Hulu wins patent infringement case

By Eriq Gardner

Hulu might not be the favorite website of TV creators like Steve Levitan ("Modern Family"), but the studio-owned video platform has a fan in federal court. Hulu has survived a patent infringement lawsuit brought by a company that claimed to own an invention allowing Internet users to view copyrighted material free of charge in exchange for watching certain ads.

A federal court in California has invalidated a patent by plaintiff Ultramercial, LLC as not covering patentable subject matter. Specifically, the court applies a test the Supreme Court recently drew up in its landmark decision, Bilski v. Kappos, over business method patents. The test is whether a patent covers a "machine-or-transformation." In invalidating the patent, the California district court rules that the patent in question is not aimed at a computer-specific application, that the Internet is not a machine, and that the mere act of storing media on computer memory doesn't tie the invention to a machine.

In other words, Ultramercial was merely asserting an "invention" of an abstract idea.

The case could get further review at a higher court. In its decision, the federal court says the "parties may benefit from the Federal Circuit's guidance on this issue."

We won't subject you to commercials to hear the nut of this story: Patent infringement claims are getting tougher to press. Hulu finds itself as one of the first beneficiaries of this new judicial approach to evaluating the merits of a claimed patent.

Incidentally, Hulu and founding investor NBC Universal are still fighting claims by a Canadian company called Huluvision, alleging executives stole a trademark and misappropriated trade secrets. We hear that this case recently went to private arbitration.