Keysoft Inc v. Amazon.com Inc

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Keysoft, Inc. (Japan)
  • Defendant: Amazon.com, Inc. (Delaware)
  • Plaintiff’s Counsel: Young Conaway Stargatt & Taylor, LLP
• Case Identification: 1:24-cv-00256, D. Del., 02/26/2024
• Venue Allegations: Plaintiff alleges venue is proper because Defendant is a Delaware corporation, is subject to personal jurisdiction in the district, and maintains a regular and established place of business in Delaware, including multiple large fulfillment centers.
• Core Dispute: Plaintiff alleges that Defendant’s "Sponsored Display audiences" advertising platform infringes a patent related to systems that use a customer's purchase history with one provider to identify them as a target for a second, different provider.
• Technical Context: The technology concerns a method for cross-promotional data analysis, where consumer data from one type of transaction is used to infer interest and drive targeted advertising for another, often related, category of goods or services.
• Key Procedural History: The complaint alleges that the inventor met with Amazon representatives in Tokyo in 2018, where he advised them of his patents and provided a physical copy of the patent-in-suit. This allegation forms the primary basis for the claim of willful infringement.

Case Timeline

Date	Event
2002-11-05	'315 Patent Priority Date (PCT Filing)
2012-01-01	Accused Product ("Sponsored Display audiences") Launch (approx.)
2012-09-18	'315 Patent Issued
2018-01-01	Alleged Notice to Amazon via in-person meeting (approx.)
2024-02-26	Complaint Filed

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

U.S. Patent No. 8,271,315, “Personal Information Utilization Systems And Personal Information Utilization Program For Commodity Based Identification,” issued September 18, 2012

The Invention Explained

• Problem Addressed: The patent's background section describes the problem that customer information is typically siloed within individual providers, preventing them from knowing what other, unrelated goods or services a customer has purchased. This leads to "miss-timing of their service provision," such as a furniture vendor being unaware that a person has just purchased a new house and is therefore a prime customer ('315 Patent, col. 1:25-40).
• The Patented Solution: The invention describes a centralized system that stores personal information and "commodity provision information" (i.e., purchase history) for customers from a "first commodity provider." A "second commodity provider" can then query the system using information related to the first commodity (e.g., "blanket") to identify a list of potential customers. The system then provides personal information about those identified customers to the second provider, enabling targeted marketing for a second commodity (e.g., furniture) ('315 Patent, Abstract; col. 2:50-3:5).
• Technical Importance: The described technical approach facilitates the sharing and leveraging of consumer purchase data across different industries or vendors to create new, highly specific marketing opportunities based on inferred life events or needs ('315 Patent, col. 1:41-46).

Key Claims at a Glance

• The complaint asserts independent claims 1 (a system claim) and 2 (a non-transitory computer-readable medium claim) (Compl. ¶¶ 32, 33, 40).
• The essential elements of independent claim 1 include:
  • A personal information storage means, a communication means, and a processor.
  • The storage means stores personal information and "first commodity provision information" from a "first commodity provider."
  • The processor is configured to:
    • (a) receive "second commodity provision information" from a "second commodity provider" that is different from the first.
    • (b) check the second commodity information against the first commodity information.
    • (c) identify a specific person associated with the first commodity information, using the second commodity information as a "key."
    • (d) read out at least a portion of the identified person's personal information.
    • (e) transmit the read-out personal information to the "information search side terminal" (i.e., the second provider).
• The complaint states its allegations are exemplary, suggesting a reservation of rights to assert other claims (Compl. ¶35).

III. The Accused Instrumentality

Product Identification

• The accused instrumentality is Amazon's "Sponsored Display audiences" advertising service (Compl. ¶15).

Functionality and Market Context

• The complaint describes this service as a "display targeting strategy that uses Amazon shopping signals" to help advertisers engage shoppers (Compl. ¶16). The system allegedly stores customer information including past purchases, lifestyle, interests, and life events (Compl. ¶20). Advertisers can target "audience(s)," or predefined groups of customers, by, for example, using a feature that identifies potential new customers via "machine learning algorithms to reach viewers of other popular products" (Compl. ¶23). The system then "sends advertisement(s) and information relating to the seller to the identified customer(s)" (Compl. ¶24). Plaintiff alleges the service generates "hundreds of millions of dollars in revenues" for Amazon (Compl. ¶25).

IV. Analysis of Infringement Allegations

The complaint references a "Preliminary Infringement Claim Chart" in an exhibit that was not available for review (Compl. ¶34). The infringement theory must therefore be summarized from the narrative allegations.

The complaint's narrative theory posits that the "Sponsored Display audiences" platform performs the steps of the asserted claims. In this theory, Amazon's servers constitute the "personal information storage means" and "processor," storing the purchase histories of Amazon users (the "first commodity provision information"). When an advertiser (the "second commodity provider") configures a campaign to target users who have purchased or viewed certain products (the "second commodity provision information"), Amazon's system allegedly "checks" its database, "identifies" the relevant user audience, and effectuates the delivery of an ad to those users. This final step is mapped to the claim limitation requiring the transmission of personal information to the advertiser. No probative visual evidence provided in complaint.

• Identified Points of Contention:
  • Scope Questions: A primary question may be whether delivering a targeted advertisement to a customer on behalf of an advertiser satisfies claim 1(e)'s requirement to "transmit... at least a portion of the personal information... to said information search side terminal" (i.e., to the advertiser). The complaint alleges the system sends ads to customers (Compl. ¶24), which raises the question of whether any of the customer's personal information is actually transmitted to the advertiser itself.
  • Technical Questions: What evidence will show that the accused system's use of "machine learning algorithms" (Compl. ¶23) to find audiences meets the specific claim limitation of "checking said received second commodity provision information against the first commodity provision information" and "identifying by using the second commodity provision information as a key" (Claim 1(b)-(c))? The parties may dispute whether the abstract matching performed by an algorithm is equivalent to using the second commodity information as a "key" in the manner described by the patent.

V. Key Claim Terms for Construction

• The Term: "transmitting said read out at least a portion of the personal information to said information search side terminal" (Claim 1(e))

  • Context and Importance: The viability of the infringement claim may depend heavily on this term's construction. Practitioners may focus on this term because the accused system is described as an advertising platform that targets users, but the complaint does not explicitly allege that it provides the users' personal information directly to the advertiser.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The patent's stated object is to "improve quality of service for customers by sharing and utilizing personal information on customers among variety of industries" ('315 Patent, col. 1:43-46). This broad purpose of "sharing" could be argued to encompass modern, privacy-focused ad targeting methods where user identity is handled via tokens or other indirect means.
    • Evidence for a Narrower Interpretation: The patent's flowchart for a commodity-based search concludes with the step "Transmitting the read out personal information to the information search side terminal" ('315 Patent, Fig. 7, S205). The corresponding search result interface depicts a "list" of "Information disclosing person[s]" ('315 Patent, Fig. 5), which suggests a direct disclosure of identifying information to the searching party, not merely targeting them within a closed system.

• The Term: "first commodity provider" and "second commodity provider" (Claim 1(a))

  • Context and Importance: The claim requires two "different" providers. Practitioners may focus on this term because the Amazon marketplace is an integrated platform where Amazon itself and third-party sellers operate. The relationship between these entities may not align with the patent's apparent model of fully independent businesses.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The patent does not provide a restrictive definition, referring generally to "a plurality of providers" and actors like "a vendor, a retailer and a banking agency" ('315 Patent, col. 1:26, col. 2:9-10). This could support an argument that any distinct commercial entity, even one operating on a common platform, qualifies.
    • Evidence for a Narrower Interpretation: The patent's background examples consistently use distinct types of businesses (e.g., house vendor, furniture vendor, bedding vendor) to illustrate the problem and solution ('315 Patent, col. 1:31-40). This may support a narrower construction requiring the providers to be independent entities in separate industries, not different actors within a single, unified e-commerce ecosystem controlled by one party.

VI. Other Allegations

• Indirect Infringement: The complaint alleges that Amazon induces infringement by providing the "Sponsored Display audiences" tool to companies and individuals who sell products on Amazon (Compl. ¶42). The act of creating and operating the platform for advertisers to use is the alleged basis for inducement.
• Willful Infringement: Willfulness is alleged based on Amazon having actual, pre-suit knowledge of the '315 Patent. The specific factual basis is an alleged 2018 meeting in Tokyo where the inventor, Mr. Kagiwada, met with two Amazon representatives, explained his patented technology, and gave them a printed copy of the '315 Patent (Compl. ¶¶26-27, 43).

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

• A core issue will be one of functional operation: does Amazon's advertising platform, which delivers targeted ads to customers, perform the claimed function of "transmitting... personal information to" the advertiser, as required by Claim 1, or is there a fundamental mismatch between the patent's data-sharing model and the accused system's ad-delivery mechanism?
• A second key issue will be one of definitional scope: can the roles of "first commodity provider" and "second commodity provider" be mapped onto the various actors within the integrated Amazon marketplace (Amazon, third-party sellers, advertisers) in a way that satisfies the claim requirement for "different" providers as contemplated by the patent?
• A critical evidentiary question will center on willfulness: what proof will be offered to substantiate the alleged 2018 meeting between the inventor and Amazon, and would the substance of that meeting be sufficient to establish that Amazon had knowledge of infringement, thereby exposing it to potential enhanced damages?