Yahoo! Inc. v. AlmondNet, Inc.

Case Overview and Background

Yahoo! Inc., a major web services provider, filed a petition for a Covered Business Method (CBM) review against a patent held by AlmondNet, Inc., a company that develops and licenses technology for targeted advertising. This proceeding took place before the Patent Trial and Appeal Board (PTAB) of the U.S. Patent and Trademark Office. AlmondNet and its related entities operate as technology developers and licensors, and have been characterized by some as a patent assertion entity (PAE). The dispute centered on Yahoo's advertising systems, which AlmondNet alleged infringed its patent covering methods for targeting online ads based on user interests.

The patent at issue was U.S. Patent No. 8,494,904, titled "Targeting of Content and Advertisements to Users of a Network." The '904 patent generally describes a method for creating user profiles based on their online behavior (such as websites visited and search queries) and then using those profiles to deliver targeted ads and content from various sources. Yahoo sought to invalidate the patent's claims, arguing they were directed to an abstract idea and thus ineligible for patent protection under 35 U.S.C. § 101. This CBM review was strategically filed in response to a district court infringement lawsuit AlmondNet had previously brought against Yahoo.

The case is notable as an example of a technology operating company using the now-defunct CBM review process to challenge the validity of a business method patent asserted against it. CBM reviews were a specific type of post-grant proceeding created by the America Invents Act, designed to be a more efficient way to challenge patents related to financial products or services. The PTAB's ultimate decision not to institute a trial in CBM2017-00051 was a significant victory for the patent owner, AlmondNet. In its decision dated November 16, 2017, the Board determined that Yahoo had not shown it was more likely than not that at least one of the challenged claims was unpatentable. This outcome allowed AlmondNet's infringement claims to proceed in district court without the parallel threat of PTAB invalidation.

Key Legal Developments and Outcome

This Covered Business Method (CBM) Review was a short-lived proceeding at the Patent Trial and Appeal Board (PTAB) that concluded with a victory for the patent owner, AlmondNet, Inc., as the Board declined to institute a trial.

Parallel District Court Litigation

The CBM petition was filed in response to a patent infringement lawsuit brought by AlmondNet and its related companies against Yahoo! Inc. in the U.S. District Court for the Eastern District of New York. The lawsuit, filed in March 2016, accused Yahoo's advertising systems of infringing several AlmondNet patents, including the 8,494,904 patent.

This district court case had its own complex procedural history. After the Supreme Court's 2017 decision in TC Heartland LLC v. Kraft Foods Grp. Brands LLC, which altered the landscape for patent venue, Yahoo (by then operating as Oath Holdings Inc.) moved to dismiss or transfer the case, arguing that venue in the Eastern District of New York was improper. The district court initially denied the motion, leading Yahoo/Oath to seek a writ of mandamus from the Federal Circuit. The appellate court ultimately directed the district court to reconsider, and the case was later transferred.

The CBM Petition and Non-Institution

In a move to counter the district court litigation, Yahoo filed a petition for a CBM review of U.S. Patent No. 8,494,904 on 2017-05-15. The petition, docketed as CBM2017-00051, argued that the patent's claims were invalid because they were directed to an abstract idea and/or were anticipated or rendered obvious by prior art. This was one of several CBM petitions Yahoo filed against AlmondNet's patents around the same time.

A CBM review is a specific type of post-grant proceeding that was available for patents claiming a method or apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service. Yahoo's petition presumably argued that the '904 patent, which relates to targeted advertising, fell into this category.

AlmondNet, as the patent owner, would have filed a Preliminary Response arguing against the institution of the CBM review. These responses typically attack the petitioner's arguments on the merits and can also challenge whether the patent is eligible for CBM review in the first place.

The key development and final outcome of this PTAB proceeding occurred on 2017-11-28, when the PTAB issued its Decision on the Petition, denying institution of the CBM review. This "Not Instituted" status means the Board determined that Yahoo had not met the statutory threshold of showing that it was more likely than not that at least one of the challenged claims was unpatentable.

The specific reasons for the denial are contained within the Board's written decision. Common reasons for non-institution include the petitioner failing to present sufficiently persuasive invalidity arguments, or the Board determining that the challenged patent is not a "covered business method patent" as defined by the statute. Without the full text of the decision, the precise rationale is not publicly available in the search results.

This outcome was a significant victory for AlmondNet, as it prevented a trial at the PTAB that could have invalidated the '904 patent. The patent remained valid and enforceable, and the parallel district court litigation could proceed without the cloud of a concurrent PTAB trial on the same patent.

Counsel for Petitioner Yahoo! Inc.

Based on filings in the related district court litigation and a subsequent appeal to the U.S. Court of Appeals for the Federal Circuit, counsel for petitioner Yahoo! Inc. was from the law firm of Quinn Emanuel Urquhart & Sullivan, LLP. The specific attorneys who represented Yahoo (later Oath Holdings Inc.) are listed below. While direct docket records for the PTAB proceeding are not readily available through public web search, a Federal Circuit opinion explicitly identifies the counsel representing Yahoo in the dispute with AlmondNet.

Law Firm: Quinn Emanuel Urquhart & Sullivan, LLP

• Charles K. Verhoeven (Lead Counsel)

  • Firm & Office: Quinn Emanuel Urquhart & Sullivan, LLP; San Francisco, CA.
  • Notable Experience: Verhoeven is a nationally recognized trial lawyer with extensive experience in high-stakes patent litigation, having represented major technology companies like Google, Samsung, and HTC in landmark cases.

• Miles Davenport Freeman (Of Counsel)

  • Firm & Office: Quinn Emanuel Urquhart & Sullivan, LLP; Los Angeles, CA.
  • Notable Experience: Freeman's practice focuses on intellectual property litigation, and he has been involved in numerous patent disputes for technology clients.

• Patrick D. Curran (Of Counsel)

  • Firm & Office: Quinn Emanuel Urquhart & Sullivan, LLP; New York, NY.
  • Notable Experience: Curran has experience in complex commercial litigation, including intellectual property matters for various technology and financial service companies.

• John Thomas McKee (Of Counsel)

  • Firm & Office: Quinn Emanuel Urquhart & Sullivan, LLP; New York, NY.
  • Notable Experience: McKee's practice includes intellectual property and complex commercial litigation, representing clients in the technology and software sectors.

This information is derived from the appellate case In re: Oath Holdings Inc., 908 F.3d 1301 (Fed. Cir. 2018), which directly arose from the district court litigation that prompted this CBM review. That filing lists Charles K. Verhoeven as lead counsel and identifies Freeman, Curran, and McKee as also representing Oath (Yahoo).

Counsel for Defendant (Patent Owner)

While the specific "Mandatory Notices" document for CBM2017-00051 was not located through web searches, counsel for AlmondNet, Inc. is identified based on their consistent representation of the company in related district court litigations and subsequent PTAB proceedings involving the same patent family. The attorneys are from the Los Angeles office of Russ August & Kabat, a firm known for representing patent holders.

• Name: Reza Mirzaie

  • Role: Lead Counsel (inferred)
  • Firm: Russ August & Kabat, Los Angeles, CA
  • Noteworthy Experience: Mirzaie, Co-Chair of the firm's patent infringement department, is a registered patent attorney who has led numerous successful post-grant matters before the USPTO and has obtained over $600 million for clients, including a significant jury verdict for AlmondNet against Amazon.

• Name: Marc A. Fenster

  • Role: Of Counsel (inferred)
  • Firm: Russ August & Kabat, Los Angeles, CA
  • Noteworthy Experience: As chair of the Patent Litigation department he founded at the firm, Fenster is a high-profile trial lawyer who has built a nationally recognized plaintiff-side patent litigation practice and secured a notable victory for Core Wireless against Apple.

• Name: James A. Milkey

  • Role: Backup Counsel (inferred)
  • Firm: Russ August & Kabat, Los Angeles, CA
  • Noteworthy Experience: Milkey is an intellectual property litigation partner and registered patent attorney with extensive experience in federal court, the International Trade Commission, and numerous post-grant proceedings before the PTAB.