Yieldmo, Inc. v. Teads, Inc.

Background

Yieldmo brought a patent-infringement action against Teads, alleging infringement of four patents concerning interactive digital advertising. The patents describe presenting advertising content that changes in response to a user’s activity on a webpage, including scrolling, and calculating an engagement measure based on that activity.

Teads moved to dismiss the amended complaint under Federal Rule of Civil Procedure 12(b)(6), which allows dismissal when a complaint does not state a legally sufficient claim. Teads argued that the patents were invalid under § 101 of the Patent Act because they claimed patent-ineligible subject matter. Teads also separately moved to dismiss the claims against Teads SA and Teads SARL for insufficient service of process. Because the court granted the Rule 12(b)(6) motion, it did not address that separate service-of-process motion.

Representative Claim

The parties agreed that claim 1 of Yieldmo’s ’729 Patent could represent the claims in all four patents for the § 101 analysis. That claim describes loading an advertisement into an image player, changing displayed frames in response to user scrolling, and calculating an engagement metric. The court found that the other asserted claims did not differ in a way that mattered to patent eligibility.

Section 101 Analysis

The court applied the two-step framework commonly called the Mayo/Alice test. First, it asks whether the claims are directed to an abstract idea or another category excluded from patent protection. Second, if they are, it asks whether the claims contain an inventive concept—an element or combination that adds significantly more than the excluded idea itself.

At the first step, the court held that the patents were directed to the abstract idea of advertising that responds to consumer activity, or customizing advertising based on a user’s interaction with a webpage. In the court’s view, the claims described the high-level concept of using scrolling or other user information to tailor advertising. The use of terms such as “image player,” “scroll event,” and “engagement metric,” along with general flowcharts, did not make the concept sufficiently concrete.

The court also found that the patents did not claim an improvement to digital hardware, software programming, or computer functionality. Instead, computers were used as tools to carry out the advertising concept. The court compared the patents to prior decisions holding that targeted advertising, customized content, and processing user information into user-tailored output were abstract ideas.

At the second step, the court held that the patents lacked an inventive concept. The claimed activities—loading an image file, displaying images in response to scrolling, changing advertisement images, selecting information, and tracking usage data—were, in the court’s view, generic or routine computer tasks. The court rejected Yieldmo’s argument that the patents improved on conventional, noninteractive advertisements or solved a problem unique to the Internet.

Disposition

The court held that all four patents were directed to patent-ineligible subject matter and lacked an inventive concept. It therefore granted Teads’s motion to dismiss for failure to state a claim, directed the Clerk to terminate all pending motions, and closed the case. The court did not reach the parties’ preemption arguments or decide the separate insufficient-service-of-process motion concerning Teads SA and Teads SARL.