Ultramercial, LLC is an online advertising company. The company primarily specializes in interactive advertisements, which emphasize

user engagement Customer engagement is an interaction between an external consumer/customer (either B2C or B2B) and an organization (company or brand) through various online or offline channels. According to Hollebeek, Srivastava and Chen's (2019, p. 166) S-D lo ...

in exchange for access to premium content, such as video, games, and public

internet access Internet access is the ability of individuals and organizations to connect to the Internet using computer terminals, computers, and other devices; and to access services such as email and the World Wide Web. Internet access is sold by Internet ...

. The company claimed that its system was effective, with a 4.84% average click-through rate in 2008 (in comparison to traditional advertisements). The company was the subject of a

patent infringement Patent infringement is the commission of a prohibited act with respect to a patented invention without permission from the patent holder. Permission may typically be granted in the form of a license. The definition of patent infringement may v ...

lawsuit against

Hulu Hulu () is an American subscription streaming service majority-owned by The Walt Disney Company, with Comcast's NBCUniversal holding a minority stake. It was launched on October 29, 2007 and it offers a library of films and television serie ...

YouTube YouTube is a global online video platform, online video sharing and social media, social media platform headquartered in San Bruno, California. It was launched on February 14, 2005, by Steve Chen, Chad Hurley, and Jawed Karim. It is owned by ...

and WildTangent;Ultramercial, Inc. v. Hulu, LLC (Fed. Cir. 2013)
/ref> in the lawsuit, Ultramercial accused the two companies of infringing its

patent A patent is a type of intellectual property that gives its owner the legal right to exclude others from making, using, or selling an invention for a limited period of time in exchange for publishing an enabling disclosure of the invention."A p ...

("the '545 Patent," filed in 2001), covering the

business model A business model describes how an organization creates, delivers, and captures value,''Business Model Generation'', Alexander Osterwalder, Yves Pigneur, Alan Smith, and 470 practitioners from 45 countries, self-published, 2010 in economic, social, ...

surrounding a "Method and system for payment of

intellectual property Intellectual property (IP) is a category of property that includes intangible creations of the human intellect. There are many types of intellectual property, and some countries recognize more than others. The best-known types are patents, cop ...

royalties by interposed sponsor on behalf of consumer over a telecommunications network". In other words, the '545 Patent was directed to modeling the value of certain programming based on the number of advertisements consumers would continue to watch, a more direct valuation of consumers' time that previous models based directly on dollars spent in advertisement campaigns. While WildTangent challenged the validity of the patent in 2011 because they felt it was too abstract, the Court of Appeals for the Federal Circuit upheld Ultramercial's patent, stating that it "does not simply claim the age-old idea that advertising can serve as currency. Instead tdiscloses a practical application of this idea." The court also asserted that the technical elements required to implement the system described were intricate enough to not be abstract. In 2012, the

Supreme Court A supreme court is the highest court within the hierarchy of courts in most legal jurisdictions. Other descriptions for such courts include court of last resort, apex court, and high (or final) court of appeal. Broadly speaking, the decisions of ...

ordered the Federal Circuit to re-examine the case in the wake of several recent patent rulings on "abstract" concepts. This ruling came in the wake of the Supreme Court's ruling on patentable subject matter in Mayo Collaborative Services v. Prometheus Laboratories, Inc. This opinion was also issued shortly after the America Invents Act ("AIA") went into effect, drastically changing the statutory landscape of US Patent Law. On June 21, 2013, the Federal Circuit upheld its decision and ruled that Ultramercial's patents validly claimed methods of using advertising as a medium of exchange. On November 14, 2014, the Federal Circuit reversed its prior rulings and found that the "patent does not claim patent eligible subject matter and accordingly affirm the district court’s grant of WildTangent’s motion to dismiss." This reversal came in the wake of the U.S. Supreme Court's ruling in Alice Corp. v. CLS Bank International, a benchmark case for doctrine-disruptive precedent defining patent eligible subject matter.

References

Online advertising services and affiliate networks Online advertising methods {{law-stub, US Federal Circuit Court of Appeals Opinion=, List of United States Appeals Court Patent Law Cases=Federal Circuit CCPA District Courts