Ultramercial, LLC is an

online advertising Online advertising, also known as online marketing, Internet advertising, digital advertising or web advertising, is a form of marketing and advertising that uses the Internet to promote products and services to audiences and platform users. ...

company. The company primarily specializes in interactive advertisements, which emphasize

user engagement Ancient Egyptian roles * User (ancient Egyptian official), an ancient Egyptian nomarch (governor) of the Eighth Dynasty * Useramen, an ancient Egyptian vizier also called "User" Other uses * User (computing), a person (or software) using an ...

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

internet access Internet access is a facility or service that provides connectivity for a computer, a computer network, or other network device to the Internet, and for individuals or organizations to access or use applications such as email and the World Wide ...

. The company claimed that its system was effective, with a 4.84% average

click-through rate Click-through rate (CTR) is the ratio of clicks on a specific link to the number of times a page, email, or advertisement is shown. It is commonly used to measure the success of an online advertising campaign for a particular website, as well ...

in 2008 (in comparison to traditional advertisements). The company was the subject of a

patent infringement 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 ...

lawsuit against

Hulu Hulu (, ) is an American Subscription business model, subscription streaming media service owned by Disney Streaming, a subsidiary of the Disney Entertainment segment of the Walt Disney Company. It was launched on October 29, 2007, initially as ...

YouTube YouTube is an American social media and online video sharing platform owned by Google. YouTube was founded on February 14, 2005, by Steve Chen, Chad Hurley, and Jawed Karim who were three former employees of PayPal. Headquartered in ...

and

WildTangent Gamigo Inc., doing business as WildTangent, is an American video game developer based in Round Rock, Texas. In April 2019, it was acquired by the German games company . Games Approximately 30 of the games in the WildTangent catalog were produc ...

;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 sufficiency of disclosure, enabling discl ...

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

business model A business model describes how a Company, business organization creates, delivers, and captures value creation, value,''Business Model Generation'', Alexander Osterwalder, Yves Pigneur, Alan Smith, and 470 practitioners from 45 countries, self-pub ...

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, co ...

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 The United States Court of Appeals for the Federal Circuit (in case citations, Fed. Cir. or C.A.F.C.) is one of the 13 United States courts of appeals. It has special appellate jurisdiction over certain categories of cases in the U.S. federal ...

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 In most legal jurisdictions, a supreme court, also known as a court of last resort, apex court, high (or final) court of appeal, and court of final appeal, is the highest court within the hierarchy of courts. 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 ''Alice Corp. v. CLS Bank International'', 573 U.S. 208 (2014), was a 2014 United States Supreme Court decision about patent eligibility of business method patents. The issue in the case was whether certain patent claims for a computer-implemente ...

, 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