Exchanging geographic and demographic data isn’t patentable

A federal district court in Arizona recently invalidated a 2018 patent for a "System and Method for Selling Customer-Specific Data Subsets on a Third-Party Website Using a Web Widget."

As the court noted about the patent,

Its first and only independent claim sets out "[a] system for searching and purchasing data subsets from a data seller" and comprises three main components: (1) an ecommerce vendor, (2) a data seller, and (3) a data extraction widget.

The patent provides the following further definitions:

The "ecommerce vendor" is a printing services vendor with a website and an "ecommerce server configured to operate the ecommerce website, the ecommerce servicer comprising a first processor and a first memory." The "data seller" maintains a database with geographic and demographic data and hosts a "database server" with a "second processor and a second memory." The "lynchpin" of this system is the data extraction widget, which is a "portable chunk of code" that can be "written in any computer readable language" and is "installed and executed within any separate HTML-based web page without requiring additional compilation." It facilitates direct connections with (1) the ecommerce server, (2) database server, and (3) "between the database server and the ecommerce server."

The patent application provided the following example of how it would work:

A sandwich shop owner wants to run a targeted mail campaign by designing and sending postcards to all residents within five miles of the sandwich shop. The owner finds an ecommerce vendor selling printing services, but the vendor lacks its own database of residents within five miles of the sandwich shop. However, a third-party data seller has a database that can be searched to obtain that specific data subset.

Using the data seller widget, the customer [sandwich shop] accesses the data seller's database via server, obtains a list of residents within a five mile radius of the customer's shop and then uses that mailing list to send out custom postcards through the web-to-print site. Preferably, the customer pays for the data subset (in this case the names and addresses) during checkout at the web-to-print site and the data seller and web-to-print vendor can settle their accounts at the same or subsequent time. Throughout the process, the customer need not know that a third-party data seller is involved.

The plaintiff in the case, USADATA Inc., produces software plugins. The patent-holder, DataWidget, sent letters to three USADATA customers, accusing them of infringing the patent by using USADATA plugins. DataWidget also sued another USADATA customer using USADATA plugins.

USADATA thus sought to have the patent declared invalid. It challenged the patent as a patent-ineligible abstract idea.

The court agreed that the patent was directed at an abstract idea and thus invalid:

Functionally, as Plaintiff argues, the data extraction widget exchanges information with and between a vendor of geographic and demographic data and a printing service. This exchange is not new. As far back as the pre-Civil War era, humans have acquired geographic and demographic data and used a printing service to reach a targeted audience. … And the Patent's own example of a sandwich shop owner comports with this historical practice of targeted, direct mailers. Defendants admit as much in their answer, characterizing the Patent as "a system for selling individually-tailored customer-specific data subsets (for example mailing lists used in direct-mail campaigns)." The Patent essentially computerizes a longstanding economic practice.