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Federal Circuit Weighs On the Patentability of Claims to Targeted Advertising
On March 5, 2024, a Federal Circuit panel of Judges Moore, Stoll, and Cunningham issued a unanimous opinion, authored by Chief Judge Moore, in Chewy, Inc. v. International Business Machines Corp., Case No. 22-1756. International Business Machines Corp. (IBM) owns U.S. Patent Nos. 7,7072,849 (the '849 patent) and 7,7076,443 (the '443 patent). The '849 patent is directed to improved methods for presenting advertisements to a user of an interactive service. Slip. Op. at 2. The '443 patent is directed to improved systems and methods for targeting advertisements. Id. Chewy, Inc. (Chewy) sought a declaratory judgment of noninfringement of the '849 and '443 patents. Id. at 3. IBM filed counterclaims alleging Chewy infringed the patents. Id. The United States District Court for the Southern District of New York granted Chewy's motion for summary judgment of noninfringement of claims 1, 2, 12, 14, and 18 of the '849 patent. Id. The district court also granted Chewy's motion for summary judgment that claims 13, 15, 16, and 17 of the '443 patent are ineligible under 35 U.S.C. §101. Id. IBM appealed both summary judgment rulings. Id.
The Federal Circuit affirmed the district court's grant of summary judgment of noninfringement of claims 1, 2, 14, and 18 of the '849 patent. The district court had construed the limitation "selectively storing" in the claims to mean the advertising objects must be "pre-fetched." Id. at 5. IBM argued that the proper construction does not require "pre-fetching." Id. The Federal Circuit affirmed the district court's construction because there are repeated written descriptions of the invention as including pre-fetching and the '849 patent uniformly refers to the pre-fetching as an aspect of the invention as a whole. Id. at 5-6. The prosecution history also showed that the applicant explained that selectively storing means advertising objects are pre-fetch. Id. at 8. IBM argued that even under the district court's construction, there is a factual dispute regarding whether Chewy's website or mobile applications selectively store advertising objects. Id. at 9. The Federal Circuit agreed with the district court that "pre-fetching" requires advertisements be retrieved and stored before the user requests a page. Id. at 10. Because Chewy only retrieves advertisements in response to a user requesting a page, the Federal Circuit found no material factual dispute that Chewy does not perform the selectively storing limitation. Id.
The Federal Circuit, however, reversed the district court's grant of summary judgment of noninfringement of claim 12 of the '849 patent. The district court construed the claim's limitation of "establishing characterizations for respective users based on the compiled data" to require delivering advertisements to a user based on user-specific targeting criteria. Id. at 11. Chewy's privacy policy and internal documents evidenced that Chewy utilizes users' browsing and purchasing history to provide personalized or targeted advertisements. Id. at 12-13. The Federal Circuit therefore found that there is a genuine dispute of material fact regarding whether Chewy "establish[es] characterizations for respective users." Id. at 14.
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