The Software IP Report

Click-Fraud Prevention Patent-Ineligible in CBM Review

By Charles Bieneman

Categories: The Software IP Report

Two patents directed to “detect[ing] invalid and fraudulent impressions and clicks in web-based advertisement systems” are Covered Business Method Patents under Section 18 of the America Invents Act, and moreover are patent-ineligible under 35 U.S.C. § 101, the PTAB has held in two companion cases.  Google, Inc. v. Zuilli, Case CBM2016-00022, Patent 8,326,763 B2 (PTAB May 5, 2017); Google, Inc. v. Zuilli, Case CBM2016-00021, Patent 7,953,667 (PTAB May 5, 2017).  The PTAB’s decision came after it had ordered additional briefing in light of Unwired Planet, LLC v. Google Inc., 841 F. 3d 1376 (Fed. Cir. 2016), in which the Federal Circuit had explained limitations on the scope of covered business method review.

Most of the following is drawn from the PTAB’s opinion concerning the ’667 patent, but the analyses in the respective opinions were very similar.

First, the PTAB had to decide whether the patents were “covered business method patents,” i.e., directed to a financial product or service, and not to a technological invention.  Claim 1 of both patents recites “[a] method for detecting fraudulent activity in a pay-per-click system.” The PTAB found that “a pay-per-click system is itself a financial product and provides a financial service.”  At the risk of over-simplifying, the PTAB’s many pages of analysis boiled down to the fact that the whole purpose of a pay-per-click system was to collect money; the fact that the claims could implicate other purposes, like data processing, or network activity, did not remove the claims from the “financial service” prong of the statute.

A similarly detailed analysis concluded that he patents did not qualify for the technological invention exception provided for in AIA § 18(d)(1).  The PTAB agreed with the Petitioner that the claims used existing technology to accomplish all recited steps.

At this point, it was a foregone conclusion that the claims would fail the Mayo/Alice patent-eligibility test of 35 U.S.C. § 101.  To no avail, the patent owner tried to rely on Enfish, LLC v. Microsoft Corp., 822 F.3d 1327 (Fed. Cir. 2016).  Unlike the claims in Enfish, the claims here “are not, by reasonable characterization, directed to an improvement, in either hardware or software, to the functioning of a computer.”  Nor did DDR Holdings, LLC v., L.P., 773 F.3d 1245 (Fed. Cir. 2014), help the patent owner.  The claims here were not “necessarily rooted in computer technology” but instead used generic technology for “recording who is making a request and measuring the duration between two requests from the same source.”  Therefore, the claims (of the ’667 patent) are “directed to the abstract idea of ‘detecting fraud based on the time between two requests by the same client.’” (Emphasis in original.)

Turning to the second prong of the Mayo/Alice test, there was no inventive concept.  Data gathering steps could not make a claim patent-eligible, and even the dependent claims recited nothing more than conventional technological elements like using cookies and unique identifiers.