Broadband iTV, Inc. v. Oceanic Time Warner Cable, LLC

• Decision Date: 29 September 2015
• Docket Number: Civ. No. 15-00131 ACK-RLP
• Citation: 135 F.Supp.3d 1175
• Parties: Broadband iTV, Inc., Plaintiff, v. Oceanic Time Warner Cable, LLC, and Time Warner Cable, Inc., Defendants.
• Court: U.S. District Court — District of Hawaii

135 F.Supp.3d 1175

Broadband iTV, Inc., Plaintiff,

v.Oceanic Time Warner Cable, LLC, and Time Warner Cable, Inc., Defendants.

Civ. No. 15-00131 ACK-RLP

United States District Court, D. Hawai'i.

Signed September 29, 2015.

Frederick A. Tecce, John D. Simmons, Keith A. Jones, Panitch Schwarze Belisario & Nadel, Philadelphia, PA, John S. Rhee, Paul Alston, Alston Hunt Floyd & Ing, Honolulu, HI, for Plaintiff.

Brandon H. Stroy, Sasha G. Rao, Maynard Cooper & Gale LLP, San Francisco, Ca, Randall Y. Yamamoto, Yamamoto Kim LLP, Honolulu, HI, Aaron Stiefel, Daniel L. Reisner, David S. Benyacar, Kaye Scholer LLP, New York, NY, Brett R. Tobin, Lisa W. Munger, Goodsill Anderson Quinn & Stifel LLP, Honolulu, HI, for Defendants.

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS OCEANIC TIME WARNER CABLE, LLC AND TIME WARNER CABLE, INC.'S MOTION FOR SUMMARY JUDGMENT REGARDING INVALIDITY OF U.S. PATENT NO. 7,631,336

Alan C. Kay Sr

., United States District Judge

For the reasons set forth below, the Court GRANTS IN PART and DENIES IN PART Defendants Oceanic Time Warner Cable, LLC and Time Warner Cable, Inc.'s Motion for Summary Judgment regarding Invalidity of U.S. Patent No. 7,631,336

, ECF No. 474.

FACTUAL AND PROCEDURAL HISTORY

On December 8, 2009, the United States Patent and Trademark Office ("USPTO") issued Patent No. 7,631,336 (the " '336 Patent")

, entitled "Method for Converting, Navigating and Displaying Video Content Uploaded from the Internet to a Digital TV Video-on-Demand Platform." Am. Compl. ¶ 19, Ex. A, ECF Nos. 100, 100-1. The patent was issued in the name of Milton Diaz Perez ("Diaz Perez")¹ and based on United States Patent Application No. 11/685,188 (the " '188 Application"), which was assigned to Broadband iTV, Inc. ("Plaintiff"). Am. Compl. ¶ 18, ECF No. 100.

The '336 Patent

discloses and claims various features related to the delivery of video-on-demand ("VOD")² content to a VOD server. Id. ¶ 21. According to the patent itself, the invention is intended to facilitate "the provision of video content to viewers through digital TV infrastructure." '336 Patent at Col. 1, ln. 17-18.³ Specifically, it relates to a method for "converting, navigating and displaying video content uploaded from the Internet on a digital TV video-on-demand platform." Id. at Col. 1, ln. 19-21. The patent includes eleven claims, out of which Claim 1 is independent and Claims 2-10 are dependent. See

id. at Col. 21-22.

On April 9, 2014, Plaintiff filed a Complaint against Defendants Oceanic Time Warner Cable, LLC, Time Warner Cable, Inc., Time Warner Entertainment Company, LP⁴ (collectively, "TWC"), and Hawaiian Telcom, Inc. ("HTI") (collectively, "Defendants"). Compl., ECF No. 1. The Complaint was amended on December 5, 2014. Am. Compl., ECF No. 100. The Amended Complaint accuses Defendants of infringing the '336 Patent

by "making, using, offering for sale and selling the '336 patent's claimed method for converting, navigating and displaying video content in connection with their providing, selling and offering for sale digital television services." Id. ¶ 22. Defendants deny that they infringe the '336 Patent. Def. HTI's Answer and Affirmative Defenses to Plf. BBiTV's Am. Compl. ¶ 22, ECF No. 104; Def. TWC's Answer to Am. Compl. ¶ 22, ECF No. 106.

Pursuant to the parties' stipulation, the Court ordered the severance of the cases against TWC and HTI on April 16, 2015. The severed cases were consolidated "for all pre-trial purposes, including claim construction." Stipulation and Order at 2, ECF No. 164. Following an off-the-record technology tutorial, held on June 3, 2015, and a Markman hearing, held on June 4, 2015, the Court issued its Claim Construction Order on June 24, 2015. ECF No. 290.

Following correspondence from the parties, the Court issued a Minute Order on August 4, 2015 outlining the number of permissible summary judgment motions. ECF No. 432. In the interests of judicial economy and pursuant to Federal Rules of Civil Procedure 1

and 16, the Court permitted each party to file one summary judgment motion regarding patent validity. In addition, each Defendant was permitted to file one summary judgment motion regarding patent infringement, and Plaintiff was permitted to file one summary judgment motion regarding patent infringement with respect to each Defendant. Id. at 2.

The instant motion relates to the validity of the '336 Patent

. On August 10, 2015, TWC filed its Motion for Summary Judgment Regarding Invalidity of U.S. Patent No. 7,631,336, ECF No. 474 ("TWC's MSJ"), and a Concise Statement of Facts attached thereto, ECF No. 475 ("TWC's CSF"). TWC's motion challenges first that the '336 Patent is invalid as related to ineligible subject matter under 35 U.S.C. § 101

, and second, that the '336 Patent is invalid as "anticipated" or "obvious" over prior art, pursuant to 35 U.S.C. §§ 102, 103.⁵

On August 27, 2015, Plaintiff filed its Memorandum in Opposition to TWC's MSJ, ECF No. 561 ("Plf.'s Opp. to TWC's MSJ"), and a Concise Statement of Facts attached thereto, ECF No. 562 ("Plf.'s CSF—TWC's MSJ").⁶

On September 4, 2015, TWC filed its Reply Memorandum in Further Support of its MSJ, ECF No. 620 ("TWC's Reply"), and a Reply Concise Statement of Facts attached thereto, ECF No. 621 ("TWC's Reply CSF"). Hearings were held on TWC's MSJ and HTI's MSJ on September 17, 2015.⁷

STANDARD

I. Summary Judgment Standard

A party is entitled to summary judgment on any claim or defense if it can be shown "that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law."' Maxwell v. Cnty. of San Diego , 697 F.3d 941, 947 (9th Cir.2012)

(quoting Fed. R. Civ. P. 56(a) ). A party asserting that a fact cannot be or is genuinely disputed must support the assertion by either "citing to particular parts of materials in the record" or "showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact." Fed. R. Civ. P. 56(c)(1).

A genuine issue of material fact exists if "a reasonable jury could return a verdict for the nonmoving party." United States v. Arango , 670 F.3d 988, 992 (9th Cir.2012)

(quoting Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 247, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ). Conversely, "[w]here the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no genuine issue for trial." Scott v. Harris , 550 U.S. 372, 380, 127 S.Ct. 1769, 167 L.Ed.2d 686 (2007).

The movant has the burden of persuading the court as to the absence of a genuine issue of material fact. Avalos v. Baca , 596 F.3d 583, 587 (9th Cir.2010)

. If the movant satisfies its burden, the nonmovant must present evidence of a "genuine issue for trial," Fed. R. Civ. P. 56(e), that is "significantly probative or more than merely colorable,"⁸

LVRC Holdings LLC v.

Brekka , 581 F.3d 1127, 1137 (9th Cir.2009) (citation omitted). When evaluating a motion for summary judgment, the court must "view the facts and draw reasonable inferences in the light most favorable to the party opposing the summary judgment motion." Scott, 550 U.S. at 378, 127 S.Ct. 1769.

II. Standards Related to Patent Eligibility Under 35 U.S.C. § 101

Issues of patent-eligible subject matter under 35 U.S.C. § 101

("Section 101") are questions of law. CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1369 (Fed.Cir.2011). To the extent that the Court must resolve underlying questions of fact related to eligibility, they must be proven by clear and convincing evidence. See, e.g. , Affinity Labs. of Texas, LLC v.

DirecTV, LLC , 109 F.Supp.3d 916, 932–34, 2015 WL 3764356 *16 (W.D.Tex. July 7, 2015) ; Kickstarter, Inc. v. Fan Funded, LLC , No. 11 Civ. 6909 (KPF), 2015 WL 3947178 *5 n. 7 (S.D.N.Y. June 29, 2015). Defendants, as the moving parties, bear the burden of establishing that the claims are patent-ineligible under Section 101. See, e.g. , Modern Telecom Sys. LLC v. Juno Online Servs., Inc. , No. SA CV 14–0348–DOC (ANx), 2015 WL 1240182 *7 (C.D.Cal. Mar. 17, 2015).

Courts disagree regarding whether a presumption of eligibility should apply in Section 101

cases. A recent Federal Circuit concurrence stated that "no presumption of eligibility attends the section 101 inquiry." Ultramercial, Inc. v. Hulu,

LLC , 772 F.3d 709, 717 (Fed.Cir.2014) (Mayer, J., concurring). District courts have taken different approaches. Compare, e.g. , Tranxition, Inc. v. Lenovo (U.S.) Inc. , No. 3:12–cv–01065-HZ, 2015 WL 4203469 *4 (D.Or. July 9, 2015) (declining to apply presumption of eligibility in Section 101 challenge) with

Exergen Corp. v. Brooklands Inc. , Civil Action No. 12–12243–DPW, 125 F.Supp.3d 307, 310–12, 2015 WL 5096464 *2 (D.Mass. Aug. 28, 2015) (applying presumption of eligibility in Section 101 challenge but noting that it "has less significance in the context of a largely legal determination"). Given the most recent available guidance from the Federal Circuit, the Court will assume that such a presumption does not apply.⁹

III. Standards Related to Patent Anticipation and Obviousness Under 35 U.S.C. §§ 102

, 103

Determinations of "anticipation" and "obviousness" under 35 U.S.C. §§ 102

, 103 ("Section 102," "Section 103") are reviewed differently from subject matter eligibility determinations under Section 101. In Section 102 and Section 103 challenges, a patent is entitled to "a presumption of validity, and the burden of proof falls upon the party seeking to establish the invalidity of a patent claim." See, e.g. , Nystrom v. Trex Co. , 374 F.3d 1105, 1117 (Fed.Cir.2004) (quotation omitted). However, where (as here) the prior art references offered by a defendant were not disclosed to the USPTO during the patent's prosecution, "the rationale underlying the presumption—that the PTO, in its expertise, has approved the claim"—is "much diminished." KSR Int'l Co. v.

Teleflex, Inc. , 550 U.S. 398, 418, 127 S.Ct. 1727, ...