Back at ya, SCOTUS. (Photo credit: Wikipedia)
The specialized court in Washington that handles patent appeals has reversed, for a second time, a ruling invalidating a patent on embedded Internet video ads, setting up a conflict with a U.S. Supreme Court that seems bent on reining in overly broad patents on business methods.
Coming just days after the Supreme Court's decision invalidating gene patents, in a case the high court had already kicked back to the Federal Circuit once for getting it wrong, the decision in Ultramercial v. Hulu could be seen as a show of defiance by the Washington appeals court.
The case, which no longer involves Hulu, revolves around a patent on a method for inserting ads in free online videos so that viewers must watch them in order to proceed with their entertainment. Leaving aside the obnoxiousness of the technology in question, a lower court held that the concept wasn't eligible to be patented in the first place because it merely represented a set of abstract ideas assembled into a process.
The Federal Circuit disagreed, saying Patent No. 7,346.545, when it was filed in 2001, was a significant advance on banner ads and other methods of making money off of Internet content. The court erred by requiring Ultramercial to prove patentability, the court said, since "that is presumed," under the law.
The patent required an "intricate and complex computer program," the court said, and wasn't overbroad. The limitations within the patent prevent it from covering all forms of making money from Internet videos.
"It does not say `sell advertising using a computer,' and so there is no risk of preempting all forms of advertising, let alone ad vertising on the Internet," the appeals court said.
By reversing the court for a second time and remanding the case for review, the Federal Circuit reasserted its view that rejecting patents as ineligible before a more intensive legal inquiry is a mistake. Technology is constantly evolving in new and unexpected ways, the court said, so it is a bad idea for courts to set up rigid rules covering what can and cannot be patented.
The Supreme Court has attempted to do just that, of course, with its rulings on gene patents and last year's Mayo v. Prometheus decision involving a method for treating chronic diseases. In both cases, the high court reversed the Federal Circuit. In Mayo, as with the Ultramercial case, the appeals court reconsidered the Supreme Court's decision but came to the same conclusion in favor of patentability.
In its decision, the court attacked the practice of beaking patents down into their component parts to see if they consist of a set of old or unpatentable ideas. Courts must look at the patent as a whole, the Federal Circuit said, even if each individual step relies on old technology or an abstract idea.
"Indeed, the abstract idea may be of central importance to the invention—the question for patent eligibility is whether the claim contains limitations that meaningfully tie that abstract idea to an actual application of that idea through meaningful limitations," the court said. "This analysis is not easy, but potentially wrought with the risk of subjectivity and hindsight evaluations."
Perhaps the Supreme Court will find it easier to decide whether a patent on inserting ads you can't fast-forward through in online videos is a breakthrough deserving of patent protection.
