United States Court of Appeals 

for the Federal Circuit ______________________ 

ULTRAMERCIAL, INC., AND ULTRAMERCIAL, LLC,

Plaintiffs-Appellants,

v.

HULU, LLC,

Defendant, 

AND

WILDTANGENT, INC.,

Defendant-Appellee.

______________________ 

2010-1544 

______________________ 

Appeal from the United States District Court for the 

Central District of California in No. 09-CV-6918, Judge R. 

Gary Klausner. 

______________________ 

Decided: June 21, 2013 

______________________ 

LAWRENCE M. HADLEY, Hennigan, Bennett & Dorman 

LLP, of Los Angeles, California, argued for plaintiffsappellants. With him on the brief were HAZIM ANSARI and 

MIEKE K. MALMBERG. 

GREGORY G. GARRE, Latham & Watkins, LLP, of 

Washington, DC, argued for defendant-appellee. On the 
2 ULTRAMERCIAL, INC. v. HULU, LLC

brief were RICHARD G. FRENKEL and LISA K. NGUYEN, of 

Palo Alto, California. Of counsel were RICHARD P. BRESS,

GABRIEL BELL and KATHERINE TWOMEY, of Washington, 

DC. 

______________________ 

Before RADER, Chief Judge, LOURIE, and O’MALLEY,

Circuit Judges. 

Opinion for the court filed by Chief Judge RADER. 

Concurring opinion filed by Circuit Judge LOURIE. 

RADER, Chief Judge. 

The United States District Court for the Central District of California dismissed this patent suit, filed by 

Ultramercial, LLC and Ultramercial, Inc. (collectively, 

“Ultramercial”), by holding that U.S. Patent No. 7,346,545 

(“the ’545 patent”) does not claim patent-eligible subject 

matter. In an earlier decision, later vacated by the United States Supreme Court, this court reversed the district 

court’s holding and remanded. Ultramercial, LLC v. 

Hulu, LLC, 657 F.3d 1325 (Fed. Cir. 2011), vacated sub 

nom. WildTangent, Inc. v. Ultramercial, LLC, 132 S.Ct. 

2431 (2012). Because this court again holds that the 

district court erred in holding that the subject matter of 

the ’545 patent is not a “process” within the language and 

meaning of 35 U.S.C. § 101, this court again reverses and 

remands. 

I. 

The ’545 patent claims a method for distributing copyrighted products (e.g., songs, movies, books) over the 

Internet where the consumer receives a copyrighted 

product for free in exchange for viewing an advertisement, and the advertiser pays for the copyrighted content. 

Claim 1 of the ’545 patent reads: 
 ULTRAMERCIAL, INC . v. HULU, LLC 3 

A method for distribution of products over the Internet via a facilitator, said method comprising 

the steps of: 

a first step of receiving, from a content 

provider, media products that are covered 

by intellectual property rights protection 

and are available for purchase, wherein 

each said media product being comprised 

of at least one of text data, music data, 

and video data; 

a second step of selecting a sponsor message to be associated with the media 

product, said sponsor message being selected from a plurality of sponsor messages, said second step including accessing an 

activity log to verify that the total number 

of times which the sponsor message has 

been previously presented is less than the 

number of transaction cycles contracted by 

the sponsor of the sponsor message; 

a third step of providing the media product for sale at an Internet website; 

a fourth step of restricting general public 

access to said media product; 

a fifth step of offering to a consumer access to the media product without charge 

to the consumer on the precondition that 

the consumer views the sponsor message; 

a sixth step of receiving from the consumer a request to view the sponsor message, 

wherein the consumer submits said request in response to being offered access to 

the media product; 
4 ULTRAMERCIAL, INC. v. HULU, LLC

a seventh step of, in response to receiving 

the request from the consumer, facilitating the display of a sponsor message to the 

consumer; 

an eighth step of, if the sponsor message is 

not an interactive message, allowing said 

consumer access to said media product after said step of facilitating the display of 

said sponsor message; 

a ninth step of, if the sponsor message is 

an interactive message, presenting at 

least one query to the consumer and allowing said consumer access to said media 

product after receiving a response to said 

at least one query; 

a tenth step of recording the transaction 

event to the activity log, said tenth step 

including updating the total number of 

times the sponsor message has been presented; and 

an eleventh step of receiving payment 

from the sponsor of the sponsor message 

displayed. 

’545 patent col. 8, ll. 5-48. 

Ultramercial sued Hulu, LLC (“Hulu”), YouTube, LLC 

(“YouTube”), and WildTangent, Inc. (“WildTangent”), 

alleging infringement of the ’545 patent. Hulu and 

YouTube have been dismissed from the case. WildTangent moved to dismiss for failure to state a claim, arguing 

that the ’545 patent did not claim patent-eligible subject 

matter. The district court granted WildTangent’s preanswer motion to dismiss under Rule 12(b)(6). Ultramercial appeals. This court has jurisdiction under 28 U.S.C. 

§ 1295(a)(1). 
 ULTRAMERCIAL, INC . v. HULU, LLC 5 

This court reviews a district court’s dismissal for failure to state a claim under the law of the regional circuit. Juniper Networks, Inc. v. Shipley, 643 F.3d 1346, 

1350 (Fed. Cir. 2011) (citation omitted). The Ninth Circuit reviews de novo challenges to a dismissal for failure 

to state a claim under Fed. R. Civ. P. 12(b)(6). Livid 

Holdings Ltd. v. Salomon Smith Barney, Inc., 403 F.3d 

1050, 1055 (9th Cir. 2005). This court also reviews the 

ultimate determination regarding patent-eligible subject 

matter under 35 U.S.C. § 101 without deference. In re 

Ferguson, 558 F.3d 1359, 1363 (Fed. Cir. 2009). 

II. 

The district court dismissed Ultramercial’s claims for 

failure to claim statutory subject matter without formally 

construing the claims and, further, without requiring 

defendants to file answers. This raises several preliminary issues. 

First, it will be rare that a patent infringement suit 

can be dismissed at the pleading stage for lack of patentable subject matter. This is so because every issued 

patent is presumed to have been issued properly, absent 

clear and convincing evidence to the contrary. See, e.g.,

CLS Bank Int’l v. Alice Corp., __ F.3d __, 2013 WL 

1920941, *33 (Fed. Cir. May 10, 2013) (Chief Judge Rader, and Judges Linn, Moore, and O’Malley, concluding 

that “any attack on an issued patent based on a challenge 

to the eligibility of the subject matter must be proven by 

clear and convincing evidence,” and Judges Lourie, Dyk, 

Prost, Reyna, and Wallach, concluding that a statutory 

presumption of validity applies when § 101 is raised as a 

basis for invalidity in district court proceedings.). Further, if Rule 12(b)(6) is used to assert an affirmative 

defense, dismissal is appropriate only if the well-pleaded 

factual allegations in the complaint, construed in the light 

most favorable to the plaintiff, suffice to establish the 

defense. See Bell Atlantic Corp. v. Twombly, 550 U.S. 
6 ULTRAMERCIAL, INC. v. HULU, LLC

544, 555 (2007); Jones v. Bock, 549 U.S. 199, 215 (2007). 

Thus, the only plausible reading of the patent must be 

that there is clear and convincing evidence of ineligibility. 

For those reasons, Rule 12(b)(6) dismissal for lack of 

eligible subject matter will be the exception, not the rule. 

Second, as is shown more fully below, the analysis 

under § 101, while ultimately a legal determination, is 

rife with underlying factual issues. For example, while 

members of this court have used varying formulations for 

the precise test, there is no doubt the § 101 inquiry requires a search for limitations in the claims that narrow 

or tie the claims to specific applications of an otherwise 

abstract concept. CLS Bank, __ F.3d at __, 2013 WL 

1920941 at *27-30 (meaningful limitations); Id. at *10 

(opinion of Lourie, J.). Further, factual issues may underlie determining whether the patent embraces a scientific 

principle or abstract idea. Id. (opinion of Lourie, J.) (“The 

underlying notion is that a scientific principle . . . reveals 

a relationship that has always existed.”) (quoting Parker 

v. Flook, 437 U.S. 584, 593 n.15 (1978)). If the question is 

whether “genuine human contribution” is required, and 

that requires “more than a trivial appendix to the underlying abstract idea,” and were not at the time of filing 

“routine, well-understood, or conventional,” factual inquiries likely abound. Id. at *11-12. Almost by definition, 

analyzing whether something was “conventional” or 

“routine” involves analyzing facts. Id. at *12. Likewise, 

any inquiry into the scope of preemption—how much of 

the field is “tied up” by the claim—by definition will 

involve historic facts: identifying the “field,” the available 

alternatives, and preemptive impact of the claims in that 

field. The presence of factual issues coupled with the 

requirement for clear and convincing evidence normally 

will render dismissal under Rule 12(b)(6) improper. 

Third, and in part because of the factual issues involved, claim construction normally will be required. This 

court has never set forth a bright line rule requiring 
 ULTRAMERCIAL, INC . v. HULU, LLC 7 

district courts to construe claims before determining 

subject matter eligibility. Indeed, because eligibility is a 

“coarse” gauge of the suitability of broad subject matter 

categories for patent protection, Research Corp. Techs., 

Inc. v. Microsoft Corp., 627 F.3d 859, 869 (Fed. Cir. 2010), 

claim construction may not always be necessary for a 

§ 101 analysis. See, e.g., Bilski v. Kappos, 130 S. Ct. 3218, 

3231 (2010) (finding subject matter ineligible for patent 

protection without claim construction); CLS Bank, __ F.3d 

__, 2013 WL 1920941 (court decided eligibility of subject 

matter without formal claim construction). 

On the other hand, if there are factual disputes, claim 

construction should be required. The procedural posture 

of the case may indicate whether claim construction is 

required. This case involves Rule 12(b)(6), which requires 

courts to accept the well-pleaded factual allegations as 

true and to require the accused infringer to establish that 

the only plausible reading of the claims is that, by clear 

and convincing evidence, they cover ineligible subject 

matter. It may also be feasible for the district court to 

choose to construe the claims in accordance with this 

court’s precedent, or to adopt the construction proffered 

by the patentee. In either case, it cannot decide factual 

questions at this stage. At summary judgment, the 

district court may choose to construe the claims in accordance with this court’s precedent, or if not it may choose to 

give a construction most favorable to the patentee, and to 

apply the usual rules pertaining to summary judgment 

from there, and still require clear and convincing evidence 

of ineligible subject matter. 

Of course, even if not required, on many occasions a 

definition of the invention by claim construction can 

clarify the basic character of the subject matter of the 

invention. Thus, claim meaning may clarify the actual 

subject matter at stake in the invention and can enlighten, or even answer, questions about subject matter abstractness. In this procedural posture, however, the 
8 ULTRAMERCIAL, INC. v. HULU, LLC

subject matter at stake and its eligibility does not require 

formal claim construction. 

Finally, fourth, the question of eligible subject matter 

must be determined on a claim-by-claim basis. Construing every asserted claim and then conducting a § 101 

analysis may not be a wise use of judicial resources. 

With these thoughts in mind, the court turns to the 

question of whether the court correctly dismissed the suit 

under § 101. 

III. 

A. 

The statute controls the inquiry into patentable subject matter. 35 U.S.C. § 101 sets forth the categories of 

subject matter that are eligible for patent protection: 

“[w]hoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or 

any new and useful improvement thereof, may obtain a 

patent therefor, subject to the conditions and requirements of this title.” (Emphasis added). Underscoring its 

breadth, § 101 both uses expansive categories and modifies them with the word “any.” In Bilski, the Supreme 

Court emphasized that “[i]n choosing such expansive 

terms modified by the comprehensive ‘any,’ Congress 

plainly contemplated that the patent laws would be given 

wide scope.” 130 S. Ct. at 3225 (quoting Diamond v. 

Chakrabarty, 447 U.S. 303, 308 (1980)). 

The pertinent, expansive definition of “process” in 

§ 100(b) confirms the statute’s intended breadth. At first 

examination, the Act’s definition of “process” to include a 

new use of a known machine seems superfluous. After 

all, if “any” process may be patented under § 101, § 100(b) 

seems wholly unnecessary. The amendment was necessary to avoid narrow judicial interpretations of “process” 

given to the pre-1952 statute. Specifically, the 1952 

amendments added § 100(b) to ensure that doubts about 
 ULTRAMERCIAL, INC . v. HULU, LLC 9 

the scope of a “process” under the pre-1952 version of the 

patent statute would not be read into the new Act. P.J. 

Federico, Commentary on the New Patent Act, reprinted in 

75 J. Pat. & Trademark Off. Soc’y 161, 177 (1993) (“Remarks have appeared in a few decisions and elsewhere 

that new uses are not patentable . . . . [I]f such remarks 

are interpreted to mean that a new use or application of 

an old machine . . . cannot result in anything patentable 

then such statements are not and have never been an 

accurate statement of the law.”); Hearing Before Subcomm. No. 3 of the Comm. on the Judiciary, at 37 (1951) 

(Federico testifying that the “definition of ‘process’ has 

been added . . . to clarify the present law as to certain 

types of methods as to which some doubts have been 

expressed . . . .”); S. Rep. No. 82-1979, at 17 (1952) (Explaining that the definition clarified that “processes or 

methods which involve merely the new use of a known 

process . . . are processes or methods under the statute 

and may be patented provided the conditions of patentability are satisfied.”). Thus, changes were made to the 

1952 Act to broaden eligible subject matter and eliminate 

doubt caused by narrow interpretations given to the prior 

statute. Moreover, not only did Congress expand the 

definition of “process” in 1952, Title 35 does not list a 

single ineligible category. At a time when Congress 

considered § 101, it broadened the statute and certainly 

did not place any specific limits on it. 

The limited role of § 101 even in patentability (the patentee did not argue that § 101 is not a defense to infringement) is confirmed by other aspects of the Patent 

Act. As § 101 itself expresses, subject matter eligibility is 

merely a threshold check; patentability of a claim ultimately depends on “the conditions and requirements of 

this title,” such as novelty, non-obviousness, and adequate 

disclosure. 35 U.S.C. § 101; see Bilski, 130 S. Ct. at 3225 

(Characterizing § 101 as a “threshold test”); Classen 

Immunotherapies, Inc. v. Biogen IDEC, 659 F.3d 
10 ULTRAMERCIAL, INC. v. HULU, LLC

1057,1064 (Fed. Cir. 2011) (Pointing out the difference 

between “the threshold inquiry of patent-eligibility, and 

the substantive conditions of patentability”). By directing 

attention to the substantive criteria for patentability, 

Congress made it clear that the categories of patenteligible subject matter are no more than a “coarse eligibility filter.” Research Corp., 627 F.3d at 869. In other 

words, Congress made it clear that the expansive categories—process, machine, article of manufacture, and 

composition of matter—are not substitutes for the substantive patentability requirements set forth in §§ 102, 

103, and 112 and invoked expressly by § 101 itself. After 

all, the purpose of the Patent Act is to encourage innovation, and the use of broadly inclusive categories of statutory subject matter ensures that “ingenuity . . . receive[s] 

a liberal encouragement.” Chakrabarty, 447 U.S. at 308. 

The plain language of the statute provides that any new, 

non-obvious, and fully disclosed technical advance is 

eligible for protection. 

B. 

The Supreme Court has on occasion recognized narrow judicial exceptions to the 1952 Act’s deliberately 

broadened eligibility provisions. In line with the broadly 

permissive nature of § 101’s subject matter eligibility 

principles and the structure of the Patent Act, case law 

has recognized only three narrow categories of subject 

matter outside the eligibility bounds of § 101—laws of 

nature, physical phenomena, and abstract ideas. Bilski, 

130 S. Ct. at 3225. The Court’s motivation for recognizing 

exceptions to this broad statutory grant was its desire to 

prevent the “monopolization” of the “basic tools of scientific and technological work,” which “might tend to impede 

innovation more than it would tend to promote it.” Mayo 

Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 

1289, 1293 (2012) (“Prometheus”) (internal quotation 

marks omitted). 
 ULTRAMERCIAL, INC . v. HULU, LLC 11 

Though recognizing these exceptions, the Court has 

also recognized that these implied exceptions are in 

obvious tension with the plain language of the statute, its 

history, and its purpose. See Chakrabarty, 447 U.S. at 

308 (“In choosing such expansive terms as ‘manufacture’ 

and ‘composition of matter,’ modified by the comprehensive ‘any,’ Congress plainly contemplated that the patent 

laws would be given wide scope.”); id. at 315 (“Broad 

general language is not necessarily ambiguous when 

congressional objectives require broad terms.”). As the 

Supreme Court has made clear, too broad an interpretation of these exclusions from the grant in § 101 “could 

eviscerate patent law.” Prometheus, 132 S. Ct. at 1293; cf. 

Bilski, 130 S. Ct. at 3226 (“This Court has not indicated 

that the existence of these well-established exceptions 

gives the Judiciary carte blanche to impose other limitations that are inconsistent with the text and the statute’s 

purpose and design.”). 

Thus, this court must not read § 101 so restrictively 

as to exclude “unanticipated inventions” because the most 

beneficial inventions are “often unforeseeable.” See 

Chakrabarty, 447 U.S. at 316; see also J.E.M. Ag Supply,

534 U.S. at 135 (describing § 101 as “a dynamic provision 

designed to encompass new and unforeseen inventions.”). 

Broad inclusivity is the Congressional goal of § 101, not a 

flaw. 

To sum up, because eligibility requires assessing judicially recognized exceptions against a broad and deliberately expanded statutory grant, one of the principles that 

must guide our inquiry is these exceptions should apply 

narrowly. Indeed, the Supreme Court has cautioned that, 

to avoid improper restraints on statutory language, 

acknowledged exceptions thereto must be rare. 

C. 

In the eligibility analysis as well, the presumption of 

proper issuance applies to a granted patent. As a practi-
12 ULTRAMERCIAL, INC. v. HULU, LLC

cal matter, because judicially acknowledged exceptions 

could eviscerate the statute, application of this presumption and its attendant evidentiary burden is consistent 

with the Supreme Court’s admonition to cabin exceptions 

to § 101. Further, applying the presumption is consistent 

with patent office practice. Before issuing a patent, the 

Patent Office rejects claims if they are drawn to ineligible 

subject matter, just as it rejects claims if not compliant 

with §§ 102, 103, or 112. With one exception, the Supreme Court’s decisions since 1952 have addressed the 

propriety of those decisions. Thus, when a patent issues, 

it does so after the Patent Office assesses and endorses its 

eligibility under § 101, just as it assesses and endorses its 

patentability under the other provisions of Title 35. See 

Microsoft Corp. v. i4i Ltd. P’ship, 131 S. Ct. 2238, 2242, 

(2011) (“Congress has set forth the prerequisites for 

issuance of a patent, which the PTO must evaluate in the 

examination process. To receive patent protection a 

claimed invention must, among other things, fall within 

one of the express categories of patentable subject matter, 

§ 101, and be novel, § 102, and nonobvious, § 103.”). 

In sum, the high level of proof applies to eligibility as 

it does to the separate patentability determinations. 

Accordingly, any attack on an issued patent based on a 

challenge to the eligibility of the subject matter must be 

proven by clear and convincing evidence. Cf. Microsoft, 31 

S. Ct. at 2242 (“We consider whether § 282 requires an 

invalidity defense to be proved by clear and convincing 

evidence. We hold that it does.”). 

IV. 

A. 

Defining “abstractness” has presented difficult problems, particularly for the § 101 “process” category. Clearly, a process need not use a computer, or some machine, in 

order to avoid “abstractness.” In this regard, the Supreme Court recently examined the statute and found 
 ULTRAMERCIAL, INC . v. HULU, LLC 13 

that the ordinary, contemporary, common meaning of 

“method” may include even methods of doing business. 

See Bilski, 130 S. Ct. at 3228. Accordingly, the Court 

refused to deem business methods ineligible for patent 

protection and cautioned against “read[ing] into the 

patent laws limitations and conditions which the legislature has not expressed.” Id. at 3226 (quoting Diamond v. 

Diehr, 450 U.S. 175, 182 (1981)). 

In an effort to grapple with this non-statutory “abstractness” exception to “processes,” the dictionary provides some help. See Merriam-Webster’s Collegiate 

Dictionary 5 (11th ed. 2003) (defining abstract as “disassociated from any specific instance . . . expressing a quality apart from an object <the word poem is concrete, poetry

is [abstract]>”). An abstract idea is one that has no 

reference to material objects or specific examples—i.e., it 

is not concrete. This court at one point set forth a machine-or-transformation test as the exclusive metric for 

determining the subject matter eligibility of processes. In 

re Bilski, 545 F.3d 943, 956 (Fed. Cir. 2008), aff'd on other 

grounds, Bilski, 130 S. Ct. 3218. The Supreme Court 

rejected this approach in Bilski, noting that the machineor-transformation test is simply “a useful and important 

clue, an investigative tool, for determining whether some

claimed inventions are processes under § 101” and is not 

“the sole test for deciding whether an invention is a 

patent-eligible ‘process.’” 130 S. Ct. at 3227 (emphasis 

added). While machine-or-transformation logic served 

well as a tool to evaluate the subject matter of Industrial 

Age processes, that test has far less application to the 

inventions of the Information Age. See id. at 3227-28 

(“[I]n deciding whether previously unforeseen inventions 

qualify as patentable ‘processes,’ it may not make sense to 

require courts to confine themselves to asking the questions posed by the machine-or-transformation test. 

§ 101’s terms suggest that new technologies may call for 

new inquiries.”). Technology without anchors in physical 
14 ULTRAMERCIAL, INC. v. HULU, LLC

structures and mechanical steps simply defy easy classification under the machine-or-transformation categories. 

As the Supreme Court suggests, mechanically applying 

that physical test “risk[s] obscuring the larger object of 

securing patents for valuable inventions without transgressing the public domain.” Id. at 3227. 

Members of both the Supreme Court and this court 

have recognized the difficulty of providing a precise 

formula or definition for the abstract concept of abstractness. See id. at 3236 (Stevens, J., concurring) (“The Court 

. . . [has] never provide[d] a satisfying account of what 

constitutes an unpatentable abstract idea.”); Research 

Corp., 627 F.3d at 868. Because technology is everchanging and evolves in unforeseeable ways, this court 

gives substantial weight to the statutory reluctance to list 

any new, non-obvious, and fully disclosed subject matter 

as beyond the reach of Title 35. 

B. 

A claim can embrace an abstract idea and be patentable. See Prometheus, 132 S. Ct. at 1294 (explaining that 

the fact that a claim uses a basic tool does not mean it is 

not eligible for patenting). Instead, a claim is not patent 

eligible only if, instead of claiming an application of an 

abstract idea, the claim is instead to the abstract idea 

itself. The inquiry here is to determine on which side of 

the line the claim falls: does the claim cover only an 

abstract idea, or instead does the claim cover an application of an abstract idea? See Bilski, 130 S. Ct. at 3230 

(“[W]hile an abstract idea, law of nature, or mathematical 

formula could not be patented, an application of a law of 

nature or mathematical formula to a known structure or 

process may well be deserving of patent protection.” 

(emphasis in original) (internal quotation marks omitted)); Gottschalk v. Benson, 409 U.S. 63, 67 (1972) (“He 

who discovers a hitherto unknown phenomenon of nature 

has no claim to a monopoly of it which the law recogniz-
 ULTRAMERCIAL, INC . v. HULU, LLC 15 

es. If there is to be invention from such a discovery, it 

must come from the application of the law of nature to a 

new and useful end.” (emphasis added) (internal quotation marks omitted)); Diehr, 450 U.S. at 187 (“It is now 

commonplace that an application of a law of nature or 

mathematical formula to a known structure or process 

may well be deserving of patent protection.”) 

In determining on which side of the line the claim 

falls, the court must focus on the claim as a whole. As the 

Court explained: 

In determining the eligibility of respondents’ 

claimed process for patent protection under § 101, 

their claims must be considered as a whole. It is 

inappropriate to dissect the claims into old and 

new elements and then to ignore the presence of 

the old elements in the analysis. This is particularly true in a process claim because a new combination of steps in a process may be patentable 

even though all the constituents of the combination were well known and in common use before 

the combination was made. 

Diehr, 450 U.S. at 188 (emphasis added). The majority in 

Diehr rejected the minority’s approach ignoring portions 

of the claims: “[i]n order for the dissent to reach its conclusion it is necessary for it to read out of respondents’ 

patent application all the steps in the claimed process 

which it determined were not novel or ‘inventive.’ That is 

not the purpose of the § 101 inquiry . . . .” Id. at 193 n.15 

(citations omitted); Aro Mfg. Co. v. Convertible Top Replacement Co., 365 U.S. 336, 345 (1961) (“[T]here is no 

legally recognizable or protected ‘essential’ element, ‘gist’ 

or ‘heart’ of the invention.”). 

The Court has long-recognized that any claim can be 

stripped down, simplified, generalized, or paraphrased to 

remove all of its concrete limitations, until at its core, 

something that could be characterized as an abstract idea 
16 ULTRAMERCIAL, INC. v. HULU, LLC

is revealed. A court cannot go hunting for abstractions by 

ignoring the concrete, palpable, tangible limitations of the 

invention the patentee actually claims. 

Instead, the relevant inquiry is whether a claim, as a 

whole, includes meaningful limitations restricting it to an 

application, rather than merely an abstract idea. See 

Prometheus, 132 S. Ct. at 1297 (“[D]o the patent claims 

add enough to their statements of the correlations to allow 

the processes they describe to qualify as patent-eligible 

processes that apply natural laws?”); see also Fort Props., 

Inc. v. Am. Master Lease LLC, 671 F.3d 1317, 1323 (Fed. 

Cir. 2012) (“[T]o impart patent-eligibility to an otherwise 

unpatentable process under the theory that the process is 

linked to a machine, the use of the machine must impose 

meaningful limits on the claim’s scope.” (internal quotation marks omitted)). For these reasons, a claim may be 

premised on an abstract idea and, indeed, the abstract 

idea may be of central importance to the invention—the 

question for patent eligibility is whether the claim contains limitations that meaningfully tie that abstract idea 

to an actual application of that idea through meaningful 

limitations. 

This analysis is not easy, but potentially wrought 

with the risk of subjectivity and hindsight evaluations. It 

also, as noted at the outset, often entails factual inquiries 

inappropriate on a motion directed to the pleadings. 

Fortunately, the Supreme Court has provided some 

guideposts. 

An old example may be the most informative. The 

claims in O’Reilly v. Morse, 56 U.S. (15 How.) 62 (1854), 

and a case described therein, illustrate the distinction 

between a patent ineligible abstract idea and a practical 

application of an idea. The “difficulty” in Morse arose 

with the claim in which Morse: 

d[id] not propose to limit [him]self to the specific 

machinery or parts of machinery described in 
 ULTRAMERCIAL, INC . v. HULU, LLC 17 

the . . . specification and claims; the essence of 

[his] invention being the use of the motive power 

of the electric or galvanic current . . . however developed for marking or printing intelligible characters, signs, or letters, at any distances . . . . 

Id. at 112 (internal quotation marks omitted). In considering Morse’s claim, the Supreme Court referred to an 

earlier English case that distinguished ineligible claims to 

a “principle” from claims “applying” that principle: 

[I]t seems that the court at first doubted, whether 

it was a patent for anything more than the discovery that hot air would promote the ignition of fuel 

better than cold. And if this had been the construction, the court, it appears, would have held 

his patent to be void; because the discovery of a 

principle in natural philosophy or physical science, is not patentable. 

But after much consideration, it was finally decided that this principle must be regarded as well 

known, and that the plaintiff had invented a mechanical mode of applying it to furnaces; and that 

his invention consisted in interposing a heated receptacle, between the blower and the furnace, and 

by this means heating the air after it left the 

blower, and before it was thrown into the fire. 

Whoever, therefore, used this method of throwing 

hot air into the furnace, used the process he had 

invented, and thereby infringed his patent, although the form of the receptacle or the mechanical arrangements for heating it, might be different 

from those described by the patentee. 

Id. at 116. The claim in Morse itself was impermissible 

because it covered “‘an effect produced by the use of 

electro-magnetism, distinct from the process or machinery 

necessary to produce it.’” The Telephone Cases, 126 U.S. 

1, 534 (1888) (quoting Morse, 56 U.S. (15 How.) at 120). 
18 ULTRAMERCIAL, INC. v. HULU, LLC

This was in contrast to a sustained claim that was limited 

to: 

making use of the motive power of magnetism, 

when developed by the action of such current or 

currents, substantially as set forth in the . . . description, . . . as means of operating or giving motion to machinery, which may be used to imprint 

signals upon paper or other suitable material, or 

to produce sounds in any desired manner, for the 

purpose of telegraphic communication at any distances. 

Id. (first ellipsis added, second ellipsis in original) (quoting Morse, 56 U.S. (15 How.) at 85). “‘The effect of [Morse] 

was, therefore, that the use of magnetism as a motive 

power, without regard to the particular process with 

which it was connected in the patent, could not be 

claimed, but that its use in that connection could.’” 

Benson, 409 U.S. at 68 (quoting The Telephone Cases, 126 

U.S. at 534). 

The concern underscoring Morse, which has become 

clearer through the Supreme Court’s more recent precedents, is to deny patentability to an idea itself, rather 

than an application of that idea. The Court has provided 

some guidance on discerning when this should occur. 

First, the Supreme Court has stated that a claim is 

not meaningfully limited if it merely describes an abstract 

idea or simply adds “apply it.” See Prometheus, 132 S. Ct. 

at 1294, 1297. The broad claim in Morse provides a 

striking example of this. We also know that, if a claim 

covers all practical applications of an abstract idea, it is 

not meaningfully limited. See id. at 1301-02. For example, “[a]llowing petitioners to patent risk hedging would 

pre-empt use of this approach in all fields, and would 

effectively grant a monopoly over an abstract idea.” 

Bilski, 130 S. Ct. at 3231 (emphasis added). While this 

concept is frequently referred to as “pre-emption,” it is 
 ULTRAMERCIAL, INC . v. HULU, LLC 19 

important to remember that all patents “pre-empt” some 

future innovation in the sense that they preclude others 

from commercializing the invention without the patentee’s permission. Pre-emption is only a subject matter 

eligibility problem when a claim pre-empts all practical 

uses of an abstract idea. For example, the claims in 

Benson “purported to cover any use of the claimed method 

in a general-purpose digital computer of any type.” 409 

U.S. at 64 (emphasis added). The claims were not allowed 

precisely because they pre-empted essentially all uses of 

the idea: 

It is conceded that one may not patent an idea. 

But in practical effect that would be the result if 

the formula for converting [binary-coded decimal] 

numerals to pure binary numerals were patented 

in this case. The mathematical formula involved 

here has no substantial practical application except in connection with a digital computer, which 

means that . . . the patent would wholly pre-empt 

the mathematical formula and in practical effect 

would be a patent on the algorithm itself. 

Id. at 71-72 (emphasis added). When the steps of the 

claim “must be taken in order to apply the [abstract idea] 

in question,” the claim is essentially no different from 

saying apply the abstract idea. Prometheus, 132 S. Ct. at 

1299-1300. It is not the breadth or narrowness of the 

abstract idea that is relevant, but whether the claim 

covers every practical application of that abstract idea.1 

 

1 The pre-emption analysis must also recognize that 

the Patent Act does not halt or impede academic research, 

without commercial ends, to test, confirm, or improve a 

patented invention. See Sawin v. Guild, 21 F. Cas. 554, 

555 (C.C.D. Mass. 1813) (No. 12,391) (Story, J.) (infringement does not occur when the invention is used “for 
20 ULTRAMERCIAL, INC. v. HULU, LLC

As noted at the outset, whether a claim preempts “too 

much” will often require claim construction and factual 

inquiries. 

And, the Supreme Court has stated that, even if a 

claim does not wholly pre-empt an abstract idea, it still 

will not be limited meaningfully if it contains only insignificant or token pre- or post-solution activity—such as 

identifying a relevant audience, a category of use, field of 

use, or technological environment. See Prometheus, 132 

S. Ct. at 1297-98, 1300-01; Bilski, 130 S. Ct. at 3230-31; 

Diehr, 450 U.S. at 191-92 & n.14; Parker v. Flook, 437 

U.S. 584, 595 n.18 (1978). Again, these may involve 

factual inquiries. 

Finally, the Supreme Court has stated that a claim is 

not meaningfully limited if its purported limitations 

provide no real direction, cover all possible ways to 

achieve the provided result, or are overly-generalized. See 

Prometheus, 132 S. Ct. at 1300 (“[S]imply appending 

conventional steps, specified at a high level of generality, 

to laws of nature, natural phenomena, and abstract ideas 

cannot make those laws, phenomena, and ideas patentable.”); Fort Props., 671 F.3d at 1323 (“Such a broad and 

general limitation does not impose meaningful limits on 

the claim’s scope.” (internal quotation marks omitted)). 

For example, in Prometheus, “the ‘determining’ step tells 

the doctor to determine the level of the relevant metabolites in the blood, through whatever process the doctor or 

the laboratory wishes to use.” 132 S. Ct. at 1297. Diehr

 

the mere purpose of philosophical experiment, or to 

ascertain the verity and exactness of the specification”). 

Further, Morse shows that a claim is not “abstract” merely because it is broad, because the “hot air” claims were 

broad and covered many “mechanical arrangements” but 

yet found patent eligible. 
 ULTRAMERCIAL, INC . v. HULU, LLC 21 

explained that the application in Flook “did not purport to 

explain how these other variables were to be determined, 

nor did it purport to contain any disclosure relating to the 

chemical processes at work, the monitoring of process 

variables, or the means of setting off an alarm or adjusting an alarm system,” and that “[a]ll that it provides is a 

formula for computing an updated alarm limit.” Diehr, 

450 U.S. at 186-87 (footnote omitted) (internal quotation 

marks omitted). 

Just as the Supreme Court has indicated when a 

claim likely should not be deemed meaningfully limited, it 

has also given examples of meaningful limitations which 

likely remove claims from the scope of the Court’s judicially created exceptions to § 101. Thus, a claim is meaningfully limited if it requires a particular machine 

implementing a process or a particular transformation of 

matter. See Bilski, 130 S. Ct. at 3227 (“This Court’s 

precedents establish that the machine-or-transformation 

test is a useful and important clue . . . for determining 

whether some claimed inventions are processes under 

§ 101.”); see also Prometheus, 132 S. Ct. at 1302-03; Diehr, 

450 U.S. at 184, 192. A claim also will be limited meaningfully when, in addition to the abstract idea, the claim 

recites added limitations which are essential to the invention. In those instances, the added limitations do more 

than recite pre- or post-solution activity, they are central 

to the solution itself. And, in such circumstances, the 

abstract idea is not wholly pre-empted; it is only preempted when practiced in conjunction with the other 

necessary elements of the claimed invention. See Diehr, 

450 U.S. at 187 (“[T]he respondents here do not seek to 

patent a mathematical formula. Instead, they seek 

patent protection for a process of curing synthetic rubber. 

Their process admittedly employs a well-known mathematical equation, but they do not seek to pre-empt the use 

of that equation. Rather, they seek only to foreclose from 

others the use of that equation in conjunction with all of 
22 ULTRAMERCIAL, INC. v. HULU, LLC

the other steps in their claimed process.”); see also Prometheus, 132 S. Ct. at 1298-99 (discussing Diehr, 450 U.S. 

175). 

In specifying what the scope of the abstract idea exception to patent eligibility is, it is also important to 

specify what the analysis is not. Flook suggested that an 

abstract idea is to be “treated as though it were a familiar 

part of the prior art.” 437 U.S. at 591-92. Prometheus

used the language of “inventive concept” to describe the 

“other elements or a combination of elements . . . sufficient to ensure that the patent in practice amounts to 

significantly more than a patent upon the natural law 

itself” and explain that purported limitations must be 

more than “routine” or “conventional” to confer patent 

eligibility. 132 S. Ct. at 1294, 1298-99. While these 

inquiries do require an understanding of what existed in 

the ken of those skilled in the art during the relevant time 

frame, principles of patent eligibility must not be conflated with those of validity, however. 

The Supreme Court repeatedly has cautioned against 

conflating the analysis of the conditions of patentability in 

the Patent Act with inquiries into patent eligibility. See 

Diehr, 450 U.S. at 190 (“The question therefore of whether a particular invention is novel is wholly apart from 

whether the invention falls into a category of statutory 

subject matter.” (internal quotation marks omitted)); see 

also Prometheus, 132 S. Ct. at 1304 (recognizing that “to 

shift the patent-eligibility inquiry entirely to [§§ 102, 103, 

and 112] risks creating significantly greater legal uncertainty, while assuming that those sections can do work 

that they are not equipped to do”). Because a new combination of old steps is patentable, as is a new process using 

an old machine or composition, subject matter eligibility 

must exist even if it was obvious to use the old steps with 

the new machine or composition. Otherwise the eligibility 

analysis ignores the text of §§ 101 and 100(b), and reads 

§ 103 out of the Patent Act. 
 ULTRAMERCIAL, INC . v. HULU, LLC 23 

In this regard, the Supreme Court’s reference to “inventiveness” in Prometheus can be read as shorthand for 

its inquiry into whether implementing the abstract idea 

in the context of the claimed invention inherently requires 

the recited steps. Thus, in Prometheus, the Supreme 

Court recognized that the additional steps were those that 

anyone wanting to use the natural law would necessarily

use. See Prometheus, 132 S. Ct. at 1298. If, to implement 

the abstract concept, one must perform the additional 

step, or the step is a routine and conventional aspect of 

the abstract idea, then the step merely separately restates an element of the abstract idea, and thus does not 

further limit the abstract concept to a practical application. Id. (“Anyone who wants to make use of these laws 

must first administer a thiopurine drug and measure the 

resulting metabolite concentrations, and so the combination amounts to nothing significantly more than an instruction to the doctor to apply the applicable laws when 

treating their patients.”) 

C. 

There are also additional guideposts specific to computer-implemented inventions. When assessing computer 

implemented claims, while the mere reference to a general purpose computer will not save a method claim from 

being deemed too abstract to be patent eligible, the fact 

that a claim is limited by a tie to a computer is an important indication of patent eligibility. See Bilski, 130 S. 

Ct. at 3227. This tie to a machine moves it farther away 

from a claim to the abstract idea itself. Moreover, that 

same tie makes it less likely that the claims will pre-empt 

all practical applications of the idea. 

This inquiry focuses on whether the claims tie the 

otherwise abstract idea to a specific way of doing something with a computer, or a specific computer for doing 

something; if so, they likely will be patent eligible. On the 

other hand, claims directed to nothing more than the idea
24 ULTRAMERCIAL, INC. v. HULU, LLC

of doing that thing on a computer are likely to face larger 

problems. While no particular type of limitation is necessary, meaningful limitations may include the computer 

being part of the solution, being integral to the performance of the method, or containing an improvement in 

computer technology. See SiRF Tech., Inc. v. Int’l Trade 

Comm’n, 601 F.3d 1319, 1332-33 (Fed. Cir. 2010) (noting 

that “a machine,” a GPS receiver, was “integral to each of 

the claims at issue” and “place[d] a meaningful limit on 

the scope of the claims”). A special purpose computer, i.e., 

a new machine, specially designed to implement a process 

may be sufficient. See Alappat, 33 F.3d at 1544 (“Although many, or arguably even all, of the means elements 

recited in claim 15 represent circuitry elements that 

perform mathematical calculations, which is essentially 

true of all digital electrical circuits, the claimed invention 

as a whole is directed to a combination of interrelated 

elements which combine to form a machine for converting 

discrete waveform data samples into anti-aliased pixel 

illumination intensity data to be displayed on a display 

means. This is not a disembodied mathematical concept 

which may be characterized as an ‘abstract idea,’ but 

rather a specific machine to produce a useful, concrete, 

and tangible result.” (footnotes omitted)); see also id. at 

1545 (“We have held that such programming creates a 

new machine, because a general purpose computer in 

effect becomes a special purpose computer once it is 

programmed to perform particular functions pursuant to 

instructions from program software.”). 

At bottom, with a claim tied to a computer in a specific way, such that the computer plays a meaningful role in 

the performance of the claimed invention, it is as a matter 

of fact not likely to pre-empt virtually all uses of an 

underlying abstract idea, leaving the invention patent 

eligible. “[I]nventions with specific applications or improvements to technologies in the marketplace are not 

likely to be so abstract that they override the statutory 
 ULTRAMERCIAL, INC . v. HULU, LLC 25 

language and framework of the Patent Act.” Research 

Corp., 627 F.3d at 869. 

With this background, the court turns to the asserted 

claims here. 

VI. 

The district court did not construe the claims in accordance with this court’s precedent. Instead, it held that 

there was no “reasonable construction” that would “bring 

the patent within patentable subject matter.” A. 6. The 

district court erred in requiring the patentee to come 

forward with a construction that would show the claims 

were eligible. That is presumed. In this procedural 

posture, the district court should either have construed 

the claims in accordance with Markman, required the 

defendant to establish that the only plausible construction 

was one that, by clear and convincing evidence rendered 

the subject matter ineligible (with no factual inquiries), or 

adopted a construction most favorable to the patentee. 

For purposes of this appeal, this court adopts the latter 

approach. It may be that formal claim construction will 

still be required to determine the merits of eligibility. 

The district court held the asserted claim to be ineligible because it is “abstract.” In this procedural posture, 

the complaint and the patent must by themselves show 

clear and convincing evidence that the claim is not directed to an application of an abstract idea, but to a 

disembodied abstract idea itself. See Diehr, 450 U.S. at 

187; Parker, 437 U.S. at 591; Gottschalk, 409 U.S. at 67. 

After all, unlike the Copyright Act which divides ideas 

from expression, the Patent Act covers and protects any 

new and useful technical advance, including applied 

ideas. 

The claimed invention is a method for monetizing and 

distributing copyrighted products over the Internet. As a 

method, it easily satisfies § 100’s definition of “process” 
26 ULTRAMERCIAL, INC. v. HULU, LLC

and thus falls within a § 101 category of patent-eligible 

subject matter. Thus, this court focuses on whether the 

claim is meaningfully limited to something less than an 

abstract idea that pre-empts use of an abstract concept. 

The parties proceed on the assumption that the mere 

idea that advertising can be used as a form of currency is 

abstract, just as the vague, unapplied concept of hedging 

proved patent-ineligible in Bilski. However, the ’545 

patent does not simply claim the age-old idea that advertising can serve as currency. Instead, for the following 

reasons, the court holds that the district court erred in 

holding that the ’545 patent does not claim a practical 

application of this concept.2

The ’545 patent seeks to remedy problems with prior 

art banner advertising over the Internet, such as declining click-through rates, by introducing a method of product distribution that forces consumers to view and 

possibly even interact with advertisements before permitting access to the desired media product. ’545 patent col. 

2, ll.14-18. By its terms, the claimed invention purports 

 

2 When assessing the abstract idea exception, the § 

101 inquiry is a two-step one: first, whether the claim 

involves an intangible abstract idea; and if so, whether 

meaningful limitations in the claim make it clear that the 

claim is not to the abstract idea itself, but to a nonroutine and specific application of that idea. Because the 

parties here focus only on the second step, we do as well. 

We note, however, that it is arguable that we are not even 

dealing with an intangible abstraction in the first instance; the claims relate to things that people do, not to 

mere mental steps. Because the district court did not 

enter judgment on that ground and the parties do not 

brief it, we decline to address this alternative ground 

upon which this matter might be resolved. 
 ULTRAMERCIAL, INC . v. HULU, LLC 27 

to improve existing technology in the marketplace. By its 

terms, the claimed invention invokes computers and 

applications of computer technology. 

Specifically, the ’545 patent claims a particular internet and computer-based method for monetizing copyrighted products, consisting of the following steps: (1) receiving 

media products from a copyright holder, (2) selecting an 

advertisement to be associated with each media product, 

(3) providing said media products for sale on an Internet 

website, (4) restricting general public access to the media 

products, (5) offering free access to said media products on 

the condition that the consumer view the advertising, (6) 

receiving a request from a consumer to view the advertising, (7) facilitating the display of advertising and any 

required interaction with the advertising, (8) allowing the 

consumer access to the associated media product after 

such display and interaction, if any, (9) recording this 

transaction in an activity log, and (10) receiving payment 

from the advertiser. ’545 patent col. 8, ll. 5-48. This court 

does not need the record of a formal claim construction to 

see that many of these steps require intricate and complex computer programming. 

Even at this general level, it wrenches meaning from 

the word to label the claimed invention “abstract.” The 

claim does not cover the use of advertising as currency 

disassociated with any specific application of that activity. 

It was error for the district court to strip away these 

limitations and instead imagine some “core” of the invention. A. 6. 

Further, and even without formal claim construction, 

it is clear that several steps plainly require that the 

method be performed through computers, on the internet, 

and in a cyber-market environment. One clear example is 

the third step, “providing said media products for sale on 

an Internet website.” Id. col. 8, ll. 20-21. And, of course, 

if the products are offered for sale on the Internet, they 
 28 ULTRAMERCIAL, INC. v. HULU, LLC

must be “restricted”—step four—by complex computer 

programming as well. 

In addition, Figure 1, alone, demonstrates that the 

claim is not to some disembodied abstract idea but is 

instead a specific application of a method implemented by 

several computer systems, operating in tandem, over a 

communications network: 
 ULTRAMERCIAL, INC . v. HULU, LLC 29 

Almost all of the steps in this process, as explained in the 

flow chart of Figure 2, are tied to computer implementation: 
30 ULTRAMERCIAL, INC. v. HULU, LLC

Viewing the subject matter as a whole, the invention 

involves an extensive computer interface. Unlike Morse, 

the claims are not made without regard to a particular 

process. Likewise, it does not say “sell advertising using a 

computer,” and so there is no risk of preempting all forms 

of advertising, let alone advertising on the Internet. 

Further, the record at this stage shows no evidence that 

the recited steps are all token pre- or post-solution steps. 

Finally, the claim appears far from over generalized, with 

eleven separate and specific steps with many limitations 

and sub-steps in each category. The district court improperly made a subjective evaluation that these limitations did not meaningfully limit the “abstract idea at the 

core” of the claims. A. 6. 

Having said that, this court does not define the level 

of programming complexity required before a computerimplemented method can be patent-eligible. Nor does this 

court hold that use of an Internet website to practice such 

a method is either necessary or sufficient in every case to 

satisfy § 101. This court simply holds the claims in this 

case to be patent-eligible, in this posture, in part because 

of these factors. 

In this context, this court examines as well the contention that the software programming necessary to 

facilitate the invention deserves no patent protection or 

amounts to abstract subject matter or, in the confusing 

terminology of machines and physical transformations, 

fails to satisfy the “particular machine” requirement. 

This court confronted that contention nearly two decades 

ago in In re Alappat, 33 F.3d 1526 (Fed. Cir. 1994) (en 

banc). At that time, this court observed that “programming creates a new machine, because a general purpose 

computer in effect becomes a special purpose computer 

once it is programmed to perform particular functions 

pursuant to instructions from program software.” Id. at

1545. As computer scientists understand: 
 ULTRAMERCIAL, INC . v. HULU, LLC 31 

[T]he inventor can describe the invention in terms 

of a dedicated circuit or a process that emulates 

that circuit. Indeed, the line of demarcation between a dedicated circuit and a computer algorithm accomplishing the identical task is 

frequently blurred and is becoming increasingly so 

as the technology develops. In this field, a software process is often interchangeable with a 

hardware circuit. 

Id. at 1583 (Rader, J., concurring). In other words, a 

programmed computer contains circuitry unique to that 

computer. That “new machine” could be claimed in terms 

of a complex array of hardware circuits, or more efficiently, in terms of the programming that facilitates a unique 

function. With the digital computer, considered by some 

the greatest invention of the twentieth century, as a vital 

invention, both this court and the Patent Office have long 

acknowledged that “improvements thereof” through 

interchangeable software or hardware enhancements 

deserve patent protection. Far from abstract, advances in 

computer technology—both hardware and software—drive 

innovation in every area of scientific and technical endeavor. 

The court also notes that the claims in this case are 

not highly generalized. Instead, the ten specific steps in 

the claim limit any abstract concept within the scope of 

the invention. Further, common sense alone establishes 

that these steps are not inherent in the idea of monetizing 

advertising. There are myriad ways to accomplish that 

abstract concept that do not infringe these claims. 

This court understands that the broadly claimed 

method in the ’545 patent does not specify a particular 

mechanism for delivering media content to the consumer 

(i.e., FTP downloads, email, or real-time streaming). This 

breadth and lack of specificity does not render the claimed 

subject matter impermissibly abstract. Assuming the 
32 ULTRAMERCIAL, INC. v. HULU, LLC

patent provides sufficient disclosure to enable a person of 

ordinary skill in the art to practice the invention and to 

satisfy the written description requirement, the disclosure 

need not detail the particular instrumentalities for each 

step in the process. 

That a process may be patentable, irrespective of 

the particular form of the instrumentalities used, 

cannot be disputed. If one of the steps of a process 

be that a certain substance is to be reduced to a 

powder, it may not be at all material what instrument or machinery is used to effect that object, whether a hammer, a pestle and mortar, or a 

mill. 

Benson, 409 U.S. at 69-70 (quoting Cochrane v. Deener, 94 

U.S. 780, 787-88 (1876)). Moreover, written description 

and enablement are conditions for patentability that Title 

35 sets “wholly apart from whether the invention falls 

into a category of statutory subject matter.” Diehr, 450 

U.S. at 190 (quoting In re Bergy, 596 F.2d 952, 961 

(C.C.P.A. 1979)). The “coarse eligibility filter” of § 101 is 

not the statutory tool to address concerns about vagueness, indefinite disclosure, or lack of enablement, as these 

infirmities are expressly addressed by § 112. See 35 

U.S.C. § 112; see also Research Corp., 627 F.3d at 869 (“In 

§ 112, the Patent Act provides powerful tools to weed out 

claims that may present a vague or indefinite disclosure 

of the invention.”). 

Finally, the ’545 patent does not claim a mathematical algorithm, a series of purely mental steps, or any 

similarly abstract concept. It claims a particular method 

for collecting revenue from the distribution of media 

products over the Internet. In a recent case, this court 

discerned that an invention claimed an “unpatentable 

mental process.” CyberSource Corp. v. Retail Decisions, 

Inc., 654 F.3d 1366, 1373 (Fed. Cir. 2011). Unlike the 

claims in CyberSource, the claims here require, among 
 ULTRAMERCIAL, INC . v. HULU, LLC 33 

other things, controlled interaction with a consumer over 

an Internet website, something far removed from purely

mental steps. 

In sum, as a practical application of the general concept of advertising as currency and an improvement to 

prior art technology, the claimed invention is not “so 

manifestly abstract as to override the statutory language 

of section 101.” Research Corp., 627 F.3d at 869. Accordingly, this court reverses the district court’s dismissal of 

Ultramercial’s patent claims for lack of subject matter 

eligibility and remands for further proceedings. This 

decision does not opine at all on the patentability of the 

claimed invention under the substantive criteria set forth 

in §§ 102, 103, and 112. 

REVERSED AND REMANDED 
United States Court of Appeals 

for the Federal Circuit ______________________ 

ULTRAMERCIAL, INC., AND ULTRAMERCIAL, LLC,

Plaintiffs-Appellants,

v.

HULU, LLC,

Defendant,

AND

WILDTANGENT, INC.,

Defendant-Appellee.

______________________ 

2010-1544

______________________ 

Appeal from the United States District Court for the 

Central District of California in No. 09-CV-6918, Judge R. 

Gary Klausner.

______________________ 

LOURIE, Circuit Judge, concurring.

I concur in the result reached by the majority, but I 

write separately because I believe that we should concisely and faithfully follow the Supreme Court’s most recent 

guidance regarding patent eligibility in Mayo Collaborative Services v. Prometheus Laboratories, Inc., 132 S.Ct. 

1289 (2012), and should track the plurality opinion of five 

judges from this court in CLS Bank International v. Alice 

Corp., __ F.3d __, 2013 WL 1920941, at *1–20 (Fed. Cir. 

May 10, 2013) (Lourie, Dyk, Prost, Reyna, & Wallach, JJ.,
2 ULTRAMERCIAL, INC. v. HULU, LLC

plurality opinion). It is our obligation to attempt to follow 

the Supreme Court’s guidance in Mayo rather than to set 

forth our own independent views, however valid we may 

consider them to be. Indeed, this appeal was specifically 

vacated by the Supreme Court and remanded for further 

consideration in light of Mayo. WildTangent, Inc. v. 

Ultramercial, LLC, 132 S.Ct. 2431 (2012). 

The claims at issue in this appeal are method claims, 

not machine claims, and both Mayo and CLS Bank dealt 

squarely with the issue of patent eligibility of method 

claims. The plurality opinion in CLS Bank identified a 

two-step process, derived from Mayo, for analyzing patent 

eligibility under § 101. First, a court must identify 

“whether the claimed invention fits within one of the four 

statutory classes set out in § 101.” CLS Bank, 2013 WL 

1920941, at *9. Second, one must assess whether any of 

the judicial exceptions to subject-matter eligibility apply, 

including whether the claims are to patent-ineligible 

abstract ideas. Id. 

In the case of abstractness, as discussed in CLS Bank,

we must determine whether the claim poses “any risk of 

preempting an abstract idea.” Id. To do so we must first 

“identify and define whatever fundamental concept appears wrapped up in the claim”; a claim construction may 

be helpful in this analysis. Id. Then, proceeding with 

the preemption analysis, the balance of the claim is 

evaluated to determine whether “additional substantive 

limitations . . . narrow, confine, or otherwise tie down the 

claim so that, in practical terms, it does not cover the full 

abstract idea itself.” Id. at *10 (citing Mayo, 132 S.Ct. at 

1300; Bilski v. Kappos, 130 S.Ct. 3218, 3231 (2010); 

Diamond v. Diehr, 450 U.S. 175, 187 (1981)). Following 

this procedure, we are then ready to evaluate the claims 

at issue in this case. 

I agree with the majority that no formal claim construction is needed to interpret the claims at this stage. 
 ULTRAMERCIAL, INC . v. HULU, LLC 3

See Majority Op. at 27. As the majority correctly notes, 

the ’545 patent “claims a particular method for collecting 

revenue from the distribution of media products over the 

Internet” and, as a process, “falls within a category of 

patent-eligible subject matter.” Majority Op. at 25–26. 

The abstract idea at the heart of the ’545 patent, which 

the district court properly identified, is “us[ing] advertising as an exchange or currency.” Ultramercial, LLC v. 

Hulu, LLC, No. CV 09-06918 RGK, 2010 WL 3360098, at *6 

(C.D. Cal. Aug. 13, 2010). The ’545 patent claims, however, 

require more than just that abstract idea as part of the

claimed method. 

The additional claim limitations reciting how that 

idea is implemented “narrow, confine, or otherwise tie 

down the claim so that, in practical terms, it does not 

cover the full abstract idea itself.” CLS Bank, 2013 WL 

1920941, at *10. While a computer or complex computer 

program, as discussed by the majority opinion, may be 

necessary to perform the method, it is not what the claim 

specifically requires and thus should not be the focus of 

the analysis. Likewise, although the number of claim 

limitations is also not an indication of patent-eligibility, 

unlike the method claims in CLS Bank, in my view, the 

added limitations in these claims represent significantly 

more than the underlying abstract idea of using advertising as an exchange or currency and, as a consequence, do 

not preempt the use of that idea in all fields. See CLS 

Bank, 2013 WL 1920941, at *15. Thus, under the CLS 

Bank plurality analysis, I agree with the majority that 

the district court erred in dismissing Ultramercial’s 

claims for lack of subject matter eligibility under § 101

due to abstractness.