26 September 2010

Icelandic Band Sigur Rós "Unsure" Whether Music in Commercials Came by Inspiration or Thievery

Quite astonished I just recognised in a posting of the IPKat, that we do not only share a passion for IP, but also a big appreciation for the music of Iclandic "post rock band" Sigur Rós, which I assume is not only because of their UK label "FatCat Records".

In a recent article asking for "homage or fromage?" on their official website, Sigur Rós is "saying 'no' to their music being used in advertising" and declare that they "never allowed their music to be used to sell anything", even though, apparently, they get asked a lot.

Nonwithstanding, Sigur Rós presents an interesting collection of advertisements that they think sound suspiciously similar to some of their compositions - which I can affirm - and critisise that copyright infringement in the music business can hardy be proved, since, according to their experience, it is sufficient to
change a note here, swap things around a bit there and, hey presto, it's an original composition, [so that musicologists will say] the chord sequence is "commonly used" or the structure is a "style-a-like" and not a "pass off", [leaving] insufficient evidence in the music to support a claim for infringement of the copyright.
There is also a nice example given of an e-mail inquiry asking for a track for a commercial for Audi's Quattro system - which was denied - and later viewers of the ad discovered that "it sounds a lot like Sigur Rós" (see also article of "freelance copyrighter" Andi Bosselman).

For the song "Hoppipolla" (the one recognised by Sigur Rós fans in the Audi ads) there are three (further) examples of such "original compositions" given that, according to my - in terms of music copyright infringement, unprofessional - understanding, really sound "suspiciously similar". But listen yourself ...

The first video is an live recording of "Hoppipolla" (engl. for "puddle jumping") made during their 2007 Iceland tour (Heima), while the others are commercials.









(Photo (C) 2006 by Stig Nygaard via Flickr under the terms of a CC license)

25 September 2010

Latest Positions from Patent Judges' Symposium, EPO, EU Authorities, and AIPPI on Language Regime and Legal Compatibility of EEUPC

Sponsored by the European Patent Office, a pan-European group of patent judges and selected political guests meets biannually for discussing political an legal patent issues on a European scale. Now the 15th Symposium of European Patent Judges was held from 15 to 17 September 2010 in Lisbon (see list of participants).

The European Patent Judges' Symposium appears to be a rather exclusive corporation since, besides an official press release on the EPO website and today's posting on the usually very well informed ipeg blog, no substantive information on the meeting seems to be available throughout the whole internet. Patent judges do not appear to blog or tweet from their events. At least, the EPO announced that proceedings of the Symposium will be published as a special edition of the Official Journal in early 2011.

According to what is available, the main issue of the meeting was the proposal of the EU Council for a European Patent and European Patent Court. Further sessions related to the draft rules of procedure for a future European patent court (which may also include the judges' position on the controversally discussed regulation of representation before the new court), the exclusion of patent protection for surgical, diagnostic and therapeutical methods, and the protection of computer-implemented inventions in the US and under the EPC.

The EU Council's Draft Agreement on a European Patent and European and EU Patent Court (EEUPC) of 23 March 2009 (Doc 9076/09) has, due to a request for an opinion, recently being assessed by the Advocates General (AG) of the Court of Justice of the European Union (CJEU). The Advocates General concluded in their statement of position that the draft agreement in its current form is incompatible with EU treaties, especially regarding the judical control of the future EEUPC and the proposed language regime for the EU patent. The patent judges, however, were not overly concerned about this criticism and emphasised that the Advocates General also offered solutions for the incompatibilities. While the CJEU is not bound by the AG's statement, the final opinion by the CJEU, however, will be decisive for the project in the current form.

From a political point of view, Benoît Battistelli, President of the EPO, and Margot Fröhlinger, Director of Knowledge-Based Economy inside the DG Internal Market of the European Commission, commented on the current shape of the EEUPC project. While Ms. Fröhlinger repeated the Commission's economical position that implementing the EEUPC system would particularly help European SMEs, Mr. Battistelli emphasised that, not very surprisingly, "the EPO fully supports [...] a EU patent to be granted by the EPO" and praised the EPO's machine translation project as a "valuable contribution to solving the language issue [...] blocking progress on the EU patent for more than 30 years".

As to the crucial language issue, the European Commission published a proposal for a Council Regulation on the translation arrangements of the EU patent on June 30, 2010 (pdf) in which, basically, human translations of EU patents were suggested in case of dispute, while for informing the general public only the claims should be properly translated in three official languages (EN, FR, DE) and machine translations should be provided for the rest.

Then, on September 03, 2010 the EU Council published a background note on machine translations (Doc 13166/10) which expresses the importance of good-quality machine translations for implementation and acceptance of the EU patent. While the EU Commission's proposal has been said to have only little chance to be adopted due to strong resistance from southern Europe - especially from Italy and Spain -, it recently appeared that at least some EU member states consider machine translations as a realistic way to provide an overall translation regime for EU patents. 

According to the background note, the EPO sees its machine translation programme, which has been set up back in 2004, as a key element and important contribution for creating a EU patent and assumes that the translation regime as suggested by the proposal for a Council Regulation would be based on the EPO's machine translation programme, which, apparently, already ensures reasonable-quality translations from and to English to and from German, French, Spanish, and Italian, respectively.

However, besides the background note, there does not appear that much information is publicly available on this issue, which is why it is assumed on the IPJur blog that the discussion on machine translations should be kept behind closed doors and it is demanded that the Administrative Council's documents CA/T 6/09 and CA/29/10, which are mentioned in the background note but are not jet available, should be published now.

Meanwhile, as mentioned on the ipeg blog, AIPPI published its position on the European and EU Patent Court System on 10 September 2010. Interestingly, with respect to the Advocate General's criticism and under the headline "Green Light for EPLA?" the AIPPI's statement takes the position that, apart from the main incompatibility issues due to a lack of CJEU competence as raised by the Advocates General, §§ 58, 60, and 63 of the AG's statement "read like an official rehabilitation of the members of the EPLA Working Party who during the discussions on EPLA before 2006 had been accused by [...] the Commission [...] of having no right and competence to negotiate without the authorization of the EC alleging that only the European Community had competence for creating an international court [...]". In this respect, the AIPPI pointed out that "the AGs take exactly the opposite view, and it will be interesting to see where the CJEU stands".

Jochen Pagenberg, the Chairman of AIPPI's special committee Q165 summarised the position of his expert group as follows:
The question for Committee Q 165 will now be – assuming the ECJ argues along the same lines as the AGs – whether the work for EPLA should be resumed while leaving aside the EEUPC for a while, since EPLA might be easier to be accomplished now. Or whether one should at the same time explore parallel avenues around the political stumble stones of the EEUPC, in order not to lose time for the project as a whole. Historically the second alternative has proven very successful when the Strasbourg and the Munich Patent Conventions were discussed in the 1960ies by different teams who succeeded to agree on identical texts of substantive laws which are still valid today.

(Photo (C) 2007 by Luca Galuzzi via Wikimedial Comons under the terms of a CC license)

22 September 2010

US Copyright First Sale Doctrine Not Applicable to Licenses for Digital Medial Products

As reported on the Internet Cases blog and the Austin Technology Law blog, the Ninth Circuit Court of Appeal recently decided the case Vernor v. Autodesk, relating to copyright of software products and the US first sale doctrine according to 17 U.S.C. § 109 of the US Copyright Act of 1976 (comparable to the exhaustion doctrine of US and European of patent law), which limits copyright in that a purchaser of a copyrighted work is allowed to transfer a lawfully made copy of the purchased work without permission of the copyright holder.

In this case the first sale doctrine was verified for applicability to digital copies of software (as opposed to a physical copy of a work) and to a licensed work (as opposed to being sold), whereas the Court found that the doctrine is not applicable if the copyrighted work is distributed under a license. Consequently, the licensee or any subsequent possessor of the work cannot anymore use the “first sale doctrine” as a defense to a copyright infringement action, as opposed to the owner of a purchased work.

Mr. Vernor, who bought several used copies of Autodesk's AutoCAD software suit from Seattle based architecture firm Cardwell/Thomas & Associates (CTA) and tried to sell them on eBay. As Autodesk asserted that Vernor infringed Autodesk’s exclusive copyrights to distribute the software, Vernor filed a declaratory judgment action to ask the Court to declare that such sales were not infringing, which the lower instance Court granted. Later, upon appeal of Autodesk, the Ninths Circuit held that Vernor's conduct was not protected under the first sale doctrine, due to the software license agreement between Autodesk and CTA, the original distributor and copyright owner of the software, according to which Autodesk retained ownership of the copyright.

While the lower court held that Venor was the “owner” of the copies of software, the Court of Appeals held that both CTA and Vernor only were licensees and thus cannot claim protection under the first sale doctrine. The court remanded the case for consider of other issues including a claim that Autodesk misused its copyright.

Criticism: Evan Brown of Hinshaw & Culbertson (Internet Cases Blog) fears that this case opens the doors for non-software vendors to restrict use and transfer of virtually any media product by calling the arrangement a license to retain ownership and that the case gives great power to software companies to really tie up tangible media to the detriment of consumers. Likewise, Paul Stanfield of Stanfield & Hiserodt (Austin Technology Law Blog) regards the decison right under the law but suspects that owners will start inserting “magic words” and turning everything into a license, which is why he is convinced that the US Congress will follow the Court's invitation to statutory changes.

Further, Erik Sherman took the position in a related BNET article, that "this isn’t about AutoCAD [but] about all manner of electronic media" and pointed out that Amazon's MP3 music store strongly restricts transfer of songs and the Kindle digital content terms are even more restrictive, while the Apple iTunes terms do not show similar restrictions for music and videos, but the App Store specifies that "the software products made available through the App Store are licensed, not sold, to you". Based on this finding, Mr Sherman further analysed that
[t]his raises some interesting business questions. Is there a competitive advantage to selling copies of files rather than licensing them because customers will perceive greater value? Will the entire industry continue to gravitate toward walled garden models? Not just Apple, but Amazon, wireless carriers selling handsets, and others. Most importantly, how long can the industry make use of licensing rather than outright sales and keep customers from getting irate?

Granted, software companies have used licensing language for decades. However, apps, music, video, ebooks, and digital magazines have a different sense to them and consumers are more likely to want to sell and trade them, just as they sell old books, music CDs, and DVDs. It may be a case where companies will have to give up restrictions if only to keep their customers placated.

Richard Stallmann interrupted EPO session at World Computer Congress in Brisbane

Following reports on the Australian itNews channel and The Register, a session of EPO patent officer Ralf Abbing relating to the 'big' issues in IP in relation to computing technology on this year's World Computer Congress (WCC) in Brisbane was interrupted by GNU founder and famous anti-patent activist Richard Stallman, advocating against, as Stallmann put it, the EPO's "campaign in favour of software patents in Australia" by carrying a placard saying "don't get caught in software patent thickets" and distributing copies of his article about IP being a seductive mirage.

While Abbings explained that the requirements for software patent applications under the EPC follow a "very narrow interpretation" (see also posting on the EPO's G3/08 decision) which especially involves a "technical character" (e.g. processing physical data, controlling an industrial process, etc.) and excludes business methods (or "abstract ideas") form patentability, Stallman rather followed a political mission. He later told it that
(Richard Stallman)
We're here at the World Computer Congress and what I've discovered is that the European Patent Office is here to campaign in favour of software patents in Australia. [...] You can be sure that if Australia allows software patents, almost all the patents will belong to foreigners and will give them the opportunity to sue Australians. [...] There's no problem that requires a solution with anything like software patents. Without software patents [...] neither of us would get sued by the various patent troll companies whose sole business is collecting patents so that they could go threaten people.
The discussion on patent-eligibility of software in Australia was fired by New Zealand's approach to only allow patents on "embedded software" (see earlier posting). Currently, the the Australian IP Advisory Council prepares a review on patentable subject matter, while an open petition asking the Australian government to end software patents attracted 1083 signatures - mainly from free-software developers (see reports on OStatic an itNews).

Referring to the itNews article, Australian Patent Attorney Mark Summerfield expressed his fear that "Australia may have a bigger problem with ill-informed foreigners showing up here, and telling us how to run our country" and further commented in a blog posting:
Of course, Australia already grants patents for inventions implemented wholly or partially in computer software, and has done so for over 20 years.  To date this has not resulted in an opening of the metaphorical (and largely mythical) floodgates to "foreigners" suing Australians for infringement of software patents.

15 September 2010

The Origin of the European Patent Applications Filed in 2009


The European Patent Office just published its "Regional Breakdown" with respect to the origin of European patent applications filed in 2009 for the EPC contracting states and other major patent filing countries in the world. According to this statistical survey (spreadsheet file can be downloaded here), a total of 132 049 patent application originated from the following countries and regions in 2009.

The top 20 filing countries in 2009 were:
1 United States 32 879 24,90%
2 Germany 25 030 18,96%
3 Japan 19 929 15,09%
4 France 8 899 6,74%
5 Netherlands 6 725 5,09%
6 Switzerland 5 857 4,44%
7 United Kingdom 4 813 3,64%
8 Rep. Korea 4 192 3,17%
9 Italy 3 864 2,93%
10 Sweden 3 142 2,38%
11 Canada 2 050 1,55%
12 Belgium 1 624 1,23%
13 China 1 597 1,21%
14 Austria 1 511 1,14%
15 Denmark 1 487 1,13%
16 Finland 1 446 1,10%
17 Spain 1 256 0,95%
18 Israel 1 093 0,83%
19 Taiwan 1 074 0,81%
20 Australia 842 0,64%

The top 30 filing political regions in 2009 were:
1 Tokyo JP 10 740 8,13%
2 California US 6 900 5,23%
3 Île-de-France FR 6 090 4,61%
4 Oberbayern DE 4 487 3,40%
5 North Brabant NL 3 434 2,60%
6 Osaka JP 3 220 2,44%
7 New York US 2 967 2,25%
8 Stuttgart DE 2 872 2,17%
9 New Jersey US 2 437 1,85%
10 Rheinhessen-Pfalz DE 2 107 1,60%
11 Massachusetts US 1 901 1,44%
12 Aichi JP 1 858 1,41%
13 Seoul KR 1 810 1,37%
14 Düsseldorf DE 1 803 1,37%
15 Illinois US 1 785 1,35%
16 Texas US 1 769 1,34%
17 Gyeonggi KR 1 667 1,26%
18 Stockholm SE 1 575 1,19%
19 Greater London UK 1 565 1,19%
20 Minnesota US 1 494 1,13%
21 Darmstadt DE 1 474 1,12%
22 Ohio US 1 462 1,11%
23 Köln DE 1 298 0,98%
24 Michigan US 1 295 0,98%
25 Ontario CA 1 283 0,97%
26 Lombardy IT 1 268 0,96%
27 South Holland NL 1 238 0,94%
28 Basel-Stadt CH 1 194 0,90%
29 Karlsruhe DE 1 179 0,89%
30 Connecticut US 1 178 0,89%

So if you, as an European patent attorney, are planning an acquisition trip in the near future, you should consider to vistit Tokyo, California, North Brabant, or Oberbayern instead of South Korea, the UK, Belguim, or Italy, respectively.

14 September 2010

Protecting and Commercialisating an Invention not Patent-Eligible in Australia (Invention Pathways Pty Ltd)

In the ex parte decision Invention Pathways Pty Ltd of 21 July 2010, the Australian IPO held that a business method related to a commercialising invention does not represent patent-eligible subject matter. The applicant, a compamy named Invention Pathways, is an IP consulting firm operating in Australia and New Zealand and offering to assist inventors in protecting and commercializing inventions.
 
Claim 1 of patent application AU 2009 201212 reads:

1.  An invention specific commercialization system to facilitate success of inventions, the system including the steps of:
  1. applying for patent protection for the invention [...],
  2. conducting a review of specific commercialization process required by the invention,
  3. preparing a research and development plan, testing the business dynamics of the invention,
  4. conducting prototype testing, developing a prototype cost/benefit analysis,
  5. determining product positioning and packaging,
  6. conducting a manufacturing checklist,
  7. entry of the information collected in steps a) to f) into an electronically fillable checklist having a prescribed time limit for each step to form a commercial entry strategy (CES) with a number of sub-steps, the CES prepared on the basis that each of the sub-steps in the CES are to be completed by a corresponding deadline, all deadlines falling within 30 months from the earliest priority date of the patent application, the checklist being computer-implemented and stored in computer or human readable format in data storage means and associated with processing means to allow updating of the checklist; and
  8. policing compliance with the deadlines for the completion of the sub-steps through the production of reminders based on the prescribed time limits in the checklist to ensure that all sub-steps are completed within the deadlines.
The essence of the claimed "invention commercialisation [business] method" appears to lie in automatically observing (through the "checklist" under item g) a number of patent-related legal terms (e.g. priority, publication, national PCT entry) and to ensure that sufficient funds are available at that crucial dates so that commercialisation issues can be realised within the 30-months term for national entry of a PCT application claiming priority of a national application.  

The most relevant case law for assessing the business method, Grant v Commissioner of Patents of 2006, stated that "it is necessary that there be some 'useful product', some physical phenomenon or effect resulting from the working of a method for it to be properly the subject of letters patent” and that a change in the state or memory of a computer may represent such a “physical effect”. It was further held in that case that a product or result of a method must produce “a concrete, tangible, physical, or observable effect.” 

Based on this ruling, the IPO found that the claimed subject matter was directed to a mere scheme, without any physical phenomenon or effect, whereas the applicant took the position that the "entry of information [...] into an electronically fillable checklist" and the fact that the checklist is stored in a data storage means and the information is updated, would satisfied the “physical effect” requirement of Grant.

However, the Australian IPO rejected the applicants arguments, since "the patentability of a business method cannot arise merely from being implemented by a computer or related device in an incidental way" and that, with reference to the recent Bilski v Kappos decision of the US Supreme Court (which must be the first Australian decision citing this prominent US case, as assumed on the Patentology blog), "the prohibition against patenting abstract ideas cannot be circumvented by attempting to limit the use of the formula to a particular technological environment”:
[§ 38] In applying the decision in Grant I therefore consider that the “concrete effect or phenomenon or manifestation or transformation” referred to must be one that is significant both in that it is concrete but also that it is central to the purpose or operation of the claimed process or otherwise arises from the combination of steps of the method in a substantial way.

[§ 40] It is however clear that the substance of the claimed method is a scheme to encourage the completion of certain commercialisation assessments within a specified period that relates to time limits present in the patent system. To the extent that this is facilitated by a computer implemented updateable checklist, its utility lies in the information it holds and conveys to a commercialisation agent about the commercialisation steps a) – g) and particularly whether they have been completed within the specified timeframe of 30 months from the earliest priority date.
Consequently, the decision Invention Pathways Pty Ltd clarified that a claimed teaching's "physical effect" according to Grant v Commissioner of Patents additionally requires to be “central to the purpose or operation of the claimed process or otherwise arises [...] in a substantial way” such that the claim may represent statutory subject matter.

Conclusion: This finding was considered important enough for updating the sections on software-related inventions (section 2.9.2.7) and business methods (section 2.9.2.10) of the Australian Patent Office Manual of Practice and Procedure (examination guidelines) on 1 September 2010. After the decision, computer-implemented inventions and even business methods remain patentable under well defined patentability criteria, according to which a tangible or physical effect must arise which is central to the purpose of the claimed process. For further reading, please als refer to the coverage of this case on BAZPAT, Patentology, and Australian Patent Law.

By the way, just around the publication of this decision, the Melbourne free software interest group initiated an open petition asking the Australian government to end software patents at all. The petition was signed by more than 500 people, among them many well-known players of Australian (open source) software industry, as affirmed in this posting of the OSS gazette OStatic, not forgetting to once again point to the OSS community's familiar enemies and their alleged outrages (e.g. Microsoft and IBM). 

11 September 2010

Federal Court of Justice (BGH) Rejected Former MP Tauss' Appeal On Sentence for Child Pornography

On 28 May 2010 a Karlsruhe district court handed former Social Democratic member of parliament Jörg Tauss a 15-month suspended sentence for illegally posessing child pornography, which he appealed before the German Federal Court of Justice (BGH).

While he alleged that he had the forbidden material only for work-related research about the scene, the Karlsruhe Chief Judge was of the opinion that “the overview shows that Tauss was not travelling through the virtual child pornography scene in fulfilment of his political duties, but out of private reasons” and explained that Tauss’ claims of special parliamentary exemption from the law were invalid even if Tauss was an expert in online criminality", since "the same powers are valid for all parliamentarians".

Two days after the German Bundestag annulled Tauss’ parliamentary immunity in September 2009 he left the centre-left Social Democratic Party to become the first and only member of the German Pirate Party (Piratenpartei) in the German Bundestag until the general election in September 2009.

After the first-instance sentence, the German Pirate Party, who was rather enthusiastic about their new prominent and "honorary member", did not find it adequate to comment on the evidence but instead called the trial a “bad sign of public prejudgement” and, as many further campaigners of internet freedom, considered the suspended verdict too harsh (see related earlier posting). There even circulated a conspiracy theory among Tauss' supporters (see press statement of the Piratenpartei), according to which the legal action hit him on purpose, because he prominently argued against internet access barriers as proposed by federal secretary Ursula von der Leyen (CDU) in order to block child pornography websites, just as his "censorship" fighting friends of the Piratenpartei (see related earlier posting). Tauss meanwhile voluntarily left the Piratenpartei to "avert any damage to the party". 

By order of 24 August 2010 and based on an opinion of the Advocate General, the Federal Court of Justice rejected Tauss' appeal as "apparently unfounded" even without oral proceedings, so that Jörg Tauss now is finally convicted for acquiring and posessing of child pornographic videos and images (BGH StR 414/10). German-language readers may also refer to legal bloggers comments here, here, here, and here).

Tauss' attorney Jan Mönikes regretted the BGH's decision, because "it is a pity that the BGH has not used the opportunity to clarify the legal boundaries within which an MP may hinself do research in a problematic area, without being liable to prosecution". The possibility of a constitutional complaint was commented by Mönikes in a rather reserved way. During the prodedure, he constantly insisted that the underlying constitutional issue as to the rights of MPs in independent investigations should be resolved by the BGH. Legal experts, however, estimat the chances of a constitutional challenge rather low, since the evidence does not support to regard Tauss' investigations as motivated by any official interest as member of parliament.

The fact that Jörg Tauss himself did not yet comment on the BGH's verdict (e.g. via his blog) is certainly not uncomprehensible. But, as far as I can see, even the Piratenpartei has not yet published some official statement on the final conviction of its former prominent member. It appears that the "pirates" finally dropped their temporary tribune like a hot potato - hopefully due to some sort of insight that the partie's earlier position towards Tauss' "invenstigations" and questionable assertions were not acceptible for a serious political party and would not at all support the political agenda of the Piratenpartei.

02 September 2010

Internet Advertising is an Abstract Idea says US District Court


On 13 August 2010, a Los Angeles District Court found patent US 7,346,545 invalid in view of the US Supreme Court's Bilski v. Kappos opinion. The patent relates to delivering of copyrighted media products (e.g. audio or video data) through a computer or server to internet users free of charge in exchange for watching advertisements.

The patent holder, a company named Ultramercial, had sued Hulu and WildTangent for patent infringement, while the defendants filed a motion to dismiss, arguing that the patent neither disclosed nor claimed patentable subject matter. As reported on Patent Litigation Weekly, Ultramercial had argued that the defendants infringed the patent, because they kept copyrighted content in the form of videos or games behind a wall that could only be bypassed after watching an advertisement. Relying on such ad walls has become fundamental to the business model that online video sites like Hulu and YouTube use (see also report on IP Spotlight and the 271 Patent blog).

The decision Ultramerical v. Hulu (Central District of California, CV 09-06918) is said to be the first patent lawsuit that was decided based on the grounds of the Bilski ruling (see earlier posts here and here).

After the Bilski opinion, according to which the machine-or-transformation test is not the only test for assessing patent eligibility and abstract ideas are not patentable at all, some have interpreted Bilski to completely reject the machine-or-transformation test, while others thought that the decision backed an extensively liberal approach on software and business method patenting, which would also legitimate granting claims like those of the Ultramerical's patent.

In fact, Ultramerical v. Hulu clearly shows that in the post-Bilski era the machine-or-transformation test still plays an important role and that there still exists subject-matter that is not patent-eligible even though it might be regarded novel and non-obvious. The Supreme Court’s Bilski opinion apparently was not the kind of “triumphus” some US software and business method advocates thought it was.

According to claim 1 of the ‘545 patent, a “method for distribution of products over the Internet via a facilitator” comprises the following steps:
  1. receiving, from a content provider, media products that are covered by intellectual-property rights protection [...];
  2. selecting a sponsor message to be associated with the media product, […];
  3. providing the media product for sale at an Internet website;
  4. restricting general public access to said media product;
  5. offering to a consumer access to the media product without charge to the consumer on the precondition that the consumer views the sponsor message;
  6. receiving from the consumer a request to view the sponsor message [...];
  7. facilitating the display of a sponsor message to the consumer […];
  8. allowing said consumer access to said media product [...], if the sponsor message is not an interactive message;
  9. presenting at least one query to the consumer and allowing said consumer access to said media product [...], if the sponsor message is an interactive message;
  10. recording the transaction event to the activity log, [...] including updating the total number of times the sponsor message has been presented; and
  11. receiving payment from the sponsor of the sponsor message displayed.
To reject the claims, the District Court applied a two-stage approach in that it first applied the Federal Circuit's machine-or-transformation test and then checked for the Supreme Court's abstract idea approach.

Machine or Transformation: According to the Court's first-stage argumentation, “the machine or transformation test appears to have a major screening function – albeit not perfect – that separates unpatentable ideas from patentable ones”, so that “even though the machine or transformation is no longer the litmus test for patentability“ it was used in the present case “as a key indicator of patentability“.

In the end, the Court found that the patent did not meet the requirements of the test, since “the Internet is not a machine”, “the mere act of storing media on computer memory does not tie the invention to a machine in a meaningful way”, and the “mere transfer of data” is not a  transformation of an article.

As to the “machine” prong, in detail, the District Court argued that
there were only three points identified as a possible reference to a machine. One independent claim recited a “method for distribution of products over the Internet via a facilitator,” while a dependent claim recited "wherein media product accessed by the consumer is downloaded to a memory of a personal computer of the consumer”, [whereas] none of the three satisfy the machine prong of the test.

[T]here is no reason to read “facilitator” as a machine such as a computer [, especially since] the patent specification suggests […] the facilitator as a person. The specification makes it clear, therefore, that the ‘545 patent is not aimed at a computer-specific application [but] is a broad claim to the concept of exchanging media for advertisement viewing.

Neither does the “Internet” recitation save the patent [, since] this Court agrees with the District Court in the Northern District of California that held the Internet is not a machine [but] an abstraction [, as ] one can touch a computer or a network cable, but one cannot touch ‘the internet (CyberSource Corp. v. Retail, 2009).

Finally, the mere act of storing media on computer memory does not tie the ‘545 invention to a machine in any meaningful way.
Abstract idea: In the second-stage argumentation, the Court found the claims to be similar to those found to be an abstract idea in Bilski v. Kappos:
At the core of the patent is the basic idea that one can use advertisement as an exchange or currency. An Internet user can pay for copyrighted media by sitting through a sponsored message instead of paying money to download the media. This core principle, similar to the core of the Bilski patent, is an abstract idea. Indeed, public television channels have used the same basic idea for years to provide free (or offset the cost of) media to their viewers. At its heart, therefore, the patent does no more than disclose an abstract idea.
As opposed to the Court’s opinion, Ultramercials' lawyer (Richard Frenkel of WSGR) argued that by "gating" the distribution of copyrighted content, the claimed subject-matter passed the machine-or-transformation test because the claims transformed copyrighted content from being physically inaccessible to an online consumer to being physical accessible, so that the patent would easily satisfy the transformation prong.

Further remarks: While the Court found that the '545 patent wasn't concretely limited to a computer-specific application (“it is a broad claim to the concept of exchanging media for advertisement viewing”) and that performing an already-known process over the Internet does not make an otherwise unpatentable idea patentable, Steve Lundberg of the patents4software blog couter argues that the claimed invention is both expressly claimed as method for distribution of products over the Internet and clearly and unequivocably limited to be used with the Internet, an Internet web site and interactive messages. Mr Lundberg identified that the big problem of this case is that it's
abstract idea death-ray appears capable of killing any invention where a key concept can be labelled ‘abstract’ even if the invention is clearly limited to an electronic implementation and even if the electronic implementation is central to the idea, as it was in this case.
It is assumed that the ruling will likely be reviewed by the Federal Circuit on appeal. The District Court explained its motivation to grant the motion to dismiss in that, 
given the lack of clarity in this area of patent law, it is perhaps even more appropriate for this Court to render its decision at the earliest stage so that the parties may benefit from the Federal Circuit’s guidance on the issue sooner rather than later, if they so desire.
By the way, the Roman “triumphus” was a religious rite of ancient Rome that later turned into a civil ceremony to publicly celebrate and sanctify an army general who had successfully completed a foreign war. To better celebrate the triumph, a monument was sometimes erected, such as the Arch of Titus (see detail above) or the Arch of Constantine in the Forum Romanum.

Originally the triumph was a pure sacral act in which the victorious commander fulfilled vows he had made to the gods before the war, cleaned himself and his army of the curse of war by a worship service, and sacrificed Jupiter. In Republican Rome, the triumph was more and more transformed into an honorary celebration for the victorious general, who became a vir triumphalis (“man of triumph”) that was connected to Rome's mythical past and ritually elevated to near-divine or near-kingly status for the day of the triumph at which he wore the regalia traditionally associated both with the ancient Roman monarchy and with the statue of Jupiter Capitolinus. Thereafter, he retained the right to be named vir triumphalis for the rest of his life.