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Virginia Innovation Sciences, Inc. v. Amazon.Com, Inc.

United States District Court, E.D. Virginia, Alexandria Division

January 5, 2017

VIRGINIA INNOVATION SCIENCES, INC., Plaintiff,
v.
AMAZON.COM, INC., Defendant.

          MEMORANDUM OPINION

          LIAM O'GRADY, UNITED STATES DISTRICT JUDGE

         Plaintiff Virginia Innovation Sciences, Inc. ("VIS") owns the rights to a family of patents that cover a method, system, and apparatus for transferring video signals from a network to a mobile device and then converting those signals in a manner that allows them to be reproduced on an "alternative display terminal" (e.g., a television). Alleging infringement of these patents, Plaintiff brought suit against Defendant Amazon.com, Inc. ("Amazon") for marketing and selling, among other things, its Amazon Fire TV and Fire Stick devices, smartphone, mobile phone, and tablet products. Amazon has moved to dismiss the claims related to eight of the ten patents at issue in this case. (Dkt. No. 21). The court heard oral argument on October 14, 2016. For the reasons that follow, the Court finds that VIS's patents are not directed to patent-eligible subject matter under 35 U.S.C. § 101, and it therefore GRANTS Amazon's motion to dismiss.

         I. BACKGROUND

         VIS owns all rights and title to, and interest in, U.S. Patent No. 7, 899, 492, entitled Methods, Systems, and Apparatus for Displaying the Multimedia Information from Wireless Communication Networks" (the "'492 patent"). It also is the owner of all rights and title to, and interest in, seven related patents: U.S. Patent No. 8, 050, 711 (the "'711 patent"); U.S. Patent No. 8, 903, 451 (the '"451 patent"); U.S. Patent No. 8, 948, 814 (the "'814 patent"); U.S. Patent No. 9, 118, 794 (the "'794 patent"); U.S. Patent No. 8, 712, 471; U.S. Patent No. 9, 286, 853 (the "'853 patent"); and U.S. Patent No. 9, 355, 611 (the "'611 patent"). Collectively, these eight patents make up the "'492 patent portfolio" or "'492 patent family".

         In addition, VIS is the owner of all rights and title to, and interest in U.S. Patent No. 9, 369, 844, entitled "System and Method for Providing Locally Applicable Internet Content with Secure Action Requests and Item Condition Alerts" (the "'844 patent"), and U.S. Patent No. 8, 135, 398, entitled "Method and Apparatus for Multimedia Communications with Different User Terminals" (the "'398 patent"). VIS also owns U.S. Patent No. RE 46, 140, entitled "Method and System for Conducting business in a transnational e-Commerce Network" (the "'140 patent"), which was issued after the initiation of this lawsuit.[1] VIS asserts infringement of all 10 patents, but Amazon does not challenge the '844 patent, the '398 patent, or the ' 140 patent in the instant motion.

         The '492 patent was filed on June 24, 2005 and issued on March 1, 2011. The Complaint describes the patent in general terms before moving to specifics; it states:

The '492 Patent Portfolio generally discloses systems and methods for converting video signals for a mobile terminal to accommodate reproduction by an alternative display terminal. To achieve this result, the video signal from a wireless communication network is processed to provide a converted video signal appropriate for an alternative display terminal. This converted video signal is then provided to accommodate the corresponding video display on a screen provided by the alternative (e.g., external) display terminal.

Compl- ¶ 14.

         Exemplary Claim 23 of the '492 patent recites:

23. An apparatus for processing signals to accommodate reproduction by an alternative display terminal, the apparatus comprising:
an interface module, which receives a video signal appropriate for displaying video content on a mobile terminal, the video signal being received from a cellular network communication that is sent to the mobile terminal and then received by the interface module; a signal conversion module, in operative communication with the interface module, which processes the video signal to produce a converted signal for use by the alternative display terminal, wherein processing by the signal conversion module includes converting the video signal from a compression format appropriate for the mobile terminal to a display format for the alternative display terminal that is different from the compression format, such that the converted video signal comprises a display format and a power level appropriate for driving the alternative display terminal; and a device interface module, in operative communication with the signal conversion module, which provides the converted video signal to the alternative display terminal to accommodate displaying the video content by the alternative display terminal.

         The '492 patent includes a graphical depiction of the claimed invention:

         (IMAGE OMITTED)

         The depiction shows a network system (104) that produces a signal which is transmitted from the base station (106) to the mobile terminal device (108). From the mobile terminal device, the signal is transmitted to the mobile signal conversion module ("MTSCM" or "intermediary device") (112), which is contained in "housing" (110). The MTSCM converts the mobile signal into a power level and display format that is compatible with the display monitor (114), which reproduces the original signal.

         Phrased in non-technical terms, the claimed idea: (1) takes a video feed from a mobile network (e.g., Verizon, AT&T, T-Mobile, etc.); (2) sends it to a mobile device that; (3) sends it to an intermediary device, which (4) converts the signal; and (5) displays it on a TV in your home. All of the asserted patents claim some form of this same invention.[2] As an additional example, Claims 28-33 of the '814 are reproduced in their entirety below:

28. An apparatus comprising:
an input interface configured to receive a multimedia signal through a wireless local area network, wherein the multimedia signal is a compressed digital signal;
at least one processing unit configured to perform a processing of the multimedia signal, wherein the processing of the multimedia signal comprises decompressing the compressed digital signal to a decompressed digital signal, wherein the processing of the multimedia signal further comprises encoding the decompressed digital signal to produce an encoded digital signal, and wherein the encoded digital signal comprises a decompressed high definition digital video signal; and a high definition multimedia interface configured to transmit the encoded digital signal to a high definition digital display;
wherein the apparatus is configured to interface with a wired connection to receive power through the wired connection while the encoded digital signal is transmitted to the high definition digital display through the high definition multimedia interface; and wherein the power received contributes power for said processing of the multimedia signal.
29. The apparatus of claim 28 further comprising a decoder, wherein the decoder is configured to perform said decompressing the compressed digital signal to the decompressed digital signal, and wherein the apparatus further comprises an encoder, wherein the encoder is configured to perform said encoding the decompressed digital signal to produce the encoded digital signal for transmission to the high definition digital display; wherein a maximum throughput rate for transmitting the encoded digital signal through the high definition multimedia interface is at least 10 Gigabits/second.
30. The apparatus of claim 29, wherein the power is received during said processing of the multimedia signal.
31. The apparatus of claim 30, wherein the maximum throughput rate supports said transmitting the encoded digital signal in real time.
32. The apparatus of claim 30, wherein the multimedia signal is received from a mobile terminal through the wireless local area network; and wherein the apparatus is an intermediate device between the mobile terminal and the high definition digital display; and wherein the mobile terminal is a cellular phone or a personal digital assistant (PDA).
33. The apparatus of claim 32, wherein the input interface receives the multimedia signal after the multimedia signal is wirelessly received by the mobile terminal.

         II. PROCEDURAL HISTORY

         Although VIS filed this complaint in July 2016, the '492 patent family has a history of related proceedings. In 2013, VIS sued Samsung for infringement in the Eastern District of Virginia. Virginia Innovation Sciences, Inc. v. Samsung Electronics Co., 983 F.Supp.2d 713 (E.D. Va. 2014). After a claim construction hearing and an adverse non-infringement ruling, VIS appealed to the Federal Circuit. Virginia Innovation Sciences, Inc. v. Samsung Electronics Co., 614 Fed.App'x 503 (Fed. Cir. 2015). The Federal Circuit reversed, writing that:

[A]lthough the intrinsic evidence strongly suggests that the claimed 'display format' must be a video signal that is 'ready for use' by a conventional external monitor, the intrinsic evidence before us does not provide a complete understanding of the term. Thus, while review of the intrinsic evidence is commonly dispositive in understanding the ordinary meaning of a claim, such is not the case in this particular instance. For example, the specification does not provide an explanation of what separates a video signal that is 'ready for use' by an external monitor from a video signal that is not. Nor does the specification explain what type of additional processing an external monitor may perform on a signal in a 'display format' in order to display the video content within that signal.

Id. at 510. Thus, the Federal Circuit determined that it could not construe the term "display format" on the record before it and therefore remanded the case. The parties settled on remand.

         While litigating that case, Samsung petitioned the U.S. Patent and Trademark Office ("USPTO") for inter partes review of the '492 patent, the '711 patent, and the '471 patent. The USPTO denied the institution of inter partes review for all three patents. Under 35 U.S.C. § 311, the request for inter partes review examined whether the patent claims could be cancelled "on a ground that could be raised under [35 U.S.C. §§102 or 103] and only on the basis of prior art consisting of patents or printed publications." Applying this standard, the USPTO found that none of challenged '492 family's patents were obvious under the prior art. In particular, the USPTO found that they were novel over Palin (U.S. Patent No. 7, 580, 005), which claims "a system ... for transmitting an image from a first display device having certain display capabilities to a second display device having different display capabilities." The USPTO ruled that, because "isolating and reassembling one or more external display device ... as a Bluetooth packet does not alter the 'format' of the video signal contained therein, " the '492 patent family's conversion of the video signal constituted an improvement over the prior art. Opp'n, Ex. 7 at 13 (Dkt. No. 36). In short, Palin did not teach the '492 patent family's "conversion to a display format... that is different from the compression format." Id., Ex. 6 at 14. As such, the teachings of the '492 patent family were found novel and not obvious under 35 U.S.C. §§102 and 103.

         Finally, VIS brought suit against HTC Corporation in February 2016. That case was transferred from the Eastern District of Virginia's Norfolk division to its Alexandria division in October 26, 2016. It is now pending before the Court. See Transfer Order, Virginia Innovation Sciences, Inc. v. HTC Corp., 1:16-cv-01350 (E.D. Va. October 26, 2016), Dkt. No. 51.

         III. LEGAL STANDARD

         On a motion to dismiss, the plaintiff must provide sufficient facts to show that it has stated a "plausible claim for relief." Ashcroft v. Iqbal,556 U.S. 662, 679 (2009). At this stage, courts must accept all facts as true, but should not give weight to purely legal conclusions. Bell Atlantic Corp. v. Twombly,550 U.S. 544, 570 (2007); United ...


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