrighted material, like, say, a movie or TV program, for free, and the broadcaster would pay for it by showing ads? I’m betting that if you’ve been alive since the dawn of broadcast radio or television, this sounds familiar.
OK, but wait. Suppose I say that my system is totally different. In mine, you can watch the programs on the Internet! Should I be able to patent just that idea of doing this on the Internet?
You may not realize it, but there’s a battle brewing in the Federal Circuit over patents like this. We wrote about the CyberSource Corp. v. Retail Decisions, Inc., No. 2009-1358 (Fed. Cir. Aug. 16, 2011), decision a few weeks ago. Actually, you might want to take a look at that post before reading the rest of this one.
The big question is: how do we know when an invention is too abstract to be eligible for a patent?
Ultramercial, LLC v. Hulu, LLC, No. 2010-1544 (Fed. Cir. Sept. 15, 2011) (Chief Judge Rader and Judges Lourie and O’Malley)
Ultramercial has a patent for a method of sending “intellectual property” (think music, TV programs, or movies) over the Internet, where content is paid for by showing ads to the customer. The broadcaster then sends royalties to the content owner. Here’s an illustration of the method, according to the patent:
If you read Ultramercial’s patent, you won’t learn a thing about how to implement this method. There’s no source code, no hardware or software specifications or requirements, and no circuitry described in it.
The district court decided that the patent is invalid under 35 U.S.C. § 101, that is, it’s not patent-eligible subject matter. The lower court applied Bilski v. Kappos, 130 S. Ct. 3218, 561 US __ (2010), which stated that a patent claim that is “abstract” is not eligible for patent protection. The Supreme Court didn’t tell us how to figure out what’s “abstract,” though, which means that trial judges and the Federal Circuit judges need to create some ground rules and draw some lines.
After the CyberSource decision, however, the lower court decision seems to be correct. Like the patent in CyberSource, this patent tries to claim every conceivable way of implementing a method that could be performed by a human being. (I’ll explain why I think that’s true in the next section.) As the court said in CyberSource, just saying that a method is performed on a computer isn’t enough to make it patent-eligible.
You Really Think You Need a Computer to Do That?
But in this case, the panel went the other way. Writing for the court, Chief Judge Rader found that Ultramercial’s method is not abstract, because
Many of these steps are likely to require intricate and complex computer programming. In addition, certain of these steps clearly require specific application to the Internet and a cyber-market environment… Viewing the subject matter as a whole, the invention involves an extensive computer interface.
(See page 11 of the opinion.) I think the court is wrong about this, unfortunately. Here are the steps in the method that the opinion identifies:
- receiving media products from a copyright holder,
- selecting an advertisement to be associated with each media product,
- providing said media products for sale on an Internet website,
- restricting general public access to the media products,
- offering free access to said media products on the condition that the consumer view the advertising,
- receiving a request from a consumer to view the advertising,
- facilitating the display of advertising and any required interaction with the advertising,
- allowing the consumer access to the associated media product after such display and interaction, if any,
- recording this transaction in an activity log, and
- receiving payment from the advertiser.
(See page 11 of the opinion.) I don’t need to do any computer programming to perform those steps. Suppose I get some CDs from a band and I list them on Craigslist with the condition that I’ll send a free CD if someone agrees to respond to an advertising survey I mail them. When I get back the completed survey form, I send out the CD and send money to the band, recording the transaction. I get paid per returned survey by the advertiser. I’ve performed every one of those steps, but I didn’t do a single bit of computer programming to accomplish them.
So is this just a disagreement about whether computer programming is needed? That’s part of it, but beyond that, I’m troubled that the court isn’t concerned by the fact that the patent doesn’t describe any software programming that could be used to accomplish the claimed method. The court is looking past the patent itself to determine if the invention is patent-eligible. If you would likely need a machine to perform the method, that’s enough for this panel. Under this reasoning, nearly any software or software-ish set of claims is eligible for protection.
Chief Judge Rader certainly hasn’t hidden his patent-eligibility philosophy. As we wrote about last week, Chief Judge Rader wrote an opinion in Classen Immunotherapies, Inc. v. Biogen IDEC, No. Nos. 2006-1634, 2006-1649 (Fed. Cir. Aug. 31, 2011), where he expressed his belief that “This court should decline to accept invitations to restrict subject matter eligibility.” In that opinion (which Judge Newman joined), the categories of patentable inventions listed in 35 U.S.C. § 101 are intentionally broad, and we should look to the other sections of the patent statute that provide various ground rules to determine whether an invention is patentable.
Side Note: A Very Strange Situation
It turns out that there’s an odd twist to this case, and it isn’t mentioned in the opinion. (I don’t know if the court even knew this part.) Ultramercial has filed a separate patent application for the system that it actually built and sells. Ultramercial has not been able to get a patent on that application, although it’s been trying to get sign off by the examiner for over four years. (The Patent Office sent out a final rejection about two months ago, after the second request for continued examination was filed.)
So Ultramercial can’t get a patent on the system it built, but it does have a patent covering any system that has the same features, no matter how it’s implemented. This can’t be right. Why did the broader claims make it through the examination process but the narrow claims are encountering problems?
Let’s take a look at the text of the statute. Here is what 35 U.S.C. § 101 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.
I think part of the reason we are in this quandary (beyond the patent being issued in the first place) is that the court focuses on the categories. It assumes that so long as we can point to one of the categories, we’re basically done.
There’s another way of looking at this, along the lines of Judge Dyk’s opinion in CyberSource. In the copyright world, there is a distinction between an “idea” and an “expression.” You can (in theory) copyright an expression, but not an idea. There is something similar in the patent world. An “abstract idea” is not an invention, as the Supreme Court said in Bilski. And if you can’t implement your idea, you haven’t invented anything. An invention is something concrete that can be used. In this case, we have an idea, namely that you can give people free access to content by using ads to pay for it. But the patent doesn’t explain how to implement the idea.
To see why this is a problem, consider what’s going on with Ultramercial’s other patent application. Ultramercial is arguing to the Patent Office (unsuccessfully, so far) that its system is so new that it would take more than just ordinary skill to build it. But at the same time, it has a patent on the general idea behind the system, which covers any conceivable way of implementing it.
But any way you look at it, this situation is kind of nuts.
Let’s Get Ready to Rumble
Whatever one thinks of the proper role of patent-eligibility of subject matter, this opinion is definitely at odds with the decision in CyberSource, and it exposes a split of opinion on the patent-eligibility standard within the Federal Circuit. Judges Dyk and Prost strongly favor using patent eligibility (35 U.S.C. § 101) to filter out patents that are vague and abstract. Chief Judge Rader and Judge Newman strongly favor letting nearly everything in and using the other parts of the patent statutes to determine whether a patent is valid. The feelings of the rest of the court aren’t as clear, although Judge Lourie recently wrote for the court in Association for Molecular Pathology v. U.S. Patent & Trademark Office, No. 2010-1406 (Fed. Cir. July 29, 2011), holding that isolated DNA sequences are patentable, while Judge Bryson dissented in that case. In Judge Lourie’s opinion in the AMP case, he took a fairly broad view of patent-eligibility, finding that the new chemical structure of isolated DNA fit into the categories on 35 U.S.C. § 101, and that was enough to make it patent-eligible.
Who was on the panel in CyberSource? Judges Dyk, Prost, and Bryson.
In this case? Chief Judge Rader and Judges Lourie and O’Malley.
There doesn’t seem to be any way to reconcile the two opinions. It looks like CyberSource didn’t file a petition for rehearing en banc. (A rehearing en banc is trying the appeal before the entire Federal Circuit instead of just a 3 judge panel. It’s the way, short of an appeal to the Supreme Court, to change or clarify the law set out in earlier Federal Circuit decisions.) But the split views in CyberSource and this opinion seem like a strong argument for granting a petition for rehearing en banc, if one is filed in this case. Certainly we need some kind of resolution on the patent-eligibility standard, although it may take the U.S. Supreme Court to give us one. We’ll be watching to see what happens.
You can read the Ultramercial opinion here.