DCT

1:19-cv-00247

AlmondNet Inc v. Oath Holdings Inc

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Key Events
Complaint

I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 1:16-cv-01557, E.D.N.Y., 03/30/2016
  • Venue Allegations: Plaintiffs allege venue is proper because Yahoo conducts substantial and continuous business in the district, including offering services to customers and partners located there, and that the alleged infringement arises from these activities.
  • Core Dispute: Plaintiffs allege that Defendant’s online advertising platforms and services, including Yahoo Ad Exchange and BrightRoll, infringe ten U.S. patents related to off-site ad targeting, programmatic ad bidding, user profile consolidation, and cross-device advertising.
  • Technical Context: The lawsuit concerns foundational technologies in targeted digital advertising, a market-critical domain for monetizing internet traffic by delivering relevant advertisements to users based on their online behavior and profile data.
  • Key Procedural History: The complaint alleges that Plaintiff AlmondNet had discussions with Yahoo regarding its patent activities in 2006, 2013, and 2015. It further alleges that in 2013, AlmondNet specifically advised Yahoo of several of the patents-in-suit and its belief that they applied to Yahoo's activities, forming the basis for Plaintiffs' willful infringement claim.

Case Timeline

Date Event
1999-12-13 Priority Date for DPC Patents (’249, ’904, ’582, ’307)
2000-11-28 Priority Date for OTA Patents (’586, ’639)
2006-06-19 Priority Date for PP Patent (’574)
2006-07-16 Priority Date for MPS Patents (’146, ’139)
2007-04-17 Priority Date for CDA Patent (’398)
2010-10-26 U.S. Patent 7,822,639 Issues
2011-07-12 U.S. Patent 7,979,307 Issues
2012-08-14 U.S. Patent 8,244,574 Issues
2012-08-14 U.S. Patent 8,244,582 Issues
2012-08-14 U.S. Patent 8,244,586 Issues
2013-07-23 U.S. Patent 8,494,904 Issues
2014-01-01 Yahoo announces Yahoo Ad Exchange (YAX) and Yahoo Audience Ads (approx. date)
2014-03-11 U.S. Patent 8,671,139 Issues
2014-03-18 U.S. Patent 8,677,398 Issues
2014-07-08 U.S. Patent 8,775,249 Issues
2014-11-01 Yahoo acquires Brightroll (approx. date)
2015-02-17 U.S. Patent 8,959,146 Issues
2015-03-01 Yahoo announces Brightroll will begin using Yahoo audience data (approx. date)
2015-09-01 Yahoo consolidates programmatic ad technology under the BrightRoll brand (approx. date)
2016-03-30 Complaint Filing Date

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

U.S. Patent 7,822,639 - Added-revenue off-site targeted internet advertising (Issued Oct. 26, 2010)

The Invention Explained

  • Problem Addressed: The patent's background describes a "saturation" problem where media properties like websites are unable to carry additional advertisements due to financial, aesthetic, or physical limitations, thus losing potential revenue from advertisers on a waiting list (’639 Patent, col. 2:22-28).
  • The Patented Solution: The invention proposes a "super-saturation" method involving a three-party system: a first media body (e.g., a premium website), a second media body, and a service facilitator. The facilitator "tags" visitors of the first media body and, when those tagged visitors are recognized on the second media body, an "off-site" advertisement is presented to them on behalf of the first media body, creating a new revenue stream that would otherwise be lost (’639 Patent, Abstract; col. 6:35-54).
  • Technical Importance: This approach enabled premium content publishers to monetize their valuable audience beyond the confines of their own digital properties, effectively expanding their sellable ad inventory across the broader internet (’639 Patent, col. 3:12-24).

Key Claims at a Glance

  • The complaint asserts independent claims 1 and 24 (Compl. ¶20b).
  • Independent claim 1 is a method claim with the essential elements:
    • Automatically creating records of a multitude of visitor computers that visit a first Internet site using a tag on each computer.
    • Automatically facilitating direction of at least one off-site advertisement to visitor computers visiting a second Internet site, based on computer-determining that those computers have the tag and based on visitor profile information connected to the tag.
    • As a result, automatically causing the first Internet site to receive revenue from the off-site advertisement.
  • The complaint reserves the right to assert dependent claims (Compl. ¶20b).

U.S. Patent 8,244,586 - Computerized Systems for Added-Revenue Off-Site Targeted Internet Advertising (Issued Aug. 14, 2012)

The Invention Explained

  • Problem Addressed: Like its family member, the ’639 patent, this patent addresses the problem of media saturation, where a media property has sold all its available advertising space but still has advertiser demand (’586 Patent, col. 2:25-31).
  • The Patented Solution: The patent describes a computerized system programmed to implement the "super-saturation" method. The system is programmed to create records of visitors to a first site using tags, facilitate the delivery of off-site ads to those visitors when they appear on a second site, and cause the first site to receive revenue from that off-site placement (’586 Patent, col. 6:35-50). This system formalizes the three-party cooperation model into a programmed, automated platform.
  • Technical Importance: This patent claims the computerized system that performs the off-site targeting method, representing the technical infrastructure needed to scale such a business model in the burgeoning online advertising market (’586 Patent, col. 3:12-24).

Key Claims at a Glance

  • The complaint asserts independent claims 1 and 11 (Compl. ¶20a).
  • Independent claim 1 is a system claim comprising a programmed computer system with essential programmed functions:
    • Automatically creating records of visitor computers that visit a first Internet site using a tag.
    • Automatically facilitating direction of at least one off-site advertisement to visitor computers visiting a second Internet site, based on determining the computers have the tag and on visitor profile information connected to the tag.
    • Automatically causing the first Internet site to receive revenue from the off-site advertisement.
  • The complaint reserves the right to assert dependent claims (Compl. ¶20a).

U.S. Patent 8,959,146 and U.S. Patent 8,671,139 (MPS Patents)

  • Technology Synopsis: Titled "Media properties selection method and system based on expected profit from profile-based ad delivery," this patent family addresses programmatic advertising. The technology involves a system that automatically calculates the expected profit from delivering a targeted ad to a specific user on a third-party website and then automatically sends a bid to an ad exchange to purchase that ad space if the profit calculation is favorable (Compl. ¶¶ 22-23).
  • Asserted Claims: ’146 Patent: independent claims 1, 17, 21. ’139 Patent: independent claim 1 (Compl. ¶¶ 22a-b).
  • Accused Features: The Brightroll demand-side platform (DSP), which allegedly performs automated bidding on ad exchanges to place retargeted ads on non-Yahoo properties based on user profile attributes and advertiser pricing (Compl. ¶23).

U.S. Patent 8,775,249; U.S. Patent 8,494,904; U.S. Patent 8,244,582; U.S. Patent 7,979,307 (DPC Patents)

  • Technology Synopsis: This "Descriptive Profile Consolidation" family concerns methods for accumulating user profile data from various sources. The technology involves receiving profile information about a user when their computer is redirected from a third-party web page (a process known as "cookie syncing") and then consolidating that received information with an existing profile for that user, while also recording the source of the new data for compensation purposes (Compl. ¶¶ 24-25).
  • Asserted Claims: ’249 Patent: independent claims 1, 11, 21. ’904 Patent: independent claims 1, 11, 21. ’582 Patent: independent claim 1. ’307 Patent: independent claim 1 (Compl. ¶¶ 24a-d).
  • Accused Features: Yahoo's alleged practice of receiving user profile information from third-party data aggregators via URL redirection or cookie syncing and consolidating it into its "massive set of audience data" to target ads, while also maintaining records of the data suppliers for compensation (Compl. ¶25).

U.S. Patent 8,244,574 (PP Patent)

  • Technology Synopsis: Titled "Method, computer system, and stored program for causing delivery of electronic advertisements based on provided profiles," this patent relates to using third-party data for ad targeting. The invention covers a system that receives user profiles from third-party data providers, tags the corresponding users, and later, upon finding the tag on a user's computer, causes a targeted, profile-dependent ad to be displayed (Compl. ¶¶ 26-27).
  • Asserted Claims: Independent claims 1, 11, 18 (Compl. ¶26).
  • Accused Features: Yahoo's alleged system of receiving profiles from over 40 third-party "data providers" (such as BlueKai), tagging those users, and subsequently delivering targeted ads to them on Yahoo and non-Yahoo properties when the tag is detected (Compl. ¶27).

U.S. Patent 8,677,398 (CDA Patent)

  • Technology Synopsis: This "Cross-Device Association" patent describes systems for taking action on one device based on activity from another device on the same network. The technology involves associating two devices (e.g., a laptop and a smartphone) using probabilistic data, such as noticing their connection to the same LAN via IP address, and then delivering a targeted ad to one device based on profile data derived from the other device's activity (Compl. ¶¶ 28-29).
  • Asserted Claims: Independent claim 13 (Compl. ¶28).
  • Accused Features: Yahoo's alleged practice of delivering targeted advertisements "cross-device" by associating a user's multiple devices through probabilistic mapping data obtained from vendors such as Tapad or Drawbridge (Compl. ¶29).

III. The Accused Instrumentality

  • Product Identification: The accused instrumentalities are Defendant Yahoo’s online advertising platforms, products, and services, including the Yahoo Ad Exchange (YAX), Yahoo Audience Ads, and the BrightRoll Demand Side Platform (DSP) and Exchange (Compl. ¶¶ 16-18, 21, 23).
  • Functionality and Market Context: The complaint alleges these platforms collectively provide a suite of advertising services that allow advertisers to target users with ads across the internet. Key alleged functionalities include:
    • Behavioral targeting, where users are tracked via cookies or other tags on Yahoo properties and then shown targeted ads on non-Yahoo properties ("audience extension") (Compl. ¶21).
    • Programmatic bidding through a Demand Side Platform (DSP), which automatically bids on ad space in real-time auctions to place ads in front of specific users based on their profiles (Compl. ¶23).
    • Data aggregation, where Yahoo allegedly receives user profile information from third-party data providers through technical processes like "cookie syncing" and consolidates it to enrich user profiles (Compl. ¶¶ 25, 27).
    • Cross-device targeting, where Yahoo allegedly uses probabilistic data to associate a single user’s multiple devices (e.g., laptop and smartphone) to deliver targeted ads across those devices (Compl. ¶29).
      The complaint positions these services as a core part of Yahoo’s business, noting the $640 million acquisition of BrightRoll and the consolidation of all programmatic ad technology under the BrightRoll brand (Compl. ¶17).
      No probative visual evidence provided in complaint.

IV. Analysis of Infringement Allegations

  • 7,822,639 Patent Infringement Allegations
Claim Element (from Independent Claim 1) Alleged Infringing Functionality Complaint Citation Patent Citation
(a) with a computer, automatically creating records of a multitude of visitor computers that visit a first Internet site using a tag on each of such visitor computers; Yahoo’s systems allegedly automatically tag end-user computers (using cookies or web beacons) that visit Yahoo-owned or -operated properties. ¶21 col. 6:45-49
(b) automatically facilitating direction of at least one off-site advertisement to visitor computers visiting a second Internet site as a consequence of computer-determining, using the tags and the records, that the visitor computers have visited the first Internet site, which off-site advertisement ... is targeted to visitors of the first Internet site based on visitor profile information connected to the tag; Yahoo allegedly uses "audience extension" techniques to check for the tag on computers visiting non-Yahoo properties and, upon finding the tag, causes the display of an ad targeted based on profile information (e.g., search history) from the user's visit to the Yahoo property. ¶21 col. 9:41-54
(c) as a result of the acts in parts (a) and (b), automatically computer-causing the first Internet site to receive revenue from the off-site advertisement being directed to the visitor computers that have visited the first Internet site. Yahoo allegedly facilitates a division of compensation for the advertisement's display between itself (as the operator of the first site) and the owner of the non-Yahoo property where the ad is displayed. ¶21 col. 3:12-24

  • Identified Points of Contention:

    • Scope Questions: A central question may be whether the patent’s three-party model of a "first broadcaster," a "second broadcaster," and a facilitating "agency" can be construed to read on the complex, multi-party, real-time-bidding ecosystem of a modern ad exchange like Yahoo's. The complaint maps these roles to Yahoo, a non-Yahoo publisher, and Yahoo's technology platform, respectively, raising the question of how the court will align the patent's terminology with the accused technology.
    • Technical Questions: The complaint alleges that Yahoo "check[s] for the tag" and "caus[es]" the display of an advertisement (Compl. ¶21). A technical point of contention may be the precise mechanism by which this occurs and whether Yahoo's role in the ad exchange ecosystem constitutes "facilitating direction" as required by the claim, or if other entities in the ad-serving chain are more directly responsible for that step.

  • 8,244,586 Patent Infringement Allegations

Claim Element (from Independent Claim 1) Alleged Infringing Functionality Complaint Citation Patent Citation
A tangible computer system ... programmed to implement a method of securing revenue from offsite targeted Internet advertising, the computer system being programmed to ... (a) automatically create records of a multitude of visitor computers that visit a first Internet site using a tag on each of such visitor computers; The complaint alleges Yahoo and Brightroll use computer systems to implement their advertising methods, which include automatically tagging user computers with cookies or web beacons when they visit Yahoo properties. ¶21 col. 6:40-44
(b) automatically facilitate direction of at least one off-site advertisement to visitor computers visiting a second Internet site ... based on visitor profile information connected to the tag; Yahoo’s computer systems are alleged to be programmed to use audience extension techniques to check for the tag and cause targeted ads to be displayed on non-Yahoo sites based on the user's profile data from their activity on Yahoo properties. ¶21 col. 9:36-49
(c) automatically cause the first Internet site to receive revenue from the off-site advertisement... Yahoo's systems, including its Real Time Bidding technology, are allegedly programmed to facilitate the division of compensation for the ad display between Yahoo and the non-Yahoo site owner. ¶21 col. 3:12-24
  • Identified Points of Contention:
    • Scope Questions: As with the '639 patent, a key question will be whether the architecture of Yahoo's ad platforms aligns with the claimed system. The defense may argue that Yahoo's system is merely one component in a larger ecosystem and is not itself singularly "programmed to" perform all the claimed steps.
    • Technical Questions: Infringement of this system claim requires showing that Yahoo's servers and software are programmed to perform the specific functions of tagging, facilitating off-site ad direction, and managing revenue sharing. A point of contention will likely be whether the collection of disparate servers, databases, and algorithms that comprise Yahoo's ad network constitutes the singular "programmed computer system" of the claim.

V. Key Claim Terms for Construction

  • The Term: "tag"

    • Context and Importance: This term is foundational to the infringement theory for the OTA patents and appears in other asserted patents. Its definition determines what tracking mechanisms (e.g., cookies, web beacons, device IDs) fall within the scope of the claims. Practitioners may focus on this term because its breadth is critical to whether modern tracking technologies are covered by a patent from 2000.
    • Intrinsic Evidence for Interpretation:
      • Evidence for a Broader Interpretation: The specification provides a functional definition: "A tag simply identifies that its bearer was so marked for having been at a specific location...or for having conducted some specific action there" (’639 Patent, col. 5:29-33). This language may support a broad reading that includes any technology performing this identifying function.
      • Evidence for a Narrower Interpretation: The specification explicitly mentions a "Cookie" as an example of a recognition symbol (’639 Patent, col. 4:38-45). A defendant might argue that the invention is limited to browser cookies or similar technologies known at the time of the invention.

  • The Term: "facilitating direction"

    • Context and Importance: This term from claim 1 of the '639 patent is critical for determining the level of control and action required by the accused "first Internet site" (Yahoo) to infringe. In a modern ad exchange, the "direction" of an ad involves many actors (DSPs, SSPs, ad exchanges). The construction of this term will determine if Yahoo's role is sufficient to meet the claim limitation.
    • Intrinsic Evidence for Interpretation:
      • Evidence for a Broader Interpretation: The patent uses broad, functional language, describing an "agency facilitating visitor identification" and a "facilitated placement of a content" (’639 Patent, col. 6:40-41; col. 8:12-14). This could support an interpretation where initiating a process or being a key part of the ad-serving chain is sufficient, without requiring direct control over every step.
      • Evidence for a Narrower Interpretation: The detailed description uses more direct examples, such as a "visitor is presented with the first broadcaster's special message" or "the visitor is caused to fetch a special message" (’639 Patent, col. 6:50-53). A defendant could argue this implies a more direct causal link than what may occur in a distributed real-time bidding auction.

VI. Other Allegations

  • Indirect Infringement: Plaintiffs pray for a judgment that Yahoo has contributorily infringed or actively induced infringement of the ten patents-in-suit (Compl. Prayer for Relief ¶ A). The complaint alleges that Yahoo infringes by "marketing, selling, offering to sell, providing, instructing, supplying, operating, licensing, or supporting" its advertising services to advertisers and publishers, which may form the basis for allegations that Yahoo provides the tools and instructions for third parties to participate in the infringing system (Compl. ¶19).
  • Willful Infringement: The complaint alleges that Yahoo's infringement was and continues to be willful and deliberate (Compl. ¶31). This allegation is based on alleged pre-suit knowledge, citing discussions between AlmondNet and Yahoo in 2006, 2013, and 2015, and alleges that in 2013 AlmondNet specifically advised Yahoo of several of the asserted patents and their applicability to Yahoo's advertising activities (Compl. ¶30).

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

  • A core issue will be one of technological translation: can the patent claims, which describe a relatively straightforward three-party model for off-site advertising from the early 2000s, be construed to cover the complex, multi-actor, algorithm-driven, real-time bidding ecosystem that characterizes modern programmatic advertising platforms like Yahoo's?
  • A second central question will be one of evidentiary proof of function: for patents concerning the consolidation of data (DPC patents) and cross-device association (CDA patent), what internal technical evidence can Plaintiffs obtain to demonstrate that Yahoo's systems actually perform the specific claimed functions of "consolidating" third-party data with existing profiles or using "probabilistic mapping data" to link devices in the manner required by the claims?
  • A key legal issue will be willfulness: given the complaint's specific allegations of pre-suit notice and discussions dating back to 2013, the court will need to examine the content of those communications to determine whether Yahoo acted with the requisite knowledge and intent to support a finding of willful infringement.