Ippv Enterprises v. Echostar Communications
| Decision Date | 03 July 2001 |
| Docket Number | Civ.A. No. 99-577-RRM. |
| Citation | 146 F.Supp.2d 498 |
| Parties | IPPV ENTERPRISES, LLC, and MAAST, Inc., Plaintiffs, v. ECHOSTAR COMMUNICATIONS CORP.; NagraVision, S.A.; and NagraStar, L.L.C., Defendants. |
| Court | U.S. District Court — District of Delaware |
James D. Heisman, Connolly, Bove, Lodge & Hutz LLP, Wilmington, Delaware, Frederick G. Michaud, Jr., David M. Schlitz, S. Lloyd Smith, Mark R. Kresloff, Burns, Doane, Swecker & Mathis, L.L.P., Alexandria, VA, for plaintiffs.
Donald F. Parsons, Jr., Rodger D. Smith, Morris, Nichols, Arsht & Tunnell, Wilmington, DE, Philip L. Cohan, Piper Marbury Rudnick & Wolfe LLP, Washington, DC, for defendants.
This is a patent case. Plaintiff IPPV Enterprises, LLC is a Nevada limited liability corporation with its principal place of business in Reno, Nevada. IPPV owns U.S.Patent Nos. 4,163,254 (the '254 patent); 4,225,884 (the '884 patent); 4,528,589 (the '589 patent); and 4,484,217 (the '217 patent). Plaintiff MAAST, Inc. is a Delaware corporation with its principal place of business in Sparks, Nevada. MAAST owns U.S.Patent No. 4,600,942 (the '942 patent). Defendant Echostar Communications Corp. is a Nevada corporation with its principal place of business in Littleton, Colorado. Defendant NagraVision, S.A. is a Swiss corporation with its principal place of business in Cheseaux, Switzerland. Defendant NagraStar is a Colorado corporation with its principal place of business in Englewood, Colorado. The '884, '217 and '942 patents were originally assigned upon issuance to Talease, Inc. before being reassigned to IPPV and MAAST.
The patents in suit relate to the encryption and decryption of pay-per-view television broadcasts. On August 26, 1999, IPPV and MAAST (collectively, "IPPV") filed a complaint in this case, alleging that Echostar Communications's creation and sale of their DISH Network, a direct broadcast satellite subscriber television service, infringes, or induced infringement of, one or more claims of the '254, '884,-'589, '217, and '942 patents. IPPV subsequently abandoned its claims based on the '589 patent.
On December 28, 1999, Echostar Communications answered the complaint, denying infringement, and asserting the following affirmative defenses: (1) that plaintiffs failed to state a claim upon which relief could be granted; (2) that the patents in suit are invalid for failing to satisfy the requirements of 35 U.S.C. §§ 102, 103, and 112; (3) that plaintiffs are equitably estopped from asserting their claims; (4) that the patents in suit are invalid because the Patent and Trademark Office ("PTO") failed to duly investigate relevant prior art; and (4) that plaintiffs failed to mark their patented articles.
On July 20, 2000, IPPV amended its complaint to add NagraVision S.A. and NagraStar, L.L.C. as defendants. Echostar Communications, NagraVision S.A. and NagraStar, L.L.C. (collectively, "Echostar") answered the amended complaint and asserted counterclaims on August 24, 2000. A ten day jury trial is scheduled to begin on July 9, 2001.
On June 8, 2001, the parties submitted proposed claim constructions for the asserted claims of the patents in suit. On June 18, 2001, the court held a trial in accordance with Markman v. Westview Instruments, Inc., 517 U.S. 370, 116 S.Ct. 1384, 134 L.Ed.2d 577 (1996), to construe the disputed terms and phrases of the asserted claims.
This is the court's construction of the claims.
The court draws the following facts from the file histories and specifications of the '254, '217, '884 and '942 patents and from its previous opinion in this matter.
The technology at issue in this case relates to the encryption and decryption of pay-per-view television broadcasting and the billing of subscribers that view the broadcasts.1 Broadcasters of pay-per-view programming employ methods to encrypt and decrypt analog television program signals so that only paying subscribers may view transmitted programs. The program signals usually comprise a video signal, an audio signal and other signals and codes associated with the transmission. Basically, a broadcaster will encrypt and transmit program signals from a remote location. A subscriber to the broadcast attaches equipment with a receiver for decrypting the signals to a television set. The receiver then receives and decrypts the transmitted program signal, allowing the subscriber to view the broadcast program.
By the late 1970s, broadcasters were employing two methods for purchasing subscription television services. One method is known as "tiering." This method involves the grouping of television programs into tiers. The first tier often includes a number of local television channels. A second tier may include all of the local channels, plus a number of special interest channels. Finally, a third tier may include all local and special interest channels, plus one or more premium movie channels. In order to access the programs carried on a certain tier, the subscriber must pay the flat fee associated with that tier whether or not the subscriber actually views any of the programming.
The second method is known as the "per view" method. With this method, a subscriber has the ability to purchase programming that is not included in the subscriber's tier. The subscriber is only billed for the programs that the subscriber actually views. The patents in suit primarily relate to the development of the "per view" billing method.
The process of billing subscribers on a "per view" basis presented an early challenge for broadcasters of encrypted signals. In the mid-1970s, inventors Robert Block, John R. Martin and John M. Lull sought to create an effective per view billing method. Their efforts resulted in the '254 patent, which issued on July 31, 1979 to Block and Martin, and the '217 patent, which issued on November 24, 1984 to Talease, as assignee of Block and Lull.
The '254 patent claims a system and method for billing the subscriber for only the specific program viewed. The patent discloses that an identification code is transmitted in the program signal to the subscriber's receiver. When the subscriber decides to view a television program, and takes the necessary steps to do so, the equipment located at the subscriber's location stores the identification code of the broadcast and decodes the encrypted television program signal. The identification signal is then later transferred to a remote location, where it is recorded and used in compiling a bill for the subscriber.
The '217 patent claims methods that allow a pay television operator to limit the per view purchase capability of a subscriber. The patent discloses that an amount of credit is stored in the equipment at the subscriber location, and the subscriber can impulsively purchase broadcast programs or services on a per view basis until the cost of the programs exceeds the subscriber's credit, at which time, the invention prevents the subscriber from ordering more programming.
Block's interests were not limited to methods for billing and restricting the access of per view subscribers. He also sought to improve the actual methods of encryption and decryption. On September 30, 1980, the '884 patent issued to Talease, as assignee of Block and Martin. The patent involves subscription television where certain programs are viewable, while other programs, that are otherwise available, are not viewable. It discloses a method wherein a television program is identified as being associated with one or more categories and decodes the corresponding program signal based on that association. The categories may be based on program ratings such as the MPAA ratings, which include the G, PG, PG-13, R, NC-17 and X ratings. The categories could also relate to different genres such as drama or comedy.
If a television program that is otherwise accessible through the viewer's subscription is associated with a category that the subscriber has deemed acceptable for viewing, the subscriber's decoding equipment will decode the corresponding program signal. If the television program is associated with a category that the subscriber has deemed to be unacceptable for viewing, the equipment will not decode the corresponding program signal. The method is particularly useful to parents who wish to restrict the television programs viewed by their children.
By the mid-1980s, broadcasters had developed three methods for encrypting program signals. The first method involved the encryption of program signals by modulating the video portion of the signal by a sine wave signal such that the different phases of the video signal could not be recognized by a normal television receiver. Broadcasters, however, found that this encryption system could be defeated by means that were readily available to average consumers.
The second method resulted from the development of technology for inverting lines or fields of the video signal on some basis that could be reproduced at a subscriber's home. While this technique satisfactorily prevented unauthorized viewing of the signals, viewers found that the reconstituted signal was frequently distorted.
The third method of encryption used by broadcasters was to encode the video signal by delaying parts of the signal relative to other parts in a determinable manner such that the signal could be reconstituted by a paying subscriber's equipment. This method was disclosed in U.S.Patent No. 4,405,942, issued to Block on September 20, 1983. The patent teaches that an analog program signal can be converted into digital samples, which are then scrambled, and subsequently reconverted into analog form for broadcasting. Broadcasters, however, found that the equipment necessary to carry out the analog-to-digital conversion of the signal was relatively expensive. Moreover, broadcasters discovered that the Block method could only encrypt...
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Ippv Enterprises v. Echostar Communications
...its claim construction opinion on the remaining disputed terms of the four patents at issue. See IPPV Enters., LLC v. Echostar Communications Corp., 146 F.Supp.2d 498 (D.Del.2001) ("IPPV II"). On September 19, 2000, Echostar moved for summary judgment that it does not infringe the '942 pate......