I/P Engine, Inc. v. AOL, Inc. et al

Filing 323

Declaration re 319 MOTION to Exclude the Testimony of Stephen L. Becker of Emily C. O'Brien by AOL Inc., Gannett Company, Inc., Google Inc., IAC Search & Media, Inc., Target Corporation. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Exhibit 3, # 4 Exhibit 4, # 5 Exhibit 5, # 6 Exhibit 6, # 7 Exhibit 7, # 8 Exhibit 8, # 9 Exhibit 9, # 10 Exhibit 10, # 11 Exhibit 11, # 12 Exhibit 12, # 13 Exhibit 13, # 14 Exhibit 14, # 15 Exhibit 15, # 16 Exhibit 16, # 17 Exhibit 17)(Noona, Stephen)

EXHIBIT 3

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
I/P ENGINE, INC.,

)
)
)
Plaintiff,
)
)
v.
)
AOL, INC., GOOGLE INC., IAC SEARCH & )
)
MEDIA, INC., TARGET CORP., and
)
GANNETT CO., INC.
)
Defendants.

C.A. No. 2:11-cv-512-RAJ
JURY TRIAL DEMANDED

REPORT OF DEFENDANTS’ EXPERT
LYLE H. UNGAR, PH.D., CONCERNING
NONINFRINGEMENT

CONFIDENTIAL – OUTSIDE COUNSEL ONLY

i
UNGAR EXPERT REPORT ON NON-INFRINGEMENT
CONFIDENTIAL OUTSIDE COUNSEL ONLY

CASE C.A. No. 2:11-cv-512-RAJ

of advertisements are thus not constant. Externally, the position an ad is displayed is termed “Ad
Rank.”
81.

After the auction is completed, Google calculates the price an advertiser will pay

for the display of its ad if actually clicked on by the user. Advertisers are charged on a per-click
basis: if the ad is not clicked on, then Google does not receive any money. (“Ad System
Overview,” G-IPE-0009737.)

This price
is termed “actual cost per click,” “Actual CPC,” or simply “CPC.” As would be expected, the
CPC for any ad in any given auction will not exceed its Max CPC. (See, generally, “Life of a
Dollar,” G-IPE-0008851 to G-IPE-0008854; “Ad System Overview,” G-IPE-0009737.)
82.

Google uses a sophisticated machine learning algorithm termed the “Smart Ad

Selection System” or Smart Ads to compute predicted clickthrough rates. (See, e.g., “Smart Ad
Selection System (SmartASS™),” G-IPE-0002076 to G-IPE-0002080.)

17

See Furrow Depo., Ex. 1.
- 45 UNGAR EXPERT REPORT ON NONINFRINGEMENT—CONFIDENTIAL OUTSIDE COUNSEL ONLY
C.A. No. 2:11-cv-512-RAJ

83.

Of note, Dr. Frieder does not identify displaying ads alongside search results,

running an auction to compute ad positions,
, charging advertisers on a per-click basis, or using a modified second-price
auction to compute CPCs as part of the functionality that supposedly infringes the asserted
claims. Rather, Dr. Frieder asserts that using various “Quality Scores”18 to filter advertisements
out of the auction through
Accordingly, an
AdWords system that contained all of the functionality described

84.

The next sections describe the operation of AdWords in more detail.
2.

85.

Load Balancing

A user’s incoming search query is first received by Google’s load balancing

system, which determines which Google web servers should receive and process the query. This
ensures that each search request is routed to a web server with available resources, reducing the
chance that the user request will “hang” or take overly long. One can think of load balancing as
similar to an employee at a grocery store that directs shoppers to the cashier with shortest
checkout line… in a store with thousands of cashiers and millions of customers. (“The Life of a
Query,” G-IPE-0004739-40).

18

- 46 UNGAR EXPERT REPORT ON NONINFRINGEMENT—CONFIDENTIAL OUTSIDE COUNSEL ONLY
C.A. No. 2:11-cv-512-RAJ