Did the Federal Circuit Just Adopt Functional Claiming Through the Back Door?

Guest Post by Mark Lemley. Professor Lemley is the William H. Neukom Professor at Stanford Law School and a founding partner of the successful law firm of Durie Tangri where he litigates intellectual property cases.

In Ultramercial v. Hulu, decided on Friday, the Federal Circuit held that a series of steps for serving ads to customers over the Internet, phrased at a high level of abstraction, was patent-eligible subject matter under section 101.  Chief Judge Rader wrote the opinion, which Judge O'Malley joined.  Perhaps more surprising, Judge Lourie, who wrote the plurality opinion in CLS Bank, found the requirements of that test satisfied by these claims despite the lack of evident tie to any particular hardware device or limitation to any particular software algorithm.

Part of the explanation for the result in Ultramercial stems from the procedural posture of the case.  The district court had granted a motion to dismiss, reasoning that patentable subject matter is a pure question of law and so not dependent on factual conclusions.  The district court's position was defensible, given that every prior Federal Circuit opinion has called patentable subject matter a pure question of law.  But the majority goes out of its way to suggest that factual questions are likely to predominate in a section 101 inquiry, though the court is a bit vague on just what those factual disputes might be.  The court also suggests that claim construction will normally be required before resolving a 101 issue, but that here, the court was opting to construe the patent in the way most favorable to the patentee (that is, in the narrowest way possible) to evaluate 101 on a motion to dismiss.  Curiously, however, the court never explicitly tells us what that narrow construction is.

Then the majority does something very odd: it proceeds to discuss in great detail the technology disclosed in the specification but not mentioned in the claims.  The court clearly viewed Ultramercial's claims as patent-eligible because the specification contained detailed technical implementations and a complex flow-chart, even though none of those were included as limitations in the claim.

What is going on here? One possibility is that three of the most experienced patent judges in the country have forgotten the single most fundamental rule of patent law — that as Judge Rich put it, the name of the game is the claim.  But I doubt it. If a lawyer arguing before the court tried to read in limitations from the specification in claim construction or for infringement or validity, these judges would (quite properly) tear that lawyer apart for violating this fundamental rule and ignoring the language of the claim.  It seems unlikely that each of them simply forgot that it is the claims that define the invention.

A second possibility is that the court thinks that the rule that the claims define the invention simply doesn't apply to patentable subject matter: that as long as you have a specific idea somewhere in your specification we don't care what you claim.  But that seems equally unlikely.  To begin, it directly contradicts controlling Supreme Court precedent such as O'Reilly v. Morse, where the court held narrow claims patent-eligible but a broader claim ineligible.  Beyond that, it simply makes no sense.  The patentable subject matter rule is against patenting abstract ideas.  A claim that covers only an abstract idea doesn't somehow become less abstract simply because the patentee could have claimed a narrower, more tangible invention.  

There is a third possibility: that the court is implicitly construing the broad, functional elements of Ultramercial's method claim as means-plus-function claims under section 112(f), with the result that they are accordingly limited to the particular implementations in the specification.  Doing so would be consistent with approach I suggested in my article "Software Patents and the Return of Functional Claiming".  It would explain why the court said it was adopting the narrowest construction of Ultramercial's claims but then never told us what that narrow construction was.  And it is the only reasonable explanation for why the Federal Circuit would suddenly drop its focus on the language of the claims and start to talk about whether the algorithms in the specification were patent-eligible subject matter.

The court didn't explicitly say what it was doing.  I hope that its focus on the specification signals a narrowing construction that saved the claim from ineligibility.  That would be a major step forward for both patentable subject matter law and for reining in overbroad software patents.  And the alternative — that the court has decided that the scope of the claim doesn't matter anymore — would represent a major step backward.

359 thoughts on “Did the Federal Circuit Just Adopt Functional Claiming Through the Back Door?

  1. 358

    >  Ned, I think it would be helpful if you actually understood the
    > definition of “integrated”. The Diehr Court writes: “([u]nless
    > otherwise defined, ‘words will be interpreted as taking their
    > ordinary, contemporary, common meaning.”)  [Diehr, supra, at 182.]
    > When one checks the dictionary definition for the ordinary,
    > contemporary, common meaning of “integrated” it says: “in·te·grat·ed
    > [in-ti-grey-tid]  Show IPA adjective:1.combining or coordinating
    > separate elements so as to provide a harmonious, interrelated whole:
    > 2.organized or structured so that constituent units function
    > cooperatively” In Diehr the math was “integrated” into the software
    > program which was “integrated” into the computer ,which was
    > “integrated” into the process as a whole, along with raw rubber, mold,
    > press/lid,  interval timer, oven/heater,  heat, and human actors
    > required to make any mental determinations, monitor and execute the
    > process. Every single element from the math to the people that
    > unloaded the cured rubber is “integral” to the solution of a more
    > efficient process for molding rubber. All the constituent units of the
    > claim “function cooperatively” in an” harmonious”, “interrelated”,
    > “inseparable whole”. Because of this fact the claims are “integrated”
    > and therefore do not rise or fall on any one element, instrument, act,
    > or part of the process. Most important for you, Ned Heller,  to
    > understand is that the Court has NEVER held that “integration”
    > requires “machine or transformation”.

  2. 356


    Define “broadly true.”

    Right after you define “technical.”

    And right after you realize that WHATEVER you define as technical is not the same as what US jurisprudence regards the useful arts.

    You keep on wondering only as you embrace your ignorance and clench your eyes tight when I have shown you the difference.

    So much for ‘a mind willing to understand.’

  3. 355

    Ned you write that “we do the same thing” and that is broadly true. That is not surprising though, is it?

    The EPC contains more statutory exclusions than the US patent statute. It was drafted in 1973, when the issues of software and business methods could already be discerned.

    However, Europe doesn’t have some of the judge-made exclusions we see in your jurisdiction. Thus, Europe has no eligibility problem with claims to signals, or software on a carrier, or isolated fragments of naturally occurring DNA because these things all have technical character. They are in a field of technology, so are eligible under TRIPS. To be frank, we over here wonder why they are not eligible in your country.

  4. 354

    LOL – Really Ned – you want to accuse me of not answering questions?

    I think the number of questions that you have left unanswered is far more staggering than anything even remotely to what I may have not yet answered.

    As to your ‘using’ falacay – I have more than once explained that to you. You cannot use a computer that has not yet been configured for such use. You pick one of the worst possible strawmen to BEotch about. This example was compelted a long time ago (Great Hall Experiment) – one you ALSO refused to engage in.

    C’mon Ned – try again, this time with a shred of decency and intellectual honesty.

  5. 353

    I was doing you the small favor Ned of updating your understanding of 101 law by providing the holding of Bilski.

    Do you really have a problem with that?

    Or are you (once again) becoming highly selective of which words of the Supreme Court you are willing to listen to? Remember the last time you did that with me? Let me remind you: product of nature and Myriad.

  6. 352
      (sigh) – Point of Novelty Canard warning

    Ned – mental steps? C’MON MAN – computers do not think: ANTHROPOMORPHICATION Another thing you insist on ignoring – and your silence SCREAMS volumes.

  7. 351

    Ned – you are quite literally missing the forest for the trees.

    You need to understand the sudden (post-1952) switch in the very words that the Court uses in its 101 decisions AFTER 1952.

    It is critical that you pay attention to the actual words used by the Court. You have avoided engaging this critical element. You have ignored the crucial moment in time. You have not offerred ANY explanation for the Court’s OWN choice of language.

    Your silence on this critical aspect is glaring (and no – you CANNOT blame Rich for this).

  8. 350

    MD, I see.

    Well as we now understand, and Supreme Court seems understand as well, that one must conduct a novelty analysis at some point to determine what in the claim is new. If that new subject matter is directed to non-integrated laws of nature, phenomena of nature, or abstract ideas, meeting mental steps such as mathematics, then the claim, taken as a whole, is not directed to patentable subject matter. Regardless of the statute we discuss, we do the same thing.

  9. 349

    Anon, according to Frederico, the courts had long recognized that when a claimed invention was not identically disclosed in the prior art, meaning it was literally novel, that the courts was still inclined to not grant a patent if the differences were not "sufficient." What this meant was defined in cases such Hotchkiss v. Greenwood where if the point of novelty in the claimed invention did not provide any new or different function (the clay knob there did not provide any new functional relationship with the structural elements of the doorknob), the claimed invention was the work of one of ordinary skill in the art. Thus over the years in cases following Greenwood, the Supreme Court and the lower courts developed the concept that the difference over the prior art must be one of kind, not of degree. You see this in case after case after case, including, for example the Eibel process case. There was no departure from this doctrine in any Supreme Court case is up until the 52 act.

    But, in drafting the new 103, Frederico did not use the same terms as Supreme Court had been using for generations . Instead he concocted a new test, purportedly based upon Hotchkiss v. Greenwood, that was entirely subjective, and a matter of opinion; and which did not look to whether differences provided any new functional relationship. Frederico was not hostile to the Supreme Court, but rather was seeking to codify the law as was his mandate from Congress. He sought to do that faithfully. At best, one can say that Frederico might have perceived that there might be more than one test for when a claimed invention was not literally novel, and his draft 103 was an attempt to synthesize a comprehensive test that embodied all of them.

    What was added to section 103 in reaction to the Supreme Court cases by bar representatives including Giles Rich was the "manner" section of section 103. This was intended to address "flash of genius."

  10. 348

    LOL. Sorry, pukin’, not particularly interested in your ring `round rosie games. I obviously understood you – why else would I have parsed it into two categories?

    Is it abstract only to say “offer access to a product” alone?

    Is it abstract to say “offer access to a product utilizing some medium”?

    Do you have anything of substance to say, or not?

    (Thought not. G’night, pukin’.)

  11. 347

    Anon, the major problem I have with discussing issues with you is that at a certain point in time you refuse to answer particular questions and simply drop out of the conversation, only later say that it was I who dropped out of the conversation.

    For example: for years now I have asked you a simple question in you have never given an answer. What is the difference between using a programmed computer and using a computer?

  12. 346

    Anon, at times I wonder whether you know how to read with comprehension.

    I was discussing the holding of Diehr with 101. There is nothing in what I said that suggested I said anything about the MOT be required to pass 101. Therefore your suggestion that I did is puzzling.

  13. 345

    LOL. Sorry, punkin’, not particularly interested in your ring `round rosie games. I obviously understood you – why else would I have parsed it into two categories?

    Is it abstract only to say “offer access to a product” alone?

    Is it abstract to say “offer access to a product utilizing some medium”?

  14. 344

    (but MaxDrei is not interested in discussing the difference between US law and Useful Arts and EP law and ‘technical’ – whatever that means)

  15. 343

    That may be, Ned, but here, from the EPC, is the non-obviousness requirement that corresponds to 35 USC 103;

    “An invention shall be considered as involving an inventive step if, having regard to the state of the art, it is not obvious to a person skilled in the art.”

    Just that.

    Nevertheless, the EPO Boards of Appeal over the last 35 years have construed “obvious” to be the antonym of “inventive in a technical field” (as opposed to inventive in other fields).

    Me, I do not see what is stopping SCOTUS from doing the same. After all, the patent statute of the USA is confined to the useful arts, so the quality of any inventiveness in the non-useful arts should be as useless to patentability in the USA as it is in Europe.

  16. 342

    repeal Supreme Court interference with the standard of invention. They did not.

    You could not be more wrong Ned.

    The 1952 act repealed the Court’s ability to set common law on invention. Quite in fact, it was a conscious choice to use ‘obviousness’ in 103 instead of ‘invention.’ The Court had so mucked things up that Congress intervened. Flash of genius was one way the Court was mucking things up – but it all centered around their given common law making authority.

      That authority was revoked.

    You are truly blind if you believe otherwise. All you need to do is pay attention to the very words that the Court itself uses, and EXACTLY where that very Court says that it derives ‘its’ authority: the words of Congress. Pay attention!

  17. 341


    How would you know? You do not even attempt to discuss the points I raise.

    It is disingenuous to say it is pointless to do something that you do not even attempt to do.

    Let’s have a bit, a tiny shread, of intellectual honesty about this, OK?

  18. 340

    Clearly you are wrong Ned – one of the holdings of Bilski was that MoT was not required.


  19. 339

    Your questions belie the fact that you do not understand what the term ‘abstract’ means in the legal sense.

    You, in fact, do not have a clue.

  20. 338

    101 I don’t know how many times I have the quote the language from Diehr to you but the decision did say that the process before it passed MOT as we know the MOT to be. Further, the Supreme Court declared that such a process, a process that passed MOT, to be an example of a traditional process that the patent laws were designed to protect. Thus when a programmed computer is integrated into such a process, there is no 101 problem.

    The Supreme Court did not have before it a process that did not pass MOT. Therefore the decision cannot be extended to processes that did not pass MOT; and to the extent it could be interpreted to so extend, that is dicta and not the holding.

  21. 336

    Hey, there are two schools on abstract:

    1. Rich/Rader and those who like State Street Bank:
    If a machine is claimed, e.g., a programmed computer or a process using a programmed computer, it is not abstract regardless that the PON is an abstraction such as the number representing price in State Street Bank.

    2. Supreme Court and those who think State Street Bank appalling: abstract includes numerical representations of abstract concepts such as price, risk, value, legal relationship, and so on. Naming a computer does nothing but limit the claim to using a particular machine to calculate using the numerical abstractions. Per Benson, such is not a “useful application” within the meaning of the patent laws.

  22. 335

    (follow up) – or do you think it is saved because the claim is not “some medium”, but rather a particular medium?

  23. 334

    “Then you realize that “offer access to product over the interwebs” cannot be a proper legal abstraction, right?”

    No, no I don’t. Does “use an intertoob” save it? What of, “offer access to a product”. Is that abstract? If not, I guess we can’t do business. But if yes, then the next question is, why is “offer access to a product” saved from abstractness by appending the idea of “via some medium”?

  24. 333

    Anon, 103 has two parts: the first part related to the standard of invention; a second part related to the matter of invention.

    Your earlier post suggested that the bar enacted 103 to repeal Supreme Court interference with the standard of invention. They did not. Rather they enacted Hotchkiss v. Greenwood. The bar was concerned about Cuno. That was a flash of genius case. That case was addressed in the second part of section 103 about the manner of making an invention.

    I thought we had discussed this before but apparently you did not understand what the bar was concerned about in Cuno Engineering.

    But the bottom line is this: you misrepresent the concern of the patent bar regarding invention and the specific legislative remedy they took.

    But certainly had nothing to do with 101.

  25. 332

    Then you realize that “offer access to product over the interwebs” cannot be a proper legal abstraction, right? and that your comment about “simply a string of abstraction” is incorrect, right?

    I mean, since you say you have a clue.

  26. 330

    What exactly am I ‘not right’ about 103, Ned?

    Funny that you don’t respond ‘because there is too much’ and yet, you have failed to have a single item to back up that statement. Your mere mouthing a statement has ZERO level of persuasion.

    Try again (with at least something).

  27. 329

    anon, since you are not right on 103, can you be right on anything?
    let us just say, the effort to respond to your frequent misstatements is not worth it.

    Sent from Windows Mail

  28. 328

    Of all the points out there waiting for a response from you and you chose this one?

    It is without a doubt that Congress reacted against the anti-patent Supreme Court. That is not up for debate.

    Now Ned, address the many other points raised against your views that you steadfastly refuse to engage, let alone acknowledge.

    We can start with one of my favorites: ANTHROPOMORPHICATION.

  29. 327

    anon, Cuno was addressed in the part of 103 that address the “manner of invention.”  The obviousness standard was an attempt at codification of Greenwood.  I think that was Frederico.

  30. 325


    The whole addition of 103 was to remove the common law power of the courts to define ‘invention’ in the analog to 101.

    You don’t recall the anger at Douglas?

    Are you high?

  31. 324

    I think the Bar was upset by Cuno, by Mercoid and to some degree by Halliburton. I don't recall them being upset about any Douglas 101 cases. If so, where is it in the legislation that takes 101 out of validity considerations? It could be 282. That was a creature of Frederico, that Rich never understood or even considered.

  32. 323

    Funny though that Lemley has not shown up once to defende himself, and yet we have Malcolm with a literal CRPfest all over this thread, lots of tough guy words and absolutely nothing solid to say.

  33. 322

    LOL – Not really Malcolm.

    But hey, maybe there is some first time posting cancer surivors you can pick on, or maybe a dead president, Or heck pick on Gene somemore, you know, since it is so ‘internet tough guy’ to pick on someone who does not post here.

    Better yet, Why don’t you get the nuts to admit a simple FACT: that I was right in the Myriad case and that you were wrong?

    Funny, that internet tough-guy act you have does not extend to simple admissions of FACT.


  34. 320


    You ‘analog’ idea was rejected by the Supreme Court in Prometheus – 9-0 (dance a jig baby)

    Why do you keep on trying to push ‘law’ that was out and out rejected by the Supreme Court?

  35. 318

    But rest assured we’ll have the discussion again.

    LOL – which discussion is that Malcolm? The one where you finally tried to apply a substantive effort to square Prometheus with the precedent case most on point and you torched your little pet theory?

    That one?


    Mmmmmm, toasty!

  36. 317


    When you finally figure out the context, let Malcolm know. He’s till trying to figure out this archive thing.

  37. 316

    I told you the context – you ignored it. Try again and this time don’t ignroe it (it’s still in the archives)

  38. 315

    A string of vacuous CRPfest by Malcolm with nothing new to say, and no points to be had.


    From Malcolm pontificating on why 101 is ‘enough’ at link to patentlyo.com and then turning around AGAIN and employing his self-defeat:

    More of the ‘goodies’ from Malcolm’s book of FAIL:

    “The Supreme Court wisely held that 101 would suffice.”

    LOL – who was one that advocated otherwise with a WHATEVER mentality? (that would be Malcolm)

    Double LOL – who JUST RECENTLY delved back into the WHATEVER mentality on a discussion of 101 and tried to conflate the discussion with 103? (that would be Malcolm)

    Triple LOL – who recently was wrong about a Supreme Court case and tried to argue a 102/103 timing into the 101 judicial exception of product of nature? (that would be Malcolm)

    Wrong prior to Prometheus and moved the goalposts, wrong after Prometheus and moved to the same lame tactics of conflation, and STILL wrong about and STILL does not have the nuts to admit that he was wrong and that I was right.

    Yet here we have Eric and Gene still bemoaning an easily applied and predictable holding in a well-written and well-reasoned decision.

    LOL – so ‘well-written and well-reasoned’ that when he FINALLY attempted a substantive squaring of Prometheus with the precedent case most on point, Malcolm tossed his pet theory into a bonfire of his own making. There has been only a single entity anywhere that has attempted to use those adjectives for the Prometheus decision.

    Mmmmmm, toasty.

    (try to keep up Malcolm, all of you retorts today have already been decimated)

  39. 314

    Les believes that the claim is a process, therefore it is eligible and not abstract.

    But don’t ask him to talk about obviousness. He’s too ignorant to follow a discussion that involves more than one statute.

  40. 313

    No one is relying on the legal status of the information for patentability.

    Are you suggesting that this never happens or that you have knowledge that this didn’t happen in this case?

    If so, you’re even more confused and deluded than you first seemed.

  41. 312

    Did Rader indicate in any way

    All Randy cares about is that a “computer” is recited. Why would he bother with the rest of the claim? The guy evidently can’t even tell the difference between a claim and a flowchart in the specification.

  42. 311

    then we will know the relevant prior art,

    Because otherwise there is no way of knowing what the “relevant art” is until Daddy Judge tells you.

    How old are you?

  43. 310

    hey, abstract THIS said in reply to Les…
    Method to distribute product, steps:
    – obtain some product
    – associate advertisement with each product, but be sure not to give away more ad time than was paid for
    – offer access to product over the interwebs (but only let the suckers see it if the suckers agree to watch the ad)
    – if sucker says yes, show the ad, and then let `em have their product unless the ad itself has a yes/no
    – keep good records
    – don’t forget to get paid for those ads.

    What about this is NOT simply a string of abstraction?_

  44. 309

    Method to distribute product, steps:
    – obtain some product
    – associate advertisement with each product, but be sure not to give away more ad time than was paid for
    – offer access to product over the interwebs (but only let the suckers see it if the suckers agree to watch the ad)
    – if sucker says yes, show the ad, and then let `em have their product unless the ad itself has a yes/no
    – keep good records
    – don’t forget to get paid for those ads.

    What about this is NOT simply a string of abstraction?

  45. 308

    Morse did say that Laws of Nature, natural, and principles in abstract are not the subject matter of patents. But I think Morse court pinned its holding on the requirement for a written description and enablement. If a principal in the abstract is the claimed invention, the specification need not describe any application and, no means need be identified to carry out the principle. But such is contrary to the statute that requires that the inventor describe the invention and how to make and use it.

  46. 307

    Mr. AAA, but 101 is a reenactment of a the basic statute that was passed in 1790 declaring what subject may be patented and excluding subject matter that was known in use. Do you want me to quote the words of the statute?

    But this case did affirm that laws of nature, phenomena of nature, and principles in the abstract were not the subject of patents. Eve so, I think the statutory basis for their exclusion was not that analog of 101 that existed at that time, but the analog of section 112 paragraph 1 that required a written description of the invention. Supreme Court seem to believe that the if one were claiming a principal an abstract, one is essentially claiming a result regardless of the means or methods of achieving a result; and that would retard the progress of the useful arts rather than promote them because the independent inventions of others that might achieve the same result using different means and methods would be covered by the patent and provide a disincentive to conduct that research.

  47. 306

    In part, because Congress was fed up with the Supreme Court messing around (a la Douglas and the only valid patent is one that has not appeared before us era) with a common law approach to ‘invention,’ and revoked that ability (which the Court should have refused to get hooked on in the first place – under a proper application of the separation of powers doctrine).

    And in concurrence, this highlights the canard of Point of Novelty that is often misused by said Ned Heller.

  48. 305

    The problem we have, MD, is a statute, 103.  It does not permit determinations of whether the novel subject matter is really a machine, process, composition or article.  All it asks is whether the new subject matter is obvious.


  49. 304

    EG: ” I’m just noting that Ultramercial suggests that there’s a presumption that machine-implemented methods are patent-eligible (i.e., presumptively “integrated” in your terminology);

    Yes, of course I agree. A new and useful “process” claim has a clear presumption of “Integration” and the presumption remains valid, and requires no further analysis under 101 unless the claims as a whole recite a Court created judicial exception. The machine elements in Ultramercial are essential or integral to performing the process steps. Integral elements that if removed would make the claim inoperable clearly point to the claim being “integrated” and therefore statutory.

  50. 303

    Thanks NWPA, we are making progress. And I do believe we will ultimately be victorious at the Supreme Court.

  51. 302

    Ned: “If the SC takes this case and approves the claims based on their the use of a computer to make the calculations, then this case will effectively overrule Benson.”

    If we do as the Supreme Court instructs us in Bilksi, and view Benson thru the lens of Diehr, then you can get a patent on using a computer to add 1+1 providing that a computer is not the only way to add 1+1. Apparently, the Supreme Court believes congress wants 1+1 and other math equations to be free for all to use for proving a scientific truth. However, Ultramercial is not about using a computer to do calculations. Nor does Ultramercial claim a mathematical formula that like an abstract idea, is a judicial exception.

    Rader said: “This inquiry focuses on whether the claims tie the otherwise abstract idea to a specific way of doing some- thing with a computer, or a specific computer for doing something; if so, they likely will be patent eligible.”

    And you must remember even the Court in Benson said: “It is said that the decision precludes a patent for any program servicing a computer. [We do not so hold. ]” ( Emphasis Added)

    So once again Ned, your conclusion about this decision being in conflict with Benson is legally and factually wrong.

    Any Questions?

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