We have all seen them – the short clips of video advertising we must watch before we are granted access to some other video content. A company known as Ultramercial claims that the “idea” of putting that short advertising clip in front of content was its novel, non obvious and hence patentable invention. A lower court disagreed, and invalidated the patent on subject matter grounds. Last September, however, in Ultramercial v Hulu, the Court of Appeals for the Federal Circuit reversed that decision and remanded the decision for further proceedings (the issue of whether the patent was even valid on novelty or non obvious grounds had not yet been decided).
On May 21, 2012 the Supreme Court of the United States granted certiorari and remanded the case back to the CAFC for further review in light of Mayo Collaborative Services v. Prometheus Laboratories, Inc., a decision in which the process and method of administering certain therapeutic drugs was held to be patent subject matter ineligible.
There has been a distinct level of Supreme Court review of patent cases recently, most of them restricting or limiting the validity and subject matter of patents. This latest remand indicates that the Supreme Court is expecting the CAFC to use these decisions in the internet area as well, to begin at least reviewing, and most likely holding invalid, many business method type patents that do not meet patent eligible subject matter requirements.
There are thousands of issued patents that cover basic functioning of the internet system (or, at least the commercial part of it) – that will be called into question in light of these recent Supreme Court decisions.