Realtime Data LLC v. Array Networks Inc.

• Docket Number: 2021-2291,2021-2251
• Decision Date: 02 August 2023
• Parties: REALTIME DATA LLC, DBA IXO, Plaintiff-Appellant v. ARRAY NETWORKS INC., NIMBUS DATA, INC., Defendants FORTINET, INC., REDUXIO SYSTEMS, INC., QUEST SOFTWARE, INC., CTERA NETWORKS, LTD., ARYAKA NETWORKS, INC., OPEN TEXT, INC., MONGODB INC., EGNYTE, INC., PANZURA, INC., Defendants-Appellees REALTIME DATA LLC, DBA IXO, Plaintiff-Appellant v. SPECTRA LOGIC CORPORATION, Defendant-Appellee
• Court: U.S. Court of Appeals — Federal Circuit

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REALTIME DATA LLC, DBA IXO, Plaintiff-Appellant v. ARRAY NETWORKS INC., NIMBUS DATA, INC., Defendants FORTINET, INC., REDUXIO SYSTEMS, INC., QUEST SOFTWARE, INC., CTERA NETWORKS, LTD., ARYAKA NETWORKS, INC., OPEN TEXT, INC., MONGODB INC., EGNYTE, INC., PANZURA, INC., Defendants-Appellees REALTIME DATA LLC, DBA IXO, Plaintiff-Appellant v. SPECTRA LOGIC CORPORATION, Defendant-Appellee

Nos. 2021-2291,2021-2251

United States Court of Appeals, Federal Circuit

August 2, 2023

This disposition is nonprecedential

Appeal from the United States District Court for the District of Delaware in Nos. 1:17-cv-00800-CFC, 1:17-cv-00925-CFC Chief Judge Colm F. Connolly BRIAN DAVID LEDAHL, Russ August &Kabat, Los Angeles, CA, argued for plaintiff-appellant. Also represented by MARC A. FENSTER PAUL ANTHONY KROEGER, REZA MIRZAIE, SHANI M. WILLIAMS.

JOHN NEUKOM, Debevoise &Plimpton LLP, San Francisco, CA argued for all defendants-appellees. Defendantappellee Fortinet, Inc. also represented by DOUGLAS R. NEMEC, Skadden Arps, Slate, Meagher &Flom LLP, New York, NY; JAMES Y. PAK, Palo Alto, CA.

GUY YONAY, Pearl Cohen Zedek Latzer Baratz LLP, New York, NY, for defendants-appellees Reduxio Systems, Inc., CTERA Networks, Ltd.

ALTON GEORGE BURKHALTER, Burkhalter Kessler Clement &George LLP, Irvine, CA, for defendant-appellee Panzura, Inc. Also represented by MAHSA MICHELLE ROHANI.

THEODORE J. ANGELIS, K&L Gates LLP, Seattle, WA, for defendant-appellee Quest Software, Inc. Also represented by NICHOLAS F. LENNING, ELIZABETH WEISKOPF.

JOSHUA M. MASUR, Zuber Lawler LLP, Redwood City, CA, for defendant-appellee Aryaka Networks, Inc.

TIMOTHY J. CARROLL, Venable LLP, Chicago, IL, for defendant-appellee Open Text, Inc. Also represented by LAURA A. WYTSMA, Los Angeles, CA.

HILARY L. PRESTON, Vinson &Elkins LLP, Austin, TX, for defendant-appellee MongoDB Inc. Also represented by PARKER DOUGLAS HANCOCK, Houston, TX.

RYAN T. BEARD, FisherBroyles LLP, Austin, TX, for defendant-appellee Egnyte, Inc. Also represented by CHRISTOPHER ROBERT KINKADE, Princeton, NJ.

ROBERT E. PURCELL, The Law Office of Robert E. Purcell, PLLC, Syracuse, NY, for defendant-appellee Spectra Logic Corporation.

GABRIEL K. BELL, Latham &Watkins LLP, Washington, DC, for amicus curiae Veritas Technologies LLC. Also represented by AMIT MAKKER, San Francisco, CA.

Before NEWMAN, REYNA, and TARANTO, Circuit Judges.

Dissenting opinion filed by Circuit Judge NEWMAN.

OPINION

REYNA, Circuit Judge.

This case returns to us for the second time. Appellant Realtime sued several companies, including some of the Appellees, in the District of Delaware for infringing various combinations of five patents related to methods and systems for data compression. Some of the Appellees moved to dismiss under Federal Rule of Civil Procedure 12(b)(6) for, among other things, failure to state a claim, arguing that the claims of the patents were patent ineligible under 35 U.S.C. § 101. The district court held a hearing and orally announced that all of the claims from the five patents were invalid under § 101. On appeal, this court vacated and remanded for the district court to provide a more detailed § 101 analysis. Realtime Data LLC v. Re-duxio Systems, Inc., 831 Fed.Appx. 492 (Fed. Cir. 2020) ("Realtime I").

On remand, the district court issued a written opinion that found that the claims from all eight asserted patents (by then, Realtime had asserted three more patents and had added more parties) were invalid under § 101 because the claims were directed to an abstract idea. Realtime Data LLC v. Array Networks Inc., 537 F.Supp.3d 591 (D. Del. 2021) ("Realtime II"). The court dismissed Realtime's complaints but allowed Realtime to amend them, which it did- adding material and dropping a patent. On renewed motions to dismiss, the district court reaffirmed its prior analysis and dismissed the amended complaints-this time, without leave to amend. Realtime Data LLC v. Array Networks Inc., 556 F.Supp.3d 424 (D. Del. 2021) ("Realtime III").

Realtime appeals. For the reasons below, we affirm.

BACKGROUND

A. The Asserted Patents

The seven patents at issue here are U.S. Patent Nos. 9,054,728 ('728 patent), 8,933,825 ('825 patent), 8,717,203 ('203 patent), 9,116,908 ('908 patent), 7,415,530 ('530 patent), 10,019,458 ('458 patent), and 9,667,751 ('751 patent). All generally relate to methods and systems for digital data compression. Appellant's Br 15. The seven patents can be broken into three families. Id.

The family 1 patents. The '728, '825, and '203 patents are in the same family, share a specification, and are titled "Data Compression Systems and Methods."^[1] The patents address issues with lossless data compression techniques, including the "fundamental problem" of their "content sensitive behavior" or "data dependency," which "implies that the compression ratio achieved is highly contingent upon the content of the data being compressed." '728 patent at 2:29-35. Another issue with lossless data compression techniques is that "there are significant variations in the compression ratio obtained when using a single lossless data compression technique for data streams having different data content and data size." Id. at 2:41-45. According to the patents, although "conventional content dependent techniques," which typically rely on file type descriptors appended to file names, for example ".doc" or ".txt," may be used to address these problems, those content dependent techniques had "[f]undamental limitations." Id. at 2:65-3:19; see also Appellant's Br. 17.

To avoid problems associated with data dependency and to improve efficacy, the patents describe "a system for data compression that looks beyond the file type descriptor, to the underlying data, to complete the desired compression." Realtime I, 831 Fed.Appx. at 493-94 (citing '728 patent at 3:59-5:11). The system uses a combination of contentindependent and content-dependent data compression and decompression. See '728 patent at Abstract, 1:34-37, 3:5962, 6:24-27.

The '728 patent includes 25 claims.^[2] Claim 25 recites:

25. A computer implemented method comprising:

analyzing, using a processor, data within a data block to identify one or more parameters or attributes of the data within the data block;

determining, using the processor, whether to output the data block in a received form or in a compressed form; and

outputting, using the processor, the data block in the received form or the compressed form based on the determination,

wherein the outputting the data block in the compressed form comprises determining whether to compress the data block with content dependent data compression based on the one or more parameters or attributes of the data within the data block or to compress the data block with a single data compression encoder; and

wherein the analyzing of the data within the data block to identify the one or more parameters or attributes of the data excludes analyzing based only on a descriptor that is indicative of the one or more parameters or attributes of the data within the data block.

Id. at claim 25.

The '825 patent includes 30 claims. Claim 18 recites:

18. A method comprising:

associating at least one encoder to each one of a plurality of parameters or attributes of data;

analyzing data within a data block to determine whether a parameter or attribute of the data within the data block is identified for the data block;

wherein the analyzing of the data within the data block to identify a parameter or attribute of the data excludes analyzing based only on a descriptor that is indicative of the parameter or attribute of the data within the data block;

identifying a first parameter or attribute of the data of the data block;

compressing, if the first parameter or attribute of the data is the same as one of the plurality of parameter or attributes of the data, the data block with the at least one encoder associated with the one of the plurality of parameters or attributes of the data that is the same as the first parameter or attribute of the data to provide a compressed data block; and

compressing, if the first parameter or attribute of the data is not the same as one of the plurality of parameters or attributes of the data, the data block with a default encoder to provide the compressed data block.

'825 patent at claim 18.

The '203 patent includes 30 claims. Claim 14 recites:

14. A system for decompressing, one or more compressed data blocks included in one or more data packets using a data decompression engine, the one or more data packets being transmitted in sequence from a source that is internal or external to the data decompression engine, wherein a data packet from among the one or more data packets comprises a header containing control information followed by one or more compressed data blocks of the data packet the system comprising:

a data decompression processor configured to analyze the data packet to identify one or more recognizable data tokens associated with the data packet, the one or more recognizable data identifying a selected encoder used to compress one or more data blocks to provide the one or more compressed data blocks, the encoder being selected based on content of the one or more data blocks on which a compression algorithm was applied one or more decompression decoders configured to decompress a compressed data block from among the one or more compressed data blocks associated with the data packet based on the one or more recognizable data tokens; wherein:

the one or more decompression decoders are further configured to decompress the compressed data block utilizing content dependent data decompression to provide a first decompressed data block when the one or more

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