Microsoft Corporation finds itself on the defensive side of a lawsuit that could make them pay for infringing two patents on reflexive advertising in search engines. The lawsuit is being brought forth by I/P Engine, Inc., a wholly owned subsidiary of mobile technology innovator Vringo, Inc.
The patent infringement lawsuit, filed in the Southern District Court of New York State, seeks reasonable royalties from Microsoft for not only infringing on I/P Engine’s patents in Microsoft’s own search engine, which employs filtering technology, but also for continuing to engage in the practice for years after alerted to the patents. I/P Engine alleges that Microsoft has been knowingly infringing upon U.S. Patent No. 6,314,420 (the ‘420 patent), which is titled “Collaborative/Adaptive Search Engine,” since at least October 2003 and U.S. Patent No. 6,775,664 (the ‘664 patent), which is titled “Information Filter System and Method for Integrated Content-Based and Collaborative/Adaptive Feedback Queries,” since at least December 2008.
These patents relate to a system of matching advertisements to search engine queries developed by inventors Andrew Lang and Donald Kosak for search engine technology firm WiseWire during the mid-1990s. WiseWire was later acquired by Lycos in 1996 to develop filtering techniques for the online website directory provider and take advantage of better targeted advertising. The system, known as Lang/Kosak Relevance Filtering Technology, filters ad responses to search queries based on topic relevancy and click feedback from browsers. The complaint contends that this system was a vast improvement on other systems that existed at the time, including the untargeted bid-based pay per click (PPC) system heavily in use at the time. The patents are currently owned by I/P Engine, which employs Lang as its Chief Technology Officer and Kosak as a technology advisor.
The complaint contends that Microsoft Corporation is knowingly infringing upon Claim 10 of the ‘420 patent and Claim 1 of the ‘664 patent. Those familiar with complaints in patent infringement cases will appreciate that the identification of specific claims that are believed to be infringing is not something that is done all the time. Indeed, in many cases only the most vague assertions of infringement are made. “This suggests to me that the plaintiff has done some pre-filing due diligence,” says Gene Quinn, a patent attorney and founder of IPWatchdog.com. “This is not the level of detail one would expect to see in a complaint filed by some of the more notorious bad actors who courts have suggested are really engaging in ‘extortion-like’ behavior. If I were Microsoft I would take a complaint like this more seriously.”
Claim 10 of the ’420 patent, which was filed in 1998 and issued on November 6, 2001, protects:
“A search engine system comprising: a system for scanning a network to make a demand search for informons relevant to a query from an individual user; a content-based filter system for receiving the informons from the scanning system and for filtering the informons on the basis of applicable content profile data for relevance to the query; and a feedback system for receiving collaborative feedback data from system users relative to informons considered by such users; the filter system combining pertaining feedback data from the feedback system with the content profile data in filtering each informon for relevance to the query.”
Claim 1 of the ‘664 patent, which was filed October 2001 and issued on August 10, 2004, protects:
“A search system comprising: a scanning system for searching for information relevant to a query associated with a first user in a plurality of users; a feedback system for receiving information found to be relevant to the query by other users; and a content-based filter system for combining the information from the feedback system with the information from the scanning system and for filtering the combined information for relevance to at least one of the query and the first user.”
The complaint for the most part implicates Microsoft’s Bing Ads system and alleges that the “Quality Score” system of filtering advertisements based on content and search data is patterned after Lang and Kosak’s invention. The plaintiff contends that Microsoft knew about the infringement on both patents from previous patent prosecutions on numerous Microsoft patents that list either of I/P Engine’s patents as a prior art reference. This is reflected by official correspondence between Microsoft and the U.S. Patent & Trademark Office that I/P Engine refers to as evidence of Microsoft’s knowledgeable infringement. The complaint also alleges that a positive verdict from November 2012 in an I/P Engine lawsuit against Google’s system of search engine advertising filters should have further alerted Microsoft to the probable infringement, especially as both of the patents in question were specifically cited in that case.
I/P Engine is seeking compensatory damages for past royalties lost since Microsoft Corporation began engaging in the patent infringement, as well as possible future damages if Microsoft plans on continuing to use Bing Ads’ Quality Score system to match advertisements with search engine queries. The complaint contends that this case is “exceptional,” which means Microsoft would also owe the attorney fees incurred by I/P Engine for the lawsuit.
This lawsuit, filed on January 31 of this year, could prove very costly to Microsoft, and the previous positive verdict against Google seems foreboding. I/P Engine requested that the legal proceedings include a trial by jury, which could turn into a lengthy court battle. The strong wording of the complaint clearly accuses Microsoft of at least serious negligence in refusing to adjust their advertising system, as well as facilitating further infringement from third parties, such as publishers of Microsoft Media Network software. I/P Engine is seeking any form of compensatory damages, which will at least be equal to reasonable intellectual property royalties for the use of patented information. Although the complaint does not specifically ask for enhanced damages in the prayer for relief, the fact that the plaintiff is making such a big deal about Microsoft being on notice and knowingly continuing infringement suggest they will make a serious run at a finding of willful infringement. Such a finding, although difficult to obtain, could lead to the awarding of triple damages.