Personalized Media Communications, LLC v. Akamai Technologies, Inc. DC

District Judge Rodney Gilstrap has overturned the $308M verdict that Personalized Media Communications, LLC (PMC) won against Apple in March, ruling on August 5 that the NPE’s strategic delay in prosecuting the patent rendered it unenforceable due to the equitable doctrine of prosecution laches. Should it survive a likely appeal, the decision could have a cascading impact throughout the long-running PMC campaign, as the invalidated patent belongs to a 106-member family that forms the bulk of the NPE’s portfolio.

An Eastern District of Texas jury has returned an infringement verdict in litigation filed by Acorn Semi, LLC against Samsung (2:19-cv-00347). On May 19, the jury found that the Samsung had infringed four semiconductor patents through the provision of wafers and processors manufactured using its 14 nm FinFET process technology as well as devices incorporating them, though it concluded that the company’s infringement had not been willful. The verdict also included a $25M damages award.

Last Friday an Eastern District of Texas jury returned a $308M verdict against Apple, having found that the tech giant infringed a single patent held by Personalized Media Communications, LLC (PMC) through the provision of its digital rights management technology, FairPlay. The PMC case against Apple (2:15-cv-01366), filed in July 2015, was stayed for a lengthy stretch in light of inter partes reviews (IPRs) of the patents-in-suit; last March the Federal Circuit revived from cancellation several of the claims of one of those patents, resulting in last week’s trial. That nearly six-year stretch spans only a fraction of this campaign, which began back in 1996—and will likely extend further, as a Federal Circuit appeal of the cancellation of other PMC claims remains pending, discovery in a Southern District of New York case against Netflix proceeds, and District Judge Rodney Gilstrap entertains posttrial motions not only in the Apple case but also in a separate case tried before him last November. That trial went the other way, producing a noninfringement verdict in favor of Alphabet (Google).

On February 13, 2020, the Federal Circuit held in In re: Google (2019-0126) that the “regular, physical presence of an employee or other agent of the defendant conducting the defendant’s business” is required “at the alleged ‘place of business’” to establish venue. The decision undercut an expansive reading of the patent venue statute by District Judge Rodney Gilstrap of the Eastern District of Texas, holding in 2018 (in Seven Networks v. Google) that certain Google servers maintained in an ISP data center were enough to establish venue. Last week, the Federal Circuit indicated that it will not revisit its mid-February ruling, either through a panel rehearing or a hearing of the full court.

The Federal Circuit recently resolved a long-simmering district court split over a controversial venue rule in In re: Google, rejecting a prior decision that the presence of certain Google servers in an ISP data center each qualified as a “regular and established place of business”. Rather, the appeals court held that the “regular, physical presence of an employee or other agent of the defendant conducting the defendant’s business” is required “at the alleged ‘place of business’”—though it clarified that it was not deciding whether a machine could serve as an agent, nor the related question of whether a machine can accept service. NPE Personalized Media Communications, LLC (PMC) has since seized on this language, asserting in another campaign that similarly located Google servers qualify as agents under the Federal Circuit’s holding. Now, both Google and campaign codefendant Netflix have argued to the contrary, countering that machines presently lack the capacity to “consent” to act on behalf of a principal.

Personalized Media Communications, LLC (PMC) has added yet more lawsuits to its long-running litigation campaign, suing Akamai (2:19-cv-00089), Alphabet (Google) (2:19-cv-00090), and Netflix (2:19-cv-00091) in the Eastern District of Texas. With these new complaints, which allege infringement of six patents (with all six at issue against Google and Netflix; five of the six, against Akamai), five of them for the first time in litigation, over 30 patents have now been asserted in PMC’s campaign. The patents belong to a large family, generally related to digital signal processing, with these most recent infringement allegations directed to media playback features within the defendants’ products and services, including a video progress bar and the user interface’s display of a thumbnail corresponding to a playback location on that progress bar; the decryption of encrypted video content; the distribution of media content from multiple storage locations and based on the selected media content; buffering; and the use of content distribution networks (CDNs).