From the outset, Ultramercial’s patent claim was a stupid idea. It tried to enforce a patent for the idea that before you could watch on-line video, you had to watch a commercial. Some you may be thinking, “Wait minute. Isn’t that like, television?” And you’d be right. It’s a textbook case of an unoriginal, completely obvious and abstract idea.
But a person named David Howard Jones was granted a patent for the process. It’s US patent 7,346,545. Howard sold the patent to Ultramercial. Some on-line vendors coughed up licensing fees for this idiocy, including Hulu. But one company, the game network WildTangent, refused to pay, and Ultramercial sued to enforce its patent.
The U.S. District Court through out Ultramercial’s patent claim as obvious and not original.
But Ultramercial’s claim was revived in 2012 by the US Court of Appeals for the Federal Circuit, the court that hears all patent appeals. Former Chief Judge Randall Rader wrote for the court that the Ultramercial patent “does not simply claim the age-old idea that advertising can serve as currency,” but rather “discloses a practical application of this idea.”
The SCOTUS ordered the Federal Circuit to reconsider its decision in light of recent case law.
The Federal Circuit again refused to invalidate the patent, this time finding the idea was not too abstract.
So earlier this year, after its Alice Corp. v. CLS Bank ruling, the SCOTUS again ordered the Federal Circuit to reconsider the case. The Federal Circuit has finally woken up and smelled the coffee. In November 14’s opinion, the three-judge panel threw out Ultramercial’s ad-watching patent.
Two U.S. District Court decisions, two SCOTUS orders and three (!) Federal Circuit Court of Appeals decision to drive a stake through the heart of a patent that should never have been granted in the first place.
Now WC has no real objection to spending reasonable amounts of money on lawyers. Heh. But idiot patents like Ultramercial’s are seriously hampering economic growth in the United States. Companies like WildTangent shouldn’t be required to expend hundreds of thousands of dollars and years of effort to fight what amounts to legally sanctioned blackmail.
The SCOTUS seems to have belatedly recognized the problem it created with its earlier decisions granting patents to abstract ideas implemented in software. At least cases like Alice v. CLS Bank suggest it is having second thoughts. But as Ultramercial demonstrates, the legal process is a slow, painful and hideously expensive way to sort this out. If we had a functional Congress, this would be an appropriate area for legislation. A lot of intellectual property scholars think legislative reform is long past due. But we don’t have a functional Congress. Or any sign of one.
So the judicial branch, as flawed as it may be, is the only presently available forum for cleaning up the intellectual swamp. Which makes Ultramercial a bit more significant than finally slapping down a silly claim.