On Friday, the United States Court of Appeals for the Federal Circuit held in Ultramercial, Inc. v. Hulu LLC that the claims to a method of distributing copyrighted media over the Internet were directed to unpatentable subject matter . The U.S. Supreme Court had previously remanded the proceeding back to the CAFC after Myriad and again after Alice when, in both previous cases, the court had found the claims patentable.

The decision (PDF) was written by Judge Lourie with a concurring opinion by Judge Mayer. The Court concludes that the patent does not claim patent-eligible matter and accordingly affirmed the district court’s grant of the defendant’s motion to dismiss. The patent at issue was US7,346.545 entitled “Method and system for payment of intellectual property royalties by interposed sponsor on behalf of consumer over a telecommunications network”.

The Court wrote at pages 9 and 10:

This ordered combination of steps recites an abstraction – an idea, having no particular concrete or tangible form. The process of receiving copyrighted media, selecting an ad, offering the media in exchange for watching the selected ad, displaying the ad, allowing the consumer access to the media, and receiving payment from the sponsor of the ad all describe an abstract idea, devoid of a concrete or tangible application. Although certain additional limitations, such as consulting an activity log, add a degree of particularity, the concept embodied by the majority of the limitations describes only the abstract idea of showing an advertisement before delivering free content.

At pages 12 and 13:

The claims of the ’545 patent, however, are not tied to any particular novel machine or apparatus, only a general purpose computer. As we have previously held, the Internet is not sufficient to save the patent under the machine prong of the machine-or-transformation test. CyberSource, 654 F.3d at 1370. It is a ubiquitous information-transmitting medium, not a novel machine. And adding a computer to otherwise conventional steps does not make an invention patent-eligible. Alice, 134 S. Ct. at 2357. Any transformation from the use of computers or the transfer of content between computers is merely what computers do and does not change the analysis.

In the concurring opinion, Judge Mayer wrote that, among other things, consideration of section 101 was properly a preliminary matter to be considered by a district court and the presumption of validity under section 101.