Realtime Data, LLC d/b/a IXO v. Morgan Stanley et al CAFC
- Filed: 09/26/2011
- Closed: 11/09/2012
- Latest Docket Entry: 05/27/2014
June 19, 2021
Sonraí Memory Limited has sued Kingston Technology (8:21-cv-01039) and Western Digital (8:21-cv-01040) over the provision of devices that contain “SanDisk/Toshiba 64L 3D NAND flash chips”, as well as solid state drives (SSDs) that include Silicon Motion SSD controllers (Kingston) or Marvell SSD controllers (Western Digital). These new suits expand a campaign that started in February of this year with Western District of Texas cases against Alphabet (Google), LG Electronics (LGE), and Samsung and that proceeded with separate additional suits filed against Apple, Dell, and Kioxia in April, also in West Texas. The new litigation, by contrast, has been filed in the Central District of California.
October 29, 2020
The Supreme Court’s Alice decision is widely considered to be difficult for courts to apply consistently, a notion regularly acknowledged by judges working through that case’s two-step eligibility test. But as the Federal Circuit recently held, neither the complexity of Alice nor the fact that Section 101 decisions are reviewed de novo on appeal provide an excuse for district courts to skimp on their written analyses. On October 23, the appeals court reversed and remanded an Alice decision by Delaware District Judge Colm Connolly that invalidated five data compression patents asserted by Realtime Data LLC, holding that “this case presents one of those rare circumstances in which a district court’s treatment of a complex and close legal issue is too cursory to allow for meaningful appellate review”.
The decision just overturned was handed down in four separate cases, against Aryaka Networks (1:18-cv-02062), Fortinet (1:17-cv-01635), Reduxio Systems (1:17-cv-01676), and Panzura (1:18-cv-01200)—just a few of the numerous lawsuits filed by Realtime Data in a sprawling campaign that began in 2008 and has since hit more than 130 defendants. Those four companies each filed Alice motions at various points throughout 2018 and 2019, collectively challenging the five patents at issue across their cases (7,415,530; 8,717,203; 9,054,728; 9,116,908; 9,667,751), with Aryaka, Fortinet, and Panzura joining motions already filed in other lawsuits. Reduxio, for its part, alleged in its own motion that the claims of the five patents fail under Alice because “(a) they are directed to the results or effect of abstract ideas involving content dependent/independent compression/decompression untethered to any specific process or device, and (b) can be performed by a mental process, an algorithm, and/or a pen and paper”, all while reciting “only conventional computer components and processes”.
The court scheduled a joint hearing on those motions in July 2019, and asked each party, around a month before that date, to identify in a letter to the court “which Supreme Court or Federal Circuit case that party contends is most similar to the challenged claim(s)”. The defendants chose the Federal Circuit’s April 2017 decision in RecogniCorp v. Nintendo (2016-1499), while Realtime Data selected the August 2017 opinion in Visual Memory v. NVIDIA (2016-2254). The court then held its hearing as scheduled, with that proceeding lasting—as the Federal Circuit later emphasized—just over two hours, including a recess, and for which the “complete oral analysis of the patent eligibility of the 159 claims in the asserted patents fills only five pages of transcript” (per the appellate ruling). At the end of the hearing, Judge Connolly announced that he was “prepared to rule on the pending motions”, informed the parties that he would “not be issuing written opinions”, and stated that he had “‘followed a thorough process before making the decision,’ including considering the briefing and engaging in oral argument”.
It was this lack of explanation, in part, to which the Federal Circuit objected in its October 23 decision on appeal, which was authored by Circuit Judge Kathleen M. O’Malley. While acknowledging that as a result of Alice’s complexity and the specter of de novo review, “district courts might be tempted to opt for an effective coin toss rather than a reasoned analysis when faced with a challenge under § 101”, the Federal Circuit argued that “the system is not supposed to work that way. The parties are entitled to more and the Court of Appeals needs more”. The reason, explained the appeals court, is that a “district court opinion ‘must contain sufficient findings and reasoning to permit meaningful appellate scrutiny’”. “De novo appellate review certainly does not justify resolving a complex legal issue without an opinion or reasoned analysis”, the Federal Circuit further emphasized—finding that, “[u]nfortunately, that is exactly the type of improper justification the district court proffered in this case”.
On that front, the Federal Circuit found that Judge Connolly’s decision—limited solely to the hearing transcript by reference—lacked the requisite findings and legal analysis. What the record did show through the transcript led the Federal Circuit to conclude that Judge Connolly’s reasoning was either unclear, or possibly even problematic.
The Federal Circuit identified four key issues presented by this limited record. First, it found that “the colloquy between the district court and Realtime leaves us unclear as to the true basis for the district court’s decision”—noting that rather than focusing on whether the claims were “directed to” an abstract idea, the court appeared to focus more on whether certain claim limitations were “novel”. Additionally, the Federal Circuit thrice highlighted Judge Connolly’s observation “that the claimed invention of the ’751 patent was ‘obvious’—but not in the patent sense, ‘like it’s common sense’”. While noting that novelty and nonobviousness may come into play at certain points of the Section 101 inquiry, it held that “they are rarely issues appropriate for resolution on the pleadings”—particularly “where, as here, Realtime repeatedly contested as factually incorrect propositions posited by the district court”. If those issues were ultimately relevant, continued the appeals court, it would be at step two of the Alice test (which focuses on whether a claim contains an inventive concept) and not step one (whether a claim is “directed to” an “abstract idea”). In the absence of a more fulsome record, ruled the Federal Circuit, “it is difficult to discern what part of the court’s concerns with the claims were directed to which step of the Alice analysis”.
Second, the Federal Circuit indicated that “to the extent the court purported to answer the Alice step 1 ‘directed to’ question, it is unclear that it did so correctly”—focusing on the fact that Judge Connolly appears to have not identified a representative claim, in which case it was “incorrect to consider whether a patent as a whole is abstract”. To the extent that Judge Connolly’s “analysis simply generalized the claims”—which the Federal Circuit posited that it did, as it apparently omitted “key aspects of the claims”—the appeals court held that this would have been a legal error.
Third, the Federal Circuit faulted Judge Connolly for not “address[ing] or even acknowledg[ing]” a pair of recommendations issued by Magistrate Judge John D. Love of the Eastern District of Texas that “considered the patent eligibility of the ‘728, ‘530, and ’908 patents, as well as the eligibility of members of the ’203 and ’751 patents’ families, in two separate cases” filed by Realtime Data against Carbonite and Actian, recommending that the patents be deemed eligible. In both cases, remarked the Federal Circuit, the presiding judge adopted Judge Love’s recommendations: “Judge Robert W. Schroeder III of the Eastern District of Texas and, due to an intervening transfer, Judge William G. Young of the District of Massachusetts—each with significant experience in patent cases”. Although the Federal Circuit noted that Judge Connolly was under no obligation to follow those conclusions, it held that he “should have, at a minimum, provided a considered explanation as to why those judges were wrong”. Rather than expressly or implicitly addressing Judge Love’s reasoning, “the court recited a series of legal conclusions and § 101 cases, without analysis. That simply was not enough”, underscored the Federal Circuit.
Fourth, the Federal Circuit took issue with the fact that Judge Connolly did not “address or distinguish” the Visual Memory case cited by Realtime Data as exemplary at the court’s request, nor any related case law. Moreover, while Judge Connolly did acknowledge the defendant’s citation of RecogniCorp, the Federal Circuit flagged his short summary of that case’s holding—and his conclusion that “[t]hat’s what we have here”, with no further explanation—as problematic in their brevity. Although it stated that it was not taking a position on the merits of either parties’ chosen case analogies, the Federal Circuit “merely note[d]” that on this issue, “the district court did not do enough”.
Circuit Judge Alan D. Lourie concurred, arguing that “[t]he foundation of a proper determination of the eligibility of claimed subject matter under 35 U.S.C. § 101 and the framework of [Alice] . . . is an accurate identification of the focus of the claimed advance at Alice’s Step 1, to be followed (if necessary) by an accurate identification of all specifics of the claims at Alice’s Step 2”—without overgeneralizing the claims, as the court did here. “In the present cases”, continued Judge Lourie, “the district court erred at the foundational stage”, as its “truncated characterization of claim 1 of the ’728 patent, and of some or all of the other claims at issue, created an incorrect starting point for the required analysis”, with similar errors apparent in the “colloquies between the district court and counsel”. By “disregard[ing] limitations, in at least some of the patent claims at issue, that are part of the focus of the asserted advances”, Judge Connolly “overgeneralized, or oversimplified, the claims in [a] fundamental way” and thus “failed to conduct the inquiries required under the branch of § 101 doctrine relevant here”—which, to Judge Lourie, justified the “unusual step” of reversing the court’s ruling without first addressing it de novo.
While the Federal Circuit’s decision here is nonprecedential, it may nonetheless give pause to judges tempted to issue shorter rulings on Alice—especially those inclined to rule on such eligibility disputes from the bench. More to the point, the appeals court’s opinion may be of particular relevance for the District of Delaware, which has on occasion seen its judges engage in a practice commonly known as a “Section 101 Day”—wherein on a given day, a district judge will hear multiple Alice motions from unrelated cases and issue oral rulings from the bench, one after another. Orders issuing from such motions have tended to limit their analysis to language incorporated from the hearing transcript.
For details on one such omnibus hearing, see “Third ‘Section 101 Day’ in Delaware—This One Not Held by Judge Stark—Leads to Disparate Results” (October 2019).
MDL Panel Denies Realtime Adaptive Streaming’s Transfer Motion as Parent Files New Data Compression SuitsAugust 10, 2018
Prolific litigant Realtime Data LLC (RTD) saw its long-running litigation campaign splinter off into a variety of new districts in the wake of the US Supreme Court’s decision in TC Heartland, both through transfers (typically from Texas to California) and through new filings. The campaign’s defendant count now tops 110, with court disclosures revealing that the NPE has received funding from public litigation fund Juridica Investment Limited and Brickell Key Investments LP (which is handling Juridica’s run-off). Amidst that expansion, RTD subsidiary Realtime Adaptive Streaming LLC (RTAS)—which joined the campaign in September 2017, asserting a family of homegrown video compression patents—moved in April 2018 to consolidate various pending lawsuits in either Texas or Colorado, the latter of which has in particular seen many new filings by RTD and RTAS since TC Heartland. However, that effort hit a wall earlier this month, when the Judicial Panel on Multidistrict Litigation (JPML) denied the motion. Meanwhile, RTD has filed eight new suits in Delaware throughout early August, asserting a well-worn set of data compression and storage acceleration patents against Hitachi, Nutanix, and SoftNAS, among others.
July 7, 2018
In June 2018, the Patent Trial and Appeal Board (PTAB) saw petitioners wage validity challenges against a variety of prominent NPEs. Among those hit by petitions for AIA review in June was Intellectual Ventures LLC (IV), which has not filed any new litigation in the US since October 2017, but continues to assert patents overseas; and NPEs affiliated with Fortress Investment Group LLC and Industrial Technology Research Institute. Also in June, the PTAB instituted trial for two IPRs against affiliates of top litigant IP Edge LLC, which remains the most prolific patent plaintiff of the past 18 years by the number of defendants added to US patent suits. In addition, the Board issued final decisions in IPRs against IV, the California Institute of Technology, inventor Daniel L. Flamm, and frequent litigants Realtime Data LLC and Uniloc Corporation Pty. Limited.
June 8, 2018
Throughout May 2018, the Patent Trial and Appeal Board (PTAB) saw activity in multiple long-running campaigns, including challenges brought against patents and plaintiffs with colorful and tangled litigation histories. The Board saw petitions for AIA review brought in May against Publishing Technologies LLC, an NPE controlled by patent attorney and frequent litigant Bradley D. Liddle; in the mobile devices campaign waged by AGIS Software Development LLC; and in the networking campaign brought by XR Communications, LLC. Also in May, the Board instituted trial for inter partes reviews (IPRs) against Iridescent Networks, Inc. and Oyster Optics, LLC. Final decisions issued in May include three against prolific plaintiff Realtime Data LLC, which saw claims cancelled from one of its data compression patents while another two survived unscathed, as well as final decisions cancelling claims from patents held by General Patent Corporation and VirnetX Holding Corporation.
Realtime, Both Data and Adaptive, Keep On Filing New Cases, Most Recently Against Charter, Comcast, Cox, and FacebookJune 8, 2018
Both Realtime Data LLC (RTD) and its subsidiary Realtime Adaptive Streaming LLC (RAS) recently added cases to their respective wings of what has become one of the longest-running, widest-ranging active litigation campaigns. RTD asserted three familiar data compression patents against Facebook (1:18-cv-01373), targeting its Zstandard compression algorithm, as well as products and services “that incorporate the algorithm”. Meanwhile, RAS tagged Charter Communications (1:18-cv-01345), Comcast (1:18-cv-01446), and Cox Communications (8:18-cv-00942), asserting three equally familiar video compression patents against the companies’ respective broadcasting services, training infringement allegations—as it has in most of its cases in this campaign—on the use of the H.264 video compression to standard “to deliver HD video broadcasting products/services” to customers.
Realtime Adaptive Streaming Files More Cases in Colorado and Texas, Asks MDL Panel to Transfer Earlier Suits to ColoradoMay 17, 2018
The number of defendants in the sprawling litigation campaign of Realtime Data LLC (RTD) and its subsidiary Realtime Adaptive Streaming LLC (RAS) has now topped 100, with the latter entity’s new suits against AMD (1:18-cv-01173), Intel (1:18-cv-01175), LG Electronics (LGE) (6:18-cv-00215), and Mitel Networks (1:18-cv-01177), filed last week. RAS accuses the defendants of infringement through the provision of products that support the H.264 video compression standard, including its Scalable Video Coding feature/extension (which allows a video bitstream to contain a subset bitstream that can comprise a lower-resolution or lower-quality version of the video). The accused AMD products include GPUs and APUs incorporating its Video Coding Engine; the accused Intel products, QuickSync Video implemented in Intel Core I9-8950HK, Intel Core i7-8850H, Intel Core i7-8750H, Intel Core I5- 8500B, and Intel Core i3-8300T processors; LGE, smartphones, hybrid recording DVRs, video servers, and surveillance systems; Mitel, video communications products and routers.
May 5, 2018
Last week saw a barrage of new complaints filed in the long-running campaign litigated by Realtime Data LLC (RTD) and its subsidiary Realtime Adaptive Streaming LLC (RAS). RTD asserted overlapping subsets of patents from its data compression portfolio in new cases against Cloudera (1:18-cv-00653), Huawei (6:18-cv-00182), and IBM (6:18-cv-00188). Meanwhile, RAS filed complaints asserting overlapping subsets of patents from its video compression portfolio against Alphabet (Google) (2:18-cv-03629), Avaya (1:18-cv-01046), Broadcom (1:18-cv-01048), and Wowza Media (1:18-cv-00927). With these new cases, the number of defendants in this sprawling litigation campaign now approaches 100, with the number of patents asserted holding steady at just shy of 40 and the number of petitions for inter partes review (IPR) of various of those patents topping 50.
April 6, 2018
In March 2018, the Patent Trial and Appeal Board (PTAB) saw petitions for inter partes review (IPR) filed in a variety of notable campaigns, including those waged by publicly traded Quarterhill Inc.; privately held XR Communications, LLC; and inventor Leigh M. Rothschild. The Board also instituted trial throughout March in campaigns brought by Oyster Optics, LLC and Uniloc Corporation Pty. Limited. In addition, the PTAB granted in March a motion to amend in two IPRs against prolific plaintiff Realtime Data, LLC, also issuing final decisions involving patents asserted by Uniloc; Papst Licensing GmbH & Company Kg; Evolved Wireless LLC; Game and Technology Co., Ltd; and TQ Delta LLC.
March 16, 2018
The Patent Trial and Appeal Board (PTAB) saw activity in a variety of notable campaigns throughout February 2018, with petitions for inter partes review (IPR) filed against publicly traded Quarterhill Inc. as well as Fundamental Innovation Systems International LLC, Intellectual Ventures LLC, Realtime Data LLC, and Uniloc Corporation Pty. Limited. The Board also instituted trial in February for IPRs against General Patent Corporation, Oyster Optics, LLC, and Uniloc. In addition, the PTAB issued final decisions throughout February in IPRs against a range of different patent owners, including publicly traded NPEs (Acacia Research Corporation; InterDigital, Inc.; and VirnetX Inc.), an individual inventor (Daniel L. Flamm), and privately held plaintiffs (ChanBond, LLC; Makor Issues & Rights Ltd.; Papst Licensing GmbH & Company Kg; and Personalized Media Communications, LLC).
March 10, 2018
So far in 2018, Realtime Adaptive Streaming LLC (RAS) has filed two new cases in the sprawling campaign that its parent entity, Realtime Data LLC (RTD), has been litigating since April 2008 and that it joined as a plaintiff last August. The new suits accuse Adobe (1:18-cv-10355) and Samsung (6:18-cv-00113) of infringing the same set of seven patents, five of which are drawn from a homegrown family of nine video compression patents, and the other two of which, broadly concerning similar subject matter, have been recently acquired. The accused devices include a long list of Adobe products and an even longer list of Samsung products (including EXYNOS application processors, smartphones, tablets, DVRs, Blu-ray players, cameras, and surveillance cameras) that operate in compliance with the H.264 and/or H.265 video compression standards. RAS’s latest cases bring its campaign defendant count to nearly 90.
January 2018 PTAB Activity Spans Several Market Sectors and Includes Challenges Against Frequent LitigantsFebruary 2, 2018
The Patent Trial and Appeal Board (PTAB) saw petitions for inter partes review (IPR) filed in large campaigns affecting a variety of market sectors in January, including the automotive campaign waged by Intellectual Ventures LLC; frequent plaintiff Realtime Data LLC’s long-running data compression and media streaming campaign; the USB device charging campaign brought by Fundamental Innovation Systems International LLC; and the mobile device campaign run by IPA Technologies Inc., a subsidiary of publicly traded Quarterhill Inc. The Board instituted trial in January for petitions against Realtime Data and in the sprawling, 12-year anti-malware campaign still being litigated by publicly traded Finjan Holdings, Inc. The PTAB also issued final decisions in January in IPRs against Realtime Data; ChriMar Systems, Inc.; and IP Bridge, Inc.
December 2, 2017
Realtime Adaptive Streaming LLC (RAS) has sued Apple (1:17-cv-02869), asserting four members of its homegrown family of video compression patents, as well as the two patents that it appears to have acquired some time before it began litigating them in cases filed against Netflix and Sony last week. At issue with respect to the homegrown patents are Apple’s streaming services (e.g., iTunes Store, Apple Music) and related products, including the iPhone, iPad, Apple TV, Mac, iPod, and Apple Watch (“devices with iOS 3.0 and later and computers with Safari 4.0 and later”). As to the two acquired and asserted patents, RAS targets Apple products and services that implement the H.265 video compression standard, including the iPhone, iPad, Apple TV, Mac, iPod, Apple Watch, and iMovie, as well as macOS High Sierra, iOS 11, and Quicktime.
Realtime Adaptive Streaming Begins Asserting One Patent Acquired from Sisvel and Another from Two German ProfessorsNovember 24, 2017
Thanksgiving week provided no break in filing for related plaintiffs Realtime Data LLC (RTD) and Realtime Adaptive Streaming LLC (RAS). The latter sued Netflix (1:17-cv-01692) and Sony (1:17-cv-01693) over the same six video compression patents, asserting a seventh such patent in the case against Sony. As it has in all of its complaints, RAS accuses the new defendants of infringement through provision of products and services operating in compliance with the H.264 (or H.265) video compression standard. In particular, RAS targets Netflix’s streaming service, while Sony is alleged to infringe through a wide range of devices, including video security cameras, still and video cameras, video recorders and satellite receivers, various models of PlayStation, smart TVs and set-top boxes for streaming media, and Blu-Ray and DVD players. Meanwhile, RTD has added to the campaign a suit accusing Reduxio Systems (1:17-cv-01676) of infringement through provision of software and/or services (and related hardware) offering data compression and deduplication features.
Realtime Data and Realtime Adaptive Streaming Each Add a New Case as Their Campaign Scatters and Another Texas Trial ApproachesNovember 17, 2017
So far in November, a new case has been added to each portion of a long-running, chaotic litigation campaign, one waged by Realtime Data LLC (RTD), the New York plaintiff involved from the campaign’s beginning, and the other waged by Realtime Adaptive Streaming LLC (RAS), a Texas subsidiary of RTD only involved in the campaign since this past August. RTD has filed suit against Fortinet (1:17-cv-01635) in the District of Delaware, asserting four data compression patents, already at issue in other cases brought by RTD, against Fortinet’s network security products Fortigate and Fortigate IPS. Meanwhile, RAS has filed suit against Polycom (1:17-cv-02692) in the District of Colorado, asserting five video compression patents, already at issue in earlier RAS cases, against Polycom’s telepresence and other video communication products that use the H.264 video compression standard. These new suits follow the cancellation by the PTAB of claims from one of the most frequently asserted RTD patents.
October PTAB Activity Includes Petitions Against Repeat Players and Cancellation of Claims from Realtime Data PatentNovember 2, 2017
In October 2017, the Patent Trial and Appeal Board (PTAB) saw the filing of petitions for inter partes review (IPR) against a variety of frequent litigants, including publicly traded NPEs Acacia Research Corporation and Xperi Corporation, as well as privately held Monument Patent Holdings, LLC and Uniloc Corporation Pty. Limited. The Board also instituted trial in October for IPRs against multiple Acacia subsidiaries, Uniloc, and Papst Licensing GmbH & Company Kg. In addition, the PTAB issued an IPR final decision cancelling multiple claims from a data compression patent held by prolific plaintiff Realtime Data LLC, including the single claim that Riverbed Technology (one of the petitioners for the IPR) was found to infringe in a $4.3M verdict in May, with other final decisions issued in campaigns waged by TQ Delta LLC and publicly traded Quarterhill Inc. IPRs against IP Bridge, Inc. and Mobile Telecommunications Technologies, LLC also ended in termination in October after the patent owners requested adverse judgments.
Realtime Data and Realtime Adaptive Streaming Each Add More Cases to Their Long-Running, Sprawling CampaignOctober 20, 2017
This past week saw new lawsuits from each of two NPEs affiliated with Gerald Padian and Richard Tashjian, partners in the New York law firm Tashjian & Padian, waging a single litigation campaign, Realtime Data LLC since April 2008 and Realtime Adaptive Streaming LLC since August 2017. Realtime Data added cases against Code42 Software (1:17-cv-02479) and Nexenta Systems (2:17-cv-07690) to the portion of the campaign litigating patents generally related to data compression or to accelerated loading of operating systems and applications upon system boot or application launch. Meanwhile, Realtime Adaptive has sued Hulu (2:17-cv-07611) and Cisco (6:17-cv-00591) over patents broadly directed to video and audio data compression and distribution. The number of defendants in the Realtime campaign has now topped 75.
October 7, 2017
In September 2017, the Patent Trial and Appeal Board (PTAB) saw more than ten petitions filed in NPE campaigns involving networking and related technologies such as cybersecurity, including those waged by publicly traded Finjan Holdings, Inc.; prolific private litigant Realtime Data LLC; and Oyster Optics, LLC. Trial was instituted in September for an inter partes review (IPR) against Finjan and in IPRs against other frequent plaintiffs, including MyMail, Ltd. and Sound View Innovations, LLC. The Board issued final decisions in two covered business method (CBM) reviews against Uniloc Corporation Pty. Limited, the first AIA reviews against the NPE to reach final decisions since March 2016, and only the fourth to date. The PTAB also issued final decisions in IPRs against publicly traded Document Security Systems, Inc. as well as Acceleration Bay, LLC; Mobile Telecommunications Technologies, LLC; and Personalized Media Communications, LLC; among other NPEs.
September 30, 2017
At the beginning of summer, RPX noted, in reporting the roughly $4M jury verdict in favor of Realtime Data LLC against Riverbed Technologies, that Gerald Padian and Richard Tashjian, that NPE’s founders, had changed the name of another entity that they had formed in 2016 to Realtime Adaptive Streaming LLC (RAS). In March, Realtime Data assigned a family of seven data compression and storage patents to the RAS. Now, as the trial court considers post-trial motions and after two more patents have issued in the same family, RAS has filed suit. Last week, the NPE sued Amazon (6:17-cv-00549) over three of its patents, targeting the company’s video streaming services, including Amazon Video, as well as its tablets and “television peripherals”, including Amazon Fire, Kindle Fire, and Fire TV Stick.
September 1, 2017
The Patent Trial and Appeal Board (PTAB) saw the number of petitions for AIA review filed against NPEs drop by more than half in August 2017, down to 30 petitions from 68 in July. Petitions were brought in August against publicly traded Finjan Holdings, Inc., inventor Leigh M. Rothschild, and a mix of prolific private litigants, including Blackbird Tech LLC, Realtime Data LLC, and Uniloc Corporation Pty. Limited. Meanwhile, the Board instituted trial in August for petitions against a variety of entities, including the California Institute of Technology and publicly traded Quarterhill Inc. as well as IP Bridge, Inc.; Realtime Data; and Uniloc. The PTAB also issued final decisions throughout August in campaigns waged by publicly traded Acacia Research Corporation; Advanced Touchscreen and Gesture Technologies, LLC; Elm 3DS Innovations LLC; and Rosetta-Wireless Corporation.
July PTAB Activity Includes Petitions Against Repeat Players and Decisions in Networking and Semiconductor CampaignsAugust 4, 2017
The Patent Trial and Appeal Board (PTAB) continued to see petitions for AIA review filed against prolific litigants in July, including a wave of petitions against Uniloc Corporation Pty. Limited across four separate campaigns, with petitions also brought against General Patent Corporation, Intellectual Ventures LLC (IV), Papst Licensing GmbH & Company Kg, and Quarterhill Inc. Meanwhile, throughout July, the Board instituted trial for inter partes reviews (IPRs) filed in semiconductor campaigns waged by Harvard University and the California Institute of Technology, with trial also instituted in campaigns related to network data compression (Realtime Data LLC), servers and data management (IV), and anti-malware technology (Finjan Holdings, Inc.). Final decisions issued by the Board in July included one that cancelled claims from a patent that has been asserted by Rothschild Connected Devices Innovations, LLC, an NPE controlled by inventor Leigh M. Rothschild, against more than 60 defendants.
July 14, 2017
In recent weeks, two federal judges have held that the filing of Alice motions and other briefs served as the waiver of an improper venue defense in cases in which defendants had explicitly reserved their right to challenge venue in initial pleadings. On July 5, District Judge Marilyn L. Huff of the Southern District of California denied a motion to dismiss due to improper venue filed by HTC in a case filed by InfoGation Corporation (3:16-cv-01902), citing the defendant’s February motion for judgment on the pleadings under Alice as a dispositive factor. Similarly, on July 11, Magistrate Judge John D. Love of the Eastern District of Texas issued a report and recommendation that a motion to dismiss due to improper venue filed by Carbonite should be denied, in one of the many cases filed by Realtime Data LLC (6:17-cv-00121).
July 8, 2017
The Patent Trial and Appeal Board (PTAB) saw petitions for AIA review filed against a variety of prolific litigants in June 2017, including General Patent Corporation, Intellectual Ventures LLC (IV), Quarterhill Inc. (f/k/a Wi-LAN Inc.), Realtime Data LLC, Uniloc Corporation Pty. Limited, and Xperi Corporation (f/k/a Tessera Holding Corporation). Also in June, the PTAB instituted trial for petitions brought against patents asserted in a variety of sprawling campaigns, including some waged by Acacia Research Corporation, IV, Papst Licensing, Quarterhill, and VirnetX Inc. The Board further issued final decisions throughout June in AIA reviews against patents involved in several notable campaigns, including some waged by Document Security Systems, Inc., Elm 3DS Innovations LLC, Empire IP LLC, and Quarterhill.
June 8, 2017
Since the US Supreme Court issued its decision in TC Heartland v. Kraft Foods Group Brands, RPX has seen an upswing in venue-related filings by both plaintiffs and defendants—with indications that some NPEs may be throwing in the towel on Texas, while others are seemingly digging in. Defendants have also begun to adapt their defensive strategies, asserting more comprehensive interpretations of the patent venue statute and proactively maintaining their right to bring venue challenges down the road.
TC Heartland returned a key portion of the patent venue statue, one that allows infringement suits to be brought where a defendant corporation “resides”, to its prior interpretation: such a defendant “resides” only in its state of incorporation. Although venue is still proper under the same statute where a defendant has “committed acts of infringement” and has “a regular and established place of business”, the ruling could significantly limit available venues—potentially impacting both new filings and existing lawsuits.
RPX has been tracking activity in each of those categories since TC Heartland issued. To receive RPX’s new daily transfer alert email summarizing all transfer motions and orders, subscribe here.
Evolving NPE Responses
Conceding to Transfer
RPX has seen a variety of cases in which NPEs, including prolific Texas plaintiffs, have simply conceded the issue of venue since TC Heartland issued. On May 30, Texas-based Monument Patent Holdings, LLC subsidiary Visual Effect Innovations, LLC stipulated to the transfer of its case against NVIDIA (a Delaware corporation headquartered in Santa Clara) from the Eastern District of Texas to the Northern District of California. The parties’ joint stipulation explicitly cited TC Heartland. Texas plaintiff Hypermedia Navigation LLC, an affiliate of monetization firm IP Valuation Partners LLC, made a similar concession in its case against Yahoo (a Delaware corporation headquartered in Sunnyvale), with both parties filing a joint motion to transfer that lawsuit to the same California district. Both Monument and IP Valuation Partners have both taken advantage of the Eastern District of Texas through the formation of multiple NPEs in the state, each designed to wage a single campaign in the Eastern District. RPX will continue to monitor whether those patterns continue as the effects of TC Heartland become clearer.
Picking New Venues
Other plaintiffs have fought back by dismissing existing cases and re-filing in districts where they consider venue to be proper under the Court’s decision. For example, prolific litigant IP Edge LLC (the top filer in 2017 thus far) has begun to shift its assertion efforts outside Texas. Just three days after TC Heartland issued, the NPE’s affiliate Venadium LLC filed five new cases in the Northern District of Illinois: three against Paylocity, State Farm Mutual Automobile Insurance, and W.W. Grainger—each alleged to reside in that district—as well as two cases against Delaware entities Allstate Insurance and Hyatt Hotels that are alleged to have a principal office in Illinois.
Additionally, Iron Oak Technologies LLC voluntarily dismissed two of its Northern District of Texas cases on June 1, conceding that it is “unaware” of defendants Acer (incorporated in California) or Lenovo (incorporated in Delaware) “having a regular and established place of business” in that district. (See here for the stipulation of dismissal as to Acer, and here for the one pertaining to Lenovo.) That same day, the NPE then filed new actions against both defendants in the Western District of Texas, attaching to its complaints evidence that each has a remote office in the district. Similarly, Express Mobile, Inc.—faced with an existing motion to dismiss due to improper venue brought by defendant Alpine Consulting—notified the district court on the day that TC Heartland was published that it would not oppose that motion. Also that day, the NPE then filed a new case against Alpine in the Northern District of Illinois.
INVT SPE LLC, an NPE controlled by Fortress Investment Group LLC (which took over a campaign started by Inventergy, Inc.) followed that same strategy. On May 25, it both dismissed two suits filed against Apple and HTC in February (one each in the Eastern District of Texas) and filed two new suits against the two defendants in the District of New Jersey. While the previous complaints merely contained short, boilerplate language to establish venue, the new filings make specific allegations supporting its contention that venue is proper in New Jersey, including that the companies have retail locations in New Jersey, have employees in that state that interact with wireless carriers there, and actively list job openings in that district. (See here for the complaint against Apple, and here for the one against HTC.)
Doubling Down on Texas
While some NPEs have attempted to get ahead of TC Heartland, some have doubled down on their venues of choice—particularly the notoriously plaintiff-friendly Eastern District of Texas. A notable example occurred toward the end of last week, when Australian NPE Uniloc Corporation Pty. Limited filed a new set of complaints, some amended and others original, in the Eastern District against Google. While its previous pleadings had dedicated scarcely a paragraph or two to venue, Uniloc’s newest filings provide expansive venue-related allegations spanning over thirty pages. (See here for one of the new complaints against Google.) The NPE now prefaces its venue pleadings with a lengthy accounting of the defendant’s supposed connections to the Eastern District, listing a wide variety of Google products made available and supposedly used by customers there along with other alleged connections to the forum, including Google business locations, data collection efforts, and even its provision of services measuring traffic conditions. Uniloc has not felt the need for such extensive venue-related pleading in all of its new cases in the Eastern District—a new round of cases against Apple, also brought last week, contain the NPE’s more standard, minimal venue language.
Roping in Foreign Defendants
RPX has also begun to see early examples of cases addressing the issue of venue for foreign defendants, which the Supreme Court explicitly declined to discuss in TC Heartland. On May 31, CyWee Group Ltd., a British Virgin Islands entity affiliated with Industrial Technology Research Institute (ITRI), sued LG Electronics (LGE) in the Southern District of California along with two of its US subsidiaries, LG Electronics Mobilecomm USA (LGEMU) and LG Electronics USA (LGEUSA). The NPE’s complaint asserts that venue is proper in that district for LGEMU based on its incorporation in California. CyWee then pleads that LGEMU is an agent of LGEUSA, noting several ways that those entities have allegedly been equated with LGE in public communications. Venue is alleged to be proper against the South Korean corporate parent both because “it is not a resident of the United States and may, therefore, be sued in any judicial district” and because it has a “regular and established place of business” in the district through its purported agents (and has allegedly committed acts of infringement in the district).
Evolving Defensive Strategies
Moving Beyond Residence
While venue motions filed in the immediate wake of TC Heartland focused on corporate residence, RPX has more recently seen an increasing number of defendants asserting improper venue due to the lack of a “regular and established place of business” in the original district. One such example occurred this past week in the sprawling campaign waged by Realtime Data LLC. Less than two weeks after a jury in the Eastern District of Texas awarded the NPE $4.32M in a trial against Riverbed Technologies, that same defendant filed a declaratory judgment action against Realtime Data in the Northern District of California. In the new complaint, Riverbed pleads that because it is not incorporated in Texas and does not have a “regular and established place of business” in the Eastern District of Texas, venue is not proper there. Meanwhile, Realtime Data faces reinvigorated venue challenges in other cases in its Texas campaign, including a motion to dismiss for improper venue or transfer to the District of Colorado brought by Spectra Logic (under a TC Heartland theory, prior to the decision’s issuance), a motion to dismiss for improper venue filed by Barracuda Networks, and a motion to dismiss for improper venue filed by Carbonite. In addition, on May 30, Huawei challenged the choice of venue in a case brought by Smart Wearable Technologies Inc., a subsidiary of Wi-LAN Inc. (which changed its name to Quarterhill Inc. on June 1 as part of a business re-organization and shift away from patent assertion). That motion alleges that venue is not proper in the Western District of Virginia, asserting that as a Texas corporation, defendant Huawei Technologies does not reside in the Western District of Virginia. Huawei also argues that it lacks a “regular and established place of business” in that district.
Additionally, some defendants have tacked venue challenges onto motions to dismiss for pleading inadequacies, arguing that the plaintiff had not sufficiently pled acts of infringement anywhere, much less in the suit’s venue. On May 25, Apple filed a Rule 12 motion to dismiss in a case brought against it by Prowire LLC in the District of Delaware. The company asserts that the NPE has not plausibly alleged infringement of the asserted claims, making that venue improper as a result because venue is only proper in a district where the defendant has “committed acts of infringement and has a regular and established place of business”. A similar argument was asserted by Lowes in a June 1 motion to dismiss filed against Monument Patent Holdings, LLC subsidiary Clean Energy Management Solutions, LLC.
At least one defendant has withdrawn a prior motion to change venues for convenience in light of TC Heartland. For example, on June 5, District Judge Robert W. Schroeder, III granted Dell’s motion to withdraw such a motion in a case filed against it by Cypress Lake Software, Inc., in favor of a future motion to dismiss for improper venue, which need not address the relative convenience of the two districts or public interest factors.
Prevention of Waiver
One potential consequence of TC Heartland is that defendants relying on the previous definition of corporate residence may have waived their ability to challenge venue in existing suits. RPX has seen parties proactively preserve their ability to challenge waiver in pleadings and motions, both since TC Heartland and in the months leading up to the decision, with defendants sometimes explicitly stating that they have reserved those rights in anticipation of TC Heartland. Two days after TC Heartland was decided, STMicro filed a motion to dismiss an Eastern District of Texas case that Semcon IP Inc. (a subsidiary of Quest Patent Research Corporation) brought against it roughly one year ago. Heading off any waiver argument, STMicro notes that it pled improper venue as an affirmative defense in its answer to Semcon IP’s complaint, that the TC Heartland theory was not available before May 22, and that, once the decision came down, it filed its motion within two days. A similar argument was raised by NVIDIA in the transfer motion that it filed in the Texas Visual Effect Innovations case, with a footnote expressly stating it had not conceded proper venue by seeking a transfer for convenience and reserving the right to object after TC Heartland was decided.
June 2, 2017
Less than two weeks ago, a jury in the Eastern District of Texas awarded Realtime Data LLC $4.32M in damages for infringement by Riverbed Technology of one (8,643,513) of two patents taken to trial in that case. The jury found the asserted claims of the other patent (7,415,530) invalid for obviousness in light of certain prior art. The case was filed in May 2015 as part of Realtime Data’s sprawling campaign, which includes a second case against Riverbed, filed just this past April. In light of the TC Heartland decision, Riverbed Technologies has taken steps to litigate the two patents at issue there (8,717,204; 8,719,438) in the Northern District of California instead, filing a complaint seeking declaratory judgments of non-infringement. In the new complaint, Riverbed pleads that because it is not incorporated in Texas and does not have a “regular and established place of business” in the Eastern District of Texas, venue is not proper there. Meanwhile, Realtime Data faces reinvigorated venue challenges in other cases in its Texas campaign.
June 1, 2017
The Patent Trial and Appeal Board (PTAB) saw 54 petitions for AIA review brought against NPEs in May, up from 20 such petitions filed in April. May PTAB filings included a resurgence in petitions against publicly traded NPEs, including Acacia Research Corporation; Pendrell Corporation; Quest Patent Research Corporation; VoIP-Pal.com, Inc.; Xperi Corporation (f/k/a Tessera Holding Corporation); and Wi-LAN Inc. (WiLAN) (which was renamed to Quarterhill Inc. on June 1). A variety of private litigants were also hit by PTAB petitions in May, including Blackbird Tech LLC, Global Equity Management (SA) Pty. Ltd., General Patent Corporation, Realtime Data LLC, and Uniloc Corporation Pty. Limited.
April 27, 2017
As the data compression campaign of Realtime Data LLC, begun in 2008, passed its ninth-year anniversary in mid-April, the NPE saw two of its Texas cases, one against Fujitsu and Quantum (3:17-cv-02109) and the other against HPE and Silver Peak Systems (3:17-cv-02373) transferred to the Northern District of California. Also in April, Realtime Data filed another case (6:17-cv-00198) against Riverbed Technologies, asserting two patents, one (8,717,204) already at issue against many defendants in the campaign and another (8,719,438) that the new complaint appears to have added to the campaign for the first time. All of this activity comes as the NPE’s most advanced case back in Texas, an earlier suit filed against Riverbed Technologies, continues furiously toward a May 22, 2017 trial. One of three cases that Realtime Data has filed against Oracle was scheduled for trial on that same day; the deadline in the stay order to submit dismissal papers in that case passed on Friday.
April 7, 2017
The Patent Trial and Appeal Board (PTAB) continued to see the filing of petitions for inter partes review (IPR) against publicly traded NPEs in March 2017, including Acacia Research Corporation; Finjan Holdings, Inc.; Pendrell Corporation; TiVo Corporation (formerly known as Rovi Corporation); and Wi-LAN Inc. (WiLAN). A variety of prolific, privately held NPEs were also targeted for IPR throughout March, including Blackbird Tech LLC, General Patent Corporation, IP Edge LLC, Realtime Data LLC, and Papst Licensing GmbH & Company Kg, along with several inventors and inventor-controlled NPEs and an assortment of other plaintiffs.
Unfazed by Looming Texas Trials in an Already Sprawling Campaign, Realtime Data Adds Yet More DefendantsMarch 3, 2017
After filing a third case against Oracle (6:17-cv-00046) in January of this year, and with two trials scheduled to begin on May 22, 2017, Realtime Data LLC has added nine more suits to a data compression campaign that now approaches its nine-year anniversary. The new defendants are Acronis (6:17-cv-00118), Array Networks (6:17-cv-00119), Barracuda Networks (6:17-cv-00120), Carbonite (6:17-cv-00121), Circadence (6:17-cv-00122), CommVault Systems (6:17-cv-00123), Exinda (6:17-cv-00124), Netgear (6:17-cv-00125), and Synacor (6:17-cv-00126). Throughout the campaign, Realtime Data has targeted certain servers and storage hardware; the NPE asserts four patents (7,415,530; 8,717,204; 9,054,728; 9,116,908) against eight of the nine new defendants, omitting infringement of the ‘204 patent from its complaint against Synacor and adding allegations of infringement of a fifth patent (7,358,867) against Circadence.
January 27, 2017
Realtime Data LLC has added a third Texas case against Oracle (6:17-cv-00046) to its data compression campaign, now in its ninth year of litigation, asserting eight patents (6,597,812; 6,748,457; 7,358,867; 7,376,772; 8,502,707; 8,643,513; 8,717,204; 9,054,728) against various products related to data storage and networking. Oracle systems and services using certain database compression technologies are at issue, with those utilizing the company’s Hybrid Columnar Compression technology alleged to infringe the ‘812, ‘867, ‘707, ‘513, ‘204, and ‘728 patents and those incorporating its Advanced Row Compression feature further accused of infringing the ‘867 patent. The ‘867 patent is also asserted against Oracle’s Essbase, a platform for business analytics, modeling, and forecasting. In addition, the complaint targets certain servers and storage hardware, with the Oracle SPARC Solaris alleged to infringe the ‘457 patent and the company’s ZFS Storage Appliance accused of infringing the ‘722 patent.