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Method of Monetizing Copyrighted Content on Internet is Patent-Eligible

Ultramercial v. Hulu and Wildtangent, Dkt. No. 2010-1544 (Fed. Cir. Sept 15, 2011) [PDF].

Update: WildTangent appealed to U.S. Supreme Court and The Court vacated the Federal Circuit’s decision discussed below and remanded the case the Federal Circuit to consider in light of Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U. S. ___ (2012).

Second Update: On remand from the Supreme Court, the Federal Circuit again found that the claimed method of monetizing copyrighted content on the Internet was a patent-eligible process.

Ultramercial sued Hulu, YouTube, and Wildtangent Inc. alleging each infringed U.S. Patent 7,346,545. Hulu and YouTube were dismissed from the case. The trial court granted WildTangent’s motion to dismiss WildTangent from the case on the basis that the ‘545 patent did not claim patent-eligible subject matter. The Federal Circuit reversed finding the claimed method of monetizing copyrighted content on the Internet was a patent-eligible process.

The ‘545 patent claims a method for distributing copyrighted products over the Internet where a consumer receives a copyrighted product for free after viewing an advertisement. The advertiser pays for the copyrighted content. Claim 1 of the ‘545 patent provides:

A method for distribution of products over the Internet via a facilitator, said method comprising the steps of:

a first step of receiving, from a content provider, media products that are covered by intellectual-property rights protection and are available for purchase, wherein each said media product being comprised of at least one of text data, music data, and video data;

a second step of selecting a sponsor message to be associated with the media product, said sponsor message being selected from a plurality of sponsor messages, said second step including accessing an activity log to verify that the total number of times which the sponsor message has been previously presented is less than the number of transaction cycles contracted by the sponsor of the sponsor message;

a third step of providing the media product for sale at an Internet website;

a fourth step of restricting general public access to said media product;

a fifth step of offering to a consumer access to the media product without charge to the consumer on the precondition that the consumer views the sponsor message;

a sixth step of receiving from the consumer a request to view the sponsor message, wherein the consumer submits said request in response to being offered access to the media product;

a seventh step of, in response to receiving the request from the consumer, facilitating the display of a sponsor message to the consumer;

an eighth step of, if the sponsor message is not an interactive message, allowing said consumer access to said media product after said step of facilitating the display of said sponsor message;

a ninth step of, if the sponsor message is an interactive message, presenting at least one query to the consumer and allowing said consumer access to said media product after receiving a response to said at least one query;

a tenth step of recording the transaction event to the activity log, said tenth step including updating the total number of times the sponsor message has been presented; and

an eleventh step of receiving payment from the sponsor of the sponsor message displayed.

Patent-Eligible Subject Matter. Section 101 of the Patent Act provides that any new process, machine, article of manufacture, and composition of matter is patent eligible subject matter. Three areas excluded from patent eligibility are laws of nature, physical phenomena, and abstract ideas. The Supreme Court has previously stated that a process under section 101 can include a business method. Further, while abstract principles are not patentable, an application of an abstract idea may be patentable.

Monetizing Content via Internet was a “Process” under the Statute. The Federal Circuit court found that the claimed method of monetizing and distributing copyrighted products over the Internet was a “process” under the patent statute and was therefore patent-eligible subject matter. The court turned its focus on whether the claimed subject matter was not patent eligible as being and abstract idea.

The Claimed Process was Not An Abstract Idea. The court stated, “[I]nventions with specific applications or improvements to technologies in the marketplace are not likely to be so abstract that they override the statutory language and framework of the Patent Act.” The court found that the ‘545 patent sought to fix the problem of declining click-through rates of banner advertising by introducing a method of distribution that caused consumers to view advertisements before granting access to the desired media such as video.

The court found that the claimed invention of the ‘545 patent was an application of an idea and not an abstract idea itself. The court termed the abstract idea as the idea that advertising can be used as a form of currency. Then the court noted that the patent disclosed a practical application of this idea. The court supported its conclusion by noting that the steps of the method are “likely to require intricate and complex computer programming” and that certain steps “require specific application to the Internet and a cyber-market environment” such as “providing said media products for sale on an Internet website.” It further noted that the invention would involve a “extensive computer interface.”

The court noted that the fact that the ‘545 patent did not specify a particular way (e.g. FTP, email, streaming) for delivering the media content to the consumer did not render the claimed subject matter impermissibly abstract. In addition, as the claim provided a controlled interaction via a website with a customer, the claim did not comprise only purely mental steps.

No Bright Line Rule. However, the court refused to specify a minimum level of programming complexity required so that a computer-implemented method is patent-eligible. Further, the court cautioned that not every use of an Internet website in a method will be sufficient alone to find that method patent-eligible.

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AMEX Gift Cards Not Infringing

Privacash, Inc. v. Am. Express Co., No. 2011-1027 (Aug. 11, 2011) [PDF].

Privacash sued AMEX alleging that AMEX gift cards infringed U.S. Patent 7,328,181. The ‘181 provides a system with the objective of providing an anonymous and untraceable means for transacting purchases over the internet.

AMEX cards are activated when purchased and a usable until the value of the card is exhausted. AMEX will deactivate a card if it is reported lost or stolen. If reported stolen, a replacement gift card will be issued with the value remaining on the deactivated card.

Claim 1 of the ‘181 patent provides :

1. A method of transacting a purchase, comprising:

distributing a plurality of unfunded purchase cards from a purchase card provider to a plurality of purchase card outlets, wherein each of the purchase cards is a bearer instrument having an associated account number issued by a major branded credit card organization, an expiration date and a non-personalized cardholder name selected by the purchase card provider printed thereon, wherein the purchase card does not include information identifying the specific perspective cardholder, wherein information associated with each of the purchase card accounts is maintained in a software implemented application operated by the purchase card provider;

issuing a purchase card to a cardholder at the a purchase card outlet;

contacting the purchase card provider to fund and activate the purchase card account of specific purchase card issued with a software implemented application or via the telephone; and

transacting a cardholder purchase at any one of a number of retailers not associated with the purchase card outlet which accepts credit cards of the major branded credit card organization, wherein the cardholder presents the purchase card and the retailer contacts the purchase card provider over a network connection to interface with the software implemented application transmitting the purchase amount and the purchase card account number without requiring the retailer to collect and transmit personalized card holder identifying information, to verify using the software implemented retail application that the  purchase card is unexpired and that the purchase amount does not exceed the cardholder’s funding limit, whereupon the purchase card account information will be debited by the amount of the purchase and the account of the retailer will be electronically credited completing the purchase transaction.

A cancelable card is not a bearer instrument. The Federal Circuit  agreed with the district court that the AMEX card was not a bearer instrument or bearer card because it was capable of being cancelled or deactivated. Therefore the AMEX card was not  “as good as cash” and may not be  “used up to the limit available on the card by anyone in possession of the card” as provided in the ‘181 patent description.

The court noted that the purpose of the card in the ‘181 patent was to ensure anonymity of a purchase. However because the AMEX card allowed the true owner of the AMEX card to deactivate the card and get a replacement for the value remaining, the AMEX card did not provide anonymity, which was the purpose of the system of the ‘181 patent.

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Claims on Manipulating Tools on Toolbar are Obvious

Odom v. Microsoft, 2011-1160 (Fed. Cir. May 4, 2011) [PDF].

Inventor Odom sued Microsoft alleging that Microsoft infringed Odom’s U.S. Patent 7,363,592 directed to a method for manipulating groups of tools in toolbars in a computer software application. The district court found certain claims the of ‘592 patent invalid as obvious in view of U.S. Patent 6,057,836, stating that Odom had simply “cobbled together various pieces of what was already out there in a manner . . . that would have been obvious to anyone skilled in the art at the time of the invention.”  On appeal the Federal Circuit affirmed.

Claim 8 is a representative claim of the ‘592 patent:

8. A computer-implemented method comprising:

displaying a toolbar comprising at least one first tool group,

wherein said first tool group comprises at least one user-selectable tool,

wherein visibly designating said first tool group by at least one user-manipulatable divider located near at least one end of said first tool group,

wherein said first tool group divider is visually distinct from a said tool and from any visible means for directly manipulating said toolbar in its entirety, and

wherein said tool group divider is user-manipulatable for altering the condition of said tool group;

selecting said first tool group;

interactively tracking user indication of move-ment related to said first tool group until receiv-ing user indication to cease tracking; and

altering the condition of at least one tool group on said toolbar based upon said tracked user indica-tions.

Prior Art. The prior art ‘836 patent discloses “customizing a composite toolbar via direct on-screen manipulation by resizing the composite toolbar and by rearranging sections within a composite toolbar.” The ‘836 patent discloses toolbars that include “groups of command buttons. ” The toolbars can be modified by adding or deleting buttons or customizing buttons according to user preferences. The prior art patent further teaches that a toolbar can be collapsed or expended to allow the user to view as many or as few buttons as the user desires.

Manipulation on a Single Toolbar is Not New. The Federal Circuit found that the concepts claimed in the ‘592 patent were the same as those the ‘836 patent except that in the ‘529 patent the groups of tools were on a single toolbar. The court found that this was an insignificant advance over the  prior art ‘836 patent. The court noted that the prior art ‘826 patent explained, in the words of the court, “that although its invention has been described in the context of a web browser, employing collections of buttons and toolbars that are relevant to that application, a person of skill in the art would appreciate that the invention can be adopted to other application where a different arrangement or combination of tools may be desired.” Further the court found that it was only a trivial change for a person skilled in the art to add an indicator that could indicate any altered condition of the tool group, as was claimed in the ‘592 patent.

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Positive for Comp.Sci. & Business Methods Pats: Federal Circuit Takes Broad Approach to Patentable Subject Matter

Classen Immunotherapies, Inc. v. BioGen IDEC, No. 2006-1634 (Fed Cir. Aug 31, 2011) [PDF].

In this case the court considered the scope of patentable subject matter under 35 USC 101. While the patents-in-suit are directed toward methods of medical treatment, the scope of patent able subject matter under section 101 is often considered in computer science and business method related patents. This case raises the issue of what constitutes a purely mental process and further what constitutes a insignificant post-solution activity.

Classen sued BioGen, GlaxoSmithKline, Merck, and Kaiser Permanente for infringement of US Patent Nos. 6,638,739, 6,420,139, and 5,723,283 (“Classen Patents”) each titled, “Method and Composition for an Early Vaccine to Protect Against Both Common Infectious Diseases and Chronic Immune Mediated Disorders or their Sequelae.” On remand from the Supreme Court, in view of Bilski v. Kappos, 130 S. Ct. 3218 (2010), the Federal Circuit considered whether the claims of the Classen Patents were in valid under 35 USC 101 as being directed to an abstract idea. The Federal Circuit found that the claimed subject matter two ( the ‘139 and ‘739 patents) of the three Classen Patents were within the scope of section 101.

The court summarized that the Classen patents state “Dr. Classen’s thesis that the schedule of infant immunization for infectious diseases can affect the later occurrence of chronic immune-mediated disorders such as diabetes, asthma, hay fever, cancer, multiple sclerosis, and schizophrenia, and that immunization should be conducted on the schedule that presents the lowest risk with respect to such disorders. ”

Patents-in-Suit. Claim 1 of the ‘739 patent, representative of the ‘139 and ‘739 patents, provides:

1. A method of immunizing a mammalian subject which comprises:

(I) screening a plurality of immunization schedules, by

(a) identifying a first group of mammals and at least a second group of mammals, said mammals being of the same species, the first group of mammals having been immunized with one or more doses of one or more infectious disease-causing organism-associated immunogens according to a first screened immunization schedule, and the second group of mammals having been immunized with one or more doses of one or more infectious disease-causing organism-associated immunogens according to a second screened immunization schedule, each group of mammals having been immunized according to a different immunization schedule, and

(b) comparing the effectiveness of said first and second screened immunization schedules in protecting against or inducing a chronic immune-mediated disorder in said first and second groups, as a result of which one of said screened immunization schedules may be identified as a lower risk screened immunization schedule and the other of said screened schedules as a higher risk screened immunization schedule with regard to the risk of developing said chronic immune mediated disorder(s),

(II) immunizing said subject according to a subject immunization schedule, according to which at least one of said infectious disease-causing organism-associated immunogens of said lower risk schedule is administered in accordance with said lower risk screened immunization schedule, which administration is associated with a lower risk of development of said chronic immune-mediated disorder(s) than when said immunogen was administered according to said higher risk screened immunization schedule.

Claim 1 of the ‘283 patent provides: A method of determining whether an immunization schedule affects the incidence or severity of a chronic immune-mediated disorder in a treatment  group of mammals, relative to a control group of mammals, which comprises immunizing mammals in the treatment group of mammals with one or more doses of one or more immunogens, according to said immunization schedule, and comparing the incidence, prevalence, frequency or severity of said chronic immune-mediated disorder or the level of a marker of such a disorder, in the treatment group, with that in the control group.

Majority. The majority noted, quoting Diamond v. Diehr, 450 U.S. 175, 187 (1981), that “[i]t is now common place that an application of a law of nature or mathematical formula to a known structure or process may well be deserving of patent protection.” The court found that the ‘139 and ‘739 patents included a physical step of immunization, and therefore was not a purely mental method. The court found with the immunization step the claims were directed to a specific tangible application under Bilski v. Kappos.  In upholding the validity of the claims of the ‘139 and ‘739 patents, the court did not find that the immunization step was an “insignificant postsolution activity” under Diehr.

However, the court characterized claim 1 of the ‘283 patent as covering the idea of collecting and comparing known information.  The court characterized the “immunizing” in the ‘283 patent as referring to the gathering of published data and therefore not a further act to set apart the claims from the abstract principle that a variation in immunization schedules may have consequences for certain diseases. As a result, the court found the claims of the ‘283 patent were invalid under section 101 as being directed to an abstract idea.

Additional View of Chief Judge Rader. Judge Rader wrote separately to comment on “significant unintended implications” of the patent eligibility doctrine under section 101. One implication is that creative claim drafting can be employed to avoid subject matter exclusions under section 101, such as the Beauregard claim for “computer programs embodied in a tangible medium” rather than computer programs themselves to avoid being rejected as a mathematical algorithm. Another implication was that subject matter limitations increase the expense and difficulty in obtaining a patent and may frustrate innovation and drive research funding to other “more hospitable locations” (countries). Judge Rader seems to encourage litigants to focus on novelty and adequate disclosure rather than whether the subject matter should be excluded under section 101 from patentability.

Dissent. The dissent would have held all the claims in question invalid as an unpatentable abstract idea. The dissent asserted that there was no difference, for section 101 purposes, between the claims of th2 ‘283 patent and the claims of the ‘139 and ‘739 patents, all of which require two steps according to the dissent: “(1) compare the incidence of chronic immune mediated disease in two groups of mammals who were immunized according to different schedules and then (2) immunize a mammal according to the lower risk schedule.” The dissent stated that the ‘283 patent claims “the scientific method as applied to the field of immunization.” The dissent said the ” claims do nothing  more than suggest that two immunized groups be compared to determine which one is better” and therefore are “exactly the type of ‘abstract intellectual concepts that ‘are the basic tools of scientific and technological work.’  (citing Gottschalk v. Benson, 409 U.S. 63, 67 (1972)). The dissent provides one absurd example of liability under the patents-in-suit,  “[a] patient might be liable for joint infringement  by receiving an immunization, and then wondering why their friend got sick when he got the same immunization.”

Conclusion. This case is favorable for clients seeking patent coverage in computer science, business methods, and related fields as it takes broad view of patentable  subject matter.

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Aritcles on Chess-Like Computer Game Analogous Prior Art for Patent on Physical Chess-Like Board Game

Innovention Toys, LLC v. MGA Entm’t, Inc., Dkt. No. 2010-1290 (Fed. Cir. March 21, 2011) [PDF].

Innovation sued MGA, Wal-Mart, and Toys “R” Us (collectively, MGA) for infringement of Innovation’s U.S. Patent No. 7,264,242. The ‘242 patent is directed to a light-reflecting physical board game. MGA’s accused game is Laser Battle, a physical board game for playing a chess-like strategy game. One issue on appeal was whether certain prior art articles regarding chess-like computer games were analogous art for determining whether the claims directed to a physical board game of the ‘242 patent were invalid as obvious. The district court found the articles were non-analogous art. The appeals court disagreed and vacated with remand.

The ‘242 Patent. The ‘242 patent discloses a game that includes “a chess-styled playing surface, laser sources positioned to project light beams over the playing surface when ‘fired,’ mirrored and non-mirrored playing pieces used to direct the lasers’ beams, and non-mirrored ‘key playing pieces’ equivalent to the king pieces in chess.” Slip op at 2.  Representative claim 31 of the patent provides:

A board game for two opposing players or teams of players comprising:

a game board, movable playing pieces having at least one mirrored surface, movable key playing pieces having no mirrored surfaces, and a laser source,

wherein alternate turns are taken to move playing pieces for the purpose of deflecting laser beams, so as to illuminate the key playing piece of the opponent.

Prior Art At Issue. The prior art at issue included articles on Laser Chess and Advanced Laser Chess published in Compute! Both articles disclosed “chess-like computer games with virtual lasers and mirrored and non-mirrored pieces which are moved or rotted by players during alternating turns on a virtual, chess-like playing board.” Slip Op. at 4.

Analogous Art and Non-Analogous Art. A reference is prior art for the purposes of determining whether an invention is obvious if it is analogous to the claimed invention. Slip op at 12. The appeals court stated, “Two separate tests define the scope of analogous art:  (1) whether the art is from the  same field of endeavor, regardless of the problem addressed, and (2) if the reference is not within the field of the inventor’s endeavor, whether the reference still is reasonably pertinent to the particular problem with which the inventor is involved.” Id. at 12-13. It further provided, “A reference is reasonably pertinent if . . . it is one which, because of the matter with which it deals, logically would have commended itself to an inventor’s attention in considering his problem.” Id. at 13.

Argument. Innovation argued that Compute! articles were non-analogous art because the invention dealt with a non-virtual, 3-D, laser-based board game. Innovation argued the invention involved mechanical engineering and not computer programming.

Court’s ruling. The appeals court rejected this view finding the the district court erred in holding the Compute! articles on a electronic, laser based strategy game were non-analogous because even if the Compute! articles were not in the same field of endeavor, they were reasonably pertinent to the problem facing the inventors of a new physical laser based strategy game. The court said that, “the ’242 patent and the Laser Chess references are directed to the same purpose: detailing the specific game elements comprising a chess-like, laser-based strategy game.” As a result, the case was remanded to the district court to consider the Compute! articles in addressing MGA’s claim that the patent was invalid as obvious.

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Shredding Parties to Destroy Evidence Could Cost Rambus $350+ Mil

Hynix Semiconductor v. Rambus, 2009-1299 (Fed. Cir. May 13, 2011) [PDF] and Micron Technology v. Rambus, 2009-1263 (Fed. Cir. May 13, 2011) [PDF].

In both of the above cited cases Rambus sued makers of SDRAM and DDR SDRAM alleging infringement of a number of Rambus owned patents.  A key issue addressed by the Federal Circuit was whether Rambus engaged in spoliation of evidence by destroying certain evidence.

In Hynix Semiconductor v. Rambus, the district court found Rambus did not spoil evidence, found for Rambus on several of Rambus’ infringement claims, and entered a 350 million dollar judgement in favor of Rambus. The district court in Micron Technology v. Rambus, found–on substantially the same facts as in Hynix— that Rambus did spoil evidence and as a sanction dismissed Rambus’ case with prejudice.  The Federal Circuit affirmed the spoliation ruling of the district court in Micron Technology and reversed the district court in Hynix Semiconductor finding the Hynix court applied too narrow an interpretation of whether the litigation was reasonably foreseeable.

Facts. Rambus’ primary business is licensing its intellectual property to DRAM Manufacturers. Rambus first attempted to license its rights in several patents covering RDRAM memory to manufacturers. It had modest success until in 1999 manufactures failed to deliver the promised manufacturing capacity and Intel began to back away from using RDRAM technology. At some point at or after Rambus began licensing RDRAM it under took a strategy for preparing to seek licensing revenue and litigation damages from manufactures adopting SDRAM. The following events occurred:

  1. At a Feb. 2, 1998 meeting between Rambus and its attorneys regarding licensing to infringing  SDRAM manufacturers, Rambus proposed a royalty rate that was so high that Rambus’ attorneys said “you’re not going to have a licensing program, you’re going to hav a lawsuit on your hands. Rambus representative’s said they didn’t to be “Battle Ready” for litigation. Rambus attorney’s recommended a document retention policy.
  2. Meeting notes for a November 1998 meeting showed that Rambus planned to assert its patents against SDRAM manufacturers.
  3. In December 1998, Joel Karp, Rambus VP of IP drafted a memo describing a “nuclear winter” scenario if Intel moved away from RDRAM and outlined plans to sue Intel ad SDRAM manufacturers. The memo also noted that infringement charts for Micron Devices were complete.
  4. A July 22, 1998, Rambus Document retention policy stated that destruction of relevant and discoverable evidence did not need to stop until the commencement of litigation.
  5. Karp told employees to look fora helpful document to keep, including documents that would help establish conception and prove that Rambus has IP.
  6. On March 16, 1998, a Rambus email discussed the growing worry that email backup tapes were discoverable information.
  7. On May 14, 1998, Rambus implemented a new policy of keeping email backup tapes for only 3 months.
  8. In July 1998, Rambus erased all but 1 of the 1,269 tapes storing email backups for the past several years. The one tape saved had documents the helped establish a priority date for one of its inventions.
  9. On September 3, 1998, Rambus held its first “shred day” to implement its newly adopted document retention policy.
  10. In April 1999, Karp instructed Rambus’ outside patent prosecution counsel to implement the document retention policy and discard material from its patent prosecution files, including draft patent applications, claims, amendments, attorney notes, and correspondence with Rambus.
  11. On August 26, 1999, Rambus held a shredding party (second shred day) as a part of its IP litigation readiness goals and destroyed between 9,000 and 18,000 pounds of documents in 300 boxes.
  12. In November 1999, negotiations with on SDRAM manufacturer, Hitachi broke down.
  13. In December 1999, Rambus instituted a litigation hold to preserve evidence.
  14. In January 2000, Rambus sued Hitachi. The case settled in June 2000.
  15. Rambus negotiated SDRAM licenses with SDRAM Manufacturers Toshiba, Oki, and NEC.
  16. Rambus sued Infineon in August 2000
  17. On August 18, 2000, Rambus approached Mircon about licensing.
  18. On August 28, 2000, Mircon sued Rambus for declaratory judgment of invalidity, non-infringement, and unenforceability of Rambus patents .
  19. On August 29, 2000, Hynix Semiconductor filed a similar declaratory judgment suit against Rambus in a different court.

Law on Spoliation of evidence. The court noted that “[d]ocument retention policies, which are created in part to keep certain information from getting into the hands of others, including the Government, are common in business. “  It also noted that “It is, of  course, not wrongful for a manager to instruct his employees to comply with a valid document retention policy under ordinary circumstances.” A party can only be sanctioned for the destruction of evidence when it has a duty to preserve it. Therefore “spoliation refers to the destruction or material alteration of evidence or to the failure to preserve property for another’s use as evidence in pending or reasonably foreseeable litigation.” The mere existence of a potential claim or distant possibility of litigation is not enough to trigger the duty to preserve. However, the standard does not require litigation to be imminent or probable with out significant contingencies.

Findings. The Federal Circuit found the district court’s finding of spoliation in Micron was not in error for the following reasons.

  1. The reason for the existence of Rambus’ document retention (or destruction) policy “was to further Rambus’s litigation strategy by frustrating the fact-finding efforts of parties adverse to Rambus.”
  2. “Rambus was on notice of likely infringing activities by particular manufacturers.”
  3. “Rambus took several steps in furtherance of litigation prior to its second shredding party on August 26, 1999.”
  4. As the plaintiff-patentee, Rambus could more likely foresee the litigation commencing because whether litigation occurred was largely dependent on Rambus’ own decision to litigate.
  5. “In general, when parties have a business relationship that is mutually beneficial and that ultimately turns sour, sparking litigation, the litigation will generally be less foreseeable than would litigation resulting from a relationship that is not mutually beneficial or is naturally adversarial.” However, the Rambus’ relationship with the RDRAM manufacturers did nothing to make litigation significantly less likely, and “Rambus and the manufacturers did not have a longstanding and mutually beneficial relationship regarding SDRAM.”

When to Preserve. Therefore, materials should be preserved at least when:

  1. The reason for the destruction of materials is or can be understood as being to frustrate fact-finding efforts of adverse parties;
  2. A patent owner/potential plaintiff is on notice of likely infringing activities; or
  3. Steps have been taken in the furtherance of litigation.
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Claim Against Yahoo! Messager Requires Logic Operations on Same Message(s)

Creative Internet Adver. Corp. v. Yahoo!, Inc., 2010-1215 (Fed Cir. April 22, 2011) [PDF].

Creative sued Yahoo! claiming Yahoo!’s instant messaging product, Yahoo! Messenger infringed U.S. Patent No. 6,205,432. The ‘432 patent is directed to a system where references to advertisements are inserted between end users of an instant messaging software.

The claim at issue on appeal was claim 45, which provides:

45. A computer program embodied on a computer-readable medium for inserting a background reference to a stored advertisement into an end user
communication message, said computer program comprising:

logic configured to receive an end user communication message from a first site;

logic configured to insert a background reference to a stored advertisement into said end user communication message, wherein said logic configured to insert the background reference is further configured to insert said background reference responsive to an overwrite authorization; and

logic configured to transmit said end user communication message with the background reference
to a second site.

Yahoo asserted that each logic elements of the claim must operate on the same message, e.g. one message being received, inserted into, and transmitted.  Creative argued that all three logic elements did not need to operate on the same message.

Majority: Claim requires each logic step to act on same message(s). The majority agreed with Yahoo, at least in part.  Generally the use of “an” or “a” in a claim means one or more. So the phrase “an end user communication message”, means one or more end user communication messages. The majority noted that “The subsequent use of  definite articles “the” or “said” in a claim to refer back to  the same claim term does not change the general plural rule [of “an”], but simply reinvokes that non-singular meaning.” The majority concluded that to infringe claim 45 the system must contain logic configured to insert a background reference into the same messages that are received and transmitted by other logic elements in the program. But, the insertion logic need not act on the message after it is received, it could act an other time. The court concluded that the trial court erred in failing to instruct the jury on this point.

Dissent: Apparatus claim requires no operation order nor action on the same message(s). The dissent asserted that because claim 45 was an apparatus claim, an infringing program only needed to have logic for receiving, inserting, and transmission, but the execution of that logic could be in any order. Further, the dissent found that the use of the term “said” in the claim does not require that each logic limitation be executed on the same message. The dissent asserted that the majority was interpreting the apparatus claim 45 as a method claim. The dissent stated, “requiring a concerted execution of the claimed logic upon a single message is not the proper test for infringement of an apparatus claim.” The dissent continued, “Instead, the proper question for infringement is whether the accused computer program contains logic configured to meet each limitation, regardless of how or when the claimed logic is used.”

The majority said that the dissent’s interpretation would cover a program that that only receives a message, inserts a background reference into a different message, and then transmits a third message.  The majority asserted that this interpretation is contrary of the claim language because “it would render the word ‘said’ a nullity.”

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Goggle Bids $900M for 6000 of Nortel’s Patents in Bankruptcy Auction

Goggle has bid $900M for Nortel’s patent portfolio, which is at auction in Nortel’s bankruptcy. Goggle said on its blog that it hopes that if its bid is successful that the Nortel patents (1) will create a disincentive for other to sue Goggle and (2) will provide a degree of freedom to operate to its partners and the open source community who have been involved in the Android and Chrome projects.

Google’s asserted reason for the attempt at acquisition–best defenses against patent litigation based on “low quality” patent is to have a formidable patent portfolio–is likely a true motive. The threat of counter-suit by a defendant can be deterrent to a competitor bringing the suit in the first place. However, threat of counter-suit is less–if at all–a factor when the plaintiff is a non-practicing entity. Also, although not asserted as a reason by Goggle, the Nortel portfolio may present opportunities for Google to license some of those patent to others to create a revenue stream.

More Coverage:

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The Difference One Word Makes: “Creating a Database ‘of’ Properties” Required a Prepopulated Database

Move, Inc. v. Real Estate Alliance, Dkt No. 2010-1236 (Fed. Cir. Mar. 22, 2011) [PDF].

Move sued Real Estate Alliance (Real) seeking declaratory judgment that Real’s U.S. Patent No. 4,870,576, and 5,032,989 (the ’989 patent) were invalid. Real appealed the district courts construction of claim 1 of the ‘989 patent.  Claim 1 provides:

A method using a computer for locating available real estate properties comprising the steps of:

a) creating a database of the available real estate properties;
b) displaying a map of a desired geographic area;
c) selecting a first area having boundaries within the geographic area;
d) zooming in on the first area of the displayed map to about the boundaries of the first area to display a higher level of detail than the displayed
map;
e) displaying the zoomed first area;
f) selecting a second area having boundaries within the zoomed first area;
g) displaying the second area and a plurality of points within the second area, each point repre-senting the appropriate geographic location of an
available real estate property; and
h) identifying available real estate properties within the database which are located within the second area.

Difference between use of “of” and “for.” The Federal Circuit addressed the construction of several terms and phrases of the claim, however this post will focus on the meaning of the phrase “creating a database of available read estate properties. “  The district court construed the claim to cover creating only the structure or schema of the database, i.e., creating an empty database with a defined structure. The district court noted that “the plain language of the claim, creating a database ‘of’ properties, rather than ‘for’ properties, implies that the database is populated with properties when its created.” However, the district court reasoned that “that database is not populated by the inventor, but rather by third-party users, who wish to sell a property.”

Federal Circuit. The federal circuit disagreed and found that the use of “of” in the claim requires that in order to infringe, the database must be populated with at least two properties upon creation.  In addition the court noted that the pre-existing properties are first mentioned in the preamble and they are displayed in step (g) and identified in step (h). In other words, an empty database would not infringe.