Zeta Global Corp. v. Maropost Marketing Cloud, Inc.

Background

Zeta brought claims against Maropost for breach of contract, tortious interference with contract, declaratory relief, and infringement of three patents. The court dismissed the non-patent claims based on a contract provision requiring disputes to be resolved in Toronto, Ontario. Zeta later withdrew its claims concerning the ’672 Patent. The court dismissed the ’439 Patent claims after finding a relevant term indefinite. On July 7, 2022, the court granted Maropost’s motion for judgment on the pleadings on Zeta’s last remaining claim involving the ’475 Patent.

In that ruling, the court determined that the ’475 Patent claims were patent-ineligible abstract ideas under the two-part analysis required by Alice Corp. v. CLS Bank International. The court found that receiving and classifying email failure messages and deciding whether email addresses should be treated as invalid involved longstanding, abstract practices. It also found no inventive concept that transformed those ideas into patent-eligible inventions.

Attorney’s-Fee Standard

Maropost then moved under Section 285 of the Patent Act for a declaration that the case was “exceptional.” Such a declaration is the first step in a process that could permit a prevailing party to seek reasonable attorney’s fees. A case is exceptional when, considering all the circumstances, the strength of a party’s legal position or the way it litigated stands out from ordinary cases. The court considered factors including frivolousness, objective unreasonableness, improper motivation, compensation, and deterrence. The motion sought only the exceptional-case declaration, not a calculation of fees.

Court’s Analysis

The court held that Zeta’s arguments about the validity of the ’439 and ’475 Patents were not objectively unreasonable. Although the patents ultimately claimed only generic computer performance of familiar pre-Internet functions, the patents were not identical to those invalidated in the cases Maropost cited. The court found it reasonable for Zeta to argue that its use of Internet-service-provider information distinguished its patents from those cases, even though that distinction ultimately failed.

The court also rejected Maropost’s argument that Zeta’s infringement positions and discovery requests were unreasonable. The court found that Zeta had a colorable basis for seeking information about Maropost’s process for setting retry intervals for so-called soft-bounced emails. Maropost used Internet-service-provider information in that process, and the court concluded that Zeta could reasonably investigate whether that use supported its infringement theory. Zeta was also not required to rely solely on Maropost’s assurances that changes to its process eliminated any possible infringement.

The court further rejected Maropost’s arguments that Zeta pursued the patent claims for an improper settlement-related purpose. Zeta’s efforts to seek a global settlement, its earlier emphasis on the non-patent claims, and its discovery conduct did not establish an improper motive. The court stated that Zeta pursued relatively weak claims that ultimately failed, but its positions were not objectively unreasonable and there was little evidence of improper motivation.

Disposition

Judge Schofield concluded that the case was not exceptional and that compensation and deterrence did not warrant the rare finding requested by Maropost. The court DENIED Maropost’s motion and directed the Clerk of Court to close the motion at Docket Number 134.