DCT

6:22-cv-01205

AlmondNet Inc v. Meta Platforms Inc

Log In
Key Events
Complaint

I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 6:22-cv-01205, W.D. Tex., 11/18/2022
  • Venue Allegations: Plaintiff alleges venue is proper in the Western District of Texas because Defendant Meta Platforms, Inc. has regular and established places of business in the district and has transacted business and committed acts of alleged infringement there.
  • Core Dispute: Plaintiff alleges that Defendant’s advertising platform infringes six patents related to novel internet and network-based advertising systems and methods, including technologies for profile-based ad selection and cross-platform ad targeting.
  • Technical Context: The patents-in-suit relate to foundational technologies in the digital advertising ecosystem, specifically concerning how user data is collected, valued, and used to optimize the placement of targeted advertisements across different online properties.
  • Key Procedural History: The complaint alleges that Plaintiff sent communications to Defendant on July 24, 2019, and October 25, 2019, putting Defendant on notice of its patent portfolio and allegations of infringement. The complaint also references a prior lawsuit, AlmondNet Inc v. Meta Platforms Inc, No. 6:21-cv-00896 (W.D. Tex.), filed on August 27, 2021, as providing Defendant with knowledge of several of the patents asserted in the current action. These events form the basis for Plaintiff's claims of willful infringement.

Case Timeline

Date Event
1999-12-13 Earliest Priority Date for ’307 and ’249 Patents
2006-06-16 Earliest Priority Date for ’745, ’783, and ’146 Patents
2007-04-17 Earliest Priority Date for ’878 Patent
2010-06-29 U.S. Patent No. 7,747,745 Issues
2011-07-12 U.S. Patent No. 7,979,307 Issues
2012-06-19 U.S. Patent No. 8,204,783 Issues
2014-07-08 U.S. Patent No. 8,775,249 Issues
2015-02-17 U.S. Patent No. 8,959,146 Issues
2019-07-24 Plaintiff allegedly sends notice communication to Defendant
2019-10-25 Plaintiff allegedly sends notice communication to Defendant
2020-07-14 U.S. Patent No. 10,715,878 Issues
2021-08-27 Prior lawsuit (AlmondNet v. Meta) filed, allegedly giving notice
2022-11-18 Complaint Filed

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”*

The Invention Explained

  • Problem Addressed: The patent describes the inefficiency in behavioral advertising that arises when the cost of ad space on a second website (where a targeted ad is to be shown) is not justified by the potential revenue generated from showing that ad to a user whose profile was collected on a first website (’745 Patent, col. 5:40-67).
  • The Patented Solution: The invention proposes an automated system that calculates the "expected profit" for delivering a targeted advertisement by subtracting the cost of ad space from the expected revenue. If the calculated profit is positive, the system selects that media property for ad delivery and arranges for the user to be electronically "tagged" to enable the ad to be served on that property (’745 Patent, Abstract; col. 6:10-27).
  • Technical Importance: This technology introduced an economic optimization layer into the ad delivery process, allowing for real-time, profit-based decisions on where to place an ad, rather than relying solely on behavioral matching (’745 Patent, col. 6:3-9).

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" for an advertisement.
    • For a visitor to a first media property, receiving information about their profile attributes.
    • Automatically authorizing a third-party second media property to display the advertisement to that visitor.
    • The authorization is for a price that does not exceed a "price cap," where the price cap is defined as a selected amount less than the determined available revenue.

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”*

The Invention Explained

  • Problem Addressed: The patent addresses the challenge of creating a viable market for individual user-profile attributes, noting that commerce has traditionally focused on the sale of entire databases rather than granular data points, making it difficult to compensate the original sources of valuable user information (’307 Patent, col. 1:47-67).
  • The Patented Solution: The invention describes a method where a central system receives partial user profiles from multiple "unaffiliated third parties" (e.g., different websites a user visits). The system aggregates this data into a maintained profile and, crucially, generates and stores an electronic record of which third party contributed which specific attributes. This source-tracking enables compensation models for the data providers (’307 Patent, Abstract; col. 6:49-65).
  • Technical Importance: This system provides a technical framework for a data marketplace by creating a mechanism to track the provenance of profile data, thereby enabling revenue sharing and incentivizing websites to contribute user data to a larger ad-targeting ecosystem (’307 Patent, col. 8:1-12).

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 programmed computer system a partial profile of an entity from a server controlled by an unaffiliated third party.
    • Receiving the partial profile via "automatic electronic URL redirection" from a page of the third party's website.
    • Automatically adding the received partial profile to a maintained profile.
    • Automatically generating and storing an electronic record identifying which of the unaffiliated third parties contributed the particular profile attributes.
    • The maintained profile is used for targeting third-party advertisements.

Multi-Patent Capsule: U.S. Patent No. 8,204,783

  • Patent Identification: U.S. Patent No. 8,204,783, titled “Media properties selection method and system based on expected profit from profile-based ad delivery,” issued June 19, 2012 (Compl. ¶32).
  • Technology Synopsis: Related to the ’745 Patent, this patent describes a system for optimizing targeted advertising by calculating the expected profit of placing an ad on a given media property. The system selects a property for ad delivery only if the expected revenue exceeds the cost of the ad space, ensuring a profitable placement (’783 Patent, Abstract).
  • Asserted Claims: At least one independent claim (Compl. ¶38).
  • Accused Features: Defendant’s advertising platform is accused of infringing by performing profit-based calculations to select and deliver targeted ads (Compl. ¶33).

Multi-Patent Capsule: U.S. Patent No. 8,775,249

  • Patent Identification: U.S. Patent No. 8,775,249, titled “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: Related to the ’307 Patent, this patent details a system for aggregating user profile data from various third-party online sources. The system maintains a record of the source of each piece of data, which allows for compensation to be paid to the entities that contribute the profile information used in ad targeting (’249 Patent, Abstract).
  • Asserted Claims: Independent claim 1 (Compl. ¶49).
  • Accused Features: Defendant’s advertising platform is accused of infringing by collecting user data from third-party sources and using it for ad targeting (Compl. ¶44).

Multi-Patent Capsule: U.S. Patent No. 8,959,146

  • Patent Identification: U.S. Patent No. 8,959,146, titled “media properties selection method and system based on expected profit from profile-based ad delivery,” issued February 17, 2015 (Compl. ¶54).
  • Technology Synopsis: Related to the ’745 and ’783 Patents, this patent describes a system for selecting where to place a targeted ad based on a calculation of expected profit. The system compares the anticipated revenue from an ad with the cost of placing it on a particular media property and proceeds only if the transaction is determined to be profitable (’146 Patent, Abstract).
  • Asserted Claims: At least one independent claim (Compl. ¶60).
  • Accused Features: Defendant’s advertising platform is accused of infringing by using a profit-based decision model to place targeted advertisements (Compl. ¶55).

Multi-Patent Capsule: U.S. Patent No. 10,715,878

  • Patent Identification: U.S. Patent No. 10,715,878, titled “targeted television advertisements based on online behavior,” issued July 14, 2020 (Compl. ¶65).
  • Technology Synopsis: This patent describes a method for cross-device advertising by electronically associating the IP address of an online access device (e.g., a computer) with the IP address of a television set-top box. This association allows for television advertisements to be selected and delivered based on a user's online behavior (such as websites visited or searches conducted), preferably without using personally identifiable information (’878 Patent, Abstract).
  • Asserted Claims: At least one independent claim (Compl. ¶71).
  • Accused Features: Defendant’s advertising platform is accused of infringing by enabling the delivery of targeted ads based on online behavior, allegedly including across different device types like computers and televisions (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 a service that allows Defendant and its customers to deliver targeted advertising to users (Compl. ¶¶1-2). The infringement theories suggest the platform functions by collecting and aggregating user profile data based on online behavior, using this data to select and price advertisements, and delivering those advertisements to users across a network of digital properties (Compl. ¶¶12, 23). The complaint does not provide sufficient detail for a more granular analysis of the specific software, servers, or methods that constitute the accused platform. No probative visual evidence provided in complaint.

IV. Analysis of Infringement Allegations

The complaint references, but does not include, claim chart exhibits detailing its infringement theories (Compl. ¶¶17, 28). The following summarizes the narrative allegations.

’745 Patent Infringement Allegations

  • The complaint alleges that Meta's advertising platform performs the claimed method of selecting media properties for ad delivery based on profit (Compl. ¶12). The theory suggests that when Meta's platform runs an ad auction, it inherently determines a "revenue" (e.g., the winning bid) and compares it to a "price cap" (related to the cost of showing the ad) to decide whether and where to deliver an advertisement, thereby practicing the patented method (Compl. ¶17).

’307 Patent Infringement Allegations

  • The complaint alleges that Meta's platform infringes by accumulating user profile data from various unaffiliated third parties and using it to target ads (Compl. ¶23). The theory appears to be that when a user visits a third-party website or app that has integrated Meta's technology (e.g., the Meta Pixel), that user's activity is communicated back to Meta's servers, which constitutes the claimed "receiving" of a "partial profile" from a third party. The platform then allegedly stores this information and a record of its source to build a targetable user profile (Compl. ¶28).

Identified Points of Contention

  • Scope Questions: A central issue for the '745 patent family may be whether the economic logic of Meta's ad auction system can be characterized as the specific "expected profit" calculation recited in the claims. The analysis may explore if Meta's system, which is based on advertiser bids, calculates a "profile-attribute-dependent revenue" and compares it to a "price cap" in the manner required by the claims, or if it operates on a different economic principle.
  • Technical Questions: For the '307 patent family, a key question may be whether the technical mechanism by which Meta's platform receives data (e.g., via the Meta Pixel or SDKs) constitutes "automatic electronic URL redirection" as that term would be construed. The analysis may focus on whether there is a mismatch between the specific data transfer method claimed in the patent and the actual operation of Meta's data collection tools. For the ’878 patent, a primary evidentiary question will be whether Plaintiff can demonstrate that Meta's platform specifically performs the claimed association of online access device IP addresses with television set-top box IP addresses for the purpose of targeting TV ads.

V. Key Claim Terms for Construction

The Term: "price cap" (from ’745 Patent, claim 1)

Context and Importance

  • This term is central to the patented method's economic decision-making process. The infringement case for the '745 patent family hinges on whether Meta's advertising system uses a financial limit corresponding to this "price cap," which is explicitly defined as being less than the available revenue, to authorize ad placement. Practitioners may focus on this term because it requires mapping the complex dynamics of a modern ad auction to a specific formula recited in the claim.

Intrinsic Evidence for Interpretation

  • Evidence for a Broader Interpretation: The specification describes the price cap as being defined by "the difference determined by subtracting from the revenue generated from advertising to a visitor with a particular profile a selected amount, here defined by the costs and desired profit margin" (’745 Patent, col. 7:22-28). This language could support an argument that any internal budgetary limit or profitability threshold used in an ad system meets the definition.
  • Evidence for a Narrower Interpretation: The claim requires the price for displaying the ad "not exceed a price cap that is a selected amount less than the revenue available" (’745 Patent, col. 12:5-7). This could be interpreted narrowly to require a specific, pre-calculated cap that is explicitly subtracted from a determined revenue figure, not merely an outcome of a competitive bidding process.

The Term: "automatic electronic URL redirection" (from ’307 Patent, claim 1)

Context and Importance

  • This term defines the core technical mechanism by which profile data is allegedly collected from third parties. The infringement case for the '307 patent family depends on whether the data transfer between third-party sites and Meta's servers constitutes "URL redirection." Practitioners may focus on this term because modern tracking technologies like API calls or pixel requests may operate differently from a traditional browser URL redirect.

Intrinsic Evidence for Interpretation

  • Evidence for a Broader Interpretation: The specification describes a user's browser being redirected to a server to have a cookie placed or read, which is a common mechanism in online advertising (’307 Patent, col. 7:59-65). This could support a broad reading that covers any server-side request initiated from a third-party webpage that results in data transfer.
  • Evidence for a Narrower Interpretation: The term "URL redirection" could be construed more narrowly to mean a specific HTTP response (e.g., a 302 redirect) that causes the user's browser to navigate to a new URL. This might not cover other forms of client-server communication, such as asynchronous JavaScript (AJAX) requests or image pixel requests that transfer data in the background without changing the user's page URL.

VI. Other Allegations

Indirect Infringement

  • For each asserted patent, the complaint alleges that Defendant induces infringement by encouraging its customers and end users to use its advertising platform in an infringing manner, for instance, through "user manuals and online instruction materials on its website" (e.g., Compl. ¶15, 26). The complaint also includes allegations of contributory infringement, stating the accused platform is a material part of the invention and not a staple article of commerce (e.g., Compl. ¶16, 27).

Willful Infringement

  • The complaint alleges that Defendant's infringement has been willful, asserting that Defendant knew of or was willfully blind to the patents-in-suit. This allegation is based on pre-suit communications in 2019 and, for the ’307, ’249, and ’146 patents, knowledge from a prior lawsuit filed in 2021 (e.g., Compl. ¶14, 25, 35, 46, 57, 68).

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

  • A core issue will be one of economic equivalence: does Meta's auction-based ad platform, which determines ad placement based on the highest qualified bidder, perform the specific steps of calculating a "profile-attribute-dependent revenue" and authorizing placement only if the cost is below a "price cap," as required by the '745 patent family, or is there a fundamental mismatch in the underlying economic model?
  • A second central question will be one of technical mechanism: do Meta's data collection technologies, such as the Meta Pixel, which operate through scripts embedded on third-party websites, meet the claim limitation of receiving profile data via "automatic electronic URL redirection" from an "unaffiliated" party, as that term would be construed from the '307 patent family?
  • A key evidentiary question for the '878 patent will be one of demonstrable conduct: what evidence can Plaintiff produce to show that Meta's platform is actually used to create and act upon associations between specific online user identifiers and television set-top box identifiers, as opposed to enabling generalized cross-device targeting that may not involve televisions in the manner claimed?