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Patent Trolls 'n Eye Rolls: Fed Circuit Protects Abstract Patent?

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By Aditi Mukherji, JD on June 28, 2013 3:57 PM

Patent troll haters’ eyes are rolling at the Federal Circuit after, according to some critics, the court missed a golden opportunity to finally rein in abstract patents, reports SiliconAngle.

One such notable critic, Timothy B. Lee, rolled his eyes completely into the back of his head in a Washington Post article he wrote titled, “One the worst patents ever just got upheld in court.”

Yeah, he was referring to the Federal Circuit…

Lee takes issue with the Federal Circuit protecting patents on concepts for future inventions. Most troubling, he thinks it will exacerbate our already out-of-control patent trolling problem.

One of the issues of abstract patents, Lee argues, is that many people will independently discover the same basic concept and infringe by accident. Then the original patent holder -- who may not have come up with the concept first, or even turned the concept into a usable technology -- can sue. That allows for the kind of abusive litigation that has been on the rise in recent years.

A firm called Ultramercial claims to have invented the concept of showing a customer an ad instead of charging for content. In other words, it claims to have a patent for display ads, which numerous companies choose to do so that they can offer their services for free.

The company has sought royalties from a number of Web sites that use such display ads, including Hulu and YouTube.

Ultramercial's patent isn't limited to any specific software algorithm, server configuration or user interface design. If you build a Web site that follows the general business strategy claimed by the patent, Ultramercial thinks you owe them money, Lee explains.

The gripe: How do you patent an abstract idea like displaying ads? Since abstract ideas can't be patented, one of Ultramercial's targets, a company called WildTangent, challenged the validity of the patent.

Back in 2011, the Federal Circuit ruled in favor of Ultramercial, holding that its patent isn't too abstract to be patented.

In 2012, soon after the highest court struck down another abstract patent, the Supreme Court held "nuh-uh, Federal Circuit" and ordered the court to reconsider its 2011 Ultramercial decision. But last week, the Federal Circuit had a reply to SCOTUS: "nuh-uh, Mom."

Striking the legal equivalent of the crossed-arm pose stubborn 5-year-olds know and love, the Federal Circuit sided with Ultramercial again. Writing for the three-judge panel, Chief Judge Randall Rader (Sidebar: How awesome is that name?) insisted the steps of "receiving media products from a copyright holder, selecting an advertisement to be associated with each media product, providing said media products for sale on an Internet website" aren't abstract.

Rest assured, "there is no risk of preempting all forms of advertising, let alone advertising on the Internet." Judge Rader says so.

So, yeah. The fight goes on. Given the back-and-forth on the issue, it won't be surprising if the Supreme Court steps in and settles the score once and for all on frivolous patenting.

After all, mom knows best, right?

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