Dali Wireless Inc v. Corning Optica

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Dali Wireless, Inc. (Delaware)
  • Defendant: Corning Optical Communications LLC (North Carolina)
  • Plaintiff’s Counsel: Bradley Arant Boult Cummings LLP
• Case Identification: 3:19-cv-00714, W.D.N.C., 04/30/2020
• Venue Allegations: Venue is alleged to be proper as Defendant is a North Carolina company deemed to reside in the judicial district.
• Core Dispute: Plaintiff alleges that Defendant’s SpiderCloud Enterprise Radio Access Network (E-RAN) System infringes three patents related to dynamic management and optimization of Distributed Antenna Systems (DAS).
• Technical Context: The technology concerns software-defined control of DAS networks, which are used to provide and enhance in-building cellular coverage and capacity.
• Key Procedural History: The complaint alleges a multi-year history of business and technical discussions between the parties (2010-2014) under a non-disclosure agreement, including Plaintiff sharing proprietary technology and patent portfolio information with Defendant during due diligence for a potential strategic partnership or acquisition. This history forms the basis for Plaintiff's allegations of willful infringement. Defendant acquired the accused technology through its purchase of SpiderCloud Wireless in 2017.

Case Timeline

Date	Event
2010-03-18	Email from Corning to Dali expresses interest in Dali's technology
2012-05-18	Priority Date for ’358 Patent
2012-05-01	Corning's IP counsel allegedly began in-depth IP due diligence on Dali
2012-07-09	Priority Date for ’261 Patent
2012-07-31	Priority Date for ’454 Patent
2014-06-03	Meeting between Dali and Corning's Corporate Development team to discuss a potential acquisition
2014-07-05	Corning allegedly conducted extensive acquisition diligence at Dali's facility
2015-11-24	’358 Patent Issued
2017-07-01	Corning acquired SpiderCloud Wireless, developer of the accused E-RAN system
2019-10-01	’261 Patent Issued
2019-12-10	’454 Patent Issued
2020-04-30	Complaint Filed

II. Technology and Patent(s)-in-Suit Analysis

U.S. Patent No. 10,433,261 - "Self-optimizing Distributed Antenna System Using Soft Frequency Reuse"

• Issued: October 1, 2019.

The Invention Explained

• Problem Addressed: The patent’s background section describes the technical challenge of “unbalanced traffic distributions inside cellular networks,” where manually adjusting network parameters is inefficient for maintaining a high Quality of Service (QoS) as user loads change dynamically (’261 Patent, col. 2:50-61).
• The Patented Solution: The invention is a method for automatically optimizing carrier power in a Distributed Antenna System (DAS). The system iteratively adjusts the power differential between a reference carrier and other carriers, measures Key Performance Indicators (KPIs) such as the “number of satisfied users” and their available data capacity at each step, and sets the power at a level that increases these KPIs, thereby self-optimizing the network’s performance (’261 Patent, Abstract; col. 1:21-34).
• Technical Importance: This approach allows a DAS to autonomously adapt to shifting traffic patterns, which is critical for efficiently maintaining QoS without manual intervention.

Key Claims at a Glance

• The complaint asserts at least independent claim 1 (Compl. ¶22).
• Claim 1 of the ’261 Patent recites the essential elements of a method:
  • setting a transmission power level for a digital remote unit (DRU);
  • determining a key performance indicator related to a number of satisfied users at that power level;
  • iteratively adjusting the transmission power level to increase the key performance indicator; and
  • setting the transmission power level at the resulting iterated power level.
• The complaint alleges infringement of one or more claims, which may include dependent claims (Compl. ¶22).

U.S. Patent No. 9,197,358 - "Method and System for Soft Frequency Reuse in a Distributed Antenna System"

• Issued: November 24, 2015.

The Invention Explained

• Problem Addressed: The patent addresses the need for improved methods of distributing communication frequencies in a DAS to enhance quality of service and data throughput, particularly for users at the edge of cellular coverage areas where interference from adjacent cells is highest (’358 Patent, col. 1:15-40).
• The Patented Solution: The invention describes a “soft frequency reuse” scheme where adjacent communication units (e.g., antennas) manage interference by using different power levels on different frequency bands for distinct geographic areas. A communication unit uses one frequency set for its central coverage area (a "first geographic footprint") and a different frequency set for a larger, surrounding area. A neighboring unit can reuse the first unit's central frequency set in its own central area, minimizing interference at the overlapping edges (’358 Patent, Abstract; col. 2:4-21).
• Technical Importance: This technique allows for more intensive reuse of spectrum compared to traditional hard frequency planning, improving data rates for users most susceptible to inter-cell interference.

Key Claims at a Glance

• The complaint asserts at least independent claim 7 (Compl. ¶42).
• Claim 7 of the ’358 Patent recites the essential elements of a method:
  • providing a set of communications units;
  • a first unit transmits/receives on a first frequency band in a first geographic footprint, and on a second, different frequency band in a second, larger surrounding footprint; and
  • a second unit transmits/receives on a third set of frequencies (including frequencies from the first band) in a third footprint, and on a fourth set of frequencies in a fourth, larger surrounding footprint.
• The complaint alleges infringement of one or more claims, which may include dependent claims (Compl. ¶42).

U.S. Patent No. 10,506,454 - "Optimization of Traffic Load in a Distributed Antenna System"

• Issued: December 10, 2019 (Compl. ¶18).
• Technology Synopsis: The patent addresses inefficient resource allocation when wireless user distribution is uneven, such as when employees move to a cafeteria during lunch (’454 Patent, col. 1:24-41). The patented solution is a system that dynamically routes signals by using a traffic monitoring unit to determine key performance indicators (KPIs) and then reconfiguring sectors by reallocating Digital Remote Units (DRUs) from a less-loaded sector to a more heavily-loaded one (’454 Patent, Abstract).
• Asserted Claims: At least independent claim 1 (Compl. ¶64).
• Accused Features: The complaint alleges the SpiderCloud system's Self-Organizing Network (SON) feature infringes by monitoring for congested cells (sectors) and adjusting power levels to shift user load, which Plaintiff alleges is equivalent to reconfiguring sectors by reallocating DRUs (Compl. ¶70-73).

III. The Accused Instrumentality

Product Identification

• Corning’s SpiderCloud Enterprise Radio Access Network (“E-RAN”) System, including its Services and Radio nodes (Compl. ¶2).

Functionality and Market Context

• The accused E-RAN system is an in-building wireless solution comprising a central “Services Node” that manages multiple distributed “Radio Nodes” (Compl. p. 6). The complaint focuses on the system’s Self-Organizing Network (SON) capabilities, which allegedly include automatically setting transmit power levels and performing “Periodic Optimization and Self-Maintenance.” This feature is alleged to adjust power levels based on factors including “periodic signal quality measurements made by user devices” to achieve goals such as “uniform coverage” and to shift load away from congested cells (Compl. p. 7, 26). The complaint further alleges, based on Corning's own technical documents and a separate Corning patent, that the system employs a "centrally coordinated dynamic fractional frequency reuse" scheme to manage inter-cell interference (Compl. ¶48). The product line was acquired by Corning through its 2017 purchase of SpiderCloud Wireless (Compl. ¶6).

IV. Analysis of Infringement Allegations

’261 Patent Infringement Allegations

Claim Element (from Independent Claim 1)	Alleged Infringing Functionality	Complaint Citation	Patent Citation
a) setting a transmission power level for the DRU;	The SpiderCloud system's SON feature sets maximum transmit power levels and "periodically adjusts the transmit power levels."	¶28	col. 2:3-5
b) determining a key performance indicator related to a number of satisfied users at the transmission power;	The system uses "periodic signal quality measurements made by user devices" to fine-tune the network; Plaintiff alleges achieving "uniform coverage" requires satisfying users.	¶29	col. 5:6-8
c) iteratively adjusting a transmission power level for the DRU to increase the key performance indicator related to the number of satisfied users;	The system "periodically" adjusts power levels, which the complaint contends is an iterative adjustment, to achieve uniform coverage, which is alleged to be an increase in the KPI.	¶30	col. 12:5-15
d) setting the transmission power level for the DRU at an iterated power level.	Because the system periodically adjusts the power based on measurements, the complaint alleges the power is necessarily "set" at the resulting iterated level.	¶31	col. 1:32-34

Identified Points of Contention

• Scope Questions: A central question may be whether the accused system's stated goal of achieving "uniform coverage" falls within the scope of the claim's requirement to "increase the key performance indicator related to the number of satisfied users." A defendant may argue that uniform coverage is a distinct technical objective from maximizing the number of users who achieve a specific service bitrate.
• Technical Questions: The analysis may turn on what evidence shows that the "periodic signal quality measurements" used by the accused system are functionally equivalent to determining a KPI "related to a number of satisfied users," as defined by the patent.

’358 Patent Infringement Allegations

Claim Element (from Independent Claim 7)	Alleged Infringing Functionality	Complaint Citation	Patent Citation
[A] providing a set of communications units;	The system provides multiple "Radio Nodes" connected to a "Services Node." The complaint references a product table showing the family of available Radio Nodes (Compl. p. 15).	¶47	Abstract
[B], [C] transmitting... from a first communications unit... a first set of frequencies... and a first geographic footprint;	The system allegedly uses "dynamic fractional frequency reuse" where each radio node has a "radio coverage area" and uses one set of frequencies for the "cell interior" (the first footprint). The complaint references a diagram from a Corning patent to illustrate this concept (Compl. p. 17).	¶48-50	Abstract
[D] a second set of frequencies... different from the first... and a second geographic footprint larger than... the first;	The system allegedly uses a different set of frequencies for the "outer areas of cells" (the cell edge), which constitutes a second, larger footprint surrounding the cell interior.	¶51-52	col. 2:4-13
[E], [F] transmitting... from a second communications unit... a third set of frequencies including one or more frequencies in the first frequency band and a third geographical footprint;	The system allegedly reuses the same frequencies within the "cell interiors" of adjacent radio nodes, which constitutes the third set of frequencies in the third footprint.	¶53-55	col. 2:13-21
[G] a fourth set of frequencies... and a fourth geographical footprint larger than... the third...	The second communications unit allegedly uses a different set of frequencies for its own cell edge, which constitutes the fourth set of frequencies in the fourth, larger footprint.	¶56-58	col. 2:13-21

Identified Points of Contention

• Evidentiary Questions: The complaint’s infringement theory relies heavily on its interpretation of a separate Corning patent (the '205 Patent) to describe the functionality of the accused product. A key question will be whether the accused E-RAN system actually implements the specific "dynamic fractional frequency reuse" scheme as described in that patent.
• Scope Questions: The mapping of the accused system’s alleged operation onto the claim's precise structure of four distinct and specifically related frequency sets and geographic footprints will likely be a point of dispute.

V. Key Claim Terms for Construction

The Term: "key performance indicator related to a number of satisfied users" (’261 Patent, claim 1)

• Context and Importance: This term is the central metric that the patented method seeks to optimize. The infringement case depends on whether the accused system's function of adjusting power for "uniform coverage" based on "signal quality measurements" meets this definition.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The complaint argues that general network health metrics like "signal quality" and "uniform coverage" are inherently related to user satisfaction, potentially supporting a broader reading (Compl. ¶29).
  • Evidence for a Narrower Interpretation: The patent specification provides a specific definition, stating that "satisfied users" are "the users that can achieve a targeted service bitrate" (’261 Patent, col. 5:6-8). This could support a narrower construction requiring a direct link to a specific bitrate threshold, rather than a general measure of signal quality.

The Term: "geographic footprint" (’358 Patent, claim 7)

• Context and Importance: The claim requires a specific spatial relationship between four different "geographic footprints" (e.g., a second footprint that is "larger than and at least partially surrounding the first"). The viability of the infringement allegation depends on how these areas are defined and measured in the accused system.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The complaint equates the term with a "radio coverage area" (Compl. ¶50). The patent uses the term without an explicit definition, which may suggest it should be given its plain and ordinary meaning in the art, potentially covering any area where a signal is present.
  • Evidence for a Narrower Interpretation: A defendant may argue that to give the claim meaning, a "footprint" must be defined by specific, measurable boundaries, such as a particular signal strength contour, to determine if one is truly "larger than" and "surrounding" another as the claim requires.

VI. Other Allegations

• Indirect Infringement: The complaint makes conclusory allegations of indirect infringement for each patent but does not provide specific facts to support the knowledge and intent elements, such as instructions in user manuals encouraging infringing use (Compl. ¶22, ¶42, ¶64).
• Willful Infringement: The complaint alleges willful infringement based on extensive pre-suit interactions between 2010 and 2014. It alleges that under an NDA, Dali disclosed its proprietary technology and patent portfolio to Corning, and that Corning’s IP counsel conducted "in-depth IP due diligence" (Compl. ¶34-36). The complaint includes a 2011 email from a Corning director to Dali stating, "We are very interested in learning more and investigating potential technology and product synergies" (Compl. p. 10). These allegations form a detailed factual basis for pre-suit knowledge of the patented technology.

VII. Analyst’s Conclusion: Key Questions for the Case

• A central issue will be one of willfulness: given the extensive history of pre-suit technical and patent-related discussions alleged by the Plaintiff, what did the Defendant know about the Plaintiff's patented technology, and when, particularly in relation to its 2017 acquisition and subsequent sale of the accused SpiderCloud products?
• A key question of claim scope will be whether the accused system’s process of optimizing for "uniform coverage" based on general "signal quality measurements" is technically and legally equivalent to the ’261 Patent's claimed method of iteratively increasing a "key performance indicator related to a number of satisfied users."
• The case may turn on a question of evidentiary proof: does the accused SpiderCloud system actually function according to the soft frequency reuse scheme detailed in Corning’s own '205 Patent, as Plaintiff’s infringement theory for the ’358 Patent appears to substantially rely on this assertion?