In a final written decision issued on April 24, 2017, the PTAB canceled all four challenged claims of U.S. Patent No. 8,671,057, directed to detecting invalid and fraudulent clicks in pay-per-click web advertising (Google Inc. v. Zuili, CBM2016-00008 (Paper 56)). The PTAB found all four claims unpatentable under 35 U.S.C § 101, and obvious under 35 U.S.C. § 103 over a combination two prior art documents related to a study on online advertising reporting and auditing.

Before addressing the merits of the Section 101 and 103 challenges, the PTAB first concluded that the ’057 patent was eligible for a CBM review because at least one claim was directed to a covered business method. The Patent Owner had argued that the ’057 patent did not meet the financial product or service requirement of a CBM review because the claims did not call for a charge to be assessed upon detecting an invalid click. The Board, however, found the preamble of Claim 1, the inventor’s testimony, and certain statements made in the specification, to be fatal to the Patent Owner’s argument.

Claim 1’s preamble recited a web page “providing a plurality of links associated with a plurality of other web pages associated with a plurality of merchants.” The Board determined that the preamble was “key to the claim.”  The body of the claim relied upon the links and web pages recited in the preamble for antecedent basis, and those links and web pages were further deemed to recite “essential structure” necessary “to give life, meaning and vitality to the claim.”  The Board emphasized that the preamble thus made clear that the claim was directed to “merchant” web sites.

The Board deemed the claimed “clicks” on those websites to be financial transactions.  The Board relied upon statements in the specification that discussed the use of the invention to “fairly invoice” the merchant.  The Board further noted that the inventor, when asked if the invention had any utility outside of advertising, failed to identify any other usage.  The Board thus concluded that the clicks recited in claim 1 were “on their face financial transactions because each valid click is a transaction for which the merchant is charged a fee and each invalid click is a fraudulent transaction that should be deducted from the merchant’s invoice.” The Board’s broad approach to CBM eligibility in this case appears to be inconsistent with Unwired Planet, LLC v. Google Inc. (discussed here), which stated that “it cannot be the case that a patent covering a method and corresponding apparatuses becomes a CBM patent because its practice could involve a potential sale of a good or service.”

Turning to the merits of the Section 101 challenge, the Board first found the claims to be directed to an abstract idea. Adopting the Petitioner’s analogy, the Board compared the claimed method of detecting invalid clicks based on repeated clicks occurring too close in time to that of pharmacists detecting a controlled substance abuse when a particular individual sought to fill a prescription for the same controlled substance (such as OxyContin) twice in too short a period of time. The Board thus concluded that the challenged claims are directed to “a longstanding business practice as exemplified by Petitioner’s pharmacy example.” Id. at 23.

The Board then found the challenged claims do not supply an inventive concept because the recited steps of “generating,” “sending,” and “obtaining” correspond to “basic calculation, storage, and transmission functions” that are within the capability of every computer. Id. at 27.

The Board’s decision provides an illustration of a useful technique for anyone raising an invalidity challenge on Section 101 ground, to supply an apt analogy to a conventional human activity, as the Petitioner has done in this case with the pharmacist example.