CAFC Upholds Ineligibility of Targeted Ad Claims in Win for TikTok

In a win for TikTok, the U.S. Court of Appeals for the Federal Circuit (CAFC) today affirmed a district court’s grant of a Rule 12(c) motion holding 10Tales, Inc.’s targeted content patent claims invalid as ineligible under Section 101. The opinion was authored by Judge Reyna.

10Tales sued TikTok and ByteDance in the U.S. District Court for the Western District of Texas, alleging infringement of its U.S. Patent No. 8,856,030, which generally covers “a system for customizing or personalizing content based on user social network information.” The case was transferred to the Northern District of California, where TikTok first filed a rule 12(b)(6) motion to dismiss the complaint because claim 1 was directed to patent ineligible subject matter.  The district court denied that motion, holding that claim construction was required to determine if the claim was ineligible.

Following the claim construction order, TikTok filed a Rule 12(c) motion for judgment on the pleadings that the claim was invalid under Section 101. The district court granted that motion, although it rejected TikTok’s argument that the claim was directed to the abstract idea of targeted advertising. The court said that the claim is “more generally directed to a system for presenting personalized digital media content to a user based on the user attributes from user social network information,” and went on to conclude that, instead, claim 1 is abstract because it is limited to “presenting personalized content to a user based on information about the user.” This amounts to “a long-standing and fundamental practice of personalizing content based on user attributes that spans many domains,” said the district court.

At Alice step two, the district court said claim 1 recites conventional steps that do not transform the abstract idea into eligible subject matter, and that the ordered combination of the elements was not inventive. The court also denied 10Tales motion for leave to amend its complaint.

On appeal to the CAFC, 10Tales argued that claim 1 is directed to the non-abstract idea of “modifying a stream of content provided to a user based on social network information about the user that has been retrieved by the system from an external source.” But the CAFC said this lacked the “specificity required to transform a claim from one claiming only a result to one claiming a way of achieving it,” citing SAP Am., Inc. v. InvestPic, LLC, 898 F.3d 1161, 1167–68 (Fed. Cir. 2018). The claim failed to identify how the functional result was achieved, said the CAFC. In the case of 10Tales’ claim 1, there is nothing “directed to how to implement these steps for modifying digital media content based on a user’s social network information.” Instead, the claim only describes a result, not a way of achieving it. “Accordingly, the claim is drawn to the underlying idea itself, i.e., presenting personalized content to a user based on information about the user,” wrote the CAFC.

At Alice step two, 10Tales argued that the “retrieving user social network information from at least one source external to the presented first composite digital media display” limitation represented an inventive concept sufficient to transform the claims into eligible subject matter. 10Tales noted that this limitation helped the claim to survive several validity challenges because prior art systems “had not envisioned resort to user social network information to improve digital media content,” said the opinion. “But the law is clear,” wrote the CAFC. “[A] claim for a new abstract idea is still an abstract idea. The search for a § 101 inventive concept is thus distinct from demonstrating § 102 novelty.” Synopsys, Inc. v. Mentor Graphics Corp., 839 F.3d 1138, 1151 (Fed. Cir. 2016).

10Tales also argued that the limitation describing a “rule based substitution of one or more of the digital media assets” made “the specific combination of limitations inventive.” But the CAFC rejected this, noting that 10Tales did not argue for a specific construction of the “rule-based limitation,” and concluding that “this nonspecific ‘rule based’ limitation, which does not limit the claimed invention to a particular type of modification or substitution, does not provide an inventive concept at step two.”