A Closer Look at Microsoft's Pending Patent Application for Control-Based Content Pricing
"A viewer who skips the advertising is the moral equivalent of a shoplifter."
-Nicholas Johnson, FCC Commissioner (1966-;1973)
On March 19, 2004, a patent application assigned to Microsoft Corp. was filed for what it calls control-based content pricing (US APP 10/805030). Although a first peek of this application was available to the public in 2005, it was only docketed for Examination on March 21, 2006 due to the backlog of computer-oriented patent applications at the United States Patent and Trademark Office (USPTO). In simple terms, the application describes a system that determines the price for media content based on how the viewer accesses that content. For example, if a user skips over an advertisement, the cost of a requested on-demand movie may be increased. Similarly, if a user initiates a replay of a sporting event, the user may be charged extra. The application also describes pro-rating of partially watched media content, as well as discounts for images of lesser quality.
The patent application clearly attempts to capitalize on the mutual interests of both Microsoft and TiVo. TiVo, in fact, has 27 issued patents covering its digital video recorder technology and at least nine pending patent applications, including one for enticing viewers to watch commercial content (US APP 11/182554, “Method for Enhancing Digital Video Recorder Television Advertising Viewership,” filed July 15, 2005).
Announcements of patents or patent applications tend to cause a mild furor in industry circles, particularly when they propose to capture key areas of hot technology. They can also cause great concern in R&D units that may be working on inventions in the same space. But these sweeping announcements can often be misleading, because they are generally not based on a full analysis of the patent. (For more information on how to analyze a patent, click here.)
Microsoft’s pending application contains seven independent or stand-alone claims and another 49 dependent claims (meaning the latter incorporate all the limitations and requirements defined in the claim that they reference). And, no, I’m not about to analyze all 56 claims for you here. Really, unless you anticipate litigating this issue down the road, such an analysis would put you to sleep. Instead, let’s take a partial look at Claim 1 (often the first claim is representative of the patent application as a whole, but it is not necessarily the broadest claim in the bag).
1. A control-based content pricing system, comprising: a content server configured to distribute media content to a client device in response to a request from the client device to receive the media content, the content server further configured to receive a view control input from the client device that indicates how the media content is to be rendered; and a valuation application configured to allocate a cost to the client device when the media content is distributed, the valuation application further configured to adjust the cost according to the view control input and how the media content is to be rendered.
The terms underlined in claim 1 are explained below with definitions and examples pulled directly from Microsoft’s patent application.
A content server distributes media content to a client device in response to a request from the client device to receive the media content. It is represented by Figure 102 in the drawings included with the application. The content server includes an advertisement log and a valuation application, but the valuation application may be implemented on a device other than the content server.
Media content includes video content as well as other content of interest to the viewer, including on-demand movies, sporting events, or even music. It may also include non-video services, such as a stock ticker data feed that is distributed as media content via a client device.
View control input indicates how the media content is to be rendered. Commands include content navigation inputs such as fast-forward, skip-ahead in a program, jump to a next segment, pause the program, rewind, and the like. The user may initiate a pause or stop command to suspend or stop rendering the advertisement or movie.
Valuation application: This is designated by Figure 126. A valuation application allocates a cost to the client device when the media content is distributed to the client device. More specifically, the valuation application adjusts the cost according to the view control input and how the media content is to be rendered. Even more specifically, the different content navigation inputs, such as advance, replay, pause, and slow motion, initiate the content server to stop distribution of a first media stream and begin distribution of a second media stream.
Each content navigation input has an associated network cost and may result in an alternate media stream and/or additional bandwidth requirements to accommodate the many media stream distribution factors, such as speed, direction, size of the display (e.g., full-screen) and/or resolution.
Alternatively, the valuation application may represent a duration of both the media content and the advertisement by a base time-line. If the duration over which the media content is rendered does not approximately equate to the base time-line duration, then the content server can determine that the advertisement was skipped over (e.g., not rendered for viewing). The valuation application may adjust the cost proportionally to the segment of the media content that is rendered for viewing.
So, where does this get someone seeking to potentially work around these claims?
Keep in mind, this is an abbreviated analysis—there may be additional fodder for distinctions in claim terms or future prosecution history not covered by this article. Checking this application on the USPTO’s website reveals that there is no substantive prosecution history on this application at the current time Also, should this application mature into a full-fledged patent, infringement of any of the claims constitutes infringement of the entire patent. That means if you need to do this for real, you can’t stop the analysis after examining only one claim.
With regard to a design-around for Microsoft’s claimed technology, there may be some possibilities in the configuration of the content server. This may be difficult, as the content server is generally described in terms of its functionality rather than its actual construction or components. One potential area of focus may be whether one could design a content server that did not include an advertisement log, and whether the alternative method of tracking viewed advertisements would be considered equivalent to the one described by Microsoft.
Another potential focus area may be the “valuation application” and its method for actually determining the costs for the viewing of various media. The application defines two fairly specific methods for determining a cost for the media content. If a competitor could devise a different method (one that is not so insubstantially different as to be practically the same thing), it might be possible to work around claim 1.
What Options Exist?
Proactively assessing the entire patent application as well as monitoring its continuing prosecution provides an advantage in designing a competitive system. On the other hand, Microsoft potentially gains some advantages for future litigation via the early publication of its patent application (that is, publication before issuance as a patent). If its claims remain substantially the same throughout prosecution, Microsoft may be able to extend the time line for damages from infringement lawsuits into the publication period rather than the point at which a patent actually issues. The sword cuts both ways.
What if designing around the claims isn’t possible (for instance, R&D has spent so much time on the project that a redesign would be cost-prohibitive)? In this situation, continued monitoring and development of “prior art”—all information already made public in any form before a given date—are critical. If a patent actually issues on this application, an interested party may apply for reexamination of the patent if it knows of published prior art, which may be used to mount an invalidity argument against the patent application. The requestor may even file comments on the patentee’s response to the prior art presented. But: if the requestor fails, they have sealed their own coffin. The requestor may be barred from challenging any fact, in court, that was established during the reexamination procedure. When fairly airtight arguments exist, this procedure offers a significantly less expensive alternative to infringement litigation.
Congress is considering two changes to the current patent laws that will offer non-patentees further options for fighting patents. One is a post-grant opposition period to any patent issued by the USPTO. Also, should Microsoft file a continuation application based on the current application, a limited window exists for submitting prior art relating to the claimed technology: two months after publication of the new application. Congress is considering expanding this window to six months and also allowing the third party to make arguments regarding such prior art in relation to the pending application. For this option, vigilance is the key. If you like either of these ideas, send a note to your local representatives!
Don’t forget that because this is a pending application, the reviewed Claim 1 and all the other claims in the application are moving targets. We won’t know the end of the story until the USPTO either issues an allowance of this application or a final rejection—and even then the story isn’t completely over, since continuation applications, reexaminations, requests for continued examination, and litigation may keep us guessing for some time to come.
In the meantime, keep an eye out for patent applications for follow-on technology. Perhaps the next step will be to integrate a built-in camera into the client device to determine if the consumer is actually staying in the room to watch the advertisement instead of using the opportunity to raid the refrigerator.
Ria Farrell Schalnat is a patent attorney with the law firm of Frost Brown Todd LLC. Her practice centers on the prosecution and litigation of patents in the telecom/computer arena. She can be reached for comments at email@example.com.
Disclaimer: The foregoing analysis comprises the personal opinions and analysis of Ria Farrell Schalnat. It does not constitute formal legal advice, nor does it necessarily represent the position of Frost Brown Todd LLC.