Ridiculous Patent Troll Gets Stomped By CAFC, Just Months After Being Awarded A Huge Chunk Of Google's Ad Revenue

from the couldn't-have-happened-to-a-nicer-bunch dept

We've written a few times about Vringo, a patent troll (which got its name, and public stock status, from a reverse merger with a basically defunct public "video ringtone" company and a pure patent troll called I/P Engine). The company was using some very broad patents (6,314,420 and 6,775,664) to claim that Google and Microsoft were infringing based on how their search ad programs worked. In effect, Vringo, whose patents were at one time associated with Lycos, was trying to pull off another Overture move -- patenting a basic idea for search ads, and then cashing in from Google actually making it work. The case took a slight detour into the bizarre when Microsoft not only settled with Vringo for $1 million -- but also with a promise to pay 5% of whatever Google had to pay.

While the original ruling against Google in 2012 had the jury reject Vringo's request for nearly $700 million, and giving it "just" $30 million, in February of this year, a judge magically decided that 1.36% of all of Google's AdWords revenue (which is most of its revenue) belonged to Vringo.

Between February and now, however, something wonderful happened. That something wonderful was the Supreme Court's ruling in CLS Bank v. Alice. As we noted at the time, depending on how you read it, it certainly could be interpreted that nearly all software patents were invalid -- even as the ruling itself insisted that wasn't the case. Still, the early returns are promising, with CAFC (apparently finally getting the message) starting to smack down software patents.

So with the Vringo patents before CAFC, it appears they got the Alice treatment, with CAFC tossing them out as totally invalid for patenting a basic concept. The ruling focuses on how the ideas were obvious to those skilled in the art based on (a rather large amount of) prior art:

As the asserted patents themselves acknowledge, however, search engines, content-based filtering, and collaborative filtering were all well-known in the art at the time of the claimed invention.... The record is replete, moreover, with prior art references recognizing that content-based and collaborative filtering are complimentary techniques that can be effectively combined. The WebHound reference explains that “content-based and automated collaborative filtering are complementary techniques, and the combination of [automated collaborative filtering] with some easily extractable features of documents is a powerful information filtering technique for complex information spaces." ... The Fab reference likewise notes that “[o]nline readers are in need of tools to help them cope with the mass of content available on the World-Wide Web,” and explains that “[b]y combining both collaborative and content-based filtering systems,” many of the weaknesses in each approach can be eliminated.... Similarly, the Rose patent, which was filed in 1994 by engineers at Apple Computer, Inc., states that “[t]he prediction of relevance [to a user’s interests] is carried out by combining data pertaining to the content of each item of information with other data regarding correlations of interest between users."

The ruling laughs off Vringo's claims that its patents took things a step further by combining two ideas, pointing out that this was quite obvious at the time.

But the concurring opinion by Judge Mayer calls out the Alice ruling and the fact that this stuff isn't patentable in the first place:

Because the claims asserted by I/P Engine, Inc. (“I/P Engine”) disclose no new technology, but instead simply recite the use of a generic computer to implement a well-known and widely-practiced technique for organizing information, they fall outside the ambit of 35 U.S.C. § 101...

[....]

I/P Engine’s claimed system is merely an Internet iteration of the basic concept of combining content and collaborative data, relying for implementation on “a generic computer to perform generic computer functions.” ...

Moreover, the scope of the claimed invention is staggering, potentially covering a significant portion of all online advertising. I/P Engine’s asserted claims fall outside section 101 because their broad and sweeping reach is vastly disproportionate to their minimal technological disclosure.

That last line is a fun one.

Either way, it looks like the writing may be on the wall for software patent trolls. Vringo's stock collapsed after the ruling and some other public patent trolls also saw their stock drop. Couldn't happen to a more deserving group of leeches on innovation.

Filed Under: cafc, patent troll, search ads
Companies: alice, cls bank, google, ip engine, microsoft, vringo

American Airlines Cuts & Pastes Its Keyword Ad Lawsuit; Tries Again With Yahoo

from the search-and-replace dept

Last year, we were surprised to see American Airlines sue Google over the fact that competitors were buying keyword-based ads on American Airlines' trademarks. Plenty of similar lawsuits had been brought, but for the most part (in the US at least), search engines are on the right side of the law. First of all, simply buying keywords based on trademarks isn't considered a violation of the trademark. Trademark law doesn't give you total control over the mark, but it is designed to prevent confusing uses. Advertising against a competitor isn't a confusing use by itself, so long as it's clear that the advertiser is different from the trademark holder. Second, and more importantly, even if it was a violation of trademark, the liability should fall on the advertiser, not the search engine. Since the search engine is just a platform, the real claim should be against whoever created and paid for the advertisement.

Given that the search engines have come out on top in many such cases, we were surprised this past summer to see Google and American Airlines settle the case, while keeping the actual details secret. Initially, it appeared that Google had won the settlement, as it was still possible to find those competing ads. However, it's possible that the terms of the settlement hadn't taken effect yet, as a more recent search no longer finds those ads. Even more damning is the news that American Airlines has now basically done a copy & paste and search & replace on the original lawsuit and re-filed it against Yahoo. It even includes the same mistakes as the first lawsuit. As Eric Goldman notes, this is strange for a variety of reasons, including the fact that Yahoo is known to be much more friendly to trademark holders in such cases. However, this certainly suggests that Google may have caved in its settlement, rather than the other way around. If so, that would have been an unfortunate decision by Google, and Google's settlement may only lead to more trademark holders taking their chances on suing as well.

Filed Under: search ads, trademark
Companies: american airlines, google, yahoo

European Court To Review Whether Google Can Sell Ads On Trademarked Terms

from the hopefully-a-little-sanity dept

While US courts have (mostly) finally realized that simply selling search terms based on someone else's trademarked name should not make Google liable, French courts haven't been so enlightened. The huge fashion retailer Louis Vuitton won a lawsuit against Google, because some advertisers had purchased search ads on the term "Louis Vuitton" to advertise "Louis Vuitton Fakes" and "Louis Vuitton Replicas." It's hard to see the common sense reasoning to support LV in this case. In fact, the ruling seems problematic on two separate accounts -- both on the question of whether this was a trademark violation and whether it's Google who should be liable even if it is a trademark violation.

On the trademark question, a trademark is not about ownership of the mark itself, but it was designed to prevent customer confusion (i.e., telling someone that they were buying a Louis Vuitton product when it really wasn't). While the name is being used to sell counterfeit products, there shouldn't be any customer confusion here since the advertisements make it quite clear that the products for sale are fakes. No one will click on such an ad and think they are buying a legitimate item. So it's difficult to see how that leads to any sort of consumer harm.

On the liability question, even if you do believe that this is trademark infringement, the infringement is on the part of the advertiser, not Google. It's the advertiser that caused the confusion with the advertisement. Suing Google for such things is simply an attempt to shift the liability from the party who actually did something, to the company with a ton of money (funny how that works).

It appears that this case is now back up for discussion, as the case now moves out of France and into the European Court of Justice. Hopefully that court will be more reasonable in its approach to dealing with this particular issue.

Filed Under: eruope, keywords, search ads, trademark
Companies: google, louis vuitton

And... They're Back: Microsoft And Yahoo Talking Again

from the a-little-shove-from-Icahn dept

Amazing what a little shove from Carl Icahn can do. Microsoft admitted on Sunday that it's submitted a new proposal to Yahoo, though not an acquisition of the entire company. Without any additional details, it's difficult to know if this actually makes any sense for anyone involved, but it does show that this whole exercise is far from over. The rumor right now is that it involves Microsoft taking over Yahoo's search-related text advertising business, which Yahoo has been considering handing over to Google. Yahoo would retain its display advertising business and its other properties like Yahoo mail and instant messaging. In many ways, this makes sense. Yahoo has never been strong in search advertising, and such a deal would let it concentrate on stuff that it actually does better.

Filed Under: ad deals, mergers, search ads
Companies: microsoft, yahoo

And Just Like That... Neither Yahoo Nor Google Really That Motivated To Complete A Search Ad Deal

from the after-sobering-up... dept

Last month Yahoo did what it had previously insisted it wouldn't do: it began testing Google's ads in place of its own search ads. At the time, Yahoo insisted that it had nothing whatsoever to do with Microsoft's attempted takeover. It even claimed that the plans had been put in place well before Microsoft's unsolicited offer. Of course, now that Microsoft has withdrawn the offer -- citing the potential ad deal with Google as one of the main reasons for backing away -- suddenly it appears that neither Yahoo nor Google are all that keen on moving forward on a more advanced deal. Funny how that works.

Filed Under: ads, search ads
Companies: google, microsoft, yahoo