Order Denying Motion for Judgment on the Pleadings, Klaustech, Inc. v. AdMob, Inc., Case No. 10-cv-05899-JSW(Judge Jeffrey S. White)
As noted previously on Orrick's blog, here, here, and here, 35 U.S.C. §101 motions are gaining increasing popularity post-Alice due in part to their high success rate. In this case, however, AdMob was unsuccessful in its effort to invalidate the at-issue patent after it survived Ex Parte Reexamination proceedings. Ex Parte Reexamination proceedings can only be brought based on patents or printed publications forming either 35 U.S.C. §§ 102 or 103 grounds for rejection, and thus the Patent Office did not during reexamination reach the question of Section 101 invalidity. Nevertheless, Judge White not only agreed with the Examiner's validity findings, but the findings contributed to his holding that the claims are directed to patent eligible subject matter.
The case dates back to 2010, when Klaustech filed a complaint asserting AdMob infringed U.S. Patent No. 6,128,651 ("the '651 Patent"), entitled "Internet Advertising with Controlled and Timed Display of Ad Content from Centralized System Controller." The patent claims "the exclusive right to a novel centrally-located, non-scrolling advertisement display frame on an Internet browser." AdMob initiated reexamination proceedings, seeking to invalidate the '651 Patent. The Patent Office, however, confirmed the patent's validity, issuing an Ex Parte Reexamination Certificate along with new and amended claims. Upon return to the district court, AdMob next sought to invalidate the patent through a 101 motion on the pleadings.
Judge White first noted his concurrence with the Examiner's findings in the reexamination, i.e., that the "[p]atent addresses a technological improvement specific to Internet-related advertising." Judge White's concurrence with the Examiner was integral to finding that the claims at issue here were similar to the claims central to the holding in DDR Holding, LLC v. Hotels.com, LP, 773 F.3d 1245, 1257 (Fed. Cir. 2014) (finding that the "claims stand apart because they do not merely recite the performance of some business practice known from the pre-Internet world along with the requirement to perform it on the Internet.."), because it meant both were directed to solutions "necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer networks." Judge White ultimately found that the '651 Patent provides a new approach to controlling and monitoring an advertisement displayed on an Internet browser, a problem distinct from conventional advertisements, and therefore, concluded Judge White, patent eligible.
Judge White further held that "even if the claimed system were directed at an abstract idea, given the high burden placed on Defendant to establish that the claims are not eligible at the pleading stage, the Court finds that the claims teach an improvement in a technology or technological field."
Despite his denial of the motion, Judge White's opinion reaffirms courts' willingness in certain situations to address potentially case-dispositive Section 101 motions early in a case and prior to claim construction, noting that"[w]here, as here, the basic character of the claimed subject matter is readily ascertainable from the face of the patent, the Court finds that it may determine patentability at the motion to dismiss stage." Defendants should not, however, forget the "high burden" to establish validity at the pleading stage.
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