Paid Search Engine Tools, LLC v. Google Canada Corporation

Paid Search Engine Tools, LLC v. Google Canada Corporation
Court (s) Database
Federal Court Decisions
Date
2022-01-12
Neutral citation
2021 FC 1435
File numbers
T-40-18
Decision Content
Date: 20220112
Docket: T-40-18
Citation: 2021 FC 1435
Fredericton, New Brunswick, January 12, 2022
PRESENT: Madam Justice McDonald
BETWEEN:
PAID SEARCH ENGINE TOOLS, LLC
Plaintiff/
Defendant by Counterclaim
and
GOOGLE CANADA CORPORATION, GOOGLE LLC AND ALPHABET INC.
Defendants/
Plaintiffs by Counterclaim
PUBLIC JUDGMENT AND REASONS
(Confidential Judgment and Reasons were issued December 17, 2021)
Table of Contents
I. Overview 4
II. Background 5
A. The Parties 5
B. Patent Background 6
III. Evidence 11
A. PSET’s Fact Witnesses 11
B. PSET’s Expert Witnesses 13
C. Google’s Fact Witnesses 15
D. Google’s Expert Witnesses 18
IV. The 167 Patent 20
V. Claims Construction 22
A. Legal Principles 22
B. Person of Skill in the Art (PSA) 24
C. Common General Knowledge (CGK) 27
D. Claim Terms Needing Construction 30
Claim 1 31
Claim 2 35
Claim 3 35
Claim 4 37
Claim 5 37
Claim 7 37
Claim 8 38
Claim 9 38
Claim 17 38
Claim 18 41
Claim 19 41
Claim 22 41
Claim 24 41
Claim 25 42
Claim 27 42
Claim 28 42
Claim 29 46
Claim 30 46
Claim 31 46
Claim 32 46
Claim 33 47
Claim 34 47
Claim 36 48
Claim 37 48
Claim 39 49
Claim 40 49
Claim 41 49
Claim 42 49
Claim 43 50
Claim 44 50
Claim 45 51
Claim 46 52
Claim 55 52
Claim 56 52
Claim 57 52
Claim 58 53
Claim 59 53
Claims 60, 61, 62, 63, 64, 65, 67, 70, 72, 73, 74 55
Claim 75 55
Claims 76, 77, 78, 79, 80, 81, 83, 86, 88, 89 56
VI. Validity 56
A. Sufficiency 56
Legal Principles 56
Analysis 58
B. Sufficiency of Claims 8, 9, 24 and 27 59
C. Sufficiency of Claims 28, 44, 59 and 75 60
D. Priority Date 61
E. Anticipation 65
Legal Principles 65
Analysis 67
976 Patent 68
Other Prior Art 70
F. Obviousness 73
Legal Principles 73
Analysis 74
G. Other Invalidity Grounds 77
VII. Infringement 77
A. Legal Principles 78
Analysis 79
B. Google’s Alleged Infringing Products 80
Claim 1 82
Claim 17 83
Claims 28, 44, 59, 75 84
C. Conclusion – Infringement 86
VIII. Territory 87
IX. Remedies 87
X. Conclusion 87
Judgment 89
I. Overview
[1] Advertising on the internet is now ubiquitous, but in 2000 it was an emerging field of opportunity for advertisers. This is a case about a patent designed to support advertisers in managing their bids for online advertising space on paid search engines.
[2] The plaintiff, Paid Search Engine Tools, LLC (PSET) owns Canadian Patent No. 2,415,167 (167 Patent) titled “Paid Search Engine Bid Management” for an invention described as “management of advertising expenses in online media”. PSET alleges that the defendants have infringed certain claims of their patent and they seek damages.
[3] The defendants deny any infringement, and by counterclaim seek a declaration that the patent claims are invalid on various grounds including anticipation, obviousness, insufficiency and inutility.
[4] This trial in this matter was conducted via videoconference pursuant to the Remote Trial Protocol Order of March 8, 2021.
[5] For the reasons that follow, after construing the asserted claims of the 167 Patent, I have concluded that the asserted claims at 28, 44, 59 and 75 (and the dependent claims) as well as claim 9 are invalid on the grounds that they are not sufficiently disclosed. I have also concluded that the asserted claims at 1 and 17 (and the dependent claims) are invalid as they are anticipated or obvious.
[6] I have also concluded that the defendants have not infringed the 167 Patent.
[7] In light of my findings, I decline to address the issue of damages.
II. Background
A. The Parties
[8] PSET is incorporated in the State of Ohio with a registered office in Hamilton, Ontario. The 167 Patent has a Canada filing date of July 5, 2001, and a publication date of January 10, 2002. The patent was issued on March 21, 2017 and expired July 5, 2021. The 167 Patent claims priority to US provisional patent application 60/215,976 (976 Patent) filed on July 5, 2000.
[9] Google Canada Corporation is incorporated in the province of Nova Scotia. Alphabet Inc. is incorporated in the State of Delaware, and was created in 2015 through a corporate restructuring in which Google Inc. became a subsidiary of Alphabet. In 2017, Google Inc. was converted into Google LLC. Unless the context requires otherwise, I will refer to the defendants collectively as “Google”.
[10] Google owns the infrastructure that operates Google Ads and formerly AdWords. AdWords Select was launched in February 2002. AdWords Select was renamed to “AdWords” and became “Google Ads” in 2018. Unless the context requires otherwise, I will use the phrase “Google Ads” to refer to these products.
B. Patent Background
[11] In the early 2000s, with the increased use and popularity of the internet, advertisers were attempting to reach internet users by paying search engines to have their information or advertisements displayed in response to searches. In paid search engines, advertisers could pay to have their information appear in a certain position in the search engine’s search result. This is described in the 167 Patent as follows:
In a paid Internet search engine, content providers submit bids for each one or more keywords they desire to associate with their site. The paid search engine will respond to a user’s request for sites with one or more keywords, by producing a list of links to those sites that have submitted bids on those keywords. The order in which links are identified is determined by the bid amounts provided by the sites – the site with the largest (cumulative) bid(s) for the keywords(s) identified by the user, appears first in the list of the sites presented to the user, followed by the site with the second largest (cumulative) bid(s) and so on.
[12] Cost-per-impression was one method by which advertisers were charged for this service, meaning advertisers paid an amount each time their advertisements appeared in response to a search query regardless of whether the searcher actually followed through on the advertisement and visited their website.
[13] In May 1999, the search engine GoTo.com (GoTo) introduced a new method for advertisers called sponsored search results. This new method was pay-per-click advertising, meaning that the advertiser was only charged for having their information appear in the search results when the searcher actually clicked on the advertiser’s information (typically their URL website address). This was a more attractive model for advertisers as it meant they were only paying for advertisements directed to those who actually showed some interest in their website. GoTo obtained a patent for its pay-per-click advertising model in July 2001.
[14] On GoTo, advertisers chose the amount of money (usually in cents) they were prepared to pay (the bid) to have their information displayed in response to the search of certain words or phrases (keywords). Advertisers who were vying for the top position in the search results had to be prepared to pay more for the chosen keywords in order to rank above competing advertisers.
[15] In February 2000, the named inventors of the 167 Patent – Juan Velez and Daren Murrer – met to discuss internet marketing. Mr. Velez was working in e-commerce and marketing. Mr. Murrer was involved in online businesses that used pay-per-click online advertising on GoTo.
[16] Mr. Murrer explained to Mr. Velez the challenges of managing as few as 10-12 keywords on GoTo, and how time consuming it was to have to manually change bids for each keyword in order to stay competitive. Mr. Murrer explained having to look at the keywords he bid on to determine his bid position and then having to change the bid to close the gap between his bid and the bids of other advertisers for that position. Mr. Velez told Mr. Murrer that he should be managing hundreds of keywords. According to the inventors, this discussion led to an all-day brainstorming session where they developed the idea that became the 167 Patent.
[17] Following this brainstorming session, Mr. Murrer and Mr. Velez contacted Mark Soper to work on computer code to implement their concept. Mr. Soper, who worked on the project over a weekend, developed code that could retrieve keyword search results from GoTo and arrange the results in a table. This table displayed the top 20 bids for a keyword, and showed the number of times the keyword was searched. This allowed advertisers to see if there was an “optimization opportunity”, namely, a gap between their bid and the next high advertisers bid, which could then be collapsed (a bid collapse). For example, if Bidder A bids $0.05 and the next highest bidder, Bidder B, bids $0.08, the “optimization opportunity” is for Bidder B to reduce their bid to $0.06 while still remaining in the top position relative to other bidders in the search results.
[18] Mr. Velez and Mr. Murrer filed a provisional patent application on July 5, 2000 (referred to as the 976 Patent). They offered a commercial product known as the Keyword Bid Optimizer (KBO or KBO tool) which they operated from their website: PaidSearchEngineTool.com. The KBO tool worked by collecting information from GoTo (each night) on PSET customers’ keywords and the bids on those keywords. These search results were then displayed in a report for PSET customers with columns showing: the keyword(s), the number of times it was searched (views), the top 20 bids for the keyword, and where the advertiser’s bid (in red) ranked relative to others. This report shown below from the 976 Patent, is also Figure 4 of the 167 Patent:
[19] From this report, the advertiser could see that they had the top position for the keyword “cover crop” with their bid of $0.03. However, they would also see an optimization opportunity to reduce their bid from $0.03 to $0.02 while maintaining this top position relative to the other bidders.
[20] According to the inventors, PSET started selling the KBO tool commercially and at one time had over 500 subscribers. During the three years that the KBO tool was sold, PSET reported revenues of: $56,000 in 2001, $43,000 in 2002 and $21,000 in 2003.
[21] In May 2001, GoTo and PSET entered into a 6-month agreement in which GoTo agreed to feed search results directly to PSET in exchange for PSET providing the URLs and historical account information of their customers. This agreement was not renewed.
[22] By June 2002, GoTo, who was now operating as Overture, introduced optimization tools directly on their website. According to PSET, these tools provided the same service and information as provided through their KBO product. According to Mr. Murrer, this move by Overture effectively put PSET out of business and by 2003 PSET stopped selling the KBO tool. PSET claimed that Overture used PSET’s method and techniques. In October 2003, Overture was purchased by Yahoo.
[23] Mr. Murrer confirmed that the KBO tool did not automatically adjust bids, did not show the number of clicks on an ad, and did not display information about clickthrough rates (CTR, or how often an ad was displayed and clicked). The KBO tool was not itself a search engine and it did not run an auction to determine what ads would be displayed.
[24] Mr. Murrer claims that the 167 Patent discloses more than the KBO tool. The details of the 167 Canadian patent history was introduced into evidence (Exhibit 2).
[25] Mr. Murrer had limited knowledge of the 167 Patent proceedings in Canada but confirmed that PSET had two patent applications in the US that claimed priority to the 976 Patent – the 450 Patent and the 912 Patent. He also confirmed that PSET’s patent infringement claims against Google (and Yahoo and Microsoft) in the US regarding these patents were dismissed (Exhibit 15).
[26] PSET’s patent application to the European Patent Office, which also relied on the 976 Patent, was refused (Exhibit 24). On January 18, 2013 and September 25, 2014, the US Patent and Trademark Office cancelled the claims pertaining to the 450 and 912 Patents (Exhibits 26 and 27).
III. Evidence
[27] The following is a brief summary of the witness evidence. I include this summary to provide an overall factual and contextual framework. Where relevant, I also note my general observations as to the reliability of the witnesses’ evidence. The particulars of some of the witness evidence will be addressed in more detail in the analysis of the issue to which it relates.
A. PSET’s Fact Witnesses
[28] Juan Velez is a co-inventor on the 167 Patent. He has a chemical engineering degree, and an MBA. He does not have a computer science background or a background in auctions. Mr. Velez gave evidence about the meeting he had with Daren Murrer in February 2000, when they developed the concept for the patent. He testified that he and Mr. Murrer also worked with Cotty England and Mark Soper to develop the patent, and consulted his professor, Jon Keel.
[29] Mr. Velez had limited knowledge of how the patent could work in practice as his involvement was focused on the marketing of the patent.
[30] Daren Murrer is the co-inventor on the 167 Patent and a founder of PSET. Mr. Murrer explained that PSET was also doing business as Earth Internet Services or Earth LLC in Ohio, before becoming its own LLC. Mr. Murrer has no formal education in computer science, online marketing or auction design. He has experience with online sales through his other businesses where he created a website to sell products.
[31] He also testified about the brainstorming session with Mr. Velez in February 2000. He explained that the code created by Mr. Soper allowed for automatic bidding, but he was not comfortable implementing that step immediately due to liability concerns. He confirmed that when they launched the KBO tool, the automatic bid feature was not included. He explained that the KBO tool was used on various search engines including GoTo, Kanoodle, and Ah-ha.
[32] Mr. Murrer provided helpful contextual background, however, he claimed to lack knowledge on details of the patent filing history in Canada and PSET’s patent litigation in the US.
[33] Mark Soper is a self-taught software programmer with no formal education in software programming or computer science. He testified about the code he wrote for PSET. He confirmed that this code did not identify bid gaps and did not do calculations, but it was capable of doing automatic bidding. He confirmed that ad quality and ad relevance were not assessed by the code he developed. Mr. Soper was a credible and straightforward witness.
[34] Jon Keel taught Mr. Velez in a course on internet marketing. He did some work for PSET and became a part owner in 2000. He described the process of managing bids prior to the use of the KBO tool. He was questioned about an email he sent to Planet Ocean Communications (Planet Ocean) where he provided them with the KBO tool (Exhibit 46).
[35] Patent Agent Shauna Paul testified about the prosecution of the 167 Patent, including the timing of the registration of the patent in Canada. She testified that she was taking instructions from PSET’s US patent attorneys.
[36] Daniel Boberg worked at GoTo from 1999-2009. He described GoTo as the first sponsored or paid listing search engine. Mr. Boberg explained the bidding process on GoTo.com, GoTo’s Direct Traffic Centre and the impact of PSET’s KBO tool on GoTo.
B. PSET’s Expert Witnesses
[37] Jessie Stricchiola was qualified on consent as an expert in search engine marketing, search engine optimization, paid search, digital marketing and web traffic analysis. She does not have any formal education in computer science, economics, or computer coding.
[38] Ms. Stricchiola has worked in the field of search engine optimization since 1998. Her company, Alchemist Media, works in strategy, implementation and management of various digital marketing efforts by clients involving search engine optimization, paid search engine advertising, website analytics and related areas. She is the co-author of The Art of SEO: Mastering Search Engine Optimization. Ms. Stricchiola is a cofounder of SEMPO, the Search Engine Marketing Professional Organization, and served on the board of directors for two years.
[39] Ms. Stricchiola prepared the following reports, marked as Exhibits 31, 32, and 33:
Report on Infringement, dated January 29, 2021 (Stricchiola First Report)
Report on Validity, dated April 7, 2021 (Stricchiola Second Report)
Responding Report, dated May 7, 2021 (Stricchiola Third Report).
[40] Overall, her evidence was helpful. However, her evidence lacked particularity with respect to claims construction and infringement. I would describe it as generalized. Further, her reliance on selected Google marketing material over Google technical information impacts the objectiveness of her opinion on infringement.
[41] Dr. Stephen Becker is an economist with expertise in corporate financial analysis and the evaluation of economic damages, including intellectual property damages and patent infringement damages. Dr. Becker provided two reports marked as Exhibits 44 and 45 as follows:
Report on Reasonable Royalty, dated January 29, 2021
Report on Apportionment and Non-Infringing Alternatives, dated May 7, 2021.
[42] Dr. Ernan Haruvy was qualified on consent as an economist with expertise in auction theory, auction design, procurement, online advertising, and quantitative and qualitative methods for data analysis, including financial analysis and predictive analysis. Dr. Haruvy has a PhD in economics from the University of Texas at Austin (1999) and completed a post-doctorate fellowship at Harvard Business School (2000-2001). He is the Cleghorn Faculty Scholar (Full) Professor of Marketing at McGill University. He is also affiliated with the University of Texas at Dallas. Dr. Haruvy provided three reports marked as Exhibits 54, 56, and 58, as follows:
Report on Revenues and Profits, dated January 29, 2021 (Haruvy First Report)
Report on Validity, dated April 7, 2021 (Haruvy Second Report)
Responding Report on Remedies, dated May 7, 2021 (Haruvy Third Report).
C. Google’s Fact Witnesses
[43] Dr. Eric Veach holds a PhD in Computer Science from Stanford University. In 2000, he joined Google and worked with the online advertising team. Dr. Veach explained the ad system used by Google in the early 2000s and described the development of Google’s AdWords in July 2000. According to Dr. Veach, by November 2000, Google began to consider ways to improve AdWords. In May 2001, Google began building the program that became AdWords Select, which was launched in February 2002. AdWords Select focused on pricing and ranking, and incorporated ad quality considerations. According to Dr. Veach, Google used a second price auction. He also explained Google’s Smart Ad Selection System (SmartASS) which uses machine-learning technology.
[44] Gerald Dischler is the VP and General Manager of Ads at Google. He previously worked with Google’s ads team on the back-end technology of search advertising. Mr. Dischler now leads product management, engineering and design for the advertising team at Google. Mr. Dischler testified about Google’s products and Google’s ad system, as well as Google’s ad quality. Mr. Dischler’s evidence at trial differed from his discovery evidence on some material points. Where there were discrepancies, I prefer his discovery evidence or the documentary evidence.
[45] Salar Kamangar began working at Google in 1999. He worked on ads at Google in 2000, including Google’s in-house ad product called Premium Sponsorships. Mr. Kamangar gave evidence about Google AdWords and AdWords Select from a high-level design standpoint.
[46] Thomas Iljic joined Google in 2015 and is currently the product manager for the text and shopping auction. In this capacity, Mr. Iljic deals with ads auctions and shopping ads auctions for Google.com. Mr. Iljic provided evidence on Google Ads from the perspective of an advertiser. He explained how ads are selected, ranked and priced.
[47] Joshua Moser leads Google’s search bidding product team. Mr. Moser has been with Google since 2013. Mr. Moser explained Google Ads Help Centre and Google Ads bidding system.
[48] Dr. Eric Schmidt is the former Executive Chairman and CEO of Google Inc. He gave evidence on the Google advertising system model beginning in 2001 and he explained how the auction-based system evolved. Dr. Schmidt also explained the impact of Google Ads on Google’s revenues. He confirmed that in the early 2000s, Google implemented financial restrictions. While PSET placed significant emphasis on Mr. Schmidt’s statements made during an interview, I accord these statements little evidentiary value as I view them more as public relations statements rather than statements of the inner workings of Google.
[49] Desmond Keane is the senior engineering director responsible for the site reliability engineering team at YouTube, which is a part of Google. In 2004, Mr. Keane started with Google as a systems administrator. In 2007, Mr. Keane managed a team of systems administrators and software engineers responsible for internal business applications and core internal infrastructure systems. In 2015, he was the engineering director for all of the Ads site reliability engineering teams. Mr. Keane gave evidence on Google’s infrastructure and confirmed that AdWords is accessible in Canada. He provided helpful detail on Exhibit 111, which provides a high-level overview of Google’s infrastructure – from the boundary of things that run in Google data centres (including the Google Ads system) to the end user interacting with Google’s home page from their phone or computer.
[50] Jessie Brader was a part owner of Planet Ocean – a company that published a digital newsletter regarding search engine information in the early 2000s. Ms. Brader gave testimony on Planet Ocean’s operations as well as an email exchange with Jon Keel about the KBO tool (Exhibit 46). She testified that this email was typical of the type of communications received by Planet Ocean in the early 2000s.
[51] Kevin Lee started Did-It in 1996. He explained that Did-It was an organic search technology company that evolved into a company that assisted marketers in monitoring their positions in search engines. He explained pay-per-click advertising in the late 1990s through the early 2000s. Did-It used GoTo as a search engine as noted in Exhibit 112. According to Mr. Lee, there were a number of companies in the early 2000s focusing on the bid search and management business. His evidence was that this was a busy area of development with a number of companies building similar products at the same time.
[52] Neela Morrison is senior corporate counsel at Google LLC. She gave evidence on the corporate structure of Google LLC, Alphabet Inc., and Google Canada.
[53] James Maccoun is patent counsel at Google who explained Google’s patent licensing agreements.
[54] Amrit Nandan is Director of Finance with the Ads Business Unit at Google. He provided financial information regarding Google’s product areas.
[55] Buck Farmer is a senior finance business intelligence analyst with Google who provided evidence on Google’s financial allocation system.
D. Google’s Expert Witnesses
[56] Dr. David Parkes is a professor of computer science at Harvard University. Dr. Parkes has a Master’s Degree in Engineering and Computing Science from Oxford University and a PhD in Computer and Information Science from the University of Pennsylvania. Dr. Parkes was qualified as an expert in relation to computer science, auctions, market design, search engines, machine learning, artificial intelligence, e-commerce and internet advertising, including search engine marketing. He has provided two reports marked as Exhibits 122 and 123 as follows:
Report on Patent Claim Construction and Validity, dated January 29, 2021 (Parkes First Report)
Responding Report, dated April 7, 2021 (Parkes Second Report).
[57] On claims construction, Dr. Parkes occasionally took a literal approach to the claims language rather than a purposive approach. Likewise, his skilled person possesses significant academic credentials which is not reflective of those who would be using the online advertising products in the early 2000s. However, subject to these comments, I generally preferred Dr. Parkes’ evidence and his claims construction.
[58] Michael Grehan was qualified on consent as an expert in relation to search engines, search engine marketing, and digital marketing. Mr. Grehan authored the book Search Engine Marketing: The Essential Practice Guide and was the Chair of SEMPO. He authored a report dated April 7, 2021. However, as I have concerns about the objectiveness and independence of Mr. Grehan’s opinions, I do not accord his opinion much weight.
[59] Steven Tadelis was qualified as an expert economist with expertise in the economics of institutions, economic analysis for business decisions, including those related to digital advertising and marketing strategies, contract theory, strategic sourcing and pricing, online auctions and pricing structures. Dr. Tadelis provided one report dated April 7, 2021. I have concerns about the objectivity of his report, as it was revealed in his oral evidence that a consulting firm – Analysis Group – was heavily involved in the preparation of his report. He was also selective in the Google information he relied upon.
[60] Christopher Bakewell was qualified on consent as an expert on intellectual property valuation and licensing related issues, including economic issues related to the determination of a reasonable royalty. Mr. Bakewell provided a report dated April 7, 2021. I have concluded that Mr. Bakewell’s approach to the royalty analysis was too narrow and relied upon unsupported assumptions. If I had assessed damages, I would not have afforded his report much weight.
[61] Errol Soriano was qualified on consent as an expert in assessing, analyzing, and quantifying financial damages and profits; the evaluation of business interests; and forensic accounting, including in the context of intellectual property disputes like patent infringement disputes. Mr. Soriano provided one report dated April 7, 2021.
IV. The 167 Patent
[62] The patent describes the advertisers’ burden of managing keyword bids on paid search engines as paid search engines became increasingly popular. As bidding on keywords increased, bid rankings changed more frequently, and managing positions became an inefficient and time-consuming task. The patent states:
To foster competition, paid search engines have provided facilities for bidders to monitor certain statistics, such as a daily count of “hits” on particular keywords, and reports of current bids on a given single keyword. However, paid search engines have not, to date, made such competitive information readily accessible. For example, a bidder can only view current bid positions of one keyword at a time, and has no mechanism for quickly identifying large gaps in bid amounts indicative of an opportunity for bid optimization. For a content provider managing tens or hundreds of keyword bids, the burden of evaluating each keyword individually can be substantial.
[63] The patent sought to address this inefficiency. First, the patent describes a process for accumulating customers’ account and keyword information (FIG. 1) and generating a keyword report (FIG. 2):
[64] The patent also describes a method for identifying opportunities for customers to optimize their keyword bids:
A method and apparatus for improving efficiencies in the current paid search engine keyword bidding market and optimizing use of use of such engines. The system accumulates bid amounts for a plurality of target keywords at one or more paid search engines and presents bid amounts to a user enabling the user to evaluate and optimize bids on those keywords. Bid amounts of keywords of interest are highlighted (302). Differential bids can be identified to optimize bids. Keyword bid changes are monitored to identify changes of interest to a potential bidder (306).
[65] This method of keyword bid monitoring is illustrated below in FIG. 3:
V. Claims Construction
A. Legal Principles
[66] The Supreme Court in Whirlpool Corp v Camco Inc, 2000 SCC 67 [Whirlpool] states at paragraph 45 that “[t]he key to purposive construction is therefore the identification by the court, with the assistance of the skilled reader, of the particular words or phrases in the claims that describe what the inventor considered to be the ‘essential’ elements of his invention.”
[67] The Supreme Court also stated in Free World Trust v Électro Santé Inc, 2000 SCC 66 [Free World Trust] at paragraph 44 that “[t]he courts have traditionally protected a patentee from the effects of excessive literalism.”
[68] The relevant date for the purposes of claims construction is the publication date (Whirlpool at para 55). Here the publication date is January 10, 2002.
[69] The principles of claim construction are well summarized by Justice Fothergill in dTechs EPM Ltd v British Columbia Hydro and Power Authority, 2021 FC 190 at para 113 [dTechs] as folllows:
The canons of claim construction are found in the Supreme Court of Canada’s decisions in Consolboard Inc v MacMillan Bloedel (Saskatchewan) Limited, [1981] 1 SCR 504 at 520, Whirlpool at paragraphs 49 to 55, and Free World Trust v Électro Santé Inc, 2000 SCC 66 [Free World Trust] at paragraphs 44 to 54. They are the following:
(a) the words of the claims must be read in an informed and purposive way with a mind willing to understand, viewed through the eyes of the person of ordinary skill in the art [PSA] as of the date of publication having regard to the PSA’s common general knowledge;
(b) the Patent Act promotes adherence to the language of the claims. This allows the claims to be read in the manner the inventor is presumed to have intended, and in a way that is sympathetic to accomplishing the inventor’s purpose, which promotes both fairness and predictability;
(c) the whole of the patent’s specification should be considered to ascertain the nature of the invention, and the claim construction must be neither benevolent nor harsh, but should instead be reasonable and fair to both the patentee and the public. The focus of the analysis is on the claims; specifications will be relevant only where there is ambiguity in the claims (AstraZeneca Canada Inc v Apotex Inc, 2017 SCC 36 at para 31); and
(d) claim construction must be the same for the purpose of validity and for the purpose of infringement.
B. Person of Skill in the Art (PSA)
[70] As noted in Whirlpool at paragraph 53:
… the patent specification is not addressed to grammarians, etymologists or to the public generally, but to skilled individuals sufficiently versed in the art to which the patent relates to enable them on a technical level to appreciate the nature and description of the invention [citations omitted].
[71] The PSA has “common knowledge in the trade” (Whirlpool at para 70) and “is thought to be reasonably diligent in keeping up with advances in the field to which the patent relates” (Whirlpool at para 74).
[72] The parties disagree on the knowledge and skills of the PSA.
[73] Google’s expert Dr. Parkes says that the skilled person has “a university degree in computer science or a degree in a related field with approximately 2-5 years of experience in internet technologies generally”, as well as “at least 2 years of experience with online marketing, and knowledge of search engine marketing”. His skilled person would also know market design, including auction design, through a university degree or 3-6 years working on online market systems (Parkes First Report at para 24).
[74] Although both PSET’s experts Ms. Stricchiola and Dr. Haruvy claim to rely upon Dr. Parkes’ skilled person, they nonetheless provided their own opinions on the attributes of the skilled person which differ from Dr. Parkes on key aspects.
[75] Ms. Stricchiola says the skilled person requires “a general understanding of the structure and function of the internet as a whole” and would be familiar with “web browsers, websites, webpages, website URLs, domain names, clicks, users, and hyperlinks, and/or links”. She says the skilled person would be familiar with “paid search advertising within search engines”, and would be familiar with “target keywords, bidding, CPC or PPC (cost per click and pay per click, respectively), clickthrough rates (CTR), impressions, landing pages, campaign management and optimization, budget, maximum bids, rankings, results, positions, competitor keywords, user demographics, search and query volume, keyword research, and related topics” (Stricchiola First Report at para 49-52).
[76] In her opinion, the skilled person would need to have access to a web developer and/or a computer programmer/coder.
[77] Dr. Haruvy says that the skilled person would have experience and familiarity with the internet search industry and would have experience or familiarity with basic concepts in bidding. He agrees that the skilled person would include or have access to a coder. Dr. Haruvy says that the skilled person would be “a manager or executive at a portal, ISP/IAP, search engine, or advertiser tasked with making strategic pricing decisions in respect to paid search engine advertising”. Further “[t]he familiarity required with (1) internet search concepts, (2) bidding concepts, and (3) access to a coder, means that the manager described here is more likely to come from a high tech business background which would often involve college education with related exposure” (Haruvy Second Report at para 61-64).
[78] Dr. Haruvy states that there is nothing in the 167 Patent that requires much familiarity with specialized auction formats (Haruvy Second Report at para 65).
[79] I agree with Ms. Stricchiola that the skilled person would have a general understanding of the structure and function of the internet as a whole and an understanding of search engines and general search engine functionality, including from both a user and advertiser perspective. I agree that this understanding would include how to perform a search, what search results are, the difference between paid and non-paid search results, and how and where advertisers can appear within search results.
[80] I do not agree with Dr. Parkes that a degree in computer science would be necessary. I note, although not determinative, that the named inventors did not have such degrees. Furthermore, Mr. Soper – the coder for the 167 Patent – does not have a formal education in software programming.
[81] The issue that arose in cross-examination was whether the PSA personally had computer coding skills or had access to someone with those skills. Although this is an area where the experts appear to diverge, they all agree that some coding is necessary to put the 167 Patent into practice. Accordingly, coding knowledge or access to that knowledge was necessary for the PSA. However, as noted by Dr. Haruvy, the relevant computer coding skills in the early 2000s were comparatively basic. Therefore, the skilled person would be someone with at least 2 years of coding experience or access to someone with at least 2 years of coding experience. The skilled person may therefore be a team.
[82] In my view, Dr. Parkes overstates the skilled person attributes. I do not agree that the skilled person requires a university degree as that was not reflective of the skill set of those working with paid search engines in the early 2000s. I do not reach this conclusion based upon the profile of the co-inventors, but rather based upon the state of the relevant technological development at the relevant time.
C. Common General Knowledge (CGK)
[83] In Apotex Inc v Sanofi-Synthelabo Canada Inc, 2008 SCC 61 [Sanofi] the Court noted that “[c]ommon general knowledge means knowledge generally known by persons skilled in the relevant art at the relevant time” (at para 37). The relevant time for assessing CGK is the publication date (Eli Lilly Canada Inc v Mylan Pharmaceuticals ULC, 2020 FC 816 at para 187 [Eli Lilly]).
[84] The publication date of the 167 Patent is January 10, 2002.
[85] Although the experts are not in complete agreement on what would make up the CGK, I would characterize their disagreement as more in relation to the depth of knowledge the PSA would possess, rather than the areas of knowledge.
[86] Based upon the above, in my view, the PSA would have knowledge of the following concepts:
a) Advertising on the internet, including banner ads on webpages.
b) How paid search engines like GoTo functioned.
c) Online pricing models for advertising including: cost-per-mille (CPM – a cost per thousand impressions); cost-per-click (CPC – a cost per clickthrough); and cost-per-action (CPA – where the advertiser is charged each time a user takes a predefined action).
d) Web browsers such as Netscape’s Navigator and Microsoft’s Internet Explorer.
e) Web scraping by fetching webpages and parsing out particular information from that web page.
f) The major search engines and web directories, including Google, Yahoo!, AltaVista, Lycos and AskJeeves.
g) Web crawling, which involved the parsing of Internet webpages to produce an index of webpages such that each webpage could be associated with search terms.
h) How to use keywords (individual words, word combinations, or short phrases) with a search engine, and understanding the association of keywords with webpage meta tags.
i) Search engine optimization (SEO), being the process of optimizing a webpage to achieve better results (higher rankings) on search engines.
j) Online auctions, including various types of auctions (like eBay), types of bidding, and auction participant behaviors including proxy bidding and the use of automatic bidding agents.
[87] On the issue of auctions, I find that Dr. Parkes’ CGK is broader in scope than the field of the invention. The advanced technical aspects of auction theory and market design fields that Dr. Parkes describes would not be part of the relevant common knowledge of the skilled person at the relevant time.
[88] Dr. Haruvy also disagrees with Dr. Parkes’ CGK regarding auctions. Dr. Haruvy states:
I agree that the Parkes Skilled Person would know, as part of their common general knowledge, that bidding agents on eBay and similar sites had the potential for “bid-snipers” […]. The Parkes Skilled Person, however, would also know that unlike the single-item auctions on eBay, “winning” in the context of a paid search engine is fundamentally different from winning on eBay. Whereas “winning” on eBay or Yahoo! Auctions means taking home the prized item, winning on a paid search engine using CPC pricing is measured by a different metric - a user clickthrough. Being listed first in search engine results page is not a “win” if users do not actually click through on the displayed advertisement. Similarly, not obtaining the first position (which would clearly be a “loss” in an eBay auction), may still be a “win” in a paid search engine if it nevertheless results in a user click through (Haruvy Second Report at para 82).
[89] I conclude that a detailed understanding of auction theory is not required to understand the technical area of the 167 Patent. The PSA would have the following general knowledge of auction concepts:
The difference between an “open” auction where all participants (bidders) know the bids of other parties, and a “closed” or sealed auction where bidders do not know the bids of others;
First price auctions (like GoTo), where the winner pays their bid amount. In a first price closed auction, this means the winner is the highest bidder; and,
Second price auctions (sometimes called Vickrey auctions) are auctions where the winner pays the amount of the second-highest bid. A second price auction allows bidders to bid their true value k