Page 1 ULTRAMERCIAL, INC., AND ULTRAMERCIAL, LLC, Plaintiffs-Appellants, v. HULU, LLC, Defendant, AND WILDTANGENT, INC., Defendant-Appellee. 2010-1544 UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT 772 F.3d 709; 2014 U.S. App. LEXIS 21633; 112 U.S.P.Q.2D (BNA) 1750 November 14, 2014, Decided SUBSEQUENT HISTORY: US Supreme Court certio- DARYL L. JOSEFFER, King & Spalding LLP, of rari denied by Ultramercial v. Wildtangent, Inc., 2015 Washington, DC, for amicus curiae Google Inc. With U.S. LEXIS 4411 (U.S., June 29, 2015) him on the brief was ADAM M. CONRAD, of Charlotte, North Carolina. PRIOR HISTORY: [**1] Appeal from the United States District Court for the Central District of California JAMES L. QUARLES III, Wilmer Cutler Pickering Hale in No. 09-CV-6918, Judge R. Gary Klausner. and Dorr LLP, of Washington, DC, for amicus curiae WildTangent, Inc. v. Ultramercial, LLC, 134 S. Ct. 2870, The Clearing House Association, L.L.C. With him on the 189 L. Ed. 2d 828, 2014 U.S. LEXIS 4647 (U.S., 2014) brief were GREGORY H. LANTIER, THOMAS G. Ultramercial, LLC v. Hulu, LLC, 2010 U.S. Dist. LEXIS SAUNDERS, and DANIEL [**2] AGUILAR. 93453 (C.D. Cal., Aug. 13, 2010) JUDGES: Before LOURIE, MAYER,* and O'MALLEY, DISPOSITION: AFFIRMED. Circuit Judges. Opinion for the court filed by Circuit Judge LOURIE. Concurring Opinion filed by Circuit Judge MAYER. COUNSEL: LAWRENCE M. HADLEY, McKool Smith Hennigan, P.C., of Los Angeles, California, for * Pursuant to Fed. Cir. Internal Operating Pro- plaintiffs-appellants. cedure 15 ¶ 2 (Nov. 14, 2008), Circuit Judge Mayer was designated to replace Randall R. GREGORY G. GARRE, Latham & Watkins LLP, of Rader, now retired, on this panel. Washington, DC, for defendant-appellee. With him on the supplemental brief were GABRIEL K. BELL, of OPINION BY: LOURIE Washington, DC, and RICHARD G. FRENKEL and LISA K. NGUYEN, of Menlo Park, California. Of OPINION counsel were RICHARD P. BRESS and Katherine I. [*711] [***1752] LOURIE, Circuit Judge. Twomey, of Washington, DC. This appeal has returned to the court following an up CHARLES DUAN, Public Knowledge, of Washington, and down journey to and from the Supreme Court. In our DC, for amicus curiae Public Knowledge. original decision, we reversed the district court's holding that granted WildTangent, Inc.'s ("WildTangent") motion DANIEL NAZER, Electronic Frontier Foundation, of to dismiss Ultramercial, LLC and Ultramercial, Inc.'s San Francisco, California, for amicus curiae Electronic (collectively "Ultramercial") patent infringement com- Frontier Foundation. With him on the brief was VERA plaint under Fed. R. Civ. P. 12(b)(6). See Ultramercial, RANIERI. Of counsel was JULIE P. SAMUELS. LLC v. Hulu, LLC, 657 F.3d 1323 (Fed. Cir. 2011), va- cated sub nom. WildTangent, Inc. v. Ultramercial, LLC, 566 U.S. , 132 S. Ct. 2431, 182 L. Ed. 2d 1059 Page 2 772 F.3d 709, *; 2014 U.S. App. LEXIS 21633, **; 112 U.S.P.Q.2D (BNA) 1750, *** (2012). The district court had held that U.S. Patent cles contracted by the 7,346,545 (the "'545 patent"), the basis for the complaint, sponsor of the sponsor does not claim patent-eligible subject matter under 35 message; U.S.C. § 101. See Ultramercial, LLC v. Hulu, LLC, No. a third step of provid- 09-06918, 2010 U.S. Dist. LEXIS 93453, 2010 WL ing [**4] the media 3360098 (C.D. Cal. Aug. 13, 2010) product for sale at an In- The present posture of the case is that Ultramercial ternet website; is again appealing from the decision of the United States a fourth step of re- District Court for the Central District of California. stricting general public ac- [*712] Upon review of the '545 patent and the stand- cess to said media product; ards adopted by the Supreme Court, for the reasons set forth below, we conclude that the '545 patent does not a fifth step of offering claim patenteligible subject matter and accordingly [**3] to a consumer access to the affirm the district court's grant of WildTangent's motion media product without to dismiss. charge to the consumer on the precondition that the BACKGROUND consumer views the spon- sor message; Ultramercial owns the '545 patent directed to a method for distributing copyrighted media products over a sixth step of receiv- the Internet where the consumer receives a copyrighted ing from the consumer a media product at no cost in exchange for viewing an ad- request to view the sponsor vertisement, and the advertiser pays for the copyrighted message, wherein the con- content. Claim 1 of the '545 patent is representative and sumer submits said request reads as follows: in response to being of- fered access to the media A method for distribution of products product; over the Internet via a facilitator, said method comprising the steps of: a seventh step of, in response to receiving the request from the consumer, a first step of receiving, facilitating the display of a from a content provider, sponsor message to the media products that are covered by intellectual consumer; property rights protection an eighth step of, if the and are available for pur- sponsor message is not an chase, wherein each said interactive message, al- media product being com- lowing said consumer ac- prised of at least one of cess to said media product text data, music data, and after said step of facilitat- video data; ing the display of said sponsor message; a second step of se- lecting a sponsor message a ninth step of, if the to be associated with the sponsor message is an in- media product, said spon- teractive message, pre- sor message being selected senting at least one query from a plurality of sponsor to the consumer and al- messages, said second step lowing said consumer ac- including accessing an ac- cess to said media product tivity log to verify that the after receiving a response total number of times to said at least one query; which the sponsor message has been previously pre- a tenth step of record- sented is less than the ing the transaction event to number of transaction cy- the activity log, said tenth Page 3 772 F.3d 709, *; 2014 U.S. App. LEXIS 21633, **; 112 U.S.P.Q.2D (BNA) 1750, *** step including updating the While WildTangent's petition was pending, the Su- total number of times the preme Court issued its decision in Alice Corp. v. CLS sponsor message has been Bank International, 573 U.S. ___, 134 S. Ct. 2347, 189 presented; and L. Ed. 2d 296 (2014). In that case, the Court affirmed our judgment that method and system claims directed to a an eleventh [**5] computer-implemented scheme for mitigating settlement step of receiving payment risk by using a third party intermediary were not pa- from the sponsor of the tent-eligible under § 101 because the claims "add nothing sponsor message dis- of substance to the underlying abstract idea." See Alice, played. 134 S. Ct. at 2359-60. The Court in Alice made clear that a claim that is directed to an abstract idea does not move into § 101 eligibility territory by "merely requir[ing] ge- neric computer implementation." Id. at 2357. [***1753] '545 patent col. 8 ll. 5-48. As the other Subsequently, the Court granted WildTangent's peti- claims of the patent are drawn to a similar process, they tion for a writ of certiorari, vacated our decision, and suffer from the same infirmity as claim 1 and need not be remanded the case for further consideration in light of considered further. Alice. See WildTangent, 134 S. Ct. 2870, 189 L. Ed. 2d 828. We invited and received briefing by the parties. We As indicated above, Ultramercial sued Hulu, LLC also received four amicus briefs, all in support of the ("Hulu"), YouTube, LLC ("YouTube"), and WildTan- appellee, WildTangent. gent, alleging infringement of all claims of the '545 pa- tent. Ultramercial, 2010 U.S. Dist. LEXIS 93453, 2010 DISCUSSION WL 3360098, at *1. Hulu and YouTube were dismissed from the case for reasons we need not [*713] concern As indicated, this case is back to this court [**7] ourselves with here, Ultramercial, 657 F.3d at 1325, but on Ultramercial's original appeal from the district court's WildTangent moved to dismiss for failure to state a dismissal, but in its present posture we have the added claim, arguing that the '545 patent did not claim pa- benefit of the Supreme Court's reasoning in Alice. We tent-eligible subject matter. Ultramercial, 2010 U.S. review a district court's dismissal for failure to state a Dist. LEXIS 93453, 2010 WL 3360098, at *2. The district claim under the law of the regional circuit in which the court granted WildTangent's pre-answer motion to dis- district court sits, here the Ninth Circuit. Juniper Net- miss under Rule 12(b)(6) without formally construing the works, Inc. v. Shipley, 643 F.3d 1346, 1350 (Fed. Cir. claims. 2010 U.S. Dist. LEXIS 93453, [WL] at *6-7. Ul- 2011) (citation omitted). The Ninth Circuit reviews de tramercial timely appealed. novo challenges to a dismissal for failure to state a claim under Fed. R. Civ. P. 12(b)(6). Livid Holdings Ltd. v. We reversed, concluding that the district court erred Salomon Smith Barney, Inc., 416 F.3d 940, 946 (9th Cir. in granting WildTangent's motion to dismiss for failing 2005). We review questions concerning patent-eligible to claim statutory subject matter. See Ultramercial, 657 subject matter under 35 U.S.C. § 101 without deference. F.3d at 1330. WildTangent then filed a petition for a writ Research Corp.