Case 1:17-cv-01692-JFB-SRF Document 13 Filed 02/05/18 Page 1 of 26 PageID #: 332
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` Plaintiff,
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`C.A. No. 17-1692 (JFB) (SRF)
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`REALTIME ADAPTIVE STREAMING
`LLC,
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`NETFLIX, INC. and NETFLIX
`STREAMING SERVICES, INC.,
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
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`v.
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`Defendants.
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`DEFENDANTS’ OPENING BRIEF IN SUPPORT OF THEIR
`MOTION TO DISMISS COMPLAINT
`
`
`MORRIS, NICHOLS, ARSHT & TUNNELL LLP
`Jack B. Blumenfeld (#1014)
`1201 North Market Street
`P.O. Box 1347
`Wilmington, DE 19899
`(302) 658-9200
`jblumenfeld@mnat.com
`
`Attorneys for Defendants
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`
`
`
`
`OF COUNSEL:
`
`Katherine Vidal
`Matthew R. McCullough
`Winston & Strawn LLP
`275 Middlefield Road, Suite 205
`Menlo Park, CA 94025
`(650) 858-6500
`
`Andrew B. Grossman
`Winston & Strawn LLP
`333 S. Grand Avenue
`Los Angeles, CA 90071
`(213) 615-1700
`
`February 5, 2018
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`
`
`

`

`Case 1:17-cv-01692-JFB-SRF Document 13 Filed 02/05/18 Page 2 of 26 PageID #: 333
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`TABLE OF CONTENTS
`
`
`NATURE AND STAGE OF THE PROCEEDING .......................................................................1 
`SUMMARY OF THE ARGUMENT ............................................................................................1 
`STATEMENT OF FACTS ............................................................................................................2 
`LEGAL STANDARDS .................................................................................................................3 
`A. 
`Rule 12(b)(6) ..........................................................................................................3 
`B. 
`Section 101 Eligibility ...........................................................................................4 
`ARGUMENT .................................................................................................................................6 
`I. 
`THE FALLON PATENTS’ CLAIMS ARE PATENT-INELIGIBLE ..............................6 
`The ’535 Patent Claims Are Patent-Ineligible Under Section
`A. 
`101..........................................................................................................................7 
`The ’477 Patent Claims Are Patent-Ineligible Under Section
`101........................................................................................................................11 
`The ’907 Patent Claims Are Patent-Ineligible Under Section
`101........................................................................................................................13 
`The ’046 Patent Claims Are Patent-Ineligible Under Section
`101........................................................................................................................14 
`REALTIME FAILS TO ALLEGE FACTS SUFFICIENT TO
`SUPPORT ITS INFRINGEMENT CLAIMS ..................................................................15 
`PLAINTIFF FAILS TO PROPERLY PLEAD INFRINGEMENT OF
`THE ’462 AND ’298 PATENTS .....................................................................................18 
`Realtime Fails to Plausibly Allege Infringement of the ’462
`A. 
`Patent....................................................................................................................18 
`Realtime Fails to Plausibly Allege Infringement of the ’298
`Patent....................................................................................................................19 
`PLAINTIFF FAILS TO PROPERLY PLEAD INDIRECT
`INFRINGEMENT............................................................................................................20 
`CONCLUSION ............................................................................................................................20 
`
`B. 
`
`C. 
`
`D. 
`
`B. 
`
`II. 
`
`III. 
`
`IV. 
`
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`i
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`

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`Case 1:17-cv-01692-JFB-SRF Document 13 Filed 02/05/18 Page 3 of 26 PageID #: 334
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`TABLE OF AUTHORITIES
`
`Cases
`
`Alice Corp. v. CLS Bank Int’l,
`134 S. Ct. 2347 (2014)
`
`Ashcroft v. Iqbal,
`556 U.S. 662 (2009)
`
`Bay Indus., Inc. v. Tru-Arx Manuf., LLC,
`No. 06-1010, 2006 WL 3469599 (E.D. Wis. Nov. 29, 2006)
`
`Becton, Dickinson & Co. v. Baxter Int’l, Inc.,
`127 F. Supp. 3d 687 (W.D. Tex. 2015), aff’d, 639 F. App’x 652 (Fed. Cir.
`2016)
`
`Bell Atl. Corp. v. Twombly,
`550 U.S. 544 (2007)
`
`Bilski v. Kappos,
`561 U.S. 593 (2010)
`
`Conley v. Gibson,
`355 U.S. 41 (1957)
`
`Dealertrack, Inc. v. Huber,
`674 F.3d 1315 (Fed. Cir. 2012)
`
`Fujitsu Ltd. v. Netgear Inc.,
`620 F.3d 1321 (Fed. Cir. 2010)
`
`Global-Tech Appliances, Inc. v. SEB S.A.,
`563 U.S. 754 (2011)
`
`In re Bill of Lading Transmission & Processing Sys. Patent Litig.,
`681 F.3d 1323 (Fed. Cir. 2012)
`
`In re Bilski,
`545 F.3d 943 (Fed. Cir. 2008) (en banc), aff’d, 561 U.S. 593 (2010)
`
`In re TLI Commc’ns LLC Patent Litig.,
`823 F.3d 607 (Fed. Cir. 2016)
`
`Intellectual Ventures I LLC v. Capital One Fin. Corp.,
`850 F.3d 1332 (Fed. Cir. 2017)
`
`Intellectual Ventures I LLC v. Erie Indem. Co.,
`850 F.3d 1315 (Fed. Cir. 2017)
`
`
`
`ii
`
`passim
`
`1, 4, 15-16
`
`18
`
`5
`
`4, 16
`
`5
`
`16
`
`4
`
`18-19
`
`20
`
`17
`
`4
`
`8
`
`6
`
`5
`
`

`

`Case 1:17-cv-01692-JFB-SRF Document 13 Filed 02/05/18 Page 4 of 26 PageID #: 335
`
`Jedi Techs., Inc. v. Spark Networks, Inc.,
`2017 WL 3315279 (D. Del. Aug. 3, 2017)
`
`Modern Telecom Sys., LLC v. TCL Corp.,
`C.A. No. 17-583-LPS-CJB, 2017 WL 6524526 (D. Del. Dec. 21, 2017)
`
`OIP Techs., Inc. v. Amazon.com, Inc.,
`788 F.3d 1359 (Fed. Cir. 2015)
`
`Planet Bingo, LLC v VKGS LLC,
`576 F. App’x 1005 (Fed. Cir. 2014)
`
`Raindance Techs., Inc. v. 10x Genomics, Inc.,
`C.A. No. 15-152-RGA, 2016 WL 927143 (D. Del. Mar. 4, 2016)
`
`RecogniCorp, LLC v. Nintendo Co.,
`855 F.3d 1322 (Fed. Cir. 2017)
`
`Smartgene, Inc. v. Advanced Biological Labs., SA,
`555 F. App’x 950 (Fed. Cir. 2014)
`
`Stragent, LLC v. BMW of N. Am., LLC,
`2017 WL 2821697 (E.D. Tex. Mar. 3, 2017)
`
`Two-Way Media Ltd. v. Comcast Cable Commc’ns, LLC,
`874 F.3d 1329 (Fed. Cir. 2017)
`
`Statutes and Rules
`
`35 U.S.C. § 101
`
`Fed. R. Civ. P. 8
`
`Fed. R. Civ. P. 12(b)(6)
`
`4
`
`16
`
`10
`
`9
`
`16
`
`passim
`
`8-9
`
`18, 20
`
`5, 10
`
`passim
`
`15
`
`3-4
`
`
`
`
`
`
`
`iii
`
`

`

`Case 1:17-cv-01692-JFB-SRF Document 13 Filed 02/05/18 Page 5 of 26 PageID #: 336
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`NATURE AND STAGE OF THE PROCEEDING
`
`Plaintiff Realtime Adaptive Streaming LLC (“Realtime”) has sued Netflix, Inc. and
`
`Netflix Streaming Services, Inc. (collectively, “Netflix”), alleging infringement of U.S. Patent
`
`Nos. 8,934,535 (“the ’535 patent”), 9,769,477 (“the ’477 patent”), 9,762,907 (“the ’907 patent”),
`
`7,386,046 (“the ’046 patent”), 8,634,462 (“the ’462 patent”), and 9,578,298 (“the ’298 patent”)
`
`(the “asserted patents”). See D.I. 1. Netflix has moved to dismiss the Complaint for failure to
`
`state a claim upon which relief can be granted.
`
`SUMMARY OF THE ARGUMENT
`
`(1) The four substantially identical Fallon patents (’535, ’477, ’907, and ’046 patents)
`
`asserted in this matter are all related purport to claim the concept of encoding and decoding
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`data—acknowledged by the Federal Circuit as a concept as old as communication itself—and are
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`unpatentable under 35 U.S.C. § 101. “Morse code, ordering food at a fast food restaurant via a
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`numbering system, and Paul Revere’s ‘one if by land, two if by sea’ signaling system all
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`exemplify encoding at one end and decoding at the other end.” RecogniCorp, LLC v. Nintendo
`
`Co., 855 F.3d 1322, 1326 (Fed. Cir. 2017). The well-known techniques for encoding and
`
`decoding claimed in the Fallon patents are performed by conventional computers and network
`
`technology, so those elements do not save the claims under 35 U.S.C. § 101. See, e.g., Alice
`
`Corp. v. CLS Bank Int’l, 134 S. Ct. 2347, 2356 (2014). The claims do not contain any inventive
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`concept that transforms the claimed abstract idea—of selecting an encoder and then encoding the
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`data—into patent-eligible subject matter.
`
`(2) Realtime also fails to properly allege infringement for any of the six asserted patents.
`
`Instead, it accuses numerous different products, which the Complaint acknowledges operate
`
`differently, and fails to state a plausible claim that each of these various products infringes. See
`
`Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
`
`
`
`1
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`

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`Case 1:17-cv-01692-JFB-SRF Document 13 Filed 02/05/18 Page 6 of 26 PageID #: 337
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`(3) Finally, Realtime alleges, but fails to sufficiently plead, induced and contributory
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`infringement for any of the asserted patents: the Complaint does not contain a single fact
`
`showing that Netflix knew any of the patents prior to this lawsuit. For this reason, the Court
`
`should dismiss Realtime’s allegations of pre-suit induced and contributory infringement.
`
`STATEMENT OF FACTS
`
`Realtime has asserted six patents, all of which relate to the concept of encoding data. The
`
`Fallon patents describe compression as a technique utilized to encode and decode data recited in
`
`the claims. ’535 patent at 2:47-49 (“data compression techniques . . . may be utilized . . . to
`
`encode/decode data”). Encoding is the process of substituting one way of representing data with
`
`another. For example, Morse code encodes the letters of the alphabet with dots and dashes that
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`could be transmitted on a telegraph or via radio:
`
`
`According to the Federal Circuit, Morse code “exemplif[ies] encoding at one end and decoding
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`at the other end.” RecogniCorp, 855 F.3d at 1326. Every day, people perform encoding in their
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`head or via pencil-and-paper with ease. For example, teenagers abbreviate text messages, using
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`a variety of techniques such as acronyms (LOL, JK, OMG), homonyms (gr8, U), or “emojis”
`(☺). Throughout this brief, attorneys use encoding to represent various case citations in
`Bluebook form (e.g., “F.3d,” “U.S.,” “Id.”).
`
`Compression is the process of using an encoding system to reduce the size of data. The
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`
`
`2
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`

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`Case 1:17-cv-01692-JFB-SRF Document 13 Filed 02/05/18 Page 7 of 26 PageID #: 338
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`Fallon patents acknowledge that compression was well-known at the time of the purported
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`inventions: “[t]here are a variety of data compression algorithms that are currently available.”
`
`’535 patent at 1:31-32. They also recognize that using compression to process and transmit data
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`was well-known: “[d]ata compression is widely used to reduce the amount of data required to
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`process, transmit, or store a given quantity of information.” Id. at 2:44-46.
`
`The Fallon patents (’535, ’477, ’442, and ’907 patents) are all related, share a common
`
`specification, and share the same two inventors. The Fallon patents relate to the abstract idea of
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`selecting an encoder (or a type of encoder called a compressor) based on some parameter and
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`then encoding data. For each of the Fallon patents, Realtime identifies a single claim in the
`
`Complaint as allegedly infringed. This motion focuses on a single claim from each patent
`
`because the other claims add only minor variations to the same basic idea of selecting a
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`compressor based on some characteristic of the data to be compressed. Realtime concedes that
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`these claims are representative, generally alleging that Netflix infringes additional claims in each
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`Fallon ’535 patent “for similar reasons.” D.I. 1, ¶ 69 (’535 patent), 107 (’477 patent), 88 (p. 55)1
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`(’907 patent), and 26 (’046 patent).
`
`For each of the Fallon patents, Realtime alleges infringement based on the H.264 video
`
`encoding standard. See generally D.I. 1, Counts I, III, V, VI. For the unrelated ’462 and ’298
`
`patents, Realtime alleges infringement based on the H.265 (HEVC) video encoding standard.
`
`See generally id., Counts II & IV.
`
`A.
`
`Rule 12(b)(6)
`
`LEGAL STANDARDS
`
`Stating a claim upon which relief may be granted “requires more than labels and
`
`1 The Complaint repeats numbers 77-95 so that, e.g., there are two paragraphs 88. For clarity,
`Netflix will also include the page number when citing to any of these mis-numbered paragraphs.
`
`
`
`3
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`

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`Case 1:17-cv-01692-JFB-SRF Document 13 Filed 02/05/18 Page 8 of 26 PageID #: 339
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`conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell Atl.
`
`Corp. v. Twombly, 550 U.S. 544, 554 (2007). To survive a Rule 12(b)(6) motion, a complaint
`
`must “state a claim to relief that is plausible on its face.” Id. at 570. Although factual allegations
`
`are taken as true, legal conclusions are given no deference—those matters are left for the court to
`
`decide. See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (holding that while factual allegations
`
`are taken as true, this assumption “is inapplicable to legal conclusions.”).
`
`B.
`
`Section 101 Eligibility
`
`Section 101 of the Patent Act defines the type of subject matter that is patent-eligible.
`
`Whether a patent claims patent-eligible subject matter is “a threshold inquiry.” In re Bilski, 545
`
`F.3d 943, 950-51 (Fed. Cir. 2008) (en banc), aff’d, 561 U.S. 593 (2010); Mayo, 132 S. Ct. at
`
`1304. Section 101 is a question of law, Dealertrack, Inc. v. Huber, 674 F.3d 1315, 1333 (Fed.
`
`Cir. 2012), that may properly be addressed on a motion to dismiss. See, e.g., Jedi Techs., Inc. v.
`
`Spark Networks, Inc., 2017 WL 3315279, at *6, *11 (D. Del. Aug. 3, 2017).
`
`The statute provides that “[w]hoever invents or discovers any new and useful process,
`
`machine, manufacture, or composition of matter, or any new and useful improvement thereof,
`
`may obtain a patent therefor, subject to the conditions and requirements of this title.” 35 U.S.C.
`
`§ 101. For over 150 years, the Supreme Court has applied “an important implicit exception” to
`
`Section 101’s seemingly wide breadth: “Laws of nature, natural phenomena, and abstract ideas
`
`are not patentable.” Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347, 2354 (2014).
`
`In Alice, 134 S. Ct. 2347, the Supreme Court confirmed that, in light of “the ubiquity of
`
`computers,” claiming a “wholly generic computer implementation” of an abstract concept is
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`insufficient to transform the concept into a patent-eligible invention. Id. at 2358.
`
`Alice articulates a two-step framework for determining whether a patent claims patent-
`
`ineligible abstract ideas. In step one, the court must determine whether the claims are directed to
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`4
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`Case 1:17-cv-01692-JFB-SRF Document 13 Filed 02/05/18 Page 9 of 26 PageID #: 340
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`a patent-ineligible abstract concept. Alice, 134 S. Ct. at 2355. To determine whether the claim is
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`“directed to” an abstract idea, the court must determine the “focus of the claimed advance over
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`the prior art”—that is, what is the “character [of the claim] as a whole.” Intellectual Ventures I
`
`LLC v. Erie Indem. Co., 850 F.3d 1315, 1325 (Fed. Cir. 2017). Where the “character of the
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`claim” pertains to standard encoding and decoding, the claim is directed to an abstract idea and
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`fails Alice step 1. See RecogniCorp, 855 F.3d at 1326.
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`If the claim is directed to an abstract idea, the court proceeds to step two. In step two, the
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`court must search for an “inventive concept”—i.e., “an element or combination of elements that
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`is ‘sufficient to ensure that the patent in practice amounts to significantly more than a patent
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`upon the [ineligible concept] itself.’”2 Alice, 134 S. Ct. at 2355 (alteration in original). To save
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`a patent at step two, the inventive concept “must be evident in the claims.” Two-Way Media Ltd.
`
`v. Comcast Cable Commc’ns, LLC, 874 F.3d 1329, 1338-39 (Fed. Cir. 2017) (“[t]he main
`
`problem that [plaintiff] cannot overcome is that the claim—as opposed to something purportedly
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`described in the specification—is missing an inventive concept”) (emphasis in original). A
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`patentee cannot circumvent the prohibition on patenting abstract ideas by limiting the idea to “a
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`particular technological environment,” nor by adding “insignificant postsolution activity,” Bilski
`
`v. Kappos, 561 U.S. 593, 610–11 (2010) (internal quotation marks omitted) or “well-understood,
`
`routine, conventional” features, Mayo, 566 U.S. at 79–80. Importantly, “the mere recitation of a
`
`generic computer cannot transform a patent-ineligible abstract idea into a patent-eligible
`
`
`2 “Where claims are ‘substantially similar and linked to the same abstract idea,’ the court may
`dispose of the other claims in the patent with less detail.” Becton, Dickinson & Co. v. Baxter
`Int’l, Inc., 127 F. Supp. 3d 687, 689 n.3 (W.D. Tex. 2015), aff’d, 639 F. App’x 652 (Fed. Cir.
`2016); see also Bilski v. Kappos, 561 U.S. 593, 612 (2010). Here, Realtime acknowledges that
`the identified claims are representative of the other claims in each patent. D.I. 1, ¶¶ 26, 69, 88
`(p. 55), 107 (alleging other claims are infringed “for similar reasons”).
`
`
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`5
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`

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`Case 1:17-cv-01692-JFB-SRF Document 13 Filed 02/05/18 Page 10 of 26 PageID #: 341
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`invention.” Alice, 134 S. Ct. at 2358.
`
`The Federal Circuit recently applied these principles to claims directed to the same
`
`purported invention claimed in the patents-in-suit—encoding and decoding data—and found
`
`them patent-ineligible:
`
`We find that claim 1 is directed to the abstract idea of encoding and decoding
`image data. It claims a method whereby a user displays images on a first display,
`assigns image codes to the images through an interface using a mathematical
`formula, and then reproduces the image based on the codes. This method reflects
`standard encoding and decoding, an abstract concept long utilized to transmit
`information. Cf. Intellectual Ventures I LLC v. Capital One Fin. Corp., 850 F.3d
`1332, 1340–41 (Fed. Cir. 2017) (organizing, displaying, and manipulating data
`encoded for human- and machine-readability is directed to an abstract concept).
`Morse code, ordering food at a fast food restaurant via a numbering system, and
`Paul Revere’s “one if by land, two if by sea” signaling system all exemplify
`encoding at one end and decoding at the other end.
`
`RecogniCorp, LLC v. Nintendo Co., 855 F.3d 1322, 1326 (Fed. Cir. 2017) (emphasis added).
`
`ARGUMENT
`
`I.
`
`THE CLAIMS OF THE FALLON PATENTS ARE PATENT-INELIGIBLE
`
`Each of the Fallon patent claims is patent-ineligible because it is directed to the abstract
`
`idea of encoding and decoding data and lacks any inventive concept. In RecogniCorp, the
`
`Federal Circuit considered a representative claim reciting “facial feature images [that] are
`
`associated with facial feature element codes,” then making a “composite facial image code . . .
`
`by performing at least one multiplication operation . . . using one or more code factors as input
`
`parameters,” and finally “reproducing the composite image . . . based on the composite facial
`
`image code.” Id. at 1324 (emphasis added). As the Federal Circuit explained, this claim recites
`
`a method “whereby a user displays images on a first display, assigns image codes to the images
`
`through an interface using a mathematical formula, and then reproduces the image based on the
`
`codes.” Id. This method “reflects standard encoding and decoding, an abstract concept long
`
`utilized to transmit information.” Id. at 1326. The Court expressly rejected the notion that
`
`
`
`6
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`

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`Case 1:17-cv-01692-JFB-SRF Document 13 Filed 02/05/18 Page 11 of 26 PageID #: 342
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`encoding data “improves the functioning of a computer,” stating that the claims at issue recite “a
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`process that qualifies as an abstract idea for which computers are invoked merely as a tool.” Id.
`
`at 1327 (internal quotations omitted). The claims-at-issue here are no different.
`
`Under Alice step two, the Federal Circuit held that the RecogniCorp claims lacked an
`
`inventive concept. In doing so, the Federal Circuit rejected the patentee’s argument that “the
`
`particular encoding process using the specific algorithm disclosed” could constitute an inventive
`
`concept. RecogniCorp, 855 F.3d at 1327 The Federal Circuit also held that the claims did not
`
`solve a unique computer-specific problem:
`
`Claim 1 . . . contains no similar inventive concept. . . . A claim directed to an
`abstract idea does not automatically become eligible merely by adding a
`mathematical formula. As we explained above, claim 1 is directed to the abstract
`idea of encoding and decoding. The addition of a mathematical equation that
`simply changes the data into other forms of data cannot save it.
`
`Id. at 1327-28. The Federal Circuit further noted that certain claims requiring a computer “do[]
`
`exactly what we have warned it may not: tell a user to take an abstract idea and apply it with a
`
`computer.” Id. at 1328.
`
`This type of encoding and decoding is precisely what Realtime claims in this case: as
`
`detailed below, the Fallon patents are directed to nothing more than the patent-ineligible concept
`
`of encoding data for transmission and are similarly patent-ineligible. Realtime’s claims recite an
`
`abstract process that starts with data, adds an algorithm, and ends with a new form of data. They
`
`do not solve any unique computer-specific problem, nor do they involve any other inventive
`
`concept that might elevate them to patentable subject matter. The Fallon claims recite nothing
`
`more than instructions to perform the abstract idea on generic computer hardware. Because the
`
`claims do not recite any inventive concept, Realtime’s claims are patent-ineligible.
`
`A.
`
`The ’535 Patent Claims Are Patent-Ineligible Under Section 101
`
`Alice Step One: The ’535 patent claims are directed to the abstract idea of encoding data
`
`
`
`7
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`

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`Case 1:17-cv-01692-JFB-SRF Document 13 Filed 02/05/18 Page 12 of 26 PageID #: 343
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`based on “a parameter” of that data. Claim 15, asserted in the Complaint and representative for
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`purposes of the Section 101 analysis, recites (emphasis added):
`
`15. A method, comprising:
`
`determining a parameter of at least a portion of a data block;
`
`selecting one or more asymmetric compressors from among a plurality of
`compressors based upon the determined parameter or attribute;
`
`compressing the at least the portion of the data block with the selected one or
`more asymmetric compressors to provide one or more compressed data blocks;
`and
`
`storing at least a portion of the one or more compressed data blocks.
`
`The four method steps recite the abstract concept of: (1) determining a parameter of the data; (2)
`
`selecting a method of encoding3 the data based on the determined parameter; (3) performing the
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`task of encoding the data; and (4) storing the data.
`
`These steps are basic computer functionality that has been found patent-ineligible. See
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`RecogniCorp, 855 F.3d at 1327 (discussed above); Context Extraction, 776 F.3d at 1347 (claims
`
`directed to “1) collecting data, 2) recognizing certain data within the collected data set, and 3)
`
`storing that recognized data in memory” are patent-ineligible); In re TLI Commc’ns LLC Patent
`
`Litig., 823 F.3d 607, 611 (Fed. Cir. 2016).
`
`Similarly, the Federal Circuit has found abstract claims that recited a computing device
`
`with “expert rules for evaluating and selecting” one of different treatment regimens. Smartgene,
`
`Inc. v. Advanced Biological Labs., SA, 555 F. App’x 950, 955 (Fed. Cir. 2014). There, the
`
`Federal Circuit explained that such a claim was like the ineligible claim in Benson because it
`
`“‘can be . . . performed without a computer’ or, alternatively, ‘can be carried out in existing
`
`3 According to the ’535 patent, “compression” (e.g., as recited by claim 15) is merely a known
`way of “encoding” data. ’535 patent at 2:47-49 (“In general, there are two types of data
`compression techniques that may be utilized either separately or jointly to encode/decode data”).
`
`
`
`8
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`

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`Case 1:17-cv-01692-JFB-SRF Document 13 Filed 02/05/18 Page 13 of 26 PageID #: 344
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`computers long in use, no new machinery being necessary.’” Id. So too here, the ’535 patent
`
`claims reciting selection of a compressor from a plurality of compressors can be done, and the
`
`claims do not purport to claim any new, unconventional hardware or software for doing this
`
`routine selection. Indeed, in RecogniCorp, the claims also recited steps involving a selection
`
`(“selecting a facial feature image”) and the use of parameters (“performing at least one
`
`multiplication operation on a facial code using one or more code factors as input parameters”),
`
`but were nonetheless held to be directed at an abstract idea. RecogniCorp, 855 F.3d at 1324.
`
`The remaining claims provide only slight variations on Claim 15, and fail to disclose
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`anything more than abstract, unpatentable ideas. See, e.g., Planet Bingo, LLC v VKGS LLC, 576
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`F. App’x 1005, 1007 (Fed. Cir. 2014). For example, certain claims (e.g., ’535 claims 1, 22, 27)
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`are limited to video or audio data but limiting the type of data encoded does not elevate the
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`patent to claiming something more than an abstract idea. See RecogniCorp, 855 F.3d at 1326
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`(encoding “image data” was abstract). Other claims (e.g., ’535 claims 7, 13, 17, 19-21, 23, 29)
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`recite transmitting the data (sometimes explicitly claimed as “over the Internet”), but the
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`transmission process relies on conventional computer elements and thus does not add any
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`patentable subject matter to the base abstract idea. See Ultramercial, 772 F.3d at 716 (“[T]he
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`use of the Internet is not sufficient to save otherwise abstract claims from ineligibility under §
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`101.”). Still other claims (e.g., ’535 claims 7, 13-14, 23, 25-26) recite decompressing data, but
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`this is simply the reverse of the encoding process and is likewise abstract under RecogniCorp.
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`Still other claims (e.g., ’535 claims 3-5, 11) recite the use of computer “files,” which are
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`conventional computer elements that do not change the abstract nature of the claims.
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`Alice Step Two: The limitations of claim 15 of the ’535 patent implement the abstract
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`idea discussed above without any additional inventive concept. For example, the ’535 patent
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`9
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`Case 1:17-cv-01692-JFB-SRF Document 13 Filed 02/05/18 Page 14 of 26 PageID #: 345
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`does not claim any specific improvements to computer systems. Rather, it claims only the use of
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`known compressors acting on a known type of data to perform the fundamental concept of data
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`encoding by compression. Moreover, additional claims recite only conventional computer
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`components that perform data encoding by compression using known methods. See, e.g., claims
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`18 and 30 reciting, “one or more central processing units (CPUs).”
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`None of the individual claim elements that implement use of a selected compression
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`technique is a technological innovation. In fact, the specification emphasizes their conventional
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`nature. For example, the patent states that the purported invention is implemented using existing
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`compression algorithms on existing hardware, software, firmware, or a combination thereof.
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`E.g., ’535 patent at 20:1-4 (“the systems and methods described herein may be implemented in
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`various forms of hardware, software, firmware, special purpose processors, or a combination
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`thereof”). Under Alice, a truly patent-eligible invention requires more.
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`Further confirming that the claim elements are not inventive is that a human can analyze4
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`data types and make determinations about the most appropriate compression technique based on
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`the type of data to be compressed or the bandwidth available. There is nothing inventive about
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`using a computer to do more quickly or efficiently what a human could otherwise accomplish
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`because “relying on a computer to perform routine tasks more quickly or more accurately is
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`insufficient to render a claim patent eligible.” OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d
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`1359, 1363 (Fed. Cir. 2015).
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`4 To the extent Realtime argues there is something computer-specific about the data upon which
`its claims operate, that argument has no merit. The inventive concept must be in the claims, not
`the specification. Two-Way Media, 874 F.3d at 1338-39. Additionally, the RecogniCorp claims
`addressed “image” data, which is an example of “digital” data but the Federal Circuit
`nevertheless found those claims unpatentable. RecogniCorp, 855 F.3d at 1326.
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`10
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`Case 1:17-cv-01692-JFB-SRF Document 13 Filed 02/05/18 Page 15 of 26 PageID #: 346
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`In sum, the claim limitations (both alone and as an ordered5 combination) are directed to
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`routine data manipulation using conventional compression techniques to encode data for storage.
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`Alice, 134 S. Ct. at 2360 (“[T]he claims at issue amount to ‘nothing significantly more’ than an
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`instruction to apply the abstract idea . . . using some unspecified, generic computer. Under our
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`precedents, that is not ‘enough’ to transform an abstract idea into a patent eligible invention.”);
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`RecogniCorp, 855 F.3d at 1328. Accordingly, the ’535 patent claims are patent-ineligible.
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`B.
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`The ’477 Patent Claims Are Patent-Ineligible Under Section 101
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`Alice Step One: Similar to the ’535 patent, the claims of the ’477 patent are directed to
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`the abstract idea of encoding data by compression and lack any inventive concept. Claim 1,
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`asserted in the Complaint and representative for the 101 analysis, recites (emphasis added):
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`1. A system, comprising:
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`a plurality of different asymmetric data compression encoders,
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`wherein each asymmetric data compression encoder of the plurality of different
`asymmetric data compression encoders is configured to utilize one or more data
`compression algorithms, and
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`wherein a first asymmetric data compression encoder of the plurality of different
`asymmetric data compression encoders is configured to compress data blocks
`containing video or image data at a higher data compression rate than a second
`asymmetric data compression encoder of the plurality of different asymmetric
`data compression encoders; and
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`one or more processors configured to:
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`determine one or more data parameters, at least one of the determined one or
`more data parameters relating to a throughput of a communications channel
`measured in bits per second; and
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`5 The “order” of the claims adds nothing to patentability. Of course, one could not “select[] one
`or asymmetric compressors . . . based upon the determined parameter” until after one had
`“determin[ed] a parameter.” Likewise, one could not “stor[e]” the compressed data blocks until
`they had been created. Ordering the claims this way recites nothing more than the conventional
`operation of the abstract idea of encoding data.
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`
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`11
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`Case 1:17-cv-01692-JFB-SRF Document 13 Filed 02/05/18 Page 16 of 26 PageID #: 347
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`select one or more asymmetric data compression encoders from among the
`plurality of different asymmetric data compression encoders based upon, at
`least in part, the determined one or more data parameters.
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`This claim is similar to ’535 patent claim 15, discussed above, in that it is directed to a system
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`for implementing the abstract idea of determining a parameter, selecting an encoder, and
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`encoding data. The only difference is that claim 1 of the ’477 patent recites that at least one of
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`the parameters is a throughput (i.e., bandwidth (’477 patent, 11:43-44) or the rate at which the
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`data can be transmitted) of the communications channel. This difference does not save the
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`claims from patent ineligibility. Alice, 134 S. Ct. at 2358 (“the prohibition against patenting
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`abstract ideas cannot be circumvented by attempting to limit the use of [the idea] to a particular
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`technological environment”).
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`The other claims of the ’477 patent, which contain only minor variations from claim 1,
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`are likewise abstract. Numerous claims attempt to restrict the encoding algorithm used (e.g.,
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`’477 claims 2, 5-6, 10-12, 20, 22, 26) or the parameter (e.g., ’477 claims 3-4, 7-9, 17, 20-21, 23-
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`25) -- yet another instance of trying to limit a claim to a “particular technological environment,”
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`which cannot save a claim. Alice, 134 S. Ct. at 2358. Other claims are restricted to using a
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`particular type of network, such as the Internet (e.g., ’477 claims 13-14, 27); this also does not
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`affect the Section 101 analysis. Ultramercial, 772 F.3d at 716. Some claims add the idea of
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`adding a “descriptor” (e.g., ’477 claims 15-16, 28), which is just another word for the abstract
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`idea of adding a label to the data. And other claims (e.g., ’477