DCT

4:23-cv-00438

AlmondNet Inc v. Meta Platforms Inc

I. Executive Summary and Procedural Information

Parties & Counsel:
- Plaintiff: AlmondNet, Inc. and Intent IQ, LLC (Delaware)
- Defendant: Meta Platforms, Inc. (Delaware)
- Plaintiff’s Counsel: Russ August & Kabat
Case Identification: 6:22-cv-01205, W.D. Tex., 11/18/2022
Venue Allegations: Venue is alleged in the Western District of Texas based on Defendant maintaining regular and established places of business in Austin and committing alleged acts of infringement within the district.
Core Dispute: Plaintiff alleges that Defendant’s advertising platform infringes six patents related to network-based advertising systems, including methods for profit-based ad selection and accumulating user profile data from third-party sources.
Technical Context: The patents address foundational technologies in the digital advertising ecosystem, focusing on optimizing ad placement and monetizing user data collected from various online sources.
Key Procedural History: The complaint alleges that Defendant was on notice of the patents-in-suit via communications in July and October 2019. For several of the asserted patents, the complaint also cites a prior lawsuit filed in August 2021 as a basis for Defendant’s knowledge.

Case Timeline

Date	Event
1999-12-13	Earliest Priority Date (’307, ’249 Patents)
2006-06-16	Earliest Priority Date (’745, ’783, ’146 Patents)
2007-04-17	Earliest Priority Date (’878 Patent)
2010-06-29	’745 Patent Issued
2011-07-12	’307 Patent Issued
2012-06-19	’783 Patent Issued
2014-07-08	’249 Patent Issued
2015-02-17	’146 Patent Issued
2019-07-24	Plaintiff allegedly sent notice communication to Defendant
2019-10-25	Plaintiff allegedly sent notice communication to Defendant
2020-07-14	’878 Patent Issued
2021-08-27	Prior lawsuit (AlmondNet v. Meta) filed, allegedly giving Defendant knowledge of certain patents
2022-11-18	Complaint Filing Date

II. Technology and Patent(s)-in-Suit Analysis

U.S. Patent No. 7,747,745 - "Media properties selection method and system based on expected profit from profile-based ad delivery," issued June 29, 2010

The Invention Explained

Problem Addressed: The patent’s background describes the economic inefficiency in behavioral advertising, where the cost to place an ad on a third-party media property may exceed the revenue generated from that ad, making it difficult to select profitable ad inventory. (’745 Patent, col. 5:63-67).
The Patented Solution: The invention proposes an automated system that calculates an "expected profit" before selecting a media property for an advertisement. It does this by deducting the cost of the ad space from the expected revenue (which is based on the user's collected profile), and only authorizing the ad placement if the result is profitable. (’745 Patent, Abstract; Fig. 1). This pre-calculation allows a behavioral targeting company to avoid making unprofitable ad buys. (’745 Patent, col. 6:15-24).
Technical Importance: The technology introduced a real-time, profit-based decision metric into the ad selection process, aiming to move beyond simple audience matching to an economically optimized model for purchasing ad inventory.

Key Claims at a Glance

The complaint asserts at least one independent claim of the ’745 patent (Compl. ¶17). Independent claim 1 includes the following essential elements:

Automatically determining a profile-attribute-dependent revenue available for an advertisement.
For each electronic visitor, and in response to receiving profile information, automatically authorizing a third-party media property to display a correlated advertisement.
The authorization is for a price that does not exceed a "price cap."
The "price cap" is defined as a selected amount less than the revenue available for the advertisement.

U.S. Patent No. 7,979,307 - "method and stored program for accumulating descriptive profile data along with source information for use in targeting third-party advertisements," issued July 12, 2011

The Invention Explained

Problem Addressed: The patent addresses the difficulty of creating a marketplace for individual pieces of user data ("information attributes"), as it is hard to track which entity originally collected a piece of data and should be compensated when it is used for targeting elsewhere. (’307 Patent, col. 1:59-64).
The Patented Solution: The invention discloses a method where a central computer system receives user profile data from multiple "unaffiliated third parties" (e.g., different websites). The system's key function is to generate and store an electronic record identifying which third party contributed which specific profile attributes. (’307 Patent, Abstract; Claim 1). This record of data provenance enables the system to facilitate targeted advertising using aggregated data while creating a mechanism for attributing data to its source.
Technical Importance: This technology provides a framework for a cooperative data ecosystem, allowing different online entities to monetize the user profile data they collect by contributing it to a central targeting system that can track data origins.

Key Claims at a Glance

The complaint asserts at least one independent claim of the ’307 patent (Compl. ¶28). Independent claim 1 includes the following essential elements:

Electronically receiving at a computer system a partial profile of an entity from a server controlled by an unaffiliated third party.
Receiving this partial profile via an automatic electronic URL redirection from a page of the third party's website.
Automatically storing the received partial profile.
Automatically generating and storing an electronic record of which third party contributed the particular profile attributes.
Using the resulting maintained profile, which includes the added data, to target third-party advertisements.

U.S. Patent No. 8,204,783 - "Media properties selection method and system based on expected profit from profile-based ad delivery," issued June 19, 2012 (Compl. ¶32)

Technology Synopsis: As a continuation of the ’745 patent, this invention relates to systems that automatically select media properties for ad placement. The selection is based on an economic calculation that determines the expected profit of displaying an ad to a user with a specific profile on a given media property.
Asserted Claims: The complaint asserts at least one independent claim (Compl. ¶38).
Accused Features: The complaint accuses Meta's advertising platform of infringing this patent (Compl. ¶33).

U.S. Patent No. 8,775,249 - "method, computer system, and stored program for accumulating descriptive profile data along with source information for use in targeting third-party advertisements," issued July 8, 2014 (Compl. ¶43)

Technology Synopsis: As a continuation of the ’307 patent, this invention describes a method for a central system to accumulate user profile data from multiple, unaffiliated third-party sources. A key aspect is the creation of a record that tracks the source of each piece of profile data, which is then used for targeting third-party ads.
Asserted Claims: The complaint asserts at least independent claim 1 (Compl. ¶49).
Accused Features: The complaint accuses Meta's advertising platform of infringing this patent (Compl. ¶44).

U.S. Patent No. 8,959,146 - "media properties selection method and system based on expected profit from profile-based ad delivery," issued February 17, 2015 (Compl. ¶54)

Technology Synopsis: This patent, also in the family of the ’745 patent, concerns automated systems for selecting where to place digital advertisements. The core technological contribution is performing a profit calculation, based on expected ad revenue and media cost for a given user profile, to guide the selection of ad inventory.
Asserted Claims: The complaint asserts at least one independent claim (Compl. ¶60).
Accused Features: The complaint accuses Meta's advertising platform of infringing this patent (Compl. ¶55).

U.S. Patent No. 10,715,878 - "targeted television advertisements based on online behavior," issued July 14, 2020 (Compl. ¶65)

Technology Synopsis: This invention addresses the technical problem of targeting television advertisements based on a user's online behavior without using personally identifiable information. The patented solution involves electronically associating the IP address of a user's online access device (e.g., a computer or mobile device) with the IP address of that same user's television set-top box, then using the user's online activity profile to select and deliver a targeted ad to the television. (’878 Patent, Abstract).
Asserted Claims: The complaint asserts at least one independent claim (Compl. ¶71).
Accused Features: The complaint accuses Meta's advertising platform of infringing this patent, presumably through its cross-device advertising capabilities (Compl. ¶66).

III. The Accused Instrumentality

Product Identification: The complaint identifies the accused instrumentality as "Meta's advertising platform" (Compl. ¶12).
Functionality and Market Context: The complaint alleges that this platform is used to deliver targeted advertising across Meta's own properties and third-party networks (Compl. ¶¶ 1, 12). The complaint does not provide sufficient detail for analysis of the specific technical architecture or operation of Meta's platform. However, the infringement allegations frame its functionality as including the collection of user profile data from various sources, the selection of advertisements based on that data, and the delivery of those advertisements to users.

No probative visual evidence provided in complaint.

IV. Analysis of Infringement Allegations

The complaint references, but does not include, claim chart exhibits that compare independent claims of the asserted patents to the accused platform (Compl. ¶¶ 17, 28, 38, 49, 60, 71). The narrative infringement theories for the two lead patents are summarized below.

’745 Patent Infringement Allegations
The complaint’s theory suggests that Meta’s advertising platform performs the method of claim 1 by automatically selecting where to place advertisements based on an economic calculation. It is alleged that Meta’s platform determines the potential revenue an ad might generate based on a user's profile, considers the cost of the ad space, and only authorizes the delivery of the ad if it meets a profitability threshold, thereby infringing the claim’s requirement of using a "price cap" derived from available revenue (Compl. ¶¶ 12-13, 17).
’307 Patent Infringement Allegations
The complaint alleges that Meta's platform infringes by accumulating user profile data from unaffiliated third-party websites, such as through the Meta Pixel tool, and that this data is received via URL redirection. The theory further suggests that Meta’s platform generates and stores a record of which third party provided which data elements and uses this aggregated profile data to target advertisements, thereby practicing the patented method (Compl. ¶¶ 23, 28).
Identified Points of Contention:
- Scope Questions: A question for the court may be whether Meta's automated ad auction, which involves complex bidding and quality-score algorithms, performs a function that meets the specific definition of calculating a "price cap that is a selected amount less than the revenue available" as required by the ’745 patent.
- Technical Questions: A factual question may arise regarding the ’307 patent as to what "electronic record" of data provenance Meta’s platform actually "generat[es] and stor[es]." The analysis may focus on whether the system specifically tracks which "unaffiliated third part[y] contributed" which "particular profile attributes" in a manner that maps onto the claim language.

V. Key Claim Terms for Construction

Term: "a price cap that is a selected amount less than the revenue available for display of the advertisement" (’745 Patent, Claim 1)
- Context and Importance: This term is central to the claimed invention of the ’745 patent family, as it defines the specific economic calculation for selecting ad placements. The infringement analysis for three of the six asserted patents will turn on how this term is construed. Practitioners may focus on this term because it appears to require a specific mathematical relationship (revenue minus an amount) rather than a general optimization.
- Intrinsic Evidence for Interpretation:
  - Evidence for a Broader Interpretation: The specification describes the profit calculation in a formulaic but general way: "Pr=Rev(profile)-P(mp)," where Pr is profit, Rev is revenue, and P is the price of the media property. (’745 Patent, col. 6:66-67). This could support a construction that covers any system that makes a placement decision by considering expected revenue and media cost.
  - Evidence for a Narrower Interpretation: The claim language itself—"a selected amount less than the revenue"—suggests a specific subtractive operation. The detailed description explains that the price cap is "defined by the difference determined by subtracting from the revenue generated... a selected amount." (’745 Patent, col. 7:22-26). This language may support a narrower construction requiring a literal subtraction to set a spending limit, as opposed to a more flexible bidding algorithm.
Term: "generating and storing an electronic record of which of the plurality of unaffiliated third parties contributed to the maintained profile particular profile attributes" (’307 Patent, Claim 1)
- Context and Importance: This limitation defines the data attribution function that is core to the ’307 patent family. Whether Meta's platform infringes will depend on whether its data management systems create and use such a "record" of data provenance.
- Intrinsic Evidence for Interpretation:
  - Evidence for a Broader Interpretation: The patent's title refers to accumulating data "along with source information." This could be interpreted to cover any system that associates user data with its source for internal management, not necessarily for the specific purpose of compensation. (’307 Patent, Title).
  - Evidence for a Narrower Interpretation: The background of the invention discusses the need for "commerce in such attributes" and a "brokerage representation model," suggesting the purpose of the "record" is to enable a data marketplace where contributors can be identified and compensated. (’307 Patent, col. 2:1-4; col. 3:45-50). This context may support a narrower construction requiring the record to be structured for attribution and value exchange, rather than just general data logging.

VI. Other Allegations

Indirect Infringement: For all asserted patents, the complaint alleges induced infringement. The stated basis is that Defendant provides "user manuals and online instruction materials on its website" that allegedly "encourage and instruct its customers and end users" to use the accused advertising platform in an infringing manner (Compl. ¶¶ 15, 26, 36, 47, 58, 69).
Willful Infringement: Willfulness is alleged for all asserted patents. The complaint alleges pre-suit knowledge based on communications sent to Defendant on July 24, 2019, and October 25, 2019 (Compl. ¶¶ 8, 14). For U.S. Patent Nos. 7,979,307, 8,775,249, and 8,959,146, it further alleges knowledge based on a prior lawsuit filed against Defendant on August 27, 2021 (Compl. ¶¶ 25, 46, 57).

VII. Analyst’s Conclusion: Key Questions for the Case

A core issue will be one of functional equivalence: does Meta's complex, auction-based ad delivery platform perform the specific, profit-based calculation required by the ’745 patent family, which recites using a "price cap" derived from subtracting an amount from expected revenue, or is there a fundamental mismatch in its economic and technical operation?
A key evidentiary question will concern data attribution: does Meta's system, particularly through tools like the Meta Pixel that collect data from third-party sites, generate and store an "electronic record" that tracks which "unaffiliated third parties contributed" specific profile attributes for targeting purposes, as claimed by the ’307 patent family?
A central technical question for the ’878 patent will be one of cross-device association: does Meta’s advertising platform function by electronically associating online access device identifiers with television-based device identifiers to deliver targeted advertisements to televisions based on a user's online behavior, as the patent claims?