DDC Technology LLC v. Sanho Corp

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: DDC Technology, LLC (Delaware)
  • Defendant: Sanho Corporation (Delaware)
  • Plaintiff’s Counsel: O & Kelly, O'Rourke
• Case Identification: 1:21-cv-00152, D. Del., 02/04/2021
• Venue Allegations: Venue is asserted in the District of Delaware on the basis that Defendant is a Delaware corporation and therefore resides in the judicial district.
• Core Dispute: Plaintiff alleges that Defendant’s HYPER++VR Virtual Reality Headsets infringe four patents related to virtual reality viewers that use an external mechanical input to interact with an enclosed smartphone's touchscreen.
• Technical Context: The technology pertains to low-cost, smartphone-based virtual reality viewers, which rely on an integrated mechanical linkage to provide user input, eliminating the need for device-specific electronics or wireless controllers.
• Key Procedural History: The patents-in-suit were originally assigned to DODOcase, Inc., which the complaint states was forced to cease production of its own products due to price pressure from competing importers before assigning the patents to Plaintiff DDC Technology. The complaint notes a history of prior litigation involving a licensee that included proceedings in district court, the Court of Appeals for the Federal Circuit, and the Patent Trial and Appeal Board (PTAB). Subsequent to the filing of this complaint, an Inter Partes Review of U.S. Patent No. 9,811,184 resulted in the cancellation of asserted independent claim 12 and the disclaimer of several other claims, a development that may significantly impact the viability of the infringement count related to that patent.

Case Timeline

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

U.S. Patent No. 9,420,075 - "Virtual Reality Viewer and Input Mechanism", issued Aug. 16, 2016

The Invention Explained

• Problem Addressed: The patent's background describes the difficulty of interacting with a smartphone's touchscreen once it is concealed within a virtual reality viewer housing. It notes that existing solutions like magnetic inputs are often incompatible with many smartphones, while dedicated controllers are cumbersome and add complexity (ʼ075 Patent, col. 1:44-2:12).
• The Patented Solution: The invention proposes a viewer with an integrated electro-mechanical input mechanism. A user interacts with an external component (e.g., a lever), which actuates an internal mechanism to physically touch the smartphone's screen (ʼ075 Patent, Abstract). This mechanism features an "electrical shield" that, when moved into an extended position, contacts the touchscreen to register an input, thereby providing a universal, non-electronic solution for interactivity (ʼ075 Patent, col. 7:6-39; Fig. 7C).
• Technical Importance: This approach enabled the creation of low-cost, broadly compatible interactive VR viewers that did not depend on a smartphone's specific sensor locations or require external wireless peripherals (ʼ075 Patent, col. 2:8-12).

Key Claims at a Glance

• The complaint asserts at least independent claim 1 (Compl. ¶27).
• Essential elements of Claim 1 include:
  • A housing configured to receive a mobile electronic device.
  • An input mechanism accessible from the exterior and moveable between a first position and an extended position.
  • The input mechanism comprising an "electrical shield" with a surface.
  • Wherein "only a portion of the surface of the electrical shield is configured to contact a central region of the touchscreen" when the mechanism is in the extended position.
• The complaint reserves the right to assert dependent claims 2-9 and 17 (Compl. ¶33).

U.S. Patent No. 9,723,117 - "Virtual Reality Viewer and Input Mechanism", issued Aug. 1, 2017

The Invention Explained

• Problem Addressed: Like its parent, the ’117 Patent addresses the challenge of providing user input to a touchscreen-enabled device that is enclosed within a VR viewer housing (’117 Patent, col. 1:55-2:16).
• The Patented Solution: The patent describes a viewer with a "user input" accessible from the exterior that is "conductively coupled" to a "touchscreen input" inside the housing. When the user manipulates the external input, the internal touchscreen input makes physical contact with the phone's screen to register a touch event (’117 Patent, Abstract). The specification describes this as a passive, mechanical system that translates external user actions into screen taps without dedicated electronics (’117 Patent, col. 5:9-6:51).
• Technical Importance: This patent, part of the same inventive family, further refines the legal description of a device-agnostic mechanical input system for the emerging smartphone VR market.

Key Claims at a Glance

• The complaint asserts at least independent claim 12 (Compl. ¶39).
• Essential elements of Claim 12 include:
  • A first lens and a second lens, and a housing to hold them and a mobile device.
  • A user input accessible from the exterior with a first and second position.
  • A "touchscreen input conductively coupled to the user input."
  • Wherein the touchscreen input is in physical contact with the touchscreen when the user input is in the second position.
• The complaint reserves the right to assert dependent claims 13-15 and 19-20 (Compl. ¶45).

U.S. Patent No. 9,811,184 - "Virtual Reality Viewer and Input Mechanism", issued Nov. 7, 2017

• Technology Synopsis: Belonging to the same patent family, the ’184 patent addresses the problem of user interaction with an enclosed smartphone in a VR viewer. The claimed solution involves an external user input that is "conductively coupled" to an internal "touchscreen input," which physically contacts the device's screen when actuated (’184 Patent, Abstract; col. 1:49-2:10).
• Asserted Claims: Independent claim 12 (Compl. ¶51).
• Accused Features: The accused features include the headset's external "Google Cardboard Trigger Button" and the internal mechanism that it actuates to touch the smartphone screen (Compl. ¶¶ 55-56).

U.S. Patent No. 10,528,199 - "Virtual Reality Viewer and Input Mechanism", issued Jan. 7, 2020

• Technology Synopsis: The ’199 patent also describes a mechanical input for a smartphone-based VR viewer. The claims focus on a "frame" for holding the device and lenses, and a "touchscreen input" where "only a portion of the surface" is configured to contact a "central region" of the touchscreen when activated (’199 Patent, Abstract; col. 2:45-3:2).
• Asserted Claims: Independent claims 1 and 30 (Compl. ¶63).
• Accused Features: The allegations target the viewer's frame and its "touchscreen input" (the "Google Cardboard Trigger Button" mechanism) that contacts the central area of an enclosed smartphone's screen (Compl. ¶¶ 66-67, 71-73).

III. The Accused Instrumentality

Product Identification

• The complaint identifies Sanho's HYPER++VR Virtual Reality Headsets as the "Accused Products" (Compl. ¶16).

Functionality and Market Context

• The Accused Products are virtual reality viewers designed to hold a smartphone, which serves as the display (Compl. ¶17). The complaint alleges the headsets include an external input mechanism that Sanho refers to as a "Google Cardboard Trigger Button" (Compl. ¶21). Actuating this button allegedly causes an internal "touchscreen button," comprising a capacitive material, to contact the smartphone's screen and "perform screen tap" actions (Compl. ¶¶ 21-23). An image from the product packaging included in the complaint identifies the "Google cardboard trigger" as a feature alongside others like 3D surround sound headphones and focus adjustment (Compl. p. 4). The complaint also alleges that Sanho is the official U.S. distributor of the BOBOVR Z4 headset (Compl. ¶11).

IV. Analysis of Infringement Allegations

’075 Patent Infringement Allegations

’117 Patent Infringement Allegations

Identified Points of Contention

• Scope Questions: The analysis may focus on whether the Accused Product's internal "touchscreen button" made of "capacitive material" (Compl. ¶23) meets the definition of an "electrical shield" as recited in the ’075 patent. A defendant could argue that "electrical shield" implies a structure or material property beyond that of a simple capacitive nub.
• Technical Questions: A factual dispute may arise regarding whether the accused mechanism contacts "only a portion" of a "central region" of the touchscreen as required by claim 1 of the ’075 patent. Evidence of the actual contact point and area across various compatible smartphones could be central to this inquiry.

V. Key Claim Terms for Construction

"electrical shield" (’075 Patent, Claim 1)

• Context and Importance: This term defines the operative internal component of the input mechanism. Its construction will be critical for determining whether the material used in the Accused Product's internal "touchscreen button" falls within the scope of the claim.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The specification suggests a functional definition, describing the component as a "material configured to... induce a touch event that is electrically detectable" and provides a wide range of examples, including "metallized textile/fabric or films," "conductive polymers," and "conductive inks" (’075 Patent, col. 8:1-15). This may support construing the term to cover any material that can activate a capacitive screen.
  • Evidence for a Narrower Interpretation: The use of the word "shield" could suggest a specific purpose or structure. The specification mentions that materials like "conductive foam gaskets used in Electromagnetic Interference (EMI) or Radio Frequency Interference (RFI) applications" could be used, which may support an argument that the term requires properties or a structure associated with shielding (’075 Patent, col. 9:39-43).

"conductively coupled" (’117 Patent, Claim 12)

• Context and Importance: This term describes the relationship between the external button and the internal component that touches the screen. The dispute may turn on whether this requires an electrically conductive path or if a purely mechanical linkage that "conducts" the user's force is sufficient.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The patent's figures and description illustrate a mechanical linkage (e.g., coupling 730 in Fig. 7A) that physically transfers motion from the external lever to the internal touch component (’117 Patent, col. 7:48-8:11). This context may support a construction where "conductively coupled" means functionally linked to conduct the user's intended input to the screen.
  • Evidence for a Narrower Interpretation: A defendant may argue that the plain meaning requires electrical conductivity. The specification provides an example where "input leads can be conductive wires/leads that electrically couple the user inputs... to touchscreen inputs," which could be used to argue for a narrower, electrical definition (’117 Patent, col. 6:5-8).

VI. Other Allegations

Willful Infringement

• The complaint does not include an explicit count for willful infringement. However, it alleges for each asserted patent that the defendant "received notice of the... Patent, and the likelihood of its infringement thereof, as of the filing of this Complaint" (Compl. ¶¶ 34, 46, 58, 75). These allegations may form the basis for seeking enhanced damages for any post-filing infringement.

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

• A core issue will be one of definitional scope: can the term "electrical shield," which appears in the ’075 patent, be construed to cover the "touchscreen button" made of "capacitive material" as alleged in the complaint, or does the term imply a more specific structure or material property that the accused device lacks?
• A key evidentiary question will be one of locational and functional precision: can Plaintiff provide evidence that the accused product's input mechanism contacts "only a portion" of a "central region" of the touchscreen, as required by claims in the patent family, and does the term "conductively coupled" require electrical conductivity or does it read on the purely mechanical linkage used in the accused device?
• A dispositive procedural question will be the effect of the post-filing IPR certificate for U.S. Patent No. 9,811,184, which cancelled the asserted independent claim 12. The court will need to determine how to proceed with the infringement count based on a claim that the USPTO has since found to be unpatentable.