The Software IP Report

PTAB in CBM Kills Internet Advertising Click-Fraud Patent

Claims of a patent directed to detecting internet advertising click-fraud were eligible for Covered Business Method (CBM) Review, and moreover were patent-ineligible under the Mayo/Alice test and 35 U.S.C. § 101, said the Patent Trial and Appeal Board (PTAB) in a Final Written Decision in Google, Inc. v. Zuili, CBM2016-00008 (Patent 8,671,057 B1) (PTAB April 24, 2017.)

The title of U.S. Patent No. 8,671,057 more or less tells the story: “Method and System to Detect Invalid and Fraudulent Impressions and Clicks in Web-Based Advertisement Schemes.” The PTAB concluded that the only independent claim of the ’057 patent “meets the financial requirement of CBM eligibility because it recites a financial transaction.” Left unaddressed was the “Petitioner’s argument that claim 1 is financial in nature because it recites advertising.”

The Patent Owner argued that the ’057 patent did not meet the “financial product or service” requirement for covered business method patents. However, the PTAB accepted the Petitioner’s argument that a system directed to providing links to merchant webpages as part of an advertising scheme and pay-per-click system was a financial product or service. The Patent Owner’s argument that the claims were simply directed to determining invalid clicks, and could be used on sites that did not belong to merchants, was to no avail.

Further, the PTAB went to lengths to explain that the claims here did not have an “attenuated” relationship to a financial product or service. Instead, the whole point of a pay-per-click system is to get somebody to click a link based on a monetary value attached to that act. The point of determining an invalid click is to identify “one that should not be counted by the pay-per-click system and that click should not be charged for the user.” Without reading limitations from the specification into the claims, the PTAB noted that the inventor could identify no utility outside of advertising, and that the only possible use for claim 1 was with respect to clicks that were financial transactions.

Moreover, the claims were not directed to a “technological invention.” All of the technology in the claims was known in the prior art. No technical problem was solved; rather the problem being solved was that “of overcharging merchant advertisers for invalid clicks.”

And with that, you can see where the Section 101 patent-eligibility analysis is going. The PTAB agreed with the Petitioner that the claims at issue were directed “to a patent-ineligible abstract idea, specifically the concept of detecting invalid clicks based on the time between two requests by the same device.” The claims made only one determination: “whether a click is invalid based on an examination of the time between clicks.” There was no improvement to a computer or software, simply a recitation of “a long-standing economic task.”

Unsurprisingly, therefore, the PTAB also found that the claims did not recite an inventive concept that was “significantly more” than the abstract idea. The PTAB rejected the Patent Owner’s argument “that the challenged claims define ‘a specific combination of technical computer functions’ that remove the claims from the realm of mere abstract ideas.” Sending codes to different devices was not a “transformation” of conventional systems to improve internet advertising click-fraud detection. In fact, claim 1 recites sending a code once, and then does not reference it again. The code is not used in performing any task, and could not be transformative.

Some of the claims of the ’057 patent were also determined to be obvious over prior art.