1 1 1 AIPLA Firm Logo American Intellectual Property Law Association ABSTRACT IDEAS – ULTRAMERCIAL AND BEYOND Joseph A. Calvaruso AIPLA 2015 Mid-Winter Institute IP Practice In Japan Committee Orlando, Florida January 28, 2015

2 2 2 AIPLA Firm Logo Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, (Fed. Cir. 2014) The '545 Patent Claims A Method For Monetizing Copyrighted Products 1)receiving media from a copyright holder, 2)selecting an ad associated with each media product, 3)offering the media for sale on the Internet website, 4)restricting general public access to the media, 5)offering free access to the media on the condition that the consumer view the advertising

3 3 3 AIPLA Firm Logo Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, (Fed. Cir. 2014) The '545 Patent Claims A Method For Monetizing Copyrighted Products (cont’d) 6)receiving a request to view the ad, 7)facilitating the display of the ad, 8)allowing the consumer access to the media, 9)recording this transaction in an activity log, and 10)receiving payment from the advertiser.

4 4 4 AIPLA Firm Logo Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, (Fed. Cir. 2014) Federal Circuit’s November 2014 Decision: Claims are unpatentable if they: 1.recite an abstract idea 2.without claiming “something more” that transforms the nature of the claim into a patent-eligible application.

5 5 5 AIPLA Firm Logo Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, (Fed. Cir. 2014) Federal Circuit’s November 2014 Decision: (cont’d) The process of offering the media in exchange for watching a selected ad, allowing the consumer access to the media, and receiving payment from the sponsor of the ad all describe an abstract idea. Routine steps such as updating an activity log, requiring a request from the consumer to view the ad, restrictions on public access, and use of the Internet do not transform an otherwise abstract idea into patent-eligible subject matter.

6 6 6 AIPLA Firm Logo Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, (Fed. Cir. 2014) Federal Circuit’s November 2014 Decision: (cont’d) The claims also fail machine or transformation test. The claims are not tied to any particular novel machine or apparatus, only a general purpose computer. The claimed manipulations of public or private legal obligations or relationships, business risks or other such abstractions are not physical objects or substances and they are not representative of physical objects or substances.

7 7 7 AIPLA Firm Logo DDR Holdings, LLC v. Hotels.com L.P., No , 2014 WL (Fed. Cir. Dec. 5, 2014) 13.An e-commerce outsourcing system comprising: a)a data store including a look and feel description associated with a host web page having a link correlated with a commerce object; and b)a computer processor... programmed, upon receiving an indication that the link has been activated by a visitor computer... to serve a composite web page to the visitor computer with a look and feel based on the look and feel description in the data store and with content based on the commerce object associated with the link.

8 8 8 AIPLA Firm Logo DDR Holdings, LLC v. Hotels.com L.P., No , 2014 WL (Fed. Cir. Dec. 5, 2014) Federal Circuit held: Abstract idea – “making two web pages look the same” But The claims recite a specific way to automate the creation of a composite web page by an “outsource provider” that incorporates elements from multiple sources in order to solve a problem faced by websites on the Internet. The claims recite an invention that is not merely the routine or conventional use of the Internet.

9 9 9 AIPLA Firm Logo Content Extraction and Transmission LLC v. Wells Fargo Bank, Nat. Ass’n, No , 2014 WL (Fed. Cir. Dec. 23, 2014) Claims generally recite a method of: extracting data from hard copy documents using an automatic digitizing unit such as a scanner. recognizing specific information from the extracted data storing that information in a memory.

10 10 AIPLA Firm Logo Content Extraction and Transmission LLC v. Wells Fargo Bank, Nat. Ass’n, No , 2014 WL (Fed. Cir. Dec. 23, 2014) Federal Circuit affirmed District Court’s grant of motion to dismiss: Data collection, recognition and storage are well known functions that humans have always performed. The claims merely recited the use of existing scanning and processing technology to recognize and store data from specific fields such as amounts, addresses and dates.

11 11 AIPLA Firm Logo Smartflash LLC et al v. Apple, Inc. et al., (E.D. Tex. Jan. 21, 2015) Claim 1 receiving access requests for stored content in non-volatile memory reading use status and use rules from parameter memory evaluating the use status data according to the use rules to determine if access is permitted displaying whether access to the content data is permitted

12 12 AIPLA Firm Logo Smartflash LLC et al v. Apple, Inc. et al., (E.D. Tex. Jan. 21, 2015) (cont’d) The claims are directed to conditioning and controlling access to data based on payment. This is an abstract idea and a fundamental building block of the economy in the digital age But The claims contain meaningful limitations that transform the abstract idea into a patent eligible invention.

13 13 AIPLA Firm Logo Smartflash LLC et al v. Apple, Inc. et al., (E.D. Tex. Jan. 21, 2015) (cont’d) The claims recite: “status data” and evaluating such data according to stored “use rules” that determine whether access to previously stored content is permitted. “Parameter memory” and “content memory.” Specific types of information and how it should be used in a particular way in the claimed system.

14 14 AIPLA Firm Logo OTHER RECENT DISTRICT COURT CASES Wolf v. Capstone Photography, Inc., No. 2:13-cv-09573, 2014 WL (C.D. Cal. Oct. 28, 2014) Motion to dismiss on the pleadings granted. Abstract idea of providing event photographs organized by participant using the Internet and basic computer technology. No claim construction. Cloud Satchel, LLC v. Amazon.com, Inc., Nos SLR & SLR, 2014 WL (D. Del. Dec. 18, 2014) Summary judgment of §101 invalidity granted. Abstract idea of cataloging documents to facilitate their retrieval from storage in the field of remote computing using a generic computer.

15 15 AIPLA Firm Logo OTHER RECENT DISTRICT COURT CASES (cont’d) Marsa v. Facebook, Inc., No. SACV JLS (C.D. Cal. Dec. 23, 2014) Motion for judgment on the pleadings granted. Claims are drawn to the abstract ideas of (1) displaying ads to consumers based on their demographic information and (2) permitting advertisers to bid on whether and how their ads will be displayed. There is no inventive concept that would ensure that the patent in practice amounts to significantly more than a patent on the abstract ideas themselves.

16 16 AIPLA Firm Logo OTHER RECENT DISTRICT COURT CASES (cont’d) MyMedicalRecords, Inc. v. Walgreen Co., No. 2:13-cv ODW, 2014 WL (C.D. Cal. Dec. 23, 2014) Motion for judgment on the pleadings granted. Abstract idea from the pre-Internet world of collecting, accessing and managing health care records in a secure and private manner on the Internet or using a conventional computer. AutoAlert, LLC v. Dominion Dealer Solutions LLC, No. SACV JLS (C.D. Cal. Dec. 23, 2014) Motion for summary judgment granted. Abstract idea of providing vehicle sales opportunities based on potential or loan or lease payments using a generic computer.

17 17 AIPLA Firm Logo OTHER RECENT DISTRICT COURT CASES (cont’d) Ameranth, Inc. v. Genesis Gaming Solutions, Inc., SACV AG (C.D. Cal. Jan. 2, 2015) Motion for summary judgment denied. Abstract idea: “employee scheduling.” But claims also recite computer components. The Court cannot decide on summary judgment whether they only amount to a generic computer in the context of implementing the claimed program idea or they combine to provide sufficient inventive concept beyond the abstract idea.

18 18 AIPLA Firm Logo OTHER RECENT DISTRICT COURT CASES (cont’d) Bascom Research, LLC v. LinkedIn Corp., 12-cv SI, (N.D. Cal. Jan. 2, 2015) Motion for summary judgment granted. Abstract idea of (1) collecting data, (2) recognizing certain data and (3) storing the recognized data in a memory using conventional computer structures and unspecified software programming.

19 19 AIPLA Firm Logo CONCLUSIONS Patent Ineligible Subject Matter Includes: Fundamental economic and conventional business practices performed on a generic computer or on the Internet. Mathematical algorithms, including those executed on a generic computer. Applying a known business process to a particular technological environment such as the Internet. Creating or altering contractual relations using generic computer functions and conventional network operations.

20 20 AIPLA Firm Logo CONCLUSIONS (cont’d) Patent Ineligible Subject Matter Includes: (cont’d) Manipulations of public or private legal obligations or relationships, business risks etc. They are not physical objects or substances and they are not representative of physical objects or substances. Transformation of an article to a different state or thing is required. Merely claiming a software implementation of a purely mental process that could otherwise be performed without the use of a computer.

21 21 AIPLA Firm Logo CONCLUSIONS (cont’d) “Technical” Features That Will Not Create Patent Eligibility: Computer components employed for basic functions, such as storage, transmitting and receiving information do not impose meaningful limitations. Use of a computer network and a server as opposed to use of standard computer is not inventive. Consulting and updating an activity log represent insignificant data gathering steps.

22 22 AIPLA Firm Logo CONCLUSIONS (cont’d) Patent Eligible Subject Matter May Include: Claim directed to computer technology that solves a problem specifically arising in the realm of computer networks. Claims tied to a particular novel machine or apparatus. Computer hardware and a database specifically programmed to perform the claimed steps. Computer components that work together such that the claim amounts to significantly more than a patent on the abstract idea itself.

23 23 AIPLA Firm Logo Thanks for your attention! Questions? Joseph A. Calvaruso Partner Orrick, Herrington & Sutcliffe LLP 51 West 52 nd Street New York, NY Joseph A. Calvaruso