DCT

2:18-cv-00464

Dynamic Data Tech LLC v. Apple Inc

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I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 2:18-cv-00464, E.D. Tex., 01/25/2019
  • Venue Allegations: Plaintiff alleges venue is proper in the Eastern District of Texas because Apple maintains regular and established places of business in the district, including retail locations in Plano and Frisco, and has committed acts of infringement within the district.
  • Core Dispute: Plaintiff alleges that Defendant’s hardware (e.g., iPhones, iPads, Apple TV) and software (e.g., Final Cut Pro X) infringe thirteen patents related to digital image and video processing technologies.
  • Technical Context: The patents-in-suit relate to foundational technologies in video compression, motion estimation, and image manipulation, which are critical for efficient digital video streaming, storage, and editing on consumer electronic devices.
  • Key Procedural History: This filing is a First Amended Complaint. The complaint notes that Plaintiff has filed contemporaneous patent enforcement actions against Apple affiliates in Germany and China, asserting related European and Chinese patents.

Case Timeline

Date Event
1998-12-11 U.S. Patent No. 6,996,175 Priority Date
1999-06-30 U.S. Patent No. 6,774,918 Priority Date
1999-08-22 U.S. Patent No. 6,996,177 Priority Date
2000-11-10 U.S. Patent No. 6,646,688 Priority Date
2001-06-29 U.S. Patent No. 6,714,257 Priority Date
2002-01-17 U.S. Patent No. 8,073,054 Priority Date
2002-03-11 U.S. Patent No. 7,571,450 Priority Date
2002-12-19 U.S. Patent No. 8,135,073 Priority Date
2003-04-03 U.S. Patent No. 7,542,041 Priority Date
2003-11-11 U.S. Patent No. 6,646,688 Issued
2004-03-30 U.S. Patent No. 6,714,257 Issued
2004-08-10 U.S. Patent No. 6,774,918 Issued
2005-06-03 U.S. Patent No. 7,894,529 Priority Date
2005-08-17 U.S. Patent No. 8,184,689 Priority Date
2005-12-30 U.S. Patent No. 7,982,799 Priority Date
2006-02-07 U.S. Patent No. 6,996,175 Issued
2006-02-07 U.S. Patent No. 6,996,177 Issued
2008-01-02 U.S. Patent No. 8,311,112 Priority Date
2009-06-02 U.S. Patent No. 7,542,041 Issued
2009-08-04 U.S. Patent No. 7,571,450 Issued
2011-02-22 U.S. Patent No. 7,894,529 Issued
2011-07-19 U.S. Patent No. 7,982,799 Issued
2011-12-06 U.S. Patent No. 8,073,054 Issued
2012-03-13 U.S. Patent No. 8,135,073 Issued
2012-05-22 U.S. Patent No. 8,184,689 Issued
2012-11-13 U.S. Patent No. 8,311,112 Issued
2019-01-25 First Amended Complaint Filed

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

U.S. Patent No. 8,135,073 - Enhancing Video Images Depending On Prior Image Enhancements

  • Issued: March 13, 2012

The Invention Explained

  • Problem Addressed: The complaint states that the patent addresses the need to reduce the processing capacity required to provide video enhancements (Compl. ¶28).
  • The Patented Solution: The invention is a video decoder that enhances video quality with minimal additional hardware cost by reusing enhancement information from a previously decoded frame (Compl. ¶29). The decoder determines a "re-mapping strategy" for a decoded first frame using a region-based analysis, and then applies that same strategy to "re-map one or more regions of the second frame" that correspond to the enhanced regions of the first frame (Compl. ¶33).
  • Technical Importance: This approach enables enhanced video quality with minimal additional hardware costs for the components required to process the video data (Compl. ¶29).

Key Claims at a Glance

  • The complaint asserts at least independent claim 14 (Compl. ¶175).
  • The essential elements of claim 14, based on the complaint's description, include:
    • receiving a video stream with an encoded first frame and an encoded second frame, where the second frame's encoding depends on the first
    • the second frame including motion vectors defining correspondence between its regions and regions of the first frame
    • a decoding unit that recovers the motion vectors for the second frame
    • a processing component that determines a re-mapping strategy for video enhancement of the decoded first frame using a region-based analysis
    • re-mapping the first frame using the strategy
    • re-mapping one or more regions of the second frame depending on the re-mapping strategy for corresponding regions of the first frame (Compl. ¶154).

U.S. Patent No. 6,714,257 - Color Key Preservation During Sample Rate Conversion

  • Issued: March 30, 2004

The Invention Explained

  • Problem Addressed: When scaling or filtering a "color-keyed" image (such as a "greenscreen" shot), standard image processing can cause color blending at the edges of objects, introducing visible artifacts when a background is inserted ('257 Patent, col. 1:11-46; Compl. ¶38).
  • The Patented Solution: The invention separates the color-keyed image into two components: a "key-only image" containing information about the keyed regions, and a "key-extracted image" containing the non-keyed foreground content ('257 Patent, col. 3:36-44). These two components are scaled independently and then merged back together, which preserves sharp edges and prevents color bleeding artifacts ('257 Patent, Abstract; Compl. ¶36).
  • Technical Importance: The method allows for the scaling and filtering of color-keyed images so that keyed regions can be replaced with background information "without introducing visible artifacts" (Compl. ¶38).

Key Claims at a Glance

  • The complaint asserts at least independent claim 9 (Compl. ¶196).

  • The essential elements of claim 9 are:

    • creating a key-only image corresponding to key regions in the keyed image
    • scaling the key-only image to form a scaled key-only image
    • scaling the keyed image to form a scaled keyed image
    • merging the scaled key-only image and the scaled keyed image ('257 Patent, col. 6:23-31).

  • U.S. Patent No. 8,073,054, Unit For And Method Of Estimating A Current Motion Vector, Issued December 6, 2011

    • Technology Synopsis: The patent discloses a motion estimation unit for a group of pixels in an image (Compl. ¶43). The invention aims to achieve faster convergence in finding appropriate motion vectors by generating a set of candidate vectors from previously estimated motion vectors and adding a "further candidate motion vector" to this set, which is calculated based on two prior motion vectors (Compl. ¶¶44, 47).
    • Asserted Claims: At least claim 1 (Compl. ¶213).
    • Accused Features: The H.265/HEVC-compliant hardware encoders in Apple's A11, A12, and A12X Bionic SoCs, as implemented in products like the iPhone 8 and later (Compl. ¶¶205, 206).

  • U.S. Patent No. 6,774,918, Video Overlay Processor with Reduced Memory And Bus Performance Requirements, Issued August 10, 2004

    • Technology Synopsis: The patent describes a method for providing an overlay, such as a cursor or subtitles, on an on-screen display (OSD) (Compl. ¶¶52, 248). OSD data is downloaded in bursts separated by gaps; during these gaps, a portion of the overlay data is downloaded (Compl. ¶¶54, 55). This approach reduces the on-chip memory required, as only a portion of the overlay needs to be stored at any one time (Compl. ¶57).
    • Asserted Claims: At least claim 18 (Compl. ¶258).
    • Accused Features: Apple products that implement HTTP Live Streaming ("HLS"), such as iPhones, iPads, and Apple TV (Compl. ¶239). The HLS protocol allegedly downloads display data (e.g., video) and overlay data (e.g., subtitles) in separate segments during gaps (Compl. ¶¶242, 251-252).

  • U.S. Patent No. 8,184,689, Method Video Encoding And Decoding Preserving Cache Localities, Issued May 22, 2012

    • Technology Synopsis: The patent discloses a method to reduce processing time and power consumption in video encoding/decoding by minimizing off-chip memory accesses (Compl. ¶62). This is achieved by simultaneously encoding or decoding more than one image of a video stream and using one of the simultaneously processed images as a reference for another, facilitating "access sharing" to a subset of image data held in a first, faster memory (e.g., on-chip cache) (Compl. ¶¶62, 65).
    • Asserted Claims: At least claim 1 (Compl. ¶279).
    • Accused Features: Apple devices implementing iOS 10.3 or later, such as iPhones, iPads, and Apple TV, which contain the A11 processor and its "big.LITTLE architecture" that enables asymmetric multiprocessing and a new video processor for encoding/decoding (Compl. ¶¶267, 269, p. 78).

  • U.S. Patent No. 6,996,177, Motion Estimation, Issued February 7, 2006

    • Technology Synopsis: The patent describes a method for motion estimation in picture signal processing that reduces the load on the CPU (Compl. ¶¶68, 73). The method involves a block-based estimation process to determine a "most frequently occurring block-based motion vector" (Compl. ¶¶69, 70). This frequently occurring vector is then used in a global motion vector estimation process to obtain a global motion vector, which in turn is applied as a candidate vector back into the block-based process (Compl. ¶¶71, 72).
    • Asserted Claims: At least claim 1 (Compl. ¶310).
    • Accused Features: Apple products that perform H.265 video encoding, such as the iPhone 8 and later, which contain hardware-based HEVC encoders (Compl. ¶¶288, 289).

  • U.S. Patent No. 8,311,112, System And Method For Video Compression Using Predictive Coding, Issued November 13, 2012

    • Technology Synopsis: The patent discloses a system for video compression using predictive coding on a macroblock of a video frame (Compl. ¶77). A key aspect is that a set of pixels within the macroblock is coded using reference pixels from the same video frame (intra-frame coding), while the rest of the macroblock is coded using reference pixels from at least one other video frame (inter-frame coding) (Compl. ¶¶77-79).
    • Asserted Claims: At least claim 11 (Compl. ¶338).
    • Accused Features: Apple products performing H.265 encoding, such as the iPhone 8 and later, containing hardware-based HEVC encoders (Compl. ¶¶319, 320).

  • U.S. Patent No. 6,646,688, High Quality Video and Graphics Pipeline, Issued November 11, 2003

    • Technology Synopsis: The patent discloses a video/graphics data processing method where a stream of data is pre-processed (Compl. ¶83). The method involves processing a "color key" from the pre-processed data, which can include substituting the color key with a pre-selected color, and then processing and transforming the resulting data to output a final result (Compl. ¶¶84, 85).
    • Asserted Claims: At least claim 6 (Compl. ¶357).
    • Accused Features: Apple Final Cut Pro X, which provides chroma key capabilities for video and graphics processing (Compl. ¶¶347, 349).

  • U.S. Patent No. 7,894,529, Method And Device For Determining Motion Vectors, Issued February 22, 2011

    • Technology Synopsis: The patent describes a method for determining motion vectors for individual regions of an image, aiming to increase resolution during motion estimation (Compl. ¶¶88, 89). An image is subdivided into blocks, and a motion estimation technique generates a modified motion vector for a first block by identifying a second block through which the first block's vector passes, and then generating the modified vector as a function of the second block's vector (Compl. ¶¶91-93).
    • Asserted Claims: At least claim 1 (Compl. ¶390).
    • Accused Features: Apple products capable of decoding video data using the H.265 standard, such as the iPhone 6s and later (Compl. ¶366).

  • U.S. Patent No. 7,542,041, Runtime Configurable Virtual Video Pipeline, Issued June 2, 2009

    • Technology Synopsis: The patent discloses a dynamically configurable multi-pipeline processing system (Compl. ¶97). The system includes multiple pipelines, each with a homogenous set of core functions, and a separate pool of auxiliary function blocks (Compl. ¶100). These auxiliary functions can be selectively inserted between the core functions of select pipelines, allowing for flexible and dynamic configuration (Compl. ¶¶100, 103).
    • Asserted Claims: At least claim 1 (Compl. ¶420).
    • Accused Features: Apple devices that implement iOS 10.3 or later, including iPhone, iPad, and Apple TV (Compl. ¶399).

  • U.S. Patent No. 7,571,450, System For And Method Of Displaying Information, Issued August 4, 2009

    • Technology Synopsis: The patent discloses a method that allows a user's selection of a certain type of information on a first service (e.g., a TV channel) to persist when the user switches to a second service (Compl. ¶109). A user selection made on the first service is used to automatically filter and select semantically related data elements from the stream of the second service for display, without requiring the user to navigate menus again (Compl. ¶¶110, 117).
    • Asserted Claims: At least claim 8 (Compl. ¶437).
    • Accused Features: Apple products implementing HTTP Live Streaming ("HLS"), such as iPhones, iPads, and Apple TV (Compl. ¶429).

  • U.S. Patent No. 7,982,799, Method And Device For Interpolation Of An Image Information Value For Pixel Of An Interline, Issued July 19, 2011

    • Technology Synopsis: The patent discloses a method for interpolating pixel values in an interlaced image to reduce artifacts (Compl. ¶¶128, 129). To determine the optimal direction for interpolation, the method ascertains a direction quality value by selecting a group of at least two pixels and determining a single direction quality value for each pixel in the group, which is then used to create a combined direction quality value for the group as a whole (Compl. ¶¶132-134).
    • Asserted Claims: At least claim 1 (Compl. ¶496).
    • Accused Features: Apple products capable of decoding video using the H.265 standard, such as the iPhone 6s and later (Compl. ¶479).

  • U.S. Patent No. 6,996,175, Motion Vector Estimation, Issued February 7, 2006

    • Technology Synopsis: The patent describes a system for recursive motion vector estimation that aims to keep the computational load low (Compl. ¶¶121, 122). Candidate vectors are generated from stored vectors, one is selected, and this selected vector is then used to generate several "test vectors" (Compl. ¶121). Finally, one of the test vectors is used to generate an output vector, with convergence of the algorithm being sped up by performing post-processing inside the recursion loop (Compl. ¶¶121, 124).
    • Asserted Claims: At least claim 1 (Compl. ¶470).
    • Accused Features: Apple products performing H.265 encoding, such as the iPhone 8 and later (Compl. ¶455).

III. The Accused Instrumentality

Product Identification

The complaint accuses two main categories of Apple products:

  1. Hardware with Video Codecs: Apple's iPhones (iPhone 6s and later), iPads, and Apple TV products containing A9, A10, A11, A12, and A12X series System-on-Chips ("SoCs") are accused of infringing multiple patents related to video encoding and decoding (Compl. ¶¶138, 205, 288).
  2. Video Editing Software: Apple Final Cut Pro X is accused of infringing patents related to color key image processing (Compl. ¶184).

Functionality and Market Context

  • The accused hardware products implement the H.265/High Efficiency Video Coding (HEVC) standard for video compression and decompression (Compl. ¶¶138, 141). This functionality is fundamental to modern video capabilities, such as streaming high-definition video and recording video in space-efficient formats (Compl. ¶141). The complaint alleges that Apple identified HEVC decoding and encoding as a "critical 'value proposition'," improving encoding efficiency by up to 40% over the prior standard (Compl. ¶143, p. 30).
  • The accused software, Final Cut Pro X, is a professional video editing application. Its accused "keying functionality" allows a user to combine two video clips by processing the foreground clip to eliminate a specific color or luma value (e.g., a green screen) and then combining it with a background clip (Compl. ¶186, p. 49).

IV. Analysis of Infringement Allegations

’073 Patent Infringement Allegations

Claim Element (from Independent Claim 14) Alleged Infringing Functionality Complaint Citation Patent Citation
a video decoder comprising: an input for receiving a video stream containing encoded frame based video information including an encoded first frame and an encoded second frame, wherein the encoding of the second frame depends on the encoding of the first frame... The accused Apple products receive and decode video data encoded using inter-frame prediction compliant with the HEVC standard, where a second frame is encoded based on a predecessor (first) reference frame (Compl. ¶¶149-150, 154). ¶149, ¶154 col. 8:50-58
...the encoding of the second frame includes motion vectors indicating differences in positions between regions of the second frame and corresponding regions of the first frame, the motion vectors define correspondence between regions... The HEVC standard implemented by the accused products uses motion vectors to define the displacement of a block in a current picture relative to a previously decoded picture (Compl. ¶¶150, 165). ¶165, ¶171 col. 7:45-55
a decoding unit for decoding the video stream, wherein the decoding unit recovers the motion vectors for the second stream; The accused products' decoders comply with the HEVC standard, which requires recovering motion vectors from the video stream during the decoding process for prediction units in inter prediction mode (Compl. ¶¶146, 169). ¶169, ¶171 col. 8:1-15
a processing component configured to determine a re-mapping strategy for video enhancement of the decoded first frame using a region-based analysis, re-map the first frame using the re-mapping strategy... The accused products implement the HEVC standard's Sample Adaptive Offset (SAO) feature, which is alleged to be a region-based analysis that classifies samples within a region and applies an offset, thereby re-mapping pixel values of the decoded first (reference) frame (Compl. ¶¶155, 157-158). ¶155, ¶158, ¶160 col. 8:1-15
...and re-map one or more regions of the second frame depending on the re-mapping strategy for corresponding regions of the first frame. The application of SAO to the first (reference) frame allegedly increases its quality, which affects the subsequent decoding of the second frame. The complaint alleges that the remapping policy applied to the second frame is therefore based on the application of the policy to the first frame (Compl. ¶¶161, 164). ¶161, ¶164 col. 8:50-58

Identified Points of Contention

  • Scope Questions: A central issue may be whether compliance with the HEVC video compression standard necessarily results in infringement of Claim 14. The analysis may focus on whether the standard’s Sample Adaptive Offset (SAO) functionality, as implemented in Apple's hardware, constitutes the claimed “re-mapping strategy for video enhancement of the decoded first frame using a region-based analysis.” The complaint presents a diagram of the SAO process, which it annotates to show that "The SAO Remaps A Region Of The First Frame Based On Luma Analysis" (Compl. p. 38).
  • Technical Questions: A key factual question will be whether re-mapping the first frame (the reference picture) via SAO has the claimed effect of "re-map[ping] one or more regions of the second frame depending on the re-mapping strategy." The dispute may explore whether improving a reference picture's quality inherently constitutes a "re-mapping" of a subsequent frame that is predicted from it, or if this is a mischaracterization of the technical process.

’257 Patent Infringement Allegations

Claim Element (from Independent Claim 9) Alleged Infringing Functionality Complaint Citation Patent Citation
creating a key-only image corresponding to key regions in the keyed image; The accused Final Cut Pro X software creates a "keyed image" through a "mask effect" which corresponds to the key regions of the original image (Compl. ¶191). ¶191 col. 3:36-44
scaling the key-only image to form a scaled key-only image; The software's "Chroma" controls allegedly allow a user to adjust the isolated range of hue and saturation to define a "keyed matte," which the complaint equates to scaling a key-only image (Compl. ¶192). ¶192 col. 3:45-48
scaling the keyed image to form a scaled keyed image; The software allows a user to "resize or reposition the foreground object to better fit with the background," which is alleged to be scaling the keyed image (Compl. ¶194). A screenshot shows a user dragging a corner handle to resize the clip (Compl. p. 51). ¶193, ¶194 col. 3:48-53
and merging the scaled key-only image and the scaled keyed image. The software merges the resized foreground object (scaled keyed image) and the defined matte (scaled key-only image) with a background clip to create a "composited output" (Compl. ¶¶187, 195). ¶195 col. 3:54-57

Identified Points of Contention

  • Scope Questions: The infringement theory relies on equating software interface elements (e.g., "mask effect," "keyed matte") with the specific structures recited in the claim (e.g., "key-only image"). A central question will be whether the internal data structures and processes within Final Cut Pro X actually create and manipulate a distinct "key-only image" as that term is understood from the patent's specification, or if the software achieves a similar result through a different technical method. The complaint provides a screenshot from Apple's documentation showing the "mask effect" applied to a foreground clip (Compl. p. 50).
  • Technical Questions: The analysis may focus on whether adjusting "softness" and "tolerance" graphs for a "keyed matte" (Compl. ¶192) is technically equivalent to the claimed step of "scaling the key-only image."

V. Key Claim Terms for Construction

For the ’073 Patent

  • The Term: "re-mapping strategy"
  • Context and Importance: This term is central because the infringement allegation hinges on whether the HEVC standard's Sample Adaptive Offset (SAO) process qualifies as the claimed "re-mapping strategy." The definition will determine if a standard-compliant decoder necessarily infringes.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The complaint does not cite specific definitions from the patent, but its theory suggests that any process that systematically modifies pixel values in a region based on an analysis (like SAO) could be considered a "re-mapping strategy."
    • Evidence for a Narrower Interpretation: The complaint does not provide sufficient detail for analysis of this element.

For the ’257 Patent

  • The Term: "key-only image"
  • Context and Importance: The entire infringement theory for this patent depends on whether the "mask effect" or "keyed matte" generated by Final Cut Pro X constitutes a "key-only image" that is then scaled and merged as the claim requires. Practitioners may focus on whether this term requires a distinct data object with specific properties.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The specification notes that the extracted color-keyed regions can be stored in the memory structure typically used for an optional fourth component, such as a transparency or texture parameter ('257 Patent, col. 3:1-9). This may support an argument that any data structure representing the keyed regions, like an alpha channel or mask, constitutes a "key-only image."
    • Evidence for a Narrower Interpretation: Claim 9 recites "creating a key-only image" and then "scaling the key-only image" as distinct steps. This may suggest that the "key-only image" must be a discrete, scalable data entity, not merely a set of parameters or a transient processing state. The specification describes it as an image that "contains only color-keyed pixels" ('257 Patent, col. 3:39-41).

VI. Other Allegations

  • Indirect Infringement: The complaint alleges Apple induces infringement of the asserted patents by providing its products along with "documentation and training materials that cause customers and end users... to utilize the products in a manner that directly infringe" (e.g., Compl. ¶¶178, 199, 473). Specific examples cited include Apple's user manuals, product support, and developer websites which allegedly instruct on the use of the accused HEVC and chroma key functionalities (Compl. ¶¶47, 53).
  • Willful Infringement: Willfulness is alleged based on Apple's knowledge of the patents since at least the service of the Original Complaint in the matter (Compl. ¶¶177, 198). The complaint further alleges the patents are "well-known within the industry as demonstrated by multiple citations" and that Apple is infringing in a manner "best described as willful, wanton, malicious... characteristic of a pirate" (e.g., Compl. ¶¶179, 200).

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

  • A central issue for a substantial portion of the asserted patents will be one of standard equivalence: does compliance with the H.265/HEVC video standard, as implemented in Apple’s hardware, necessarily perform the specific steps recited in the asserted method and apparatus claims, or are there non-infringing ways to implement the standard?
  • A key evidentiary question for the software-focused patents will be one of functional mapping: does the accused Final Cut Pro X software, through its "keying" and "masking" user interface functions, perform the specific, multi-step process of creating, independently scaling, and merging a distinct "key-only image" as required by Claim 9 of the ’257 Patent, or does it achieve a similar visual outcome through a fundamentally different technical process?
  • The case may also present a significant damages question: given the large number of asserted patents, which originate from the historical Philips R&D portfolio and cover various aspects of video processing, a core dispute will likely involve determining the appropriate reasonable royalty, including whether the patented technologies are essential to the accused standards and products and how to apportion value among the thirteen asserted patents.