US Appeals Court Affirms That Google AdWords Not Infringing

The US Court of Appeals for the Federal Circuit (Court) has affirmed that Google’s AdWords system does not infringe a patent owned by Bid for Position LLC (Plaintiff). The patent in question describes a method of continuous auction, such as an auction for display position in Internet advertising. When a search is performed on the Google search engine, Google’s Adwords system runs an auction to determine the sequence in which to run advertisements on the search results page. Advertisers have chosen keywords to trigger the display of their ads, and have submitted the maximum price they are willing to pay when the advertisements are clicked. The order of the ads is determined through various algorithms. The AdWords system also contains a “Position Preference” feature that allows advertisers to specify a preferred position or range of positions for their advertisements. The Plaintiff’s patent similarly covers a method that allows advertisers to select the position of priority in display results that they wish to maintain, allowing them to choose a position other than the highest available. The method automatically adjusts the bids as required, reducing or increasing the bids. The Court compared Google’s system with the system claimed in the patent, noting that when the AdWord’s Position Preference feature was not activated, the AdWords system simply selected the highest ranking of position of priority available for the offered bid. The Court found that this was different from the Plaintiff’s patented system, in which the bidder must actively accept a particular position, and AdWords, therefore, did not infringe this aspect of the patent. The Court went on to find that there was no infringement even when the Position Preference feature was activated. For the full text of the decision in Bid for Position LLC v AOL LLC and Google Inc (2009 – 1068), see: http://pub.bna.com/eclr/091068Apr7.pdf For a copy of the patent in question, visit: http://www.google.com/patents/about?id=vR6AAAAAEBAJ&dq=7225151 For Google’s AdWords in the context of trade-mark protection, see an earlier E-TIPS® article “Google’s Keyword Ad Sales May Be 'Use in Commerce'” May 20th 2009, Vol 7 No 23. Summary by: Lea Epstein