DCT

1:22-cv-01178

DataCloud Tech LLC v. Liquid Web LLC

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Key Events
Amended Complaint

I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 1:22-cv-01178, D. Del., 12/13/2022
  • Venue Allegations: Venue is alleged to be proper in the District of Delaware because the Defendant is a Delaware corporation and therefore resides in the district.
  • Core Dispute: Plaintiff alleges that Defendant’s website hosting platforms infringe eight U.S. patents related to network communication, anonymous browsing, remote file access and management, application deployment, and system resource regulation.
  • Technical Context: The dispute centers on the underlying technologies that enable modern web hosting services, including server architecture, data routing, file management systems, and methods for deploying applications to end-users.
  • Key Procedural History: This filing is a First Amended Complaint. The complaint alleges that Defendant had knowledge of at least one of the patents-in-suit as of the filing of the original complaint, which is relevant to the allegation of willful infringement. The provided documents note that U.S. Patent No. 6,560,613 underwent an Inter Partes Review (IPR2021-00361), resulting in the cancellation of several claims, including asserted independent claim 12. Certificates of Correction were issued for three of the patents-in-suit.

Case Timeline

Date Event
2000-02-08 U.S. Patent No. 6,560,613 Priority Date
2000-04-04 U.S. Patent No. 7,209,959 Priority Date
2002-02-20 U.S. Patent No. 7,246,351 Priority Date
2003-05-06 U.S. Patent No. 6,560,613 Issued
2003-08-26 Certificate of Correction Issued for U.S. Patent No. 6,560,613
2007-03-13 U.S. Patent No. 8,370,457 Priority Date
2007-03-23 U.S. Patent No. 7,398,298 Priority Date
2007-04-24 U.S. Patent No. 7,209,959 Issued
2007-06-14 U.S. Patent No. RE44,723 Priority Date
2007-07-17 U.S. Patent No. 7,246,351 Issued
2007-11-20 Certificate of Correction Issued for U.S. Patent No. 7,246,351
2008-07-08 U.S. Patent No. 7,398,298 Issued
2008-07-08 U.S. Patent No. 8,615,555 Priority Date
2012-12-31 U.S. Patent No. 8,762,498 Priority Date
2013-02-05 U.S. Patent No. 8,370,457 Issued
2013-12-24 U.S. Patent No. 8,615,555 Issued
2014-01-21 U.S. Patent No. RE44,723 Issued
2014-03-18 Certificate of Correction Issued for U.S. Patent No. 8,370,457
2014-06-24 U.S. Patent No. 8,762,498 Issued
2022-12-13 First Amended Complaint Filed

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

U.S. Patent No. 7,209,959 - Apparatus, System, And Method For Communicating To A Network Through A Virtual Domain Providing Anonymity To A Client Communicating On The Network (Issued Apr. 24, 2007)

  • The Invention Explained:
    • Problem Addressed: The patent’s background section describes how the standard HTTP protocol allows a user's information, such as e-mail address and web history, to be recorded and traced by servers, creating privacy risks (’959 Patent, col. 1:57-65). Existing proxy server solutions are described as merely substituting one persistent identity for another without providing true session-based anonymity (’959 Patent, col. 2:9-19).
    • The Patented Solution: The invention proposes a system of three distinct components—a "deceiver," a "controller," and a "forwarder"—that collectively intercept and reroute a client's network requests to mask the client's true IP address from the destination server (’959 Patent, Abstract; col. 2:31-37). The system establishes a temporary, session-based virtual domain, making the client's activity anonymous and unique to that session (’959 Patent, Fig. 1).
    • Technical Importance: This approach provided a method for enabling anonymous network activity while also allowing for the creation of "virtual namespaces," which could be used to establish ad hoc, domain-specific communities or software applications for groups of users (’959 Patent, col. 2:49-63).
  • Key Claims at a Glance:
    • The complaint asserts independent claim 1 (Compl. ¶22).
    • Claim 1 is a method claim requiring the following essential steps:
      • In response to a client request, setting up a forwarding session between the client and a destination server.
      • Employing a "forwarder" disposed between the client and destination server to forward packets bilaterally.
      • Implementing the session such that neither the client nor the destination server is aware of the "forwarder's" employment.
      • Employing a "controller" configured to communicate with the "forwarder" and a domain name server (DNS).
      • The "controller" queries the DNS to resolve the destination's name and initiates communication with the "forwarder".
      • Employing a "deceiver" configured to communicate with the "controller" and the client.
      • The "deceiver" receives the client's request and initiates the "controller" to query the DNS.
      • In response to the "controller" receiving the answer from the DNS and communicating with the "forwarder", the forwarding session is initiated.

U.S. Patent No. 7,398,298 - Remote Access And Retrieval Of Electronic Files (Issued Jul. 8, 2008)

  • The Invention Explained:
    • Problem Addressed: The patent identifies a shortcoming in then-current remote access systems, which often do not provide users with the ability to manage the underlying data directory structures or receive confirmation that data has been successfully delivered to its intended target (’298 Patent, col. 1:55–2:13). This was particularly problematic in corporate environments where users needed more granular remote control (’298 Patent, col. 4:1-15).
    • The Patented Solution: The invention describes a system centered on a server-side computing application that manages requests for remote data directory control. The system uses a "profile data store" containing user permissions and directory information, allows users to select and modify specific directory structures, and provides notifications to confirm data delivery (’298 Patent, Abstract; col. 4:35-51).
    • Technical Importance: The claimed system aimed to give remote users more powerful, desktop-like control over their file systems, including the ability to manage directory structures and verify data delivery, which was an improvement over simple remote file access (’298 Patent, col. 4:30-35).
  • Key Claims at a Glance:
    • The complaint asserts independent claim 13 (Compl. ¶33).
    • Claim 13 is a system claim requiring:
      • A system for providing remote control of data directory structures across a communications network.
      • A computer server coupled to the network.
      • A remote data directory structure management computing application operating on the server to process user requests for directory management.
      • A "profile data store" with information relating to the data and directory structures accessible to users.
      • The "profile data store" is queried for accessible data directory structures.
      • A user selects a "single directory structure" from a plurality of structures for modification.
      • The system delivers the selected structure and data to the user over the network.
      • The system provides at least one notification to the user of the data delivery.
      • The system evaluates the "profile data store" to determine if requested data is accessible and delivers it with a confirmation notice.

  • Multi-Patent Capsule: U.S. Patent No. 8,615,555

    • Patent Identification: 8,615,555, "Remote Access And Retrieval Of Electronic Files," Issued Dec. 24, 2013.
    • Technology Synopsis: This patent, related to the ’298 Patent, describes a method for providing remote management of data directory structures. The method involves receiving sequential requests from a user to query a data store, send a file to a third-party electronic address, and modify the directory structure, with notifications sent to the user (’555 Patent, Abstract).
    • Asserted Claims: Independent Claim 1 (Compl. ¶44).
    • Accused Features: The Liquid Web Website Hosting interfaces are alleged to provide the claimed method for remote data and directory management (Compl. ¶45).

  • Multi-Patent Capsule: U.S. Patent No. 8,762,498

    • Patent Identification: 8,762,498, "Apparatus, System, And Method For Communicating To A Network Through A Virtual Domain," Issued Jun. 24, 2014.
    • Technology Synopsis: This patent, related to the ’959 Patent, discloses a method for anonymizing network traffic. A controller device determines a destination IP address based on a "virtual namespace destination address" received from a client, establishes a correlation between that IP and a forwarder's IP, and instructs the forwarder to send the client's request data to the destination (’498 Patent, Abstract).
    • Asserted Claims: Independent Claim 1 (Compl. ¶55).
    • Accused Features: Defendant's hosting platform is alleged to use this method to route traffic, for example through features like SNI Routing (Compl. ¶56).

  • Multi-Patent Capsule: U.S. Patent No. 6,560,613

    • Patent Identification: 6,560,613, "Disambiguating File Descriptors," Issued May 6, 2003.
    • Technology Synopsis: The patent addresses the problem that operating systems often use the same system calls to access both files stored on media and communication channels, making it difficult to selectively intercept calls for one type but not the other (’613 Patent, col. 2:26-31). The solution is a method to "disambiguate" file descriptors by intercepting system calls that create files, storing an indicator of the file type in a table, and then examining that table to determine the file type associated with a given descriptor (’613 Patent, Abstract).
    • Asserted Claims: Independent Claim 12 (Compl. ¶66). Analyst Note: IPR2021-00361 resulted in the cancellation of Claim 12.
    • Accused Features: The complaint alleges that Kernel-based Virtual Machine (KVM) technology, used in Defendant's products, employs the claimed method of disambiguating file descriptors by intercepting system calls (Compl. ¶67).

  • Multi-Patent Capsule: U.S. Patent No. 7,246,351

    • Patent Identification: 7,246,351, "System And Method For Deploying And Implementing Software Applications Over A Distributed Network," Issued Jul. 17, 2007.
    • Technology Synopsis: The patent describes a system for deploying applications to an Internet-enabled device. An "application assembler" on the device downloads text files containing program logic from a server, retrieves the logic, and assembles it into a functioning application with a graphical user interface (’351 Patent, Abstract).
    • Asserted Claims: Independent Claim 1 (Compl. ¶77).
    • Accused Features: Defendant's hosting and server management/control panel software is alleged to provide a system for deploying applications (e.g., websites with custom CSS/HTML/JavaScript) in a manner that infringes the patent (Compl. ¶78).

  • Multi-Patent Capsule: U.S. Patent No. 8,370,457

    • Patent Identification: 8,370,457, "Network Communication Through A Virtual Domain," Issued Feb. 5, 2013.
    • Technology Synopsis: This patent, related to the ’959 and ’498 patents, describes a method for establishing a forwarding IP address for a pre-defined combination of a client IP address and a destination IP address. When a data request is received from the client, the system identifies the pre-defined combination and forwards the request via the forwarding IP address (’457 Patent, Abstract).
    • Asserted Claims: Independent Claim 9 (Compl. ¶94).
    • Accused Features: The "advanced firewall settings in Cloud Firewall" are alleged to infringe by establishing translated IP addresses based on pre-defined combinations of client and destination IPs (Compl. ¶95).

  • Multi-Patent Capsule: U.S. Patent No. RE44,723

    • Patent Identification: RE44,723, "Regulating File Access Rates According To File Type," Issued Jan. 21, 2014.
    • Technology Synopsis: This patent describes a method for regulating file access rates to prevent denial-of-service attacks. The method involves intercepting a system call attempting to access a file, determining a process-specific access rate corresponding to the file's type, and regulating the process to access the file at that determined rate (’723 Patent, Abstract).
    • Asserted Claims: Independent Claim 1 (Compl. ¶105).
    • Accused Features: Defendant's hosting platform is alleged to use the claimed method to limit resource access and prevent Denial of Service (DoS) attacks (Compl. ¶106).

III. The Accused Instrumentality

  • Product Identification: The accused instrumentalities are "Liquid Web's website hosting platforms," collectively referred to as "Liquid Web Website Hosting" (Compl. ¶14). Specific product categories identified include "Dedicated Server Hosting," "Cloud Dedicated Servers," "Server Clusters," "HIPAA Compliant Hosting," and "Private Cloud Powered by VMware" (Compl. ¶14).
  • Functionality and Market Context: The complaint alleges these are platforms through which Defendant advertises, sells, and provides website hosting services to customers (Compl. ¶13). The functionality is described in the context of the infringement allegations and includes routing network traffic, managing server resources and user permissions, providing control panels for software deployment, and implementing security features like firewalls and DoS protection (Compl. ¶¶ 23, 34, 67, 78, 95, 106). The complaint references Defendant's webpages as exhibits for these services, such as the webpage for "Server Clusters" (Compl. ¶14, Ex. L) and for "HIPAA Compliant Hosting" (Compl. ¶14, Ex. M).

IV. Analysis of Infringement Allegations

’959 Patent Infringement Allegations

Claim Element (from Independent Claim 1) Alleged Infringing Functionality Complaint Citation Patent Citation
...setting up a forwarding session...between the client...and a destination server... Setting up a forwarding session from the internet to a WWW server. ¶23 col. 8:50-53
...the forwarding session employing a forwarder disposed between the client and the destination server to forward packets... A front-end server switch is disposed between the client and the WWW server to facilitate bilateral communications. ¶23 col. 2:34-37
...wherein the forwarding session is set up and implemented such that neither the client or the destination server is aware of the employment of the forwarder... The WWW server has a direct TCP connection between a local IP address and a client IP, so neither party is aware of the forwarder. ¶23 col. 8:56-61
...employing a controller configured to communicate...with the forwarder...and a domain name server... A firewall communicates with the front-end server switch and a DNS. ¶23 col. 2:34-37
...wherein the controller queries the domain name server to resolve the name of the destination website... The controller queries the DNS to resolve the name of www.liquidweb.com and initiates communication with the switch. ¶23 col. 6:3-9
...employing a deceiver configured to communicate with the controller...and the client...wherein the deceiver receives the request by the client... A router communicates with the firewall and client, receives the client's request, and sends data from the server in a manner that makes the router appear to be the source. ¶23 col. 2:34-37
  • Identified Points of Contention:
    • Scope Questions: The patent claims a specific three-part architecture of a "deceiver", "controller", and "forwarder". A central question will be whether standard network components in a web hosting environment (e.g., "router," "firewall," "front-end server switch") can be construed to meet the specific functional definitions of these claimed elements.
    • Technical Questions: Claim 1 requires that "neither the client or the destination server is aware of the employment of the forwarder." The complaint alleges this is met because of a direct TCP connection. The technical evidence required to prove or disprove this specific lack of awareness will be a key point of contention.

’298 Patent Infringement Allegations

Claim Element (from Independent Claim 13) Alleged Infringing Functionality Complaint Citation Patent Citation
a remote data directory structure management computing application operating on the computer server to process received requests for remote data directory management... The Liquid Web Website Hosting interfaces operate on a WWW server to process requests like adding a user. ¶34 col. 4:47-51
...a profile data store comprising information relating to the data and data directory structures...accessible to each of the participating users... A secure SQL server/database contains information on permissions, files, and operations available to users. ¶34 col. 5:6-14
...wherein the profile data store is queried for the data directory structures accessible to each of the participating users... The profile data store is queried to determine user permissions. ¶34 col. 7:1-3
...wherein a single directory structure from among a plurality of the data directory structures...is selected by each of the participating users for modification... A user selects a permission from one of the available roles for modification. ¶34 col. 7:3-10
...delivering the requested data along with a confirmation notice. The system delivers the requested data with a confirmation notice. ¶34 col. 7:22-24
  • Identified Points of Contention:
    • Scope Questions: Does a user selecting a permission from a list of "available roles" meet the claim limitation of selecting a "single directory structure from among a plurality of the data directory structures... for modification"? The definition of "directory structure" will be critical.
    • Technical Questions: What evidence does the complaint provide that the accused system performs the specific two-part notification process required by the claim: "at least one notification to the user of the data delivery" and delivering data "along with a confirmation notice"?

V. Key Claim Terms for Construction

For U.S. Patent No. 7,209,959:

  • The Term: "forwarder"
  • Context and Importance: This term is a central component of the claimed three-part architecture. The defendant's liability may depend on whether a standard network device, like the alleged "front-end server switch," falls within the scope of this term. Practitioners may focus on this term because its definition appears to require specific functionality beyond that of a generic network switch.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The patent states the "forwarder's" role is "to forward packets sent from the client to the destination server and to forward packets sent from the destination server to the client," a general function of many network devices (’959 Patent, col. 8:53-56).
    • Evidence for a Narrower Interpretation: The claim requires the forwarding session to be implemented such that "neither the client or the destination server is aware of the employment of the forwarder" (’959 Patent, col. 8:56-61). This suggests the "forwarder" is not just any intermediary device but one that operates with a specific level of stealth or network transparency not inherent in all switches or routers.

For U.S. Patent No. 7,398,298:

  • The Term: "profile data store"
  • Context and Importance: This is the core component that allegedly stores user permissions and directory information. The infringement analysis will turn on whether the accused "secure SQL server/database" meets the structural and functional requirements of the "profile data store" as claimed.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The patent summary describes the system in general terms, suggesting the data store could be a component that "manages the transmission and delivery of desired data, data structures, and data delivery notifications" (’298 Patent, col. 2:50-54), a function that could be performed by various database systems.
    • Evidence for a Narrower Interpretation: Claim 13 requires that the "profile data store" is queried for structures "accessible to each of the participating users" and that a "single directory structure...is selected...for modification." This suggests a specific data model and user interaction paradigm beyond a generic database that simply stores user data.

VI. Other Allegations

  • Indirect Infringement: The complaint alleges intentional inducement of infringement for the ’351 patent. The allegations state that Defendant encourages and instructs customers to use its hosting products in an infringing manner through its "support and sales activities," referencing exhibits described as webpages for "Server Clusters" and "HIPAA Compliant Hosting" (Compl. ¶¶ 80-81, 83; Ex. L, Ex. M).
  • Willful Infringement: The complaint alleges willful infringement of the ’351 patent, stating that Defendant had "knowledge of the ’351 patent as early as the original complaint" and continued its allegedly infringing activities (Compl. ¶82). The prayer for relief also specifically requests a finding that Defendant willfully infringed U.S. Patent No. 7,246,351 (Compl. ¶110(C)).

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

  • A core issue will be one of definitional scope: can the specialized architectural terms from the network anonymity patents (e.g., "deceiver", "forwarder") be construed to cover general-purpose components of a standard web hosting platform (e.g., "router," "firewall"), or do the claims require a specific, non-standard architecture?
  • A key evidentiary question will be one of functional specificity: do the accused hosting platforms, which provide broad file and application management capabilities, actually perform the precise, multi-step methods recited in the claims for remote directory management (’298 patent), application assembly (’351 patent), and file-type-based access regulation (’723 patent)?
  • A third central question relates to viability of assertion: given that asserted claim 12 of the ’613 patent was cancelled in an Inter Partes Review, the court will need to address the continued basis for this count of infringement.