Background
Ultramercial held a patent on a method of distributing copyrighted media over the internet — specifically, a model in which consumers could access premium content for free by first watching an advertisement. The claimed method involved steps like receiving a request, determining if the consumer had watched an ad, allowing access after ad viewing, and collecting ad revenue. Ultramercial sued Hulu, YouTube, and WildTangent for infringement. The district court found the claims patent-ineligible under § 101 as an abstract idea. Ultramercial appealed.
The case went through multiple Federal Circuit decisions and two Supreme Court remands — first in light of Mayo (2012) and then in light of Alice (2014) — making it one of the most traveled § 101 cases in the Federal Circuit during the Alice era.
The Court’s Holding
In its first decision (2013), the Federal Circuit reversed the district court and held the claims patent-eligible, finding the steps of receiving, routing, and monetizing media content through advertising were specific enough to be patent-eligible applications of the general concept. But after the Supreme Court’s Alice decision in June 2014, the Supreme Court vacated the 2013 decision and remanded for reconsideration under Alice.
On remand in November 2014, the Federal Circuit reversed course and affirmed invalidity. Applying Alice Step 1, the court found the claims directed to the abstract idea of showing an advertisement in exchange for free access to media — a fundamental business concept of exchanging access to content for the viewer’s attention, which humans have practiced since the invention of commercial television and radio. At Step 2, the claim steps (using the internet, a computer, a database) were conventional and generic — adding nothing beyond routine internet implementation of the abstract concept.
Key Takeaways
- Internet advertising and content monetization business models implemented through conventional computer and internet infrastructure are directed to abstract ideas — the concept of exchanging content access for advertising viewing is a fundamental business practice not rendered patent-eligible by internet implementation.
- Ultramercial’s trajectory from patent-eligible (2013) to patent-ineligible (2014) illustrated how dramatically the Alice decision shifted § 101 doctrine — claims that survived pre-Alice analysis often failed under the Alice two-step framework.
- The “steps plus internet” pattern — taking a conventional business model and adding steps to implement it online using generic internet technologies — is categorically insufficient to supply an inventive concept at Alice Step 2.
- The Ultramercial case is a useful historical benchmark for the § 101 revolution caused by Alice: patent attorneys and companies must recognize that the Federal Circuit’s pre-2014 § 101 jurisprudence was substantially more permissive than the current Alice framework, and pre-Alice patents should be audited for current § 101 vulnerability.
Why It Matters
Ultramercial v. Hulu was one of the clearest illustrations of the Alice revolution in § 101 doctrine — the same claims that were found patent-eligible under the pre-Alice framework were found abstract and patent-ineligible under Alice’s two-step analysis just a year later. The case showed that the Alice standard represented a genuine change in the legal landscape, not merely a refinement, and that many patents issued during the internet era would not survive the new framework.
The case also illustrated a pattern that would repeat across hundreds of internet business method patents: methods for distributing content, conducting transactions, or delivering services online using conventional internet infrastructure are abstract ideas implemented on generic computers — the most common and most vulnerable category of software and internet patents under Alice. For patent holders holding pre-Alice internet advertising, content delivery, and digital media distribution patents, Ultramercial was an early warning of the widespread invalidity vulnerability that post-Alice § 101 doctrine created for the internet patent portfolio.