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Emblaze Ltd. v. Apple Inc.

United States District Court, N.D. California, San Jose Division

April 24, 2014

EMBLAZE LTD., Plaintiff,
v.
APPLE INC., Defendant

Page 1109

(Re: Docket Nos. 343, 346, 348, 350 and 401).

For Emblaze Ltd., Plaintiff: Andrew P. Nemiroff, LEAD ATTORNEY, PRO HAC VICE, Lisa A. Ferrari, Marilyn Neiman, PRO HAC VICE, Martin Brian Pavane, Cozen O'Connor, New York, NY; Martin L. Fineman, Davis Wright Tremaine LLP, San Francisco, CA; Nathan Dooley, Los Angeles, CA.

For Apple Inc., Defendant: James Joseph DeCarlo, LEAD ATTORNEY, Greenberg Traurig LLP(Sta Monica), New York, NY; Mark Fowler, LEAD ATTORNEY, Krista Anne Celentano, Robert Buergi, DLA Piper LLP (U.S.), East Palo Alto, CA; Stephen M. Ullmer, LEAD ATTORNEY, Sarah Elizabeth Barrows, Greenberg Traurig LLP, San Francisco, CA; Eduardo J Blanco, DLA Piper LLP, Palo Alto, CA; Erin Paige Gibson, Jacob Daniel Anderson, John Allcock, Robert Chen Williams, DLA Piper LLP (U.S.), San Diego, CA; Julie Pamela Bookbinder, Greenberg Traurig, LLP (NYC), New York, NY; Kenneth L. Steinthal, King & Spalding, San Francisco, CA; Michael A. Nicodema, PRO HAC VICE, Scott J Bornstein, Greenberg Traurig LLP, New York, NY; William Sloan Coats , III, Greenberg Traurig, LLP, East Palo Alto, CA.

For Microsoft Corporation, Interested Party: Eric Lance Wesenberg, LEAD ATTORNEY, Perkins Coie LLP, Palo Alto, CA.

For Akamai Technologies, Inc., Miscellaneous: David H. Judson, LEAD ATTORNEY, Law Office of David H. Judson, Dallas, TX.

For Apple Inc., Counter-claimant: James Joseph DeCarlo, LEAD ATTORNEY, Greenberg Traurig LLP(Sta Monica), New York, NY; Kenneth L. Steinthal, LEAD ATTORNEY, King & Spalding, San Francisco, CA; Scott J Bornstein, LEAD ATTORNEY, Greenberg Traurig, LLP, New York, NY; Julie Pamela Bookbinder, Greenberg Traurig, LLP (NYC), New York, NY; Michael A. Nicodema, PRO HAC VICE, Greenberg Traurig LLP, Florham Park, NJ; Robert Buergi, DLA Piper LLP (U.S.), East Palo Alto, CA; Sarah Elizabeth Barrows, Stephen M. Ullmer, Greenberg Traurig LLP, San Francisco, CA; William Sloan Coats , III, Greenberg Traurig, LLP, East Palo Alto, CA.

For Emblaze Ltd., Counter-defendant: Lisa A. Ferrari, Marilyn Neiman, PRO HAC VICE, Martin Brian Pavane, Cozen O'Connor, New York, NY; Martin L. Fineman, Davis Wright Tremaine LLP, San Francisco, CA; Nathan Dooley, Los Angeles, CA.

Page 1110

ORDER RE: APPLE'S MOTIONS FOR SUMMARY JUDGMENT AND EMBLAZE'S MOTION FOR LEAVE TO AMEND ITS INFRINGEMENT CONTENTIONS

PAUL S. GREWAL, United States Magistrate Judge.

The invention claimed in this patent case bears a certain resemblance to the Veg-O-Matic once hawked on late-night TV: " It slices, it dices and so much more!" But rather than carrots or celery, this contraption chops up streams of data for upload and download. The point is to permit live casting of audio, video and the like without any dedicated server.

Before the court are Plaintiff Emblaze Ltd.'s motion for leave to amend its infringement contentions to add recently-released Apple products [1] and Defendant Apple Inc.'s separate motions for summary judgment of: (1) non-infringement across

Page 1111

all [2] and (2) specific [3] content streams, (3) invalidity [4] and (4) no willfulness.[5] To address these motions, the parties appeared at a specially-set hearing. Although Apple's dispositive motions remain opposed, at the hearing Apple agreed not to oppose Emblaze's motion for leave to amend its infringement contentions.[6] On that basis, Emblaze's motion is GRANTED. After considering the arguments, the court GRANTS Apple's motions, but only IN-PART, as follows:

DOCKET NUMBER

MOTION

RESULT

343

Summary Judgment of No Willful Infringement

GRANTED

346

Summary Judgment of Non-Infringement as to All Accused Streams

GRANTED-IN-PART

348

Summary Judgment of Non-Infringement of Specific Content Providers

DENIED

350

Summary Judgment of Invalidity

DENIED

I. BACKGROUND

A. The Parties and Disputed Technology

Emblaze is an Israeli corporation dedicated to the " development and marketing of innovative high-tech technologies and products." [7] Apple is a California-based corporation that, among other things, markets phones, tablets and computers that incorporate " HTTP Live Streaming technology" capable of " real-time" broadcasting.[8] Emblaze owns the sole patent at issue in this case: U.S. Patent No. 6,389,473 (" the '473 patent" ).[9]

The '473 patent describes methods that allow " transmission of live audio and video to multiple devices" without requiring " devoted streaming servers" and permitting adjustment to " different bandwidths" where necessary.[10] As the patent abstract of the '473 patent puts it, the invention disclosed is:

A method for real-time broadcasting from a transmitting computer to one or more client computers over a network, including providing at the transmitting computer a data stream having a given data rate, and dividing the stream into a sequence of slices, each slice having a predetermined data size associated therewith. The slices are encoded in a corresponding sequence of files, each file having a respective index, and the sequence is uploaded to a server at an upload rate generally equal to the data rate of the stream, such that the one or more client computers can download the sequence over the network from the server at a download rate generally equal to the data rate.

Independent Claim 1 of the '473 patent is representative:

A method for real-time broadcasting from a transmitting computer to one or

Page 1112

more client computers over a network, comprising:
providing at the transmitting computer a data stream having a given data rate;
dividing the stream into a sequence of slices, each slice having a predetermined data size associated therewith;
encoding the slices in a corresponding sequence of files, each file having a respective index; and
uploading the sequence to a server at an upload rate generally equal to the data rate of the stream, such that the one or more client computers can download the sequence over the network from the server at a download rate generally equal to the data rate.[11]

Emblaze claims that through its HTTP Live Streaming, introduced into Apple's products around 2009,[12] Apple infringes each of the asserted '473 patent claims.

B. Procedural History

Emblaze kicked off this case by filing a complaint for patent infringement in the Southern District of New York.[13] Several months later, the case was transferred to this district.[14] After the parties initially declined to consent to magistrate judge jurisdiction, the case was assigned to United States District Judge Saundra Brown Armstrong.[15] Emblaze thereafter sought leave to amend its complaint to:

(1) amend the list of claims of the '473 Patent that are asserted by Emblaze so as to conform the allegations to what Emblaze has asserted in its Infringement Contentions;
(2) amend the products that Emblaze is accusing of infringement so as to conform the allegations of the Complaint to what Emblaze has learned in its ongoing investigation and from discovery thus far;
(3) remove certain allegations concerning Apple's presence in the Southern District of New York (no longer relevant now that the action has been transferred to the Northern District of California);
(4) update the firm affiliation of counsel for Emblaze and the change of venue from the Southern District of New York to the Northern District of California; and
(5) make minor editing changes to the text.[16]

After Apple filed a statement of non-opposition, Judge Armstrong granted Emblaze's motion for leave to amend the complaint. Apple then moved to dismiss the amended complaint pursuant to Fed.R.Civ.P. 12(b)(6). Judge Armstrong dismissed Emblaze's indirect infringement claims with leave to amend, but denied Apple's related request to dismiss Emblaze's direct infringement or willfulness claims.[17] Emblaze's responded with a second amended complaint claiming direct, induced, contributory and willful infringement.[18]

Pursuant to the parties' stipulation, the

Page 1113

case was reassigned to the undersigned.[19] Following this latest reassignment and a tutorial and hearing, the court construed disputed claim terms as follows:[20]

CLAIM TERM

CONSTRUCTION

" real-time broadcasting"

simultaneous transmission of data to one or more clients matching the human perception of time or proceeding at the same rate as a physical or external process

" providing at the transmitting computer a data stream having a given data rate"

the transmitting computer provides a data stream having a given amount of data per unit of time

" data stream having a given data rate"

a data stream having a given amount of data per unit of time

" slice"

a discrete segment of the data stream

" each slice having a predetermined data size associated therewith"

each slice having a data size, which may be a time duration, assigned in advance of the stream being divided [21]

" encoding the slices in a corresponding sequence of files"

forming each slice as a file, wherein a file includes compressed data from the slice and a file descriptor, and wherein the sequence of files corresponds to the sequence of slices

" sequence of files, each file having a respective index"

sequence of files, wherein each file has an indicator that represents a respective slice's location in the sequence

" uploading the sequence to a server at an upload rate generally equal to the data rate of the stream"

transmitting the files from the transmitting computer to the server at an upload rate generally equal to the data rate of the stream

" such that one or more client computers can download the sequence over the network from the server at a download rate generally equal to the data rate"

such that one or more client computers are able to select individual files corresponding to the slices for download over the network at a download rate generally equal to the data rate

" decode the sequence"

decompressing any compressed data in the sequence

" play back the data stream responsive to the indices of the files"

playing back the data stream based on the indices of the files to be played back

" at a replay rate generally equal to the data rate"

the rate at which the client plays back the data stream is generally equal to the data rate of the stream

" uploading and updating an index file containing the index of the file in the sequence that was most recently uploaded"

uploading to a server an index file, and updating the index file with the index of the most recently uploaded file

" encoding slices at a different plurality of different quality levels"

forming slices at more than one quality level

" determining a data bandwidth of the network between the server and the client computer"

the client determines a data rate at which a client can download a file from the server

" wherein dividing the stream into the sequence of slices comprises dividing the stream into a sequence of time slices, each having a predetermined duration associated therewith"

the stream is divided into a sequence of slices, where the predetermined data size of the slices is established by setting the time duration of the slices

A few months later, Apple moved the court to reconsider or clarify its prior construction that the term " each slice having a

Page 1114

predetermined data size associated therewith" means " each slice having a data size, which may be time duration, assigned in advance of the stream being divided." [22] The court agreed that reconsideration was warranted and construed the term as meaning " each slice having a data size, which may be established by setting a time duration of the slice, assigned in advance of the stream being divided." [23]

Apple next moved for leave to amend its invalidity contentions,[24] which the court granted.[25] The court later held that it would consider Emblaze's revised patent disclosures to be its operative patent disclosures pursuant to a stipulation between the parties.[26]

As the case turned towards dispositive motion practice, the court denied Apple's motion to stay in light of the Supreme Court's decision to grant certiorari in Akami v. Limelight Networks. [27] The court also held that although portions of the report of Emblaze expert Vijay Madisetti report would not be struck, Emblaze was precluded from introducing later-model accused products in its report that were not disclosed in Emblaze's original or revised infringement contentions.[28]

With that, the dispositive motions now before the court finally appeared.

II. LEGAL STANDARDS

A. Summary Judgment

Pursuant to Fed.R.Civ.P. 56(a), the " court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." [29] Material facts are those that may affect the outcome of the case.[30] A dispute as to a material fact is genuine if there is sufficient evidence for a reasonable jury to return a verdict for the nonmoving party.[31] When the parties file cross-motions for summary judgment, the district court must consider all of the evidence submitted in support of both motions to evaluate whether a genuine issue of material fact exists precluding summary judgment for either party.[32] The " sufficiency of an expert's opinion at summary judgment" in a patent case is evaluated " according to the standards of regional circuit law." [33] In the Ninth Circuit, expert " opinion evidence is itself sufficient to create a genuine issue of disputed fact

Page 1115

sufficient to defeat" summary judgment,[34] but when " expert opinion is not supported by sufficient facts to validate it in the eyes of the law, or when indisputable record facts contradict or otherwise render the opinion unreasonable, it cannot support a jury's verdict." [35]

B. Anticipation

Section 102(a) provides that an issued patent is invalid, absent an exception, if " the claimed invention was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention." [36] Once issued, however, patents are entitled to a presumption of validity. Apple's attempt to invalidate the '473 patent therefore " must overcome the presumption of validity in 35 U.S.C. § 282 by clear and convincing evidence." [37]

" Section 102 embodies the concept of novelty--if a device or process has been previously invented (and disclosed to the public), then it is not new, and therefore the claimed invention is 'anticipated' by the prior invention." [38] " Anticipation requires a showing that each element of the claim at issue, properly construed, is found in a single prior art reference." [39] Apple must show " that the four corners of a single, prior art document describe every element" of the disputed claims within the '473 patent.[40] To invalidate the '473 patent, any prior art Apple points to " must be 'enabling'--i.e., it must be sufficient to permit a person having ordinary skill in the art to practice the invention." [41] " Anticipation is a question of fact, and the determination of whether a prior art reference is enabling 'is a question of law based upon underlying factual findings.'" [42] " However, without genuine factual disputes underlying the anticipation inquiry, the issue is ripe for judgment as a matter of law." [43] To prevail on its anticipation argument Apple must prove by " clear and convincing" evidence that " each and every limitation is found either expressly or inherently in a single prior art reference." [44]

Page 1116

C. Obviousness

A patent is invalid as obvious under Section 103 " if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains." [45] " Whether a patent claim is obvious is a question of law based on four underlying facts: (1) the scope and content of the prior art; (2) the level of ordinary skill in the pertinent art; (3) the differences between the prior art and the claims at issue; and (4) such secondary considerations as commercial success, long felt but unsolved need, and the failure of others." [46] " Generally, a party seeking to invalidate a patent as obvious must demonstrate by clear and convincing evidence that a skilled artisan would have had reason to combine the teaching of the prior art references to achieve the claimed invention, and that the skilled artisan would have had a reasonable expectation of success from doing so." [47]

" The Supreme Court has warned, however, that, while an analysis of any teaching, suggestion, or motivation to combine known elements is useful to an obviousness analysis, the overall obviousness inquiry must be expansive and flexible." [48] The obviousness inquiry must be account for the fact that a person having ordinary skill in the art is also " a person of ordinary creativity, not an automaton." [49] There need not be " precise teachings directed to the specific subject matter of the challenged claim, for a court can take account of the inferences and creative steps that a person of ordinary skill in the art would employ." [50] " Almost any invention, no matter how nonobvious at the time, will appear obvious when looking backward from the solution. It is for that reason that '[c]are must be taken to avoid hindsight reconstruction by using the patent in suit as a guide through the maze of prior art references, combining the right references in the right way so as to achieve the result of the claims in suit.'" [51]

D. Willfulness

" Establishing that a defendant has willfully infringed a valid patent is a two-step inquiry." [52] First, " a patentee must show by clear and convincing evidence that the infringer acted despite an

Page 1117

objectively high likelihood that its actions constituted infringement of a valid patent." [53] After the " threshold objective standard is satisfied, the patentee must also demonstrate that this objectively-defined risk" was " either known or so obvious that it should have been known to the accused infringer." [54] The threshold objective prong " is a question of law based on underlying questions" of law and fact.[55]

III. DISCUSSION

A. Summary Judgment of Non-Infringement as to All Accused Streams is Warranted, But Only In Part

Although Apple marshals five non-infringement arguments as to all accused streams, at oral argument it focused on two in particular: (1) that the accused streams do not have an " upload rate generally equal to the data rate" and (2) that the accused streams do not have slices of " predetermined data size." Apple's additional arguments address (3) streams not analyzed by Emblaze's expert Vijay Madisetti, (4) the absence of a single infringer of the apparatus claims at issue and (5) whether Apple is a direct infringer of the '473 patent. The court will consider each argument in turn.

1. A Reasonable Jury Could Find That the Accused Streams Upload the Claimed Sequence at an Upload Rate Generally Equal to the Data Rate of the Stream

Apple argues that because the " undisputed upload rate evidence shows that the Accused Streams are not uploaded at an upload rate generally equal to the data rate of the stream," summary judgment is warranted.[56] To get there, Apple urges a further construction of the " upload rate" term as " the rate at which the files are uploaded from the transmitting computer to the server, and it must be generally equal to the data rate of the stream." [57] As explained in greater detail below, while Apple is right that further construction is appropriate, Apple's construction inappropriately excludes the wait time between files during a sequence upload from the calculation.

Pursuant to O2 Micro, the court is obligated to construe " upload rate" specifically -- despite the court's prior constructions offered in this case.[58] As noted earlier,

Page 1118

the court previously issued the following construction of a broader limitation that includes " upload rate" :[59]

CLAIM TERM

CONSTRUCTION

" uploading the sequence to a server at an upload rate generally equal to the data rate of the stream"

transmitting the files from the transmitting computer to the server at an upload rate generally equal to the data rate of the stream

Because determining the meaning and scope of patent claims is a responsibility of the court,[60] the court accepts its O2 Micro duty and will construe the specific " upload rate" term with the guidance of Phillips [61] and its progeny in mind, just as it has done with its earlier constructions.[62]

According to Apple, " upload rate" must constitute the ratio of data uploaded to upload time, exclusive of the wait time between file uploads. But this construction overlooks the claims' specific reference to the upload rate of the sequence, not the upload rate of a single file within the sequence.[63] The court has already explained that " uploading the sequence to a server at an upload rate generally equal to the data rate of the stream" means " transmitting the files from the transmitting computer to the server at an upload rate generally equal to the data rate of the stream." [64] The upload rate thus must be based on the transmission of the files -- plural -- to the server and not transmission of a single file. Even though the data in a single file may take only a fraction of the slice allotted to upload, the encoder must wait the balance of the wait time before uploading a second file.[65] Because the sequence as a whole is not uploaded until the upload of the last of its files, the wait time in between the files must be included.[66]

Page 1119

Apple's additional argument that " use of the segment duration for the time to upload renders the claim's 'generally equal' requirement meaningless" -- because the upload rate and data rate must necessarily be the same if wait time is included -- is incomplete.[67] " A claim construction that gives meaning to all the terms of the claim is preferred over one that does not do so." [68] But here, regardless of whether wait time is included, if the upload rate is too slow, a " live" stream will lag and the client's display will eventually stall while subsequent segments are uploaded and transmitted. The upload and data rates therefore must be " generally equal" to maintain live streaming.

Apple also urges that the " upload time" referred to in the patent as pertaining to a single file is interchangeable with " upload rate." It cannot be overlooked, however, that the patentee relied on two different words to describe those two concepts.[69]

In sum, the term " upload rate" in the context of the '473 patent should be read to include wait time between the transmission of files within a sequence. A reasonable jury could find that the accused streams include such an upload rate.

2. A Reasonable Jury Could Find Each Slice Has a Data Size Established By Setting a Time Duration Assigned in Advance of the Stream Being Divided

Focusing on an ambiguity in the specific term " predetermined data size" Apple argues that the record is undisputed that the accused products do not practice the broader limitation " each slice having a predetermined data size associated therewith." Once again, while the court agrees that clarification of the disputed term is appropriate, that clarification could be applied by a reasonable jury to find infringement of the accused content streams.

Consider first the history of the construction of the " predetermined data size" term thus far. The asserted claims of the '473 patent all require each slice to have " a predetermined data size associated therewith." [70] During the initial Markman hearing in this case, Apple argued this

Page 1120

term should be construed as " each slice has an amount of data, measured in bits, that is assigned in advance of the stream being divided." [71] Emblaze countered that the predetermined data size could be an " assigned time duration." [72] The court declined to adopt Apple's granular construction -- in part, because the patent does not identify any requirement that the predetermined data size be measured in bits -- and construed the term as " each slice having a data size, which may be a time duration, assigned in advance of the stream being divided." [73] Apple subsequently sought leave to move the court to reconsider its initial construction [74] and the court granted Apple's request.[75] Apple's motion for reconsideration suggested that the court impermissibly equated " data size" with " time duration" and suggested that neither party advocated the court's construction. In response, the court refined its construction to " each slice having a data size, which may be established by setting a time duration of the slice, assigned in advance of the stream being divided." [76]

Now, at summary judgment, the parties dispute whether setting the time duration generates a slice with a data size that is assigned in advance of the slice being divided, in satisfaction of the claim limitation. Apple urges that the data size of a slice may not be assigned in advance by a time duration if the accused streams employ variable data rates. But the patent simply does not teach always assigning the exact number of bits prior to slice division. In fact, it teaches the opposite, by describing one embodiment in which setting the time duration predetermines the data size of the slice.[77] Under ordinary circumstances, claims should not be construed to ignore an embodiment.[78] Apple's argument is colorable, but colorable arguments alone cannot overcome the intrinsic record.

Dependent claim 23 also supports the notion that setting the time duration predetermines the data size of the slice. It reads: " wherein dividing the stream into the sequence of slices comprises dividing the stream into a sequence of time slices, each having a predetermined duration associated therewith." Claim 23 thus makes it clear that the predetermined data size of the slices in claim 1 may comprise a " predetermined duration." The same analysis applies to claim 37, which ultimately depends from claim 25.[79] Critically, nothing in any of this language limits the use of

Page 1121

time duration in predetermining data size to only constant bit rate streams.[80]

A reasonable jury could find the accused streams, with their rates subject to a maximum rate, meet this requirement. For example, the MLB stream has a nominal 1200Kbps (the " given data rate" ), combined with an audio stream having a " given data rate" of 64Kbps and a slice duration of 5 seconds, yields roughly 800,000 bytes per slice (or 800 Kbytes). By providing a data stream having a given data rate, whether constant or variable, and then establishing a time duration for each slice in advance of the stream being divided, so long as the rate is subject to a maximum value all of the resulting slices will have data sizes that are approximately equal. In Madisetti's experimental results, all the accused streams do just that -- the streams are all within a few percentage points of target rates.[81] This is sufficient to require a jury to decide.[82]

3. Summary Judgment of Non-Infringement is Warranted As To Unanalyzed, Accused Streams

Apple argues that Emblaze has not satisfied its burden to establish infringement of streams from certain content providers that have not been analyzed. Because Emblaze did not compare each accused stream to the claims, Apple says Emblaze carried an obligation show that accused streams use HLS and that HLS necessarily practices the asserted claims.[83] Emblaze concedes it did not analyze certain streams -- e.g. CNN, Fox News, NBC and Fox Sports -- nor did it opine that HLS necessarily practices the asserted claims. Emblaze also conceded at oral argument that it is not accusing unanalyzed content streams. Based on these concessions the court grants partial summary judgment of non-infringement as to the unanalyzed content provider streams.

4. A Reasonable Jury Could Find Infringement of the Accused Apparatus Claims Based on Madisetti's Report

Apple argues that no reasonable jury could find that it induced infringement of any of the apparatus claims from the '473 patent.[84]

Page 1122

For Apple to be so liable at least one party must have directly infringed the apparatus claims.[85] Typically, this is not a problem,[86] and the record would support a finding that the same is true here. Emblaze's infringement expert report concludes by reference that Apple induces MLB Advanced Media, which offers MLB AT BAT, to infringe the asserted apparatus claims of the '473 patent for " the same reasons discussed above" for the related asserted method claims. While the court will not speculate whether this incorporation by reference strategy will succeed at trial, and the court will not permit Madisetti to stray from opinions disclosed in his report, a reasonable jury could rely on such testimony to find Apple induced MLB Advanced Media to directly infringe the asserted apparatus claims. Summary judgment is not warranted as to the accused apparatus claims.

5. Summary Judgment That Apple is Not a Direct Infringer is Warranted

Because Madisetti only opined that Apple induced but did not directly infringe the '473 patent -- and in light of Emblaze's concession to the same at the hearing -- summary judgment that Apple did not directly infringe the '473 patent is warranted.

B. Summary Judgment of Non-Infringement as to Specific Accused Content Providers Is Not Warranted

1. A Genuine Issue Remains as to Whether the PGA and ABC Streams Infringe

The parties agree that two of the accused streams -- ABC and the PGA -- use something called the Akamai RTMP architecture:[87]

Page 1123

As shown, the Akamai architecture consists five key components: (1) Entrypoint, (2) RtmpCore, (3) Archiver, (4) NetStorage and (5) Ghost (sitting on the " edge server" ). After ABC or the PGA generates a live stream, the stream is passed through Entrypoint and onto RtmpCore. RtmpCore converts the stream into an intermediate proprietary Akamai file format that supports not just Apple's HLS, but also HD Flash 1.0 and HDS. The intermediate file format is not sent to the client but instead is subsequently stored in Archiver or NetStorage. When an Apple client serves a stream request, Ghost fetches the intermediate file format from storage as " raw material" to build an HLS stream, which is what the client receives.

Apple argues that no reasonable juror could find that this architecture practices any of the asserted claims. But none of Apple's three supporting arguments are persuasive. First, there is ample evidence in the record that the sequence of files sent to the client are uploaded to the edge server on which Ghost sits.[88] A reasonable

Page 1124

jury could discount the fact that when those files are uploaded, the files are in the proprietary Akamai format, and when they are downloaded, they are in the format of Apple's HLS. Nothing in the claim specifically excluded a translation of file format, and claims " comprising" certain steps are generally understood to permit others.[89] Second, while Apple is right that the patent distinguishes its claimed invention from those relying on " high-cost, dedicated computer systems" found in the prior art,[90] this distinction is identified as a preferred embodiment and nothing in the claim language itself is so limited. When " claim language is broader than the preferred embodiment, it is well-settled that claims are not to be confined to that embodiment." [91] A reasonably jury could therefore find that Entrypoint and RtmpCore make up the " transmitting computer" even if they are not common or general purpose devices. Finally, even if the " response bodies" Ghost sends to the client could not reasonably be deemed the stored " files" that the patent requires,[92] files are stored

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in the intermediate format in NetStorage and Archiver.[93] And there is nothing inherently unreasonable about a finding that the response bodies are in fact files that are stored when in temporary memory in Ghost. Summary judgment that the Akamai RTMP architecture does not infringe is not warranted.

2. A Genuine Issue Remains As To Whether the ESPN and NFL Preseason Streams Infringe

Apple argues summary judgment of non-infringement is warranted as to the specific accused content streams provided by ESPN and NFL Preseason due to the bare evidentiary record. Because Emblaze did not depose ESPN, Apple says Emblaze has no record evidence as to what " backend" ESPN uses to stream its content. That Madisetti " didn't have time to put the full" analysis together in unavailing.[94] For the NFL Preseason stream, Apple highlights the fact that the NFL 30(b)(6) witness was unknowledgeable about how its content is streamed, presumably because the stream was handled externally by Neulion.com.[95] If Emblaze believed the NFL had not properly complied with its 30(b)(6) obligations, Emblaze should have sought relief at that time. The net of all this according to Apple is that Emblaze's expert now is unable to offer evidence about who owns and operates the transmitting computer responsible for streaming the NFL Preseason content.[96]

Emblaze counters that Madisetti's reliance on Wireshark, which permitted him to capture packets sent over a wireless network, store those packets as PCAP files and attach the results to his report and subsequent data analysis and comparison to the asserted claims -- including determining the presence of indexes, file descriptors, target duration of slices and segments and data rates -- provided him a sufficient basis to conclude that all of the streams complied with the HLS protocol.[97] Madisetti's conclusion that both ESPN and NFL employ Apple's HLS streaming is based on " experimental" Wireshark results that " show" Apple follows the HLS protocol and uses " the same formats, the same syntax, and the same codes, the descriptors." [98]

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Emblaze urges that Madisetti's conclusion that ESPN and the NFL Preseason both use HLS, together with Madisetti's detailed analysis of how HLS works relative to MLB AT BAT, provides him a sufficient basis to opine that the ESPN and NFL Preseasons streams infringe the asserted claims.[99]

The court agrees with Apple that Emblaze may not simply intuit what is going on in the back by what is coming out the front without additional analysis that the content provider practices HLS and HLS necessarily infringes. Emblaze must show that a content stream complies with the HLS protocol and the HLS protocol necessarily infringes the asserted claims.[100] But Madisetti does rely on outputs from Wireshark to suggest the similarity of the ESPN and NFL Preseason streams to MLB AT BAT -- which relies on HLS. Madisetti then bootstraps his infringement arguments regarding the ESPN and NFL Preseason streams onto his more fulsome infringement analysis of MLB AT BAT. Although Madisetti's report is hardly a model of clarity, or disclosure, it appears to be just enough to squeak by under Ninth Circuit law.[101] In particular, Apple has not pointed to " indisputable record facts" that contradict or otherwise indicate the unreasonableness of Madisetti's expert opinion. Although the court cannot say whether Emblaze will ultimately succeed at trial relying on Madisetti's analysis, summary judgment is not warranted on these streams.

C. Summary Judgment of Invalidity is Not Warranted

1. A Reasonable Jury Could Find The '473 Patent Not Invalid as Anticipated By Cohen

Asserted claims 1 and 25 are the only two independent claims in the '473 patent.[102] Apple argues that a reasonable jury could only find those claims are anticipated by U.S. Patent No. 5,751,968 (" Cohen" ).[103] The parties' primary disagreement centers on whether the Sound Blaster Audio Card referenced in Cohen provides a data stream with a given data rate as required by the independent claims of the '473 patent.[104] Apple believes two references from Cohen, read together, satisfy this limitation:

For example, if the multi-media presentation is an audio presentation, the computer forming the unit 12 will include an audio card capable of receiving audio signals, an audio card capable of receiving audio signals such as Sound Blaster, manufactured and sold by Creative Lab Technologies of the USA.[105]
Another example is that the data fed by the feeding unit can be compressed and subsequently decompressed by the UOD. Similarly, the data files including

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segments of the multi-media presentation or the single file may be compressed in the HITP server and subsequently decompressed in the UOD. These compression and decompression steps may be performed by any suitable compression and decompression algorithm known in the art.[106]

Emblaze disagrees.

A comparison of Cohen and the asserted, independent claims informed by expert declarations draws out key factual questions in dispute that require jury adjudication. In particular, Madisetti and Michael Orchard, Apple's expert, filed conflicting declarations highlighting the parties' dispute over (1) the breadth of Cohen's disclosure,[107] (2) what a PHOSITA would understand about the various compression schemes from the mid-1990s and what the Sound Blaster Cards -- referenced in both Cohen and the '473 patent -- disclose [108] and (3) whether Cohen considered the need to

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maintain the upload, download and data rates all generally equal in satisfaction of the claim limitation requiring " transmitting the files from the transmitting computer to the server at an upload rate generally equal to the data rate of the stream such that one or more client computers are able to select individual files corresponding to the slices for download over the network at a download rate generally equal to the data rate." [109] Because a reasonable jury could draw different conclusions on these factual questions and find that Cohen does not anticipate the '473 patent, summary judgment of anticipation is not warranted.

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2. A Reasonable Jury Could Find Dependent Claims 11, 12 and 40 Not Invalid as Obvious in Light of Cohen and Ferriere

As to the three " multiple quality level claims" (11, 12 and 40), Apple argues that the '473 patent is obvious in light of Cohen in combination with U.S. Patent No. 5,835,495 (" Ferriere" ). Because of the genuine disputes regarding certain limitations allegedly disclosed by Cohen, Ferriere must therefore disclose these same limitations for the dependent multiple quality level claims to be obvious. Apple, however, makes no such claims, relying on Ferriere for only the additional limitations that the dependent claims require.[110] Because the central disputes over compression and maintenance of the upload, download and data rates thus remain even with the addition of Ferriere, summary judgment of obviousness as to dependent claims 11, 12 and 40 is not warranted.

D. No Reasonable Fact-Finder Could Conclude That Apple Acted Willfully

Although Apple believes summary judgment precluding a finding of willfulness is warranted in this case based on the strength of its non-infringement and invalidity defenses, at oral argument it focused the court on its non-infringement positions. Because willfulness may be precluded based on the presentation of one objectively reasonable claim-construction-based defense, this court should find, as a matter of law, Apple did not willfully infringe.

Emblaze responds that viewing the evidence in the light most favorable to it, a reasonable fact finder could find facts sufficient to support a finding of willfulness. The record, viewed in this light, establishes that Apple knew about Emblaze and its technology at least as early as 2002. Emblaze also points out that Apple knew about the '473 patent and Emblaze's claim of infringement as of October 29, 2009 -- only a few months after Apple introduced HTTP Live Streaming in its products at a time when network effects from live-streaming were ripe for the taking. Although Apple alleges it believed there were multiple, non-infringing alternatives to HTTP Live Streaming, it has not submitted record evidence to that effect or pursued those alternatives.

Apple has the better of the argument. When " a defense or noninfringement theory asserted by an infringer is purely legal (e.g., claim construction), the objective recklessness of such a theory is a purely legal question to be determined by the judge." [111] The court must " determine, 'based on the record ultimately made in the infringement proceedings,' whether a 'reasonable litigant could realistically expect' those defenses to succeed." [112] Where a disputed claim term is " susceptible to a reasonable construction under which" the accused products do not infringe,

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there is " not an objectively high likelihood" that the accused infringer's " actions constituted infringement." [113]

Here, every asserted claim contains the " uploading" and " predetermined data size" limitations. Even though the court did not agree that complete summary judgment of non-infringement was warranted, Apple's motions raise substantial questions. They may not be enough to preclude any reasonable jury from finding infringement, but read together, Apple's non-infringement defenses based on its claim construction positions are reasonable enough to preclude a finding as a matter of law that Apple has disregarded an " objectively high likelihood that its actions constituted infringement of a valid patent." [114] Summary judgment on willfulness is warranted.

IT IS SO ORDERED.


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