1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION 7 8 THE RECEIVERSHIP ESTATE OF Case No. 22-cv-04756-EJD AUDIENCESCIENCE INC., et al., 9 ORDER GRANTING DEFENDANTS’ Plaintiffs, MOTION FOR JUDGMENT ON THE 10 PLEADINGS v. 11 GOOGLE LLC, et al., Re: ECF No. 140 12 Defendants.
13 14 Plaintiffs The Receivership Estate of AudienceScience Inc. (“AudienceScience”) and 15 Revitalization Partners, L.L.C. (“Revitalization” and, with AudienceScience, “Plaintiffs”) bring 16 this action against defendants Google LLC (“Google”) and YouTube, LLC (“YouTube and, with 17 Google, “Defendants”), alleging infringement of three patents in violation of 35 U.S.C. § 271. See 18 Compl., ECF No. 1. Now pending before the Court is Defendants’ Motion for Judgment on the 19 Pleadings (the “Motion”), brought pursuant to Federal Rule of Civil Procedure 12(c) on the 20 ground that the claims of the patents at issue are invalid under 35 U.S.C. § 101 because they are 21 directed to patent-ineligible subject matter. See Mot., ECF No. 140. The Court finds the Motion 22 suitable for decision without oral argument pursuant to Civil Local Rule 7-1(b). For the reasons 23 below, the Court GRANTS the Motion. 24 I. BACKGROUND 25 A. Technical Background 26 Plaintiffs allege that Defendants have infringed and continue to infringe three patents-in- 27 suit (together, the “Patents-in-Suit”) owned by AudienceScience, namely U.S. Patent No. 1 7,747,676 (the “’676 Patent”), ECF No. 1-2; U.S. Patent No. 7,882,175 (the “’175 Patent”), ECF 2 No. 1-3; and U.S. Patent No. 8,082,298 (the “’298 Patent”), ECF No. 1-4. See Compl. ¶¶ 13–16, 3 19, 40, 63. Each of the Patents-in-Suit claims priority to U.S. Provisional Patent Application No. 4 60/637,681, filed in December 2004. See ’676 Patent col. 1 ll. 9–11; ’175 Patent col. 1 ll. 9–13; 5 ’298 Patent col. 1 ll. 9–15. The Patents-in-Suit are all directed to the field of electronic advertising 6 and share a common specification. See generally ’676 Patent; ’175 Patent; ’298 Patent; see also 7 Opp’n 4, ECF No. 144. As such, the Court will cite only to the ’676 Patent when referring to the 8 common specification. 9 The Patents-in-Suit teach “an approach to selecting advertising messages for presentation” 10 on webpages intended to address the shortcomings of two conventional approaches to selecting 11 advertising. ’676 Patent col. 2 ll. 21–24. The two conventional approaches described are (1) 12 analyzing the contents of each webpage and selecting advertising based on similar content, and (2) 13 monitoring a user’s behavior on a publisher’s site, assigning the user to a user segment thought to 14 share common interests, and selecting advertising based on the traits of the user segment. See id. 15 at col. 1 ll.47–col. 2. Ll. 20. The Patents-in-Suit describe “[a] software and/or hardware facility 16 used by or on behalf of a publisher to select advertising messages for presentation on pages of the 17 publisher web site based upon both user history and page context.” Id. at col. 2. l. 65–col. 3 l. 1 18 (emphasis added). After identifying advertising messages related to the user history and page 19 context, the described method “then weights each of the collected advertising messages in 20 accordance with its performance score, and randomly selects one or more of the collected 21 advertising messages based on the” performance ratings. Id. at col. 3 ll. 27–30. The “performance 22 score” is a score maintained by advertisers “indicating the extent to which [each] advertising 23 message has generated revenue when previously presented.” Id. at col. 3 ll. 10–13. 24 B. Procedural History 25 Plaintiffs filed their complaint (the “Complaint”) in November 2021 in the Western 26 District of Texas. See Compl. Defendants filed an answer in January 2022. See Answer, ECF 27 No. 28. The action was transferred to this Court in August 2022. See ECF No. 87. The Court 1 held a Markman hearing and claim tutorial in June 2023, and issued a claim construction order on 2 December 18, 2023. See ECF Nos. 122, 123, 139. In the meantime, Defendants moved to amend 3 their original answer and invalidity contentions in November 2023, see ECF No. 133, and filed the 4 instant Motion in December 2023, see Mot. The Court granted the motion to amend, and 5 Defendants filed their amended answer on February 8, 2024. See First Am. Answer (“Am. 6 Answer”), ECF No. 150. The parties agree that the amended answer does not impact the instant 7 Motion. See ECF No. 147. 8 The Motion was fully briefed on February 16, 2024. See Reply, ECF No. 151. The Court 9 took the Motion under submission on March 7, 2024. See ECF No. 156. 10 II. LEGAL STANDARDS 11 A. Motion for Judgment on the Pleadings (Federal Rule of Civil Procedure 12(c)) 12 “After the pleadings are closed—but early enough not to delay trial—a party may move for 13 judgment on the pleadings.” Fed. R. Civ. P. 12(c). A motion for judgment on the pleadings under 14 Rule 12(c) challenges the legal sufficiency of the opposing party’s pleadings, and is “functionally 15 identical” to a motion to dismiss under Rule 12(b)(6). Dworkin v. Hustler Mag., Inc., 867 F.2d 16 1188, 1192 (9th Cir. 1989). “Judgment on the pleadings is properly granted when there is no issue 17 of material fact in dispute, and the moving party is entitled to judgment as a matter of law.” 18 Fleming v. Pickard, 581 F.3d 922, 925 (9th Cir. 2009) (citing Heliotrope Gen., Inc. v. Ford Motor 19 Co., 189 F.3d 971, 979 (9th Cir. 1999)). 20 In evaluating a Rule 12(c) motion, courts must “accept all factual allegations in the 21 complaint as true and construe them in the light most favorable to the non-moving party.” Id. 22 (citing Turner v. Cook, 362 F.3d 1219, 1225 (9th Cir. 2004)). Although a court generally may not 23 consider materials beyond the pleadings, it may “consider facts that ‘are contained in materials of 24 which the court may take judicial notice.’” Heliotrope Gen., Inc. v. Ford Motor Co., 189 F.3d 25 971, 981 n.18 (9th Cir. 1999) (quoting Barron v. Reich, 13 F.3d 1370, 1377 (9th Cir. 1994)). 26 B. Patent Eligibility (35 U.S.C. § 101) 27 “Patent eligibility can be determined on the pleadings under Rule 12(c) when there are no 1 factual allegations that, when taken as true, prevent resolving the eligibility question as a matter of 2 law.” Data Engine Techs. LLC v. Google LLC, 906 F.3d 999, 1007 (Fed. Cir. 2018) (citations 3 omitted). “An invention is patent-eligible if it fits into one of four statutory categories: processes, 4 machines, manufactures, and compositions.” Intellectual Ventures I LLC v. Cap. One Bank (USA) 5 (“Capital One”), 792 F.3d 1363, 1366 (Fed. Cir. 2015) (citing 35 U.S.C. § 101); see also, e.g., 6 Aatrix Software, Inc. v. Green Shades Software, Inc., 882 F.3d 1121, 1125 (Fed. Cir. 2018). These 7 broad categories of patent-eligible materials contain certain implicit exceptions, such that “[l]aws 8 of nature, natural phenomena, and abstract ideas are not patentable.” Ass’n for Molecular 9 Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 589 (2013) (internal quotation marks and 10 citation omitted). The Supreme Court has instructed that courts, in evaluating patent eligibility, 11 “must distinguish between patents that claim the building blocks of human ingenuity and those 12 that integrate the building blocks into something more.” Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 13 573 U.S. 208, 217 (2014) (internal quotations and citation omitted). 14 When a party argues that a patent’s subject matter is directed to an abstract idea and thus 15 not patent-eligible, courts employ a two-step analytical framework. First, the court must 16 “determine whether the claims at issue are directed to a patent-ineligible concept.” Alice, 573 U.S. 17 at 217. “This inquiry is a ‘meaningful one’ and ‘cannot simply ask whether the claims involve a 18 patent-ineligible concept, because essentially every routinely patent-eligible claim involving 19 physical products and actions involves a law of nature and/or natural phenomenon.’” Samsung 20 Elecs. Co. Ltd. v. Blaze Mobile, Inc., 673 F. Supp. 3d 1066, 1072–73 (N.D. Cal. 2023) (quoting 21 Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016)); see also, e.g., 22 ChargePoint, Inc. v. SemaConnect, Inc., 920 F.3d 759, 765 (Fed. Cir. 2019) (“We recognize that 23 ‘at some level, all inventions . . . embody, use, reflect, rest upon, or apply laws of nature, natural 24 phenomena, or abstract ideas.’”) (internal alterations and punctuation omitted) (quoting Alice, 573 25 U.S. at 217). “[T]he ‘directed to’ inquiry applies a stage-one filter to claims, considered in light of 26 the specification, based on whether ‘their character as a whole is directed to excluded subject 27 matter.’” Enfish, 822 F.3d at 1335 (quoting Internet Patents Corp. v. Active Network, Inc., 790 1 F.3d 1343, 1346 (Fed. Cir. 2015)). However, “while the specification may help illuminate the true 2 focus of a claim, when analyzing patent eligibility, reliance on the specification must always yield 3 to the claim language in identifying that focus.” ChargePoint, 920 F.3d at 766. 4 If the court finds the claims are not directed to an abstract idea but rather to patent-eligible 5 subject matter, the inquiry ends in favor of the patent owner. See Data Engine, 906 F.3d at 1007 6 (“If the claims are not directed to a patent-ineligible concept under Alice step 1, ‘the claims satisfy 7 § 101 and we need not proceed to the second step.’”) (quoting Core Wireless Licensing S.A.R.L. v. 8 LG Elecs., Inc., 880 F.3d 1356, 1361 (Fed. Cir. 2018)). But if the claims are directed to an 9 abstract idea, the court must apply Alice step two and “consider the elements of each claim both 10 individually and ‘as an ordered combination’ to determine whether the additional elements 11 ‘transform the nature of the claim’ into a patent-eligible application.” Alice, 573 U.S. at 217 12 (quoting Mayo Collaborative Servs. v. Prometheus Lab’ys, Inc., 566 U.S. 66, 78 (2012)). “The 13 second step of the Alice test is satisfied when the claim limitations ‘involve more than 14 performance of “well-understood, routine, [and] conventional activities previously known to the 15 industry.”’” Berkheimer v. HP Inc., 881 F.3d 1360, 1367 (Fed. Cir. 2018) (quoting Content 16 Extraction & Transmission LLC v. Wells Fargo Bank, Nat’l Ass’n, 776 F.3d 1343, 1347–48 (Fed. 17 Cir. 2014)). Whether the elements of a claim or the claimed combination are well-understood, 18 routine, and conventional activities “is a question of fact” that—if subject to a genuine dispute— 19 “cannot be answered adversely to the patentee based on the sources properly considered on a 20 motion to dismiss,” Aatrix, 882 F.3d at 1128; see also Dworkin, 867 F.2d at 1192 (“[T]he same 21 standard of review applicable to a Rule 12(b) motion applies to its Rule 12(c) analog.”). 22 III. DISCUSSION 23 Defendants argue that Claim 2 of the ’676 Patent, Claim 12 of the ’175 Patent, and Claim 24 12 of the ’298 Patent are representative of remaining claims in their respective patents, see Mot. 7, 25 and that all of the claims recited in the Patents-in-Suit are ineligible under § 101, see id. at 7–18. 26 Plaintiffs respond that Defendants’ argument is based on inadmissible attorney-created evidence 27 rather than the language of the Patents-in-Suit, so that issues of fact preclude consideration of the 1 Motion, see Opp’n 11–13; that “numerous dependent claims . . . must be considered in a section 2 101 analysis,” see id. at 11; and that the Patents-in-Suit are directed to patent-eligible subject 3 matter under the Alice framework, see id. at 13–25. The Court first addresses whether there exist 4 any factual disputes foreclosing the Alice analysis, and—finding none—evaluates which claims, if 5 any, are representative before turning to the substance of the Alice analysis. 6 A. Factual Disputes 7 Plaintiffs argue that the Motion is premature and precluded by issues of fact. See Opp’n 8 11–13. Plaintiffs base this argument on Defendants’ submission of a color-coded chart reciting 9 the language of each of the claims at issue, see id. at 11, and on the assertion that Defendants 10 “present[] attorney argument describing the claimed technology as if they were substantiated 11 expert opinions,” id. at 12. With respect to Defendants’ chart—submitted in support of their 12 arguments regarding the representative claims, see Mot. 7—the Court disagrees with Plaintiffs’ 13 argument that Defendants failed to properly rely on the Complaint’s exhibits attaching the Patents- 14 in-Suit, as the chart recites verbatim the language of the asserted claims. Nonetheless, as 15 evidenced below, see infra, at Part III(B), the Court does not rely on Defendants’ chart in 16 analyzing the representative claims. 17 With respect to Plaintiffs’ second argument, it appears to the Court that Plaintiffs have 18 confused the standard for evaluating the existence of factual disputes. Plaintiffs argue that 19 Defendants’ Motion includes attorney argument “in lieu of properly submitted expert testimony,” 20 Opp’n 12, but such testimony would be improper on a Rule 12(c) motion. See Fed. R. Civ. P. 21 12(d) (“If, on a motion under Rule 12(b)(6) or Rule 12(c), matters outside the pleadings are 22 presented to and not excluded by the court, the motion must be treated as one for summary 23 judgment under Rule 56.”). Further, as Plaintiffs note, patent eligibility may be determined on the 24 pleadings “only when there are no factual allegations that, taken as true, prevent resolving the 25 eligibility question as a matter of law.” Id. at 12 (quoting Aatrix, 882 F.3d at 1125). Accordingly, 26 “[t]he existence of factual disputes does not render [a Rule 12(c) motion on § 101 ineligibility] 27 improper.” Barbaro Techs., LLC v. Niantic, Inc., 475 F. Supp. 3d 1007, 1011 (N.D. Cal. 2020). 1 “It simply means all allegations must be accepted as true and construed in the light most favorable 2 to the non-moving party.” Id.; see also Aatrix, 882 F.3d at 1125; SAP Am., Inc. v. InvestPic, LLC, 3 898 F.3d 1161, 1166 (Fed. Cir. 2018), cert. denied, 139 S. Ct. 2747 (2019), reh’g denied, 140 S. 4 Ct. 27 (2019) (noting § 101 ineligibility “may be, and frequently has been, resolved on a Rule 5 12(b)(6) or (c) motion”). Plaintiffs do not identify any factual allegations in the Complaint or the 6 Patents-in-Suit that preclude resolution of a § 101 motion.1 The Court thus finds that the Motion 7 is not premature or otherwise precluded by factual disputes. It considers the parties’ arguments 8 based only on the pleadings, including the Patents-in-Suit attached as exhibits to the Complaint. 9 B. Representative Claims 10 “Courts may treat a claim as representative in certain situations, such as if the patentee 11 does not present any meaningful argument for the distinctive significance of any claim limitations 12 not found in the representative claim or if the parties agree to treat a claim as representative.” 13 Berkheimer, 881 F.3d at 1365 (citing Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1352 14 (Fed. Cir. 2016); Intellectual Ventures I LLC v. Symantec Corp., 838 F.3d 1307, 1316 & n.9 (Fed. 15 Cir. 2016)). Although Plaintiffs state that the Patents-in-Suit include “numerous dependent claims 16 that must be considered in a section 101 analysis,” Opp’n 11, they include no argument at all on 17 what those claims might be and what limitations they contain that are not found in the claims 18 Defendants contend are representative, i.e., Claim 2 of the ’676 Patent, Claim 12 of the ’175 19 Patent, and Claim 12 of the ’298 Patent. However, Plaintiffs argue generally that the Patents-in- 20 Suit include claims directed to two improvements over the conventional approaches to ad 21 selection, i.e., (1) using a performance score and (2) considering both current page context and 22 individual user history, see Opp’n 15, and additionally that the Patents-in-Suit assert claims 23 directed to the application of performance scores to execute weighted selections of (1) ads, (2) 24 subjects, and (3) keywords, see id. at 9. Plaintiffs state that Claim 1 of the ’676 Patent, Claims 1 25
26 1 As Defendants note, see Reply 3, fact discovery had nearly concluded by the time Plaintiffs filed 27 their opposition, so that Plaintiffs presumably had the ability to raise any factual issues that may have arisen over the course of discovery. 1 and 22 of the ’175 Patent, and Claim 1 of the ’298 Patent relate to the approach of considering 2 both page context and user history and applying performance scores to ads, and appear to suggest 3 that Claim 1 of the ’298 Patent is representative of this group of claims. See id. at 15. Plaintiffs 4 further state that Claims 2 and 10 of the ’676 Patent, Claims 12 and 33 of the ’175 Patent, and 5 Claim 12 of the ’298 Patent relate to the application of performance scores to subjects or keywords 6 associated with ads, and appear to suggest that Claim 10 of the ’676 Patent is representative of 7 these claims. See id. at 16–17. 8 Having reviewed the claims in each of the Patents-in-Suit, the Court agrees with Plaintiffs 9 that no single claim in any of the patents is entirely representative of the limitations, particularly 10 with respect to whether the claim limitations are directed to the weighting of advertising messages, 11 subjects, or keywords. The Court finds that Claims 1, 2, and 10 of the ’676 Patent are 12 representative of the remainder of the claims in that patent, and likewise with Claims 1, 12, and 33 13 of the ’175 Patent and Claims 1 and 12 of the ’298 Patent (collectively, the “Representative 14 Claims”).2 Further, Claim 1 of each of the Patents-in-Suit are representative of the claims across 15 the three patents that recite a method—or computer-readable device that causes the computer to 16 perform the method3—for selecting advertising messages based on the weighting of advertising 17 messages by revenue generation; Claim 2 of the ’676 Patent and Claim 12 of the ’175 Patent are 18 representative of claims reciting a method or device for ad selection based on weighting 19 advertising subjects by revenue generation; and Claim 10 of the ’676 Patent, Claim 33 of the ’175 20 Patent, and Claim 12 of the ’298 Patent are representative of claims reciting a method or device 21 for ad selection based on weighting advertising keywords (which describe advertising subjects) by 22 revenue generation. The Representative Claims are copied below. 23
24 2 Although the Court’s list of representative claims differs from that proposed by Defendants, 25 Defendants’ arguments under Alice are applicable because they address the same set of limitations; the Court has merely expanded the claims necessary to represent those limitations. 26 3 The Court notes that the limitations of the “device” claims expressly relate to the “method” that 27 the device causes a computing system to perform. See, e.g., ’676 Patent, Claim 2; ’175 Patent, Claim 22. 1. ’676 Patent 1 a. Claim 1 2 1. A method performed by a computing system having a processor 3 and a memory for selecting an advertising message for inclusion in a requested web page, comprising: 4 receiving a page request sent by a user identifying the requested page; 5 adding the requested page to a page request history listing pages recently requested by the user; 6 using a mapping from pages to keywords describing those pages to identify a set of keywords each mapped to from at least one 7 of the pages listed in the page request history; using a mapping from keywords to advertising messages 8 described by those keywords to identify a set of advertising messages each mapped to from at least one of the identified 9 set of keywords; to each of the identified set of advertising messages, attributing a 10 selection weighting reflecting the advertising message’s relative performance, wherein the relative performance is 11 determined by a performance score that indicates the extent to which the advertising message has generated revenue; 12 selecting one advertising message of the identified set of advertising messages in accordance with the selection 13 weightings attributed to the advertising messages of the identified set of advertising messages; and 14 responding to the page request with a version of the requested page that includes an instruction to display the selected 15 advertising message within the page, wherein code implementing the method is stored in the memory of the 16 computing system for execution by the processor of the computing system. 17 b. Claim 2 18 2. A computer-readable storage medium whose contents cause a 19 computing system to perform a method for designating an advertising message for inclusion in a requested page, and method comprising: 20 receiving a page request sent by a user identifying the requested page; 21 determining a set of subjects each relating to at least one of a set of pages recently visited by the user, the set of pages including 22 the requested page by virtue of the page request for the requested page; 23 from among the set of subjects, randomly selecting one subject in accordance with a selected weighting for each subject based 24 upon a performance score attributed to the subject that reflects the performance of advertising messages selected using the 25 subject, wherein the performance score indicates the extent to which the advertising messages selected using the subject 26 have generated revenue; and responding to the page request with a version of the requested 27 page that includes an instruction to select an advertising message for display within the page on the basis of the 1 selected subject. 2 c. Claim 10
3 10. A method performed by a computing system having a processor and a memory for designating an advertising message to present to a 4 user via a selected device in connection with a selected instance of electronic content presented via the selected device, comprising: 5 for the selected instance of electronic content and any other instances of electronic content previously presented via the 6 selected device during an immediately preceding period of time of preselected length, distinguishing any keywords 7 identified as corresponding to the instance of electronic content; 8 weighting each of the distinguished keywords based upon the expected level of performance of advertising messages 9 identified as corresponding to the distinguished keyword, wherein the expected level of performance indicates the extent 10 to which advertising messages selected using the distinguished keyword have generated revenue; and 11 randomly selecting one of the distinguished keywords in accordance with their weights for use in selecting an 12 advertising message to present in connection with the selected instance of electronic content via the selected device, wherein 13 code implementing the method is stored in the memory of the computing system for execution by the processor of the 14 computing system. 15 2. ’175 Patent 16 a. Claim 1
17 1. A method in a computing system for selecting an advertising message for inclusion in a requested page, comprising: 18 receiving a page request sent by a user identifying the requested page; 19 determining a set of subjects each relating to at least one of a set of pages recently visited by the user, the set of pages including 20 the requested page by virtue of the page request for the requested page; 21 from among a set of advertising messages each indicated to relate to at least one of the set of subjects, randomly selecting one 22 advertising message in accordance with a selection weighting for each advertising message based upon the performance of 23 the advertising message, wherein the performance of the advertising message is determined by a performance score 24 that indicates the extent to which the advertising message has generated revenue; and 25 responding to the page request with a version of the requested page that includes the selected advertising message. 26 b. Claim 12 27 12. A computer-readable storage device whose contents cause a 1 computing system to perform a method for designating an advertising message for inclusion in a requested web page, the method 2 comprising: receiving a web page request set by a user identifying the 3 requested web page; identifying a set of subjects each relating to at least one of a set of 4 web pages recently visited by the user, the set of webpages including the requested web page by virtue of the web page 5 request for the requested web page; from among the set of subjects, selecting one subject in 6 accordance with a selection weighting for each subject based upon a performance score attributed to the subject that reflects 7 the performance of advertising messages selected using the subject, wherein the performance score indicates the extent to 8 which the advertising messages selected using the subject have generated revenue; and 9 responding to the web page request with a version of the requested web page that includes an instruction to select an advertising 10 message for display within the web page on the basis of the selected subject. 11 c. Claim 33 12 33. A method for designating an advertising message to present to a 13 user via a selected device in connection with a selected instance of electronic content presented via the selected device, comprising: 14 for the selected instance of electronic content and any other instances of electronic content previously presented via the 15 selected device during preceding period of time of preselected length, distinguishing any keywords identified as 16 corresponding to the instance of electronic content; weighting each of the distinguished keywords based upon the 17 expected level of performance of advertising messages identified as corresponding to the distinguished keyword, 18 wherein the expected level of performance indicates the extent to which advertising messages selected using the 19 distinguished keyword have generated revenue; and selecting one of the distinguished keywords in accordance with 20 their weights for use in selecting an advertising message to present in connection with the selected instance of electronic 21 content via the selected device. 22 3. ’298 Patent 23 a. Claim 1
24 1. A method in a computing system for selecting an advertising message for inclusion in a requested page, comprising: 25 receiving a page request sent by a user identifying the requested page; 26 from among a set of advertising messages each indicated to relate to at least one of a set of subjects, randomly selecting one 27 advertising message in accordance with a selection weighting for each advertising message based upon the performance of 1 the advertising message, wherein the performance of the advertising message is determined by a performance score 2 that indicates the extent to which the advertising message has generated revenue; and 3 responding to the page request with a version of the requested page that includes the selected advertising message. 4 b. Claim 12 5 12. A computer-readable device whose contents cause a computing 6 system to perform a method for designating an advertising message for inclusion in a requested web page, the method comprising: 7 receiving a web page request set by a user identifying the requested web page; 8 identifying a set of keywords each relating to at least one of a set of web pages recently visited by the user; 9 from among the set of keywords, selecting one keyword in accordance with a selection weighting for each keyword based 10 upon a performance score attributed to the keyword that reflects the performance of advertising messages selected 11 using the keyword, wherein the performance score indicates the extent to which the advertising messages selected using 12 the keyword have generated revenue; and responding to the web page request with a version of the requested 13 web page that includes an instruction to select an advertising message for display within the web page on the basis of the 14 selected keyword. 15 C. Alice Step One – Whether the Claims are Directed to an Abstract Idea 16 Defendants argue that the claims in the Patents-in-Suit are “directed to the abstract idea of 17 using information about a consumer’s interests and past ad performance to target ads to the 18 consumer.” Mot. 8. Plaintiffs counter that the claims “are not abstract (and thus pass the first step 19 of the Alice test) because they are directed to specific improvements to Internet ad technology.” 20 Opp’n 17. More specifically, Plaintiffs argue that “the use of performance scores to allow a 21 weighted selection of ads is a new and useful feature” that “improves upon the functionality of 22 Internet advertising.” Id. at 18–19. Plaintiffs further argue that “Internet ad systems have access 23 to information not otherwise obtainable or usable by traditional media” and that the Patents-in-Suit 24 recite specific improvements to “leverage this new information in novel ways to allow webpages 25 and other online services to deliver relevant, useful, and interesting ads to end users – all in a 26 technological manner, e.g., using Internet ad servers.” Id. at 19. Plaintiffs concede that 27 information tailoring is not new, but argue that their claims “are not limited to that practice, but to 1 a solution to an Internet-centric problem caused by electronic advertisement technology” because 2 the claims “explain exactly how advertisements are selected . . . by virtue of implementing a 3 performance score and a weighted selection of ads.” Id. at 20. 4 “In this first step” of the Alice test, the Court “consider[s] the claims ‘in their entirety to 5 ascertain whether their character as a whole is directed to excluded subject matter.’” ChargePoint, 6 920 F.3d at 766 (quoting Internet Patents Corp. v. Active Network, Inc., 790 F.3d 1343, 1346 7 (Fed. Cir. 2015)). Claim 10 of the ’676 Patent and Claim 33 of the ’175 Patent both culminate in 8 the selection of a keyword “for use in selecting an advertising message,” and the remaining 9 Representative Claims recite a response to a user’s web page request with either a selected 10 advertising message or a computer-readable instruction to select an advertising message. Claim 11 10 of the ’676 Patent and Claim 33 of the ’175 Patent begin with a step of distinguishing a set of 12 keywords based on the recent prior history of a user’s electronic device, while the remaining 13 Representative Claims begin with the receipt of a user’s web page request. The intervening steps 14 of the Representative Claims all involve the identification or use of keywords or subjects related to 15 the requested web page or previously viewed electronic content in order to create either a set of 16 advertising messages from which one will be selected for display, or (in the case of Claim 10 of 17 the ’676 Patent and Claim 33 of the ’175 Patent) or a set of keywords from which a keyword will 18 be selected for use in selecting an advertisement to display. Lastly, each claim teaches a 19 weighting of either advertising messages, keywords, or subjects by scoring based on revenue 20 generation. The claim language, considered as whole, appears directed to the idea of targeting 21 advertisements to internet users to maximize revenue generation. 22 The common specification of the Patents-in-Suit supports this understanding of the claim 23 language. The specification’s “Background” section states that “[p]ublishers have an incentive to 24 maximize the extent to which the advertising messages presented to each user are relevant to that 25 user,” and that “the greater [the] extent to which the advertising messages presented to a 26 particular user are relevant to that user, the more revenue the publisher can expect to derive from 27 presenting” the advertisement. ’676 Patent, col. 1 ll. 38–43. Based on this contextual framework, 1 the Patents-in-Suit begin the “Detailed Description” section by explaining that the claims teach a 2 “facility used by or on behalf of a publisher to select advertising messages for presentation . . . 3 based upon both user history and page context.” Id. at col. 2 l. 65–col. 3 l. 1. Accordingly, 4 “embodiments of the facility are able to take advantage of both page context and user history to 5 select advertising messages likely to be relevant to the user, the most remunerative to the 6 publisher, and/or the most effective for the advertiser.” Id. at col. 4 ll. 31–36. 7 Accordingly, based on the language of the Representative Claims and the common 8 specification, the Court determines that the claims asserted by Plaintiffs are directed to the idea of 9 targeting advertisements to internet users to maximize revenue generation. The Federal Circuit 10 has repeatedly held that the concept of tailoring advertisements to a viewer based on various 11 collected information is an abstract idea under Alice step one. See Capital One, 792 F.3d at 1370 12 (“An advertisement taking into account the time of day and tailoring the information presented to 13 the user based on that information is another ‘fundamental . . . practice long prevalent in our 14 system . . . .’”) (quoting Alice, 573 U.S. at 219); Bridge & Post, Inc. v. Verizon Commc’ns, Inc., 15 778 F. App’x 882, 887 (Fed. Cir. 2019) (“Targeted marketing is a form of ‘tailoring information 16 based on [provided] data,’ which we have previously held is an abstract idea.”) (alternation in 17 original) (quoting Capital One, 792 F.3d at 1369); In re Morsa, 809 F. App’x 913, 917 (Fed. Cir. 18 2020) (“Here, the claim recites both targeted advertising and bidding to display the advertising, 19 which are both abstract ideas relating to customizing information based on the user and matching 20 them to the advertiser.”) (quoting RecogniCorp, LLC v. Nintendo Co., 855 F.3d 1322, 1327 (Fed. 21 Cir. 2017)). And no party suggests that the idea of maximizing revenue is anything but a 22 “fundamental economic practice long prevalent in our system of commerce.” Alice, 573 U.S. at 23 219 (quoting Bilski v. Kappos, 561 U.S. 593, 611 (2010)). 24 Further, although Plaintiffs argue that the Patents-in-Suit are directed to specific 25 technological improvements and solve an internet-centric problem in advertising, see Opp’n 18– 26 20, the Court can find nothing in the Complaint, the Patents-in-Suit, or Plaintiffs’ Opposition that 27 indicates such a problem or solution. According to the common specification of the Patents-in- 1 Suit, the prior art related to internet advertising used either page context or user history to tailor 2 web page advertisements, and the primary claimed advance is the use of both sets of information. 3 See ’676 Patent, col. 1 ll. 47–51, col. 2 ll. 1–3, col. 2 l. 65–col. 3 l. 1. The problem solved by this 4 advance is one of better tailoring of information, which is not internet-centric; as such, the Patents- 5 in-Suit recite an application of the idea of using additional targeting information to an internet 6 environment. See DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245, 1259 (Fed. Cir. 2014) 7 (noting that solution “for resolving [a] particular Internet-centric problem” may be patent eligible, 8 but that application of a “known business process to the particular technological environment of 9 the Internet” does not confer eligibility); Enfish, 822 F.3d at 1338 (distinguishing inventions that 10 “simply add[] conventional computer components to well-known business practices” from those 11 “directed to an improvement in the functioning of a computer”); cf. Klaustech, Inc. v. AdMob, Inc., 12 No. C 10-05899, 2015 WL 10791915, at *3 (N.D. Cal. Aug. 31, 2015) (finding claimed invention 13 solved technical problem unique to internet technology where invention related to non-scrolling 14 advertisement display frame on internet browser and allowed ad frame to appear in browser 15 without being part of hosting website).4 16 Likewise, the performance score concept is directed to the decidedly non-internet-centric 17 problem of selecting the most effective ad—in terms of revenue generation—for a given audience. 18 See, e.g., Capital One, 792 F.3d at 1370 (“For example, a television channel might choose to 19 present a commercial for children’s toys during early morning cartoon programs but beer during 20 an evening sporting event.”); see also Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 715 (Fed. 21 Cir. 2014) (“Although certain additional limitations, such as consulting an activity log, add a 22 degree of particularity, the concept embodied by the majority of the limitations describes only the 23
24 4 Plaintiffs also cite to Google LLC v. EcoFactor, Inc., 602 F. Supp. 3d 1265 (N.D. Cal. 2022), but 25 this case concerns specific improvements to a physical HVAC system and is thus inapposite, particularly in light of the numerous cases regarding advertising technology decided by courts in 26 this district and by the Federal Circuit. See Samsung Elecs., 673 F. Supp. 3d at 1075 (“Whether or not an idea is abstract is generally determined by ‘comparing claims at issue to those claims 27 already found to be directed to an abstract idea in previous cases.’”) (alterations omitted) (quoting Enfish, 822 F.3d at 1334). 1 abstract idea of showing an advertisement before delivering free content.”). Plaintiffs’ arguments 2 about the specific limitations of the performance score, see Opp’n 20, are relevant to step two of 3 Alice, rather than step one, and the Court evaluates those arguments in the following section. See 4 Affinity Labs, 838 F.3d at 1257–58 (explaining that the “abstract idea” inquiry requires evaluation 5 of the “claims ‘character as a whole,’” while the “‘inventive concept’ step requires us to look with 6 more specificity at what the claim elements add”) (citations omitted). 7 For the foregoing reasons, the Court finds that the Representative Claims are directed to 8 the abstract idea of targeting advertisements to internet users to maximize revenue generation, and 9 turns now to step two of the Alice test. 10 D. Alice Step Two – Whether the Claims Recite an Inventive Concept 11 Step two of the Alice analysis requires that the Court engage in a search for an “inventive 12 concept,” i.e., a review of the claim elements, both individually and as an ordered combination, for 13 a concept that “in practice amounts to significantly more than a patent upon the [abstract idea] 14 itself.” Mayo, 566 U.S. at 72–73 (citation omitted); see also Bascom Glob. Internet Servs., Inc. v. 15 AT&T Mobility LLC, 827 F.3d 1341, 1349 (Fed. Cir. 2016) (“An inventive concept that transforms 16 the abstract idea into a patent-eligible invention must be significantly more than the abstract idea 17 itself, and cannot simply be an instruction to implement or apply the abstract idea on a computer.”) 18 (citing Alice, 573 U.S. at 223). A claim may be patent-eligible where an ordered combination of 19 elements provides a technical improvement over the prior art, even if its individual elements are 20 generic or conventional. See, e.g., Bascom, 827 F.3d at 1350 (holding claims patent-eligible due 21 to “an inventive concept . . . in the non-conventional and non-generic arrangement of [the] known, 22 conventional pieces”). 23 Defendants argue that Plaintiffs’ claimed invention lacks any inventive concept because 24 the claims recite only “generic computer components” such as a CPU, memory, and network 25 connection; the Patents-in-Suit do not describe specific mechanisms for accomplishing the steps 26 but instead “treat each of these [components] as well-understood steps”; the use of past 27 advertisement and keyword performance is “merely implementing a task of organizing web pages 1 and advertising messages”; and the dependent claims add only abstract ideas. See Mot. 15–18. 2 Plaintiffs counter that the common specification’s description of the process for selecting 3 advertising messages based on user history, page context, and performance scores—which the 4 Court must take as true on a motion for judgment on the pleadings—requires the conclusion that 5 the claims “are plausibly directed to specific improvements in Internet advertising technology over 6 the conventional approaches described in the specification.” Opp’n 23. Plaintiffs further 7 “invite[]” the Court to consider the Statements of Reasons for Allowability from the PTO, which 8 are “part of the public record,” and argue that Defendants’ description of the claims is overly 9 reductive and “misses the point that the conventional approaches were problematic, and the 10 Asserted Patents disclose a novel solution of performance scores to select ads based for individual 11 users . . . among other things, to overcome the issues.” Id. at 24–25. Additionally, Plaintiffs 12 argue—albeit in their discussion of Alice step one, see Opp’n 20—that the leveraging of 13 performance scores to select and deliver advertisements is an inventive improvement, and that the 14 claims “explain exactly how advertisements are selected.” 15 Plaintiffs’ argument boils down to the circular position that the Patents-in-Suit recite an 16 inventive concept because they state that the claimed invention “overcame some or all of the 17 shortcomings of the [] conventional approaches,” see ’676 Patent, col. 2 ll. 22–24, and then 18 describe the steps recited in the claims. See Opp’n 22–23. But accepting this position leads to the 19 incorrect conclusion that essentially no infringement suit could be dismissed on the pleadings, as 20 patents generally—if not always—explain the purported advances over the prior art. See In re 21 Morsa, 809 F. App’x at 918 (“Although Mr. Morsa alleges that the Proposed Claims are ‘directed 22 to improving an existing technological process in the technical field of advertising over the 23 Internet/computer networks,’ . . . we have recognized that similar claims directed to advertising do 24 not ‘transform the abstract idea into a patent-eligible invention.”) (internal alterations and citations 25 omitted). The Alice step two analysis requires more than the acceptance of the general statement 26 in the common specification that the Patents-in-Suit are directed to overcoming identified 27 shortcomings of the prior art approaches. See Cisco Sys., Inc. v. Uniloc 2017 LLC, 813 F. App’x 1 495, 499 (Fed. Cir. 2020) (“Step two ‘looks more precisely at what the claim elements add’ to 2 determine if ‘they identify an inventive concept in the application of the ineligible matter to which 3 . . . the claim is directed.’”) (quoting SAP, 898 F.3d at 1167). 4 Reviewing the elements of the Representative Claims and the common specification first 5 shows that “neither the claim[s] nor the specification provide[] for implementation of the abstract 6 idea using anything other than existing, conventional technology.” Cisco, 813 F. App’x at 499. 7 The Representative Claims recite steps using conventional computer technologies such as “a 8 computing system,” “a processor,” “a memory,” “a computer-readable storage medium,” and “a 9 computer-readable device.” See, e.g., ’676 Patent, cl. 1; ’175 Patent, cl. 12; ’298 Patent, cl. 12. 10 Further, the common specification itself describes as “conventional” the two independent 11 advertising methods—i.e., the use of user history or page context to target an internet 12 advertisement to a user—that the Patents-in-Suit claim to combine. See ’676 Patent, col. 1 l. 47– 13 col. 2 l. 20. The recitation in the claims of the combination of these conventional approaches 14 involves generic steps such as adding a page request to a user’s page request history and mapping 15 descriptions—whether keywords or subject tags—of the current page and prior pages to 16 advertisements. See ’676 Patent, cl. 1; ’175 Patent, cls. 1, 12; ’298 Patent, cls. 1, 12; see also ’676 17 Patent, cl. 10 (reciting use of keyword descriptions of prior electronic content, rather than web 18 pages, accessed by user on a device); ’175 Patent, cl. 33 (same); id. cl. 22 (same except using 19 “subject” descriptions rather than keywords). 20 Nor does the selection of an advertisement using weighted performance scores for subjects, 21 keywords, or advertising messages constitute an inventive concept. First, although Plaintiffs argue 22 that the weighting of advertisements or their keyword and subject descriptors by revenue was an 23 advancement over prior art, neither the Complaint nor the Patents-in-Suit contain any allegations 24 or statements to this effect. See generally Compl.; ’676 Patent; ’175 Patent; ’298 Patent. 25 Nonetheless, the Court will make this inference in Plaintiffs’ favor in evaluating this pleading- 26 stage motion. Even so assuming, it is telling that the Patents-in-Suit do not describe a precise 27 method of weighting beyond stating that the relevant category to be weighted, i.e., advertising 1 messages, keywords, or subjects, is to be rated by revenue generated. See, e.g., ’676 Patent, col. 3 2 ll. 10–13 (“The advertiser further maintains a performance score for each advertising message 3 indicating the extent to which the advertising message has generated revenue when previously 4 presented.”); id. cl. 1, col. 9 ll. 48–53 (“attributing a selection weighting reflecting the advertising 5 message’s relative performance . . . determined by a performance score that indicates the extent to 6 which the advertising message has generated revenue”). So described, the performance score 7 recites the essential concept of ranking an advertisement by economic performance, which goes to 8 the central purpose of advertising and, without a more specific method of weighting which can be 9 evaluated for inventiveness, cannot be said to add an inventive concept to advertising on the 10 internet or otherwise. See Cisco, 813 F. App’x at 496, 499 (affirming Rule 12(c) dismissal of 11 claim “directed to the abstract idea of ‘ranking stations based on antenna performance 12 characteristics and selecting the station with the highest rank to act as master in a network’” where 13 alleged inventive concept of forming network with stations ranked by antenna performance was 14 “coincident with the abstract idea itself). 15 Accordingly, the Court finds that the Representative Claims do not include individual 16 elements or an ordered combination of elements that “‘transform[s] the nature of the claim’ into a 17 patent-eligible application.” Alice, 573 U.S. at 218 (quoting Mayo, 566 U.S. at 78–79). Further, 18 because the Court’s findings in each step of the Alice analysis is based on the language of the 19 Patents-in-Suit, it finds that amendment of the Complaint would be futile. 20 // 21 // 22 23 24 25 26 27 1 |} IV. CONCLUSION 2 For the foregoing reasons, it is hereby ORDERED that Defendants’ motion for judgment 3 || onthe pleadings is GRANTED. The Complaint is DISMISSED WITHOUT LEAVE TO 4 || AMEND. Accordingly, Defendants’ recently filed Motion for Leave to Amend First Amended 5 Answer, ECF No. 165, the accompanying administrative motions to seal, ECF Nos. 163-64, and 6 || all pending dates and deadlines are TERMINATED AS MOOT. 7 The Clerk of Court shall close the file in this matter. 8 9 IT IS SO ORDERED. 10 Dated: May 2, 2024 11 EDWARD J. DAVILA 12 United States District Judge
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Z 18 19 20 21 22 23 24 25 26 27 28 || Case No.: 22-cv-04756-EJD ORDER GRANTING DEFS.’ MOT. J. ON THE PLEADINGS