CAFC Affirms Section 101 Dismissal for Google Over Internet Advertising Patents

The U.S. Court of Appeals for the Federal Circuit (CAFC) issued a decision Friday in The Receivership Estate of AudienceScience Inc. v. Google LLC, affirming a ruling from the U.S. District Court for the Northern District of California that granted Google LLC and YouTube LLC judgment on the pleadings on patent ineligibility grounds under 35 U.S.C. Section 101.

AudienceScience, through its court-appointed receiver Revitalization Partners, LLC, owns U.S. Patent Nos. 7,747,676, 7,882,175, and 8,082,298, which share a common specification and relate to internet advertising. The patents describe selecting an advertisement for display on a publisher’s web page based on information collected about the requested page and the user’s browsing activity. Each web page is associated with keywords describing its content, and a user’s page request history is likewise associated with keywords. Advertisements matching those keywords are assigned a selection weighting according to a performance score reflecting the revenue the advertisement previously generated, with the highest-weighted advertisement ultimately displayed. AudienceScience treated claim 1 of the ‘676 patent as representative for purposes of the appeal.

AudienceScience filed a lawsuit against Google LLC and YouTube LLC in 2021 in the U.S. District Court for the Western District of Texas, alleging infringement of the three patents. The case was later transferred to the Northern District of California, where Judge Edward J. Davila presided. Google moved for judgment on the pleadings under Federal Rule of Civil Procedure 12(c), arguing the asserted claims failed to recite patent-eligible subject matter. The district court granted the motion, finding at step one of the Alice framework that “the asserted claims, as a whole, are ‘directed to the abstract idea of targeting advertisements to maximize revenue generation,’” and at step two that the claims recite no inventive concept beyond that idea. The district court also determined, on its own initiative, that amending the complaint would be futile, and dismissed it without leave to amend.

On appeal, the CAFC agreed with the district court’s step one determination. The representative claim recites collecting keywords associated with a requested page and a user’s browsing history. It then uses those keywords to identify matching advertisements and weights each advertisement according to a performance score reflecting generated revenue. Finally, the claim selects one advertisement for display. The court concluded that the claim is “directed to the abstract idea of targeting advertisements to internet users to maximize revenue generation.”

AudienceScience argued that its claims were eligible under DDR Holdings, LLC v. Hotels.com,L.P. because internet advertising presents a challenge unique to computer networks. The court rejected the comparison, explaining that the claims are not directed to solving a problem specific to the internet in the way the claims in DDR Holdings addressed the transience of website locations. The CAFC quoted the district court’s finding that “the asserted claims here are directed to ‘selecting the most effective ad[vertisement],’ which is fundamentally a ‘non-internet centric problem.’” The court found the claims analogous to targeted advertising long used in print and television, applied to the internet.

Moreover, AudienceScience further argued that its claim recited a specific methodology rather than a mere desirable result, pointing to steps such as adding a requested page to a history and identifying sets of keywords and advertisements. The CAFC found this argument foreclosed by Chewy, Inc. v. International Business Machines Corp., where similarly broad steps of identifying search results and correlating them with matching advertisements were held abstract. AudienceScience also cited SRI International, Inc. v. Cisco Systems, Inc., Finjan, Inc. v. Blue Coat Systems, Inc., and McRO, Inc. v. Bandai Namco Games America Inc. as examples of eligible software claims, but the court distinguished each on the ground that those claims recited specific technical solutions to identified technological problems, which the representative claim here does not.

At step two, AudienceScience argued that combining page context and user browsing history and weighting advertisements by a performance score together supply an inventive concept, but the CAFC disagreed with each argument. The common specification describes each targeting approach as conventional, and AudienceScience’s characterization of their combination as producing more personalized results collapsed back into the abstract idea itself. The court noted that AudienceScience’s complaint contained no allegations that weighting advertisements by revenue was inventive, distinguishing the claims from those the court found in Weisner v. Google LLC. The court explained that an invention’s use of the very concept found ineligible cannot itself supply the inventive concept needed to render the claim significantly more than that abstract idea.

Furthermore, AudienceScience argued that the district court improperly foreclosed amendment of its complaint. The CAFC found this argument forfeited, noting that AudienceScience never sought leave to amend below, never appended a proposed amended complaint to its opposition brief, and never moved for reconsideration after dismissal, unlike the patent owner in Aatrix Software, Inc. v. Green Shades Software, Inc. The court explained, citing Ninth Circuit precedent, that “the request on appeal to remand with instructions to permit amendment comes too late” when no such request was made to the district court below. Since AudienceScience forfeited the argument, the CAFC did not reach the merits of the futility determination.

Ultimately, the Federal Circuit affirmed the district court’s grant of judgment on the pleadings against AudienceScience’s asserted claims across all three patents.