DCT
1:14-cv-00954
TQ Delta LLC v. ADTRAN Inc
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: TQ Delta, LLC (Delaware)
- Defendant: ADTRAN, Inc. (Delaware)
- Plaintiff’s Counsel: Farnan LLP; McAndrews, Held & Malloy, Ltd.
- Case Identification: 1:14-cv-00954, D. Del., 07/07/2015
- Venue Allegations: Venue is alleged to be proper in the District of Delaware because Defendant is a Delaware corporation and regularly conducts business in the district.
- Core Dispute: Plaintiff alleges that Defendant’s Digital Subscriber Line (DSL) telecommunications equipment infringes thirty-two patents related to various aspects of DSL technology, including methods for data transmission, error correction, and power management.
- Technical Context: DSL technology enables high-speed data transmission over the existing copper-wire infrastructure of local telephone networks, forming the basis for widely deployed broadband internet services.
- Key Procedural History: The complaint details extensive pre-suit licensing negotiations beginning in July 2013, during which Plaintiff allegedly presented Defendant with exemplary claim charts. It also alleges that the defendant, as a participant in the International Telecommunication Union (ITU), was on notice of patents declared essential to the DSL standards its products practice, due to intellectual property rights warnings published with those standards.
Case Timeline
| Date | Event |
|---|---|
| 1998-01-26 | Priority Date for U.S. Patent No. 6,445,730 |
| 1999-04-26 | Defendant submits a General Patent Statement and Licensing Declaration to the ITU |
| 1999-11-09 | Priority Date for U.S. Patent Nos. 7,292,627; 7,471,721; 8,073,041; 8,090,008; 8,218,610; 8,355,427 |
| 2001-10-05 | Priority Date for U.S. Patent Nos. 7,453,881; 7,809,028; 7,978,706; 8,422,511 |
| 2002-09-03 | U.S. Patent No. 6,445,730 Issued |
| 2004-09-25 | Priority Date for U.S. Patent Nos. 7,451,379; 7,925,958; 7,979,778; 8,516,337 |
| 2004-10-12 | Priority Date for U.S. Patent Nos. 7,831,890; 7,836,381; 7,844,882; 8,276,048; 8,495,473; 8,607,126 |
| 2005-04-05 | Plaintiff's predecessor Aware, Inc. submits PSLD for VDSL2 standard to the ITU |
| 2005-06-24 | Priority Date for U.S. Patent Nos. 7,570,686; 7,835,430; 7,889,784; 8,238,412; 8,432,956 |
| 2005-10-04 | Priority Date for U.S. Patent Nos. 7,978,753; 8,437,382; 8,611,404 |
| 2006-11-28 | Priority Date for U.S. Patent Nos. 8,462,835; 8,594,162 |
| 2007-11-06 | U.S. Patent No. 7,292,627 Issued |
| 2008-11-18 | U.S. Patent No. 7,453,881 Issued |
| 2008-11-11 | U.S. Patent No. 7,451,379 Issued |
| 2008-12-30 | U.S. Patent No. 7,471,721 Issued |
| 2009-08-04 | U.S. Patent No. 7,570,686 Issued |
| 2010-10-05 | U.S. Patent No. 7,809,028 Issued |
| 2010-11-09 | U.S. Patent No. 7,831,890 Issued |
| 2010-11-16 | U.S. Patent Nos. 7,835,430 and 7,836,381 Issued |
| 2010-11-30 | U.S. Patent No. 7,844,882 Issued |
| 2011-02-15 | U.S. Patent No. 7,889,784 Issued |
| 2011-04-12 | U.S. Patent No. 7,925,958 Issued |
| 2011-07-12 | U.S. Patent Nos. 7,978,706; 7,978,753; and 7,979,778 Issued |
| 2011-12-06 | U.S. Patent No. 8,073,041 Issued |
| 2012-01-03 | U.S. Patent No. 8,090,008 Issued |
| 2012-07-10 | U.S. Patent No. 8,218,610 Issued |
| 2012-08-07 | U.S. Patent No. 8,238,412 Issued |
| 2012-09-25 | U.S. Patent No. 8,276,048 Issued |
| 2013-01-15 | U.S. Patent No. 8,355,427 Issued |
| 2013-04-16 | U.S. Patent No. 8,422,511 Issued |
| 2013-04-30 | U.S. Patent No. 8,432,956 Issued |
| 2013-05-07 | U.S. Patent No. 8,437,382 Issued |
| 2013-06-11 | U.S. Patent No. 8,462,835 Issued |
| 2013-07-15 | TQ Delta sends first letter to Defendant to open licensing discussions |
| 2013-07-23 | U.S. Patent No. 8,495,473 Issued |
| 2013-08-20 | U.S. Patent No. 8,516,337 Issued |
| 2013-11-08 | Parties execute a Mutual Standstill & Confidentiality Agreement |
| 2013-11-26 | U.S. Patent No. 8,594,162 Issued |
| 2013-12-10 | U.S. Patent No. 8,607,126 Issued |
| 2013-12-16 | Parties engage in WebEx meeting where Plaintiff presents claim charts |
| 2013-12-17 | U.S. Patent No. 8,611,404 Issued |
| 2014-01-07 | U.S. Patent No. 8,625,660 Issued |
| 2014-03-19 | TQ Delta sends ADTRAN a license offer |
| 2014-06-17 | Parties hold follow-up meeting at ADTRAN's offices |
| 2015-07-07 | Amended Complaint for Patent Infringement Filed |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 8,090,008 - “System and Method for Scrambling the Phase of the Carriers in a Multicarrier Communications System,” Issued January 3, 2012
The Invention Explained
- Problem Addressed: In multicarrier communication systems like DSL, if the phase of the modulated carrier signals is not random, the peak-to-average power ratio (PAR) of the transmitted signal can increase significantly ('008 Patent, col. 1:10-26). High PAR can lead to increased power consumption and a greater probability of "clipping" the transmission signal, which introduces errors ('008 Patent, col. 2:1-11).
- The Patented Solution: The invention describes a system for scrambling the phase of carrier signals before data is modulated onto them ('008 Patent, Abstract). A "phase scrambler" computes a phase shift for each carrier signal based on a value that is independent of the data bits being transmitted (e.g., derived from a random number generator or a carrier number) ('008 Patent, col. 3:51-61). This computed shift is combined with the carrier's existing phase characteristic, resulting in a substantially scrambled signal that produces a transmission signal with a reduced PAR ('008 Patent, col. 4:38-42).
- Technical Importance: Managing PAR is a fundamental challenge in multicarrier modulation; reducing it allows for more efficient and reliable data transmission using less expensive hardware components ('008 Patent, col. 2:1-11).
Key Claims at a Glance
- The complaint asserts infringement of "one or more claims" without specifying which ones (Compl. ¶44). Independent claim 1 is representative.
- Claim 1 (paraphrased elements):
- A method for scrambling the phase of carrier signals in a multicarrier transceiver.
- Associating each carrier signal with a value determined independently of any input bit value carried by that carrier.
- Computing a phase shift for each carrier signal based on that associated value.
- Combining the computed phase shift with the phase characteristic of that carrier signal to substantially scramble it.
- Modulating bits of an input bit stream onto the carrier signals having the scrambled phase characteristic.
- The complaint does not explicitly reserve the right to assert dependent claims for this patent.
U.S. Patent No. 8,073,041 - “System and Method for Descrambling the Phase of the Carriers in a Multicarrier Communications System,” Issued December 6, 2011
The Invention Explained
- Problem Addressed: This patent addresses the receiver-side counterpart to the problem described in the ’008 Patent. Once a transmitter has scrambled the phase of carrier signals to reduce PAR, the receiver must be able to correctly descramble them to recover the original data ('041 Patent, col. 1:12-25).
- The Patented Solution: The invention describes a receiving system that computes the same phase shift that was applied at the transmitter and uses it to demodulate the received signal ('041 Patent, Abstract). The receiver associates each carrier signal with the same value used by the transmitter (e.g., from a synchronized pseudo-random number generator) and computes the corresponding phase shift ('041 Patent, col. 3:52-64). This computed phase shift is then used in the demodulation process to accurately recover the transmitted data bits ('041 Patent, col. 4:35-42).
- Technical Importance: This technology enables the reliable reception and decoding of signals whose phase has been intentionally scrambled, allowing communication systems to realize the benefits of PAR reduction without sacrificing data integrity ('041 Patent, col. 2:1-11).
Key Claims at a Glance
- The complaint asserts infringement of "one or more claims" without specifying which ones (Compl. ¶51). Independent claim 1 is representative.
- Claim 1 (paraphrased elements):
- A method for descrambling the phase of carrier signals in a multicarrier transceiver.
- Receiving a transmission signal with a plurality of carrier signals.
- Associating each carrier signal with a value determined independently of any input bit value.
- Computing a phase shift for each carrier signal based on the associated value.
- Demodulating the transmission signal using the computed phase shift for each carrier signal.
- The complaint does not explicitly reserve the right to assert dependent claims for this patent.
Multi-Patent Capsule: U.S. Patent No. 7,292,627 - “System and Method for Scrambling the Phase of the Carriers in a Multicarrier Communications System,” Issued November 6, 2007
- Technology Synopsis: This patent is an earlier member of the same family as the '008 and '041 patents. It addresses the same problem of high PAR in multicarrier systems and proposes a similar solution of scrambling the phase of carriers based on a value independent of the input data bits, such as a value from a random number generator or a carrier number ('627 Patent, Abstract; col. 3:51-61).
- Asserted Claims: One or more unspecified claims (Compl. ¶58).
- Accused Features: DSL products that operate in accordance with the ITU-T VDSL2 (G.993.2) standard (Compl. ¶57).
Multi-Patent Capsule: U.S. Patent No. 7,471,721 - “System and Method for Scrambling the Phase of the Carriers in a Multicarrier Communications System,” Issued December 30, 2008
- Technology Synopsis: This patent is another member of the '008 patent family, relating to scrambling the phase of carrier signals to reduce PAR. It similarly describes computing a phase shift for each carrier based on a data-independent value and combining it with the carrier's phase characteristic before modulating data bits onto it ('721 Patent, Abstract).
- Asserted Claims: One or more unspecified method claims (Compl. ¶¶64-65).
- Accused Features: DSL products that operate in accordance with the ITU-T VDSL2 (G.993.2) standard (Compl. ¶64).
The complaint asserts thirty-two patents in total. Given the substantial overlap in technology and infringement allegations, particularly within patent families, this report will not provide individual capsules for the remaining twenty-eight patents.
III. The Accused Instrumentality
Product Identification
- Defendant’s DSL Customer Premise Equipment (“CPE”) Products and Central Office (“CO”) Products (Compl. ¶11). This includes devices such as modems, gateways, routers, integrated access devices, DSLAMs, MSANs, and line cards (Compl. ¶11).
Functionality and Market Context
- The complaint alleges that the accused products are designed and sold to operate in accordance with a set of industry standards published by the ITU, collectively referred to as the "DSL Standards" (Compl. ¶¶10, 12). These standards include ITU-T ADSL2 (G.992.3), ADSL2+ (G.992.5), VDSL2 (G.993.2), and G.bond (e.g., G.998.1, G.998.2) (Compl. ¶10). The products are allegedly sold to telephone and broadband carriers for deployment in their networks to provide DSL service to subscribers (Compl. ¶12). The complaint provides a link to an example data sheet for a product compliant with the VDSL2 (G.993.2) standard (Compl. ¶44).
IV. Analysis of Infringement Allegations
The complaint’s infringement theory is premised on the patents-in-suit being essential to practicing the DSL standards. It alleges that because the accused products are designed to comply with these standards, they necessarily infringe the asserted patents (Compl. ¶¶43, 45, 50, 52).
8,090,008 Patent Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| a method for scrambling the phase characteristic of a plurality of carrier signals in a multicarrier transceiver | Accused products perform multicarrier communications in compliance with the VDSL2 standard. | ¶43 | col. 3:41-54 |
| associating each carrier signal with a value determined independently of any input bit value carried by that carrier signal | Accused products operating according to the VDSL2 standard associate values with carriers for phase scrambling. | ¶43 | col. 3:51-61 |
| computing a phase shift for each carrier signal based on the value associated with that carrier signal | Accused products compute phase shifts for carriers as part of their standards-compliant operation. | ¶43 | col. 4:1-5 |
| combining the phase shift computed for each carrier signal with the phase characteristic of that carrier signal to substantially scramble the phase characteristic of the plurality of carrier signals | This combination is alleged to be a necessary step for products operating under the VDSL2 standard. | ¶43 | col. 4:35-42 |
| modulating bits of an input bit stream onto the carrier signals having the substantially scrambled phase characteristic | Accused products modulate data onto the phase-scrambled carriers for transmission. | ¶43 | col. 4:43-52 |
8,073,041 Patent Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| a method for descrambling the phase characteristic of a plurality of carrier signals in a multicarrier transceiver | Accused products perform multicarrier communications in compliance with the VDSL2 standard. | ¶50 | col. 3:41-54 |
| receiving a transmission signal comprising a plurality of carrier signals | Accused products receive DSL signals from the network. | ¶50 | col. 3:41-45 |
| associating each carrier signal with a value determined independently of any input bit value carried by that carrier signal | Accused products operating according to the VDSL2 standard associate values with carriers for phase descrambling. | ¶50 | col. 3:52-64 |
| computing a phase shift for each carrier signal based on the value associated with that carrier signal | Accused products compute the corresponding phase shifts as part of their standards-compliant operation. | ¶50 | col. 4:1-6 |
| demodulating the transmission signal using the phase shift computed for each carrier signal | Accused products use the computed phase shifts to recover the original data from the received signal. | ¶50 | col. 4:35-42 |
Identified Points of Contention
- Scope Questions: A central question will be whether practicing the relevant sections of the DSL standards (e.g., VDSL2) necessarily requires performing every step of the asserted claims. The analysis may focus on whether non-infringing alternatives exist within the standard's framework.
- Technical Questions: What evidence does the complaint provide that the accused products' standards-compliant operations are technically identical to the claimed methods of "associating," "computing," and "combining"? The dispute may turn on specific implementation details of the phase scrambling and descrambling algorithms within the accused products versus those described and claimed in the patents.
V. Key Claim Terms for Construction
The complaint does not provide sufficient detail for analysis of specific claim terms. However, based on the infringement theory, the construction of terms defining the scrambling and descrambling actions will be critical. Practitioners may focus on the term below because it defines the core inventive step.
- The Term: "associating each carrier signal with a value determined independently of any input bit value carried by that carrier signal" (from '008 Patent, Claim 1)
- Context and Importance: This limitation is central to the infringement dispute because it defines the source of the scrambling information. The case will likely hinge on whether the method of generating scrambling values specified by the VDSL2 standard is the same as the data-independent method claimed by the patent. If the standard allows for or requires a data-dependent value, the infringement argument may be contested.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The specification provides several examples of data-independent values, such as "a random number generator, a carrier number, a DMT symbol count, a superframe count, and a hyperframe count" ('008 Patent, col. 4:46-50). This list of diverse examples may support a broad interpretation covering any value not derived from the payload data bits.
- Evidence for a Narrower Interpretation: The detailed description focuses on specific examples, such as deriving the value from a "predefined parameter, such as a pseudo-random number generator (pseudo-RNG), a DMT carrier number, a DMT symbol count," and others ('008 Patent, col. 4:58-62). A defendant may argue that the term should be limited to these specific types of enumerated, predetermined parameters, rather than any conceivable data-independent value.
VI. Other Allegations
Indirect Infringement
- The complaint alleges induced infringement on the basis that Defendant provides its products to customers with instructions, support, upgrades, and troubleshooting, with the intent to encourage them to use the products in their normal, standards-compliant manner, which allegedly constitutes direct infringement (Compl. ¶¶13, 44, 51). It further alleges contributory infringement, stating the products are especially made for use in an infringing manner and are not staple articles of commerce with substantial non-infringing uses (Compl. ¶¶46, 53).
Willful Infringement
- The complaint alleges pre-suit knowledge of the patents based on two independent grounds. First, it details nearly a year of licensing negotiations, including a December 16, 2013 meeting where Plaintiff allegedly presented "numerous exemplary patent claim charts" (Compl. ¶¶16-28). Second, it alleges Defendant had constructive and actual knowledge by virtue of its participation in the ITU, which publishes IPR warnings "strongly urg[ing]" implementers to consult its patent database for patents declared essential to the standards (Compl. ¶¶31-38). The complaint references an ITU database record showing Plaintiff's predecessor, Aware, Inc., submitted a licensing declaration for the VDSL2 standard (Compl. ¶¶33-34, Exhibit N). In the alternative, the complaint alleges willful blindness (Compl. ¶¶39-40).
VII. Analyst’s Conclusion: Key Questions for the Case
- A core issue will be one of technical essentiality: Do the asserted patent claims, as they may be construed by the court, cover techniques that are mandatory for compliance with the relevant DSL standards? If alternative, non-infringing methods of compliance exist within the standards, the plaintiff's primary infringement theory may be challenged.
- A key evidentiary question will be one of pre-suit knowledge and intent: The complaint provides a detailed narrative of licensing discussions and alleged notice via the ITU standards body. The case may turn on what specific information was conveyed in those meetings and whether Defendant’s participation in the ITU created a duty to investigate that would support a finding of willfulness.
- A central claim construction question will be one of functional scope: How broadly will terms such as "associating...a value determined independently of any input bit value" be construed? The outcome will determine whether the specific methods for generating phase information in the accused products fall within the scope of the patent claims.