Funimation is a successful anime streaming company. It has a monthly subscription tier, which is ad-free, and a free tier, which includes advertisement. This week, failed company Firtiva filed a lawsuit against Funimation. The lawsuit asserts that Funimation violates Firtiva’s patent, U.S. 10,116,999, titled “Method for advertisers to sponsor broadcasts without commercials.”
“Without commercials” apparently means “with commercials” when you’re trying to force a successful company to pay you money.
The ‘999 Patent
Derived from an application filed back in 2001, the ‘999 patent is about a system where the time viewers spend watching any given broadcast is monitored. That time is associated with a sponsor, and based on that association, the viewer is later offered some kind of ‘enticement’ by the sponsor.
Now, in large part this seems like exactly what the Nielsen “People Meter” system did—the meter would monitor how long viewers spent watching and record that data. They receive a gift for that—an enticement to participate. And all ads are functionally enticements to purchase something, meaning that the idea of enticement as a reward for viewing is as old as broadcast advertising.
It isn’t tied to a particular sponsor, but advertisers sponsoring a given segment of content is as old as radio, much less TV. Even making that sponsorship commercial-free isn’t novel—Schindler’s List was famously broadcast in 1997 without commercial interruption, with the viewers being shown a Ford ad after the movie ended.
So even if no one had yet come up with the idea of having sponsor information tied to a given segment of media, measuring that viewing, and providing an enticement is all well within the realm of what a person of ordinary skill in the art would have been able to do back in 2001.
But the Patent Office still issued a patent for it.
The Infringement Allegations
This is really the crux of the issue with this case—this patent, which is supposed to be for an “invention [that] allows content to be broadcast without commercials interruption, yet lets the company or companies that sponsor the broadcast to offer advertisements and discounts and various special offers to the viewers at a later time of their own choosing,” is somehow being asserted against a service that either includes ads or lacks sponsor, depending on if you pay for it.
If Funimation is being used in its free mode, it includes ads, which means that it isn’t really viewing “without commercials interruption.” And in its original patent, that would have been a problem—the claim specifically required that the content be without commercial interruption. But in 2012, when the ‘999 patent was actually filed for, they got rid of that clause. So the invention—an invention that was about a system that involved viewing without commercial interruption—is suddenly being used to claim a system that can have commercials. That’s a problem, because the Federal Circuit says that claims are invalid when they claim something outside of the stated purpose of the invention.
This is only reinforced by the inventor, who during prosecution of the ‘999 patent argued that his invention was different from the prior art because the claimed invention “do[es] not embed advertisements into or with a content signal transmitted to a viewer as [the prior art] does.” In other words, the inventor told the Patent Office that his invention was about commercial-free viewing, but is now attempting to assert the patent against a system including advertisements.
It’s Not Unusual
It’s pretty hard to provide a clearer example of abusing the patent system than promising the Patent Office that your invention was about commercial-free viewing and then asserting your patent against a system that includes commercials.
But it’s not an unusual case—NPEs regularly try to argue that something should mean its opposite so they can make out an infringement case, including arguing that “infinite” means “finite” and “top surface” means “bottom surface.” A combination of patent examiners who are crunched for time, a patent system that makes it too hard for examiners to reject patents, and plaintiffs’ lawyers willing to push this kind of nonsensical argument means that companies large and small wind up hauled into court to defend themselves.
The money those companies spend on lawyers to point out that “without commercials” shouldn’t apply to “with commercials” is money that could have been spent on new products, new inventions, or even—in Funimation’s case—additional anime content they could provide to their viewers. And as long as the Patent Office continues to issue these kinds of patents, the companies that create innovation are going to be forced to continue to pay to defend against the companies that just create lawsuits.