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Blue Calypso Sues MyLikes, Foursquare, Groupon and Yelp for Infringing Peer-to-Peer Advertising Patents


Written by Gene Quinn
President & Founder of IPWatchdog, Inc.
Patent Attorney, Reg. No. 44,294
Zies, Widerman & Malek
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Posted: November 6, 2012 @ 10:02 am
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Blue Calypso, Inc. (OTCBB: BCYP), an innovator in digital word-of-mouth marketing, announced today that it filed patent infringement lawsuits against MyLikes and Foursquare for infringement of Blue Calypso’s U.S. Patent Nos. 7,664,516 and 8,155,679.

Both patents cover methods and associated systems that enable peer-to-peer advertising. In the innovation described in the patent a subsidy program is set up based on a profile of an advertiser. A qualified subscriber is identified for the advertiser based on a profile of a subscriber. One or more advertisers and subsidy programs for the qualified subscriber are then selected. When a communication transmission is received one or more advertisements associated is transmitted from a central communication device to the subscribers communication device.

Blue Calypso has recently filed similar complaints against Yelp Inc. (NYSE: YELP) and Groupon, Inc. (NASDAQ:GRPN) in an effort to protect the state-of-the-art digital marketing platform that is at the core of the company’s business. The Groupon lawsuit was filed in the United States District Court for the Eastern District of Texas, Tyler Division.

“These patents are the result of years of technology innovation and development that enable us to deliver best-in-class digital word-of-mouth marketing programs to our customers”, said Bill Ogle, CEO of Blue Calypso, upon the filing of the Groupon lawsuit. “As companies try to monetize their social media connections, they are rapidly moving into our technological area of expertise and it is imperative that we protect and secure what we have built.”

“Patent protection is enshrined in our Constitution and the jury trial we have requested is designed to protect and encourage inventive businesses like Blue Calypso,” said Thomas M. Melsheimer, lead trial counsel for the company and Managing Principal of Fish & Richardson P.C.’s Dallas office. “Innovative technologies, like the ones involved here, must be protected from companies who would use them without permission.”

The complaint filed against Groupon, which was filed on July 31, 2012, and was the first of the above mentioned lawsuits.  The crux of the Blue Calypso grievance is found in paragraphs 8 and 9 of the complaint, which state:

8. Groupon infringes by operating a computer-based system typified by the screen shots attached as Exhibits C and D. Groupon enrolls both consumers and advertisers in the program and offers deals to consumers, as shown in Exhibit C, based on at least a geographic match between the consumer and the advertiser’s deal. In offering the deal to the matched consumer Groupon encourages the consumer to refer the deal to other consumers, and provides the referring consumer with content to carry out the referral as shown in Exhibit D.

9. On information and belief, Groupon has infringed and is infringing one or more claims of the ’516 and ’679 patents, literally or under the doctrine of equivalents, directly and indirectly. Groupon induces infringement by encouraging use of the system by consumers and advertisers. Groupon contributorily infringes by, inter alia, providing content to consumers for use in referring deals to other consumers (e.g., as shown on Exhibit D).

At first glance, these patents seem to be rather well written and there are a number of claims written from a variety of different vantage points.  There are system claims, method claims and method claims that operate within a defined system.  This type of belt and suspenders approach is what one expects to see in a serious patent for computer implemented innovations.

For example, the ’516 patent has the following independent claims:

1. In a system comprising a network, a source communication device, a destination communication device and an intermediary connected to the network, a method for providing advertising content to a recipient associated with the destination communication device and for subsidizing a qualified subscriber associated with the source communication device comprising: creating a first profile including a set of demographic requirements related to at least one advertiser of a group of advertisers; creating a second profile including a set of demographic data related to the subscriber; deriving a match condition between the first profile and the second profile; determining if the subscriber is a qualified subscriber based on the match condition; conditioning a set of subsidy programs based on the match condition;communicating a subsidy program of the set of subsidy programs to the qualified subscriber; receiving a first selection of the at least one advertiser of the group of advertisers from the qualified subscriber; receiving a second selection of a chosen subsidy program from the set of subsidy programs from the qualified subscriber; providing an endorsement tag related to the at least one advertiser of the group of advertisers and linked with the advertising content; transmitting a content communication from the qualified subscriber to the recipient including the endorsement tag; subsidizing the qualified subscriber according to the chosen subsidy program; receiving a signal from the recipient through execution of the endorsement tag to transmit the advertising content; and, transmitting the advertising content to the recipient.

2. A method for providing access to an advertisement from an advertiser to a source communication device possessed by a subscriber and distributing the access to the advertisement from the source communication device to a destination communication device possessed by a recipient, wherein the destination communication device is compatible with the source communication device, and the recipient having a relationship to the subscriber, the method comprising the steps of: comparing a desired demographic profile to a subscriber demographic profile to derive a match; establishing a bi-lateral endorsement between the subscriber and the advertiser; providing a subsidy program to the subscriber based on the match; sending a token related to the advertisement to the source communication device; activating an endorsement manager in the source communication device; initiating a communication session between the source communication device and the destination communication device; transmitting a message, including the token, from the source communication device to the destination communication device contemporaneously with the communication session; and recognizing a subsidy, according to the subsidy program, for the subscriber after a termination of the communication session.

20. A system for a set of advertisers to provide a set of advertising media from a first communication device to a second communication device, associated with a recipient, connected in a communication session via a network, the system providing a subsidy to a qualified subscriber associated with the first communication device, the system comprising: an intermediary, supporting a set of subsidy programs, an analysis application, and a website, resident on a computer server, connected to the network; at least one subsidy program, of the set of subsidy programs, being associated with at least one advertiser of the set of advertisers, for determining the subsidy; the intermediary having a processor configured to perform the following steps: receive a set of demographic qualifications from at least one advertiser of the set of advertisers; communicate a set of advertiser profiles related to the set of advertisers to a potential subscriber via the first communication device, receive a subscriber profile related to the potential subscriber from the potential subscriber; compare the subscriber profile related to the potential subscriber to the set of demographic qualifications from the at least one advertiser of the set of advertisers to determine a qualified subscriber, determine a bi-lateral endorsement by the qualified subscriber and the at least one advertiser; and,transmit the set of advertising media to the first communication device; an endorsement manager, resident on the first communication device, programmed to: transmit at least one advertising media, of the set of advertising media, to the second communication device; log a first set of data related to the communication session; and, transmit the first set of data to the analysis application; the intermediary having a processor configured to execute the analysis application, and perform the following steps: conduct an evaluation of the first set of data; determine an amount of the subsidy according to the evaluation; and relate the subsidy to the qualified subscriber.

28. A method for providing an advertisement related to an advertiser from an intermediary machine to a source communication device possessed by a subscriber and distributing the advertisement between the source communication device and a destination communication device possessed by a contact of a set of contacts related to the subscriber, the method comprising: providing a first communication channel between an intermediary machine and the source communication device; qualifying the subscriber, to become a qualified subscriber, by comparing a desired demographic profile from the advertiser to a descriptive demographic profile associated with the subscriber; establishing a bi-lateral endorsement between the qualified subscriber and the advertiser; moving the advertisement from the intermediary machine to the source communication device over the first communication channel; activating an endorsement manager in the source communication device; providing a second communication channel between the source communication device and the destination communication device; initiating a communication session from the source communication device to the destination communication device over the second communication channel; associating the advertisement with the communication session; transmitting the advertisement to the destination communication device; accessing the advertisement through the destination communication device; storing a first set of data relating to transmitting the advertisement in the source communication device; uploading the first set of data from the source communication device to the intermediary machine over the first communication channel; storing a second set of data relating to accessing the advertisement in the intermediary machine; recognizing a first reward for the qualified subscriber based on the first set of data and the second set of data; and, recognizing a second award for the qualified subscriber based on a frequency of communication sessions.

Time will tell the outcome of this litigation, as it tells all things. But I wouldn’t necessarily anticipate that Blue Calypso will be stopping here with its lawsuits.  The Groupon lawsuit was filed in July 2012, the Yelp lawsuit in October 2012, and MyLikes and Foursquare in November 2012. If anything it seems Blue Calypso is accelerating.

“It is our duty to protect our Intellectual Property and this is what we are doing with this suit and others like it,” said Ogle upon the filing of the latest lawsuit against MyLikes and Foursquare. “We built this technology to give our customers a platform for reaching new consumers. When others infringe on our innovation, we are going to take the steps necessary to protect what is ours.”

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Posted in: Gene Quinn, IP News, IPWatchdog.com Articles, Patent Litigation, Patents

About the Author

is a Patent Attorney and the founder of the popular blog IPWatchdog.com, which has for three of the last four years (i.e., 2010, 2012 and 2103) been recognized as the top intellectual property blog by the American Bar Association. He is also a principal lecturer in the PLI Patent Bar Review Course. As an electrical engineer with a computer engineering focus his specialty is electronic and computer devices, Internet applications, software and business methods.

 

4 comments
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  1. Having implemented real-time campaigning with location-awareness for a mobile telco using off-the-shelf products back in 2003/4, my initial impressions gained from an quick reading is that the Blue Calypso patents do seem to have a rather large obvious element to them; but as Gene likes to remind us the devil is in the detail.

    Given a first filing date in 2005 and the evidence Blue Calypso has put forward in the Groupon case, namely ‘normal’ web referral/endorsement mechanisms, there will be a significant body of prior art …

  2. This seems frivolous, as in programming novel solutions are often wanting. Unless the litigant can prove that no other solution exists for the same programming problem, it is like a dolphin suing a marsupial because both have five finger-like bones in each hand or flipper. The reason is that both co-evolved from a single progenitor. In this case, as is so with many programming ‘patents’, both the litigant and the defendants came from a similar background – of being web merchants or brokers for the same. If no other programming solution is apparent then no patent infringement can be established, or even if it can be shown that the defendants arrived at the same conclusion in their coding simply because it is the straightest line between the points in question. I believe both the patents and the lawsuits are frivolous.

  3. Paulos-

    Your analogy aside, infringement is not acceptable regardless of how you may choose to rationalize it. While you may want the litigant to have to prove that no other solution exists, that is not what the law requires.

    You can believe the patents and these types of lawsuits are frivolous, but your understanding of the law is extremely limited. You seem to be a part of the crowd that wants to be able to copy others who innovate without getting charged for infringement. The belief that software programmers have a god given right to copy the work of others is what is fanciful, or frivolous.

    -Gene

  4. Gene,

    Please update us (the IPwatchdog readership) as and when there are developments with the Blue Calypso filings.

    Paulos,
    Thanks for reminding me about this case, I had totally forgotten about it. By the way I do recommend hanging around, you’ll be surprised just how much you will improve your understanding of the law and how it may impact your work whether we like it or not.