`107 U.S.P.Q.2d 1193
`
`KeyCite Red Flag - Severe Negative Treatment
`Certiorari Granted, Judgment Vacated by WildTangent, Inc. v.
`Ultramercial, LLC, U.S.,
`June 30, 2014
`
`
`
`722 F.3d 1335
`United States Court of Appeals,
`Federal Circuit.
`
`ULTRAMERCIAL, INC., and
`Ultramercial, LLC, Plaintiffs–Appellants,
`v.
`HULU, LLC, Defendant,
`and
`WildTangent, Inc., Defendant–Appellee.
`
`No. 2010–1544.
`
` | June 21, 2013.
`
`Synopsis
`Background: The United States District Court for the
`Central District of California, 2010 WL 3360098, dismissed
`patent suit after holding that patent claiming a method for
`distributing copyrighted products over the Internet did not
`claim patent-eligible subject matter. The United States Court
`of Appeals for the Federal Circuit, 657 F.3d 1323,reversed.
`The United States Supreme Court, ––– U.S. ––––, 132 S.Ct.
`2431, 182 L.Ed.2d 1059, vacated and remanded. On remand,
`the District Court, 2010 WL 3360098, again dismissed patent
`claims for lack of subject matter eligibility, and patentee
`appealed.
`
`[Holding:] The Court of Appeals, Rader, Chief Judge, held
`that claimed invention of a particular internet and computer-
`based method for monetizing copyrighted products was not
`manifestly abstract so as to be ineligible for patent protection.
`
`Reversed and remanded.
`
`Lourie, Circuit Judge, filed concurring opinion.
`
`West Headnotes (14)
`
`[1]
`
`Patents
`Scope, Standard, and Extent of Review
`
`the ultimate determination
`reviews
`Court
`regarding patent-eligible subject matter under
`without deference. 35 U.S.C.A. § 101.
`
`12 Cases that cite this headnote
`
`[2]
`
`Patents
`Eligible Subject Matter
`
`[3]
`
`Question of patent eligible subject matter must
`be determined on a claim-by-claim basis. 35
`U.S.C.A. § 101.
`
`28 Cases that cite this headnote
`
`Patents
`Eligible Subject Matter
`Patents
`Classes of Invention or Discovery;
` Statutory Subject Matter
`Patents
`Necessity of nonobviousness or invention
`
`Purpose of the Patent Act is to encourage
`innovation, and the use of broadly inclusive
`categories of statutory subject matter ensures
`that ingenuity receives a liberal encouragement;
`plain language of the statute provides that any
`new, non-obvious, and fully disclosed technical
`advance is eligible for protection. 35 U.S.C.A. §
`101.
`
`Cases that cite this headnote
`
`[4]
`
`Patents
`Eligible Subject Matter
`
`eligibility
`read patent
`Court must not
`requirements so restrictively as to exclude
`unanticipated
`inventions because
`the most
`beneficial inventions are often unforeseeable;
`broad inclusivity is the Congressional goal, not a
`flaw. 35 U.S.C.A. § 101.
`
`Cases that cite this headnote
`
`[5]
`
`Patents
`Presumption of correctness in general
`
` © 2015 Thomson Reuters. No claim to original U.S. Government Works.
`
`1
`
`1
`
`SAMSUNG 1046
`Samsung Electronics v. SmartFlash
`CBM2014-00190
`
`
`
`Ultramercial, Inc. v. Hulu, LLC, 722 F.3d 1335 (2013)
`107 U.S.P.Q.2d 1193
`
`In the patent eligibility analysis, the presumption
`of proper issuance applies to a granted patent. 35
`U.S.C.A. § 101.
`
`Cases that cite this headnote
`
`[6]
`
`Patents
`Degree of proof
`
`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. 35 U.S.C.A. § 101.
`
`[11]
`
`20 Cases that cite this headnote
`
`[7]
`
`Patents
`Laws of nature, natural phenomena, and
`abstract ideas; fundamental principles
`
`For patent eligibility purposes, a process need
`not use a computer, or some machine, in order to
`avoid “abstractness.” 35 U.S.C.A. § 101.
`
`Cases that cite this headnote
`
`[8]
`
`Patents
`Laws of nature, natural phenomena, and
`abstract ideas; fundamental principles
`
`A claim can embrace an abstract idea and be
`patentable. 35 U.S.C.A. § 101.
`
`11 Cases that cite this headnote
`
`[9]
`
`Patents
`Laws of nature, natural phenomena, and
`abstract ideas; fundamental principles
`
`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. 35
`U.S.C.A. § 101.
`
`19 Cases that cite this headnote
`
`[10]
`
`Patents
`Processes or methods
`
`In determining the eligibility of a claimed
`process for patent protection, 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, and relevant inquiry is
`whether a claim, as a whole, includes meaningful
`limitations restricting it to an application, rather
`than merely an abstract idea. 35 U.S.C.A. § 101.
`
`8 Cases that cite this headnote
`
`Patents
`Classes of Invention or Discovery;
` Statutory Subject Matter
`Patents
`Use or operation of machine or apparatus as
`affecting process; “machine or transformation”
`test
`
`A patent claim is meaningfully limited to an
`application, rather than merely an abstract idea,
`and is thus patent eligible, if it requires a
`particular machine implementing a process or a
`particular transformation of matter; claim also
`will be limited meaningfully when, in addition
`to the abstract idea, the claim recites added
`limitations which are essential to the invention.
`35 U.S.C.A. § 101.
`
`14 Cases that cite this headnote
`
`[12]
`
`Patents
`Computers and Software
`
`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. 35 U.S.C.A. § 101.
`
`3 Cases that cite this headnote
`
`[13]
`
`Patents
`Business methods; Internet applications
`
`As a practical application of the general concept
`of advertising as currency and an improvement
`to prior art technology, claimed invention of a
`particular internet and computer-based method
`for monetizing copyrighted products was not
`manifestly abstract so as to be ineligible for
`
` © 2015 Thomson Reuters. No claim to original U.S. Government Works.
`
`2
`
`2
`
`
`
`Ultramercial, Inc. v. Hulu, LLC, 722 F.3d 1335 (2013)
`107 U.S.P.Q.2d 1193
`
`patent protection; patent ten specific steps in the
`claim limited any abstract concept within the
`scope of the invention, and common sense alone
`established that those steps were not inherent in
`the idea of monetizing advertising. 35 U.S.C.A.
`§ 101.
`
`v. Ultramercial, LLC, ––– U.S. ––––, 132 S.Ct. 2431, 182
`L.Ed.2d 1059 (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.
`
`Cases that cite this headnote
`
`[14]
`
`Patents
`In general; utility
`
`US Patent 7,346,545. Cited.
`
`Cases that cite this headnote
`
`Attorneys and Law Firms
`
`*1337 Lawrence M. Hadley, Hennigan, Bennett & Dorman
`LLP, of Los Angeles, CA, argued for plaintiffs-appellants.
`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 brief were Richard
`G. Frenkel and Lisa K. Nguyen, of Palo Alto, CA. 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
`
`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
`1323 (Fed.Cir.2011), vacated sub nom. WildTangent, Inc.
`
`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:
`
`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;
`
`*1338 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;
`
` © 2015 Thomson Reuters. No claim to original U.S. Government Works.
`
`3
`
`3
`
`
`
`Ultramercial, Inc. v. Hulu, LLC, 722 F.3d 1335 (2013)
`107 U.S.P.Q.2d 1193
`
`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 pre-answer motion to dismiss
`under Rule 12(b)(6). Ultramercial appeals. This court has
`jurisdiction under 28 U.S.C. § 1295(a)(1).
`
`[1]
` 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., 717 F.3d 1269, 1304–05, 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 *1339 Bell Atlantic Corp. v.
`Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d
`929 (2007); Jones v. Bock, 549 U.S. 199, 215, 127 S.Ct. 910,
`166 L.Ed.2d 798 (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, 707 F.3d at 1298–1302, 2013 WL 1920941 at
`*27–30 (meaningful limitations); Id. at 1282–83, 2013 WL
`1920941 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, 98 S.Ct.
`2522, 57 L.Ed.2d 451 (1978)). If the question is whether
`“genuine human contribution” is required, and that requires
`“more than a trivial appendix to the underlying abstract
`
` © 2015 Thomson Reuters. No claim to original U.S. Government Works.
`
`4
`
`4
`
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`Ultramercial, Inc. v. Hulu, LLC, 722 F.3d 1335 (2013)
`107 U.S.P.Q.2d 1193
`
`idea,” and were not at the time of filing “routine, well-
`understood, or conventional,” factual inquiries likely abound.
`Id. at 1283–85, 2013 WL 1920941 at *11–12. Almost by
`definition, analyzing whether something was “conventional”
`or “routine” involves analyzing facts. Id. at 1284–85, 2013
`WL 1920941 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 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,
`––– U.S. ––––, 130 S.Ct. 3218, 3231, 177 L.Ed.2d 792 (2010)
`(finding subject matter ineligible for patent protection without
`claim construction); CLS Bank, 717 F.3d 1269, 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
`*1340 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 subject matter at stake and its eligibility
`does not require formal claim construction.
`
`[2]
` 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, 100 S.Ct. 2204, 65 L.Ed.2d
`144 (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 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
`
` © 2015 Thomson Reuters. No claim to original U.S. Government Works.
`
`5
`
`5
`
`
`
`Ultramercial, Inc. v. Hulu, LLC, 722 F.3d 1335 (2013)
`107 U.S.P.Q.2d 1193
`
`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 *1341 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.
`
`[3]
` 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 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 patent-eligible 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, 100
`S.Ct. 2204. 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., ––– U.S. ––––, 132 S.Ct. 1289, 1293, 182 L.Ed.2d 321
`(2012) (“Prometheus ”) (internal quotation marks omitted).
`
`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, 100 S.Ct.
`2204 (“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, 100 S.Ct. 2204
`(“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
`*1342 the text and the statute's purpose and design.”).
`
`[4]
` 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, 100 S.Ct. 2204; see also
`J.E.M. Ag Supply, 534 U.S. at 135, 122 S.Ct. 593 (describing
`§ 101 as “a dynamic provision designed to encompass
`new and unforeseen inventions.”). Broad inclusivity is the
`Congressional goal of § 101, not a flaw.
`
` © 2015 Thomson Reuters. No claim to original U.S. Government Works.
`
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`Ultramercial, Inc. v. Hulu, LLC, 722 F.3d 1335 (2013)
`107 U.S.P.Q.2d 1193
`
`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.
`
`[5]
` In the eligibility analysis as well, the presumption of
`proper issuance applies to a granted patent. As a practical
`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, –––U.S. ––––, 131
`S.Ct. 2238, 2242, 180 L.Ed.2d 131 (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.”).
`
`[6]
` 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,
`131 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.
`
`[7]
` 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 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, 101 S.Ct. 1048, 67
`L.Ed.2d 155 (1981)).
`
`In an effort to grapple with this non-statutory “abstractness”
`exception to “processes,” *1343 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 machine-or-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 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.
`
` © 2015 Thomson Reuters. No claim to original U.S. Government Works.
`
`7
`
`7
`
`
`
`Ultramercial, Inc. v. Hulu, LLC, 722 F.3d 1335 (2013)
`107 U.S.P.Q.2d 1193
`
`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.
`
` [9]
`[8]
` 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, 93 S.Ct.
`253, 34 L.Ed.2d 273 (1972) (“He who discovers a hitherto
`unknown phenomenon of nature has no claim to a monopoly
`of it which the law recognizes. 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,
`101 S.Ct. 1048 (“It is now commonplace that an application
`of a law *1344 of nature or mathematical formula to a
`known structure or process may well be deserving of patent
`protection.”)
`
`[10]
` 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:
`
`the eligibility of
`In determining
`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, 101 S.Ct. 1048 (e