Authored by: Jeremy J. Gustrowsky
A recent decision from the Federal Circuit highlights the challenges of enforcing patents related to online advertising and targeted marketing. The dispute centered on two patents owned by IBM: U.S. Patent No. 7,072,849, which covers methods for presenting advertisements on user devices, and U.S. Patent No. 7,076,443, which relates to targeting ads based on search results. Chewy, Inc., an online retailer, sought a court ruling that it did not infringe these patents, and also challenged the validity of some claims.
For the ‘849 patent, the court agreed with Chewy that it did not infringe most of the asserted claims. The key issue was whether Chewy’s system “pre-fetched” ads—meaning, whether ads were retrieved and stored on a user’s device before the user requested the relevant page. The court found that Chewy’s system only retrieved ads in response to user requests, not in advance, so it did not meet this requirement. However, the court found there was still a factual dispute about one claim that involved targeting ads based on a user’s interaction history. Evidence such as Chewy’s privacy policy and internal documents suggested that Chewy might indeed use individualized targeting, so this part of the case was sent back for further proceedings.
On the other hand, the court found that several claims of the ‘443 patent were not eligible for patent protection at all. These claims covered methods of associating ads with search results, but the court ruled that this was an abstract idea—essentially, just using a computer to deliver targeted ads based on information, which is not enough to qualify for a patent. The court also rejected arguments that the use of databases, offline batch processing, or session identifiers made these claims inventive or unique.
This decision underscores how courts are scrutinizing software and business method patents, especially those that cover broad concepts like targeted advertising. Patent owners need to show that their inventions go beyond abstract ideas and include specific, inventive technical solutions in order to be enforceable.