TNS Media Research, LLC et al v. TiVo Research and Analytics, Inc.
Filing
226
OPINION AND ORDER: For the foregoing reasons, counterclaim-defendants' motion for summary judgment is GRANTED as to all patent claims, on the grounds of patent invalidity. The Clerk of the Court is directed to close this motion (Dkt. No. 122). A conference is scheduled for March 15, 2016, at 4:00 p.m. (As further set forth in this Order) (Status Conference set for 3/15/2016 at 04:30 PM before Judge Shira A. Scheindlin.) (Signed by Judge Shira A. Scheindlin on 2/22/2016) (kl)
I.
INTRODUCTION
On November 25, 2013, this Court issued an Opinion and Order (the
“November 25 Opinion” granting summary judgment, inter alia, as to
counterclaim-defendants’ patent non-infringement claims. Because I granted
summary judgment on the patent non-infringement claims, I held that
counterclaim-defendants’ patent ineligibility claims were moot. On appeal, the
Federal Circuit affirmed in part and remanded in part this Court’s grant of
summary judgment.1 In light of the Federal Circuit’s decision, I now address the
patent ineligibility issue. For the following reasons, counterclaim-defendants’
motion for summary judgment is GRANTED.
II.
BACKGROUND2
This is a dispute over intellectual property pertaining to marketing and
advertising analytics. Plaintiffs TNS Media Research, LLC (d/b/a Kantar Media
Audiences) (“Kantar Media”) — a market research company — and Cavendish
Square Holding B.V. (“Cavendish”) — Kantar Media’s affiliate — commenced
1
See TNS Media Research, LLC v. Tivo Research & Analytics, Inc.,
No. 2014-1668, 2015 WL 5439002 (Fed. Cir. Sept. 16, 2015).
2
The facts recited below are drawn from the pleadings, the parties’
Local Civil Rule 56.1 Statements, the affidavits submitted in connection with this
motion, and the exhibits attached thereto. These facts are undisputed unless
otherwise noted.
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this action on June 14, 2011 against defendant TRA Global, Inc. (“TRA”). Kantar
Media sought a declaration that it had not infringed United States Patent No.
7,729,940 (the “‘940 patent”), of which TRA is the sole assignee. Cavendish
alleged in the complaint that TRA breached a contract entitling Cavendish to place
a member on TRA’s board, but subsequently dropped this claim.
Kantar Media and Cavendish are indirect subsidiaries of WPP PLC.
WPP PLC (hereafter, “WPP Parent”) is the parent company to WPP Group USA,
Inc. (“WPP USA”), Kantar Group Ltd. (“Kantar Group”), and Kantar Retail
America, Inc. (“Kantar Retail”) (collectively with WPP PLC, Kantar Media and
Cavendish, the “WPP Companies”).
TRA asserted the following six counterclaims against counterclaimdefendants the WPP Companies (singly or in combination): (1) patent infringement
of the ‘940 patent (against Kantar Media); (2) patent infringement of United States
Patent No. 8,000,993 (the “‘993 patent”) (against Kantar Media and Kantar Retail);
(3) patent infringement of United States Patent No. 8,112,301 (the “‘301 patent”)
(against Kantar Media and Kantar Retail); (4) aiding and abetting breach of
fiduciary duty (against Kantar Media, Cavendish, WPP Parent, WPP USA, and
Kantar Group); (5) misappropriation of trade secrets (against the WPP
Companies); and (6) breach of contract (against Kantar Retail, Kantar Media, and
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WPP USA).
A.
Overview
TRA — a nested acronym3 meaning “True ROI for Media”4 — was
founded in 2007 with the goal of using modern data-mining techniques to
determine the cost-effectiveness of advertisements.5 After its first financing round
in August 2007, its post-money valuation was roughly ten million dollars; after its
second round in May 2009, roughly twenty-seven million dollars; and after its third
round in May 2010, roughly fifty-four million dollars. The WPP Companies,
through their investment arm, invested a substantial sum in each of TRA’s first
three financing rounds.6
3
A nested acronym is an acronym that contains another acronym; in
this case, TRA contains the acronym “ROI,” which means “return on investment.”
4
2/23/09 Press Release Announcing TRA’s Partnership with Kognitio
(a hardware neutral data warehousing firm), Ex. E to Declaration of Eric Rutt
(counsel for the WPP Companies) in Support of Counterclaim-Defendants’ Motion
for Summary Judgment (“Rutt Decl.”), at SPENCE_006020.
5
See Answer, Defenses, and Supplemental and Amended
Counterclaims for Patent Infringement, Aiding and Abetting Breach of Fiduciary
Duty, Misappropriation of Trade Secrets, and Breach of Contract ¶ 22.
6
See id.
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B.
The Patent Claims Asserted by TRA
1.
The ‘940 Patent
a.
Claim Asserted
The ‘940 patent — titled “Analyzing Return on Investment of
Advertising Campaigns by Matching Multiple Data Sources” — issued on June 1,
2010 with TRA designated as the sole assignee.7 As the title suggests, the claimed
invention relates to a method for correlating the advertisements that consumers
view with their purchasing behavior. Claim 71 is illustrative of the invention, and
is the only claim of the ‘940 patent asserted by TRA. It is set forth in full below.
A computer-implemented method for facilitating analysis of
consumer behavior in association with advertising exposure or
program delivery, the method comprising:
collecting in an advertising measurement system:
(i)
7
clickstream data [a recording of the user’s
input into a media device, such as a computer
or television set-top box] from a program
delivery source of a consumer, wherein
collecting the clickstream data is not
dependent on a supplemental data collection
device, and also wherein the collected
clickstream data includes household level data
associated with multiple consumer
households;
See ‘940 Patent, Ex. S to Rutt Decl.
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(ii)
advertising data associated with delivery of
the program by the program delivery source,
wherein collecting the advertising data is not
dependent on a supplemental data collection
device, and also wherein the collected
advertising data includes household level data
associated with multiple consumer
households;
(iii)
program data associated with the program
delivered on the program delivery source,
wherein collecting the program data is not
dependent on a supplemental data collection
device, and also wherein the collected
program data includes household level data
associated with multiple consumer
households;
(iv)
purchase data from a purchase data source,
wherein collecting the purchase data is not
dependent on a supplemental data collection
device, and also wherein the collected
purchase data includes household level data
associated with multiple consumer
households;
matching at least portions of the collected advertising data, the
collected clickstream data, the collected purchase data, and the
collected program data in the advertising measurement system at
a household data level with a centrally located electronic computer
processor configured for centrally processing data received from
the program delivery source, the advertising data source, the
program data source, and the purchase data source, wherein the
matching further includes:
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(i)
grouping the collected data in association with an
account identifier of each consumer household
without processing any personally identifiable
information associated with the consumer household,
and
(ii)
matching each account identifier associated with
each consumer household with other account
identifiers associated with the same consumer
household without processing any personally
identifiable information associated with the
consumer household;
storing the matched advertising data, clickstream data, purchase
data, and program data in at least one centrally located electronic
data storage medium operatively associated with the computer
processor;
applying at least one cleansing and editing algorithm to the
matched and stored data; and,
calculating at least one true target index metric based on the
matched and stored data.8
In sum, the ‘940 patent teaches a method for: (1) using a computer to
collect data about (i) commands that viewers input into, e.g., a television; (ii) the
advertisements that they view; (iii) the programs they watch; and (iv) the products
they then purchase; (2) grouping these data with a unique identifier that does not
personally identify the viewer/purchaser, and transmitting it to a central database;
(3) storing this grouped, ‘blinded’ data in the centrally located database; (4)
8
Id. at cols. 46:33-48:8.
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cleansing and editing the data (e.g., deleting information that is irrelevant to the
advertiser using the invention, or repeated); and (5) using the data to generate
granular statistical inferences about the cost-effectiveness of advertisements. For
example, TiVo might collect data about the programs and advertisements its users
watch, while Walgreens collected their purchasing information from customer
loyalty cards; the companies might then group this data together and transmit
it—without any personally identifying information — to TRA, which could use it
to advise Proctor & Gamble whether to run ads for Tide Detergent during
America’s Got Talent.
b.
Claim Construction Proceedings
A Markman hearing was held on July 6, 2012, and I subsequently
issued an Order construing the two phrases in dispute as follows.9
Disputed Phrase
Construction
“household level data associated with
multiple consumer households”
“data about a household that can be
later aggregated into a data set
including multiple consumer
households”
9
See TNS Media Research, LLC v. TRA Global, Inc., No. 11 Civ. 4039,
2012 WL 3756325, at *14 (S.D.N.Y. Aug. 29, 2012).
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“cleansing and editing algorithm”
“an algorithm to remove
inconsistencies in, correct, or otherwise
improve the reliability of data collected
from a program delivery source”
The parties stipulated to the following claim term constructions,
which were entered as an Order.10
Term
Stipulated Construction
“clickstream data from a program
delivery source of a consumer”
“data describing a consumer’s
exposure to content delivered from a
program delivery source”
“advertising data associated with
deliver of the program by the program
delivery source”
“data describing advertisements
delivered from a program delivery
source”
“program data associated with the
program delivered on the program
delivery source”
“data describing media content
delivered from a program delivery
source”
“purchase data from a purchase data
source”
“data describing the purchase of a
particular product at a given time,
obtained from a purchase data source,
such as a shopping loyalty card, point
of sale collection means, or other
record of a sale of a product or service”
“supplemental data collection device”
“a piece of hardware that is separate
from the program delivery source or
purchase data source and is used for
the exclusive purpose of recording data
that facilitates analysis of consumer
behavior”
10
See 4/9/12 Stipulation and Order, Doc. No. 65.
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Term
Stipulated Construction
“return on investment metric”
“a measurement of the benefit that a
particular past investment (e.g., an
advertisement) has produced in terms
of changed purchasing behavior”
“true target index report”
“a report that allows users to compare
different media environments (e.g.,
particular programs, networks, or
dayparts) based on the likelihood that
consumers who meet a particular
profile will be exposed to such media”
“demographics weighting algorithm”
“a process to account for differences
between the composition of the sample
from which data is drawn and the
composition of the larger population
that one wants to study”
2.
The ‘993 Patent
The ‘993 Patent — titled “Using Consumer Purchase Behavior for
Television Targeting” — issued on August 16, 2011, and lists TRA as the sole
assignee.11 TRA asserts that Kantar Media and Kantar Retail have infringed claims
1, 2, 3, 7, 8, and 9. These claims are quoted in full below.
[Claim 1]:
A computer-implemented system for facilitating analysis of
consumer behavior in association with advertising exposure or
program delivery, the system comprising:
11
See ‘993 Patent, Ex. T to Rutt Decl.
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an advertising measurement system including at least one
electronic computer processor configured for:
[(i)] collecting clickstream data from a program delivery source
of a consumer, wherein collecting the clickstream data is
not dependent on a supplemental data collection device,
and also wherein the collected clickstream data includes
household level data associated with multiple consumer
households;
(ii)
collecting advertising data associated with delivery of the
program by the program delivery source, wherein collecting
the advertising data is not dependent on a supplemental
data collection device, and also wherein the collected
advertising data includes household level data associated
with multiple consumer households;
(iii)
collecting programming data associated with the program
delivered on the program delivery source, wherein
collecting the programming data is not dependent on a
supplemental data collection device, and also wherein the
collected programming data includes household level data
associated with multiple consumer households;
(iv)
collecting purchase data from a purchase data source,
wherein collecting the purchase data is not dependent on a
supplemental data collection device, and also wherein the
collected purchase data includes household level data
associated with multiple consumer households; and
(v)
matching at least portions of the collected advertising data,
the collected clickstream data, the collected purchase data,
and the collected programming data at a household data
level;
wherein the collected data include a first identifier associated with
the household assigned to the program delivery source;
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a module configured to use a thesaurus for:
(i)
producing data from the collected data without personally
identifiable information, and
(ii)
indexing the produced data with a second identifier,
wherein the thesaurus relates each first identifier of each
household to the second identifier;
at least one electronic data storage medium operatively associated
with the computer processor, the data storage medium configured
for storing the matched advertising data, clickstream data,
purchase data, and programming data;
a module programmed for applying at least one cleansing and
editing algorithm to the matched data or the stored data; and
a module programmed for calculating at least one return on
investment metric or true target index metric based on the
matched or stored data.12
[Claim 2]
The system of claim 1, further comprising:
a list matcher configured to:
receive data communicated in parallel from the one or more
data sources, the communicated data comprising at least
personally identifiable information associated with the
household and the first identifier associated with the
household assigned by the data source;
generate the thesaurus relating each first identifier
associated with the household to the second identifier; and
12
Id. at cols. 42:16–43:3.
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send the thesaurus to the module configured to use the
thesaurus.13
[Claim 3]
The system of claim 1, wherein the thesaurus is configured for
relating an account number identifier to at least one other account
number identifier associated with the same household across
multiple data sources.14
[Claim 7]
A computer-implemented method for facilitating analysis of
consumer behavior in association with advertising exposure or
program delivery, the method comprising:
collecting in an advertising measurement system:
(i)
clickstream data from a program delivery source of
a consumer, wherein collecting the clickstream data
is not dependent on a supplemental data collection
device, and also wherein the collected clickstream
data includes household level data associated with
multiple consumer households;
(ii)
advertising data associated with delivery of the
program by the program delivery source, wherein
collecting the advertising data is not dependent on a
supplemental data collection device, and also
wherein the collected advertising data includes
household level data associated with multiple
consumer households;
13
Id. at col. 43:4-15.
14
Id. at col. 43:16-19.
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(iii)
programming data associated with the program
delivered on the program delivery source, wherein
collecting the programming data is not dependent on
a supplemental data collection device, and also
wherein the collected programming data includes
household level data associated with multiple
consumer households; and,
(iv)
purchase data from a purchase data source, wherein
collecting the purchase data is not dependent on a
supplemental data collection device, and also
wherein the collected purchase data includes
household level data associated with multiple
consumer households;
matching at least portions of the collected advertising data,
the collected clickstream data, the collected purchase data,
and the collected programming data in the advertising
measurement system at a household data level with at least
one electronic computer processor configured for
processing data received from the program delivery source,
the advertising data source, the programming data source,
and the purchase data source, wherein the matching further
includes:
[(i)] receiving data including a first identifier associated
with the household assigned by the data source, and
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(ii)
electronically using a thesaurus for: producing data
without personally identifiable information, and
indexing the produced data by a second identifier,
wherein the thesaurus relates each first identifier of
the household to the second identifier; storing the
matched advertising data, clickstream data, purchase
data, and programming data in at least one electronic
data storage medium operatively associated with the
computer processor; applying at least one cleansing
and editing algorithm to the matched data or the
stored data; and, calculating at least one return on
investment metric or true target index metric based
on the matched or stored data.15
[Claim 8]
The method of claim 7, further comprising:
receiving data communicated in parallel from the one or
more data sources, the communicated data comprising at
least personally identifiable information associated with the
household and the first identifier associated with the
household assigned by the data source; and,
generating the thesaurus for relating each first identifier
associated with the household to the second identifier.16
15
Id. at cols. 43:28-44:14.
16
Id. at col. 44:15-22.
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[Claim 9]
The method of claim 7, further comprising using the thesaurus for
relating an account number identifier to at least one other account
number identifier associated with the same household across
multiple data sources.17
3.
The ‘301 Patent
The ‘301 Patent — titled “Using Consumer Purchase Behavior for
Television Targeting” — issued on February 7, 2012, and lists TRA as the sole
assignee.18 TRA asserts that Kantar Media and Kantar Research have infringed
claims 1, 23, 42, 47, 49, 63, 108, and 109, which are set forth in full below.
[Claim 1]
A computer-implemented method for facilitating analysis of
consumer behavior in association with advertising exposure or
program delivery, the method comprising:
collecting in an advertising measurement system:
(i)
clickstream data from a program delivery source of
a consumer, wherein collecting the clickstream data
is not dependent on a supplemental data collection
device, and also wherein the collected clickstream
data includes household data;
17
Id. at col. 44:23-26.
18
See ‘301 Patent, Ex. U to Rutt Decl.
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(ii)
advertising data associated with delivery of the
program by the program delivery source, wherein
collecting the advertising data is not dependent on a
supplemental data collection device, and also
wherein the collected advertising data includes
household level data associated with multiple
consumer households;
(iii)
programming data associated with the program
delivered on the program delivery source, wherein
collecting the programming data is not dependent on
a supplemental data collection device, and also
wherein the collected programming data includes
household level data associated with multiple
consumer households; and,
(iv)
purchase data from a purchase data source, wherein
collecting the purchase data is not dependent on a
supplemental data collection device, and also
wherein the collected purchase data includes
household data;
matching at least portions of the collected advertising data,
the collected clickstream data, the collected purchase data,
and the collected program data in the advertising
measurement system at a household data level with at least
one electronic computer processor configured for
processing data received from the program delivery source,
the advertising data source, the programming data source,
and the purchase data source, wherein the matching further
includes:
(i)
grouping the collected data in association with an
identifier of each consumer household without
processing any personally identifiable information
associated with the consumer household, and
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(ii)
matching each identifier associated with each
consumer household with other identifiers associated
with the same consumer household without
processing any personally identifiable information
associated with the consumer household;
storing the matched advertising data, clickstream data,
purchase data, and programming data in at least one
electronic data storage medium operatively associated with
the computer processor;
applying at least one cleansing algorithm or editing
algorithm to the collected data, the matched data or the
stored data; and,
calculating at least one return on investment metric or true
target index metric based on the collected data, the matched
data or the stored data.19
[Claim 23]
The method of claim 1, further comprising receiving clickstream
data derived from a program delivery source comprising a
television set-top box operatively associated with a television
distribution system.20
[Claim 42]
The method of claim 1, further comprising using at least a portion
of the matched data to drive at least one addressable commercial
to the household.21
19
Id. at cols. 51:23-52:11.
20
Id. at col. 53:9-12.
21
Id. at col. 54:28-30.
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[Claim 47]
The method of claim 1, wherein the purchase data are associated
with product purchase records of a discount card associated with
the consumer.22
[Claim 49]
The method of claim 1, further comprising generating a true target
index report in the advertising measurement system.23
[Claim 63]
A system for facilitating analysis of consumer behavior in
association with advertising exposure or program delivery, the
system comprising:
an advertising measurement system including an electronic
computer programmed for:
(i)
collecting clickstream data from a program delivery
source of a consumer, wherein collecting the
clickstream data is not dependent on a supplemental
data collection device, and also wherein the collected
clickstream data includes household data;
(ii)
collecting advertising data associated with delivery
of the program by the program delivery source,
wherein collecting the advertising data is not
dependent on a supplemental data collection device,
and also wherein the collected advertising data
includes household level data associated with
multiple consumer households;
22
Id. at col. 54:47-49.
23
Id. at col. 54:53-55.
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(iii)
collecting programming data associated with the
program delivered on the program delivery source,
wherein collecting the programming data is not
dependent on a supplemental data collection device,
and also wherein the collected programming data
includes household level data associated with
multiple consumer households; and,
(iv)
collecting purchase data from a purchase data source,
wherein collecting the purchase data is not
dependent on a supplemental data collection device,
and also wherein the collected purchase data
includes household data;
(v)
matching at least portions of the collected
advertising data, the collected clickstream data, the
collected purchase data, and the collected program
data in the advertising measurement system at a
household data level with at least one electronic
computer processor configured for processing data
received from the program delivery source, the
advertising data source, the programming data
source, and the purchase data source, wherein the
matching further includes:
(i)
grouping the collected data in association with
an identifier of each consumer household
without processing any personally identifiable
information associated with the consumer
household, and
(ii)
matching each identifier associated with each
consumer household with other identifiers
associated with the same consumer household
without processing any personally identifiable
information associated with the consumer
household;
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at least one data storage medium operatively associated with the
computer processor, the data storage medium configured for
storing the matched advertising data, clickstream data, purchase
data, and programming data;
a module programmed for applying at least one cleansing
algorithm or editing algorithm to the collected data, the matched
data or the stored data; and,
a module programmed for calculating at least one return on
investment metric or true target index metric based on the
collected data, the matched data or the stored data.24
III.
LEGAL STANDARD25
Summary judgment is appropriate where, “viewing the record in the
light most favorable to the non-moving party . . . ‘there is no genuine dispute as to
any material fact and the movant is entitled to judgment as a matter of law.’”26 “In
making this determination . . . we resolve all ambiguities and draw all permissible
factual inferences in favor of the party against whom summary judgment is
24
Id. at cols. 55:28-56:18.
25
In a case arising under the patent laws, the rules of the regional circuit
govern the standard of review applicable to a motion for summary judgment. See,
e.g., Whitserve, LLC v. Computer Packages, Inc., 694 F.3d 10, 18 (Fed. Cir. 2012).
Accordingly, the summary judgment standard of the Second Circuit is recited
below.
26
Robinson v. Concentra Health Servs., Inc., 781 F.3d 42, 44 (2d Cir.
2015) (quoting Fed. R. Civ. P. 56(a)) (quotation marks and citation omitted).
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sought.”27 “A fact is material if it might affect the outcome of the suit under the
governing law, and an issue of fact is genuine if the evidence is such that a
reasonable jury could return a verdict for the nonmoving party.”28
“The moving party bears the burden of showing the absence of a
genuine dispute as to any material fact.”29 To defeat a motion for summary
judgment, the non-moving party must “‘do more than simply show that there is
some metaphysical doubt as to the material facts, and may not rely on conclusory
allegations or unsubstantiated speculation.’”30 “If the non-moving party has the
burden of proof on a specific issue, the movant may satisfy its initial burden by
demonstrating the absence of evidence in support of an essential element of the
non-moving party’s claim.”31
“‘The function of the district court in considering the motion for
27
Simpson v. City of New York, 793 F.3d 259, 265 (2d Cir. 2015)
(quotation marks and citation omitted).
28
Windsor v. United States, 699 F.3d 169, 192 (2d Cir. 2012), aff’d, 133
S.Ct. 2675 (2013) (quotation marks, citation, and alterations omitted).
29
Crawford v. Franklin Credit Mgmt. Corp., 758 F.3d 473, 486 (2d Cir.
2014) (citing Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970)).
30
Robinson, 781 F.3d at 44 (quoting Brown v. Eli Lilly & Co., 654 F.3d
347, 358 (2d Cir. 2011)).
31
Chen v. New Trend Apparel, 8 F. Supp. 3d 406, 430 (S.D.N.Y. 2014)
(citing Celotex v. Catrett, 477 U.S. 317, 325 (1986) (further citations omitted)).
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summary judgment is not to resolve disputed questions of fact but only to
determine whether, as to any material issue, a genuine factual dispute exists.’”32
“‘Credibility determinations, the weighing of the evidence, and the drawing of
legitimate inferences from the facts are jury functions, not those of a judge.’”33
IV.
APPLICABLE LAW
A.
Patent Invalidity Under 35 U.S.C. § 101
Section 101 of Title 35 of the United States Code provides that
“whoever invents or discovers any new and useful process, machine, manufacture,
or composition of matter, or any new and useful improvement thereof, may obtain
a patent therefor . . . .” The courts recognize three general exceptions to this rule:
“laws of nature, physical phenomena, and abstract ideas” are inherently
unpatentable.34 The Supreme Court has “described the concern that drives this
exclusionary principle as one of preemption.”35 That is, “[l]aws of nature, natural
phenomena, and abstract ideas are the basic tools of scientific and technological
32
Rogoz v. City of Hartford, 796 F.3d 236, 245 (2d Cir. 2015) (quoting
Kaytor v. Electric Boat Corp., 609 F.3d 537, 545 (2d Cir. 2010)).
33
Crawford, 758 F.3d at 486 (quoting Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 255 (1986)).
34
Bilski v. Kappos, 561 U.S. 593, 601 (2010).
35
Alice Corp. v. CLS Bank, 134 S.Ct. 2347, 2354 (2014).
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work,” and “monopolization of those tools through the grant of a patent might tend
to impede innovation more than it would tend to promote it, thereby thwarting the
primary object of the patent laws . . . .”36
In 2012, the Supreme Court articulated a two-prong test for policing
this prohibition as to laws of nature and physical phenomena.37 The Supreme
Court then applied this test to abstract ideas two years later, in Alice Corporation v.
CLS Bank.38
Step one of the Alice test requires assessing whether the claims at
issue are directed to a patent-ineligible concept (a law of nature, physical
phenomenon, or abstract idea).39 An abstract idea can encompass “longstanding
practices” tied to human activity, and need not be limited to “preexisting,
fundamental truths” stated in a vacuum.40 Categories of abstract ideas recognized
by the Federal Circuit post-Alice include “method[s] of organizing human
activity,” “data collection, recognition, and storage,” “using categories to organize,
36
Id. (internal citations and quotations omitted).
37
See Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S.Ct.
1289 (2012).
38
134 S.Ct. at 2347.
39
See id. at 2355.
40
Id. at 2356.
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store, and transmit information,” and “process[es] of organizing information.”41
If the patent at issue is directed towards a patent-ineligible concept, a
court then “examine[s] the elements of the claim to determine whether it contains
an inventive concept sufficient to transform the claimed abstract idea into a patenteligible application.”42 This step requires examining the elements of each claim
both individually and as an ordered combination.43 Claims are invalid for lack of
an inventive concept if they merely combine the patent-ineligible concept with
“well-understood, routine, conventional activities.”44 For example, “routine datagathering steps” do not transform an abstract idea into a patent-eligible invention.45
Nor does “conventional computer activity.”46 As the Supreme Court explained in
Alice, “transformation into a patent-eligible application requires more than simply
41
Id. at 2356-57; Content Extraction & Transmission LLC v. Wells
Fargo, 776 F.3d 1343, 1347 (Fed. Cir. 2014); Digitech Image Techs. v. EFI, Inc.,
758 F.3d 1344, 1350 (Fed. Cir. 2014).
42
Alice, 134 S.Ct. at 2357.
43
See id. at 2355.
44
Internet Patents Corp. v. Active Network, Inc., 790 F.3d 1343, 1348
(Fed. Cir. 2015).
45
OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359, 1360-61 (Fed.
Cir. 2015).
46
Id.
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stating the abstract idea while adding the words ‘apply it.’”47
Alice has had a marked, even transformative impact on courts’
assessment of patents directed towards arguably abstract ideas. In twelve of the
Federal Circuit’s first thirteen decisions applying Alice (including one issued mere
days after the filing of counterclaim-defendants’ reply brief), the Federal Circuit
invalidated the patents at issue as insufficiently inventive abstract ideas.48 Each
47
Alice, 134 S.Ct. at 2357 (quoting Mayo, 132 S.Ct. at 1294).
48
See Mortgage Grader, Inc. v. First Choice Loan Servs. Inc., No.
2015-1415, 2016 WL 362415, at *1 (Fed. Cir. Jan. 20, 2016) (patent directed to
calculating borrower’s credit “grade” and providing loan pricing information);
Vehicle Intelligence & Safety LLC v. Mercedes-Benz USA, LLC, No. 2015-1411,
2015 WL 9461707, at *2 (Fed. Cir. Dec. 28, 2015) (patent directed to testing
operators of moving equipment for physical or mental impairment); Versata Dev.
Grp., Inc. v. SAP Am., Inc., 793 F.3d 1306, 1333 (Fed. Cir. 2015) (patent directed
to product group price determinations); OIP Techs., Inc., 788 F.3d at 1359 (patent
directed to e-commerce price optimization); Intellectual Ventures I LLC v. Capital
One Bank (USA), 792 F.3d 1363, 1367 (Fed. Cir. 2015) (patent directed to sending
notifications regarding financial transactions); Internet Patents Corp., 790 F.3d at
1344 (patent directed to retaining online application data regardless of use of web
browser’s “back” and “forward” buttons); Ariosa Diagnostics, Inc. v. Sequenom,
Inc., 788 F.3d 1371, 1377 (Fed. Cir. 2015) (patent directed to detecting and
amplification of DNA sequences in blood plasma or serum); Digitech, 758 F.3d at
1344 (patent directed to generation and use of “improved device profile” to
improve printing of digital photographs); Ultramercial, Inc. v. Wildtangent, Inc.,
772 F.3d 709 (Fed. Cir. 2014) (patent directed to free delivery of copyrighted
material over the Internet in conjunction with sponsor advertising); Content
Extraction & Transmission LLC, 776 F.3d at 1343 (patents directed to collection
and recognition of scanned document data by ATMs); Planet Bingo, LLC v. VKGS
LLC, 576 Fed. App’x 1005, 1007 (Fed. Cir. 2014) (patent directed to managing
computerized bingo games); buySAFE, Inc. v. Google, Inc., 765 F.3d 1350 (Fed.
Cir. 2014) (patents directed to computer-based third-party guarantee of sales
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and every one of these invalidated patents was directed towards a digital
application of a non-digital concept.49
B.
The WPP Companies’ Burden
The parties dispute counterclaim-defendants’ burden in connection
with their motion for summary judgment. TRA argues that its patents are
presumed valid and the WPP Companies bear the burden of proving invalidity by
clear and convincing evidence, relying on section 282(a) of Title 35 of the United
States Code (“A patent shall be presumed valid . . . . The burden of establishing
invalidity of a patent or any claim thereof shall rest on the party asserting such
invalidity.”). The WPP Companies argue that the clear and convincing evidence
standard does not apply to patent eligibility claims brought under section 101, as
patent eligibility is a question of law, not fact.
The Federal Circuit appears to have resolved this question. After
Alice, courts have frequently decided questions of patent eligibility on the
transactions).
49
In the single case where the Federal Circuit upheld a patent under
Alice, the patent at issue was directed towards an entirely new technological
problem — the retention of website visitors during online purchases. See DDR
Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245, 1249-50 (Fed. Cir. 2014).
-27-
pleadings.50 Courts decline to decide patent eligibility at the pleading stage not
because factual development is required, but because certain claims require
construction before the patent eligibility question can be adjudicated.51 Because no
evidence outside the pleadings is considered in deciding a motion to dismiss or a
motion for judgment on the pleadings, “it makes little sense to apply a clear and
convincing evidence standard — a burden of proof — to such motions.”52 The
same is true in the summary judgment context: like summary judgment on a claim
of breach of an unambiguous contract, this Court’s determination of patenteligibility requires no extraneous information, no factual record — only the patents
themselves. The presumption of validity — and its concomitant clear and
convincing evidence standard — does not apply to section 101 claims.
This determination is in line with the Federal Circuit’s guidance on
the issue: “Although the Supreme Court has taken up several section 101 cases in
recent years, it has never mentioned — much less applied — any presumption of
50
See, e.g., Content Extraction & Transmission LLC, 776 F.3d at 1349;
Ultramercial, 772 F.3d at 711; buySAFE, Inc., 765 F.3d at 1351 (affirming district
court’s decision to grant judgment on the pleadings based on 35 U.S.C. § 101).
51
See, e.g., StoneEagle Servs., Inc. v. Pay-Plus Solutions, Inc., No. 8:13CV-2240-T-33MAP, 2015 WL 518852 (M.D. Fla. Feb. 9, 2015).
52
Modern Telecom Sys. LLC v. Earthlink, Inc., No. SA CV 14-0347DOC, 2015 WL 1239992, at *7 (C.D. Cal. Mar. 17, 2015).
-28-
eligibility. The reasonable inference, therefore, is that while a presumption of
validity attaches in many contexts, no equivalent presumption of eligibility applies
in the section 101 calculus.”53
Although the clear and convincing evidence standard is not applicable
to the WPP Companies’ claims, as the parties moving for relief they still bear the
burden of establishing that the claims are patent-ineligible under section 101.
Additionally, the Court construes the challenged patent claims in a manner most
favorable to TRA.54
V.
DISCUSSION
A.
Ripeness for Review
TRA contends that the WPP Companies’ section 101 claims are not
ripe until this Court construes the ‘940 patent term “at a given time,” which the
Federal Circuit indicated required construction in the context of the WPP
Companies’ patent infringement claims.55 I disagree. While “it will ordinarily be
desirable — and often necessary — to resolve claim construction disputes prior to
53
Ultramercial, 772 F.3d at 720-21 (Mayer, J., concurring) (emphasis
added).
54
See Content Extraction & Transmission LLC, 776 F.3d at 1349.
55
See TNS Media Research, 2015 WL 5439002, at *21.
-29-
a § 101 analysis,”56 courts have routinely invalidated claims without the benefit of
claim construction or discovery — especially post-Alice.57 To the extent the
Federal Circuit indicated that this Court was required to engage in further claim
construction, that claim construction was required to properly adjudicate the WPP
Companies’ patent infringement claims, not its section 101 claims. Indeed, the
term “at a given time” is entirely irrelevant to the patent eligibility question — as
evinced by TRA’s failure to “identify any relevant factual dispute”58 about the term
that would affect the WPP Companies’ patent eligibility claim. Further claim
construction is not required; the section 101 claims are ripe for resolution.
B.
Representativeness
One question remains before this Court can adjudicate the WPP
Companies’ section 101 claims — whether claim 71 of the ‘940 patent is
representative of the ‘993 and ‘301 patent claims. TRA argues that it is not
representative, correctly noting that the Federal Circuit did not explicitly hold that
56
Modern Telecom Sys., 2015 WL 1239992, at *6.
57
See, e.g., Internet Patents Corp., 790 F.3d at 1344 (affirming district
court’s dismissal for § 101 invalidity prior to claim construction and discovery).
See also Bancorp Servs., LLC v. Sun Life Assurance Co. of Can., 687 F.3d 1266,
1273 (Fed. Cir. 2012) (“claim construction is not an inviolable prerequisite to a
validity determination under § 101.”).
58
Fairfield Indus., Inc. v. Wireless Seismic, Inc., No. 4:14-cv-2972,
2014 WL 7342525, at *4 (S.D. Tex. Dec. 23, 2014).
-30-
claim 71 of the ‘940 patent is representative of TRA’s purported invention.
However, while the Federal Circuit did not have reason to hold claim 71 of the
‘940 patent representative, its language strongly suggested such an outcome — it
chose to emphasize claim 71 of the ‘940 patent as “illustrative of [TRA’s]
invention,” and set out that claim in full while presenting the ‘993 and ‘301 patents
as “similar to” the ‘940 patent, with very little further detail.59 The Federal Circuit
looked to the ‘940 patent in reviewing this Court’s November 25 Opinion. There
was, however, no holding of representativeness.
This Court is certainly not required to “individually address every one
of [TRA’s] claims” under section 101 merely because the Federal Circuit made no
explicit ruling on representativeness.60 “[I]t is not necessary to address each claim
when one claim (or more) is representative [of the others].”61 So long as “the other
claims of the patent[s] are drawn to a similar process,”62 and so long as the
remaining claims are “substantially similar in that they recite little more than the
same abstract idea,”63 this Court may apply the Alice test to a single representative
59
TNS Media Research, 2015 WL 5439002, at *2.
60
Content Extraction & Transmission LLC, 776 F.3d at 1348.
61
Modern Telecom Sys., 2015 WL 1239992, at *10 n.4.
62
Ultramercial, 772 F.3d at 712.
63
Content Extraction & Transmission LLC, 776 F.3d at 1348.
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claim.
I find claim 71 of the ‘940 patent to be representative of the ‘301 and
‘993 patent claims. While there are minor differences across each of the three
patents-in-suit, each of the patents describes the same basic invention in five basic
steps: (1) collecting household-level data from a variety of digital sources, (2)
matching this data to individual households through the use of digital double-blind
matching, (3) digitally storing this matched data, (4) applying a “cleansing and
editing algorithm” to the data to remove extraneous and/or private information, and
(5) calculating an advertising metric based on the data. The differences that do
exist between the patents are ancillary to this core invention; indeed, TRA itself
has described the ‘993 and ‘301 patents as “relat[ing] to the same technology” and
“contain[ing] similar claims as those in the original [‘940] patent” in arguing for
leave to file supplemental counterclaims based on these two patents.64 It is
noteworthy that, across all of the briefing on this matter (including sur-reply), TRA
has failed to articulate why the differences between the ‘940, ‘301, and ‘933 patent
claims matter for the purpose of patent eligibility. It has instead hung its hat on the
argument that without an explicit holding by this Court, or an agreement among
the parties, there was no basis for the use of a representative claim at all. TRA now
64
Memorandum of Law in Support of TRA’s Motion for Leave to File
Supplemental and Amended Counterclaims at 14.
-32-
has its holding; I proceed to analyze claim 71 of the ‘940 patent under Alice.
C.
Alice
1.
Alice Step One: “Abstract Idea”
The first step of the Alice test requires a court to “distill the gist of the
claim,” then determine whether that claim is directed towards a patent-ineligible
concept — such as an abstract idea.65 TRA’s claim is for the digital, double-blind
matching of collected purchase data and program delivery data to individual
households. TRA argues that this view of its invention “completely ignor[es] the
fact that to practice TRA’s invention, one must use concrete and tangible items
such as television set top boxes and cash registers.”66 This is a mischaracterization
of its own patent, which refers generically to “purchase data sources” and
“program delivery sources” — sources that could just as easily be found entirely
on the Internet.67 No tangible machine is needed to collect the data required for the
65
Open Text S.A. v. Box, Inc., 78 F. Supp. 3d 1043, 1046 (N.D. Cal.
2015). Accord buySAFE, 765 F.3d at 1354-55 (holding that “[t]he claims are
squarely about creating a contractual relationship” despite the existence of other,
more specific claim limitations).
66
Counterclaim-Plaintiff’s Response to Supplemental Memorandum
Regarding Summary Judgment (“TRA Mem.”) at 5.
67
For example, purchase data could come from an online retailer instead
of a brick-and-mortar store, and program delivery data could come from an online
video streaming service instead of a cable company.
-33-
double-blind match.
Nor would such a tangible machine defeat the abstract nature of
TRA’s patent claims. An otherwise-abstract idea cannot be rendered patenteligible by requiring it to be implemented alongside routine data collection. Such
“insignificant data-gathering steps . . . add nothing of practical significance to the
underlying abstract idea.”68 Here, TRA’s invention requires the gathering of data
from many possible sources (including cash registers and television set top boxes).
That conventionally gathered data is then matched to individual households using
digital double-blind matching, is digitally stored, and is digitally prepared for and
presented to end users in the form of advertising metrics. The abstract concept of
matching consumer data to households using a double-blind matching strategy runs
through this entire claim, and is not changed by the fact that certain possible
sources of data to be matched are gathered using separate computer systems.
The abstract nature of TRA’s patent is confirmed by the fact that
TRA’s claim, as a whole, can be performed by humans rather than computers.
“[A] helpful way of assessing whether the claims of [a] patent are directed to an
abstract idea is to consider if all of the steps of the claim could be performed by
68
Ultramercial, 772 F.3d at 716.
-34-
human beings in a non-computerized ‘brick and mortar’ context.”69 Here, a human
could take the place of the generic computer described in claim 71 of the ‘940
patent. For example, a research analyst could gather purchase data from an online
retailer and viewing data from an online video streaming service, with each list
identifying only accounts rather than personally identifiable information (the data
collection). The researcher could then correlate the purchase data and viewing data
with households by using an index prepared by a third party who had access to the
transactions’ personally identifying information, but not behavioral information
(the double-blind match). The analyst could then manually remove extraneous
information and calculate the advertising metric to be sold to end users. A
computer certainly makes this process a great deal more efficient, but the
underlying abstract idea remains unchanged.70
TRA’s patents are directed towards a patent-ineligible abstract idea.
69
Intellectual Ventures I LLC v. Symantec Corp., 100 F. Supp. 3d 371,
383 (D. Del. 2015) (citing buySAFE, 765 F.3d at 1353). Accord DietGoal
Innovations LLC v. Bravo Media LLC, 33 F. Supp. 3d 271, 278-79 (S.D.N.Y.
2014), aff’d, 599 Fed. App’x 956 (Fed. Cir. 2015) (finding claims that “recite steps
that, although computer-implemented by virtue of the patent application, could be
performed in the human mind, or by a human using a pen and paper” were directed
towards an abstract concept).
70
See OIP Techs., Inc., 788 F.3d at 1363 (“[R]elying on a computer to
perform routine tasks more quickly or more accurately is insufficient to render a
claim patent-eligible.”).
-35-
This Court therefore turns to step two of the Alice test to determine whether the
claim contains elements sufficient to transform the underlying abstract idea into a
patent-eligible application.
2.
Alice Step Two: Inventiveness
Because TRA’s claim is directed to an abstract idea, it must include an
“inventive concept” in order to be patent-eligible. No such inventive concept is
present here. Instead, claim 71 of the ‘940 patent recites only “well-understood,
routine, [or] conventional activities”71 such as data collection, data storage, and
routine “post-solution”72 activities (activities performed on the data following the
double-blind match) that are insufficiently inventive to render TRA’s claims
patentable. Indeed, the remaining limitations in the claim do little more than
implement the core concept of TRA’s claims — the digital double-blind match of
household data. As the Supreme Court noted in Alice, “if a patent’s recitation of a
computer amounts to a mere instruction to implemen[t] an abstract idea on . . . a
computer, . . . that addition cannot impart patent eligibility.”73
“Nothing in the asserted claims ‘purport[s] to improve the functioning
71
Alice, 134 S.Ct. at 2359.
72
DietGoal, 33 F. Supp. 3d at 288.
73
134 S.Ct. at 2358 (internal quotation omitted).
-36-
of the computer itself’ or ‘effect an improvement in any other technology or
technical field.’”74 Nor are the claims tied to a “particular machine or apparatus.”75
To the extent TRA argues that its claims “allowed a massive scale up of tracking
the efficacy of advertising without the burden and expense of installing
supplemental data collection devices in people’s homes and without an invasion of
consumer privacy,” these hypothetical benefits are not recited in TRA’s actual
patent claims.76 Such unclaimed features cannot render an ineligible claim patenteligible.77 Because the asserted claims are directed to an abstract idea and nothing
in the claims comprises an inventive concept, TRA’s claims are patent-ineligible.
74
Mortgage Grader, 2016 WL 362415, at *7 (quoting Alice, 134 S.Ct.
at 2359).
75
Bilski, 561 U.S. at 601.
76
TRA Mem. at 9.
77
See Planet Bingo, 576 Fed. App’x at 1008-09.
-37-
- Appearances For Defendant and Counterclaim-Plaintiff TRA:
Christopher Colvin, Esq.
Kramer Levin Naftalis & Frankel, LLP
1177 Avenue of the Americas
New York, NY 10036
(212) 715-7799
Jay Lefkowitz, Esq.
John Paul Del Monaco, Esq.
Kirkland & Ellis LLP
601 Lexington Avenue
New York, NY 10022
(212) 446-4970
Richard Doyle, Esq.
Jaime Herren, Esq.
Janssen Doyle LLP
140 Brookwood Road, Suite 102
Orinda, CA 94563
(925) 295-1800
Perry Mark Goldberg, Esq.
Tanya Acker, Esq.
Goldberg, Lowenstein & Weatherwax LLP
11400 West Olympic Blvd., Suite 400
Los Angeles, CA 90064
(310) 203-9222
For Plaintiffs and Counterclaim-Defendants the WPP Companies:
Marc Rachman, Esq.
Andrew Keisner, Esq.
Davis & Gilbert LLP
1740 Broadway
New York, NY10019
-39-
(212) 468-4800
Michael A. Albert, Esq.
John Strand, Esq.
Charles Steenburg, Esq.
Eric Rutt, Esq.
Robert Abrahamsen, Esq.
Wolf, Greenfield & Sacks, P.C.
600 Atlantic Ave.
Boston, MA 02210
(617) 646-8000
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