Case 2:19-cv-00395-JRG Document 28 Filed 04/07/20 Page 1 of 36 PagelD #: 587
`
`IN THE UNITED STATES DISTRICT COURT
`
`FOR THE EASTERN DISTRICT OF TEXAS
`
`MARSHALL DIVISION
`
`LUMINATI NETWORKSLTD.
`
`Plaintiff,
`
`v.
`
`TESO LT, UAB; OXYSALES, UAB;
`METACLUSTER LT, UAB;
`
`Defendants.
`
`
`Case No. 2:19-cv-395-JRG
`
`LUMINATYIS OPPOSITION TO DEFENDANTS’ MOTION TO DISMISS
`
`NetNut Ltd. v. Bright Data Ltd.
`NetNut Exhibit 1004
`Page 1 of 36
`
`

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`Case 2:19-cv-00395-JRG Document 28 Filed 04/07/20 Page 2 of 36 PagelD #: 588
`
`TABLEOFCONTENTS
`
`F,.
`
`INTRODUCTIONocccccccssesssasscosecsssssccessecseosesscasscesecsssssscessesseosesssasscesssssssscsessessensesscasscssesssssess 1
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`Il. STATEMENT OF THE ISSUES...........ccccscsscsssessesssssssssssesssessessessessessessessssseessessessessessessens 1
`
`Ill. FACTUAL AND PROCEDURAL BACKGROUND. ..........csssssssssssssssssssssssessesssssesseesees 2
`
`A. Technical Background of Asserted Patents ..0...0....cccccccccceeeeeseeeeeeeeeeseeneeeaeeeseeeeeeaeeeaeeneeeaeeees 2
`
`B. Procedural History.......c.cccccccccceccesccseesseeeeceseeeeeeseeesecaecseeesecesececeseeeaeeseeeaeseaeeeeeeaeeeaeeeeeaeeees 8
`
`IV. LUMINATI’S ASSERTED PATENT CLAIMS ARE VALID UNDER101..............000 8
`
`A. Legal Standard ......ccccccccccccccseesseeseeeseeeseeeeeeseeeeeeseeeseeeaeeseeeseeeaeeseeeaeeeaeeeeeseseaeseeeeeseaeeneseaeeees 8
`
`1. Step One: The Asserted Patents Are Not “Directed To” An Abstract Idea or Law of
`Nature oo... ecccceccceceeeeeeeseceeceeeeseceeeeseeeseceeeseeeaesseeeseeeneeeeeseseaesseeeseseaeeeeeseseaeeseeeaeeeeeeeeseneeeaee 10
`
`2. Step Two: The Asserted Claims Recite Inventive Concepts.............ccccccccececeseeeeeeeeeeees 11
`
`B. Defendants misconstrue patent terms to overgeneralize the claims and make them seem
`more abstract than they are........ccccc cece ccceceseceseeceseeeseeceaeecseeceseecsaeceaeeeaeceeeeeseeseaeeeseeeeaees 12
`
`C. The Asserted Patents Satisfy Alice Step One. They Are Directed Toward an Entirely New
`Network Based on an Innovative Server-Client Device-Web Server Architecture........... 14
`
`L.
`
`2.
`
`3.
`
` °319 Patent Claims 2.0... cece eccccecceeseeeeeeseeeseeeeeeseeeseeeseeeeeeaeseaeeaeeseeeaeeeeeeeeeaeeeeeeneseaeenaee 14
`
`‘510 Patent Claims oo... cece cc cccccceeeeseeseeceeeeeeeseecseeeeeseceaeceaeeseseaeceeeseeeaeeeeeeaeseaeeneeeneeees 15
`
`$614 Patent Claims ooo. cece cece cceeeeneeeeeeeeseeeseeeeseeeeeceseecseeseseeeseeseseeesaeseaeeeseeeeaeeeues 16
`
`4. Defendants’ argumentthat the claims use “routine and ordinary devices andservers... in
`a routine and ordinary way”is incorrect and a misapplication of the law... 17
`
`5. Defendants’ cited cases are distinguishable ..0....0...0.c cece ccc eceeeeseeeeeeeeseeeeeeeeseeeeaeeeeee 19
`
`D. The Asserted Patents Meet Alice Step Two By Reciting Inventive Concepts..............0.... 23
`
`1. The Asserted Patents recite inventive concepts and improvements...............::cceeeeeeeee 23
`
`2. Under Alice step two, the question of whether the claims are conventional is a question
`of fact not amenable to dismissal or summary judgment.............ccecceeeeeeeeeteeeeeeneeeeeeeee 25
`
`Vv. LUMINATI’S NON-PATENT CLAIMS SHOULD NOT BE DISMISSED UNDER
`12(B)(6), BECAUSE LUMINATI PROPERLY PROVIDED NOTICE OF FACIALLY
`PLAUSIBLE CLAIMS cccccsccsccossesssssessessessessecsceosvesessessessensessesseoseesoessssessessessesseasecsoesenssesses 26
`
`A. Legal Standard.....ccccccccccccccccccccceeeeeseeeseeceseceseeeeeeceseecseeceseeceaeceseeceeeseseeeeaeseseeceaeeeeeeeeaeeeaes 26
`
`B. Plaintiff Properly Pled Misappropriation of Trade Secrets...........cccceccceeeeeeeeeeeeeeeeeeeeeeeees 26
`
`C. Plaintiff Properly Pled Intentional Unauthorized Access of a Protected Computer.......... 27
`
`D. Plaintiff Properly Pled False Advertising Under the Lanham Act.............ccccccececeeeeeeeeees 28
`
`E. Plaintiff Properly Pled Tortious Interference with Business Relations........0..000.eeeeeeee 30
`
`VI. CONCLUSION........ccsccsssssessssscessessessessessecssseeseesssssessessessssssesenseessessessessesssnssessnssessssessensens 30
`
`NetNut Ltd. v. Bright Data Ltd.
`NetNut Exhibit 1004
`Page 2 of 36
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`

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`Case 2:19-cv-00395-JRG Document 28 Filed 04/07/20 Page 3 of 36 PagelD #: 589
`
`TABLE OF AUTHORITIES
`
`Cases
`
`Aatrix Software, Inc. v. Green Shades Software, Inc., 882 F.3d 1121 (Fed. Cir. 2018).. 12, 21, 23,
`25
`
`Alice Corp. Pty. Ltd. v. CLS Bank Int'l, 134 S. Ct. 2347 (2014) ..eeeeccccccceeseeeeeeteeeeeeeees 9, 10, 11
`
`AmdocsIsr. Ltd. v. Openet Telecom, Inc., 841 F.3d 1288 (Fed. Cir. 2016)... 11,21, 22, 25
`
`Atticus Research Corp. v. Mmsofi Design, 2018 U.S. Dist. LEXIS 228681 (S.D. Tex. Sept. 6,
`QOLB8).cceecceccecceceseeecsecseeseseeseeeeeecsecseeeesecseeeeecseceeecseeseeeesessecseeessesseeeseecsecaeeesseeseceeeeeseceeeesesaeeeeeees 24
`
`Bancorp Servs. L.L.C v. Sun Life Assurance Co. ofCanada, 687 F.3d 1266 (Fed. Cir. 2012).... 12
`
`BASCOMGlob. Internet Servs., Inc. v. AT&T Mobility LLC, 827 F.3d 1341 (Fed. Cir. 2016)... 21
`
`Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) ..ccccccccccccccscsscsseeeeeeeeseeseesecseeseeeeseeeeeeaeeaeeaeeneens 26
`
`Berkheimerv. HP Inc., 881 F.3d 1360 (Fed. Cir. 2018).....0.cccccccccccccsseccesseeeeseeeeeseeeeeaeeee 10, 12, 25
`
`Butowskyv. Folkenflik, Civil Action No. 4:18CV442, 2019 U.S. Dist. LEXIS 104297 (E.D. Tex.
`Apr. 17, 2019) oeccecccccccsceeseeeeeeeseeseeseeseeseeseeseeseeeeeaeeaeesecsecsecsesseeseeeeeeaeeaeeaecsesaeeaeseeseaseaeeaseaeenees 29
`
`buySAFE,Inc. v. Google, Inc., 765 F.3d 1350 (Fed. Cir. 2014)... ccc ccceeeeeeeeeeeeeeeneeeeeeeeee 22, 24
`
`Content Extraction & Transmission LLC y. Wells Fargo Bank, Nat'l Ass'n, 776 F.3d 1343 (Fed.
`Cir, 2014) cece ccc cceceeceecseceeceeeeeeeeeeseceesaesseesesaceeeeeeeeecsesseceassesseseeseeeseeeaeesessesseseseeeeeseeseeseaeeaee 10
`
`Core Wireless Licensing S.A.R.L. v. LG Elecs., Inc., 880 F.3d 1356 (Fed. Cir. 2018) wu... 21
`
`CXTSys. v. Acad., Ltd., No. 2:18-CV-00171-RWS-RSP, 2019 U.S. Dist. LEXIS 51992 (E.D.
`Tex. Mar. 27, 2019). ...cccccccccccccscccssccsecessccesecesecceseceseeceseceseccesecesecesecesaeceaeceseceeseceseeceaeeeneeeeseeeues 25
`
`DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014 wo..ccccccccccccseceeeeseeeeees 20
`
`Diamond v. Diehr, 450 U.S. 175 (1981) ...ccccccccccscceeceseeesseceseceseeceseeeseeceseeeseeeeaeeeseeeaeee 10, 20, 23
`
`Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d 1350 (Fed. Cir. 2016) ....ccccccccecceeeeeeeeeeee 21, 24
`
`Enfish, LLC v. Microsoft Corp., 822 F.3d 1327 (Fed. Cir. 2016).......cccccccccesceseeeeeeeeeseeeneeeee 18, 20
`
`Finjan, Inc. v. Blue Coat Sys., Inc., 879 F.3d 1299 (Fed. Cir. 2018) .occccceccccceceeeeeeseeeeeeeeseeeeeees 21
`
`Freenyv. Fossil Grp., Inc., 2019 U.S. Dist. LEXIS 36688 (E.D. Tex., Feb. 12, 2019)... 21
`
`NetNut Ltd. v. Bright Data Ltd.
`NetNut Exhibit 1004
`Page 3 of 36
`
`

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`Case 2:19-cv-00395-JRG Document 28 Filed 04/07/20 Page 4 of 36 PagelD #: 590
`
`Frisco Med. Ctr., LLP. Bledsoe, 147 F. Supp. 3d 646 (E.D. Tex. 2015) wo. cececeeeeeeeeeeeee 27, 28
`
`In re Katrina Canal Breaches Litig., 495 F.3d 191 (Sth Cir. 2007) .occcccecccccccceecseeeeeeeeeeeeeeeeeee 26
`
`Intellectual Ventures I LLC v. Capital One Bank, 792 F.3d 1363 (Fed. Cir. 2015)... 22
`
`Intellectual Ventures I LLC v. Symantec Corp., 100 F. Supp. 3d 371 (D. Del. 2015)... 22
`
`Intellectual Ventures II LLC vy. BITCO Gen. Ins. Corp., 362 F. Supp. 3d 370 (E.D. Tex. Jan. 24,
`QOL) eececccccceceecsecsecseesecsecceceeceecceeceeesecsecsecsecsececeeseeeeaceeecsecsecsecseceseeeseeeeeeeecaecsecseseeeeeseeeseseaeeeeea 22
`
`Interval Licensing LLC v. AOL,Inc., 896 F.3d 1335 (Fed. Cir. 2018).....cccecceeeceeteeeeeeeeeee 22, 24
`
`Kazee, Inc. v. Callender, No. 4:19-CV-31-SDJ, 2020 U.S. Dist. LEXIS 36105 (E.D. Tex, March
`2, 2020). .ececcecceccesecsecseesecsececeeeeeeseeeeeesesseesessecsessessaeeeeeaecseceeesesecseseeeeeeeeeaeeeeseecsesaseeseeseeeeeeeaeenee 26
`
`Lifetime Indus., Inc. v. Trim-Lok, Inc., 869 F.3d 1372 (Fed. Cir. 2017) w..cccccccccccccseeeeeseeeseeeeees 26
`
`Lormand v. US Unwired, Inc., 565 F.3d 228 (Sth Cir. 2009) .....cccccccccccccceccseeeseeeseeeeeeeeseeeeeeeees 26
`
`Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. 66 (2012) wu... 11
`
`McRO,Inc. v. Bandai Namco Games Am.Inc., 837 F.3d 1299 (Fed. Cir. 2016)... ceceeeeeeees 11
`
`Milkovich v. Lorain Journal Co., 497 U.S. 1 (1990) .occcccccccccccccsseceseecsscceseceseecesecesaeceseeeseeeeaeceees 29
`
`Mortg. Grader, Inc. v. First Choice Loan Servs., Inc. 811 F.3d 1314 (Fed. Cir. 2016)............. 23
`
`MyMail, Ltd. v. ooVoo, LLC, 934 F.3d 1373 (Fed. Cir. 2019 ...ccccccccccceesecsseeeeeeeeeeesceaeeaeenees 8, 12
`
`NobelBiz, Inc. v. InsideSales.com, Inc., No. 6:13-cv-360, Dkt. 32 (E.D. Tex. Oct. 14, 2014)..... 26
`
`Parus Holdings, Inc. v. Sallie Mae Bank, 137 F. Supp. 3d 660 (N.D. Cal. 2015)... eee 21
`
`Pizza HutInc. v. Papa John’s Int’] Inc., 227 F.3d 489 (5" Cir. 2000) ...cecscsceceseseseseeseseseeeeeseseeees 28
`
`Rapid Litig. Mgmt. Ltd. v. CellzDirect, Inc., 827 F.3d 1042 (Fed. Cir. 2016) wo... cceecceeeeeeeeeee 20
`
`Reese v. Sprint Nextel Corp., 774 Fed. App’x 656 (Fed. Cir. 2019) occ cccccceeceeeeeeeeeeeeeeees 21
`
`SAP Am., Inc. v. InvestPic, LLC, 898 F.3d 1161 (Fed. Cir. 2018) ..ccccccccccccseceseeeseceeseeeseeeeeeee 20
`
`Specialized Monitoring Sols., LLC vy. ADT LLC, 367 F. Supp. 3d 575 (E.D. Tex. 2019) ............ 20
`
`Staton Holdings, Inc. v. Russell Ath., Inc., Civil Action No. 3:09-CV-0419-D, 2009 U.S. Dist.
`LEXIS 108603 (N.D. Tex. Nov. 20, 2009) .....ccccccccccsccssceseceseeseeeseeseecseceseceeceseeeaeeeeceeeeaeensees 30
`
`NetNut Ltd. v. Bright Data Ltd.
`NetNut Exhibit 1004
`Page 4 of 36
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`Case 2:19-cv-00395-JRG Document 28 Filed 04/07/20 Page 5 of 36 PagelD #: 591
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`Test Masters Educ. Servs., Inc. v. Singh, 428 F.3d 559 (Sth Cir. 2005) .....ccceccecceeeeteeeeeeteeeeees 26
`
`Thales Visionx, Inc. v. United States, 850 F.3d 1343 (Fed. Cir. 2017)... cece cceeeeeeeeeee 10, 20
`
`Tinnus Enters., LLC v. Telebrands Corp., No. 6:17-CV-00170-RWS, 2018 U.S. Dist. LEXIS
`79068 (E.D. Tex. Mar. 9, 2018) ..ccccccccccccccceececececsececsecsecseseeeeeeeseceecsecsecsecseseeseeeeeseeseeeeaeeas 28
`
`TLI Communs. LLC v. AV Auto., L.L.C. (In re TLI Communs. LLC PatentLitig.), 823 F.3d 607
`(Fed. Cir, 2016) ...cccccccccccccccccccccsssccceseecceecccesescesseeceeseeessecceuscceaeecesueeceueecesaeceesueeeeeeeeeaeees 13, 19
`
`Trading Techs. Int'l, Inc. v. COG, Inc., 675 Fed. App’x. 1001 (Fed. Cir. 2017)...eee 11
`
`Transmission LLC v. Wells Fargo Bank, Nat’l Ass’n, 776 F.3d 1343 (Fed. Cir. 2014)... 22
`
`Uniloc United States, Inc. v. Samsung Elecs. Am., Inc., No. 2:17-CV-00651-JIRG, 2018 U.S.
`Dist. LEXIS 176336 (E.D. Tex. Sep. 18, 2018).....cccecccccececeeeeeceeeeeecseeeeeeesecseeeeseseeeeeeesseeeeeeeees 9
`
`Visual Memory LLC vy. NVIDIA Corp., 867 F.3d 1253 (Fed. Cir. 2017) ...ccccccecceceeeeeeeeneeeeeeeeee 21
`
`Voip-Pal.com, Inc. v. Apple Inc., 411 F. Supp. 3d 926 (N.D. Cal. 2019)... cccecccceeeeteeteeteeeees 20
`
`WindyCity Innovations, LLC vy. Facebook, Inc., 411 F. Supp. 3d 886 (N.D. Cal 2019)... 22
`
`
`Statutes
`
`18 U.S.C. § LOZ O(e)CL 1) eee eee ccc ceeeceeeeceeeseceeeeeeeeseeeeeeeeeeeeceeesessesseseeeeseeeeeeeeesaessesseseeseeseeseeeeaeeaees 28
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`NetNut Ltd. v. Bright Data Ltd.
`NetNut Exhibit 1004
`Page 5 of 36
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`Case 2:19-cv-00395-JRG Document 28 Filed 04/07/20 Page 6 of 36 PagelD #: 592
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`I,
`
`INTRODUCTION
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`Defendants move to dismiss patent claims as not patent eligible and non-patent claims as
`
`failing to state a claim for which relief can be granted. Neither argument has any merit.
`
`Defendants know they cannot win their A/ice motion based on the actual claim limitations, which
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`are tangible and not abstract. So, instead, they build “straw man” claims by misconstruing the
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`claim requirements and rewriting the claims to make them seem moregeneric than they are. To
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`do so, Defendants intentionally gloss over the claimed, innovative server-client device-web server
`
`architecture and other importantlimitations.
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`Defendants’ arguments lack basic credibility. The Patent Office reviewed and granted
`
`these claims, yet Defendants would have the Court believe the claims do nothing more than
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`describe the Internet, or, even more unbelievably, a method of communication practiced by middle
`
`school children. The Patent Office knows what the Internet is. The patent examiner understood
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`that the Asserted Patents created a new network of client peer devices that constitute a tangible,
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`patentable advance in networking technology.
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`As to the non-patent claims, Luminati has provided extensive factual allegations in support.
`
`The Complaint includes allegations regarding Defendants’ access to test emails, contact with
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`Luminati former employees, and publication of advertisements containing false and misleading
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`statements regarding Luminati’s patents and patented technology. The allegations are further
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`supported by exhibits attached to the Complaint. These allegations are more than sufficient to
`
`provide notice of plausible claims by Luminati and meet the pleading standard.
`
`Il.
`
`STATEMENT OF THE ISSUES
`
`Defendants’ 12(b)(6) Motion raises two issues:
`
`(i) Whetherthe asserted patents are unpatentable under 35 U.S.C. § 101 as abstract, when
`
`NetNut Ltd. v. Bright Data Ltd.
`NetNut Exhibit 1004
`Page 6 of 36
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`Case 2:19-cv-00395-JRG Document 28 Filed 04/07/20 Page 7 of 36 PagelD #: 593
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`the patents claim methodsthat create a novel computer networkarchitecture performed bya client
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`device, such as a normal consumercell phoneorlaptop, serving as a proxy within a server — client
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`device — web server system architecture, when courts regularly hold that improvements to network
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`architecture are patentable and not abstract; and
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`(ii) Whether the Luminati pled sufficient facts to meeting the pleading standardsfor its
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`non-patent causesofaction.
`
`fil.
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`FACTUAL AND PROCEDURAL BACKGROUND
`
`A.
`
`Technical Background of Asserted Patents
`
`The patent claims at issue address a new computer network architecture. The asserted
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`claims includeat least claims 1, 17, 24, 25, and 27 of U.S. Patent No. 10,257,319 (*319 Patent”),
`
`claims 1, 8, 13, 15, 16, 18, 20, 22, and 23 of U.S Patent No. 10,484,510 (“*510 Patent’’), and claims
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`1, 2,4, 7, 9, 11, 12, 15, 16, 17, and 29 of U.S. Patent No. 10,469,614 (‘614 patent”), with the
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`patents referred collectively as the Asserted Patents. Complaint at {| 28, 54, 67, 80.
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`The ‘319 and ‘510 patents, directed to architecture and methodsfor fetching content over
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`the Internet, share the same named inventors (Derry Shribman and Ofer Vilenski),
`
`the same
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`specification (the ‘510 patent is a continuation of the ‘319 patent), and the sametitle: “System
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`Providing Faster and More Efficient Data Communication.” Complaintat {[] 14-15, 62, 75; see
`
`also Dkt. 1-2 and 1-3. Both patents claim priority to provisional application 61/249,624,filed on
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`October 8, 2009. Complaintat {| 62, 75. The ‘614 patentis also directed to a server-client device-
`
`webserverarchitecture and methodsfor fetching content over the Internet and has the same named
`
`inventors.
`
`It
`
`is in a different patent family that claims priority to provisional application
`
`61/870,815, filed on August 28, 2013. Complaintat {| 14-15, 48; Dkt. 1-1.
`
`The
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`‘319 and ‘510 Patents create a “system designed for
`
`increasing network
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`NetNut Ltd. v. Bright Data Ltd.
`NetNut Exhibit 1004
`Page 7 of 36
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`Case 2:19-cv-00395-JRG Document 28 Filed 04/07/20 Page 8 of 36 PagelD #: 594
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`communication speed for users...” Dkt. 1-2 at Abstract.'! As describedin the sharedspecification,
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`{t]he present inventionis related to Internet communication, and moreparticularly, to improving
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`data communication speed and bandwidth efficiency on the Internet.” Jd. at 1:23-25. “The need
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`for a new methodof data transfer that is fast for the consumer, cheap for the content distributor
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`and does not require infrastructure investment for ISPs, has become a major issue whichis yet
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`unsolved.” /d. at 1:54-57. The ‘319 and ‘510 Patents discuss that previous “proxy servers” fail to
`
`provide a “comprehensivesolution for Internet surfing,”at least in part because they “would need
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`to be deployed at every point around the world wherethe Internet is being consumed.”/d.at 2:24-
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`27; see also 2:8-23.
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`Instead, to create a new type of consumer-based network that never existed before, these
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`patents employ “client devices,” which are consumerdevices that operate as proxies.
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`Id. at 3:13-
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`55. The client devices (circled in red below) are modified to function asaclient, peer or agent and
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`serve as a proxy in the system, permitting “any numberof agents and peers.”Id. at 4:43-64.
`
`The present system and method provides for faster and more efficient data
`communication within a communication network. An example of such a
`communication network 100 is provided by the schematic diagram of FIG. 3. The
`network 100 of FIG. 3 contains multiple communication devices. Due to
`functionality provided by software stored within each communication device,
`which maybe the same in each communication device, each communication device
`mayserve asaclient, peer, or agent, depending upon requirements of the network
`100, as is described in detail herein. It should be noted that a detailed description
`of a communication device is provided with regard to the description of FIG. 4.
`
`Returning to FIG. 3, the exemplary embodimentof the network 100 illustrates that
`one of the communication devices is functioning as a client 102. The client 102 is
`capable of communication with one or more peers 112, 114, 116 and one or more
`agents 122. For exemplary purposes, the network contains three peers and one
`agent, although it is noted that a client can communicate with any numberof agents
`and peers.
`
`' Citationsto the specification of the ‘319 Patent at Dkt. 1-2 also apply to the sameportion of the
`‘510 Patent (Dkt. 1-3).
`
`NetNut Ltd. v. Bright Data Ltd.
`NetNut Exhibit 1004
`Page 8 of 36
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`

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`Case 2:19-cv-00395-JRG Document 28 Filed 04/07/20 Page 9 of 36 PagelD #: 595
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`
`
`FIG. 4
`
`FIG. 3
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`The ‘614 Patent creates a client device network of “tunnel devices” that are client devices
`
`(circled in red below) within a server-client device—web server architecture. Complaint at {| 51;
`
`Dkt. 1-1 at 1:19-23 (“apparatus and method for improving communication over the Internet by
`
`using intermediate nodes, andin particular, to using devices that may doubly function as an end-
`
`user and as an intermediate node.”).
`
`Each of devices herein may consist of, include, be part of, or be based on,a part of,
`or the whole of, the computer 11 or the system 100 shownin FIG. 1. Each of the
`servers herein may consist of, may include, or may be based on,a part or a whole
`of the functionalities or structure (such as software) of any server described in the
`‘604 Patent, such as the web server, the proxy server, or the acceleration server.
`Eachofthe clients or devices herein may consist of, may include, or may be based
`on, a part or a whole of the functionalities or structure (such as software) of any
`client or device described in the ‘604 Patent, such as the peer, client, or agent
`devices.
`
`In one example, an accessing to a data server is improved byusing an intermediate
`device referred to as ‘tunnel’ device, that is executing a ‘tunnel’ flowchart. FIG. 5
`showsa system 30 including twoclient devices, a client device #1 31a and a client
`device #2 31b, that may access the data 20 servers 22a and 225 using one or more
`of a tunnel device #1 33a, a tunnel device #2 33b, and a tunnel device #3 33c, under
`the managementand control of an acceleration server 32. These network elements
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`NetNut Ltd. v. Bright Data Ltd.
`NetNut Exhibit 1004
`Page 9 of 36
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`Case 2:19-cv-00395-JRG Document 28 Filed 04/07/20 Page 10 of 36 PagelD #: 596
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`communicates with each other using the Internet 113. Dkt. 1-1 at 83:4-15.
`
`30
`
`33b
`
`Tunnel #2
`
`110
`\
`
`NyeK 31b —
`‘/2a
`“ae
`.
`he,
`__
`Was
`“A
`“*
`
`
`Tunnel #3
`
`me,
`
`Tunnel #3
`
`ms,
`
`a
`
`ke
`
`e
`
`
`
`
`
`asa cones=INternet Client #2
`
`
`
`FIG. 5
`
`FIG. 11
`
`The ‘614 Patent further improves on the above network by having the proxy client devices
`
`dynamically shift between two states based onacriteria. Specifically, the client (tunnel) device
`
`is available as a proxy in the first state (for example, when there is sufficiently available
`
`bandwidth) and unavailable in the second state (for example, when there is not sufficiently
`
`available bandwidth). Complaint at {| 51.
`
` Criteria-based dynamic switching improves the
`
`performance of the system by maintaining a new, dynamic network madeexclusively of available
`
`client devices that can meet a given performancecriteria. Dkt. 1-1 at 124:3-13.
`
`A device maybe selected to provide a service, such as a tunnel device that may be
`selected (alone or as part of a group) by a client device as part of the ‘Select
`Tunnels’ step 10la in the flowchart 100. The selected tunnel device mayshift to the
`‘offline’ state 301 or to the ‘congested’ state 303, and thus respectively becomes
`unavailable or less effective to use. In such a case, a new tunneldevice, that was
`not formerly selected, may be now selected as a substitute for the ‘offline’ or
`‘congested’ tunnel device as part of a ‘Replace Device’ step 321d.
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`NetNut Ltd. v. Bright Data Ltd.
`NetNut Exhibit 1004
`Page 10 of 36
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`Case 2:19-cv-00395-JRG Document 28 Filed 04/07/20 Page 11 of 36 PagelD #: 597
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`40
`\
`
`dla
`
`41b
`
`dic
`
`41d
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`doe —» 103.52.25.73|24/1 20:42 Cairo, Egyot
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`FIG. 5a
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`This network created by a registry of available client devices as proxies has notable
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`advantages. For example, it provides untraceability and anonymity, which in turn stops requests
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`from being blocked. ‘614 Patent at 87:51-88:10. As addressed in paragraph 17 of the Complaint,
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`this anonymity addressed a well-known problem with direct requests over the Internet that
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`otherwise permit web servers to identify requesting devices (emphasis added):
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`“Since 2014, Luminati has offered proxy-based services relying on its “Residential
`Proxy Network”that practice one or more claims of the Asserted Patents. Luminati
`permits its business customersto utilize its residential proxy network to gather data
`overthe Internet using residential proxy devices from variouslocalities as required
`by the customers. Because each of these residential proxy devices has its own
`residential IP address, web servers receiving requests from these proxy devices do
`not recognize such requests as originating from the actual user making the request.
`Instead, the server identifies the request as coming from a residential device based
`uponthe residential IP address of the proxy device. These residential proxy devices
`provide businesses with a number of advantages. For example, online retailers may
`anonymously use these residential proxy devices to gather information from web
`servers (such as for comparative pricing), businesses may utilize these devices to
`test their web sites from any city in the world, and cybersecurity firms may employ
`these devices to test web sites for malicious code.”
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`Traditional data center proxy services used proxy data servers with a limited number of
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`commercial IP addresses.
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`‘319 Patent at 2:8-32. Target servers regularly blocked such proxies
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`NetNut Ltd. v. Bright Data Ltd.
`NetNut Exhibit 1004
`Page 11 of 36
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`

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`Case 2:19-cv-00395-JRG Document 28 Filed 04/07/20 Page 12 of 36 PagelD #: 598
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`because a target server could easily identify such commercial IP addresses, or a web server might
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`intentionally send incorrect information to such an address, for example. Additional IP addresses
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`leasing failed to solve the problem becausethey werestill identifiable as commercial IP addresses
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`and leasing individual addressesis prohibitively expensive beyond a numberin the thousands.
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`In contrast, the Asserted Patents created a new residential IP proxy network that solved
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`these problems.
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`It was made of a dynamic registry of consumer devices that would go on and
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`offline but allowed for a proxy network with millions of nodes instead of thousands. As consumer
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`devices, they would noteasily be identified or blocked. This contrasts with the previously client-
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`server Internet architecture that relied on servers as proxies. Dkt. 1-1 at 4:40-61.
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`The claimed solution provides concrete structure differing from the prior art. The Asserted
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`Claims require this new networkarchitecture of a server-client device-web server to operate. The
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`‘614 patent also requires additional functionality on the proxy client device to optimize the
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`architecture by dynamically that client devices meetcriteria, such as available bandwidth, access
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`to wi-fi connections versus cellular connections, etc. The real-time nature of the ‘614 patent also
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`ensures that the content obtained is fresh and that not cached. Dependentclaims add limitations
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`such as causing the client device and server to periodically communicate (claim 17 of the ‘319
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`Patent and claim 8 of the ‘510 Patent); downloading the software application containing the
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`computerinstructions that causes the client device to perform the claimed steps (claim 13 of the
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`‘510 Patent); receiving the request from thefirst server over the established TCP connection (claim
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`15 of the ‘510 Patent); the client device performsthe determiningstep (claim 2 of the ‘614 Patent);
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`the client device is a smartphone (claim 16 of the ‘614 Patent); and the client device is using a
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`client operating system, which can be a mobile operating system including Android version 2.2 or
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`Apple iOSversion 3 (claims 9, 11, and 12 of the ‘614 Patent).
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`NetNut Ltd. v. Bright Data Ltd.
`NetNut Exhibit 1004
`Page 12 of 36
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`

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`Case 2:19-cv-00395-JRG Document 28 Filed 04/07/20 Page 13 of 36 PagelD #: 599
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`B.
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`Procedural History
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`On July 19, 2018 Luminati filed a complaint against Tesonet, UAB (‘“‘Tesonet”)
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`in
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`Luminati Networks Ltd. v. UAB Tesonet, case no. 2:18-cv-299 (“Tesonet Action”) for patent
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`infringement followed by an amended complaint (Dkt. 15) on December 12, 2018 adding claims
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`of misappropriation of trade secrets, intentional unauthorized access of protected computer, false
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`advertising, and tortious interference with Luminati’s business relationships. Subsequent to
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`service of the complaint, Tesonet reorganized itself into a number ofrelated entities including
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`defendants Teso LT, UAB (“Teso”), Metacluster UAB (“Metacluster’”), and Oxysales, UAB
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`(“Oxysales”’) (collectively, ““Defendants”) in the present action. On November5, 2019, the parties
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`to the Tesonet Action filed a joint stipulation (Dkt. 220) dismissing without prejudice the non-
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`patents claimsofall parties in that case (Luminati, Teso and Metacluster).
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`Notably, no motion to dismiss wasfiled against the non-patent claimsin the prior case.
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`Yet the same claims with even more supporting evidenceare subject to a motion on the pleadings
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`here in a clear overreach by Defendants. On December 6, 2019, Luminati filed the Complaint
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`against Defendants in this action (““Teso Action”). This Complaint includes the allegations from
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`the Tesonet Action relevant to the non-patent claims as well as additional allegations regarding
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`Defendants’ activities after the filing of the Tesonet Action complaint,
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`including unrefuted
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`allegations upon information and belief that Defendants are behind the website titled “the Dark
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`Side of Luminati.” Complaint at | 36-46; 87-108.
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`IV.
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`LUMINATI’S ASSERTED PATENT CLAIMS ARE VALID UNDER101
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`A.
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`Legal Standard
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`“Determining patent eligibility requires a full understanding of the basic character of the
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`claimed subject matter.” MyMail, Ltd. v. ooVoo, LLC, 934 F.3d 1373, 1379 (Fed. Cir. 2019). For
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`NetNut Ltd. v. Bright Data Ltd.
`NetNut Exhibit 1004
`Page 13 of 36
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`

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`Case 2:19-cv-00395-JRG Document 28 Filed 04/07/20 Page 14 of 36 PagelD #: 600
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`questions of patent eligibility under §101, the Supreme Court instructs courts to distinguish
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`between claims that claim patent ineligible subject matter and those that “integrate the building
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`blocks into something more.” Uniloc United States, Inc. v. Samsung Elecs. Am., Inc., No. 2:17-
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`CV-00651-JRG, 2018 U.S. Dist. LEXIS 176336, at *3-5 (E.D. Tex. Sep. 18, 2018)(citing
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`Alice Corp. Pty. v. CLS Bank Int’l, 134 S. Ct. 2347, 2354 (2014)).
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`The Alice test on patenteligibility consists of a two-part test which asks: 1. Are the claims
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`at issue directed to a patent-ineligible concept, i.e., law of nature, natural phenomena,or abstract
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`idea? and 2. If so, do the claims contain additional element(s) sufficient to ensure that the claims
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`amountto significantly more than the ineligible conceptitself?” Alice Corp. Pty. Ltd. v. CLS Bank
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`Int'l, 134 8. Ct. 2347 (2014). The requirement ofpatent eligibility under 35 U.S.C. § 101 is not
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`new.In Alice, the Court acknowledgedthat “[w]e have interpreted § 101 and its predecessors in
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`light of this exception for more than 150 years.” /d. at 2354 (internal citations omitted). The
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`concern that has alwaysdriven the exclusionary principle embodied in § 101 is preemption, mainly
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`“that patent law notinhibit further discovery by improperly tying up the future use of these building
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`blocks of human ingenuity.” /d. (internal quotations and citations omitted).
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`To promote and encourage innovation, these preemptive concerns mustbe balanced against
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`the primary purpose of the patent laws. The Supreme Court recognized this balance and the need
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`to “tread carefully in construing this exclusionary principle lest it swallow all of patent law.” Jd.
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`(emphasis added). The Court recognizedthat “[a]t somelevel, all inventions embody,use, reflect,
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`rest upon, or apply lawsof nature, natural phenomena, or abstract ideas” and that “‘an inventionis
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`not rendered ineligible for patent simply because it involves an abstract concept.” /d. (internal
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`quotations andcitations omitted). “The applications of such concepts to a new and useful end, we
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`have said, remain eligible for patent protection.” Jd.
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`NetNut Ltd. v. Bright Data Ltd.
`NetNut Exhibit 1004
`Page 14 of 36
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`

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`Case 2:19-cv-00395-JRG Document 28 Filed 04/07/20 Page 15 of 36 PagelD #: 601
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`The secondstep of the Alice test only applies if step one findsthat the patent claims address
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`only abstract, ineligible ideas. Even if true, the patent claim is nonetheless patentable under step
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`two when the claim limitations “involve more than performance of ‘well-understood, routine,
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`[and] conventional activities previously known to the industry.’” Content Extraction &
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`Transmission LLC vy. Wells Fargo Bank, Nat’l Ass’n, 776 F.3d 1343, 1347-48 (Fed. Cir. 2014)
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`(quoting Alice, 134 S. Ct. at 2359). “The question of whether a claim element or combination of
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`elements is well-understood, routine and conventionalto a skilled artisan in the relevantfield is a
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`question of fact” that must be “proven by clear and convincing evidence.” Berkheimerv. HP Inc.,
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`881 F.3d 1360, 1368 (Fed. Cir. 2018).
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`Step One: The Asserted Patents Are Not “Directed To” An Abstract Idea
`1.
`or LawofNature
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`The patent claimshere are eligible under step one because they are not merely directed to
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`“lawsof nature, natural phenomena[or] abstract ideas.” Alice at 2355. Courts must “ensureat step
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`one that we articulate what the claims are directed to with enough specificity to ensure the step
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`one inquiry is meaningful.” Thales Visionx, Inc. v. United States, 850 F.3d 1343, 1347 (Fed. Cir.
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`2017) (citing Alice, 134 S. Ct. at 2354).
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`By law, just because a patent claim on somelevel may involve various concepts or ideas
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`does not renderit ineligible. Diamond v. Diehr, 450 U.S. 175, 187 (1981); see also Alice at 2354
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`(“an invention is not rendered ineligible for patent simply because it
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`involves an abstract
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`concept”).” A patent directed to improving an existing technological
`p
`p
`p
`g
`g
`gical
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`process is patent eligible and
`p
`g
`
`p
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`* Diehr recognized the key limitations of prior art rubber molding techniques which were not
`precise due in part to the inability to accurately monitor the temperature inside the mold. Diehr
`450 U.S. at 177-178. The invention at issue in Diehr solved these problems using a thermocouple
`to monitor the temperature and take the steps of: “installing rubberin a press, closing the mold,
`constantly determining the temperature of the mold, constantly recalculating the appropriate cure
`time through the use of the formula and a digital computer, and automatically openingthe pressat
`the proper time.” /d. at 187. The Diehr claims were patent-eligible because they solved a
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`NetNut Ltd. v. Bright Data Ltd.
`NetNut Exhibit 1004
`Page 15 of 36
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`

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`Case 2:19-cv-00395-JRG Document 28 Filed 04/07/20 Page 16 of 36 PagelD #: 602
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`not abstract. See Alice, 134 S. Ct. at 2358 (“the claims in Diehr were patent-eligible because they
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`improved an existing technological process....”); see also Trading Techs. Int’l, Inc. v. COG,Inc.,
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`675 Fe