Background
The Receivership Estate of AudienceScience Inc. and its general receiver owned three related patents concerning the selection of online advertisements. The patents described using keywords derived from both a requested webpage and a user’s browsing history to identify potentially relevant advertisements, then selecting an advertisement according to weightings based on its revenue-generating performance.
AudienceScience sued Google and YouTube for patent infringement. After the action was transferred from the Western District of Texas to the Northern District of California, Google moved for judgment on the pleadings under Rule 12(c), arguing that the asserted claims were ineligible under 35 U.S.C. § 101. The district court granted the motion and dismissed the complaint with prejudice, concluding that the claims covered an abstract idea without an inventive concept and that amendment would be futile.
The Court’s Holding
The Federal Circuit affirmed. At the first step of the Alice analysis, it held that the claims were directed to the abstract idea of targeting advertisements to internet users to maximize revenue. Combining webpage context, browsing history, and an advertisement’s past revenue performance did not solve an internet-specific technological problem or improve computer functionality; it used computers to perform targeted advertising comparable to selecting advertisements for print or television audiences.
At Alice step two, the court held that the claims supplied no inventive concept. The patents described page-context and user-history targeting as conventional, while the claimed performance score merely reflected generated revenue and lacked a specific implementation. The court also held that AudienceScience forfeited its appellate request for an opportunity to amend because it never sought leave to amend, proposed an amended complaint, indicated below that it wished to amend, or identified with specificity on appeal what new allegations it would add. The court therefore did not reach the merits of the district court’s futility determination.
Key Takeaways
- Using webpage context and browsing history to select online advertisements was an abstract advertising strategy, not a technological improvement.
- Weighting advertisements according to revenue performance did not provide an inventive concept because the claims did not specify how the scoring or weighting was technically implemented.
- A plaintiff seeking another chance to plead facts relevant to patent eligibility should timely request leave to amend and identify the proposed allegations; doing nothing in the district court may forfeit the issue on appeal.
Why It Matters
The nonprecedential decision illustrates that adding internet-specific data and generic computer operations to a targeted-advertising method will not necessarily make the method patent eligible. Claims tied to online advertising remain vulnerable when they describe a business objective and desired results without a concrete technological mechanism.
The ruling also underscores the procedural importance of preserving amendment arguments in § 101 litigation. Although factual allegations can affect the inventive-concept inquiry at the pleadings stage, a patentee may lose the opportunity to rely on new allegations if it neither seeks amendment nor explains what an amended complaint would add.