In Ultramercial, Inc. v. Hulu, LLC, the Court of Appeals for the Federal Circuit reviewed whether a method of Internet advertising is patentable subject matter under 35 U.S.C. § 101. The plaintiff, Ultramercial, claimed that their patent (US 7,346,545) was infringed by the defendants, Hulu, YouTube, and WildTangent. US 7,346,545 ("US '545") claims a method for on-line advertising whereby an Internet user is forced to view an advertisement in exchange for the rights to view copyrighted material. After Hulu and YouTube were dropped from the case, WildTangent filed a Rule 12(b)(6) motion to dismiss, arguing that the claims of US '545 are unpatentable abstract ideas. The Central District of California granted WildTangent's motion and Ultramercial appealed.

In his opinion for the Federal Circuit, Chief Judge Rader noted that, while an abstract idea is not patentable a particular application of that abstract idea is. Determining whether or not an application is claimed, rather than the idea itself, involves searching for "meaningful limitations." Claims which include meaningful limitations will not be written in a general form to incorporate every practical application of an abstract idea and often have ties to the use of a particular machine. While the Supreme Court has noted that a mechanical application of the "machine-or-transformation" test is inappropriate, the test may still be helpful in evaluating abstractness.

In reaching its decision, the Federal Circuit determined that US '545 specifically includes ties to computers and the Internet in its method claims. Therefore, the Federal Circuit was not concerned that the claims would pre-empt every possible application of the abstract idea which forms the claim's core, advertising on the internet. Furthermore, the ties to a computer give the claims tangibility and moves them away from the realm of abstract ideas. Based on the foregoing, the Federal Circuit found US '545 to claim patentable subject matter and remanded to the district court for a ruling on the remaining infringement issues.