DCT

1:18-cv-01406

Blue Spike LLC v. Comcast Cable Communications LLC

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Key Events
Complaint

I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 6:18-cv-00181, E.D. Tex., 04/27/2018
  • Venue Allegations: Plaintiff alleges venue is proper in the Eastern District of Texas because Defendant maintains a regular and established place of business in the district, including physical "stores" and by operating, maintaining, and controlling cable systems within Harrison and Liberty Counties.
  • Core Dispute: Plaintiff alleges that Defendant’s Business Enterprise Managed Solutions and Xfinity TV products and services infringe twelve U.S. patents related to packet watermarking, secure content servers, and trusted transactions for digital rights management and bandwidth provisioning.
  • Technical Context: The patents address methods for managing and securing digital data streams by embedding information ("watermarks") into data packets to control network traffic, verify authenticity, and manage digital rights.
  • Key Procedural History: The complaint asserts that Blue Spike's founder, Scott Moskowitz, is a pioneer in digital watermarking and data security, with an early patent application once being placed under a "secrecy order" by the National Security Agency. The complaint also states that Blue Spike has licensed its patents to competitors of Defendant, but does not identify any prior litigation or licensing history involving Comcast itself.

Case Timeline

Date Event
1999-08-04 Earliest Priority Date for ’246, ’295, ’602, ’842, ’408 Patents
1999-12-07 Earliest Priority Date for ’116, ’011 Patents
2002-04-17 Earliest Priority Date for ’222, ’307, ’275, ’746, ’705 Patents
2007-01-02 U.S. Patent No. 7,159,116 Issues
2007-10-23 U.S. Patent No. 7,287,275 Issues
2009-01-06 U.S. Patent No. 7,475,246 Issues
2012-07-17 U.S. Patent No. 8,224,705 Issues
2013-05-15 Reissued U.S. Patent No. RE44,222 Issues
2013-06-25 Reissued U.S. Patent No. RE44,307 Issues
2013-06-25 U.S. Patent No. 8,473,746 Issues
2013-09-17 U.S. Patent No. 8,538,011 Issues
2014-05-27 U.S. Patent No. 8,739,295 Issues
2015-04-28 U.S. Patent No. 9,021,602 Issues
2015-08-11 U.S. Patent No. 9,104,842 Issues
2018-04-03 U.S. Patent No. 9,934,408 Issues
2018-04-27 Complaint Filed

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

Reissued U.S. Patent No. RE44,222E1 - "Methods, systems and devices for packet watermarking and efficient provisioning of bandwidth"

  • Patent Identification: Reissued U.S. Patent No. USRE044222E1, titled “Methods, systems and devices for packet watermarking and efficient provisioning of bandwidth,” issued May 15, 2013.

The Invention Explained

  • Problem Addressed: The patent addresses the need to optimize and provision network bandwidth to handle competitive needs between networks and to ensure a certain Quality of Service ("QoS") for data transmission (U.S. Patent No. 7,287,275, col. 1:25-32).
  • The Patented Solution: The invention proposes embedding a "packet watermark" into individual data packets of a data stream. This watermark acts as a label that network infrastructure can use to identify, authenticate, and prioritize data traffic, thereby enabling more granular control over bandwidth allocation and QoS (U.S. Patent No. 7,287,275, Abstract; col. 3:34-45).
  • Technical Importance: This packet-level approach allows for dynamic, content-aware management of network resources, which is significant for digital rights management and for ensuring reliable delivery of streaming media.

Key Claims at a Glance

  • The complaint asserts independent claim 1 (a process claim) and independent claim 12 (a system claim) (Compl. ¶39, ¶221).
  • Claim 1 (Process):
    • receiving a stream of data;
    • organizing the stream of data into a plurality of packets;
    • generating a packet watermark associated with the stream of data wherein the packet watermark indicates the integrity of at least one of the plurality of packets;
    • combining the packet watermark with each of the plurality of packets to form watermarked packets; and
    • transmitting at least one of the watermarked packets across a network.
  • Claim 12 (System):
    • a processor to receive content and to organize the content into a plurality of packets;
    • a generator to generate at least one packet watermark associated with the content;
    • a packager to combine the generated packet watermark with at least one of the plurality of packets to form watermarked packets; and
    • a transmitter to transmit at least one of the watermarked packets across a network.

Reissued U.S. Patent No. RE44,307E1 - "Methods, systems and devices for packet watermarking and efficient provisioning of bandwidth"

  • Patent Identification: Reissued U.S. Patent No. USRE044307E1, titled “Methods, systems and devices for packet watermarking and efficient provisioning of bandwidth,” issued June 25, 2013.

The Invention Explained

  • Problem Addressed: As with the ’222 Patent, this invention addresses the efficient provisioning and allocation of network bandwidth (U.S. Patent No. 7,287,275, col. 1:25-32).
  • The Patented Solution: The solution is also a "packet watermark" embedded into data packets. The focus of the asserted claim in this patent is on using the watermark to enable "discrimination between packet flows," allowing network infrastructure to differentiate and prioritize various streams of data based on the embedded information (U.S. Patent No. 7,287,275, col. 3:34-45).
  • Technical Importance: This method provides a mechanism for network operators to implement sophisticated traffic-shaping and QoS policies by distinguishing between different types of data streams at a granular level.

Key Claims at a Glance

  • The complaint asserts independent claim 1 (a process claim) (Compl. ¶70, ¶251).
  • Claim 1 (Process):
    • receiving a stream of data;
    • organizing the stream of data into a packet flow comprising a plurality of packets;
    • generating, using a processor, a packet watermark associated with the packet flow wherein the packet watermark enables discrimination between packet flows;
    • combining, using a processor, the packet watermark with each of the plurality of packets to form watermarked packets; and
    • provisioning at least one of the watermarked packets across a network.

Multi-Patent Capsules

U.S. Patent No. 7,287,275B2 - "Methods, systems and devices for packet watermarking and efficient provisioning of bandwidth"

  • Technology Synopsis: This patent, the original version of the reissued ’222 and ’307 Patents, discloses methods for embedding watermarks in data packets to manage network bandwidth and authenticate data streams. The asserted claim focuses on using the watermark to enable identification of individual packets (Compl. ¶101).
  • Asserted Claims: Independent claim 1 (Compl. ¶101, ¶280).
  • Accused Features: The complaint alleges that both the Business Enterprise and Xfinity TV services, through their use of routers and QoS packet management, practice the claimed method of watermarking data streams for identification (Compl. ¶102-104, ¶281).

U.S. Patent No. 8,473,746B2 - "Methods, systems and devices for packet watermarking and efficient provisioning of bandwidth"

  • Technology Synopsis: A continuation of the '275 patent family, this patent discloses a router configured to manage network traffic. The router receives a transmission including a data packet, its associated watermark, and a "bandwidth rights certificate," and uses a processor to analyze the transmission and check its authenticity (Compl. ¶132).
  • Asserted Claims: Independent claim 1 (Compl. ¶132).
  • Accused Features: The Business Enterprise services are accused of infringing by providing routers that provision data, generate watermarks for QoS, and manage classified packets based on bits in the IP header (Compl. ¶133-135).

U.S. Patent No. 8,224,705B2 - "Methods, systems and devices for packet watermarking and efficient provisioning of bandwidth"

  • Technology Synopsis: Also from the '275 patent family, this patent claims a two-way communication system for selling an item or service. The system uses a "packet watermark protocol" to transmit a data stream that facilitates a transaction, such as displaying an advertisement or determining a purchase value (Compl. ¶309).
  • Asserted Claims: Independent claim 19 (Compl. ¶309).
  • Accused Features: Xfinity TV services are accused of infringing by providing a system to purchase products "on demand" that allegedly practices the claimed two-way communication method (Compl. ¶310).

U.S. Patent No. 7,475,246B2 - "Secure personal content server"

  • Technology Synopsis: This patent describes a local content server system (LCS) for creating a secure environment for digital content. The system includes a domain processor that imposes rules for content transfer and authorizes content delivery to and from connected "Satellite Units" (SUs) based on authorization rules (U.S. Patent No. 7,475,246, Abstract).
  • Asserted Claims: Independent claim 3 (Compl. ¶338).
  • Accused Features: The Xfinity TV service is alleged to be a local content server system that creates a secure environment for digital content, thereby practicing the claimed invention (Compl. ¶339).

U.S. Patent No. 8,739,295B2 - "Secure personal content server"

  • Technology Synopsis: A continuation of the '246 patent, this patent discloses a local content server system (LCS) that manages digital data within a defined "LCS domain." The LCS is configured to determine if incoming content belongs to a different domain and to apply rules to determine the security status and appropriate quality level for transmitting the content (Compl. ¶367).
  • Asserted Claims: Independent claim 1 (Compl. ¶367).
  • Accused Features: Xfinity TV is accused of infringing by providing an LCS server that creates a secure environment for digital content (Compl. ¶368).

U.S. Patent No. 9,021,602B2 - "Data Protection and Device"

  • Technology Synopsis: This patent, related to the '246 patent family, also describes a local content server system (LCS) for managing digital data. It has similar claim limitations regarding an LCS domain, a domain processor, and rules for handling and transmitting content based on its security status and origin (Compl. ¶396).
  • Asserted Claims: Independent claim 1 (Compl. ¶396).
  • Accused Features: Xfinity TV is accused of infringing by providing an LCS server that practices the claimed method of creating a secure environment for digital content (Compl. ¶397).

U.S. Patent No. 9,104,842B2 - "Data Protection and Device"

  • Technology Synopsis: A continuation in the same family as the '602 patent, this patent also claims a local content server system (LCS). Its features include a communications port, storage unit, and a domain processor that imposes rules for content transfer and determines content status (e.g., unsecure, secure, legacy) (Compl. ¶425).
  • Asserted Claims: Independent claim 1 (Compl. ¶425).
  • Accused Features: Xfinity TV is accused of infringing by providing an LCS server that creates a secure environment for digital content (Compl. ¶426).

U.S. Patent No. 9,934,408B2 - "Secure personal content server"

  • Technology Synopsis: Another continuation in the '246 patent family, this patent also claims a local content server system (LCS) with a domain processor that imposes rules for content transfer. The system is configured to determine if content belongs to a different LCS domain and to manage content based on security status and user rights (Compl. ¶454).
  • Asserted Claims: Independent claim 1 (Compl. ¶454).
  • Accused Features: Xfinity TV is accused of infringing by providing an LCS server for creating a secure digital content environment (Compl. ¶455).

U.S. Patent No. 7,159,116B2 - "Systems, methods and devices for trusted transactions"

  • Technology Synopsis: This patent discloses a device for conducting a trusted transaction between parties. The device uses a "steganographic cipher" governed by a key, message, and carrier signal to generate unique identifying information for the transaction, a party, or value-added information (U.S. Patent No. 7,159,116, Abstract; Compl. ¶163).
  • Asserted Claims: Independent claim 14 (Compl. ¶163, ¶483).
  • Accused Features: The Business Enterprise services are accused of providing "trusted transaction" services (Compl. ¶164), while the Xfinity TV service is accused of being a "local content server system" that practices the invention (Compl. ¶484).

U.S. Patent No. 8,538,011B2 - "Systems, methods and devices for trusted transactions"

  • Technology Synopsis: A continuation of the '116 patent, this patent claims a device for conducting trusted transactions using a steganographic cipher. The device includes a controller and input/output connections, and is configured to steganographically cipher value-added information associated with the transaction (Compl. ¶192).
  • Asserted Claims: Independent claim 35 (Compl. ¶192, ¶512).
  • Accused Features: The Business Enterprise services are accused of providing "Managed WiFi conducting trusted transactions" (Compl. ¶193), while the Xfinity TV service is accused of being a "local content server" that practices the invention (Compl. ¶513).

III. The Accused Instrumentality

Product Identification

  • The complaint identifies two categories of accused instrumentalities: (1) Comcast’s Business Enterprise Managed Solutions, and (2) Comcast’s Xfinity TV products and services (Compl. ¶27, ¶29).

Functionality and Market Context

  • The complaint alleges that the Business Enterprise Managed Solutions are services that use routers and managed WiFi to transmit streams of data for business customers (Compl. ¶40, ¶41). These services allegedly organize data into packets and use bits "watermarked into the packet's IP header" to signify priority or Quality of Service (QoS), which allows the packets to be "classified and differentiated" (Compl. ¶41-42). A screenshot of the "Managed Enterprise Solutions" webpage is provided as visual evidence of this offering (Compl. p. 8, Fig. 1).
  • The complaint describes Xfinity TV as a system for provisioning content that receives and organizes content into packets, generates watermarks, and transmits the watermarked packets across a network (Compl. ¶222-223, ¶281). It is also described as a "local content server system" for creating a secure digital content environment (Compl. ¶339). A screenshot of the Xfinity TV webpage is provided as visual evidence (Compl. p. 9, Fig. 2).
  • The complaint alleges that Defendant has not licensed Blue Spike's technology, while competitors such as Apple, Dell, and IBM have, creating a competitive disadvantage (Compl. ¶31).

IV. Analysis of Infringement Allegations

RE44,222E1 Infringement Allegations

Claim Element (from Independent Claim 1) Alleged Infringing Functionality Complaint Citation Patent Citation
A process for transmitting a stream of data, comprising: receiving a stream of data; Defendant's Business Enterprise services institute systems and processes for transmitting streams of data. ¶40 col. 3:15-18
organizing the stream of data into a plurality of packets; Defendant's services use one or more routers to organize the stream of data into a plurality of packets. ¶41 col. 4:51-60
generating a packet watermark associated with the stream of data wherein the packet watermark indicates the integrity of at least one of the plurality of packets; One or more routers are alleged to generate a packet watermark signifying priority or Quality of Service (QoS). ¶41 col. 5:44-48
combining the packet watermark with each of the plurality of packets to form watermarked packets; Packets are allegedly "classified and differentiated based on the bits watermarked into the packet’s IP header." ¶42 col. 5:49-53
and transmitting at least one of the watermarked packets across a network. The services provision data between routers, switches, and consumer end-point devices. ¶40 col. 3:15-18

RE44,307E1 Infringement Allegations

Claim Element (from Independent Claim 1) Alleged Infringing Functionality Complaint Citation Patent Citation
A process for provisioning a stream of data, comprising: receiving a stream of data; Defendant's Business Enterprise services institute systems for transmitting streams of data. ¶71 col. 3:15-18
organizing the stream of data into a packet flow comprising a plurality of packets; One or more routers organize the stream of data into a plurality of packets. ¶72 col. 4:51-60
generating, using a processor, a packet watermark associated with the packet flow wherein the packet watermark enables discrimination between packet flows; One or more routers allegedly generate a packet watermark that signifies priority or Quality of Service (QoS). ¶72 col. 5:44-48
combining, using a processor, the packet watermark with each of the plurality of packets to form watermarked packets; Packets are allegedly classified and differentiated based on bits watermarked into the packet's IP header. ¶73 col. 5:49-53
and provisioning at least one of the watermarked packets across a network. The services are alleged to provision data between routers, switches, and end-point devices. ¶71 col. 3:15-18
  • Identified Points of Contention:
    • Scope Questions: A central question may be whether standard network management techniques, such as modifying bits in a packet’s IP header to indicate a Quality of Service (QoS) level, fall within the scope of the term "packet watermark" as used in the patents. The complaint alleges that QoS bits are a "packet watermark" (Compl. ¶41, ¶72), which suggests the possibility that the dispute will center on if this term requires a more specialized, proprietary data structure beyond standard protocol fields.
    • Technical Questions: The complaint alleges that routers "generate a packet watermark" and "combine" it with packets (Compl. ¶41, ¶72). A key technical question will be whether Comcast's accused systems perform an affirmative act of "generating" a distinct watermark that is then "combined" with a packet, or if they merely set or modify pre-existing fields in a standard IP header as part of a routing function. The complaint does not provide specific technical details distinguishing these operations.

V. Key Claim Terms for Construction

  • The Term: "packet watermark"

  • Context and Importance: This term is the core of the asserted claims in the lead patents. Its construction will likely determine whether the accused functionality—allegedly the use of standard Quality of Service (QoS) bits in packet headers—constitutes infringement. Practitioners may focus on this term because the dispute appears to hinge on whether "packet watermark" can be broadly interpreted to read on conventional network traffic management fields or if it is limited to a more specific, proprietary data structure.

  • Intrinsic Evidence for Interpretation:

    • Evidence for a Broader Interpretation: The specification describes the invention as providing "a labeling scheme that can be handled by network infrastructures" to "prioritize data traffic" (U.S. Patent No. 7,287,275, col. 4:18-24), which could suggest the term covers any packet-level label used for prioritization, including standard QoS bits.
    • Evidence for a Narrower Interpretation: The abstract states the invention relates to a "computerized system for packaging data... to generate a bandwidth rights certificate" and uses the watermark for authentication (U.S. Patent No. 7,287,275, Abstract). This context, along with detailed discussions of generating watermark keys and hash outputs (U.S. Patent No. 7,287,275, col. 5:40-67), may support a narrower construction requiring a specific, generated data structure beyond pre-existing header fields.

  • The Term: "combining the packet watermark with each of the plurality of packets"

  • Context and Importance: This active step is a required element of the asserted process claims. The case may turn on whether simply setting or modifying bits in a pre-existing IP header constitutes "combining." A narrow construction might require a more complex integration of a separately generated watermark into the packet, while a broader one could cover standard header manipulation.

  • Intrinsic Evidence for Interpretation:

    • Evidence for a Broader Interpretation: The specification states that in IPv4, "there are option fields that can be exploited at any place in the transmission chain for writing/embedding... digital watermarks" (U.S. Patent No. 7,287,275, col. 3:37-43). This could support the view that modifying existing fields is a form of "combining."
    • Evidence for a Narrower Interpretation: The claim language recites a sequence of "generating a packet watermark" and then "combining" it with packets, which suggests two distinct steps. This may support an interpretation that "combining" requires an additive process where a newly created data structure (the watermark) is inserted into the packet, rather than merely modifying existing bits.

VI. Other Allegations

  • Indirect Infringement: The complaint alleges inducement on the basis that Defendant "instructed its customers to use the Business Enterprise Accused Products and Services in an infringing way" (Compl. ¶43, ¶74). It further alleges contributory infringement by asserting that the accused functionality has "no substantial non-infringing uses" (Compl. ¶58, ¶89).
  • Willful Infringement: Willfulness is alleged based on Defendant’s knowledge of the patents-in-suit "at least as early as the service of this complaint" (Compl. ¶54, ¶85). The complaint also makes general allegations of pre-suit knowledge based on "due diligence," "news coverage," and "blog postings," without providing specific factual support for these assertions (Compl. ¶61, ¶92).

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

  • A core issue will be one of definitional scope: can the term "packet watermark," as described in the context of a specialized system for authenticating and provisioning bandwidth, be construed broadly enough to cover the alleged use of standard Quality of Service (QoS) bits in conventional IP packet headers for network traffic management?
  • A key evidentiary question will be one of technical operation: what evidence will emerge to show whether Comcast's accused network infrastructure performs the discrete claimed steps of "generating" a watermark and then "combining" it with packets, or if it simply processes packets according to standard, non-infringing network protocols? The complaint’s high-level allegations will require specific technical proof to establish that the accused systems operate in the manner claimed by the patents.