[00:00:01] Speaker 03:
The United States Court of Appeals for the Federal Circuit is now open and in session.

[00:00:05] Speaker 03:
God save the United States and this honorable court.

[00:00:11] Speaker 01:
OK, our first case this morning is number 19-1506, Restream Media Corporation versus Alfonso, Inc.

[00:00:19] Speaker 01:
Before we begin, I'd just like to alert counsel that the panel has some concern about the amount of material that's marked as confidential.

[00:00:31] Speaker 01:
And we are going to be asking questions about the relationship with Vizio.

[00:00:41] Speaker 01:
My understanding is that what's marked as confidential are the various fields that are processed.

[00:00:50] Speaker 01:
And I don't think our questioning will get into that area, but if we ask a question that

[00:00:59] Speaker 01:
intrudes into confidential material, we expect counsel to advise us of that and then we'll figure out how to proceed at that point.

[00:01:09] Speaker 01:
Do counsel have any questions about that and do my colleagues have any questions?

[00:01:19] Speaker 01:
Hearing none, why don't you begin Mr. Powers.

[00:01:23] Speaker 05:
Thank you, Your Honor.

[00:01:23] Speaker 05:
May it please the Court.

[00:01:25] Speaker 05:
I'd like to begin with the Akamai issues raised by the vizio contract that Your Honor just alluded to.

[00:01:29] Speaker 05:
The District Court committed three errors in granting summary judgment under the Akamai analysis, two of them legal, one of them factual.

[00:01:39] Speaker 05:
The two legal errors were first in treating claims 10, 13, and 18 similarly to claim one.

[00:01:47] Speaker 05:
Claim one certainly does have a television generating fingerprint data

[00:01:51] Speaker 05:
and therefore the Akamai issue is live there.

[00:01:54] Speaker 05:
However, claims 10, 13, and 18 are not structured the same way and the only presence of a television is that it is part of the environment in which the Alfonso server operates and is merely communicatively coupled to that server.

[00:02:08] Speaker 02:
There is no issue.

[00:02:09] Speaker 02:
Sorry, Mr. Powers, can I just interrupt you?

[00:02:11] Speaker 02:
Since you mentioned that, this is Judge Hughes.

[00:02:14] Speaker 02:
What does communicatively coupled mean in your view?

[00:02:18] Speaker 05:
It means that you can access data from it directly or indirectly, and there were claim constructions below about that question, and there's no debate, I think, among the parties that the information... What does indirectly access data mean?

[00:02:37] Speaker 05:
So, for example, the television data would be uploaded to the cloud, and Alfonso would access it from the cloud.

[00:02:46] Speaker 05:
that there's just an intermediary server which is accessing the information and holding it.

[00:02:52] Speaker 02:
Do you agree that Alfonso doesn't access data directly from Vizio TVs that were relying on your indirect prong here?

[00:03:01] Speaker 02:
Yes, that's correct.

[00:03:03] Speaker 02:
So your definition of indirect seems pretty broad.

[00:03:08] Speaker 02:
Would that encompass, and I know this is old school, nobody would do it like this anymore.

[00:03:13] Speaker 02:
If Vizio put a bunch of data on a huge hard drive and sent it to Alfonso and then Alfonso hooked that up to that system, would that be indirectly accessing data from Vizio TVs?

[00:03:27] Speaker 02:
Would they be communicatively coupled with those TVs merely by downloading data to a hard drive, sending it through the mail, and then hooking it up to the Alfonso system?

[00:03:38] Speaker 05:
I think that's a harder question than what the facts present here because the facts present, the construction is, quote, connected in a manner that permits communication.

[00:03:49] Speaker 05:
And certainly there are cases in this court and many others which make clear that such communication need not be a direct wire connecting one device to another, that there are often intermediary devices and that is considered to be connected.

[00:04:07] Speaker 02:
But it still has to be communication, right?

[00:04:09] Speaker 02:
It doesn't just have to be a one-way download of data.

[00:04:14] Speaker 05:
Communically coupled doesn't necessarily require a talking back and forth.

[00:04:19] Speaker 05:
It just means that Alfonso can access the data from the TV via some communication.

[00:04:25] Speaker 05:
And it does so via communication with the servers in the cloud that are immediately intermitted.

[00:04:32] Speaker 02:
It seems to me that the hard drive hypothetical is the same thing.

[00:04:35] Speaker 02:
It's accessing the data through the hard drive via the mail.

[00:04:41] Speaker 02:
There seems to me a little difference in uploading data to the cloud on Vizio's own servers and putting it on a hard drive and sending it through the mail.

[00:04:51] Speaker 05:
The only reason I said I think it's a little harder, Your Honor, is that

[00:04:56] Speaker 05:
the form of indirect communication that I'm referring to is quite common and is commonly understood to be a form of communication.

[00:05:02] Speaker 05:
You're communicating through an intermediary device where it's all done in the cloud and that is well understood.

[00:05:10] Speaker 02:
Okay.

[00:05:10] Speaker 02:
Let me, can I just ask one more question on this point and then I'll let you move on is how are you communicating with the TV?

[00:05:16] Speaker 02:
Aren't you just communicating with the part in the cloud where the video uploaded this data and that there's no active

[00:05:24] Speaker 02:
either direct or indirect, coupling with the TVs themselves.

[00:05:30] Speaker 05:
There is no direct coupling with the TV.

[00:05:33] Speaker 05:
The TV couples to the cloud and the Alfonso server couples to the cloud.

[00:05:38] Speaker 05:
And in that sense, that was communically coupled.

[00:05:42] Speaker 05:
I also don't believe that was the ground for ruling below.

[00:05:47] Speaker 05:
It was argued below, right?

[00:05:50] Speaker 05:
It was argued below tangentially, but that's certainly not the basis for the ruling below as to claims 10, 13, and 18.

[00:05:58] Speaker 01:
What about the specification, which talks about an intermediary server as being part of this communicatively coupled thing?

[00:06:09] Speaker 05:
That further supports the idea that that form of communicatively coupled is satisfied by the clients.

[00:06:17] Speaker 04:
Council, this is Judge Raina.

[00:06:18] Speaker 04:
I have a related question, and this goes to the communicatively coupled issue that my colleagues have brought up.

[00:06:26] Speaker 04:
Under Claim 10, the coupling is between a television and a mobile device through a network, correct?

[00:06:39] Speaker 05:
Under Claim 10, the server is communicatively coupled with a television and a mobile device.

[00:06:45] Speaker 05:
It's not coupling the television and the mobile device directly.

[00:06:50] Speaker 04:
We also argue that the different court erred because claims can do not require the use of a mobile device.

[00:06:59] Speaker 04:
True.

[00:06:59] Speaker 05:
That's a billion dollar issue.

[00:07:04] Speaker 04:
OK.

[00:07:04] Speaker 04:
Is it your position that the mobile device itself is not claimed?

[00:07:09] Speaker 04:
It's not part of this patent?

[00:07:10] Speaker 04:
Anything dealing with a mobile device, including its use, that's not part of a patent, correct?

[00:07:16] Speaker 05:
So that's not quite our position, Your Honor.

[00:07:19] Speaker 05:
It's certainly in the claim, but it's different in the sense that it's not part of the system that is being claimed.

[00:07:27] Speaker 05:
It's in the preamble, of course, but it is not something that would be required to be controlled under Occamai or used under Centilia.

[00:07:37] Speaker 05:
It's merely, so that would be like the cross medical case where you had a part of bone that was connected and they didn't require control over that under Otomy for example.

[00:07:50] Speaker 05:
So there is a different Claim 1 and Claim 10 in both the TV and the phone for sure.

[00:07:55] Speaker 04:
Okay.

[00:07:56] Speaker 04:
So then in Claim 1,

[00:07:58] Speaker 04:
It talks to the relevancy matching server through a sandbox application that's connected to the telephone.

[00:08:08] Speaker 04:
And I'm intrigued by this whole notion of a sandbox application.

[00:08:13] Speaker 04:
That's related to the phone only.

[00:08:16] Speaker 04:
Is that correct?

[00:08:18] Speaker 05:
That's part of the phone's operating system, how it protects the phone from being disrupted or hacked or other things.

[00:08:25] Speaker 05:
Yes, that's part of the phone.

[00:08:27] Speaker 04:
Are you claiming that?

[00:08:29] Speaker 05:
No, we're claiming that's the problem.

[00:08:33] Speaker 05:
What we're claiming is that we have found a way to pierce that sandbox application so that you can place a targeted ad on the phone.

[00:08:42] Speaker 04:
Are you claiming the way that you found to pierce that problem?

[00:08:47] Speaker 05:
Yes, that's through the embedded object that the relevancy matching server creates as part of the whole process of claim one.

[00:08:56] Speaker 01:
Could we turn to claim one which does seem to be different from 10, 13, and 18 in that it requires a television?

[00:09:06] Speaker 05:
Yes, we don't dispute that.

[00:09:10] Speaker 01:
I'm not understanding how merely purchasing data from Visio can amount to using the television as part of the system.

[00:09:24] Speaker 05:
Understood, your honor.

[00:09:25] Speaker 05:
There's two, two errors on that issue.

[00:09:27] Speaker 05:
We're first a legal error about what is required or optimize for direction and control.

[00:09:32] Speaker 05:
And a second, a factual error based on the facts of the contract between Alfonso and Vizio by which Alfonso directed Vizio to do certain things.

[00:09:41] Speaker 05:
The legal error committed by the district court was to require specifically that the contract say you must practice.

[00:09:48] Speaker 05:
You must give us these results according to the method steps of the claim.

[00:09:52] Speaker 05:
That's the how.

[00:09:53] Speaker 05:
that the District Court required on Appendix 10 and 17.

[00:09:57] Speaker 05:
That, of course, is inconsistent with the general principle that you can't escape liability merely by contracting it out, but it's also very inconsistent with this Court's decision in Mancus v. Vivid Seats, 822F3rd at 1302 at 1310, where the District Court ruled exactly the same way the Court did here, finding that the contract didn't specify the particular claim steps and held that Akamai makes clear it does not suffice to conclude

[00:10:24] Speaker 05:
that the local viewers are not required to take the claim steps they perform.

[00:10:28] Speaker 05:
There's no dispute that the Vizio TVs do perform the claim steps.

[00:10:32] Speaker 05:
The only issue for the ruling below was that the court felt that there wasn't sufficiently clear evidence that Vizio was required by Alfonso to perform specifically those steps.

[00:10:44] Speaker 05:
The Mancos case says that's not the right test.

[00:10:48] Speaker 05:
And even if it were, the factual dispute is created by the actual contract

[00:10:53] Speaker 05:
that Alfonso has with Vizio.

[00:10:56] Speaker 05:
That contract at Appendix 2230 and 31 and then Appendix 2, Attachment 2 at 2237 has two things that make clear there's a specific factual dispute about whether Alfonso's contract with Vizio required it to generate fingerprint data, which is all that's required in the claim.

[00:11:16] Speaker 05:
The first is that

[00:11:18] Speaker 05:
The contract requires at 2230 that the audiovisual content on the TV be identified, quote, without the aid of metadata, without the aid of metadata.

[00:11:30] Speaker 05:
That is what generating fingerprint data is.

[00:11:32] Speaker 05:
That's precisely the definition of it.

[00:11:35] Speaker 05:
And that was proven by us at Appendix 3056, 1864, 65, and 2237.

[00:11:41] Speaker 05:
That is the essence of what fingerprint data is, is doing it without metadata.

[00:11:47] Speaker 05:
i.e.

[00:11:47] Speaker 05:
you're recognizing the content itself by the content.

[00:11:52] Speaker 05:
But second, Attachment 2 specifies both the manner and frequency by which Alfonso insisted that Visio generate its data.

[00:12:02] Speaker 05:
That is where I think Your Honor's concern about confidentiality arises.

[00:12:06] Speaker 05:
I'll just note that at a high level, the content recognition fields there are exactly what fingerprint data are.

[00:12:15] Speaker 05:
And there's no dispute that that's what DeZio did, that they did generate fingerprint data, again, and that is all that's required by the claims.

[00:12:23] Speaker 05:
The question of the level of direction and control is a question of fact.

[00:12:29] Speaker 05:
Those are specific facts from which a jury easily could have confirmed that that direction and control was present based on the contractual requirements, and that should have gone to the jury for factual resolution.

[00:12:41] Speaker 02:
Mr. Powers, this is Judge Hughes again.

[00:12:43] Speaker 02:
I know you're now into your rebuttal, but I just wanted to touch briefly on the sling portion of this case, because even if we disagree with your views about the video TVs and conclude that they're not communicatively coupled or under claim line, they're not sufficient to provide the TV, that ground doesn't apply to sling, right?

[00:13:05] Speaker 02:
True.

[00:13:06] Speaker 02:
Okay.

[00:13:07] Speaker 02:
So what was the basis for the district court summary judgment on Sling?

[00:13:12] Speaker 02:
Was it the no telephone, no mobile device, and no computer relevancy matching?

[00:13:23] Speaker 05:
Not as to that.

[00:13:24] Speaker 05:
With Sling, it's just the source of the data.

[00:13:25] Speaker 05:
So you're right about the mobile phone ground would apply.

[00:13:28] Speaker 05:
That's the centillion issue that I was hoping to get to.

[00:13:31] Speaker 02:
But what about the relevancy matching?

[00:13:35] Speaker 02:
Does that apply to all three?

[00:13:36] Speaker 02:
That's the data and how Alfonso uses it.

[00:13:42] Speaker 02:
And this is very complicated and a little confusing about some of the grounds the district court relied on or not.

[00:13:50] Speaker 02:
But my understanding is that Alfonso's view is in both the vizio and the sling factors,

[00:13:59] Speaker 02:
it doesn't do its computer doesn't do relevancy matching because it's actual human employees that take the data and match the segments with the IP addresses.

[00:14:11] Speaker 02:
And that that's not done by a computer, which is what I think your claims require the computer to do that matching relevancy matching, right?

[00:14:22] Speaker 05:
You're exactly right about what their argument is, about what the ruling below was with regard to the human interactivity with the relevancy matching.

[00:14:31] Speaker 05:
And I very much, I realize I'm in my rebuttal time, I would very much like to address both the centillion issue briefly and this human interaction issue on the relevancy matching server as well.

[00:14:43] Speaker 01:
Well, I'd like to do that, but I'm confused about this discussion because I looked at footnote one in the

[00:14:51] Speaker 01:
in the red brief on page three, and it says that Sling isn't an issue on appeal.

[00:14:58] Speaker 01:
Do you have a different view of that?

[00:15:01] Speaker 05:
So Sling is not an issue on appeal as far as the Visio data acquisition argument goes.

[00:15:08] Speaker 05:
Alfonso did make an argument that even as to where the data came from the Sling application, that in the Beeswax server, they still have their human activity argued.

[00:15:21] Speaker 05:
It just, so the way to think of it is that Sling does not apply to the Akamai analysis.

[00:15:29] Speaker 05:
That's, but their argument that they've maintained as to human activity would still apply to Sling.

[00:15:38] Speaker 02:
And you're still saying that the summary judgment as to non-imprisonment on the Sling was incorrect, aren't you?

[00:15:47] Speaker 05:
Absolutely.

[00:15:49] Speaker 05:
So as to that one, sorry, go ahead.

[00:15:57] Speaker 05:
Yes, because we believe the district court got the other two grounds wrong.

[00:16:02] Speaker 05:
I E it is the beeswax server, which is the relative matching server, which does the matching at 50,000 times per second.

[00:16:10] Speaker 05:
Obviously no human being is doing that.

[00:16:13] Speaker 05:
Uh, and as to the centillion argument,

[00:16:17] Speaker 05:
that relevancy matching server is exactly what Alfonso is putting into service and benefiting from, which is what Centillion requires.

[00:16:27] Speaker 01:
Okay, so why don't you go on and address the other two points.

[00:16:31] Speaker 01:
Thank you.

[00:16:32] Speaker 01:
The Centillion argument and I forget what the other one was.

[00:16:35] Speaker 05:
Thank you, Your Honor.

[00:16:37] Speaker 05:
With regard to Centillion, there's again a distinction between claims one and claims 10, 13, and 18 because

[00:16:47] Speaker 01:
Centillion had nothing to do with 10, 13, and 18, right?

[00:16:51] Speaker 05:
It should not, but it was relied upon by the district court to do so.

[00:16:54] Speaker 05:
But Centillion does not apply to 10, 13, and 18, but does legitimately apply to Claim 1.

[00:17:02] Speaker 05:
And so that is one error by the district court with regard to its Centillion analysis.

[00:17:08] Speaker 05:
The primary issue, obviously, on Centillion is who is putting the system into place.

[00:17:16] Speaker 05:
and benefiting from it.

[00:17:18] Speaker 05:
And the mistake that the district court made was in believing that the phone, which obviously Alfonso does not have the phone and use the phone to request the ad, but isn't, wasn't focusing the lens of the Centillion analysis on that end.

[00:17:35] Speaker 05:
If you look at the claim, the phone is a minor part of it.

[00:17:38] Speaker 05:
And the rest, the whole claim is about what Alfonso does put into service, what it does control.

[00:17:43] Speaker 05:
and certainly what it benefits from, which is a primary issue under Centillion.

[00:17:48] Speaker 05:
And so the phone merely requesting the information and putting into motion the entire Alfonso apparatus is similar to the shopping website cases where yes, a third party human computer has to log into that website, but the whole website is being done for the benefit of the owner of the website.

[00:18:13] Speaker 05:
Just as here, Alfonso's relevancy matching server is all put into effect and benefited from by it.

[00:18:23] Speaker 05:
So that is, that was the mistake it made on Centillion.

[00:18:27] Speaker 01:
Okay, what about this issue about the human designation of the data that's the subject of interest?

[00:18:40] Speaker 01:
Yes, thank you.

[00:18:41] Speaker 01:
That's not covered by the client.

[00:18:43] Speaker 05:
Yes, Your Honor.

[00:18:44] Speaker 05:
So on this one, it is certainly true, as it is true in all computers, that humans program the computer.

[00:18:56] Speaker 05:
They load the data that the computer is going to use.

[00:18:59] Speaker 05:
And in this context, they would load the ads that are going to be served.

[00:19:05] Speaker 05:
They would load, for example, the thousands of IP addresses that watched a particular show.

[00:19:13] Speaker 05:
That's not the question for the court.

[00:19:16] Speaker 05:
The question for the court is who is doing the matching at 50,000 times per second when all those ad requests come in and you have to decide who gets the ad and who doesn't.

[00:19:28] Speaker 05:
The thing that is doing that matching, i.e.

[00:19:31] Speaker 05:
taking the IP addresses and linking them up to the ads to be served at 50,000 times per second, that is the beeswax server computer.

[00:19:39] Speaker 05:
Not a human being.

[00:19:41] Speaker 02:
Let me, sorry, this is such a huge, let me interrupt because this is where I'm very unclear about the party's position to whether there's a factual dispute.

[00:19:50] Speaker 02:
I thought that the beeswax system already had uploaded the matched IP addresses and the segments or the targeted ads.

[00:20:03] Speaker 02:
Like before it gets uploaded to beeswax, you have a list of IP addresses

[00:20:09] Speaker 02:
that are already matched to certain either ads or segments.

[00:20:16] Speaker 02:
I'm unclear on this, but let's say that it's the ads, and then all that has to happen is beeswax is a certain IP address asks for an ad, and it goes into that computer and matches the IP address, but the ad is already matched.

[00:20:36] Speaker 02:
Am I mistaken about how beeswax occurs?

[00:20:39] Speaker 02:
And if I'm not, why does that satisfy the matching limitation if the matching is done previously by ALPHA employees actually uploading lists of IP addresses and identifying them with certain segments?

[00:20:57] Speaker 05:
Thank you, Your Honor.

[00:20:57] Speaker 05:
So you are absolutely correct that

[00:21:02] Speaker 05:
Beeswax has uploaded to it prior to being pinged by a phone a list of IP addresses.

[00:21:09] Speaker 05:
Let's take an example.

[00:21:10] Speaker 05:
Let's say that the campaign is that Chevy wants to serve a Chevy ad to everybody who watched a Ford ad.

[00:21:17] Speaker 05:
Let's take that as the example.

[00:21:19] Speaker 05:
So Beeswax will have loaded up to it thousands and thousands of IP addresses of people who watched Ford ads.

[00:21:28] Speaker 05:
And Beeswax will have uploaded to it

[00:21:31] Speaker 05:
the Chevy ad that Chevy wants to serve to those IP addresses.

[00:21:38] Speaker 05:
But the matching hasn't occurred yet.

[00:21:40] Speaker 05:
The matching occurs when one of those IP addresses that happened to have been on the list of ones that watched the Ford ad pings the server.

[00:21:51] Speaker 05:
That server then looks to see if that IP address matches anything in its database.

[00:21:55] Speaker 05:
If so, yes.

[00:21:57] Speaker 05:
Then it bids on the ad.

[00:21:59] Speaker 05:
If it wins the bid on the ad, then it matches the ad to that IP address and sends the ad to that IP address.

[00:22:06] Speaker 05:
So that is where the matching occurs.

[00:22:11] Speaker 02:
Sorry, but the matching between the IP address and the forward viewing is already done when it's uploaded to Beeswax.

[00:22:23] Speaker 02:
The data is already matched.

[00:22:26] Speaker 02:
Here are the IP addresses.

[00:22:28] Speaker 02:
that it watched forward.

[00:22:30] Speaker 02:
That is true.

[00:22:31] Speaker 05:
That is absolutely true.

[00:22:32] Speaker 02:
And it's also already uploaded.

[00:22:35] Speaker 02:
So all that these WACs is matching really is an IP address.

[00:22:41] Speaker 05:
And that is the primary data which is required to be matched in the claim.

[00:22:44] Speaker 05:
It's matching the primary data, which is the IP address, which comes in.

[00:22:49] Speaker 05:
And that's the whole structure of the claim.

[00:22:53] Speaker 05:
That's how it works, is that you're matching, you're trying to deliver to that IP address the right end.

[00:23:01] Speaker 02:
So you're saying the matching doesn't have to be between the IP address and the viewing under your claim.

[00:23:07] Speaker 02:
It just has to be to the IP address if that has already been pre-associated.

[00:23:14] Speaker 02:
And let's just assume that was done through human means, not computer means.

[00:23:19] Speaker 02:
Make the hypothetical even clearer.

[00:23:21] Speaker 02:
There was no computer involved in the matching.

[00:23:23] Speaker 02:
Vizio got a list of, here are 10,000 IP addresses that watched a Ford commercial, and they enter it into the database one by one.

[00:23:35] Speaker 02:
I mean, clearly that's not going to happen, but let's just assume.

[00:23:38] Speaker 02:
And then they've done, the human has done the matching between the IP address and the Ford viewing.

[00:23:44] Speaker 02:
And so all BISWACS does is match an IP address.

[00:23:47] Speaker 02:
You say that satisfies the claim for relevancy matching?

[00:23:50] Speaker 02:
I think relevancy matching required that connection between IP address and billing, not just passing an IP address.

[00:23:58] Speaker 02:
So you're asking a slightly different question.

[00:24:01] Speaker 05:
You're right that there are two questions.

[00:24:04] Speaker 05:
One is, what is the matching?

[00:24:06] Speaker 05:
Excuse me.

[00:24:09] Speaker 05:
But the second is, what does it mean to use a relevancy matching factor, relevancy factor?

[00:24:16] Speaker 05:
The claim does not require that the relevancy factor be created by a computer.

[00:24:24] Speaker 01:
And your honor is right that the relevant matching between the idea of matching the Chevy with a Ford Buick, right?

[00:24:32] Speaker 05:
Yes.

[00:24:32] Speaker 05:
The relevancy factor could be that I want to show a Chevy ad to Ford Buicks.

[00:24:39] Speaker 05:
And the beeswax clearly uses that as part of the campaign ID.

[00:24:42] Speaker 05:
So there's no question.

[00:24:44] Speaker 05:
that the relevancy factor is used.

[00:24:46] Speaker 05:
And this is a mistake the district court made in saying that relevancy factor had to have been made on the fly by the computer.

[00:24:55] Speaker 05:
The claim doesn't say that.

[00:24:56] Speaker 05:
The claim merely says that the computer uses the relevancy factor, which it undeniably does because there's a campaign ID that says, show Chevy commercials to the group of people who watch Ford.

[00:25:09] Speaker 05:
That's relevancy.

[00:25:10] Speaker 05:
But the matching is between the primary data

[00:25:13] Speaker 05:
which is the IP address and the ad.

[00:25:18] Speaker 05:
And that's exactly what the Beeswax computer does.

[00:25:23] Speaker 05:
Because that has to happen very fast in real time.

[00:25:27] Speaker 05:
Because an individual IP address comes in, the fact that it was on a list of thousands doesn't mean that that was matched.

[00:25:33] Speaker 05:
That's just a list of the database.

[00:25:35] Speaker 05:
The match occurs when one of those IP addresses comes in on 1.50th of a second.

[00:25:43] Speaker 05:
and is matched with the ad and gets the ad quickly.

[00:25:45] Speaker 05:
That's the matching step.

[00:25:47] Speaker 05:
So it's the relevancy factor and the matching are two different things.

[00:25:51] Speaker 05:
The matching has to occur by the computer, no question it does.

[00:25:55] Speaker 05:
The relevancy factor has to be used by the computer but not created by it.

[00:26:00] Speaker 01:
All right.

[00:26:01] Speaker 01:
Well, unless my colleagues have further questions, I think we're about out of time.

[00:26:07] Speaker 01:
Mr. Powers will restore your four minutes for rebuttal and we'll hear from Mr. Chatterjee.

[00:26:13] Speaker 03:
Thank you, Your Honor.

[00:26:26] Speaker 03:
Your Honor, this is Mr. Chatterjee Manterseed.

[00:26:29] Speaker 03:
Yes.

[00:26:30] Speaker 03:
Thank you, Your Honor.

[00:26:31] Speaker 03:
May I please the Court, this is Neil Chatterjee and I represent Alfonso in this case.

[00:26:37] Speaker 03:
If I may, I'd like to start with, I believe, I don't have all the voices down, but I believe it was Judge Hughes' questions followed by several of the other judges about the construction of the term communicatively coupled.

[00:26:52] Speaker 03:
The definition of communicatively coupled is in the appendix on page 34, and the agreed upon construction is connected in a way that permits communication.

[00:27:03] Speaker 03:
If you look at the relevant claims here that talk about

[00:27:07] Speaker 03:
that particular term, what the construction applies to is that there's a communicative coupling between a television and a mobile device.

[00:27:18] Speaker 03:
And I think, Your Honors, hit the nail on the head when you asked the question of, if I were just to give a hard drive that had a bunch of data from Vizio that was mailed to somebody else, would that satisfy the communicative coupling?

[00:27:33] Speaker 03:
And the answer is that it does.

[00:27:35] Speaker 03:
And here, it's no different.

[00:27:37] Speaker 03:
All they've done, that Vizio's done, is they've downloaded a bunch of information onto an online storage repository, which is a virtual hard drive.

[00:27:47] Speaker 03:
And then our client, Alfonso, pays them to download whatever data is available.

[00:27:53] Speaker 01:
Okay, but the problem with that, it seems to me, is that if you read the specification, the specification itself,

[00:28:01] Speaker 01:
appears to contemplate that the use of that intermediary server is within the claims.

[00:28:10] Speaker 03:
But that's correct, Your Honor, although there's one material difference between what is in Figure 7 of the patent and our case.

[00:28:19] Speaker 03:
Because in the Alfonso case, there is a human being that interrupts that communication between the intermediate server and the smartphone or the mobile device.

[00:28:32] Speaker 03:
So there is no connection that works from that intermediate server that goes directly to a smartphone.

[00:28:39] Speaker 01:
There is no connection.

[00:28:40] Speaker 01:
How does the human intervene?

[00:28:43] Speaker 03:
What the human does is the information is downloaded to the Alphonso environment.

[00:28:51] Speaker 03:
An Alphonso person, and this is outlined in the Coda J declaration that's in the appendix, and then that human being

[00:29:01] Speaker 03:
fills out a series of forms.

[00:29:03] Speaker 03:
One is called the campaign segment tool.

[00:29:06] Speaker 03:
They then upload it to a different environment, which is Beeswax, and they basically offer up the ability to place an ad.

[00:29:20] Speaker 03:
Beeswax is essentially an eBay for advertising.

[00:29:25] Speaker 03:
They take a number of bids from a number of different people, and whoever is willing to pay the highest amount

[00:29:31] Speaker 03:
Beeswax decides whether or not the ad is delivered to the mobile device.

[00:29:36] Speaker 03:
But the interruption is in the middle because there's a human being that downloads the data, that puts it into a form, and then that form is then uploaded to this other environment called the DSP, and the specific DSP is called Beeswax, in order to compete for that.

[00:29:55] Speaker 01:
Is the human being doing anything more

[00:29:58] Speaker 01:
than identifying what the campaign is?

[00:30:01] Speaker 01:
In other words, that we're trying to match forward viewers with Chevy ads?

[00:30:11] Speaker 03:
So, yes, Your Honor.

[00:30:13] Speaker 03:
What the company does, and again, this is outlined in the Codajay, they fill out a form.

[00:30:18] Speaker 03:
So they might say, I want to see everybody who has looked at a Chevy ad.

[00:30:26] Speaker 03:
and will download that data, will fill out a form based upon the criteria that it identifies based upon their human activity.

[00:30:37] Speaker 03:
And there can be many different criteria.

[00:30:39] Speaker 03:
And then when that form is filled out, they then have customers that will want to place ads that might meet those forms.

[00:30:47] Speaker 03:
But all of the relevancy matching, to the extent there is any, is being done by a human being at Alfonso.

[00:30:54] Speaker 01:
But I'm not sure that I understand that answer.

[00:30:56] Speaker 01:
What is it that the human is doing other than determining what the campaign is?

[00:31:02] Speaker 03:
That is what the human being is doing.

[00:31:08] Speaker 03:
And then the second thing that the human being is doing is they're physically entering the data to place a bid for advertising on the BSWAC system.

[00:31:19] Speaker 01:
Physically entering the data, what does that mean?

[00:31:22] Speaker 03:
So they will say, for example, I want to place an ad for Ford.

[00:31:29] Speaker 03:
And this is what Ford is willing to pay for that ad.

[00:31:33] Speaker 03:
And they say that to beeswax, the beeswax system.

[00:31:38] Speaker 03:
And the beeswax system will then have essentially an auction of many different companies that are all competing to deliver

[00:31:47] Speaker 03:
an ad to a mobile phone and Beeswax will decide which ad is the winner based upon who's paying the most.

[00:31:55] Speaker 02:
This is Judge Hughes.

[00:31:56] Speaker 02:
Can I ask a question?

[00:31:58] Speaker 02:
And let me preface by saying it seems like there's two forms of matching here.

[00:32:03] Speaker 02:
There's a matching between viewership and an IP address.

[00:32:09] Speaker 02:
And then there's a matching between a specific ad campaign

[00:32:14] Speaker 02:
and people that fall into the category of viewership that they want.

[00:32:19] Speaker 02:
Is that correct?

[00:32:19] Speaker 02:
There's two different forms of matching.

[00:32:22] Speaker 03:
That's right.

[00:32:24] Speaker 03:
Yes, Your Honor.

[00:32:24] Speaker 03:
They're done by two different systems.

[00:32:30] Speaker 02:
Well, and what is relevancy matching?

[00:32:33] Speaker 02:
Is it associating an IP address with particular TV viewing, or is it associating

[00:32:41] Speaker 02:
the IP address that falls in that category with a targeted ad campaign.

[00:32:47] Speaker 02:
I understand.

[00:32:48] Speaker 02:
Your position... Sorry, let me just play this out so you're clear what I'm getting at.

[00:32:53] Speaker 02:
I understand you to be saying that the Alphonso employees do the first matching, i.e.

[00:32:58] Speaker 02:
they down... They query the database to see who watched the Ford ad.

[00:33:06] Speaker 02:
And so that matching is done by an Alphonso employee.

[00:33:10] Speaker 02:
Is that correct?

[00:33:11] Speaker 02:
That is correct, Your Honor.

[00:33:13] Speaker 02:
Now, who does the matching between once you have, here are the 10,000 IP addresses associated with people who watched board ads in the last month.

[00:33:24] Speaker 02:
Who then does the matching between those IP addresses and the Chevy ad when Chevy says, I want to send that Chevy ad to all those people?

[00:33:37] Speaker 03:
That is also a human being at Alfonso when they're uploading to the beeswax system, your honor.

[00:33:42] Speaker 02:
What they do is... So the beeswax... When all the information is uploaded to beeswax, the matching is already done with the particular ads.

[00:33:55] Speaker 02:
That's correct, your honor.

[00:33:56] Speaker 02:
So beeswax knows these 10,000 people watched forward and Chevy wants to send them an ad if they meet the right price.

[00:34:05] Speaker 02:
So all of the matching is done.

[00:34:08] Speaker 02:
beforehand, and all the matching that Beeswax does is matching just an IP address.

[00:34:16] Speaker 03:
That's correct, Your Honor.

[00:34:18] Speaker 03:
It's actually even simpler than that.

[00:34:21] Speaker 03:
Essentially, what the Alfonzo user does is they fill out this campaign segment tool that says, here's everyone that watched a Chevy ad, and they upload that data to the Beeswax system.

[00:34:35] Speaker 03:
When the Alphonso person puts in an ad request, they fill out a separate form and it says for all of the Ford ads, go pull the IP addresses from that other record.

[00:34:47] Speaker 03:
That's all it does is it has a pointer to that other record and say go pull those IP addresses if we're the winning bid.

[00:34:54] Speaker 03:
All the matching though is done.

[00:34:56] Speaker 03:
The only thing that is in the advertisement request that a user or a human being at Alphonso fills out is a pointer to this other record.

[00:35:04] Speaker 03:
There is no relative matching.

[00:35:06] Speaker 02:
And does this ground for non-imprisonment apply to all of the claims at issue here?

[00:35:13] Speaker 02:
Yes, Your Honor.

[00:35:18] Speaker 03:
Okay.

[00:35:18] Speaker 03:
Your Honor, just to kind of address a couple of the points that we discussed, that is where this case should start and end in our view, is the human matching that occurs

[00:35:31] Speaker 03:
There was not really a dispute at all about the facts here, and it was all outlined in detail in the COTA-J declaration, which can be, I'm sorry, the Tortilla Declaration, which can be found at pages 1510 to 1513 of the appendix.

[00:35:51] Speaker 03:
I do want to touch upon a couple other issues that

[00:35:55] Speaker 03:
The Centillion and Akamai cases really don't have any application here.

[00:36:01] Speaker 03:
We disagree with Mr. Powers on that.

[00:36:03] Speaker 03:
Even to claim one?

[00:36:06] Speaker 03:
Even to claim one, Your Honor.

[00:36:08] Speaker 03:
And the reason it doesn't apply to claim one is because what is claimed in the claim itself is two things.

[00:36:17] Speaker 03:
One of the things it requires is that there's a television to generate fingerprint data, just as an example.

[00:36:24] Speaker 03:
And in claim one,

[00:36:25] Speaker 03:
All we do is we buy data from Vizio.

[00:36:30] Speaker 03:
And the contracts are very clear that Vizio decides whatever they want to collect from wherever they want to collect it.

[00:36:36] Speaker 03:
And the only thing that we do is we specify the format in which data is delivered to us.

[00:36:43] Speaker 03:
And that is entirely independent.

[00:36:46] Speaker 03:
We do not control the TVs.

[00:36:48] Speaker 03:
We don't direct how they collect the data.

[00:36:50] Speaker 03:
We don't direct who they collect it from.

[00:36:52] Speaker 03:
We don't set a time for when they have to collect it.

[00:36:55] Speaker 03:
We just buy the data in bulk and we ask them to format it in a particular way.

[00:37:01] Speaker 01:
OK.

[00:37:01] Speaker 01:
But Mr. Powers is saying that the fact that you don't control the details is irrelevant.

[00:37:07] Speaker 01:
If you have a contract with them and pursuant to the contract, they do it in a way that would be within the claims that that's sufficient, even if the contract doesn't require them to do it in that way.

[00:37:21] Speaker 03:
Yes, I understand that's Mr. Power's argument, Your Honor.

[00:37:24] Speaker 03:
I don't read Akamai as going that far.

[00:37:28] Speaker 03:
Because if that were the case, any commercial transaction with anybody where you're simply buying something in a grocery store that you would then be infringing for all of the manufacturing process that went into creating a product, that could not be the reading of Akamai.

[00:37:47] Speaker 01:
But he suggests, and I'm not familiar with this case, and I may have the name wrong, the Mann House case or something like that.

[00:37:53] Speaker 01:
Minkus.

[00:37:55] Speaker 01:
Adopt his position.

[00:37:57] Speaker 03:
We don't agree that Minkus adopts that broad of position, Your Honor.

[00:38:02] Speaker 03:
If you go back and you look at the Akamai case, what Akamai says is we conclude on the facts of this case, that liability under Section 271A,

[00:38:12] Speaker 03:
can be found when an alleged infringer conditions participation in an activity or receipt of a benefit upon performance of a step or steps of a patented method and establishes the manner or timing of that performance.

[00:38:27] Speaker 03:
Neither Mingus nor Akamai says... Is Mingus opposed to Akamai?

[00:38:33] Speaker 03:
It is.

[00:38:34] Speaker 03:
It's interpreting Akamai, Your Honor.

[00:38:38] Speaker 03:
If, if what we were, and your honor, I'm out of time.

[00:38:41] Speaker 03:
May I, may I continue?

[00:38:42] Speaker 01:
Don't, don't worry about it.

[00:38:44] Speaker 01:
I'll, I'll, I'll tell you to stop when we're ready to have you stop.

[00:38:48] Speaker 03:
Yeah.

[00:38:48] Speaker 03:
Thank you, your honor.

[00:38:49] Speaker 03:
The, the, the one of the point I'd make here is what both Minkus and Akamai stand for is if Alfonso were to say, we want you to collect data from televisions in Northern California between the hours of 4 PM and 9 PM.

[00:39:08] Speaker 03:
And we want you to deliver that data to us.

[00:39:11] Speaker 03:
We would have a much closer case as to whether that would satisfy the Akamai standard or not.

[00:39:16] Speaker 03:
But that isn't what happens here.

[00:39:17] Speaker 03:
And the agreement specifically disclaims any responsibility or any obligation by Vizio to collect data from a TV in any particular manner.

[00:39:29] Speaker 04:
And... Who controls the files from which Alfonso gathers the data?

[00:39:35] Speaker 03:
I'm sorry.

[00:39:36] Speaker 03:
I couldn't hear you, Your Honor.

[00:39:38] Speaker 04:
I understand that Alfonso downloads the Visio data from the cloud, correct?

[00:39:45] Speaker 04:
Correct.

[00:39:47] Speaker 04:
And who controls that site, the cloud?

[00:39:51] Speaker 03:
Who does that access it?

[00:39:55] Speaker 03:
Yes, Your Honor.

[00:39:56] Speaker 03:
What I understand happens is that Visio controls the platform where the data is stored.

[00:40:05] Speaker 03:
And then Alphonso has the ability to connect into that platform through an API and downloads the information.

[00:40:14] Speaker 03:
And Vizio preformats it so it's in a language that Alphonso can understand.

[00:40:21] Speaker 04:
Then nobody else can access that other than Alphonso, correct?

[00:40:27] Speaker 03:
We don't know, Your Honor.

[00:40:28] Speaker 03:
We don't know who else Vizio makes that data available to or if they format it in similar ways for other people.

[00:40:35] Speaker 03:
because that's entirely within Vizio.

[00:40:38] Speaker 04:
How to format the cloud so that it's accessible by a sponsor?

[00:40:45] Speaker 03:
That is Vizio dependent, Your Honor.

[00:40:47] Speaker 03:
We just get the information from them and they tell us how to access it and download it.

[00:40:55] Speaker 01:
Okay, unless my colleagues have further questions about infringement, why don't we turn to 101?

[00:41:02] Speaker 03:
Yes, Your Honor.

[00:41:04] Speaker 01:
And here... I'll just make sure there's no other questions about infringement.

[00:41:09] Speaker 01:
Okay.

[00:41:10] Speaker 01:
Hearing none, you can proceed with one-on-one.

[00:41:13] Speaker 03:
Thank you, Your Honor.

[00:41:14] Speaker 03:
And I'll be brief, given that I've already exceeded my time and I appreciate the court's indulgence on this.

[00:41:20] Speaker 03:
I'd like to start by just referencing a relatively new case that came out of the Federal Circuit.

[00:41:26] Speaker 03:
It's an unpublished case.

[00:41:27] Speaker 03:
called Ex Parte Morsa, and that's 809 Federal Appendix 913.

[00:41:34] Speaker 03:
And there's a line of cases in the Federal Circuit, and we talk about this in our brief.

[00:41:38] Speaker 03:
It's the Intellectual Ventures case, the Bridge and Post case, and now Ex Parte Morsa, that essentially say that these targeted advertising types of claims are patent ineligible under Section 101.

[00:41:54] Speaker 03:
And the Morse case is particularly important here, because if you read that claim, it actually operates in almost precisely the way that Free Stream Media Samba is trying to assert their patents here.

[00:42:12] Speaker 03:
It starts with understanding data associated with user behavior.

[00:42:17] Speaker 03:
It then does relevancy matching to provide a targeted ad.

[00:42:20] Speaker 03:
And it even includes a bidding system

[00:42:23] Speaker 03:
where the winning bid is ultimately placed.

[00:42:26] Speaker 03:
And this court found in the ex parte morso that it failed to satisfy section 101 of the Patent Act.

[00:42:34] Speaker 01:
There... Did you tell Mr. Powers that you were going to raise morso?

[00:42:39] Speaker 03:
I did not, Your Honor.

[00:42:41] Speaker 03:
I was preparing yesterday and I just did a quick search and I... Okay.

[00:42:44] Speaker 01:
Contrary to our rules, our rules require the notification of opposing counsel.

[00:42:50] Speaker 03:
My apologies, Your Honor.

[00:42:53] Speaker 03:
Go ahead.

[00:42:57] Speaker 03:
The real issue that they talk about in their briefing is they say that there is a technical solution on the 356 patent because there is a sandbox in a mobile device that could preclude the provisioning of targeted advertising.

[00:43:16] Speaker 03:
But the claims don't say anything about this.

[00:43:19] Speaker 03:
They don't say anything about

[00:43:20] Speaker 03:
how or why the sandbox exists.

[00:43:22] Speaker 03:
They don't talk anything about security.

[00:43:25] Speaker 03:
And their core arguments as to what the technical innovation here that takes it from an abstract claim to an actual inventive claim simply isn't reflected anywhere in the claim.

[00:43:38] Speaker 04:
Is it your position then that SAMBA looks at this sandbox technology as the claimed advanced

[00:43:49] Speaker 03:
I'm sorry, Your Honor, there was a click on the phone.

[00:43:51] Speaker 03:
I didn't hear the question.

[00:43:52] Speaker 04:
Okay.

[00:43:54] Speaker 04:
Is it your position that the SENT technology is a claimed advance?

[00:44:01] Speaker 03:
No, I don't believe they do.

[00:44:03] Speaker 03:
They do claim that the sandbox technology is a claimed advance.

[00:44:06] Speaker 03:
And that is not a core to their inventiveness here.

[00:44:11] Speaker 01:
And also... Their claim is that they figured out a way to get around the sandbox technology.

[00:44:16] Speaker 01:
Is that correct?

[00:44:17] Speaker 01:
You're saying that's not part of the claim.

[00:44:20] Speaker 03:
That's right, Your Honor.

[00:44:22] Speaker 01:
That's exactly right.

[00:44:24] Speaker 01:
What about step two of Alice?

[00:44:28] Speaker 03:
In step two of Alice, the question is, is there something new here in order to claim or something that takes it from being an abstract concept to something that is inventive?

[00:44:40] Speaker 03:
And here again, if you look at the Bridge and Post case, which we compared in our brief as well as

[00:44:48] Speaker 03:
the intellectual ventures case, there is nothing here that really transforms this into some sort of inventive step.

[00:44:59] Speaker 03:
It doesn't improve the operation of computers.

[00:45:01] Speaker 03:
It doesn't really solve any kind of technical problem and doesn't provide anything new that is inventive.

[00:45:07] Speaker 03:
You even heard Mr. Powers say, for example, that the relevancy factor can be a human being just deciding it's relevant.

[00:45:15] Speaker 03:
If there's anything that one could consider inventive in this claim, it would be applying that relevancy factor for the relevancy matching.

[00:45:23] Speaker 03:
And if it's merely a human being exercising judgment, that isn't taking this out of the realm of patent and eligibility.

[00:45:35] Speaker 01:
Okay.

[00:45:35] Speaker 01:
And my colleagues have further questions about 101.

[00:45:41] Speaker 01:
Okay.

[00:45:41] Speaker 01:
Hearing none.

[00:45:43] Speaker 01:
Let's hear from Mr. Powers and then we'll restore Mr. Chatterjee's rebuttal time.

[00:45:51] Speaker 05:
Thank you, Your Honor.

[00:45:52] Speaker 05:
With regard to communicatively coupled, I will refer the court to page 29 of our blue brief, which cites their expert as admitting that the specification and it's typical to have such communication couplings indirect.

[00:46:04] Speaker 05:
I think that should eliminate that issue.

[00:46:07] Speaker 05:
With regard to the human activity question,

[00:46:10] Speaker 05:
I'd like to address Judge Hsu's question about being two types of matching.

[00:46:15] Speaker 05:
Your Honor is right that there are two types of things that could be considered matching.

[00:46:20] Speaker 05:
One, where you're setting up the data at the front end, which is done by people.

[00:46:26] Speaker 05:
But there's only one type of matching in the claims.

[00:46:29] Speaker 05:
And the claims is what you were referring to, I think, as the second matching, which is when an individual IP address comes in.

[00:46:36] Speaker 05:
not the creation of the list of thousands of them, but when one phone with an IP address comes in, matching that against the ad to be placed to that phone.

[00:46:46] Speaker 02:
Well, Mr. Howard, can we go to the claim language?

[00:46:48] Speaker 02:
I'm looking at claim one because it describes it more particularly, I think.

[00:46:52] Speaker 02:
It says match primary data generated from the fingerprint data.

[00:46:57] Speaker 02:
What is that?

[00:46:59] Speaker 05:
Primary data is the IP address and targeted data is the ad.

[00:47:05] Speaker 02:
I heard your friend on the other side say that is done prior to uploading to Beeswax.

[00:47:13] Speaker 02:
Is there a dispute of fact over that?

[00:47:15] Speaker 05:
There is a dispute of characterization, I think.

[00:47:18] Speaker 05:
There's not a dispute of fact.

[00:47:19] Speaker 05:
There is no question that an Alphonso employee loads all the IP addresses of people who saw a Ford ad and makes a request to Beeswax

[00:47:31] Speaker 05:
that a campaign to show a Chevy ad to anybody who saw the four ad list, that that be done.

[00:47:38] Speaker 05:
That is done by a campaign.

[00:47:39] Speaker 02:
So Beeswax, a human being matches IP addresses, targeted IP addresses with the particular ad.

[00:47:49] Speaker 05:
A human being specifies what Beeswax is supposed to do when an IP address comes in.

[00:47:54] Speaker 05:
And so you're absolutely.

[00:47:57] Speaker 02:
And to do that, it has to say these 10,000 IP addresses

[00:48:02] Speaker 02:
watch the TV show we're keying on, and therefore associate them with the Chevy ad.

[00:48:11] Speaker 02:
Beeswax has that information from Alfonso.

[00:48:14] Speaker 05:
That is true.

[00:48:15] Speaker 02:
And that is what Beeswax does is, well, why isn't that matching the primary data from the fingerprint data?

[00:48:23] Speaker 02:
And the primary data is the IP address?

[00:48:26] Speaker 02:
Yes.

[00:48:28] Speaker 02:
And the fingerprint data is the TV viewing?

[00:48:31] Speaker 05:
Yes, that's just loading up the information for which BSWAPs can make the mask an individual IP address.

[00:48:38] Speaker 02:
I'm just trying to go through the claims step-by-step.

[00:48:41] Speaker 02:
So the primary data is the IP address.

[00:48:43] Speaker 02:
The fingerprint data is the TV viewing.

[00:48:46] Speaker 02:
The targeted data is the ad.

[00:48:49] Speaker 00:
Yes.

[00:48:50] Speaker 02:
Okay.

[00:48:55] Speaker 02:
And when an individual IP address... I'm sorry, I don't see individual.

[00:49:00] Speaker 02:
It sounds to me, that's what a relevancy matching server, your claim says, this is what the relevancy server does.

[00:49:07] Speaker 02:
It matches the primary data with the fingerprint data with the targeted data.

[00:49:12] Speaker 02:
If that is done by an Alphonso employee instead of the computer, how do they infringe?

[00:49:21] Speaker 05:
They infringe because that's just loading up the data for the BSVAC server to do its job.

[00:49:28] Speaker 05:
So the campaign ID,

[00:49:30] Speaker 05:
which is created initially, just says, here's, we want to show this ad to any one of these groups of people.

[00:49:37] Speaker 05:
So for example, it might be people who watched foreign ads.

[00:49:40] Speaker 05:
It might be people who watched the Superbowl.

[00:49:42] Speaker 05:
It might be 20 different types of factors.

[00:49:45] Speaker 05:
That's their decision.

[00:49:46] Speaker 05:
But the matching and the claim comes in when an individual IP address from a phone comes in and beeswax has to figure out very quickly which ad to serve to that IP address.

[00:50:00] Speaker 05:
And it does that based on this bidding system and matching that IP address with whatever ad is supposed to go to that group of IP addresses based on the campaign ID.

[00:50:15] Speaker 05:
I'd like to address very quickly counsel's argument that there's nothing in the Alfonso-Visio agreement that dictates the manner by which Visio produces the data.

[00:50:27] Speaker 05:
The manner is dictated twice.

[00:50:30] Speaker 05:
in the contract.

[00:50:31] Speaker 05:
One is that the audiovisual content has to be done without the aid of metadata.

[00:50:36] Speaker 05:
That's the quote.

[00:50:38] Speaker 05:
Without the aid of metadata is specifying the manner in which it be conducted.

[00:50:42] Speaker 05:
And that means using fingerprint data as per the experts of the discussion that I gave in the earlier context.

[00:50:50] Speaker 05:
The second place it does so is in attachment two, an appendix 2231 and 2237, which specifies various fields that have to be filled in

[00:50:59] Speaker 05:
some of which are content recognition type fields, again, at a high level for confidentiality purposes.

[00:51:05] Speaker 05:
I'd like to address very briefly the 101 question, if I may.

[00:51:08] Speaker 01:
Go ahead.

[00:51:10] Speaker 05:
The argument that was just made to you is that targeted ad claims, per se, are unpatentable.

[00:51:17] Speaker 05:
And I would agree with that if that's what the claim is covering, is covering the concept of a targeted ad.

[00:51:23] Speaker 05:
That is not this claim.

[00:51:25] Speaker 05:
This claim is claiming a system that may be used to create targeted ads, but the concept of the claim is not do a targeted ad.

[00:51:33] Speaker 05:
The concept of the claim is in order to do this right, you have to pierce the sandboxing technology that the phones have, and this claim specifies a way to do that by using the... How does it specify a way to do that?

[00:51:49] Speaker 05:
It has the embedded object that the phone is going to process

[00:51:52] Speaker 05:
that is placed there by the relevancy matching server.

[00:51:55] Speaker 05:
And the content identification server is also there to go through that sandbox application.

[00:52:02] Speaker 05:
So that way when you have, you're sitting there with your phone watching your TV and that Ford ad comes up, all of a sudden you get a Chevy ad on your phone.

[00:52:15] Speaker 05:
That can't happen without.

[00:52:16] Speaker 01:
Let's look at the actual claim language.

[00:52:19] Speaker 01:
Let's take claim 10.

[00:52:21] Speaker 01:
Where is this dealing with allowing communication in a sandbox environment?

[00:52:32] Speaker 01:
What language in the claim is dealing with this?

[00:52:37] Speaker 05:
So if you look at the mass primary data limitation, it says, quote,

[00:52:44] Speaker 05:
match primary data generated using the fingerprint data with targeted data based on a relevancy factor comprising at least one of a category of the primary data, a behavioral history of the user, a category of sandboxed application, and another information associated with the user.

[00:53:02] Speaker 05:
So that's specifically saying you're using the sandbox information as a way of matching the IP address, for example, with the ad.

[00:53:13] Speaker 05:
The last clause is wherein the relevancy matching server is to cause a rendering of the targeted data to the user through the sandbox application of the mobile device.

[00:53:23] Speaker 05:
So it's specifically saying that that relevancy matching server is piercing the sandbox.

[00:53:28] Speaker 05:
And the specification goes into more detail on ways that it can do that.

[00:53:34] Speaker 05:
But for example, using a common IP address.

[00:53:37] Speaker 05:
So if your phone, if you're sitting in your home,

[00:53:41] Speaker 05:
and you're watching your TV through an IP address and your phone is linked to that same IP address.

[00:53:47] Speaker 05:
This is exactly what the Relevancy Magic server is that's being discussed in 10 and the relevancy factor comprising including the IP address.

[00:53:56] Speaker 01:
But that's why you're saying that the details of how to do that are in the specification but not in the clinic.

[00:54:04] Speaker 05:
An example of how to do that is in the specification.

[00:54:07] Speaker 05:
The claim says you're going to pierce the sandbox application using Relativity Factor, and specifically says the Relativity Factor includes the category of sandbox application, the primary data, the behavioral history of the user.

[00:54:23] Speaker 05:
Those are examples of how you can pierce the sandbox application.

[00:54:28] Speaker 04:
I think it's more fair to say you are... Go ahead.

[00:54:33] Speaker 04:
It's your argument that under Claim 10, the language that says

[00:54:37] Speaker 04:
to cause a rendering of the targeted data that you claim to advance.

[00:54:42] Speaker 04:
Is that correct?

[00:54:44] Speaker 05:
That's half of it.

[00:54:45] Speaker 05:
The other half is the part above which says the relevancy factor comprising.

[00:54:50] Speaker 05:
So we're saying the relevancy factor has to comprise the category of primary data, behavioral history of the user, a category of sandboxed application.

[00:55:00] Speaker 05:
That is the way, part of the way, that the sandbox application is pierced.

[00:55:06] Speaker 01:
I don't understand that, Mr. Powers.

[00:55:08] Speaker 01:
I thought the relevancy factor was the relationship between Ford viewing and Chevy ads.

[00:55:15] Speaker 05:
That's an example for claim one, yes.

[00:55:18] Speaker 01:
How does that supply technological solution of piercing the sandbox?

[00:55:25] Speaker 05:
That was an example for claim one.

[00:55:27] Speaker 05:
This is claim 10 that is providing more information and different information about what the relevancy factor comprises.

[00:55:33] Speaker 05:
And it makes clear that part of that can be the sandbox application.

[00:55:37] Speaker 02:
And I think the fair way to say... Mr. Powers, when you keep saying category of a sandbox application, what does that actually mean?

[00:55:47] Speaker 02:
Isn't that just another type of identifier of a particular individual using or a particular device?

[00:55:57] Speaker 02:
It's similar to... I don't understand what you're saying when you say a category of a sandbox application.

[00:56:02] Speaker 02:
That sounds like just one other possible relevancy factor along with IP addresses, behavioral history, all that kind of stuff, not that it's a particular way of dealing with the sandboxed application.

[00:56:17] Speaker 05:
I would half agree, Your Honor.

[00:56:21] Speaker 05:
So you're absolutely right that the category of sandbox application is listed here as part of the relevancy factor.

[00:56:30] Speaker 05:
The specification

[00:56:31] Speaker 05:
goes has more of an explanation of how that can be used, but that doesn't need to be in the claim.

[00:56:36] Speaker 05:
The point of the claim is that you're using the sandbox information to pierce the sandbox as it says later in the claim.

[00:56:42] Speaker 02:
But what does that even mean?

[00:56:44] Speaker 02:
That's what I'm asking and I'm not trying to be obtuse here.

[00:56:48] Speaker 02:
I don't understand what category of sandbox application means.

[00:56:54] Speaker 02:
Give me an example of what is the type of category of the sandbox application.

[00:56:59] Speaker 05:
Android, iPhone, it could be something that specifies that this is a particular, this is an iPhone, which means that you would use that information to pierce an iPhone differently than you would an Android, for example.

[00:57:13] Speaker 05:
That's one example.

[00:57:15] Speaker 01:
How does the claim tell you how to do that?

[00:57:18] Speaker 05:
The claim doesn't need to, I think, Your Honor.

[00:57:21] Speaker 05:
The claim says, needs to say what you're doing.

[00:57:24] Speaker 05:
The explanation for how that can work is found in the specification.

[00:57:30] Speaker 01:
I don't think that's consistent with our cases.

[00:57:33] Speaker 05:
I believe it is, Your Honor, because there are many cases that require, of course, that the claim have the elements to provide the technological advance.

[00:57:46] Speaker 05:
The claim doesn't have to have the detailed explanation for how that advance functions.

[00:57:52] Speaker 05:
That I don't think your cases require at all.

[00:57:55] Speaker 04:
Wait, Your Honor.

[00:57:56] Speaker 04:
Counselor, this is Judge Raina Ngo.

[00:57:59] Speaker 04:
in your infringement argument, and I realize that now we're talking on section 101, and this is directed to section 101, but this is a question that I asked earlier in these arguments, and that is that you say in your brief that the district court erred because claims 10, 13, and 18 do not require the use of a mobile device.

[00:58:23] Speaker 04:
That's your argument.

[00:58:25] Speaker 04:
Yes.

[00:58:26] Speaker 04:
And if your claimed advance is that this patent, its relevancy matching server causes a rendering of the targeted data to the user, and then it goes on through the sandbox application on the mobile device, doesn't your claimed advance require the use of a mobile device?

[00:58:50] Speaker 05:
Not in a centillion sense.

[00:58:52] Speaker 04:
I'm not talking about Centillion.

[00:58:54] Speaker 04:
I'm talking about in the Section 101 sense.

[00:58:57] Speaker 05:
Yes, so in the Section 101 sense, what is required is that the server renders this information to the phone.

[00:59:04] Speaker 05:
That's what's required.

[00:59:06] Speaker 05:
But in a Centillion sense, that's not use of the phone.

[00:59:08] Speaker 04:
No, no, it doesn't say that.

[00:59:09] Speaker 04:
It says that it renders its sandbox reachable service to the phone.

[00:59:16] Speaker 05:
Yes, so wherein the relevancy matching, the language of Claim 10, wherein the relevancy matching server

[00:59:22] Speaker 05:
is to cause a rendering of the targeted data to the users through the sandbox application of the mobile device.

[00:59:27] Speaker 05:
So that's exactly what we're saying is the technological advance that was not possible before, and it's done that through the relevancy factors that are shown up above and to causes above.

[00:59:40] Speaker 04:
Right, so absent that language, absent this particular part of claim number 10, to cause a rendering of the targeted data,

[00:59:50] Speaker 04:
If that was not in the claim, then this would just be a mere targeted advertising.

[00:59:57] Speaker 04:
I disagree with that, Your Honor, but I think that... I mean, the only thing that makes you different here is this to cause a rendering of the targeted data to the user through the sandbox application of the mobile device.

[01:00:10] Speaker 05:
That's... Go ahead, sir.

[01:00:13] Speaker 05:
That's your advance.

[01:00:16] Speaker 05:
I certainly agree that's part of it, but I would also draw a hard distinction between

[01:00:21] Speaker 05:
A claim which is claiming the idea of relevant ads versus a claim that is claiming a system which is... You're claiming a system that gets you past the sandbox applications of the mobile devices.

[01:00:38] Speaker 04:
That is true.

[01:00:42] Speaker 04:
Okay.

[01:00:43] Speaker 05:
As the claim specifies and using the techniques that the claim identifies to limitations above.

[01:00:52] Speaker 01:
Okay, unless my colleagues have further questions, let's hear from Mr. Chatterjee.

[01:00:58] Speaker 01:
Thank you, Your Honor.

[01:01:00] Speaker 03:
On 101.

[01:01:03] Speaker 03:
Thank you, Your Honor.

[01:01:04] Speaker 03:
This is Neil Chatterjee for Alfonso again.

[01:01:06] Speaker 03:
Your Honor, I think Your Honor has hit the nail on the head in terms of the issues with these claims and their vulnerabilities under Section 101.

[01:01:17] Speaker 03:
As you've been going for quite some time, I'll just focus on one issue

[01:01:21] Speaker 03:
which was a question that one of your honors asked about the phrase that's used here in claim 10 that talks about rendering of the targeted data to the user through the sandboxed application of the mobile device.

[01:01:37] Speaker 03:
And I heard one of the judges mention that Mr. Power's response was not consistent with the case law.

[01:01:44] Speaker 03:
And I agree with that because that claim is written purely in functional terms.

[01:01:50] Speaker 03:
in an abstract way.

[01:01:51] Speaker 03:
It doesn't actually say how it's done in the claim.

[01:01:55] Speaker 03:
And that is the precise problem with the claim that makes it vulnerable and ineligible under Section 101 of the Patent Act.

[01:02:05] Speaker 03:
Mr. Powers made a lot of references to these embedded objects that are sent with the transmission, but you don't see that anywhere in the claim.

[01:02:13] Speaker 03:
He's relying on specification.

[01:02:15] Speaker 03:
And had they claimed that, we might have a different issue here.

[01:02:18] Speaker 03:
But that isn't what they claimed.

[01:02:20] Speaker 03:
They claimed purely a functional aspect of provisioning targeted advertising.

[01:02:27] Speaker 03:
And I believe one of the other judges also made a remark on how does this gel with the infringement allegation.

[01:02:34] Speaker 03:
As I'm focusing on rebuttal here, I think that that is an important point because they either have to say that this sandbox component is part of the claim and is relevant or it's not.

[01:02:48] Speaker 03:
And if it is relevant, it's patented and eligible because it's purely functional claiming stated in an abstract way.

[01:02:56] Speaker 03:
Unless your honors have further questions, I'll submit at this point and I appreciate your time.

[01:03:01] Speaker 01:
Okay.

[01:03:01] Speaker 01:
Hearing no further questions, the case is submitted.

[01:03:04] Speaker 01:
We thank both counsels.