DCT
4:19-cv-06769
Apple Inc v. IXI IP LLC
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: Apple Inc. (California)
- Defendant: IXI Mobile (R&D) Ltd. (Israel) and IXI IP, LLC (New York)
- Plaintiff’s Counsel: Desmarais LLP
- Case Identification: 4:19-cv-06769, N.D. Cal., 10/18/2019
- Venue Allegations: Venue is alleged to be proper because a substantial part of the events giving rise to the claim occurred in the district, IXI is subject to personal jurisdiction there, and IXI has previously conceded in related litigation that the district is an "appropriate place" for suit.
- Core Dispute: Plaintiff Apple seeks a declaratory judgment that it does not infringe U.S. Patent No. 7,039,033, that the patent is invalid, and that Defendants are barred by the doctrine of res judicata from asserting the patent against Apple.
- Technical Context: The technology relates to using a mobile device, such as a smartphone, as a "gateway" to provide internet connectivity to other nearby devices, a feature commonly known as tethering or a personal hotspot.
- Key Procedural History: The complaint details a complex litigation history between the parties. IXI previously sued Apple in 2014 on the original claims of the '033 Patent. Those asserted claims were subsequently invalidated in an inter partes review (IPR) proceeding, a decision affirmed by the Federal Circuit. During the appeal of the IPR, IXI initiated an ex parte reexamination, which resulted in new and amended claims ("Reexam Claims"). When IXI sought to assert these Reexam Claims in the original litigation, the court denied the motion. Apple now brings this action, arguing the new claims are barred by res judicata from the prior judgment of invalidity, or alternatively, are not infringed and/or are invalid.
Case Timeline
| Date | Event |
|---|---|
| 2001-05-07 | '033 Patent Priority Date |
| 2006-05-02 | U.S. Patent No. 7,039,033 Issued |
| 2014-10-02 | IXI sues Apple in S.D.N.Y. on original claims of the '033 Patent |
| 2014-12-08 | IXI and Apple representatives hold in-person meeting in California |
| 2015-06-19 | Apple and Samsung file IPR petition on '033 Patent |
| 2015-08-06 | Prior litigation transferred to N.D. Cal. |
| 2015-12-30 | PTAB institutes IPR on all challenged claims |
| 2017-03-XX | IXI files for ex parte reexamination of '033 Patent |
| 2017-04-03 | IXI sends Apple notice letter alleging infringement of pending reexam claims |
| 2018-02-01 | Ex Parte Reexamination Certificate issues with new/amended claims |
| 2018-04-18 | IXI sends Apple "continuing notice" letter for Reexam Claims |
| 2018-09-10 | Federal Circuit affirms PTAB's invalidation of original claims |
| 2019-01-16 | PTO issues IPR Certificate cancelling original asserted claims |
| 2019-10-11 | Court denies IXI's motion to assert Reexam Claims in prior case |
| 2019-10-18 | Apple files this Complaint for Declaratory Judgment |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 7,039,033 - "System, Device and Computer Readable Medium for Providing a Managed Wireless Network Using Short-Range Radio Signals"
The Invention Explained
- Problem Addressed: The patent describes a landscape where users possess multiple wireless devices (e.g., a phone, PDA, laptop), but these devices operate in isolation. This creates inefficiencies, such as requiring separate internet connections, facing individual security burdens, and lacking the ability to share services or resources with each other (’033 Patent, col. 1:12-42).
- The Patented Solution: The invention proposes a system centered on a "wireless gateway device" (e.g., a cellular phone) that acts as a hub for a "personal area network" (PAN) (’033 Patent, Abstract). This gateway device connects to a wide-area network like the Internet via a cellular signal and then manages connectivity, routing, and services for other local "terminal" devices (e.g., a laptop or PDA) that connect to it via short-range radio signals like Bluetooth (’033 Patent, col. 4:15-24; Fig. 1). This centralizes the internet connection and allows for the management and sharing of services among the connected devices (’033 Patent, col. 1:59-65).
- Technical Importance: The technology aimed to create a cohesive, managed ecosystem for a user's personal devices, moving beyond single-purpose connections to a more integrated and resource-efficient personal network (’033 Patent, col. 1:59-65).
Key Claims at a Glance
- The complaint focuses its non-infringement analysis on exemplary independent claim 65, one of the new claims issued from reexamination (Compl. ¶42).
- Essential elements of independent claim 65 include:
- A system with a "first wireless device" (the gateway) and a "second wireless device" (the terminal) in a short-distance network.
- The first device accesses the Internet via a cellular network.
- The first device includes "router software" with a "routing component" for exchanging IP packets.
- The first device has a speaker, microphone, touchscreen, and software for telephony, email, and location services.
- The system software includes a "network address translator software component" to translate between an IP address from the cellular network and a second address for the second device.
- The system software includes a "service repository software component to identify a service provided by the second wireless device."
- The complaint notes that Apple denies infringement of all remaining claims for similar reasons (Compl. ¶46).
III. The Accused Instrumentality
Product Identification
Apple products that include "Personal Hotspot" functionality, with the complaint specifically mentioning iPhones and iPads as examples (Compl. ¶¶ 8, 44).
Functionality and Market Context
The "Personal Hotspot" feature allows an Apple device with a cellular connection (the "first wireless device," e.g., an iPhone) to share its internet access with other nearby devices (the "second wireless device," e.g., an iPad or laptop) by creating a local, short-distance wireless network (Compl. ¶¶ 8, 19). The complaint alleges that IXI has repeatedly accused this functionality of infringing the '033 Patent (Compl. ¶¶ 8, 17, 19).
IV. Analysis of Infringement Allegations
This is a declaratory judgment action where Apple alleges non-infringement. The following table summarizes Apple's non-infringement arguments for exemplary claim 65, which Apple presents in a table in its complaint. This table, provided by Apple, serves as a form of visual evidence breaking down its legal theory. (Compl. ¶42).
U.S. Patent No. 7,039,033 Non-Infringement Allegations
| Claim Element (from Independent Claim 65) | Apple's Alleged Non-Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| wherein the software component includes a network address translator software component to translate between a first Internet Protocol (“IP”) address provided to the first wireless device from the cellular network and a second address for the second wireless device provided by the first wireless device, | Apple's accused products do not include the claimed component because they do not translate between an IP address provided to the iPhone and a second IP address for a connected iPad. | ¶44 | col. 8:16-22 |
| wherein the software component includes a service repository software component to identify a service provided by the second wireless device. | Apple's accused products do not include this component because they do not identify services provided by another wireless device or store such services in a repository. | ¶45 | col. 12:9-14 |
Identified Points of Contention
- Scope Questions: A central dispute will be whether Apple's method of providing internet access via Personal Hotspot constitutes "translating" between IP addresses in the manner required by the "network address translator" limitation. The case raises the question of whether the functionality in Apple's products is technically distinct from the specific NAT function described in the patent.
- Technical Questions: The complaint raises a factual question about whether Apple's products perform the function of a "service repository." The analysis will question what evidence exists that Apple's products "identify a service provided by the second wireless device" and maintain a "repository" of such services, as opposed to simply providing a data conduit.
V. Key Claim Terms for Construction
The Term: "network address translator software component"
- Context and Importance: Apple's non-infringement argument for limitation 65[f] hinges on this term. Its definition is critical because if Apple's Personal Hotspot feature does not perform the specific type of "translation" claimed, there is no literal infringement. Practitioners may focus on this term to determine if it requires the specific private-to-public IP translation described in the specification or if it can be read more broadly to cover any form of network address management that facilitates tethering.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The claim language itself is functional, describing translation "between a first...address...and a second address." Parties arguing for a broader scope may suggest this covers any software that manages the two different addresses to enable communication.
- Evidence for a Narrower Interpretation: The specification describes a specific "NAT component 553" that "translates a private IP address to and from a real IP address," noting that because mobile networks typically provide only a single IP address, terminals on the PAN "will have to use private IP addresses supplied by NAT component 553" ('033 Patent, col. 8:16-22). This suggests the term may be limited to this specific private-to-public IP translation architecture.
The Term: "service repository software component"
- Context and Importance: Apple's second primary non-infringement argument relies on this term from limitation 65[g]. The dispute centers on whether Apple's products "identify a service provided by the second wireless device." The construction of "service repository" will determine whether simply knowing a device is connected is sufficient, or if if the claim requires a more active system of service discovery, registration, and management as described in the patent.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The claim language requires a component "to identify a service provided by the second wireless device." An argument for a broad reading might suggest that recognizing a device capable of browsing the web is "identifying a service."
- Evidence for a Narrower Interpretation: The specification describes a detailed "Service repository software component 704" that performs numerous specific functions, including "service registration," "service unregistration," "searching of services" by class and attribute, and maintaining a "local database of PIN numbers" ('033 Patent, col. 12:9-49; col. 11:30-34). This detailed description could support a narrow construction requiring a component that actively manages and catalogues services, not one that merely facilitates a data connection.
VI. Other Allegations
Indirect Infringement
As a declaratory judgment complaint, Apple does not allege infringement. However, the facts alleged would form the basis for a potential counterclaim of infringement by IXI. The complaint references IXI's letters sent to Apple in April 2017 and April 2018, which explicitly accuse Apple of infringing the Reexam Claims (Compl. ¶¶ 17, 19). These letters would serve as evidence of IXI's infringement theory and could be used by IXI to establish pre-suit knowledge to support claims for induced or willful infringement.
Willful Infringement
The complaint alleges that IXI sent multiple notice letters to Apple's Cupertino offices, putting Apple on notice of the alleged infringement by the Reexam Claims (Compl. ¶¶ 17, 19). These facts establish the basis for the justiciable controversy and would also be the foundation for any potential claim by IXI that any continued infringement by Apple after receiving these notices was willful.
VII. Analyst’s Conclusion: Key Questions for the Case
- A threshold issue will be one of claim preclusion: Does the final judgment of invalidity against the original claims of the '033 Patent, resulting from the IPR affirmed by the Federal Circuit, bar IXI under res judicata from asserting the newly-issued Reexam Claims from the same patent against the same accused products?
- Should the case proceed to the merits, a core infringement question will be one of definitional scope: Do Apple’s Personal Hotspot features, which provide shared internet access, embody the specific functionalities of a "network address translator software component" and a "service repository software component" as those terms are narrowly defined by the detailed embodiments in the '033 Patent's specification?
- Finally, an underlying validity question will be one of patentability over the prior art: Are the additional limitations in reexamined claim 65 (e.g., touchscreen, specific software applications) sufficient to render the claim non-obvious in view of the same prior art that the PTAB found invalidated the original, broader claims?