IP Law Daily, PATENT NEWS: Impact Engine petitions High Court to review Federal Circuit’s expansion of the abstract idea exception in patent eligibility, (Feb 11, 2025)

By Saurabh Kashyap, B.A., LL.B., LL.M.

Federal Circuit’s broad reading of § 101 expands the abstract idea exception, and its inconsistent approach to § 112(f) creates uncertainty in software patent eligibility, Impact Engine argues.

Impact Engine, Inc. has filed a petition for writ of certiorari before the U.S. Supreme Court, seeking review of a Federal Circuit decision that affirmed the invalidation of its online advertising patents under 35 U.S.C. § 101. The company argues that the Federal Circuit improperly applied the framework established under Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S. 208 (2014), failed to consider the structural elements of its claims under 35 U.S.C. § 112(f), and ignored the role of preemption in determining patent eligibility. The petition contends that the Federal Circuit's ruling significantly expands the abstract idea exception to patentability and threatens innovation in digital advertising technologies. Impact Engine warns that the decision if left unreviewed, will discourage software-based inventions and further deepen the uncertainty surrounding patent eligibility in the digital economy. The company urges the Supreme Court to clarify the application of Alice and address the interaction between Section 101 and Section 112(f) (Impact Engine, Inc. v. Google LLC, No. 24-836 (U.S. filed Feb. 3, 2025)).

Background. The petitioner, Impact Engine, Inc., is a digital advertising technology company. It owns patents directed to systems and methods for dynamically generating and distributing interactive advertisements. The respondent, Google LLC, is a multinational technology company specializing in internet services, digital advertising, and artificial intelligence-driven platforms. It operates the Google Ads network, one of the world's largest online advertising platforms.

Impact Engine asserted multiple patents in this lawsuit, each covering different aspects of its web-based advertisement system. The asserted patents included U.S. Patent Nos. 7,870,497 (the ’497 patent), 8,356,253 (the ’6,253 patent), 8,930,832 (the ’832 patent), 9,361,632 (the ’632 patent), 10,068,253 (the ’8,253 patent), 10,565,618 (the ’618 patent), and 10,572,898 (the ’898 patent). These patents detailed innovations in multimedia communication and advertisement technology, focusing on a system that enables users to create, edit, and distribute dynamic, media-rich online advertisements with an interactive interface. Among the asserted claims, some specifically required a “project viewer”, a component designed to render and transmit assembled communications over a network. The claims across these patents described features such as a media repository for storing templates and assets, a graphical user interface for assembling advertisements, and an interactive interview mechanism to tailor content based on user preferences.

In 2020, Impact Engine sued Google LLC in a federal district court, alleging that Google’s online advertising tools, including those in Google Ads, infringed its patents by implementing similar automated ad-creation and delivery functionalities.

Google challenged the patents under 35 U.S.C. § 101, arguing that the claims were directed to an abstract idea and lacked an inventive concept necessary for patent eligibility under Alice. Simultaneously, Google filed multiple inter partes review (IPR) petitions before the Patent Trial and Appeal Board (PTAB), asserting that the claims were anticipated or obvious based on prior art.

The PTAB denied the institution of IPR, concluding that Google failed to show a reasonable likelihood that the asserted claims were unpatentable under §§ 102 and 103. However, the district court granted Google's motion to dismiss, holding that the patents were ineligible under § 101 because they merely automated a known business practice using generic computer components. Impact Engine appealed to the U.S. Court of Appeals for the Federal Circuit, arguing that its patents provided a concrete technological improvement and that the court failed to consider structural elements under § 112(f). The Federal Circuit affirmed the district court’s ruling, concluding that the patents were directed to an abstract idea and lacked an inventive concept. Impact filed the instant petition for certiorari.

The petition. In its petition, Impact Engine presents two central legal questions for Supreme Court review. The first concerns whether courts must conduct a preemption analysis when applying Alice to determine whether a patent claim monopolizes fundamental technology. The company asserts that the Federal Circuit’s ruling is flawed because it failed to consider whether the patent preempted an entire field of digital advertising. Impact Engine contends that its patents improve existing technology rather than claiming a basic building block of online advertising. The petition cites Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. 66 (2012), to argue that preemption is a core principle underlying Alice and that the Federal Circuit’s failure to analyze this issue deviates from established Supreme Court precedent.

The second issue raised in the petition concerns the role of 35 U.S.C. § 112(f) in determining patent eligibility. Impact Engine argues that the Federal Circuit wrongly disregarded the structural elements of its claims when evaluating whether they were directed to an abstract idea. The company contends that certain functional claim terms should have been analyzed under § 112(f), which governs means-plus-function claims and requires courts to identify corresponding structures in the specification. Impact Engine maintains that its patents disclose specific algorithms and technical implementations, making them fundamentally different from abstract ideas. The petition cites Williamson v. Citrix Online, LLC, 792 F.3d 1339 (Fed. Cir. 2015) (en banc), in support of the argument that § 112(f) must be considered when determining the patentability of functional claim limitations.

The petition emphasizes that the Federal Circuit’s decision exacerbates the ongoing uncertainty surrounding patent eligibility for software and digital technologies. Impact Engine warns that if left unchecked, the ruling will discourage innovation by rendering a wide range of computer-implemented inventions ineligible for patent protection. The company argues that the Federal Circuit has applied Alice inconsistently, leading to unpredictable outcomes in software patent litigation. The petition points to previous Supreme Court rulings that have stressed the need for careful application of patent eligibility doctrine to avoid stifling technological advancements.

Impact Engine further argues that the Federal Circuit’s ruling threatens to undermine investment in digital advertising technologies. The company contends that its patents provide a concrete technological solution to challenges in online marketing, enabling advertisers to automate the creation of highly customized interactive ads. By invalidating these patents without a thorough preemption analysis, the Federal Circuit has effectively discouraged investment in similar innovations. The petition warns that if patent protection is denied to companies developing novel advertising solutions, the industry will be dominated by a few large players who can operate without fear of infringement liability.

The case also raises broader concerns about the scope of the abstract idea exception under § 101. Impact Engine argues that the Federal Circuit’s approach conflates patent eligibility with patentability, improperly using Section 101 as a tool to invalidate claims that should instead be evaluated under Sections 102, 103, and 112. The company contends that the Alice test has been applied so broadly that it now encompasses nearly all software-based patents, regardless of whether they provide a technical improvement. The petition cites Bilski v. Kappos, 561 U.S. 593 (2010), and Diamond v. Diehr, 450 U.S. 175 (1981), to argue that patent eligibility must be assessed in a way that preserves the ability of inventors to obtain protection for genuine technological advancements.

The Supreme Court's decision on whether to grant certiorari in this case could have significant implications for the software and digital advertising industries. If the court takes up the case, it may clarify whether preemption must be considered when determining patent eligibility under Alice and whether § 112(f) plays a role in assessing whether functional claims are abstract.

On February 10, 2025, Google LLC filed a waiver of its right to respond.

The Case is Dkt. No. 24-836.

Attorneys: Jason Michael Wilcox (Kirkland & Ellis LLP) for Impact Engine, Inc. Andrew Thomas Dufresne (Perkins Coie LLP) for Google LLC.

Companies: Impact Engine, Inc.; Google LLC

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