Real estate website sued by computer giant for patent infringement. IBM v. Zillow

A patent is a set of exclusive rights granted to the inventor of a new invention. To gain a patent in the United States an inventor must file a patent application with the United States Patent and Trademark Office. The patent application must describe the invention in detail and can claim the aspects of the invention which are new, useful and not obvious. The United States Patent and Trademark Office will grant an application when the patent application demonstrates that all the requirements for patentability have been met. A patent grants its owner the exclusive right to make, use, sell and import the invention in the United States. If someone exercises one of these exclusive rights, without the authorization of the patent owner, that can be considered patent infringement.

Several different classes of inventions are eligible for patent protection. 35 U.S. Code § 101 states that, any person who “invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent.” Software can be considered a computer implemented process and is eligible for patent protection provided that the invention meets all the other requirements for patentability.

Software patents are a point of contention with both academics and practitioners. One argument is that software, like any other invention, deserves patent protection because it takes a certain amount of effort and inventiveness to create and the inventor should be able to benefit from that effort. The opposing argument is that software frequently performs a task that was performed by humans in the past, merely instructing a computer to perform that task is not inventive enough to warrant patent protection. Which ever side of the argument you adopt, the United States Supreme Court’s decision in Alice v CLS Bank preserved the ability for software to receive patent protection in certain circumstances. The key thing that distinguishes whether a software patent is valid is whether the software is merely performing a task ON a computer versus the task doing something TO the computer.

INTERNATIONAL BUSINESS MACHINES v. ZILLOW GROUP, INC., 8:19-cv-01777 (C.D.CA 2019) is a case which involves software patents and may evolve into a precedent setting case. The plaintiff in this case is an internationally known computer manufacturer and software developer. The plaintiff spends billions of dollars each year on research and development, and those efforts have resulted in the issuance of more than 110,000 patents worldwide.

The defendant is a real estate website that lists homes for sale, and gives an estimated price for the home based on a variety of factors. Lists of homes for sale are presented to a user of the defendant’s website based on geospacial factors and advertisements are also presented to the user based on what the user’s search queries.

The plaintiff contacted the defendant three years ago, warned the defendant that the defendant’s website might infringement on several of the plaintiffs patents, and attempted to negotiate a licensing agreement. Licensing negotiations failed and the plaintiff filed a patent infringement lawsuit based on seven different patents. The patents relate to (1) Presenting Applications And Advertisements, (2) User Account Creation, (3) Algorithms For Computing The Desirability Of A Geographic Area Using Dynamic Image Data, (4) Methods for Listing and Filtering Geospacial Data, (5) Simultaneously Presenting Different Layers of Data, (6) Automatically Associating Related Advertisements to Search Results, and (7) Using Promotion Templates.

The broad spectrum of the patents are difficult to comprehend. In the time between these patents being granted and today, the case law surrounding software patents has evolved drastically. If the defendant decides to fight the case it is likely some of the patents will be deemed partially or wholly invalid. However when presented with such a broad spectrum of patents to research the cost of fighting the lawsuit might far out weigh the cost of licensing the patents. We will have to wait and see what the defendant says in its answer.

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