Case 1:17-cv-02869-MSK-STV Document 32 Filed 03/05/18 USDC Colorado Page 1 of 23
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF COLORADO
`
`Civil Action No. 1:17-cv-02869-MSK-STV
`
`REALTIME ADAPTIVE STREAMING LLC,
`
`Plaintiff,
`
`v.
`
`APPLE INC.
`
`Defendant.
`
`DEFENDANT APPLE INC.’S MOTION TO DISMISS
`
`

`

`Case 1:17-cv-02869-MSK-STV Document 32 Filed 03/05/18 USDC Colorado Page 2 of 23
`
`TABLE OF CONTENTS
`
`Page
`
`I.
`
`II.
`
`III.
`
`IV.
`
`INTRODUCTION ...............................................................................................................1
`
`COMPLAINT ALLEGATIONS .........................................................................................2
`
`A.
`
`B.
`
`Summary of the Asserted Patents ............................................................................3
`
`The Accused Video Coding Standards ....................................................................3
`
`LEGAL STANDARD..........................................................................................................4
`
`ARGUMENT.......................................................................................................................7
`
`A.
`
`B.
`
`C.
`
`D.
`
`E.
`
`Realtime Fails to Plead Sufficient Factual Matter to State a Plausible
`Claim of Direct Infringement for the ‘462 Patent (Count II)...................................7
`
`Realtime Fails to Plead Sufficient Factual Matter to State a Plausible
`Claim of Direct Infringement for the ‘298 Patent (Count V) ................................10
`
`Realtime Fails to Plead Sufficient Factual Matter to State a Plausible
`Claim of Direct Infringement for the Fallon Patents (Counts I, III, IV, &
`VI)..........................................................................................................................11
`
`Realtime Has Failed to Sufficiently State a Claim for Induced Patent
`Infringement...........................................................................................................14
`
`Realtime Has Failed to Sufficiently State a Claim for Contributory Patent
`Infringement...........................................................................................................17
`
`V.
`
`CONCLUSION..................................................................................................................18
`
`CERTIFICATE OF SERVICE
`
`i
`
`

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`Case 1:17-cv-02869-MSK-STV Document 32 Filed 03/05/18 USDC Colorado Page 3 of 23
`
`TABLE OF AUTHORITIES
`
`Page(s)
`
`CASES:
`
`Affinity Labs of Texas LLC v. Toyota Motor N. Am., Inc.,
`No. W:13-cv-365, 2014 WL 2892285 (W.D. Tex. May 12, 2014) .........................................16
`
`Air Vent, Inc. v. Owens Corning Corp.,
`No. 02:10-CV-01699, 2011 WL 2601043 (W.D. Pa. June 30, 2011) .....................................15
`
`Ashcroft v. Iqbal,
`556 U.S. 662 (2009).........................................................................................................1, 5, 18
`
`Atlas IP LLC v. Pac. Gas & Elec.,
`No. 15-cv-05469-EDL, 2016 WL 1719545 (N.D. Cal. Mar. 9, 2016) ............................5, 6, 13
`
`Bell Atl. Corp. v. Twombly,
`550 U.S. 544 (2007).........................................................................................................1, 5, 11
`
`BIAX Corp. v. Motorola Sols., Inc.,
`No. 10-cv-03013-PAB-KLM, 2012 WL 502727 (D. Colo. Feb. 15, 2012) ................14, 15, 18
`
`Bryson v. Gonzales,
`534 F.3d 1282 (10th Cir. 2008) .................................................................................................5
`
`Core Wireless Licensing S.A.R.L. v. Apple Inc.,
`No. 6:14-CV-752-JRG-JDL, 2015 WL 4910427 (E.D. Tex. Aug. 14, 2015) .........................15
`
`Cross Med. Prods., Inc. v. Medtronic Sofamor Danek, Inc.,
`424 F.3d 1293 (Fed. Cir. 2005)..................................................................................................7
`
`e.Digital Corp. v. iBaby Labs, Inc.,
`No. 15-CV-05790-JST, 2016 WL 4427209 (N.D. Cal. Aug. 22, 2016)....................................6
`
`Fujitsu Ltd. v. Netgear Inc.,
`620 F.3d 1321 (Fed. Cir. 2010)..................................................................................................9
`
`In re Bill of Lading Transmission and Processing Sys. Patent Litig.,
`681 F.3d 1323 (Fed. Cir. 2012)................................................................................6, 14, 17, 18
`
`IP Commc’n Sols., LLC v. Viber Media (USA) Inc.,
`No. 16-134-GMS, 2017 WL 1312942 (D. Del. Apr. 5, 2017) ................................................16
`
`ii
`
`

`

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`
`Jacobsen v. Deseret Book Co.,
`287 F.3d 936 (10th Cir. 2002) ...................................................................................................7
`
`Macronix Int’l Co., Ltd. v. Spansion Inc.,
`4 F. Supp. 3d 797, 801–04 (E.D. Va. 2014) ..............................................................................5
`
`Modern Telecom Sys., LLC v. TCL Corp.,
`C.A. No. 17-583-LPS-CJB, 2017 WL 6524526 (D. Del. Dec. 21, 2017) .......................5, 6, 13
`
`Network Managing Solutions, LLC v. AT&T Inc.,
`No. 16-295, 2017 WL 472080 (D. Del. Feb. 3, 2017)...........................................................8, 9
`
`Realtime Adaptive Streaming LLC v. Apple Inc.,
`No. 1:17-cv-02869 (D. Colo. filed Nov. 30, 2017), ECF No. 1 ................................................2
`
`Stragent, LLC v. BMW of N. Am., LLC,
`2017 WL 2821697 (E.D. Tex Mar. 3, 2017) .......................................................................9, 10
`
`Vita-Mix Corp. v. Basic Holdings, Inc.,
`581 F.3d 1317 (Fed. Cir. 2009)..................................................................................................6
`
`STATUTES:
`
`35 U.S.C. § 271(a) ...........................................................................................................................3
`
`35 U.S.C. § 271(b) ...........................................................................................................................3
`
`35 U.S.C. § 271(c) .....................................................................................................................3, 17
`
`RULES:
`
`Fed. R. Civ. P. 8.........................................................................................................................5, 16
`
`Fed. R. Civ. P. 84.............................................................................................................................5
`
`iii
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`

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`Case 1:17-cv-02869-MSK-STV Document 32 Filed 03/05/18 USDC Colorado Page 5 of 23
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF COLORADO
`
`Civil Action No. 1:17-cv-02869-MSK-STV
`
`REALTIME ADAPTIVE STREAMING LLC,
`
`Plaintiff,
`
`v.
`
`APPLE INC. Defendant.
`
`DEFENDANT APPLE INC.’S MOTION TO DISMISS
`
`I.
`
`INTRODUCTION
`
`Realtime Adaptive Streaming LLC (“Realtime”) fails to plead necessary facts supporting
`
`a plausible inference that Apple Inc. (“Apple”) infringes the patents asserted in its Complaint.
`
`Under Iqbal and Twombly, a plaintiff must make out a plausible case that the defendant infringes
`
`at least one claim of each patent. Realtime’s Complaint in this case is voluminous, but the
`
`volume is merely a smokescreen. In each instance, Realtime fails to plausibly allege
`
`infringement of any patent claim. Allegations that the accused products comply with a standard
`
`are not enough to support a plausible inference that Apple infringes any of these patents for one
`
`1
`
`

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`simple reason: the features upon which Realtime relies are not actually required by the standard.
`
`Apple respectfully requests that the Court dismiss the Complaint on this basis.
`
`II.
`
`COMPLAINT ALLEGATIONS
`
`In its Complaint against Apple, Realtime alleges infringement of six U.S. Patents
`
`(“Asserted Patents”): Nos. 7,386,046 (‘046 Patent); 8,929,442 (‘442 Patent); 8,934,535 (‘535
`
`Patent); 9,769,477 (‘477 Patent); 8,634,462 (‘462 Patent); and 9,578,298 (‘298 Patent).
`
`(Complaint for Patent Infringement, Realtime Adaptive Streaming LLC v. Apple Inc., No. 1:17-
`
`cv-02869 (D. Colo. filed Nov. 30, 2017), ECF No. 1 ¶ 6) (“ECF No. 1”)). For each Asserted
`
`Patent, Realtime alleges infringement of one representative patent claim.
`
`Realtime’s infringement allegations arise out of Apple’s alleged use of two industry
`
`standards and one widely-implemented industry protocol. Realtime alleges that use of the HTTP
`
`Live Streaming protocol (“HLS”) to stream video encoded with the Advanced Video Coding
`
`standard (“AVC,” also known as H.264 Standard) infringes four of the Asserted Patents. (See,
`
`e.g., ECF No. 1 ¶¶ 16 (Count I), 57 (Count III), 76 (Count IV), 111 (Count VI).) Realtime
`
`further alleges that use of the High Efficiency Video Coding standard (“HEVC,” also known as
`
`H.265 Standard) infringes the other two Asserted Patents. (See, e.g., ECF No. 1 ¶¶ 34 (Count II),
`
`93 (Count V).) HLS defines a method of streaming live videos to multiple clients over a
`
`computer network. AVC and HEVC are video coding standards that compress video for storage
`
`or transmission over a network.
`
`Realtime accuses Apple products that are compatible with HLS, AVC, and HEVC
`
`including Apple’s iTunes Store, Apple Music, Apple devices with iOS 3.0 and later (including
`
`iPhones, iPads, and iPods), Apple computers with Safari 4.0 and later, macOS High Sierra,
`
`2
`
`

`

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`iMovie, QuickTime, Apple Watch, and Apple TV (the “Accused Products”). (See, e.g., ECF
`
`No.1 ¶¶ 14, 32, 55, 74, 91, 109.) Each count of the Complaint includes claims for direct,
`
`induced, and contributory infringement under 35 U.S.C. § 271(a), (b) and (c).
`
`A.
`
`Summary of the Asserted Patents
`
`All six of the Asserted Patents are generally directed to data encoding and decoding1
`
`technologies. The ‘046, ‘535, ‘442, and ‘477 Patents (“Fallon Patents”) are from the same patent
`
`family, and each names James Fallon as first inventor. The Fallon Patents are directed to
`
`dynamically selecting among available compression algorithms based on factors such as
`
`bandwidth, processing power, and storage. See, e.g., ‘046 Patent at [57]. The ‘462 Patent is
`
`directed to a self-attributed “enhanced” method of encoding video data using hybrid coding. See,
`
`e.g., ‘462 Patent at [57]. The purported enhancement of the ‘462 Patent relates to how certain
`
`parts of the video data stream are “quantized,” or mapped to a digital representation, during
`
`encoding and compression. ‘462 Patent at col. 2 l. 4 – 14, col. 4 l. 1 – 10, Fig. 1. The ‘298
`
`Patent is generally directed to decoding video data streams presenting three-dimensional images
`
`in a two-dimensional format. ‘298 Patent at [57].
`
`B.
`
`The Accused Video Coding Standards
`
`The specifications defining the AVC and HEVC standards referenced in the Complaint
`
`contain both mandatory and optional elements for practicing each standard. See, e.g., HEVC
`
`Spec § 0.8 (noting that some statements throughout the specification are informational and not
`
`integral to the specification); AVC Spec § 0.7 (same). For example, certain Annexes to the
`
`1 Encoding data generally means making it smaller (i.e., compressing) for transmission from one
`device, whereas decoding generally means expanding (i.e., decompressing) for viewing on
`another device.
`
`3
`
`

`

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`HEVC standard define messages which “[c]onforming decoders are not required to process.”
`
`E.g., HEVC Spec Annex D at 1 (emphasis added); see also Annex E at 1 (same). Both the
`
`mandatory and optional elements of those standards also leave many aspects of the video coding
`
`system unspecified, such that the implementer is free to craft a solution optimized for any
`
`particular application. HEVC Spec § 0.3; AVC Spec § 0.2. For example, neither AVC nor
`
`HEVC specify the encoding aspect of that standard—the design of the encoder is left up to the
`
`implementer. HEVC Spec § 0.7; AVC Spec § 0.6. Indeed, many of the “requirements” of the
`
`standards that Realtime cites do not actually dictate specific implementations.2 Thus, systems
`
`that practice the AVC and HEVC standards may operate differently from one another in many
`
`respects. Standard-compliant systems may include none, some, or all of the optional elements,
`
`and they may implement the unspecified aspects of AVC and HEVC in a variety of different
`
`ways. In short, the AVC and HEVC specifications outline requirements for compliance with
`
`mandatory elements of the standard, but leave many elements to the discretion or design of each
`
`implementer.
`
`III.
`
`LEGAL STANDARD
`
`A complaint must contain a “ʻshort and plain statement of the claim showing that the
`
`pleader is entitled to reliefʼ in order to ʻgive the defendant fair notice of what the . . . claim is and
`
`2 To illustrate, the AVC and HEVC standards are similar to a language such as English. The
`standards define a syntax and ways in which English may be understood (i.e., decoded) by a non-
`English speaker. But the standards do not mandate ways in which to craft (i.e., encode) English
`sentences. The speaker can chose any number of ways to construct sentences with similar
`meanings. This way, implementers of the standard may speak with flexibility (i.e., encode), and
`the non-English speaker always understands (i.e., decodes).
`
`4
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`

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`the grounds upon which it rests.ʼ” Fed. R. Civ. P. 8; Bell Atl. Corp. v. Twombly, 550 U.S. 544,
`
`555 (2007) (citation omitted); see also Ashcroft v. Iqbal, 556 U.S. 662, 663 (2009).
`
`Under Iqbal and Twombly, to survive a motion to dismiss “a complaint must contain
`
`sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’”
`
`Iqbal, 556 U.S. at 663, 678 (quoting Twombly, 550 U.S. at 570). Reviewing the plausibility of a
`
`complaint is “a context-specific task” that requires “judicial experience and common sense.”
`
`Iqbal, 556 U.S. at 679. The court must exclude from consideration threadbare recitals,
`
`conclusory statements, and formulaic recitations, while assuming that the facts the plaintiff
`
`presents are true. Id., 556 U.S. at 678. If the factual allegations “do not permit the court to infer
`
`more than the mere possibility of misconduct,” id. at 679, then the plaintiff has “not nudged [its]
`
`claims . . . across the line from conceivable to plausible.” Twombly, 550 U.S. at 570; see also
`
`Bryson v. Gonzales, 534 F.3d 1282, 1286 (10th Cir. 2008).
`
`Allegations of direct patent infringement are subject to the pleading standards established
`
`by Twombly and Iqbal that apply in all civil cases.3 Under Twombly and Iqbal, a claim for direct
`
`patent infringement requires the presence of each claim limitation (of an apparatus claim) or
`
`performance of each step (of a method claim). Atlas IP LLC v. Pac. Gas & Elec., No. 15-cv-
`
`05469-EDL, 2016 WL 1719545, at *5 (N.D. Cal. Mar. 9, 2016) (“PGE”); Modern Telecom Sys.,
`
`LLC v. TCL Corp., C.A. No. 17-583-LPS-CJB, 2017 WL 6524526, at *2 (D. Del. Dec. 21,
`
`3 Some courts and commentators had perceived a conflict between Form 18 and the
`Twombly/Iqbal pleading standard that applied in all other civil actions. See, e.g., Macronix Int’l
`Co., Ltd. v. Spansion Inc., 4 F. Supp. 3d 797, 801–04 (E.D. Va. 2014). The 2015 Amendments
`to the Federal Rules of Civil Procedure abolished Rule 84 and Form 18, which previously set
`infringement. PGE, 2016 WL 1719545, at *2.
`forth an exemplary complaint for patent
`Therefore, Twombly/Iqbal applies to claims for patent infringement and Form 18 is no longer
`relevant.
`
`5
`
`

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`2017); e.Digital Corp. v. iBaby Labs, Inc., No. 15-CV-05790-JST, 2016 WL 4427209, at *4
`
`(N.D. Cal. Aug. 22, 2016). Accordingly, the failure to plausibly plead any single patent claim
`
`limitation or step renders the infringement claim itself implausible. PGE, 2016 WL 1719545, at
`
`*4 (dismissing complaint for failure to plausibly plead one limitation of the asserted patent
`
`claim); Modern Telecom Sys., 2017 WL 6524526, at *2 (same).
`
`To state a claim for induced infringement, the complaint “must contain facts plausibly
`
`showing that [defendants] specifically intended their customers to infringe the patent and knew
`
`that the customer's acts constitute infringement.” In re Bill of Lading Transmission and
`
`Processing Sys. Patent Litig., 681 F.3d 1323, 1339 (Fed. Cir. 2012). Mere knowledge of the
`
`patents and instructions to use the product are not enough. Specific intent requires both (1)
`
`knowledge of the patent, and (2) culpable conduct directed to encouraging another’s
`
`infringement. Id.
`
`Contributory infringement occurs if a party sells or offers to sell a material or apparatus
`
`for use in practicing a patented process and that material or apparatus is “material to practicing
`
`the invention, has no substantial non-infringing uses, and is known by the party ‘to be especially
`
`made or especially adapted for use in an infringement of such patent.’” Id. at 1337 (citations
`
`omitted). “To state a claim for contributory infringement, therefore, a plaintiff must, among
`
`other things, plead facts that allow an inference that the components sold or offered for sale have
`
`no substantial non-infringing uses.” Id. A substantial non-infringing use is any use that is ‘not
`
`unusual, far-fetched, illusory, impractical, occasional, aberrant, or experimental.’” Id. (quoting
`
`Vita-Mix Corp. v. Basic Holdings, Inc., 581 F.3d 1317, 1327–29 (Fed. Cir. 2009)). Contributory
`
`infringement also requires allegations showing that the defendant knew “that the combination for
`
`6
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`

`

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`which its components were made was both patented and infringing.” Cross Med. Prods., Inc. v.
`
`Medtronic Sofamor Danek, Inc., 424 F.3d 1293, 1312 (Fed. Cir. 2005) (internal quotation marks
`
`and citation omitted).
`
`IV.
`
`ARGUMENT
`
`A.
`
`Realtime Fails to Plead Sufficient Factual Matter to State a Plausible Claim
`of Direct Infringement for the ‘462 Patent (Count II)
`
`The ‘462 Patent relates to an aspect of video coding that is not specified in the HEVC
`
`standard (to the extent it relates to the standard at all). The purported invention as recited in
`
`claim 1 of the ‘462 Patent (which is asserted in Count II) relates to a specific encoding algorithm.
`
`‘462 Patent col. 18 l. 20 (claiming “[a] method for coding a video signal . . .”). But, nothing in
`
`the HEVC specification requires use of any particular encoding algorithm, much less the specific
`
`one disclosed in the ‘462 Patent. Section 0.7 of the HEVC specification explicitly states
`
`“[e]ncoding algorithms” are “not specified in this Recommendation | International Standard.”
`
`HEVC Spec § 0.7.4 Although Realtime relies exclusively on Apple’s alleged implementation of
`
`the standard to support its infringement allegations, Realtime specifically concedes this point in
`
`Paragraph 40 of the Complaint, admitting that the “HEVC Spec” does not specify “encoding
`
`algorithms that can be used . . . .” ECF No. 1 ¶ 40.
`
`The standard’s failure to dictate or require a particular encoding algorithm is consistent
`
`with the stated intent of the HEVC standard: to enable its use “in a flexible manner” for various
`
`4 The Court may consider the AVC and HEVC specifications on a motion to dismiss. Jacobsen v.
`Deseret Book Co., 287 F.3d 936, 941 (10th Cir. 2002) (“In addition to the complaint, the district
`court may consider documents referred to in the complaint if the documents are central to the
`plaintiff's claim and the parties do not dispute the documentsʼ authenticity.”). Realtime
`repeatedly cites those documents in its Complaint, Realtime’s claims are specifically premised
`on compliance with those standard, and there is no dispute about their authenticity.
`7
`
`

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`network environments and applications. HEVC Spec § 0.3. Implementers like Apple thus have
`
`the flexibility to develop unique encoding techniques or to pick from “a number of techniques
`
`that may be used to achieve highly efficient compression.” HEVC Spec § 0.7. Because HEVC
`
`only defines how to decode video signals, none of the allegations in Paragraphs 33–41, which
`
`simply allege that the Accused Products implement HEVC can make out a plausible claim of
`
`infringement for an encoder, which is what the claim covers.
`
`The Complaint further alleges that the “infringement of the Accused Instrumentalities is
`
`also shown” by “considering” certain reference software, which appears on the website of a third
`
`party. ECF No. 1, ¶ 41. Paragraphs 41–45 of the Complaint purport to show how the reference
`
`software infringes claim 1 of the ’462 Patent. But Realtime does not allege that Apple uses the
`
`reference software. See ECF No. 1 ¶¶ 41–45. In fact, Realtime does not allege any connection
`
`whatsoever between the reference software and Apple’s systems. See id. The Complaint
`
`contains no factual allegations providing any basis, let alone a plausible basis, to infer that the
`
`third party reference software is evidence of, or at all relevant to, whether Apple’s own system
`
`infringes. See id. Consequently, the Complaint fails to allege facts to state a plausible claim of
`
`direct infringement and should be dismissed with respect to the ‘462 Patent.
`
`Other courts have dismissed complaints for patent infringement on similar facts. In
`
`Network Managing Solutions, LLC v. AT&T Inc., No. 16-295, 2017 WL 472080, at *1 (D. Del.
`
`Feb. 3, 2017), the court dismissed claims of direct and indirect infringement that were premised
`
`on standard compliance. There, the plaintiff alleged that certain standards “incorporate the
`
`technologies covered by the patents.” Id. The Court rejected this allegation as insufficient: “The
`
`standards are public. Saying on ‘information and belief’ that the standards ‘incorporate the
`
`8
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`fundamental technologies’ covered by the patents, without more, is insufficient to plausibly
`
`allege that to practice the standard necessarily means that a defendant also practices the patent.”
`
`Id. (emphasis added).
`
`The insufficient allegations in Network Managing Solutions were more factually detailed
`
`than what the Complaint alleges here. For example, the complaint in Network Managing
`
`Solutions expressly alleged that the standards “incorporate the technologies covered by the
`
`patents.” Id. In contrast, the Complaint never definitively alleges that practicing the HEVC is
`
`covered by any claim of the ‘462 Patent. Nor does the Complaint provide any rationale why an
`
`HEVC-compliant system necessarily practices the limitations of claim 1 of the ‘462 Patent. To
`
`the contrary, Realtime concedes that HEVC does not require practicing the method of claim 1.
`
`ECF No. 1 ¶ 40.
`
`Moreover, “[o]nly in the situation where a patent covers every possible implementation
`
`of a standard will it be enough to prove infringement by showing standard compliance.” Fujitsu
`
`Ltd. v. Netgear Inc., 620 F.3d 1321, 1327-28 (Fed. Cir. 2010). This is because the requirements
`
`of an industry standard relevant to practicing a patent may be part of optional requirements of the
`
`standard, such that “standard . . . compliance alone would not establish that the accused infringer
`
`choose to implement the optional section.” Stragent, LLC v. BMW of N. Am., LLC, 2017 WL
`
`2821697, at *4 (E.D. Tex Mar. 3, 2017). Here, the HEVC standard includes mandatory
`
`requirements and optional elements, yet the Complaint fails to plead any facts alleging that the
`
`‘462 Patent covers the mandatory requirements, much less every implementation of the standard.
`
`Accordingly, the claim for direct infringement in Count II of the Complaint should be dismissed.
`
`9
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`
`B.
`
`Realtime Fails to Plead Sufficient Factual Matter to State a Plausible Claim
`of Direct Infringement for the ‘298 Patent (Count V)
`
`The Complaint’s allegations as to the ‘298 Patent are similarly deficient. Even assuming
`
`the truth of Realtime’s allegations, practicing the HEVC standard does not require using the ‘298
`
`Patent.
`
`The ‘298 Patent is directed to processing stereoscopic video streams encoded in a
`
`particular “frame packing” format. ‘298 Patent, at [57]. Realtime alleges that the Accused
`
`Products infringe by using Supplemental Enhancement Information (“SEI”), which is defined in
`
`Annex D to the HEVC standard, and Video Usability Information (“VUI”), which is defined in
`
`Annex E. ECF No.1 ¶¶ 94, 96, 97. According to Realtime’s Complaint, the Accused Products
`
`receive metadata in the form of SEI messages to determine certain frame packing parameters of a
`
`composite frame. Id. ¶ 96. Then, Realtime cites NOTE – 9 of the HEVC Spec, which also
`
`appears in Annex D. Id.
`
`None of these aspects of HEVC are required for standard compliance. Annex D states:
`
`SEI messages assist in processes related to decoding, display or other purposes.
`However, SEI messages are not required for constructing the luma or chroma
`samples by the decoding process. Conforming decoders are not required to
`process this information for output order conformance to this Specification (see
`Annex C and clause F.13 for the specification of conformance).
`
`HEVC Spec, Annex D. Annex E contains a similar explanation. HEVC Spec, Annex E. The
`
`conformance requirements in Annex C do not mention frame packing SEI. See HEVC Spec,
`
`Annex C. In fact, the HEVC specification states “there are no decoding process requirements
`
`associated with the presence or interpretation of frame packing arrangement SEI messages or
`
`segmented rectangular frame packing arrangement SEI messages,” which are the two features
`
`Realtime alleges infringe the ‘298 Patent. HEVC Spec § 7.4.4 (emphasis added) (Note 2 on page
`
`10
`
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`Case 1:17-cv-02869-MSK-STV Document 32 Filed 03/05/18 USDC Colorado Page 15 of 23
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`90). Simply put, Realtime alleges that optional features of the HEVC specification infringe the
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`‘298 Patent but does not allege any basis on which to believe that any of the Accused Products
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`actually implement those optional features. Those allegations fail to make out a plausible—as
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`opposed to theoretical or merely possible—infringement claim. Twombly, 550 U.S. at 570. This
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`omission is fatal to Realtime’s claim for direct infringement in Count V of the Complaint.
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`C.
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`Realtime Fails to Plead Sufficient Factual Matter to State a Plausible Claim
`of Direct Infringement for the Fallon Patents (Counts I, III, IV, & VI)
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`Counts I, III, IV and VI of the Complaint, which allege infringement of the Fallon
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`Patents, fail to plead plausible claims for relief because Realtime fails to allege the presence of a
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`key claim limitation in each of the asserted claims. The Fallon Patents relate to data
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`compression, which refers to methods of encoding data such that it takes fewer bits to represent
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`the same information. ‘046 Patent, Abstract, 2:35–44. Compressed data takes up less space in
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`storage, such as on a hard drive, and is faster to transmit across a network than the original
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`representation. See, e.g., ‘046 Patent, 2:35–44. According to the Fallon Patents, different
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`methods of compression have various advantages and disadvantages such that no single
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`compression algorithm is ideal in all circumstances. ‘046 Patent, 1:24–49. The purported
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`advance of the Fallon Patents is deciding which compression algorithm to use at any given point
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`in time based on which algorithm is most advantageous under current or anticipated
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`circumstances. E.g., ‘046 Patent, 7:65–8:3. In other words, the Fallon Patents select the best
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`compression routine for prevailing conditions, and then use that routine to compress data for
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`transmission or storage. Realtime’s complaint, though voluminous, lacks any allegation that the
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`accused system performs this central piece of the purported invention.
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`Case 1:17-cv-02869-MSK-STV Document 32 Filed 03/05/18 USDC Colorado Page 16 of 23
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`Claim 40 of the ‘046 Patent in Count I, for example, recites “a controller for tracking
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`throughput and generating a control signal to select a compression routine. . . . [T]he controller
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`commands the data compression engine to use one of the plurality of compression routines to
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`provide a faster rate of compression.” ‘046 Patent, 27:34–28:10; see also ECF No. 1 ¶ 15
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`(reciting the claim language of claim 1). Thus, in claim 40, the “controller” performs the central
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`feature of the Fallon Patents. But the Complaint contains no factual allegation regarding any
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`“command[] to [a] data compression engine,” and instead merely states the legal conclusion that
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`such a limitation is present in the Accused Products. ECF No. 1 ¶¶ 15, 22.
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`Realtime alleges that an HLS client—which is receiving, decompressing, and playing a
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`live stream—decides which version of the stream to decompress. Specifically, the Complaint
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`states:
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`HTTP Live Streaming supports switching between streams dynamically if the
`available bandwidth changes. The client software uses heuristics to determine
`appropriate times to switch between the alternates. Currently, these heuristics are
`based on recent trends in measured network throughput.
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`The current implementation of the client observes the effective bandwidth while
`playing a stream.
`If a higher-quality stream is available and the bandwidth
`appears sufficient to support it, the client switches to a higher quality. If a lower-
`quality stream is available and the current bandwidth appears insufficient to
`support the current stream, the client switches to a lower quality.
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`ECF No. 1 ¶ 16 (citations omitted, emphasis added). Simply put, Realtime alleges that the client
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`switches between alternate streams, but not that the client’s decision about which stream to
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`decompress has any effect on, or is even communicated to, the component in the HLS system
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`that encodes and compresses the live stream (i.e., a “data compression engine”).5 That omission
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`5 Such a system would not infringe the Fallon Patents, for example, if the server were to provide
`a predetermined menu of available data streams each with a preselected set of compression
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`Case 1:17-cv-02869-MSK-STV Document 32 Filed 03/05/18 USDC Colorado Page 17 of 23
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`is fatal to Realtime’s claims, because without a plausible inference that “the controller
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`commands the data compression engine to use one of the plurality of compression routines to
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`provide a faster rate of compression,” patent infringement itself is not plausible. See, e.g., Atlas
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`IP LLC, 2016 WL 1719545, at *4–5 (dismissing complaint for failure to allege plausibility of
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`each claim limitation); Modern Telecom Sys., LLC, 2017 WL 6524526, at *2 (same).
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`The other asserted claims in Counts III, IV and VI contain similar requirements, albeit
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`phrased in different terms. Realtime’s allegations in those Counts mimic the allegations in
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`Count I, and fail for the same reason. Claim 8 of the ‘442 Patent (asserted in Count III) is
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`directed to data decompression, but requires that the “data was compressed with one or more
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`compression algorithms selected from among a plurality of compression algorithms based on
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`throughput of a communication channel and a parameter or an attribute of the . . . data block.”
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`‘442 Patent, col. 20 l. 48–54 (emphasis added). Thus, the asserted claim of the ‘442 Patent
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`requires that the system select which compression algorithm to use at or before the time the data
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`is compressed—not when the data is decompressed, which is all that Realtime alleges. See ECF
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`No. 1 ¶¶ 57, 60 (alleging that the client determines which stream to decompress). Claim 15 of
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`the ‘535 Patent (asserted in Count IV) requires “selecting one or more asymmetric compressors
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`from among a plurality of compressors based upon the determined parameter or attribute” and
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`then “compressing at least the portion of the data block with the selected one or more
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`asymmetric compressors to provide one or more compressed data blocks.” ‘535 Patent, col. 22 l.
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`4–9 (emphasis added). Here, too, the system must use the specifically selected compressor to
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`compress the data. But Realtime alleges only that the client selects one of the available alternate
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`In this example, the client’s decision about which of the alternate streams to
`parameters.
`download and decompress would have no bearing on how the data is