Intellectual Ventures II L.L.C. v. JP Morgan Chase & Co. et al
Filing
449
ORDER AND OPINION DENYING MOTION FOR SUMMARY JUDGMENT BASED UPON NONINFRINGEMENT re: 388 MOTION for Summary Judgment of Noninfringement of U.S. Patent No. 7,634,666 filed by JP Morgan Chase Bank, National Association, Chase Ba nk USA, National Association, Paymentech LLC, JP Morgan Chase & Co., Chase Paymentech Solutions, LLC: For the foregoing reasons, JPMC's motion is DENIED. The Clerk shall mark the motion (Doc. No. 388) terminated. The stay of discovery im posed at the May 21, 2015 status conference, see Order Summarizing May 21, 2015 Status Conference, No 13 Civ. 3777, ECF No. 406 (S.D.N.Y. May 21, 2015), is hereby lifted. Fact discovery shall be completed by September 15, 2015, the same date as fa ct discovery related to the '574 Patent is scheduled to be complete. The status conference scheduled for August 10, 2015 is cancelled. A status conference on the two remaining patents in dispute shall be held on September 17, 2015 at 11:00 a.m. (Signed by Judge Alvin K. Hellerstein on 6/30/2015) (tn)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
------------------------------------------------------------ x:
ORDER AND OPINION
DENYING MOTION FOR
SUMMARY JUDGMENT
BASED UPON NONINFRINGEMENT
INTELLECTUAL VENTURES II LLC,
Plaintiff,
V.
JP MORGAN CHASE & CO., et al.,
13 Civ. 3777 (AKH)
Defendants.
------------------------------------------------------------ x:
ALVIN K. HELLERSTEIN, U.S.D.J.:
Intellectual Ventures II LLC ("Intellectual Ventures") sues JP Morgan Chase &
Co. ("JPMC") for infringement of U.S. Patent No. 7,634,666 (the "'666 Patent"), which claims
hardware, referred to as a "crypto-engine," capable of ex:ecuting two public key encryption
protocols. Document discovery concluded on April 10, 2015 and the parties have taken some,
but not all, depositions. Prior to the completion of the deposition phase of discovery, JPMC
moved for summary judgment based upon non-infringement. I hold that Intellectual Ventures
has raised triable issues of fact and deny JPMC's motion.
I.
Background
A.
The '666 Patent
The '666 Patent claims a physical co-processor, referred to as a "crypto-engine,"
used to assist a host processor, such as a personal or network computer, with the encryption of
data. Two aspects of the claimed hardware are particularly relevant. First, the crypto-engine has
a Modular Arithmetic Unit capable of "heterogeneous computation," which means it can ex:ecute
cryptographic algorithms at a higher speed than that at which the host processor operates. The
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crypto-engine contains an Interface Control Unit that moderates between the host processor and
the Modular Arithmetic Unit, synchronizing the two asynchronous speeds.
Second, the claimed Modular Arithmetic Unit has the capability of executing two
commonly-used public key encryption protocols known, respectively, as Rivest-ShamirAdleman ("RSA") and Elliptic Curve Cryptography ("ECC"). RSA involves the computation of
two large prime numbers whereas ECC involves computation based upon points on an elliptic
curve. The Modular Arithmetic Unit's selection of the RSA or ECC protocols is based upon an
op-code signal generated by a unit known as the "cryptographic controller." According to the
patent specification, prior art was unable to conduct such "assymetic cryptographic algorithms"
because "in known hardware architecture resources cannot be shared by the algorithms and
reused." '666 Patent at 1:5-28; 2:49-63.
Intellectual Ventures alleges infringement of Claim 4 of the '666 Patent, which
reads in relevant part as follows:
A crypto-engine for cryptographic processing of data comprising an
arithmetic unit operable as a co-processor for a host processor and an
interface controller for managing communications between the arithmetic
unit and host processor . . . the interface controller including: a bus
interface for connecting high frequency manipulated data inside the
arithmetic unit with the lower frequency manipulated data in the host
processor; a concatenator/splitter for merging or splitting data width, and a
cryptographic controller generating status and interrupt signals for the host
processor and generating an op-code signal for the arithmetic unit, the
arithmetic unit selecting RSA or [ECC} modes of operation based on the
op-code signal.
'666 Patent at 11:43-12:19 (emphasis added). The parties primarily dispute the meaning and
scope of the italicized clause. The Court previously construed "op-code signal" to mean a
"[s]ignal capable of indicating an RSA operation when it has one characteristic and an ECC
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operation when it has a different charactistic." Order Regarding Claim Construction and Patent
Summaries ("Markman Order"), No. 13 Civ. 3777, ECF No. 82 (S.D.N.Y. Mar. 18, 2014).
B.
The Accused Product
Intellectual Ventures accuses the IBM 4765 PCie Cryptographic Coprocessor (the
"IBM Crypto Card") of infringing the '666 Patent. See Deel. Brent P. Ray Supp. Defs.' Mot.
Summ. J. Based Upon Noninfringement ("Ray Deel."), Exh. D at 285. The parties dispute the
functionality and capability of the IBM Crypto Card.
According to Intellectual Ventures, the IBM Crypto Card contains a unit known
as the module central processing unit ("MCPU"), which purportedly operates as the cryptographic controller described in Claim 4 of the '666 Patent. See Deel. Sal Lim Supp. Pl.'s Opp'n
Defs.' Mot. Summ. J. Based Upon Noninfringement ("Lim Deel."), Exh. C ,-i 23. In addition, the
IBM Crypto Card contains a microchip known as "Otello," which purportedly operates as the
arithmetic unit described in Claim 4. See id. ,-i 24. The MCPU is capable of receiving requests
from the host processor to carry out either RSA or ECC public key encryption functions. See id.,
Exh. C ,-i,-i 26-29, Exh. G, Exh. N, Exh. Z. The MCPU then generates op-codes for use by Otello.
See id. Although not sent to Otello directly, the op-code signals are generated by the MCPU for
the sole purpose of instructing Otello to perform a RSA or ECC function. See id., Exh. C i-li-1 2632, 35, Exh. G, Exh. N, Exh. Z. Based upon these op-code signals, Otello performs either RSA
or ECC functions. See id., Exh. C ,-i,-i 29, 33, 35, Exh. Z. Intellectual Ventures argues that this
satisfies the language of Claim 4 because the MCPU "generat[es] an op-code signal for" Otello
and Otello "select[s] RSA or [ECC] modes of operation based on the op-code signal." '666
Patent at 12:17-19; see Opp'n Br. at 9.
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JPMC disputes Intellectual Ventures' description of the IBM Crypto Card. First,
JPMC asserts that while Otello performs RSA and several other mathematical functions, it does
not perform ECC operations. See Corrected Mem. Law Supp. Defs.' Mot. Summ. J. ("Opening
Br.") at 9; Ray Deel., Exh. Cat 21, Exh. E
~
3. When ECC capability was added to the IBM
Crypto Card in September 2010, it was added by updating software executed by the MCPU, and
not by reconfiguring Otello's hardware. See id, Exh. E ~ 6. Thus, it is the MCPU, and not
Otello, that is capable of performing ECC operations. See id. Furthermore, the MCPU does not
send an op-code signal directly to Otello and, therefore, Otello' s selection of the ECC operation
cannot be based on the op-code signal as required by Claim 4. See id, Exh. F ~ 8; Opening Br.
at 11.
II.
Standard of Review
"The court shall grant summary judgment if the movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a matter of
law." Fed. R. Civ. P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). A genuine issue
of material fact exists "if the evidence is such that a reasonable jury could return a verdict for the
nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). In ruling on a
motion for summary judgment, the court must view all evidence in the light most favorable to
the nonmoving party, see Overton v. NY State Div. ofMilitary & Naval Affairs, 373 F.3d 83, 89
(2d Cir. 2004), and must "resolve all ambiguities and draw all permissible factual inferences in
favor of the party against whom summary judgment is sought," Sec Ins. Co. ofHartford v. Old
Dominion Freight Line Inc., 391 F.3d 77, 83 (2d Cir. 2004).
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III.
Discussion
The parties first dispute the scope of the claim language. JPMC argues that Claim
4 is limited to actual functionality (i.e., how the accused product performs in practice), rather
than capability (i.e., potential uses of the accused product). Therefore, the argument continues,
evidence that the IBM Crypto Card does not select or execute an ECC algorithm in practice
establishes non-infringement as a matter oflaw. See Opening Br. at 4-6. Intellectual Ventures
counters that the '666 Patent claims the capability of executing ECC algorithms and that the IBM
Crypto Card has such capability. Thus, the argument goes, whether the IBM Crypto Card
actually executes ECC algorithms, as opposed to RSA algorithms, is irrelevant. See Mem. Law
Supp. Pl.'s Opp'n Defs.' Mot. Summ. J. Based on Noninfringement ("Opp'n Br.") at 9-13.
The extent to which capability alone may constitute infringement depends upon
the scope and construction of a patent's claim language. See Fantasy Sports Props., Inc. v.
Sportsline.com, Inc., 287 F.3d 1108, 1117-18 (Fed. Cir. 2002) (noting that capability to infringe
does not establish per se infringement because "in every infringement analysis, the language of
the claims, as well as the nature of the accused product, dicates whether an infringement has
occurred"); see also Fujitsu Ltd. v. Netgear Inc., 620 F.3d 1321, 1329 (Fed. Cir. 2010) ("Unless
the claim language only requires the capacity to perform a particular claim element, we have
held that it is not enough to simply show that a product is capable of infringement."). For
example, in Typhoon Touch Technologies., Inc. v. Dell, Inc., upon which JPMC relies heavily,
the district court, after reviewing the specification, expressly construed the claim at issue "as
requiring that a device, to be covered by the claim, actually performs, or is configured or
programmed to perform, each of the functions stated in the claim." 659 F.3d 1376, 1380 (Fed.
Cir. 2011). After affirming the district court's claim constructions, the Federal Circuit held that
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summary judgment for non-infringement was appropriate because the apparatus was not
configured to perform the recited function, as required by the district court's claim construction. 1
See id.
Unlike the district court in Typhoon Touch, I did not construe Claim 4 of the '574
Patent as being limited to actual performance. See Markman Order at 12 (construing "op-code
signal" as a "[s]ignal capable of indicating an RSA operation when it has one characteristic and
an ECC operation when it has a different charactistic") (emphasis added). Furthermore, the
specification makes clear that the '666 Patent is broad enough to encompass hardware that is
capable of performing ECC operations. For example, it recites that "the invention relates to a
crypto-engine capable of executing either [RSA] or [ECC] public key encryption protocols."
'666 Patent at 1:8-11 (emphasis added). Later, it recites that "[t]he preferred embodiment of the
present invention provides a compact crypto-engine capable of executing assymetic
cryptographic algorithms including both RSA and ECC protocols." '666 Patent at 2:59-63
(emphasis added). Nothing in the claim language limits the claimed hardware to actual
performance of the claimed function. Rather the '666 Patent claims an "arithmetic unit selecting
RSA or ECC modes of operation." '666 Patent at 12:18-19 (emphasis added).2
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In Typhoon Touch, the Federal Circuit drew a distinction between the capability of a device to perform functions
recited by a patent, even in the absence of actual performance, and the need to modify or reprogram a device in
order for it to have the capability of performing the recited functions. See Typhoon Touch, 659 F.3d at 1380-81.
Depending on the scope of a patent's claim language, capability may constitute infringement, while the need for
reconfiguration or reprogramming generally forecloses infringement claims. Compare Microprocessor
Enhancement Corp. v. Texas Instruments, Inc., 520 F.3d 1367, 1375 (Fed. Cir. 2008) ("[The claim] is clearly limited
to a pipelined processor possessing the recited structure and capable of performing the recited functions.") with
Telemac Cellular Corp. v. Topp Telecom, Inc., 247 F.3d 1316, 1330 (Fed. Cir. 2001) ("[T]hat a device is capable of
being modified to operate in an infringing manner is not sufficient, by itself, to support a finding of infringement.").
2 Nazomi
Communications, Inc. v. Nokia Corp., 739 F.3d 1339 (Fed. Cir. 2014), upon which JPMC also relies, is
similarly inapposite. In that case, the district court "construed the claims as claiming an apparatus, comprising both
hardware and software, capable of practicing the claimed functionality. Id. at 1343. Because at the time of the
alleged infringement the device lacked the software necessary to perform the functions claimed by the patent, the
Federal Circuit affirmed summary judgment on the basis of non-infringement. See id.
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Intellectual Ventures has presented evidence, sufficient to raise a triable issue of
fact, that the IBM Crypto Card has the capability of selecting between RSA and ECC
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functionality. For example, the data sheet for the IBM Crypto Card states that it contains
"[h]ardware to perform ... large number modular math functions for RSA (up to 4096-bit), ECC
Prime Curve and other public-key cryptographic algorithms." Lim Deel., Exh. F at 1; see also
id., Exh. H at IBM-JPMC-0041962. Additionally, an IBM hardware engineer testified at his
deposition that a chip within the IBM Crypto Card's arithmetic unit performs "either RSA or
ECC." Id., Exh. G at 46:3-15; see also id. at 18:1-9 ("It is true that the hardware supports large
modular math functions for RSA. And the same modular math functions can be used for ECC as
well.").
JPMC further argues that the IBM Crypto Card does not infringe the '666 Patent
because there is no evidence that the MCPU "sends" op-code signals directly to Otello. See
Opening Br. at 11-12. However, neither Claim 4 nor this Court's construction of the claim
language are so narrow. Rather, the '666 Patent encompasses an arithmetic unit that selects
either RSA or ECC protocols "based on" a generated op-code signal. '666 Patent at 12:15-19;
Markman Order at 12. Intellectual Ventures has pointed to evidence, sufficient to raise a triable
issue of fact, that the IBM Crypto Card is capable of such functionality. See, e.g., Lim Deel.,
Exh. C iii! 47-49. Accordingly, I similarly decline to grant summary judgment on this basis at
this stage of the proceedings.
While it may prove to be true, in the end, that the IBM Crypto Card requires
reconfiguration to infringe the '666 Patent or that the hardware itself is incapable of doing so, the
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In the alternative Intellectual Ventures argues that there may be evidence that the IBM Crypto Card actually
performs ECC c~tography but that JPMC's failure to place a litigation hold on relevant evidence resulted.in
spoliation. This is the subject of a separate motion pending before the Court and is scheduled to be fully bnefed by
July 7, 2015.
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evidence presented thus far is sufficient to defeat JPMC's motion for summary judgment at this
stage. I note that depositions and expert discovery may shine additional light on the functionality
and capability of the IBM Crypto Card and JPMC may renew its motion for summary judgment
following the close of discovery.
IV.
Conclusion
For the foregoing reasons, JPMC's motion is DENIED. The Clerk shall mark the
motion (Doc. No. 388) terminated. The stay of discovery imposed at the May 21, 2015 status
conference, see Order Summarizing May 21, 2015 Status Conference, No 13 Civ. 3777, ECF No.
406 (S.D.N.Y. May 21, 2015), is hereby lifted. Fact discovery shall be completed by September
15, 2015, the same date as fact discovery related to the '574 Patent is scheduled to be complete.
The status conference scheduled for August 10, 2015 is cancelled. A status conference on the
two remaining patents in dispute shall be held on September 17, 2015 at 11 :00 a.m.
SO ORDERED.
Dated:
New York, New York
June 30, 2015
United States District Judge
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