Realtime Data LLC v. Array Networks Inc.
Filing
104
MEMORANDUM OPINION Signed by Judge Colm F. Connolly on 8/23/2021. Associated Cases: 1:17-cv-00800-CFC, 1:17-cv-00925-CFC(nmf)
Case 1:17-cv-00800-CFC Document 104 Filed 08/23/21 Page 1 of 28 PageID #: 4384
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
Realtime Data LLC,
Plaintiff,
Civil Action No. 17-0800-CFC
v.
CONSOLIDATED
Array Networks Inc., et al.,
Defendants.
Realtime Data LLC,
Plaintiff,
v.
Civil Action No. 17-0925-CFC
Spectra Logic Corp.,
Defendant.
Stephen B. Brauerman, BAYARD, P.A., Wilmington, Delaware; Marc A. Fenster,
Brian D. Ledahl, Reza Mirzaie, Paul A. Kroeger, C. Jay Chung, Christian X.
Conkle, Adam S. Hoffinan, Philip X. Wang, RUSS AUGUST & KABAT, Los
Angeles, California
Counsel for Plaintiff
Geoffrey Graham Grivner, BUCHANAN INGERSOLL & ROONEY P.C.,
Wilmington, Delaware; S. Lloyd Smith, Brian Gold, BUCHANAN INGERSOLL
& ROONEY PC, Alexandria, Virginia
Counsel for Defendant Array Networks, Inc.
Case 1:17-cv-00800-CFC Document 104 Filed 08/23/21 Page 2 of 28 PageID #: 4385
Jack B. Blumenfeld, Brian P. Egan, MORRIS, NICHOLS, ARSHT & TUNNELL .
LLP, Wilmington, Delaware; Jeffrey J. Lyons, BAKER & HOSTETLER,
Wilmington, Delaware
Counsel for Defendant Fortinet, Inc.
Andrew Colin Mayo, ASHBY & GEDDES, Wilmington, Delaware; Guy Yonay,
Kyle Auteri, PEARL COHEN ZEDEK LATZER BARATZ LLP, New York, New
York
Counsel for Defendant Reduxio Systems, Inc. and CTERA Networks,
Ltd.
Jack B. Blumenfeld, Brian P. Egan, MORRIS, NICHOLS, ARSHT & TUNNELL
LLP, Wilmington, Delaware; Jeffrey J. Lyons, BAKER & HOSTETLER,
Wilmington, Delaware; Brian E. Mitchell, :MITCHELL & CONJPANY, San
Francisco, California
Counsel for Defendant Panzura
Steven L. Caponi, Matthew B. Goeller, K&L GATES LLP, Wilmington,
Delaware; Theodore J. Angelis, Elizabeth J. Weiskopf, Nicholas F. Lenning, K&L
GATES LLP, Seattle, Washington
Counsel for Defendant Quest Software, Inc.
Kenneth Laurence Dorsney, MORRIS JAlv:IES LLP, Wilmington, Delaware;
Joshua M. Masur, ZUBER LAWLER & DEL DUCA LLP, Redwood City,
California
Counsel for Defendant Aryaka Networks, Inc.
RobertM. Vrana, YOUNG, CONWAY, STARGATT & TAYLORLLP,
Wilmington, Delaware
Counsel for Defendant Nimbus Data, Inc.
David Ellis Moore, Bindu Ann George Palapura, Alan Richard Silverstein,
POTTER ANDERSON & CORROON, LLP, Wilmington, Delaware; Manny J.
Caixeiro, Laura Wytsma, VENABLE LLP, Los Angeles, California; Timothy J.
Carroll, VENABLE LLP, Chicago, Illinois; Elizabeth M. Manno, VENABLE LLP,
Washington, District of Columbia; Scott S. Crocker, Steven R. Sprinkle,
SPRINKLE LAW GROUP, Austin, Texas
11
Case 1:17-cv-00800-CFC Document 104 Filed 08/23/21 Page 3 of 28 PageID #: 4386
Counsel for Defendant Open Text, Inc.
Rolin P. Bissell, Robert M. Vrana, YOUNG, CONWAY, STARGATT &
TAYLOR LLP, Wilmington, Delaware; Hilary L. Preston, VINSON & ELKINS
LLP, New York, New York; Parker D. Hancock, VINSON & ELKINS LLP,
Houston, Texas,
Counsel for Defendant MongoDB Inc.
Carl Douglas Neff, FISHER BROYLES, LLP, Wilmington, Delaware; Ryan T.
Beard, FISHER BROYLES, LLP, Austin, Texas; Christopher R. Kinkade,
FISHER BROYLES, Princeton, New Jersey
Counsel for Defendant Egnyte, Inc.
David Ellis Moore, Bindu Ann George Palapura, Stephanie E. O'Bryne, POTTER
ANDERSON & CORROON, LLP, Wilmington, Delaware; Robert E. Purcell,
THE LAW OFFICE OF ROBERT E. PURCELL, PLLC, Syracuse, New York
Counsel for Defendant Spectra Log;,c Corp.
MEMORANDUM OPINION
August 23, 2021
Wilmington, Delaware
111
Case 1:17-cv-00800-CFC Document 104 Filed 08/23/21 Page 4 of 28 PageID #: 4387
.
OLLY
CHIEF JUDGE
Plaintiff Realtime Data LLC has sued Defendants for infringement of
various combinations of seven patents it holds: U.S. Patent Nos. 7,415,530 (the
#530 patent), 8,717,203 (the #203 patent), 8,933,825 (the #825 patent), 9,054,728
(the #728 patent), 9,116,908 (the #908 patent), 9,667,751 (the #751 patent), and
10,019,458 (the #458 patent). The asserted patents pertain to systems and methods
involving data compression.
Pending before me are motions to dismiss pursuant to Federal Rule of Civil
Procedure l 2(b )(6) filed by the consolidated Defendants and Spectra Logic. D .I.
78; 1 Rea/time Data LLC v. Spectra Logic Corp., No. 17-0925, D.I. 68. Defendants
argue that I should dismiss Realtime' s complaints because the asserted patents are
invalid under 35 U.S.C. § 101 for failing to claim patentable subject matter.
I.
BACKGROUND
A.
Asserted Patents
The asserted patents all relate to methods and systems for compression and
decompression of data. The asserted patents come from three patent families. The
#203, #825, and #728 patents share one written description; the #530, #908, and
1
All citations are to Rea/time Data v. Array Networks, Inc., No. 17-800 unless
otherwise noted.
Case 1:17-cv-00800-CFC Document 104 Filed 08/23/21 Page 5 of 28 PageID #: 4388
#458 patents share another written description; and the #751 has a distinct written
description. The #751 patent is titled "Data Feed Acceleration." The #530, #908,
and #45 8 patents are titled "Systems and Methods for Accelerated Data Storage
and Retrieval." And the #203, #825, and #728 patents are titled "Data
Compression Systems and Methods." Not every patent is asserted against every
defendant, but collectively Defendants challenge the validity of all asserted
patents.
Claim 1 of the #751 patent recites
[a] method for compressing data comprising:
analyzing content of a data block to identify a parameter,
attribute, or value of the data block that excludes
analyzing based solely on reading a descriptor;
selecting an encoder associated with the identified
parameter, attribute, or value;
compressing data in the data block with the selected
encoder to produce a compressed data block,
wherein the compressing includes utilizing a state
machine; and
storing the compressed data block;
wherein the time of the compressing the data block and
the storing the compressed data block is less than
the time of storing the data block in uncompressed
form.
Clam 1 of the #530 patent recites
[a] system comprising:
a memory device; and
a data accelerator, wherein said data accelerator is
coupled to said memory device, a data stream is
received by said data accelerator in received form,
said data stream includes a first data block and a
2
Case 1:17-cv-00800-CFC Document 104 Filed 08/23/21 Page 6 of 28 PageID #: 4389
second data block, said data stream is compressed
by said data accelerator to provide a compressed
data stream by compressing said first data block
with a first compression technique and said second
data block with a second compression technique,
said first and second compression techniques are
different, said compressed data stream is stored on
said memory device, said compression and storage
occurs faster than said data stream is able to be
stored on said memory device in said received
form, a first data descriptor is stored on said
memory device indicative of said first compression
technique, and said first descriptor is utilized to
decompress the portion of said compressed data
stream associated with said first data block.
Claim 1 of the #908 patent recites
[a] system comprising:
a memory device; and
a data accelerator configured to compress: (i) a first data
block with a first compression technique to
provide a first compressed data block; and (ii) a
second data block with a second compression
technique, different from the first compression
technique, to provide a second compressed data
block;
wherein the compressed first and second data blocks are
stored on the memory device, and the compression
and storage occurs faster than the first and second
data blocks are able to be stored on the memory
device in uncompressed form.
Claim 9 of the #458 patent recites
[a] method for accelerating data storage comprising:
analyzing a first data block to determine a parameter of
the first data block;
applying a first encoder associated with the determined
parameter of the first data block to create a first
3
Case 1:17-cv-00800-CFC Document 104 Filed 08/23/21 Page 7 of 28 PageID #: 4390
encoded, data block wherein the first encoder
utilizes a lossless dictionary compression
technique;
analyzing a second data block to determine a parameter
of the second data block;
applying a second encoder associated with the
determined parameter of the second data block to
create a second encoded data block, wherein the
second encoder utilizes a lossless compression
technique different than the lossless dictionary
compression technique; and
storing the first and second encoded data blocks on a
memory device, wherein encoding and storage of
the first encoded data block occur faster than the
first data block is able to be stored on the memory
device in unencoded form.
Claim 14 of the #203 patent recites
[a] system for decompressing, one or more compressed
data blocks included in one or more data packets
using a data decompression engine, the one or
more data packets being transmitted in sequence
from a source that is internal or external to the data
decompression engine, wherein a data packet from
among the one or more data packets comprises a
header containing control information followed by
one or more compressed data blocks of the data
packet the system comprising:
a data decompression processor configured to analyze the
data packet to identify one or more recognizable
data tokens associated with the data packet, the
one or more recognizable data identifying a
selected encoder used to compress one or more
data blocks to provide the one or more compressed
data blocks, the encoder being selected based on
content of the one or more data blocks on which a
compression algorithm was applied;
one or more decompression decoders configured to
decompress a compressed data block from among
4
Case 1:17-cv-00800-CFC Document 104 Filed 08/23/21 Page 8 of 28 PageID #: 4391
the one or more compressed data blocks associated
with the data packet based on the one or more
recognizable data tokens; wherein:
the one or more decompression decoders are
further configured to decompress the
compressed data block utilizing content
dependent data decompression to provide a
first decompressed data block when the one
or more recognizable data tokens indicate
that the data block was encoded utilizing
content dependent data compression; and
the one or more decompression decoders are
further configured to decompress the
compressed data block utilizing content
independent data decompression to provide
a second decompressed data block when the
one or more recognizable data tokens
indicate that the data block was encoded
utilizing content independent data
compression; and
an output interface, coupled to the data decompression
engine, configured to output a decompressed data
packet including the first or the second
decompressed data block.
Claim 18 of the #825 recites
[a] method comprising:
associating at least one encoder to each one of a
plurality of parameters or attributes of data:
analyzing data within a data block to determine whether
a parameter or attribute of the data within the data
block is identified for the data block;
wherein the analyzing of the data within the data block
to identify a parameter or attribute of the data
excludes analyzing based only on a descriptor that
is indicative of the parameter or attribute of the
data within the data block;
identifying a first parameter or attribute of the data of
the data block;
5
Case 1:17-cv-00800-CFC Document 104 Filed 08/23/21 Page 9 of 28 PageID #: 4392
compressing, if the first parameter or attribute of the
data is the same as one of the plurality of
parameter or attributes of the data, the data block
with the at least one encoder associated with the
one of the plurality of parameters or attributes of
the data that is the same as the first parameter or
attribute of the data to provide a compressed data
block; and
compressing, if the first parameter or attribute of the
data is not the same as one of the plurality of
parameters or attributes of the data, the data block
with a default encoder to provide the compressed
data block.
Claim 25 of the #728 patent recites
[a] computer implemented method comprising:
analyzing, using a processor, data within a data block to
identify one or more parameters or attributes of the
data within the data block;
determining, using the processor, whether to output the
data block in a received form or in a compressed
form; and
outputting, using the processor, the data block in the
received form or the compressed form based on the
determination,
wherein the outp~tting the data block in the compressed
form comprises determining whether to compress
the data block with content dependent data
compression based on the one or more parameters
or attributes of the data within the data block or to
compress the data block with a single data
compression encoder; and
wherein the analyzing of the data within the data block to
identify the one or more parameters or attributes of
the data excludes analyzing based only on a
descriptor that is indicative of the one or more
parameters or attributes of the data within the data
block.
6
Case 1:17-cv-00800-CFC Document 104 Filed 08/23/21 Page 10 of 28 PageID #: 4393
B.
Procedural History
This is the third time I am ruling on the subject-matter eligibility of some of
these patents. The first time was an oral ruling on motions to dismiss brought by
Aryaka, Panzura, Fortinet, and Reduxio. I found the #728, #908, #530, and #751
patents invalid under§ 101. Reduxio, No. 17-1676, D.I. 46 (oral order). These
four patents were the only patents before me at that hearing. Realtime appealed,
and the Federal Circuit vacated my prior ruling as insufficient. Rea/time Data LLC
v. Reduxio Sys., Inc., 831 F. App'x 492,499 (Fed. Cir. 2020). The Federal Circuit
cautioned that "[n]othing in [its] opinion should be read as opining on the relative
merits of the parties' arguments or the proper resolution of the case." Id.
I subsequently issued a written opinion finding all the asserted patents
invalid for claiming ineligible subject-matter. 2 D.I. 41. I found the #825 and #728
patents directed to the abstract idea of compressing data based on the content of
that data. D.I. 41 at 20, 27. I found the #908 and #530 patents directed to the
combination of the abstract idea of compressing two different data blocks with
different methods and the logical condition that compression and storage together
are faster than storage of the uncompressed data alone. D.I. 41 at 30. I found that
combination to itself be an abstract idea. D.I. 41 at 30. I found that the #458
2
I also found U.S. Patent No 8,717,204 (the #204 patent) invalid, but it is no
longer asserted in Realtime's amended complaints.
7
Case 1:17-cv-00800-CFC Document 104 Filed 08/23/21 Page 11 of 28 PageID #: 4394
patent is directed to the abstract idea of compressing data using two distinct
lossless compression algorithms such that the time to compress and store the first
data block is less than the time to store the uncompressed data block. D.I. 41 at 34.
I found the #751 patent directed to the abstract idea of compressing data with a
state machine under conditions where compressing and storing the data is faster
than storing the uncompressed data and where the compression method applied to
the data is based on the content of the data. D.I. 41 at 36. And lastly, I found the
#203 patent directed to the abstract idea of compressing or decompressing data
based on the characteristics of that data where a token is used to signify the
compression method used. D .I. 41 at 40.
I gave Realtime the opportunity to file amended complaints, and it did.
Defendants have renewed their motion to dismiss. The case against Spectra Logic
has not been consolidated with the other case, and so Spectra Logic moves for
dismissal separately but joins the other Defendants in briefing. See No. 17-925,
D.I. 65; No. 17-925, D.I. 68; No. 17-925, D.I. 69; No. 17-925, D.I. 71.
II.
LEGAL STANDARDS
A.
Legal Standards for Stating a Claim
To state a claim on which relief can be granted, a complaint must contain "a
short and plain statement of the claim showing that the pleader is entitled to relief."
Fed. R. Civ. P. 8(a)(2). Detailed factual allegations are not required, but the
8
Case 1:17-cv-00800-CFC Document 104 Filed 08/23/21 Page 12 of 28 PageID #: 4395
complaint must include more than mere "labels and conclusions" or "a formulaic
recitation of the elements of a cause of action." Bell Atl. Corp. v. Twombly, 550
U.S. 544, 555 (2007) (citation omitted). The complaint must set forth enough
facts, accepted as true, to "state a claim to relief that is plausible on its face." Id. at
570. A claim is facially plausible "when the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the defendant is liable for the
misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citation
omitted). Deciding whether a claim is plausible is a "context-specific task that
requires the reviewing court to draw on its judicial experience and common sense."
Id. at 679 (citation omitted).
When assessing the merits of a Rule 12(b)(6) motion to dismiss, a court
must accept as true all factual allegations in the complaint and in documents
explicitly relied upon in the complaint, and it must view those facts in the light
most favorable to the plaintiff. See Umland v. Planco Fin. Servs., 542 F.3d 59, 64
(3d Cir. 2008).
B.
Legal Standards for Patent-Eligible Subject Matter
Section 101 of the Patent Act defines patent-eligible subject matter. It
provides: "Whoever invents or discovers any new and useful process, machine,
manufacture, or composition of matter, or any new and useful improvement
9
Case 1:17-cv-00800-CFC Document 104 Filed 08/23/21 Page 13 of 28 PageID #: 4396
thereof, may obtain a patent therefor, subject to the conditions and requirements of
this title." 35 U.S.C. § 101.
There are three judicially created limitations on the literal words of§ 101.
The Supreme Court has long held that laws of nature, natural phenomena, and
abstract ideas are not patentable subject matter. Alice Corp. Pry. v. CLS Bank Int 'l,
573 U.S. 208,216 (2014). These exceptions to patentable subject matter arise
from the concern that the monopolization of "these basic tools of scientific and
technological work" "might tend to impede innovation more than it would tend to
promote it." Id. (internal quotation marks and citations omitted). Abstract ideas
include mathematical formulas and calculations. Gottschalkv. Benson, 409 U.S.
63, 71-72 (1972).
"[A]n invention is not rendered ineligible for patent [protection] simply
because it involves an abstract concept[.]" Alice, 573 U.S .. at 217.
"[A]pplication[s] of such concepts to a new and useful end ... remain eligible for
patent protection." Id. (internal quotation marks and citations omitted). But in
order "to transform an unpatentable law of nature [or abstract idea] into a patenteligible application of such law [or abstract idea], one must do more than simply
state the law of nature [or abstract idea] while adding the words 'apply it.'" Mayo
Collaborative Servs. v. Prometheus Lab 'ys, Inc., 566 U.S. 66, 71 (2012) (emphasis
omitted).
10
Case 1:17-cv-00800-CFC Document 104 Filed 08/23/21 Page 14 of 28 PageID #: 4397
In Alice, the Supreme Court established a two-step framework by which
courts are to distinguish patents that claim eligible subject matter under§ 101 from
patents that do not claim eligible subject matter under§ 101. The court must first
determine whether the patent's claims are drawn to a patent-ineligible concepti.e., are the claims directed to a law of nature, natural phenomenon, or abstract
idea? Alice, 573 U.S. at 217. If the answer to this question is no, then the patent is
not invalid for teaching ineligible subject matter. If the answer to this question is
yes, then the court must proceed to step two, where it considers "the elements of
each claim both individually and as an ordered combination" to determine if there
is an "inventive concept-i. e., an element or combination of elements that is
sufficient to ensure that the patent in practice amounts to significantly more than a
patent upon the [ineligible concept] itself." Id. at 217-18 (alteration in original)
(internal quotations and citations omitted). 3
3
The Court in Alice literally said that this two-step framework is "for
distinguishing patents that claim laws of nature, natural phenomena, and abstract
ideas from those that claim patent-eligible applications of those concepts." 573
U.S. at 217. But as a matter of logic, I do not see how the first step of the
Alice/Mayo framework can distinguish (or even help to distinguish) patents in
terms of these two categories (i.e., the categories of ( 1) "patents that claim laws of
nature, natural phenomena, and abstract ideas" and (2) patents "that claim patenteligible applications of [laws of nature, natural phenomena, and abstract ideas]").
Both categories by definition claim laws of nature, natural phenomena, and abstract
ideas; and only one of Alice's steps (i.e., the second, "inventive concept" step)
could distinguish the two categories. I therefore understand Alice's two-step
framework to be the framework by which courts are to distinguish patents that
11
Case 1:17-cv-00800-CFC Document 104 Filed 08/23/21 Page 15 of 28 PageID #: 4398
Issued patents are presumed to be valid, but this presumption is rebuttable.
Microsoft Corp. v. i4i Ltd. Partnership, 564 U.S. 91, 96 (2011). Subject-matter
eligibility is a matter of law, but underlying facts must be shown by clear and
convincing evidence. Berkheimer v. HP Inc., 881 F.3d 1360, 1368 (Fed. Cir.
2018).
ID.
DISCUSSION
I previously considered whether the asserted patents were invalid under
§ 101 and found them subject-matter ineligible. D.I. 41 at 11-53. In summary, I
found at step one that each of the patents are directed to related abstract ideas
involving the compression of data. Data compression is an example of abstract
information processing. Recogn.iCorp, LLC v. Nintendo Co., 855 F.3d 1322, 1327
(Fed. Cir. 2017) ("A process that start[s] with data, add[s] an algorithm, and end[s]
with a new form of data [is] directed to an abstract idea."). In order to be
patentable claims must do more than simply process data. See Elec. Power Grp.,
LLC v. Alstom S.A., 830 F.3d 1350, 1353-54 (Fed. Cir. 2016) (explaining claims
that "analyz[e] information ... by mathematical algorithms, without more" are
directed to abstract ideas). The asserted claims lack this something more. This is a
case where "although written in technical jargon, a close analysis of the claims
claim eligible subject matter under § 101 from patents that do not claim eligible
subject matter under § 101.
12
Case 1:17-cv-00800-CFC Document 104 Filed 08/23/21 Page 16 of 28 PageID #: 4399
reveals that they require nothing more than .... abstract idea[s]" for the algorithmic
processing of information. Ericsson Inc. v. TCL Commc 'n Tech. Holdings Ltd.,
955 F.3d 1317, 1326 (Fed. Cir. 2020), cert. denied sub nom. Ericsson Inc. v. TCL
Commc 'n, 209 L. Ed. 2d 752 (May 17, 2021).
At step two, I found that the patents do not contain any inventive step other
than the abstract ideas to which the patents are directed. The patents' written
description makes clear that the only inventions are the ineligible abstract ideas.
See #530 patent at 4:47-61, 5:20-24, 11:5-10, 40-46, 14: 19-23 (describing how
the invention can be implanted on generic technology using any compression
technique "currently well known within the art"), #203 patent at 6:24-41, 7:7-11,
9:24-26, 12:50-54, 14:66-15:3, 16:30-37 (same), #751 patent at 6:20-27, 7:17-25
(incorporating the parents of the #53 0 and #203 patents by reference). The patents
simply apply the claimed abstract ideas on generic hardware in a straightforward
manner. This does not constitute an inventive step sufficient for subject-matter
eligibility. Alice, 573 U.S. 208 at 223-24 (explaining an abstract idea is not patent
eligible when simply applied on generic computer hardware).
In considering the renewed motions to dismiss, I will first examine whether
there are any material differences in Realtime' s complaints. Then, I consider
whether Realtime has presented new legal arguments that require me to reconsider
my original analysis.
13
Case 1:17-cv-00800-CFC Document 104 Filed 08/23/21 Page 17 of 28 PageID #: 4400
A.
New Pleadings
I first consider whether any of the new pleadings in Realtime' s amended
complaints requires me to change my prior analysis. Realtime argues that it has
introduced new factual pleadings relevant to § 101 that preclude dismissal, because
its "amended complaints contain numerous detailed factual allegations
demonstrating the inventiveness of each of the patents ...." D.I. 91 at 34. The
new paragraphs in the complaints assert that certain claims are not representative,
offer proposed claim constructions, repeat numerous quotations from the patents'
written descriptions, summarize the results of other proceedings involving the
asserted patents, assert that the claims cannot be performed by hand, offer
conclusory statements, and contain legal argumentation. See, e.g., D.I. 53 ,I,I 1015, 20-32. None of these changes impact the§ 101 inquiry for the following
reasons.
1.
Representative Claims
In my previous opinion, I explained my decision to adopt certain claims as
representative and to treat each patents' claims as equivalent for the purpose of§
101 eligibility. D.I. 41 at 15-18, 26-27, 29-30, 32-34, 36, 39--40. In short, the
claims of each patent can be considered together for the purposes of the Alice test,
because the independent claims reflect the same ideas written in different ways and
because the dependent claims do not add limitations that affect eligibility under§
14
Case 1:17-cv-00800-CFC Document 104 Filed 08/23/21 Page 18 of 28 PageID #: 4401
101. See Content Extraction & Transmission LLC v. Wells Fargo Bank, 776 F.3d
1343, 1348 (Fed. Cir. 2014).
Subsequently, Realtime amended its complaints to emphasize the fact that
the claims do not have identical limitations. See, e.g., D .I. 43
,r 26 ("Claim 1 is not
representative of all claims of the [#]728 patent. For example, claim 24 claims the
use of a "default" compression encoder."), ,r 28 ("The dependent claims contain
limitations not found in the independent claims."). Realtime also argues that
Defendants have failed to uniquely explain the lack of subject-matter eligibility for
all 211 asserted claims. D .I. 92 at 3 5.
Realtime's new pleadings do not change my prior analysis. Realtime simply
provides quotations from the asserted claims and provides conclusory assertions
that these limitations must be considered separately for the purposes of § 101. But
Realtime does not explain why these limitations are relevant to subject-matter
eligibility, and I have already concluded otherwise. Since Realtime provides
neither affirmative argument nor new factual pleadings relevant to
representativeness, there is no need to revisit my prior analysis.
2.
Claim Construction
Realtime asserts that its proposed claim constructions preclude a decision on
subject-matter eligibility at this time because the proposed constructions would, if
adopted, confirm that that the patents are directed to technological solutions. D.I.
15
Case 1:17-cv-00800-CFC Document 104 Filed 08/23/21 Page 19 of 28 PageID #: 4402
91 at 36. But I already considered five of the six suggested claim constructions in
my prior opinion. See D.I. 41 at 50-51 (discussing the "compressing" terms,
"descriptor," "data stream," "data block," and "analyze"). The same constructions
were proposed as part of the complaint against Kaminario that was before me at
the time. See Rea/time Data, LLC v. Kaminario, No. 19-cv-350, D.I. 18 ,r 9 (D.
Del. Aug. 16, 2019). I conclude<;! that the proposed claim constructions did not
require postponing a decision on § 101 eligibility, because the constructions did
not change the Alice inquiry. D .I. 41 at 51. I also noted that the proposed
constructions only "confirm that the claims are directed to data analysis." D.I. 41
at 50--51.
The only new proposal is to construe "data accelerator" as "hardware or
software with one or more compression encoders" in the #530 and #908 patents.
See, e.g., D.I. 43
,r 48.
Not only does this broad construction not impact the § 101
analysis, it also effectively concedes that a "data accelerator" does not require any
components beyond a generic processer that can run software. Once again, I
conclude that the proposed claim constructions do not impact the Alice test, and,
accordingly, I simply choose to adopt Realtime's proposed constructions for the
purposes of these motions to dismiss.
16
Case 1:17-cv-00800-CFC Document 104 Filed 08/23/21 Page 20 of 28 PageID #: 4403
3.
Additional Citations to the Patents
Realtime quotes extensively from the asserted patents in its amended
complaints. See, e.g., D.I. 43
,r,r 20-24, 28.
Adding quotations from the asserted
patents' written descriptions does not create a factual dispute (or otherwise alter
my analysis), because the patents were already in the record before me. To the
extent that the pleadings interpret the text of the patents, I am free to look directly
to the patents. Secured Mail Sols. LLC v. Universal Wilde, Inc., 873 F.3d 905, 913
(Fed. Cir. 2017) ("In ruling on a 12(b)(6) motion, a court need not accept as true
allegations that contradict matters properly subject to judicial notice or by exhibit,
such as the claims and the patent specification." (internal quotation marks
omitted)). I previously considered the written descriptions in my earlier ruling.
These amendments to the complaints are immaterial.
Realtime also argues that the file histories for the patents show that the
claimed inventions were not well-understood, routine, and conventional, because
the U.S. Patent and Trademark Office "considered hundreds of references." See,
e.g., D.I. 43
,r,r 25, 60, 95.
But the Patent and Trademark Office has always
reviewed prior art in the course of issuing a patent before a district court rules on
the patent's§ 101 eligibility. The number of references the Patent and Trademark
Office examined is of no consequence.
17
Case 1:17-cv-00800-CFC Document 104 Filed 08/23/21 Page 21 of 28 PageID #: 4404
4.
Non-Binding Rulings from Other Districts
Realtime has included in its complaints the outcomes of other cases
involving the same patents. See, e.g., D.I. 43
,r,r 10-13.
Realtime previously
presented these same arguments in briefing and in its First Amended Complaint
against Kaminario. No. 19-cv-350, D.I. 18 ,r,r 10-14; D.I. 33 at 36-37. In my
prior opinion, I considered these non-binding rulings. D.I. 41 at 45 n.4. I
conducted an independent analysis and reached a different conclusion.
5.
Statements in Unrelated Patents
Realtime has pled that patents filed in 2012 and 2013 by Altera and Western
Digital "admitted that there was still a technical problem associated with computer
capacity and a need for a more efficient compression system." D.I. 43
,r,r 29-31.
I
previously considered these pleadings as they were included in the First Amended
Complaint against Kaminario. See No. 19-cv-350, D.I. 18 ,r,r 25-27. Even taking
as true that there was a technical problem associated with compression, that does
not imply that the claims in the asserted patents are directed to a subject-matter
eligible solution. I must consider the asserted patents based on what they claim
and statements in unrelated patents do not change that analysis.
6.
Pen and Paper Argument
Realtime now pleads that the asserted claims cannot be carried out on "pen
and pencil." See, e.g., D.I. 43
,r,r 18, 50.
Even assuming, without deciding, that
this is a factual assertion I must take as true, it does not change my analysis. A
18
Case 1:17-cv-00800-CFC Document 104 Filed 08/23/21 Page 22 of 28 PageID #: 4405
patent can be directed to an abstract idea even if it cannot literally be performed on
pen and paper. FairWarning IP, LLC v. Iatric Sysc., 839 F.3d 1089, 1098 (Fed.
Cirl. 2016) ("[T]he inability for the human mind to perform each claim step does
not alone confer patentability. "). Regardless of whether the asserted patents are
limited to being carried out in a computational environment, they are still directed
to the type of abstract data manipulation that is not patent eligible. Otherwise, a
patentee could ensure subject-matter eligibility simply by including as a limitation
that the invention cannot be performed on pen and paper or in the human mind.
This is inconsistent with governing law. See Intell. Ventures I LLC v. Cap. One
Bank (USA), 792 F.3d 1363, 1366 (Fed. Cir. 2015) ("An abstract idea does not
become nonabstract by limiting the invention to a particular field of use or
technological environment.").
7.
Conclusory Statements
The remaining amendments to the complaints consist of conclusory
statements and legal argument. See, e.g., D.I. 43
,r 14 ("[T]he patents are directed
to patent eligible subject matter."), ,r 17 ("The claims of the patent are not abstract
...."), ,r 27 ("The claims do not merely recite a result."). 4
4
I am to ignore such
Some of the legal conclusions in the complaint are assertions of novelty. See,
e.g., D.I. ,r 21 ("The [#]728 patent solves the foregoing problems with novel
technological solutions ...."). But novelty under § 102 is a separate issue than
subject-matter eligibility under § 101. A novel abstract idea is still a patent19
Case 1:17-cv-00800-CFC Document 104 Filed 08/23/21 Page 23 of 28 PageID #: 4406
pleadings in ruling on a motion to dismiss. Iqbal, 556 U.S. at 678 ("[W]e are not
bound to accept as true a legal conclusion couched as a factual allegation.); Sirnio,
LLC v. FlexSim Software Prod., Inc., 983 F.3d 1353, 1365 (Fed. Cir. 2020) ("We
disregard conclusory statements when evaluating a complaint under Rule l 2{b)( 6).
A statement that a feature 'improves the functioning and operations of the
computer' is, by itself, conclusory." (internal citation omitted)); Boom! Payments,
Inc. v. Stripe, Inc., 839 F. App'x 528, 533 (Fed. Cir. 2021) (finding allegations that
the claims were not routine or conventional were conclusory statements to be
disregarded).
B.
Renewed Legal Arguments
Having found that none ofRealtime's amendments materially change my
prior analysis, I incorporate my previous decision into this opinion, subject to the
preceding discussion about the significance of the pen-and-paper criterion. 5
Realtime's legal arguments on these renewed motions are substantially
similar to its previous arguments. Realtime again argues that the asserted patents
"claim specific improvements in computer functionality." D.I. 91 at 4. Because
ineligible abstract idea. Adaptive Streaming Inc. v. Netflix, Inc., 836 F. App'x 900,
904 (Fed. Cir. 2020) ("We have explained that satisfying the requirements of
novelty and non-obviousness does not imply eligibility under § 101, ... because
what may be novel and non-obvious may still be abstract.").
5 Additionally,
the discussion of U.S. Patent No. #204 is now moot because
Realtime no longer_ asserts that patent.
20
Case 1:17-cv-00800-CFC Document 104 Filed 08/23/21 Page 24 of 28 PageID #: 4407
Realtime repeats essentially the same arguments, there is no reason to reconsider
my prior analysis. I again find that the asserted patents lack subject-matter
eligibility under § 101. The unavoidable problem for Realtime is that data
compression by itself is a type of information processing and information
processing, without more, is patent-ineligible subject matter. The asserted patents
do not have that something "more." See Elec. Power, 830 F .3d at 1353-54. For
the reasons I previously explained, the asserted claims do not identify specific
techniques that provide a technical solution. 6 Compression is an idea relevant to
6
As I explained in my prior opinion,
The patents do not provide a technical solution to a
technical problem because they do not teach how to
engineer an improved system. See Interval Licensing
LLC v. AOL, Inc., 896 F.3d 1335, 1345 (Fed. Cir. 2018)
(explaining that a patent is not directed to a technical
solution when it covers results without teaching how to
obtain those results). The asserted patents allow the use
of any compression method. See #908 patent 16:49-54
("the data storage accelerator 10 employs ... any
conventional data compression method suitable for
compressing data at a rate necessary for obtaining
accelerated data storage); #825 patent at 7:7-11; #204
patent at 15: 12-22; #203 patent at 16:30-16:42. The
patents do not teach a technical solution to analyze data.
See, e.g., #825 patent at 16:15-24 (describing a content
dependent data recognition module without any
specificity). Nor do the patents teach how to achieve the
claimed efficiency benefits, beyond directing the skilled
artisan to apply well-known techniques. See WhiteServe
LLC v. Dropbox, Inc., No. 19-2334, slip op. at 9, (Fed.
21
Case 1:17-cv-00800-CFC Document 104 Filed 08/23/21 Page 25 of 28 PageID #: 4408
information in general and is not inherently grounded in a particular technical
environment. The results-based claims describe desirable outcomes and
functionality, but do not offer ways to achieve these results. See Ajfinfty Labs of
Texas, LLC v. Amazon.com Inc., 838 F.3d 1266, 1269 (Fed. Cir. 2016) (finding
claims abstract because they did "no more than describe a desired function or
outcome, without providing any limiting detail that confines the claim to a
particular solution to an identified problem."). The patents are directed to abstract
ideas. And the patents simply direct artisans to apply those ideas without teaching
any additional inventive features. They are, therefore, subject-matter ineligible
under the Alice test. Alice, 573 U.S. at 222-24.
Cir. Apr. 26, 2021) (finding patent invalid under§ 101
when "[t]he specification d[id] not[] explain the
technological processes underlying the purported
technological improvement."). In arguing that the
patents teach a specific way of or structure for
performing compression, Realtime is only able offer
conclusory statements while repeating the same generic
language in the claims. See, e.g., Reduxio, 17-1676, D.I.
14 at 10-12. In short, while the patents do disclose
potential challenges (e.g., the problem of selecting the
best compression method for given data), they do not
teach how to address those challenges.
D.I. 41 at 42-43.
22
Case 1:17-cv-00800-CFC Document 104 Filed 08/23/21 Page 26 of 28 PageID #: 4409
The cases cited by Realtime do not suggest a different outcome. 7 In
Koninklijke KPN N. V. v. Gema/to M2M GmbH, for example, the Federal Circuit
explained that for a software patent "[t]o be patent-eligible, the claims must recite
a specific means or method that solves a problem in an existing technological
process." 942 F.3d 1143, 1150 (Fed. Cir. 2019). The asserted claims, by contrast,
may be performed using any means or methods that can implement the ideas to
which the patents are directed. Realtime' s other cited cases are not applicable here
because those opinions considered claims that were genuinely directed to technical
problems inherently grounded in computer technology and that offered specific
technical solutions. See Packet Intel. LLC v. NetScout Sys., Inc., 965 F.3d 1299,
1309 (Fed. Cir. 2020), cert. denied,. 209 L. Ed. 2d 552 (Apr. 19, 2021) (finding that
the asserted patent solved a technical problem "unique to computer networks");
7
Realtime filed as an exhibit a claim chart comparing claim 1 of the #728 patent to
claims Realtime represents as being inv·alid. D.I. 91-1, Ex. 1. First, review of this
claim chart shows substantial differences between claim 1 of the #728 patent and
the comparison claims. The large differences make clear that the claims are not
directly comparable. Second, Realtime compared claim 1 of the #728 patent to a
claim that was in fact found invalid. D.I. 91-1, Ex. 1 at 1. The comparison claim,
claim 1 of the patent at issue in Koninklijeke KPN, was found invalid under§ 101
and this finding was not appealed. Koninklijke KPN N. V. v. Gema/to M2M GmbH,
942 F.3d 1143, 1149 (Fed. Cir. 2019). And in finding the appealed claims valid,
the Federal Circuit relied on a claim limitation that was in the appealed claims but
not in claim 1 to show that the claims had a technological solution. Id. at 1150.
Thus, comparing claim 1 of the #728 patent to claim 1 of the patent at issue in
Koninklijeke KPN only suggests that the #728 patent should also be invalid.
23
Case 1:17-cv-00800-CFC Document 104 Filed 08/23/21 Page 27 of 28 PageID #: 4410
TecSec, Inc. v. Adobe Inc., 978 F.3d 1278, 1295 (Fed. Cir. 2020) (finding claims
patent eligible because they were directed to solving a technical problem specific
to computer network security); Uniloc USA, Inc. v. LG Elecs. USA, Inc., 957 F.3d
1303, 1308 (Fed. Cir. 2020) (finding that "the claims at issue do not merely recite
generalized steps to be performed on a computer using conventional computer
activity"); SRI Int'/, Inc. v. Cisco Sys., Inc., 930 F.3d 1295, 1303 (Fed. Cir. 2019),
cert. denied, 140 S. Ct. 1108 (2020) (finding claims eligible at Alice step one
because the claims were "directed to using a specific technique ... to solve a
technological problem" in network security).
There can be a fine-and often unclear-line between applying an abstract
idea on technology and claiming a software-based improvement to technology.
But in my view, the line here is clear, and the asserted claims do not have the
specificity required of a technical solution See Elec. Power, 830 F.3d at 1356
("[T]here is a critical difference between patenting a particular concrete solution to
a problem and attempting to patent the abstract idea of a solution to the problem in
general."); Cf Ericsson, 955 F.3d at 1328 (finding claims invalid when they did
"not have the specificity required to transform a claim from one claiming only a
result to one claiming a way of achieving it" (internal quotation marks and
alternations omitted)); Free Stream Media Corp. v. Alphonso Inc., 996 F.3d 1355,
1363-64 (Fed. Cir. 2021) (finding claim directed to gathering, matching, and
24
Case 1:17-cv-00800-CFC Document 104 Filed 08/23/21 Page 28 of 28 PageID #: 4411
sending information ineligible in part because "the asserted claims do not at all
describe how [the claimed] result is achieved."). The patentee had ideas about data
compression, but rather than claim specific implementations of those ideas or
provide new techniques to achieve the claimed results, the patentee sought and
received claims on the ideas themselves. The patents claim abstract ideas without
teaching how to implement those ideas. This is what § 101 jurisprudence
prohibits.
IV.
CONCLUSION
For the reasons stated above and in my prior opinion, D .I. 41, I find that all
claims of the asserted patents are invalid under§ 101 for lack of subject-matter
eligibility. Accordingly, I will grant Defendants' Renewed Motion to Dismiss.
The Court will issue Orders consistent with this Memorandum Opinion.
25
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?