Affinity Labs of Tex., LLC v. DirecTV, LLC

• Decision Date: 07 July 2015
• Docket Number: Case No. 6:15–CV–0030–WSS–JCM.
• Citation: 109 F.Supp.3d 916
• Parties: AFFINITY LABS OF TEXAS, LLC, Plaintiff, v. DIRECTV, LLC, DirecTV Digital LLC, et al., Defendants.
• Court: U.S. District Court — Western District of Texas

109 F.Supp.3d 916

AFFINITY LABS OF TEXAS, LLC, Plaintiff,

v.DIRECTV, LLC, DirecTV Digital LLC, et al., Defendants.

Case No. 6:15–CV–0030–WSS–JCM.

United States District Court, W.D. Texas, Waco Division.

Signed July 7, 2015.

Cyrus A. Morton, Daniel R. Burgess, Patrick M. Arenz, Ronald J. Schutz, Shira T. Shapiro, Robins Kaplan LLP, Minneapolis, MN, John P. Palmer, Naman Howell Smith & Lee, Waco, TX, for Plaintiff.

Brian M. Cook, Ryan K. Yagura, O'Melveny & Myers LLP, Los Angeles, CA, Darin W. Snyder, O'Melveny & Myers LLP, San Francisco, CA, Hana O. Chen, O'Melveny & Myers LLP, Newport Beach, CA, for Defendants.

David B. Weaver, Jeffrey T. Han, Vinson & Elkins LLP, Austin, TX, Hilary L. Preston, Vinson & Elkins, LLP, New York City, for Defendants NBA Media Ventures, LLC, Turner Digital Basketball Services, Inc., NHL Enterprises, L.P., NHL Enterprises, Inc. and NHL Interactive CyberEnterprises, LLC.

Lindsy Solanki, Cooley LLP, Palo Alto, CA, Christopher C. Campbell, Nathan K. Cummings, Cooley LLP, Reston, VA, for Defendants MLB Advanced Media, L.P. and MLB Advanced Media, Inc.

ORDER

WALTER S. SMITH, JR., District Judge.

Plaintiff Affinity Labs of Texas, LLC ("Affinity") filed the instant patent infringement suit, which was referred to the United States Magistrate Judge for all purposes. Doc. 9. Pursuant to 28 U.S.C. § 636(b)(1)(C) and Rules 1(h) and 4(b) of Appendix C of the Local Rules of the United States District Court for the Western District of Texas, the Magistrate Judge submitted a Report and Recommendation to this Court addressing Defendants' Motion to Dismiss Pursuant to Rule 12(b)(6). Doc. 19. After holding oral argument on May 12, 2015, and considering the parties' briefing, the Magistrate Judge concluded that Defendants' Motion is meritorious and recommended that it be granted with respect to all of the asserted claims of U.S. Patent No. 7,970,379 ("the '379 Patent"). Having reviewed the Magistrate Judge's report de novo, Affinity's objections thereto, and Defendants' Response, the Court hereby adopts the Magistrate Judge's findings and recommendation. Consequently, Defendants' Motion to Dismiss is GRANTED.

FACTUAL AND PROCEDURAL HISTORY

Affinity is an innovation consulting firm that owns a large portfolio of technology-based patents. Defendants are four companies, all in the business of broadcast media. Affinity filed suit against each Defendant separately,¹ alleging infringement of the '379 Patent. The Magistrate Judge granted the parties' Joint Motion to Consolidate under Rule 42(a). Doc. 22.

The '379 Patent, entitled "Providing Broadcast Content," claims a means for delivering regionally broadcasted radio or television content to an electronic device located outside a region of the regionally broadcasted content. '379 Patent (filed June 30, 2009). According to the specification, the patent addresses the following problem:

[A] user may want to listen to a radio station located in a remote location wherein conventional radio receivers could not receive the desired broadcast. For example, a person living in Houston, Tex. may not be able to receive a radio broadcast signal from a radio station in Seattle, Wash. utilizing a conventional radio receiver.

Id. at col. 15 l. 58–64. The patents claim (1) a method for streaming regional content outside of a specific geographic location ("the method claims"); and (2) a system configured to carry out the method on a wireless cellular telephone device ("the system claims"). Id. at 57.

At the hearing on Defendants' Motion, the parties agreed that Claim 1 is representative. Claim 1 reads as follows:

1. A broadcast system, comprising:

A network based resource maintaining information associated with a network available representation of a regional broadcasting channel that can be selected by a user of a wireless cellular telephone device; and

a non-transitory storage medium including an application configured for execution by the wireless cellular telephone device that when executed, enables the wireless cellular telephone device:

to present a graphical user interface comprising at least a partial listing of available media sources on a display associated with the wireless cellular telephone device, wherein the listing includes a selectable item that enables user selection of the regional broadcasting channel;

to transmit a request for the regional broadcasting channel from the wireless cellular telephone device; and to receive a streaming media signal in the wireless cellular telephone device corresponding to the regional broadcasting channel, wherein the wireless cellular telephone device is outside of a broadcast region of the regional broadcasting channel, wherein the wireless cellular telephone device is configured to receive the application via an over the air download.

Id. at col. 18 l. 21–44. Defendants jointly seek to dismiss Affinity's Complaint pursuant to Fed.R.Civ.P. 12(b)(6) on the grounds that the '379 Patent is invalid under 35 U.S.C. § 101 for failing to state a claim patentable subject matter.

Affinity previously asserted the '379 Patent in the Austin Division of the Western District of Texas. See Affinity Labs of Tex., LLC v. Clear Channel Broad., Inc., No. 1:12–CV–205–LY, 2014 WL 1699063 (W.D.Tex. Apr. 29, 2014). In a Markman order, Judge Yeakel held that the purpose of the invention described in the '379 Patent at issue is "to allow a user to consume ‘regionally broadcasted content’ when the user is physically located outside of the range of that regionally broadcasted content." Id. at *6. In Clear Channel, Judge Yeakel was not presented with the opportunity to analyze whether the '379 Patent was invalid under § 101.

Here, after holding oral argument and conducting a thorough review of the parties' briefing, the Magistrate Judge's Report and Recommendation recommended granting Defendants' Motion to Dismiss pursuant to Rule 12(b)(6). Doc. 53. In response to the Report and Recommendation, Affinity timely filed objections thereto. Doc. 56. Defendants filed a Response to Affinity's objections. Doc. 57.

STANDARD OF REVIEW

If a party files specific written objections to a Magistrate Judge's Report and Recommendation, the court "shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which [an] objection is made." 28 U.S.C. § 636(b)(1) ; see also Fed.R.Civ.P. 72(b)(2) (requiring specific written objections). The objections must be "sufficiently specific to focus the district court's attention on the factual and legal issues which are truly in dispute." United States v. 2121 E. 30th St., 73 F.3d 1057, 1060 (10th Cir.1996) ; Nettles v. Wainwright, 677 F.2d 404, 410 (5th Cir.1982) (en banc) ("It is reasonable to place upon the parties the duty to pinpoint those portions of the magistrate's report that the district court must specifically consider.").

General, vague, conclusive, or frivolous objections will not suffice. See Battle v. U.S. Parole Comm'n, 834 F.2d 419, 421 (5th Cir.1987). In such cases, the Court will only review the Magistrate Judge's findings to determine if they are clearly erroneous or contrary to the law. See Gallegos v. Equity Title Co. of America, Inc., 484 F.Supp.2d 589, 591 (W.D.Tex.2007) (citing United States v. Wilson, 864 F.2d 1219, 1221 (5th Cir.1989) ). Objections made with sufficient specificity, however, allow for the district court to "accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate." Freeman v. Cnty. of Bexar, 142 F.3d 848, 852 (5th Cir.1998) (quoting 28 U.S.C. § 636(b)(1) ).

RELEVANT LAW

Section 101 of the Patent Act defines patentable subject matter. 35 U.S.C. § 101. More specifically, § 101 states that "[w]hoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title." Id. The Supreme Court has interpreted § 101 to "contain[ ] an important implicit exception: Laws of nature, natural phenomena, and abstract ideas are not patentable." Alice Corp. Pty. Ltd. v. CLS Bank Int'l, ––– U.S. ––––, 134 S.Ct. 2347, 2354, 189 L.Ed.2d 296 (2014) (quotation marks omitted). "[T]he concern that drives this exclusionary principle [i]s one of pre-emption."Id. These categories are not patent-eligible because "they are the basic tools of scientific and technological work" that are "free to all men and reserved exclusively to none." Mayo Collaborative Servs. v. Prometheus Labs., ––– U.S. ––––, ––––, 132 S.Ct. 1289, 1293, 182 L.Ed.2d 321 (2012) (quotation marks omitted). Allowing patent claims for laws of nature, natural phenomena, and abstract ideas would "tend to impede innovation more than it would tend to promote it[,]" thereby thwarting the primary object of the patent laws. Id. Thus, the Court has "repeatedly emphasized this ... concern that patent law not inhibit further discovery by improperly tying up the future use of these building blocks of human ingenuity." Id. at 1301. However, the Court has also recognized the need to "tread carefully in construing this exclusionary principle, lest it swallow all of patent law." Alice, 134 S.Ct. at 2354.

The Supreme Court has recognized that, at some level, "all inventions ... embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas." Mayo, 132 S.Ct. at 1293. Thus, an invention is not rendered ineligible for patent simply because it involves an abstract concept. See Diamond v. Diehr, 450 U.S. 175, 187, 101 S.Ct. 1048, 67 L.Ed.2d 155 (1981). Applications of such concepts "to a new and useful end" remain eligible for patent protection. Gottschalk v. Benson, 409 U.S. 63, 67, 93 S.Ct. 253, 34 L.Ed.2d 273 (1972).

In Alice, the Court identified a "framework for distinguishing patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of...