Fed. Circuit Reverses Denial of Motion to Dismiss in Marketing Patent Dispute

On Tuesday, Judge Jimmie V. Reyna issued a precedential opinion in a case brought by Free Stream Media Corp. doing business as Samba TV (Samba) against Alphonso Inc. regarding two patents relating to targeted advertising for television audiences across multiple screen devices. The appellate panel considered cross appeals from the parties and ultimately ruled in favor of Alphonso, finding that five claims in one of Samba’s two asserted patents were patent-ineligible.

The court first explained the case’s somewhat complex procedural history, starting with Samba’s November 2015 patent infringement suit concerning U.S. Patent No. 9,386,356 (the ’356 patent) filed in the Northern District of California. Subsequently, it filed another suit against Alphonso in the Eastern District of Texas concerning a related patent, U.S. Patent No. 9,026,668 (the ’668 patent). 

Before consolidation in the Northern District of California, the Eastern District of Texas court issued a claim construction opinion. After consolidation, the California federal court denied Alphonso’s motion to dismiss, then later granted its motion for summary judgment.

Samba appealed the claim construction and summary judgment decisions, while Alphonso appealed the denial of its motion to dismiss. The court first considered Alphonso’s dispositive appeal concerning the ’356 patent, which purportedly “‘describes systems and methods for addressing barriers to certain types of information exchange between various technological devices, e.g., a television and a smartphone or tablet being used in the same place at the same time with ads seen by the user while watching television.’”

Alphonso contended, and the appellate court agreed, that the district court erred in concluding that the ’356 patent is not directed to patent-eligible subject matter, and is instead directed to “the abstract idea of targeted advertising.” Under the Supreme Court’s two-step analysis, the panel reasoned that Samba’s asserted claims are not directed to an improvement of a technology or creation of a new computer functionality.

At the second step, and in order for an abstract idea to be patent eligible, it must provide “an inventive solution to a problem in implementing the idea.” Judge Reyna explained that claims at issue within the ’356 patent did not because they “simply recite that the abstract idea will be implemented using conventional components and functions generic to the technology.”

Because the panel reversed the lower court’s denial of Alphonso’s motion to dismiss for noninfringement, it did not reach Samba’s summary judgment question.

As to claim construction, the panel affirmed the Texas district court’s findings on the meaning of a term within the ’668 patent. Judge Reyna wrote that a person of ordinary skill in the art would have understood the term as the court construed it, rather than the lesser restrictive construction Samba advocated for. Judge Reyna noted that this decision did not affect its previous noninfringement determination in favor of Alphonso.

Samba is represented by Tensegrity Law Group LLP, and Alphonso by Goodwin Procter LLP.