DCT

1:15-cv-00616

TQ Delta LLC v. Verizon Services Corp

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I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 1:15-cv-00616, D. Del., 09/09/2015
  • Venue Allegations: Venue is alleged to be proper as all defendant entities are incorporated or formed in Delaware and transact substantial business in the state.
  • Core Dispute: Plaintiff alleges that Defendant’s products and services compliant with the Multimedia over Coax Alliance (MoCA) standards infringe eight patents related to multicarrier communications technologies, including methods for signal scrambling, diagnostic messaging, and power management.
  • Technical Context: The technology at issue involves high-speed data transmission over in-home coaxial cables, a foundational technology for home networking of services like multi-room DVR and high-speed internet.
  • Key Procedural History: The complaint alleges that Plaintiff engaged in pre-suit licensing discussions with Defendant beginning in December 2014, nine months before filing suit. During these communications, Plaintiff allegedly identified its MoCA-related patent portfolio and, in an April 29, 2015 letter, specifically identified five of the eight patents now asserted, providing notice that may be relevant to later claims of willful infringement.

Case Timeline

Date Event
1998-01-26 Priority Date for ’404 and ’268 Patents
1999-11-09 Priority Date for ’369, ’158, and ’243 Patents
2000-01-07 Priority Date for ’430, ’412, and ’956 Patents
2005-01-01 Verizon becomes a member of MoCA Alliance (approx. date)
2005-11-01 Issue Date for U.S. Patent No. 6,961,369
2010-11-16 Issue Date for U.S. Patent No. 7,835,430
2012-08-07 Issue Date for U.S. Patent No. 8,238,412
2013-04-30 Issue Date for U.S. Patent No. 8,432,956
2013-12-17 Issue Date for U.S. Patent No. 8,611,404
2014-05-06 Issue Date for U.S. Patent No. 8,718,158
2014-12-19 Plaintiff sends first licensing letter to Defendant
2015-02-04 Defendant responds to Plaintiff, declining confidentiality agreement
2015-04-21 Issue Date for U.S. Patent No. 9,014,243
2015-04-29 Plaintiff sends letter identifying specific patents to Defendant
2015-07-28 Issue Date for U.S. Patent No. 9,094,268
2015-09-09 Complaint Filing Date

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

U.S. Patent No. 6,961,369 - "System and Method for Scrambling the Phase of the Carriers in a Multicarrier Communications System"

  • Patent Identification: U.S. Patent No. 6,961,369, "System and Method for Scrambling the Phase of the Carriers in a Multicarrier Communications System," issued November 1, 2005.

The Invention Explained

  • Problem Addressed: The patent describes a problem in multicarrier communication systems (such as DSL) where, if the phase of the multiple carrier signals is not random, the combined signal can have a high peak-to-average power ratio (PAR). High PAR can cause signal distortion ("clipping") and requires more expensive, power-intensive components (’369 Patent, col. 2:11-26).
  • The Patented Solution: The invention proposes a "phase scrambler" that modifies the phase of each carrier signal before transmission. It computes a phase shift for each carrier based on a value—such as a pseudo-random number or a carrier index number—that is independent of the data being transmitted on that carrier. This computed shift is then added to the data-dependent phase, effectively randomizing the final phase of the combined signal, which reduces the PAR (’369 Patent, Abstract; col. 5:48-65).
  • Technical Importance: Reducing PAR is a fundamental goal in multicarrier system design, as it allows for more efficient power usage and the use of less complex and costly hardware, such as linear amplifiers (’369 Patent, col. 2:5-9).

Key Claims at a Glance

The complaint does not specify which claims of the ’369 patent are asserted, alleging infringement of "one or more claims" (Compl. ¶41). Independent claim 1 is representative of the core method:

  • In a multicarrier system utilizing a plurality of QAM-modulated carrier signals, a method of randomizing the phase characteristics of the carriers comprising:
  • generating an array of pseudo-random numbers;
  • determining a phase shift for each carrier signal by multiplying a value from the array of pseudo-random numbers times (π/m) mod 2π, where m is an integer; and
  • adding the determined phase shift for each carrier signal to the phase characteristic of each carrier signal.

U.S. Patent No. 8,718,158 - "System and Method for Scrambling the Phase of the Carriers in a Multicarrier Communications System"

  • Patent Identification: U.S. Patent No. 8,718,158, "System and Method for Scrambling the Phase of the Carriers in a Multicarrier Communications System," issued May 6, 2014.

The Invention Explained

  • Problem Addressed: As a continuation of the application leading to the ’369 Patent, this patent addresses the same technical problem of high PAR in multicarrier communication systems resulting from non-random signal phases (’158 Patent, col. 2:18-32).
  • The Patented Solution: The patent similarly discloses a method to scramble the phase characteristic of carrier signals. The solution involves associating each carrier with a value determined independently of the data bits (e.g., from a pseudo-random number generator) and using this value to compute a phase shift that is then combined with the data-modulated phase to reduce the PAR of the final transmitted signal (’158 Patent, Abstract; col. 4:51-65).
  • Technical Importance: The technology enhances the robustness and efficiency of multicarrier systems, which are foundational to modern high-speed data communications over physical media like coaxial cables and telephone lines (’158 Patent, col. 2:11-15).

Key Claims at a Glance

The complaint alleges infringement of "one or more claims" without specifying which ones (Compl. ¶49). Independent claim 1 is representative of the method:

  • In a multicarrier modulation system, a method for scrambling comprising:
  • associating a carrier signal with a value determined independently of any bit of the plurality of data bits carried by the carrier signal, the value associated with the carrier signal determined by a pseudo-random number generator;
  • determining a phase shift for the carrier signal at least based on the value associated with the carrier signal;
  • modulating at least one bit of the plurality of data bits on the carrier signal; and
  • modulating the at least one bit on a second carrier signal of the plurality of carrier signals.

Multi-Patent Capsules

  • U.S. Patent No. 9,014,243: "System and Method for Scrambling Using a Bit Scrambler and a Phase Scrambler," issued April 21, 2015.

    • Technology Synopsis: This patent discloses a two-stage approach to signal randomization. It describes first using a "bit scrambler" on the input data bits and then using a "phase scrambler" on the carrier signals, as described in the ’369 and ’158 patents, to further ensure the transmitted signal has a low PAR.
    • Asserted Claims: Unspecified in the complaint (Compl. ¶57).
    • Accused Features: Verizon's products and services operating in accordance with MoCA standards 1.0, 1.1, and/or 2.0 (Compl. ¶56).

  • U.S. Patent No. 7,835,430: "Multicarrier Modulation Messaging for Frequency Domain Received Idle Channel Noise Information," issued November 16, 2010.

    • Technology Synopsis: This patent addresses the need for transceivers to exchange diagnostic and test information, particularly when normal high-speed communication has failed. It discloses a robust "diagnostic link mode" for transmitting messages, such as idle channel noise data, to help diagnose connection problems without a technician physically visiting the site.
    • Asserted Claims: Unspecified in the complaint (Compl. ¶65).
    • Accused Features: Verizon's products and services operating in accordance with at least the MoCA 2.0 standard (Compl. ¶64).

  • U.S. Patent No. 8,238,412: "Multicarrier Modulation Messaging for Power Level per Subchannel Information," issued August 7, 2012.

    • Technology Synopsis: Related to the ’430 patent, this invention focuses on the robust exchange of diagnostic information in a multicarrier system. It specifically discloses transmitting messages containing information about the power level on a per-subchannel basis, which is critical for diagnosing and optimizing signal transmission.
    • Asserted Claims: Unspecified in the complaint (Compl. ¶73).
    • Accused Features: Verizon's products and services operating in accordance with at least the MoCA 2.0 standard (Compl. ¶72).

  • U.S. Patent No. 8,432,956: "Multicarrier Modulation Messaging for Power Level per Subchannel Information," issued April 30, 2013.

    • Technology Synopsis: As a continuation of the application leading to the ’412 patent, this patent covers the same technology for establishing a robust diagnostic link to exchange power level information between transceivers, particularly in environments where normal communication is impaired.
    • Asserted Claims: Unspecified in the complaint (Compl. ¶81).
    • Accused Features: Verizon's products and services operating in accordance with at least the MoCA 2.0 standard (Compl. ¶80).

  • U.S. Patent No. 8,611,404: "Multicarrier Transmission System With Low Power Sleep Mode and Rapid-On Capability," issued December 17, 2013.

    • Technology Synopsis: This patent addresses power consumption in "always-on" devices. It describes a system for a transceiver to enter a low-power "sleep mode" and, crucially, to store its operational state (e.g., equalizer coefficients, channel parameters). This allows the transceiver to perform a "rapid-on" wake-up without undergoing a full, time-consuming re-initialization sequence.
    • Asserted Claims: Unspecified in the complaint (Compl. ¶89).
    • Accused Features: Verizon's products and services operating in accordance with at least the MoCA 2.0 standard (Compl. ¶88).

  • U.S. Patent No. 9,094,268: "Multicarrier Transmission System With Low Power Sleep Mode and Rapid-On Capability," issued July 28, 2015.

    • Technology Synopsis: A continuation related to the ’404 patent, this patent further describes the methods for entering a low-power sleep mode and rapidly resuming full operation. The technology is designed to save power while maintaining the user experience of an instantly available connection.
    • Asserted Claims: Unspecified in the complaint (Compl. ¶97).
    • Accused Features: Verizon's products and services operating in accordance with at least the MoCA 2.0 standard (Compl. ¶96).

III. The Accused Instrumentality

Product Identification

  • The complaint collectively defines the accused instrumentalities as "MoCA Products" (Compl. ¶19). These include systems, methods, and services that operate in accordance with one or more of the MoCA 1.0, 1.1, and 2.0 standards (Compl. ¶19). Specific examples cited include Verizon's digital cable, TV Online services, Multi-Room and Multi-Hub DVR services, Internet service, and associated hardware such as set-top boxes, gateways, routers, and modems (Compl. ¶19).

Functionality and Market Context

  • The accused products are alleged to use MoCA technology to create a high-performance, reliable network for multimedia content distribution over existing in-home coaxial cable wiring (Compl. ¶¶13, 16). The complaint asserts that MoCA is a "worldwide standard" adopted by major cable, telco/IPTV, and satellite operators to deliver services to subscribers (Compl. ¶16). It is further alleged that Verizon has been a "Promoter" member of the Multimedia over Coax Alliance since 2005 and was involved in developing the MoCA standards (Compl. ¶¶15, 18).

No probative visual evidence provided in complaint.

IV. Analysis of Infringement Allegations

The complaint does not contain claim charts or map specific functionalities of the accused products to discrete claim elements. The central theory of infringement is that the accused MoCA Products, by virtue of operating in accordance with the MoCA standards, necessarily practice the methods claimed in the patents-in-suit (Compl. ¶¶40, 48).

’369 Patent Infringement Allegations

The complaint does not specify which claims are asserted. The following chart summarizes the allegations as they would apply to representative independent claim 1.

Claim Element (from Independent Claim 1) Alleged Infringing Functionality Complaint Citation Patent Citation
In multicarrier modulation communications... a method of randomizing the phase characteristics of the carriers comprising: generating an array of pseudo-random numbers; The complaint alleges that Verizon's MoCA Products operate according to MoCA standards, which require a method of randomizing carrier phases that includes this step. ¶40 col. 5:58-60
determining a phase shift for each carrier signal by multiplying a value from the array of pseudo-random numbers times (π/m) mod 2π, where m is an integer; and The complaint alleges that standard-compliant MoCA Products perform this computation to determine a phase shift for scrambling. ¶40 col. 6:58-62
adding the determined phase shift for each carrier signal to the phase characteristic of each carrier signal. The complaint alleges that standard-compliant MoCA Products combine the computed phase shift with the data-modulated phase to reduce PAR. ¶40 col. 5:35-40

’158 Patent Infringement Allegations

The complaint does not specify which claims are asserted. The following chart summarizes the allegations as they would apply to representative independent claim 1.

Claim Element (from Independent Claim 1) Alleged Infringing Functionality Complaint Citation Patent Citation
associating a carrier signal with a value determined independently of any bit of the plurality of data bits carried by the carrier signal, the value associated with the carrier signal determined by a pseudo-random number generator; The complaint alleges that Verizon's MoCA Products, by complying with MoCA standards, associate each carrier with a data-independent value for phase scrambling purposes. ¶48 col. 6:55-61
determining a phase shift for the carrier signal at least based on the value associated with the carrier signal; The complaint alleges standard-compliant MoCA Products compute a phase shift based on the associated value. ¶48 col. 6:4-9
modulating at least one bit of the plurality of data bits on the carrier signal; and modulating the at least one bit on a second carrier signal... The complaint alleges that MoCA Products perform multicarrier data modulation on carriers whose phases have been scrambled according to the preceding steps. ¶48 col. 5:42-47

Identified Points of Contention

  • Scope Questions: A primary point of contention may be whether compliance with the MoCA standards necessarily requires practicing every element of the asserted claims. The complaint alleges this equivalence but does not cite specific sections of the standards documents. A key question for the court will be whether the MoCA standards mandate the claimed methods or merely permit them among other, potentially non-infringing, alternatives.
  • Technical Questions: The complaint does not provide technical evidence of how the accused Verizon products actually operate, beyond the assertion of standards-compliance. A central technical question will be what evidence demonstrates that the accused products actually perform the specific steps of "generating an array of pseudo-random numbers" and "multiplying a value" from it, as required by claim 1 of the ’369 Patent, rather than another method of phase randomization.

V. Key Claim Terms for Construction

The complaint does not identify any claim terms for construction. Based on the representative claims analyzed above, the following terms may become central to the dispute.

  • The Term: "pseudo-random numbers" (from claim 1 of the ’369 Patent)

    • Context and Importance: The definition of this term is critical because it defines the source of the values used for phase scrambling. The dispute may turn on whether the sequence used in the accused products meets the definition of "pseudo-random" or if it is deterministic in a way that falls outside the claim scope.
    • Intrinsic Evidence for Interpretation:
      • Evidence for a Broader Interpretation: The specification suggests that values for computing the phase shift can be derived from several sources, including non-random parameters like a "DMT carrier number, a DMT symbol count, a DMT superframe count, a DMT hyperframe count, and the like" (’369 Patent, col. 5:61-64). This could support an argument that the invention is not strictly limited to sequences generated by a pseudo-random number generator.
      • Evidence for a Narrower Interpretation: The claim explicitly recites "pseudo-random numbers," and the specification describes an embodiment where the value is derived from a "pseudo-random number generator (pseudo-RNG)" (’369 Patent, col. 5:58-60). This language may support a narrower construction limited to values having specific statistical properties of randomness.

  • The Term: "associating" (from claim 1 of the ’158 Patent)

    • Context and Importance: This term governs the relationship between a carrier signal and the value used to scramble its phase. The nature of this "association"—whether it is static, dynamic, direct, or indirect—will be important for determining infringement.
    • Intrinsic Evidence for Interpretation:
      • Evidence for a Broader Interpretation: The specification describes embodiments where the value changes over time based on a "symbol count," suggesting the association can be dynamic and updated with each transmitted symbol (’158 Patent, col. 6:35-41). This may support a broad interpretation covering various forms of mapping.
      • Evidence for a Narrower Interpretation: The specification also describes an embodiment where the value is based on the "DMT carrier number," which is a fixed identifier for each carrier frequency (’158 Patent, col. 6:46-51). This could support a more limited definition, such as a fixed, one-to-one mapping.

VI. Other Allegations

  • Indirect Infringement: The complaint alleges both induced and contributory infringement for all eight patents. Inducement is based on allegations that Verizon provides customers with MoCA Products along with instructions and support, with the intent to encourage the infringing use (e.g., Compl. ¶¶41-42). Contributory infringement is based on allegations that the MoCA Products are a material part of the invention, are not staple articles of commerce suitable for substantial non-infringing use, and are sold knowing they are especially made for use in an infringing manner (e.g., Compl. ¶44).
  • Willful Infringement: Willfulness is alleged based on pre-suit knowledge of the patents. The complaint details a series of communications beginning on December 19, 2014, in which TQ Delta allegedly notified Verizon of its MoCA patent portfolio (Compl. ¶30). A letter dated April 29, 2015, specifically identified five of the patents-in-suit (’369, ’158, ’430, ’956, and ’404) (Compl. ¶34). The complaint also pleads willful blindness, alleging Verizon took "deliberate actions to purposefully avoid confirming the high probability" of infringement (Compl. ¶¶36-37).

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

The resolution of this case will likely depend on the court's determination of the following central questions:

  • A core issue will be one of standards-essentiality: does compliance with the MoCA 1.0, 1.1, and/or 2.0 standards, as alleged, necessarily require practicing the specific methods recited in the asserted claims? The complaint's infringement theory hinges on this assertion, and its validation will require detailed technical evidence from the standards documents themselves.
  • A key evidentiary and legal question will be one of pleading sufficiency and claim construction: given that the complaint asserts infringement of unspecified claims and relies on standards-compliance rather than direct evidence of the accused products' operation, can the term "pseudo-random numbers" be construed broadly enough to read on deterministic values allowed by the specification, and does the complaint provide sufficient factual matter to make a plausible claim that the accused products practice each limitation of any asserted claim?