Case 1:17-cv-01692-CFC-SRF Document 14 Filed 02/20/18 Page 1 of 26 PageID #: 358
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
`
`
`
`
`
`C.A. No. 1:17-cv-01692-JFB-SRF
`
`
`Plaintiff,
`
`
`
`v.
`
`
`
`Defendants.
`
`REALTIME ADAPTIVE STREAMING
`LLC,
`
`
`
`
`
`NETFLIX, INC. AND NETFLIX
`STREAMING SERVICES, INC.,
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`PLAINTIFF REALTIME ADAPTIVE STREAMING LLC’S ANSWERING BRIEF IN
`OPPOSITION TO DEFENDANTS’ MOTION (D.I. 11) TO DISMISS COMPLAINT
`
`
`February 20, 2018
`
`OF COUNSEL:
`
`Marc A. Fenster
`Brian D. Ledahl
`Reza Mirzaie
`C. Jay Chung
`RUSS, AUGUST & KABAT
`12424 Wilshire Boulevard, 12th Floor
`(310) 826-7474
`Los Angeles, CA 90025-1031
`mfenster@raklaw.com
`bledahl@raklaw.com
`rmirzaie@raklaw.com
`jchung@raklaw.com
`
`
`BAYARD, P.A.
`
`Stephen B. Brauerman (No. 4952)
`Sara E. Bussiere (No. 5725)
`600 N. King Street, Suite 400
`Wilmington, DE 19801
`(302) 655-5000
`sbrauerman@bayardlaw.com
`sbussiere@bayardlaw.com
`
`Attorneys for Plaintiff Realtime Adaptive
`Streaming LLC
`
`

`

`Case 1:17-cv-01692-CFC-SRF Document 14 Filed 02/20/18 Page 2 of 26 PageID #: 359
`
`TABLE OF CONTENTS
`
`Page(s)
`
`
`I.
`
`NETFLIX FAILS TO SHOW THAT ANY OF THE 114 CLAIMS OF THE FOUR
`
`FALLON PATENTS ARE INVALID UNDER §101. .......................................................... 1
`B. Netflix Cannot Establish That The Patent Claims Are Directed To An
`Abstract Idea Under Alice Step 1. ................................................................1
`1. Examining the patents confirms that they claim technological solutions
`to technological problems, not abstract subject matter. ...................2
`2. Another district court has repeatedly held that the subject matter of the
`asserted patents is patent-eligible despite several prior challenges. 6
`3. Netflix’s flawed arguments mischaracterize the law and claims. ...........7
`a. Netflix mischaracterizes the applicable law. ................................7
`b.
`Netflix mischaracterizes the claims. ....................................9
`C. Netflix Also Cannot Establish That the Claims Are Patent Ineligible Under
`Alice Step 2. ...............................................................................................11
`1. Section 101 analysis under Alice step 2 involves questions of fact. .....11
`2. The intrinsic record confirms that the claimed inventions involve
`unconventional technological solutions under step 2. ...................13
`C. Netflix Fails To Analyze Every Single Claim Separately. .............................15
`II. REALTIME’S ELEMENT-BY-ELEMENT ALLEGATIONS FAR EXCEED THE
`TWOMBLY STANDARD. ................................................................................................... 16
`III. NETFLIX’S ARGUMENT REGARDING THE ‘462 AND ‘298 PATENTS IS
`MERITLESS ........................................................................................................................ 18
`B. Realtime’s Allegations Regarding ‘462 Patent Easily Exceeds the Twombly
`Standard for Pleading Infringement. ..........................................................18
`C. Realtime’s Allegations Regarding ‘298 Patent Also Easily Exceeds the
`Twombly Standard for Pleading Infringement. ..........................................19
`IV. NETFLIX’S ARGUMENT REGARDING INDIRECT INFRINGEMENT IS
`MERITLESS. ....................................................................................................................... 20
`
`i
`
`

`

`Case 1:17-cv-01692-CFC-SRF Document 14 Filed 02/20/18 Page 3 of 26 PageID #: 360
`
`Cases
`
`TABLE OF AUTHORITIES
`
`Page(s)
`
`Aatrix Software, Inc. v. Green Shades Software, Inc.,
`-- F.3d --, 2018 WL 843288 (Fed. Cir. Feb. 14, 2018). ...................................................... 12, 16
`
`Alice Corp. v. CLS Bank Int’l,
`34 S. Ct. 2347 (2014) .................................................................................................................. 1
`
`Ashcroft v. Iqbal,
`129 S. Ct. 1937 (2009) .............................................................................................................. 16
`
`Berkheimer v. HP Inc.,
`-- F.3d --, 2018 WL 774096 (Fed. Cir. Feb. 8, 2018) ......................................................... 11, 16
`
`C. R. Bard, Inc. v. Angiodynamics, Inc.,
`156 F. Supp. 3d 540 (D. Del. 2016) .......................................................................................... 16
`
`Cal. Institute of Tech. v. Hughes Commcn’s Inc.,
`No. 2:13-cv-07245-MRP-JEM, 2014 U.S. Dist. LEXIS 156763 (C.D. Cal Nov. 3 2014) ....... 10
`
`Content Extraction v. Wells Fargo Bank,
`776 F.3d 1343 (Fed. Cir. 2014)................................................................................................... 9
`
`Core Wireless Licensing v. LG Elecs., Inc.,
`--- F.3d ---, 2018 WL 542672 (Fed. Cir. Jan. 25, 2018). ............................................................ 4
`
`DDR v. Hotels.com LP,
`773 F.3d 1245 (Fed. Cir. 2014)................................................................................................... 4
`
`Enfish, LLC v. Microsoft Corp,
`822 F.3d 1327 (Fed. Cir. 2016)................................................................................................... 3
`
`Finjan, Inc. v. Blue Coat Sys., Inc.,
`--- F.3d ---, 2018 WL 341882 (Fed. Cir. Jan. 10, 2018). ........................................................ 2, 8
`
`Fujitsu Ltd. v. Netgear, Inc.,
`620 F.3d 1321 (Fed. Cir. 2010)................................................................................................. 19
`
`In re TLI Communications LLC Patent Litigation,
`823 F.3d 607 (Fed. Cir. 2016)..................................................................................................... 9
`
`Intellectual Ventures I LLC v. Erie Indem. Co.,
`850 F.3d 1315 (Fed. Cir. 2017)................................................................................................... 9
`
`
`
` ii
`
`

`

`Case 1:17-cv-01692-CFC-SRF Document 14 Filed 02/20/18 Page 4 of 26 PageID #: 361
`
`IOP Techs., Inc. v. Amazon.com, Inc.,
`728 F.3d 1359 (Fed. Cir. 2015)................................................................................................... 9
`
`IP Commc'n Sols., LLC v. Viber Media (USA) Inc.,
`2017 WL 1312942 (D. Del. Apr. 5, 2017) ................................................................................ 17
`
`Lifetime Indus. Inc. v. Trim-Lok Inc.,
`869 F.3d 1372 (Fed. Cir. 2017)................................................................................................. 16
`
`MAZ Encryption Techs. LLC v. Blackberry Corp.,
`No. 13-304-LPS, 2016 WL 5661981 (D. Del. Sept. 29, 2016) ................................................ 11
`
`McGinley v. Franklin Sports, Inc.,
`262 F.3d 1339, 1351 (Fed. Cir. 2001)....................................................................................... 11
`
`McRO, Inc. v. Bandai Namco Games Am. Inc.,
`837 F.3d 1299 (Fed. Cir. 2016)................................................................................................... 7
`
`Modern Telecom Sys. LLC v. TCL Corp.,
`2017 WL 6524526 (D. Del. Dec. 21, 2017) .............................................................................. 17
`
`Nichia Corp. v. VIZIO, Inc.,
`2017 WL 3836141 (E.D. Tex. July 24, 2017) .......................................................................... 17
`
`Prowire LLC v. Apple, Inc.,
`2017 WL 3444689 (D. Del. Aug. 9, 2017). .............................................................................. 16
`
`Raindance Tech. Inc. v. 10x Genomics, Inc.,
`2016 WL 927143 (D. Del. Mar. 4, 2016) ................................................................................. 17
`
`Realtime Data LLC v. Rackspace US, Inc.,
`2017 WL 2590195 (E.D. Tex. June 14, 2017) ............................................................................ 6
`
`RecogniCorp, LLC v. Nintendo Co.,
`855 F.3d 1322 (Fed. Cir. 2017)................................................................................................... 8
`
`Smartgene, Inc. v. Advanced Biological Labs., SA,
`555 Fed. Appx. 950 (Fed. Cir. 2014) .......................................................................................... 9
`
`Stragent, LLC v. BMW of N. Am., LLC,
`2017 WL 2821697 (E.D. Tex. Mar. 3, 2017) ........................................................................... 19
`
`Toshiba Corp. v. Imation Corp.,
`681 F.3d 1358 (Fed. Cir. 2012)................................................................................................. 19
`
`TQP Dev., LLC v. Intuit Inc.,
`2014 WL 651935 (E.D. Tex. Feb. 19, 2014). ........................................................................... 10
`
`iii
`
`

`

`Case 1:17-cv-01692-CFC-SRF Document 14 Filed 02/20/18 Page 5 of 26 PageID #: 362
`
`Two-Way Media Ltd. v. Comcast Cable Commc'ns, LLC,
`874 F.3d 1329 (Fed. Cir. 2017)................................................................................................... 9
`
`U.S. Gypsum Co. v. New NGC, Inc.,
`2017 WL 5187845 (D. Del. Aug. 18, 2017). ............................................................................ 16
`
`Univ. of Pittsburgh v. Varian Med. Sys., Inc.,
`569 F.3d 1328 (Fed. Cir. 2009)................................................................................................. 17
`
`Visual Memory LLC v. Nvidia Corp.,
`867 F.3d 1253 (Fed. Cir. 2017)............................................................................................... 4, 7
`
`Windy City Innov., LLC v. Microsoft,
`193 F. Supp. 3d 1109 (N.D. Cal. 2016) .................................................................................... 17
`
`
`
`iv
`
`

`

`Case 1:17-cv-01692-CFC-SRF Document 14 Filed 02/20/18 Page 6 of 26 PageID #: 363
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`Netflix’s argument that the Fallon patents1 are ineligible under §101 fails because the
`
`claims are directed to a particularized technological solution that improve computer capabilities—
`
`e.g., particularized digital data compression systems to increase the capacity of a computer system
`
`to store or transfer data more efficiently in flexible ways. The claims describe specific ways (using
`
`multiple compressors, asymmetric compressors, parameter of data block and/or throughput) to
`
`make this happen.2 In the least, the intrinsic record raises factual issues that preclude dismissal.
`
`Netflix also argues that Realtime’s Complaint is insufficient under Iqbal/Twombly. A
`
`review of Realtime’s 70-page Complaint—providing detailed element-by-element allegations—
`
`shows the fallacy of that argument. Netflix’s argument is premised on a faulty legal standard and
`
`mischaracterization of the Complaint. Netflix’s argument regarding pre-suit indirect infringement
`
`should also be rejected, as it is an improper attempt to prematurely limit damages.
`
`I.
`
`NETFLIX FAILS TO SHOW THAT ANY OF THE 114 CLAIMS OF THE FOUR
`FALLON PATENTS ARE INVALID UNDER §101.
`
`Under 35 U.S.C. §101, patent eligibility is to be construed broadly, and the exceptions are
`
`narrow. One exception is the “abstract idea” exception. The Supreme Court has warned against
`
`interpreting the exception too broadly, as that could could “swallow all of patent law” because
`
`“[a]t some level, ‘all inventions ... embody, use, reflect, rest upon, or apply laws of nature, natural
`
`phenomena, or abstract ideas.’” Alice Corp. v. CLS Bank Int’l, 134 S. Ct. 2347, 2354 (2014).
`
`B.
`
`Netflix Cannot Establish That The Patent Claims Are Directed To An
`Abstract Idea Under Alice Step 1.
`
`
`1 The ’535, ’477, ’907, and ’046 patents asserted in this case (“Fallon patents”) are related to
`each other and share substantially the same specification. Netflix has not argued that the
`remaining two asserted patents (the ’462 and ’298 patents) are patent ineligible under §101.
`2 The §101 arguments similar to those of Netflix have been considered and rejected by another
`court involving other Realtime patents that are incorporated by reference into the Fallon patents
`asserted in this case. Specifically, two judges in Texas have repeatedly found patents of the same
`inventor involving the same field (compression) to be eligible under §101. (See Ex. 1-3.)
`
`
`
` 1
`
`

`

`Case 1:17-cv-01692-CFC-SRF Document 14 Filed 02/20/18 Page 7 of 26 PageID #: 364
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`The threshold inquiry of the §101 analysis requires Netflix to demonstrate that the patent
`
`claims are directed to an “abstract idea,” i.e., an “idea of itself” or “fundamental truths or
`
`fundamental principles the patenting of which would pre-empt the use of basic tools of
`
`scientific and technological work.” Alice, 134 S. Ct. at 2355. Netflix fails to do so here. Under any
`
`fair characterization, the claims here are patent-eligible because they provide particular, technical
`
`solutions to technical problems specific to compression of digital computer data.
`
`1.
`
`Examining the patents confirms that they claim technological
`solutions to technological problems, not abstract subject matter.
`
`Under the Supreme Court’s Alice framework, claims that “improve[] an existing
`
`technological process” or “solve a technological problem in ‘conventional industry practice’” are
`
`patent eligible. Alice, 134 S. Ct. at 2358. The Federal Circuit has applied these standards in several
`
`controlling cases to uphold the patentability of claims challenged as abstract.
`
`In Finjan, the Federal Circuit held eligible a patent for identifying suspicious computer
`
`virus. Finjan, Inc. v. Blue Coat Sys., Inc., --- F.3d ---, 2018 WL 341882, at *2-4 (Fed. Cir. Jan. 10,
`
`2018). Finjan’s claim recited only three steps: (a) “receiving” computer program; (2) “generating
`
`… security profile that identifies suspicious code;” and (3) “linking” the security profile to the
`
`computer program. Id. The claim did not specify how to “identif[y] suspicious code.” Id. at *2.
`
`While acknowledging that prior Federal Circuit precedent has held that “virus screening,” by itself,
`
`is an abstract idea, the court nevertheless held that Finjan’s patent claim was not abstract because
`
`it was not directed to just any “virus screening,” but instead limited to a particular type of virus
`
`screening, which constituted improvement in computer functionality. In so holding, the court
`
`rejected the same argument advanced by Netflix here, namely, that the claims “do not sufficiently
`
`describe how to implement” any idea. Id. at *3-4. On this point, the court held that the three recited
`
`claimed steps were all that was needed to render the claim patent-eligible. Id.
`
`2
`
`

`

`Case 1:17-cv-01692-CFC-SRF Document 14 Filed 02/20/18 Page 8 of 26 PageID #: 365
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`The Realtime claims here present an even clearer case for patent-eligibility than those at
`
`issue in Finjan. In contrast to Finjan’s patent, which was about “virus screening” that previously
`
`was held to be abstract, Realtime’s claims are directed to digital data compression, which plainly
`
`is not abstract. See DDR, 733 F.3d at 1259. And the asserted claims are not just directed to digital
`
`data compression in general, but a particularized subset of novel digital data compression, which
`
`is directed to improving the capacity of a computer system to store more data or to transfer data
`
`more efficiently across computer systems. Moreover, the asserted claims require even more
`
`specific steps and components than those held eligible in Finjan. These include: (i) the use of “a
`
`plurality of different” compression algorithms or techniques; (ii) determining “data parameters”
`
`or “attributes” of a digital data block; (iii) “select[ing]” specific techniques based upon that
`
`determination relating to “a throughput of a communication channel,” or a digital data “access
`
`profile,” (iv) requiring the selected techniques to be “asymmetric,” and other novel elements. E.g.,
`
`‘535 patent claims 1 & 15; ‘477 claim 1; ‘907 claim 1; ‘046 patent claims 1 & 34.
`
`In Enfish, the Federal Circuit reversed an ineligibility ruling on a database patent, which
`
`the district court described as being directed to “storing, organizing, and retrieving memory in a
`
`logical table.” Enfish, LLC v. Microsoft Corp, 822 F.3d 1327, 1337 (Fed. Cir. 2016). The Federal
`
`Circuit held that “describing the claims at such a high level of abstraction and untethered from the
`
`language of the claims all but ensures that the exceptions to §101 swallow the rule.” Id. It further
`
`criticized the district court’s analysis for “downplay[ing] the invention’s benefits” disclosed in the
`
`specification. Id. at 1337–38. Because the claims were “designed to improve the way a computer
`
`stores and retrieves data in memory,”3 they were “directed to a specific implementation of a
`
`
`3 All emphasis added, unless otherwise stated.
`
`3
`
`

`

`Case 1:17-cv-01692-CFC-SRF Document 14 Filed 02/20/18 Page 9 of 26 PageID #: 366
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`solution to a problem in the software arts” and, thus, “not directed to an abstract idea.” Id. at 1339.4
`
`In Visual Memory, the claims recited a system with “operational characteristics” which
`
`“determines a type of data.” Visual Memory LLC v. NVidia, 867 F.3d 1253, 1257 (Fed. Cir. 2017).
`
`The court rejected defendant’s argument that the claims “are directed to no more than a desired
`
`result” or that the patent claim “nothing more than a black box.” Id. at 1260-61. The court
`
`cautioned against over-simplifying the claims, and held that they were directed to “improvements
`
`to computer functionality” as opposed to “economic or other tasks for which a computer is used
`
`in its ordinary capacity.” Id. at 1258-1261.
`
`In Core Wireless, the Federal Circuit affirmed eligibility of a patent about summarizing
`
`and presenting information in electronic devices. Core Wireless Licensing v. LG Elecs., Inc., ---
`
`F.3d ---, 2018 WL 542672, *4 (Fed. Cir. Jan. 25, 2018). In so doing, the court rejected defendants’
`
`failure to acknowledge key claim elements and cautioned that courts “must be mindful that all
`
`inventions at some level embody, use, reflect, rest upon, or apply laws of nature, natural
`
`phenomena, or abstract ideas.” Id. at *3. It held that the patent claimed “an improvement in the
`
`functioning of computers” (id. at *3-4) because the claims were limited “to a particular manner
`
`of summarizing and presenting information in electronic devices.” Id. at *4. As in Core Wireless,
`
`the patents at issue here claim particular manners of selecting and compressing digital data to
`
`improve the capacity of a computer system to store more data or to transfer data more efficiently.
`
`
`4 Similarly, in DDR, the claims addressed “the problem of retaining website visitors.” DDR v.
`Hotels.com LP, 773 F.3d 1245, 1257 (Fed. Cir. 2014). Despite being directed to e-commerce, the
`court held that these claims “stand apart” from abstract claims “because they do not merely recite
`the performance of some business practice known from the pre-Internet world along with the
`requirement to perform it on the Internet.” Id. Instead, “the claims recite[d] an invention that is not
`merely the routine or conventional use of the Internet.” Id. at 1259. Thus, they were eligible
`because the patented claims were “necessarily rooted in computer technology in order to overcome
`a problem specifically arising in the realm of computer networks.” Id.
`
`4
`
`

`

`Case 1:17-cv-01692-CFC-SRF Document 14 Filed 02/20/18 Page 10 of 26 PageID #: 367
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`As in Finjan, Enfish, DDR, Core Wireless, and Visual Memory, the claimed inventions
`
`here provide particular technological solutions to overcome technological problems, i.e., those
`
`specific to the field of digital-data compression. The patents themselves state they are directed to
`
`problems unique to the realm of digital data, a form of computer data “not easily recognizable to
`
`humans in native form.” (E.g., ’535 patent at 2:28-30.)5 In this realm, the patents describe using
`
`a combination of particular steps or structural computer components to help improve detection and
`
`exploitation of redundancies, for example, in the incoming strings of computer “1s” and “0s.”
`
`Like the inventions in Finjan, DDR, Enfish, Core Wireless, and Visual Memory, the patents
`
`teach specific improvements to the function of the computer parts themselves, such as computer
`
`memory and computer-data storage and retrieval mechanisms. For example, the patents describe
`
`problems in the conventional arts, including “limitations in the size of the data”; “file systems
`
`[that] are not able to randomly access compressed data in an efficient manner”; “slower access
`
`times”; and “a compromise between efficient data storage, access speed, and addressable data
`
`space.” (’535 patent at 6:31-53.) These are technological problems, as opposed to human problems.
`
`The Fallon patents expressly confirm that “[t]hese and other limitations within the current
`
`art are solved with the present invention.” (Id. at 7:46-47.) For instance, the claims recite novel
`
`technological systems in digital data compression utilizing two or more compressors (e.g.,
`
`“asymmetric” compressor6), and the systems configured to select a compressor based on a
`
`parameter of a data block / throughput of a communication channel. (See, e.g., id. at 7:51-8:54.)7
`
`
`5 “[S]ources properly considered on a motion to dismiss [include] the complaint, the patent, and
`materials subject to judicial notice.” Aatrix Software, Inc. v. Green Shades Software, Inc., -- F.3d
`--, 2018 WL 843288, at *5 (Fed. Cir. Feb. 14, 2018).
`6 “In “[a]n asymmetrical data compression algorithm[,] … the execution time for the compression
`and decompression routines differ significantly.” (’535 patent at 9:63-66.)
`7 See also, e.g., ’535 claims 1 & 15; ‘477 claim 1; ‘907 claim 1; ‘046 claims 1 & 34.
`
`5
`
`

`

`Case 1:17-cv-01692-CFC-SRF Document 14 Filed 02/20/18 Page 11 of 26 PageID #: 368
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`The patents describe that “the overall throughput (bandwidth) … is one factor considered by the
`
`controller 11 in deciding whether to use an asymmetrical or symmetrical compression” (id. at
`
`11:25-29), and recognized that “utiliz[ing] an asymmetrical algorithm … [may] provide an
`
`increase in the overall system performance as compared the performance that would be obtained
`
`using a symmetrical algorithm” (id. at 12:14-20). These claimed solutions are not abstract. They
`
`are necessarily rooted in computer technology and aimed at solving limitations in then-existing
`
`digital-data compression systems,8 i.e., technological solutions to technological problems.
`
`Realtime’s claims present a clearer case of eligibility than those held eligible in other cases.
`
`In DDR, after analyzing the invention, which were about “look and feel” of websites, the court
`
`held that, although the “claims do not recite an invention as technologically complex as an
`
`improved, particularized method of digital data compression,” they were nonetheless eligible.
`
`DDR, 773 F.3d at 1259. The claims here thus present precisely the type of invention the Federal
`
`Circuit recognized as unquestionably eligible: particularized methods of digital data compression.
`
`2.
`
`Another district court has repeatedly held that the subject matter of
`the asserted patents is patent-eligible despite several prior challenges.
`
`The asserted Fallon patents incorporate other patents of related Realtime entity, all invented
`
`by the same inventor and covering the same field (compression), including U.S. Pat. Nos.
`
`6,195,024 and 6,309,424 (see ’535 patent at 5:33-38); and 6,601,104 (id. at 9:19-28). These
`
`Realtime patents incorporated by reference in the asserted Fallon patents are in the same patent
`
`
`8 The patents are limited to compression of digital data. For example, the term “compress,” which
`is in all claims, had been construed for other Realtime patents to mean “represent data with fewer
`bits,” indicating digital data compression (“bit” is a unit of digital data). Realtime Data LLC v.
`Actian Corp., 2016 WL 4054914, at *18 (E.D. Tex. July 28, 2016); Realtime Data LLC v.
`Rackspace US, Inc., 2017 WL 2590195, at *8 (E.D. Tex. June 14, 2017). Also, “data block” was
`construed for other Realtime patents to mean “a single unit of data, which may range in size from
`individual bits through complete files or collection of multiple files.” Id. at *18. Any construction
`that does not limit the terms to digital data would be contrary to the plain and ordinary meaning.
`
`6
`
`

`

`Case 1:17-cv-01692-CFC-SRF Document 14 Filed 02/20/18 Page 12 of 26 PageID #: 369
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`family as other Realtime patents that a district court has repeatedly held to be patent eligible. For
`
`example, in Realtime Data LLC v. Actian Corp., a Texas court found U.S. Pat. Nos. 7,378,992;
`
`8,643,513; 6,597,812; 7,415,530; and 9,116,908 to be patent eligible.9 2016 WL 259581 (E.D.
`
`Tex. Jan. 21, 2016) (Ex. 2; see also Ex. 3.) And, in Realtime Data LLC v. Carbonite Inc., the Texas
`
`court found U.S. Pat. Nos. 9,054,728 and 8,717,204, as well as the ‘530 and ‘908 patents to be
`
`patent eligible.10 2017 WL 4693969 (E.D. Tex. Sept. 20, 2017) (Ex. 1).
`
`In so holding, the Realtime court rejected some of the same arguments advanced by Netflix
`
`here. For instance, the ’728 patent related to “analyz[ing] data … to identify one or more
`
`parameters or attributes” in performing compression, among other things. Id. at *1. The court held
`
`that the patents are “directed to non-abstract improvements to computerized data compression
`
`techniques” and “is a solution to a computing problem.” Id. at *5. Same reasoning applies here.
`
`3.
`
`Netflix’s flawed arguments mischaracterize the law and claims.
`a.
`
`Netflix mischaracterizes the applicable law.
`
`As the Federal Circuit in Finjan, Enfish, Core Wireless, and Visual Memory explained, the
`
`law draws a line of distinction between patent claims in which “computers are invoked merely as
`
`a tool” (which may be ineligible) and patent claims that provide technological solutions to
`
`technological problems (e.g., “improvement in computer capabilities,” which are patent eligible).
`
`Enfish, 822 F.3d at 1335-36; Visual Memory, 867 F.3d at 1258-59.11 Applying that law here
`
`requires rejection of Netflix’s argument. It is not the mere fact that the asserted patents are in the
`
`
`9 The ’513/’992 patents are related to the ’024/’424 patents incorporated by reference in the
`asserted Fallon patents; and the ‘530/‘908 patents are related to the ’104 patent incorporated by
`reference in the asserted Fallon patents.
`10 The ’728 patent is related to the ’024/’424 patents incorporated into the asserted Fallon patents.
`11 See also McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299, 1315 (Fed. Cir. 2016)
`(rejecting argument that inventions “simply use a computer as a tool” and holding patents eligible
`because claims “focused on a specific asserted improvement in computer animation”).
`
`7
`
`

`

`Case 1:17-cv-01692-CFC-SRF Document 14 Filed 02/20/18 Page 13 of 26 PageID #: 370
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`digital domain that is relevant; rather, it is the fact that the problems that gave rise to Realtime’s
`
`inventions are rooted in digital computer technologies, and also that the solutions provided in
`
`Realtime’s inventions are improvements on the computer capabilities—e.g., increasing the
`
`capacity of a computer system to store or to transfer data more efficiently in flexible ways.
`
`Netflix relies on inapplicable cases involving patents that are not about digital data
`
`compression at all, much less the narrow subset of digital data compression systems claimed here.
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`For example, the patent at issue in RecogniCorp, LLC v. Nintendo Co., 855 F.3d 1322 (Fed. Cir.
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`2017), relied on by Netflix, was about “creating [an] image” by using a mathematical formula
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`(“one multiplication operation”). 855 F.3d at 1324. Netflix mischaracterizes RecogniCorp in
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`arguing that it was about compression of digital data (e.g., Mot. at 10, n.4). The Federal Circuit
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`expressly found otherwise, holding that the invention in RecogniCorp “does not even require a
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`computer; the invention can be practiced verbally.” 855 F.3d at 1328. In contrast, the claims at
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`issue here cannot be “practiced verbally,” nor do they claim a mathematical formula. Indeed, the
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`patent specifically discusses digital computer data “not easily recognizable to humans in its native
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`form.” (’535 patent at 2:28-30.) Moreover, unlike an invention about creating an image, the Fallon
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`patents are directed to technological improvements (e.g., specific methods of reducing the amount
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`of bits) that solve technological problems (e.g., increasing the capacity of a computer system to
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`store or transfer data more efficiently in flexible ways) by utilizing multiple compressors (e.g.,
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`asymmetric compressors) and selecting among the multiple compressors to compress data blocks
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`based on a parameter relating to, e.g., the data blocks and/or throughput (bandwidth) of a
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`communication channel.12 Netflix has not shown (nor can it) that the inventions were conventional.
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`Netflix’s reliance on other cases, involving entirely different subject matter, is similarly
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`12 See, e.g., ’5