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Google cries “Vive la differénce!” in patent case
Consumers aren’t the only ones who depend
on online auctions. Google, for example, uses
them to determine the positions and prices of its display advertisements. But, in the case of Bid for Position, LLC v. AOL, LLC and Google, Inc., the
company faced accusations that its system infringed a patented method.
It’s an ad, ad world
Bid for Position holds a patent for a method of
conducting a continuous auction. The method lets a bidder select a priority position in an online auction and then automatically adjusts the bidder’s bid to maintain that priority. AOL uses a rebranded version of AdWords, Google’s Internet advertising system. AdWords runs continuous auctions to determine the placement of ads on Google’s search result pages.
AdWords allows advertisers to select keywords to trigger the display of their ads. When a user enters a keyword in a search, AdWords runs an auction that determines the order in which the ads will appear next to the search results. Ads are displayed according to their Ad Rank, which is based on the advertiser’s bid price and its “quality score.” (Google calculates this using a confidential algorithm.) Advertisers
Google cries “Vive la
differénce!” in patent case
Inequitable conduct can leave an otherwise valid and infringed patent unenforceable. But just whose inequitable conduct is a threat?
In Avid Identification Systems, Inc. v. Crystal Import Corp., Inc., the Federal Circuit weighed in on the enforceability of the patent of a company whose president withheld material information. Although the president wasn’t the inventor or the patent filer, he owed the U.S. Patent and Trademark Office (USPTO) a “duty of candor” because he was “substantively involved” in the preparation of the patent application.
Going to the dogs
Avid held a patent related to a radio-frequency identification system for reading computer chips implanted in pets. Avid’s president, Hannis Stoddard, formed the company after visiting an animal shelter to recover his own lost dog. According to the court, he made
affects patent enforceability
can also use the “Position Preference” feature to ensure that their ads never appear below their lowest
Bid for Position brought a patent infringement lawsuit against Google and AOL. The district court found that neither version of AdWords (with or without Position Preference) infringed the patent. Bid for Position appealed.
What’s the difference?
Like the district court, the Federal Circuit considered both versions of AdWords. It found that the version without Position Preference didn’t infringe the patented method because that method doesn’t simply select the highest ranking position of priority that’s available for the offered bid, as AdWords without Position Preference does. With the patented method, the bidder must select a particular position; the bid isn’t for the best available position.
AdWords with Position Preference does permit a
bidder to select a particular position of priority, but the patented method bases priority solely on the bid value. AdWords’ rankings incorporate both the bid value and the quality score, so a bidder that places the highest bid but has a low quality score may not snag the desired position.
In the end, the court found that the patented method is “substantially different” from either
version of AdWords. Through its use of the quality score, Google exercises significant control over an auction’s outcome, and the court deemed that a fundamental difference — and one that precluded patent infringement. need a loan fast with bad creditbad credit personal loans for