Paid Search Engine Tools, LLC v. Yahoo! Inc.

746 F. Supp. 2d 808, 2010 U.S. Dist. LEXIS 104142, 2010 WL 3853331
CourtDistrict Court, E.D. Texas
DecidedSeptember 28, 2010
Docket4:07-cv-00403
StatusPublished

This text of 746 F. Supp. 2d 808 (Paid Search Engine Tools, LLC v. Yahoo! Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Paid Search Engine Tools, LLC v. Yahoo! Inc., 746 F. Supp. 2d 808, 2010 U.S. Dist. LEXIS 104142, 2010 WL 3853331 (E.D. Tex. 2010).

Opinion

ORDER

DAVID FOLSOM, District Judge.

Before the Court is Defendants’ Statement of Objections to the Magistrate Judge’s Report and Recommendation Regarding Google Inc.’s and Microsoft Corp.’s Motion for Summary Judgment of Invalidity. Dkt. No. 179. Also before the Court are Plaintiffs Response, Defendants’ Reply, and Plaintiffs Sur-Reply. Dkt. Nos. 187, 189, and 195, respectively. Having considered all the relevant papers and pleadings, the Court finds that Defendants’ Objections to the Magistrate Judge’s Report and Recommendation should be overruled.

I. BACKGROUND

On September 13, 2007, Plaintiff Paid Search Engine Tools, LLC (“PSET”) initiated this patent infringement suit against Yahoo! Inc. alleging infringement of U.S. Patent No. 7,043,450 (“the '450 patent”). Dkt. No. 1. On February 12, 2008, PSET filed a separate suit against Google, Inc. (“Google”) and Microsoft Corp. (“Microsoft”) (collectively, “Defendants”) also alleging infringement of the '450 patent. See Paid Search Engine Tools, LLC v. Google, Inc., No. 2:08-CV-061 (E.D.Tex.). *811 On June 4, 2009, the undersigned ordered that the second suit be consolidated with the above-captioned cause. Dkt. No. 62. The undersigned also ordered that the consolidated action be referred to the Honorable Chad Everingham for case management. Id. Judge Everingham issued a claim construction order on May 10, 2010, 2010 WL 1904545. 1

Defendants filed a motion for summary judgment of invalidity as to the '450 patent arguing that claims 12, 13, 15, 18, and 22 are invalid as anticipated by U.S. Patent No. 7,225,151 to Konia (“Konia”). The Federal Circuit recently addressed the scope of Konia in Bid for Position, LLC v. AOL, LLC, 601 F.3d 1311 (2010).

Magistrate Judge Everingham issued a Report and Recommendation (“Recommendation”) on July 7, 2010 recommending granting in part and denying in part Defendants’ motion for summary judgment. Dkt. No. 172. Specifically, the Magistrate Judge recommended granting the motion as to claims 12, 18, and 22 and denying the motion as to claims 13 at 15.

II. REPORT AND RECOMMENDATION

The Magistrate Judge found that dependent claims 13 and 15 were not anticipated by Konia. Dkt. No. 172 at 9. Claim 13 recites: “The method of claim 12 wherein the identified change creates a differential in offers meeting certain criteria.” Claim 15 states: “The method of claim 14 wherein the criteria identify differentials between offers larger than a minimum currency amount.”

Defendants argued that Konia anticipates both claims. Defendants cited Konia’s disclosure of “If a system finds that the bidder has achieved the proper position in the search engine with respect to the current term being processed, the system may reduce the bid to a minimum which allows the bidder to keep the position, step 210.” Id. at 9-10. The “minimum which allows the bidder to keep the position,” argued Defendants, corresponded to the “minimum currency amount” of claims 13 and 15. Id. at 10.

The Magistrate Judge disagreed and found that the “minimum currency amount” of claims 13 and 15 refers to “the difference between bids, not the value of the next lower bid.” Id. (emphasis in original). The Magistrate Judge found that claims 13 and 15 “thus refer to a minimum increment or decrement in which bids may be raised or lowered” such that “a bid optimization opportunity occurs when the differences between bids exceeds the minimum bid decrement amount.” Id. Finding this lacking in Konia, the Magistrate Judge recommended denying Defendants’ motion as to claims 13 and 15. Id.

III. DEFENDANTS’ OBJECTIONS

Defendants object reurging their previous argument that Konia discloses that a bid may be increased or decreased if the difference exceeds a minimum amount. Dkt. No. 179 at 2. Defendants submit that “Konia discloses that ‘[i]f the system finds that the bidder has achieved the proper position in the search engine with respect to the current term being processed, the system may reduce the bid to a minimum which allows the bidder to keep the position.’ ” Id. at 3. Accordingly, Defendants contend that since the Konia system “may” reduce a bid to a minimum, Konia teaches *812 the very conditional bid changing features required by claims 13 and 15. Id. Defendants add, “If the difference between the bidder’s bid and the next lower bid did not exceed the ‘minimum bid increment or decrement in which bids may be raised or lowered’ in the auction system, as required by claims 13 and 15, then Konia could not reduce the bidder’s bid without losing the bidder’s desired position.” Id. Defendants also argue that the Recommendation applied an improper claim construction and should not have required proof of invalidity by clear and convincing evidence. Id. at 4-5.

IV. DISCUSSION

A. Legal Principles

In a motion for summary judgment, the moving party has the initial burden of showing that there is no genuine issue of any material fact and that judgment should be entered as a matter of law. Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). “The evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). An issue is “material” where it involves a fact that might affect the outcome of the suit under the governing law of the underlying cause of action. See Burgos v. S.W. Bell Tel. Co., 20 F.3d 633, 635 (5th Cir.1994) (citing Anderson, 477 U.S. at 248, 106 S.Ct. 2505). The nonmovant is not required to respond to a motion for summary judgment until the movant first meets its burden of demonstrating that there are no factual issues warranting trial. Ashe v. Corley, 992 F.2d 540 (5th Cir.1993). Once the movant has shown the absence of material fact issues, however, the opposing party has a duty to respond, via affidavits or other means, asserting specific facts showing that there is a genuine issue for trial. Fed. R. Civ. P. 56(e).

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746 F. Supp. 2d 808, 2010 U.S. Dist. LEXIS 104142, 2010 WL 3853331, Counsel Stack Legal Research, https://law.counselstack.com/opinion/paid-search-engine-tools-llc-v-yahoo-inc-txed-2010.