Bilski vs. Kappos Death Star Vaporizes Ultramercial Patent

I don’t want to be overly dramatic, but if the Ultramercial, LLC et al. v. Hulu, LLC, et al., decision (U.S. District Court for the Central District of California)  (Ultramercial Decision) holds up on review at the Federal Circuit, the Bilski v. Kappos decision may become an unstoppable death star for any computer-related invention that hinges on an “abstract idea.”  

The inventions at issue (US Patent 7,346,545 — US07346545) are both expressly claimed as methods for distribution of products over the Internet and are clearly and unequivocably limited to use with the Internet, an Internet web site and interactive messages.  Although the claim could be more explicit, it would also be reasonable to interpret many of the steps specified in the claims as Internet-implemented.  Notwithstanding the express limitations tying the invention to an Internet implementation, the Court found that the claims were not “meaningfully” limited to machine implementation and, accordingly, did not pass muster under the machine prong of the machine or transformation test. The claims also failed the transformation test as well according to the Court.

I think the following passage from the opinion fairly well sums up Judge Klausner’s thinking about the value of limiting claims to computers or computer networks in order to pass the machine test: 

“That the disclosed invention is only used on computers or computer networks cannot alone satisfy the machine test without rendering the test completely toothless.  As already stated above, the machine must limit the invention in a meaningful way. One cannot circumvent the patentabilitytest by merely limiting the use of the invention to a computer. The binary representation, one of the most fundamental concepts that has enabled digitalcomputation as we know it today was not patentable, even though its utility was linked to “general-purpose digital computers.” Gottschalk v. Benson , 409 U.S. 63, 64 (1972). Similarly in the case of the ‘545 patent, the concept of advertisement-media-exchange does not become patentable simply because the patentee claims to have limited its application to the Internet or computers. Therefore, the ‘545 patent fails the machine test.”

But wait, there’s more good stuff.  Here is what Judge Klausner says about the Internet:  

“Neither does the “Internet” recitation save the patent. First, this Court agrees with the District Court in the Northern District of California that held the Internet is not a machine. CyberSource Corp. v. Retail Decisions, Inc., 620 F. Supp. 2d 1068 (N.D. Cal. 2009) (“[T]he Internet is an abstraction.” “One can touch a computer or a network cable, but one cannot touch ‘the internet.’”). In CyberSource, the court held that methods for “detecting fraud in credit card transaction between consumer and merchant over the Internet were not tied to a specific machine.” Id. at 1077-78 (emphasis added). This Court agrees in full with the court’s reasoning in CyberSource to the effect that the “over the Internet” recitation does not make an otherwise unpatentable idea patentable. Id.”

Judge Klausner also found that the “case at hand is very similar” to Kappos v. Bilski, in that the “core principle” of using advertisement as an exchange or currency is an “abstract” idea “similar to the core of the Bilski patent.”   And that, “[at] its heart, therefore, the patent does no more than disclose an abstract idea.”

The big problem with this case, in my opinion, is that its “abstract idea death-ray” appears capable of killing any invention where a key concept can be labeled “abstract” even if the invention is clearly limited to an electronic implementation and even if the electronic implementation is central to the idea, as it was in this case.

Here are claims 1 and 8 from the ‘545 patent (emphasis added):

1. A method for distribution of products over the Internet via a facilitator, said method comprising the steps of:

a first step of receiving, from a content provider, media products that are covered by intellectual-property rights protection and are available for purchase, wherein each said media product being comprised of at least one of text data, music data, and video data;

a second step of selecting a sponsor message to be associated with the media product, said sponsor message being selected from a plurality of sponsor messages, said second step including accessing an activity log to verify that the total number of times which the sponsor message has been previously presented is less than the number of transaction cycles contracted by the sponsor of the sponsor message;

a third step of providing the media product for sale at an Internet website;

a fourth step of restricting general public access to said media product;

a fifth step of offering to a consumer access to the media product without charge to the consumer on the precondition that the consumer views the sponsor message;

a sixth step of receiving from the consumer a request to view the sponsor message, wherein the consumer submits said request in response to being offered access to the media product;

a seventh step of, in response to receiving the request from the consumer, facilitating the display of a sponsor message to the consumer;

an eighth step of, if the sponsor message is not an interactive message, allowing said consumer access to said media product after said step of facilitating the display of said sponsor message;

a ninth step of, if the sponsor message is an interactive message, presenting at least one query to the consumer and allowing said consumer access to said media product after receiving a response to said at least one query;

a tenth step of recording the transaction event to the activity log, said tenth step including updating the total number of times the sponsor message has been presented; and

an eleventh step of receiving payment from the sponsor of the sponsor message displayed.

8.  A method for distribution of products over the Internet via a facilitator, said method comprising the steps of:

a first step of providing a product list on an Internet website, wherein at least some of the products are media products covered by intellectual property rights protection and are available for purchase, said media products being provided by content providers, wherein each said media product is comprised of at least one of text data, sound data, and video data;

 a second step of selecting a sponsor message to be associated with at least one of said media products, said sponsor message being selected from a plurality of sponsor messages, said second step including accessing an activity log to verify that the total number of times which the sponsor message has been previously presented is less than the number of transaction cycles contracted by the sponsor of the sponsor message;

 a third step of restricting general public access to said media products;

 a fourth step of offering to a consumer access to a requested media product available for purchase without charge to the consumer on the precondition that the consumer views the sponsor message;

 a fifth step of receiving from the consumer a request to view a sponsor message in response to said step of offering;

 a sixth step of facilitating the display of a sponsor message to the consumer in response to receiving the request;

 a seventh step of, if the sponsor message is not an interactive message, allowing said consumer access to said requested media product after said step of facilitating the display of said sponsor message;

 an eighth step of, if the sponsor message is an interactive message, presenting at least one query to the consumer and allowing said consumer access to said media product after receiving a response to said at least one query;

 a ninth step of recording the transaction event to the activity log, said ninth step including updating the total number of times the sponsor message has been presented; and

 a tenth step of receiving payment from the sponsor of the sponsor message displayed.

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2 Responses to “Bilski vs. Kappos Death Star Vaporizes Ultramercial Patent”

  1. step back says:

    Steve,

    Thanks for the clarifying notes.

    Of course, you cannot possibly be reading this comment because my keyboard is an “abstraction”, its electrical coupling to that there ‘Internets’ is an “abstraction”, and the electrons that are induced into motion so as to cause my keystrokes to appear symbolically on your computer screen, those too are “abstractions”.

    Thank goodness we live in the 12th Century.
    (Anyone who thinks it’s the 21st Century is confused. Their digits must have been alchemically transposed.)

  2. Sal Ignab says:

    I would have thought that this patent would have been challenged on the basis of obviousness, not start a debate about whether the Internet is a machine.

    It seems to me that if somebody has a really great idea, and it allows others to make money off of it, then the inventors ought to be compensated.

    Bilski may be a Death Star, but in this case, Hulu et al clearly profited from Ultramercial’s idea – and blowing up this patent was exactly the kind of henious act that gets the Jedi on your ass.