DCT

4:18-cv-06185

ZTE USA Inc v. AGIS Software Development LLC

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I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 4:18-cv-06185, N.D. Cal., 02/05/2019
  • Venue Allegations: Plaintiff ZTE alleges venue is proper in the Northern District of California because a substantial part of the events giving rise to the action occurred there, citing Defendant AGIS's prior patent enforcement activities in California against other technology companies, the deposition of ZTE witnesses in the district, and the service of subpoenas on Google, a key non-party located in the district.
  • Core Dispute: Plaintiff seeks a declaratory judgment that its Android-based smartphones and tablets do not infringe five of Defendant’s patents related to mobile group communications, ad hoc networking, and forced messaging alerts, and further seeks to have the patents declared unenforceable due to inequitable conduct.
  • Technical Context: The patents relate to methods for establishing and managing secure, location-aware communication groups on mobile devices, a technology area foundational to modern collaborative and social networking applications.
  • Key Procedural History: This declaratory judgment action follows a prior lawsuit where AGIS sued ZTE for infringement in the Eastern District of Texas. That case was transferred to the Northern District of California upon a finding of improper venue. AGIS then voluntarily dismissed the transferred case, and ZTE filed this action the next day. The complaint also notes that ZTE has filed Inter Partes Review (IPR) petitions challenging three of the patents-in-suit and alleges that AGIS has taken contradictory positions before the U.S. Patent and Trademark Office and in court regarding the applicable patent law framework (pre-AIA vs. post-AIA), which forms the basis of an inequitable conduct claim. Post-filing IPR proceedings have resulted in the cancellation of all asserted claims of U.S. Patent No. 9,408,055 and all but one amended claim of U.S. Patent No. 8,213,970.

Case Timeline

Date Event
2004-09-21 Earliest Priority Date for all Patents-in-Suit
2012-07-03 U.S. Patent No. 8,213,970 Issued
2016-08-02 U.S. Patent No. 9,408,055 Issued
2016-09-13 U.S. Patent No. 9,445,251 Issued
2016-10-11 U.S. Patent No. 9,467,838 Issued
2017-06-21 AGIS files original complaint against ZTE in E.D. Tex. (Former Case)
2017-08-29 U.S. Patent No. 9,749,829 Issued
2018-09-28 E.D. Tex. transfers Former Case to N.D. Cal.
2018-10-08 AGIS voluntarily dismisses the transferred Former Case
2018-10-09 ZTE files original Declaratory Judgment Complaint in N.D. Cal.
2019-02-05 ZTE files Second Amended Complaint for Declaratory Judgment

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

U.S. Patent No. 8,213,970 - "Method of Utilizing Forced Alerts for Interactive Remote Communications," issued July 3, 2012

The Invention Explained

  • Problem Addressed: The patent's background describes the difficulty for a sender of a digital message to know whether the message was received by a group of recipients and to compel a timely response, which is crucial in situations requiring coordination (’970 Patent, col. 1:50-60).
  • The Patented Solution: The invention is a system and software for "forced message alerts" on mobile devices ('970 Patent, col. 1:19-24). When a sender transmits a forced alert, the recipient's device is compelled to automatically transmit an acknowledgment of receipt back to the sender ('970 Patent, Abstract). The alert also presents a pre-defined list of manual responses on the recipient's screen, and the user must select one to clear the alert, ensuring the sender receives not just a receipt confirmation but a substantive reply ('970 Patent, col. 2:25-34). The sender's device can monitor which recipients have acknowledged and responded ('970 Patent, col. 2:18-25).
  • Technical Importance: The technology aimed to create a closed-loop communication system for mobile environments, enhancing reliability and accountability beyond standard best-effort messaging protocols like SMS ('970 Patent, col. 1:56-60).

Key Claims at a Glance

  • The sole surviving independent claim post-IPR is Claim 2 (amended).
  • Key elements of amended Claim 2 include:
    • A communication system with a network of participants having similarly equipped PDA/cell phones.
    • A "forced message alert software application program" that attaches a "software packet" to a message.
    • The packet requires the recipient's device to transmit an "automatic acknowledgment" upon receipt.
    • The system requires a "required manual response from the response list" to clear the recipient's display.
    • The sender's device has means for receiving and displaying which recipients have acknowledged and which have sent a manual response.
    • The system includes means for displaying a geographical map on the sender's device with a "recipient symbol" corresponding to the recipient's location.

U.S. Patent No. 9,408,055 - "Method to Provide Ad Hoc and Password Protected Digital and Voice Networks," issued August 2, 2016

The Invention Explained

  • Problem Addressed: The patent addresses the need for emergency response groups from different organizations (e.g., police, fire, military) to establish secure, interoperable voice and data communication networks rapidly at the scene of a disaster, without needing pre-existing contact information or complex configuration (’055 Patent, col. 2:5-15).
  • The Patented Solution: The invention describes a method where users can quickly join a temporary, password-protected "ad hoc" network using their mobile devices ('055 Patent, Abstract). A user initiates contact with a central server and provides a mutually agreed-upon network name and password ('055 Patent, col. 3:50-55). Once authenticated, the server routes location (GPS) and status data between all participants, displaying each user as an icon on an interactive map on every other user's device, thereby enabling cross-agency situational awareness and coordination ('055 Patent, col. 2:55-63).
  • Technical Importance: This technology provides a framework for on-the-fly network creation for mission-critical team coordination, bypassing the typical communication silos that exist between different public safety or military organizations ('055 Patent, col. 2:16-32).

Key Claims at a Glance

  • All claims of this patent were cancelled in subsequent Inter Partes Review proceedings. The complaint was filed before this cancellation. Independent Claim 1, now cancelled, was representative.
  • Key elements of original Independent Claim 1 included:
    • A first device obtaining telephone numbers of second devices.
    • Initiating IP-based communication by sending SMS messages to the second devices.
    • The SMS messages must include the first device's telephone number and "information usable by the respective second device to send IP-based communication to the first device."
    • Receiving IP-based responses from the second devices that include their location information.
    • Presenting an interactive map with user-selectable symbols representing the locations of the second devices.

Multi-Patent Capsule: U.S. Patent No. 9,445,251

  • Patent Identification: U.S. Patent No. 9,445,251, "Method to Provide Ad Hoc and Password Protected Digital and Voice Networks," issued September 13, 2016.
  • Technology Synopsis: Belonging to the same family as the ’055 Patent, this patent describes methods for creating temporary, secure, map-based communication networks for coordinating groups, particularly in emergency response scenarios. It focuses on the system architecture that allows users to join a common network via a server using a shared password, enabling the exchange of location and status data.
  • Asserted Claims: Not specified in the complaint.
  • Accused Features: Functionality within the Android OS and associated Google applications that allows users to form groups, view member locations on a map, and engage in various forms of communication (Compl. ¶¶23, 26).

Multi-Patent Capsule: U.S. Patent No. 9,467,838

  • Patent Identification: U.S. Patent No. 9,467,838, "Method to Provide Ad Hoc and Password Protected Digital and Voice Networks," issued October 11, 2016.
  • Technology Synopsis: Also in the same family as the ’055 Patent, this patent further details the system for establishing ad hoc, password-protected digital and voice networks. The technology enables rapid deployment of a common operating picture for disparate groups by automatically sharing location and status information on a map-based interface upon joining a shared, secure session.
  • Asserted Claims: Not specified in the complaint.
  • Accused Features: Features in Android and Google applications that permit the formation of user groups for location sharing and communication, allegedly practicing the claimed methods for ad hoc networking (Compl. ¶¶23, 27).

Multi-Patent Capsule: U.S. Patent No. 9,749,829

  • Patent Identification: U.S. Patent No. 9,749,829, "Method to Provide Ad Hoc and Password Protected Digital and Voice Networks," issued August 29, 2017.
  • Technology Synopsis: This patent continues the themes of the '055 patent family, describing a system where mobile device users can quickly establish a secure, shared communication environment. The core invention involves using a common network name and password to access a server that facilitates the exchange of location data for display on a map, enabling real-time, collaborative situational awareness.
  • Asserted Claims: Not specified in the complaint.
  • Accused Features: The complaint alleges that functionalities for creating user groups, sharing locations on a map, and communicating within those groups, as found in the Android OS and related Google applications, infringe this patent (Compl. ¶¶23, 28).

III. The Accused Instrumentality

Product Identification

  • The accused instrumentalities are ZTE's electronic devices, specifically Android-based smartphones and tablets, including but not limited to the Tempo, Axon 7, Axon 7 mini, Blade V8 Pro, ZMax Pro, and ZMax 2 models (Compl. ¶23).

Functionality and Market Context

  • The complaint states that infringement is based on these devices being "pre-configured or adapted with map-based communication applications and/or features" provided by Google as part of the Android operating system (Compl. ¶23). The specifically accused functionalities include Google Maps, Android Device Manager, Find My Device, Google Messages, Android Messenger, Google Hangouts, and Google Plus (Compl. ¶23). The core technical functions at issue are those that allow users to form groups, view the geographic locations of other users on a map, and engage in text, voice, and multimedia communication (Compl. ¶23). The complaint notes that the Android operating system is the most widely used for smartphones, suggesting significant commercial scale (Compl. ¶22). No probative visual evidence provided in complaint.

IV. Analysis of Infringement Allegations

The complaint does not include claim charts from the prior litigation it references, preventing a detailed element-by-element analysis. The narrative summary of AGIS's infringement allegations from the prior case suggests the following theories:

  • ’970 Patent Infringement Allegations (Narrative Summary): AGIS's theory appears to contend that standard features in Android messaging applications (e.g., Google Messages) practice the claimed "forced alert" system. The sending of a text message would be equated with the claimed "forced message alert," and the system's automated delivery or read receipts would be alleged to meet the "automatic acknowledgment" limitation. The user interface notifications that persist until a user interacts with the message would be alleged to function as the "required manual response" needed to clear the display. The integration of location-sharing features in such apps would be mapped to the claim elements requiring the display of a recipient's location on a map.

  • ’055 Patent Family Infringement Allegations (Narrative Summary): AGIS's theory for the four related ad hoc networking patents appears to be that features within the Android OS and Google apps (e.g., Google Maps location sharing, Google+ Circles) allow users to form temporary groups for communication and location sharing. The process of one user inviting another to share their location, potentially via an SMS message containing a link, would be alleged to practice the claimed methods of initiating an "ad hoc network." Once a sharing session is established, the subsequent transmission of GPS data between devices and the display of user locations as icons on a map would be alleged to meet the respective claim limitations for sharing status and location data among network participants.

  • Identified Points of Contention:

    • Scope Questions: A central question for the '970 patent is whether a standard message notification and an optional read receipt in a general-purpose messaging app can be construed as a "forced message alert software packet" that "takes control" of a recipient's device and compels a response from a specific list, as described in the patent ('970 Patent, col. 8:36-57). For the '055 patent family, a key dispute may be whether the user--to-user invitation and server-mediated connection process in a consumer application like Google Maps meets the definition of establishing an "ad hoc network" via the specific SMS-based bootstrap method recited in claims like original Claim 1 of the '055 patent.
    • Technical Questions: What evidence exists that the accused Android applications function in the specific manner claimed? For the '970 patent, do the accused apps transmit a "software packet" that forces an acknowledgment, or is the acknowledgment a separable feature of the messaging protocol? For the '055 patent family, do the accused apps actually use SMS messages containing telephone numbers and IP-related information to initiate the connection, or do they rely on account-based authentication through Google's servers, with any SMS functioning merely as a notification containing a hyperlink?

V. Key Claim Terms for Construction

  • Term: "forced message alert software"

    • Context and Importance: This term from the '970 patent is central to the dispute. AGIS's case would require this term to be construed broadly enough to encompass the functionality of standard mobile messaging applications. Practitioners may focus on whether the "forced" nature of the alert implies a higher level of control over the recipient device than a typical notification.
    • Intrinsic Evidence for Interpretation:
      • Evidence for a Broader Interpretation: The specification describes the software in functional terms, as a program that "enables a user to create and send a voice or text message alert that forces an automatic acknowledgement" ('970 Patent, col. 1:20-23). This focus on function over specific implementation could support a broader reading.
      • Evidence for a Narrower Interpretation: The patent repeatedly states that the software "effectively takes control of the recipient PC or PDA/cell phone" and causes a message and response list to be shown that "cannot be stopped from repeating until one of the entries on the response list is selected" ('970 Patent, col. 8:36-52). This language suggests a highly intrusive and specific functionality not present in standard messaging apps.

  • Term: "facilitating initiation of Internet Protocol (IP) based communication...by using...Short Message Service (SMS) messages including a telephone number of the first device and information usable by the...second device to send IP-based communication to the first device"

    • Context and Importance: This limitation from original Claim 1 of the '055 patent defines a very specific mechanism for establishing a communication network. The infringement case against Google's services depends on whether their connection methods fall within this definition.
    • Intrinsic Evidence for Interpretation:
      • Evidence for a Broader Interpretation: A party could argue that any use of SMS that results in an IP connection, such as sending a web link, falls under this language, interpreting "information usable" broadly. The patent's focus is on the ad hoc outcome, not necessarily the minutiae of the connection protocol ('055 Patent, col. 2:32-44).
      • Evidence for a Narrower Interpretation: The claim language recites that the SMS message itself includes the information needed to establish the IP link, suggesting a more direct peer-to-peer or device-to-server bootstrap than simply sending a hyperlink. The specification describes establishing a connection directly with a "remote Server" by providing its IP address, which is distinct from following a generic link in an SMS ('055 Patent, col. 9:48-55).

VI. Other Allegations

  • Indirect Infringement: As this is a declaratory judgment action, ZTE is seeking a judgment of non-infringement, which would include indirect infringement. AGIS's underlying theory against ZTE, a device manufacturer, would necessarily rely on indirect infringement. The complaint notes AGIS's allegation that ZTE's devices are "pre-configured or adapted" with the accused Google software, which directly supports a claim for contributory or induced infringement based on the actions of ZTE's customers (Compl. ¶23).
  • Willful Infringement: The complaint does not explicitly mention allegations of willfulness from the prior case. However, AGIS's history of litigating these patents against numerous other Android device manufacturers is documented in the complaint, a fact that could be used to establish pre-suit knowledge if willfulness were asserted (Compl. ¶15).
  • Inequitable Conduct: ZTE lodges a detailed claim for unenforceability due to inequitable conduct against four of the five patents ('055, ’251, ’838, and ’829). ZTE alleges that during prosecution, AGIS repeatedly represented to the USPTO that the applications were subject to the post-AIA "first-to-file" patent laws (Compl. ¶¶61-77). However, in litigation against Apple, AGIS allegedly contended that the same patents were subject to pre-AIA "first-to-invent" laws, which would allow AGIS to "swear behind" certain prior art—an advantage unavailable under post-AIA law. ZTE characterizes this as a direct and material contradiction intended to deceive the USPTO and gain an unfair litigation advantage (Compl. ¶¶78-82).

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

  • A core issue will be one of patent viability: Given that Inter Partes Review proceedings have invalidated all claims of the '055 patent and all but one amended claim of the '970 patent, a threshold question is whether AGIS possesses any remaining valid and enforceable patent claims that are broad enough to cover the accused functionality in ZTE's devices.
  • A key legal question will be one of enforceability: Did AGIS's allegedly contradictory representations to the USPTO (claiming post-AIA status) and in prior litigation (claiming pre-AIA status) for four of the asserted patents constitute inequitable conduct, potentially rendering the entire portfolio unenforceable regardless of the technical merits of infringement?
  • A central technical question will be one of functional scope: For any surviving claims, can the specific and arguably specialized functionalities described—such as a "forced message alert" that takes control of a device or an "ad hoc network" initiated via a specific SMS bootstrap method—be construed to read on the general-purpose, server-mediated, and user-permission-based features found in the modern Android operating system and its associated consumer applications?