Uniloc 2017 LLC v. Barnes & Noble Inc

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Uniloc 2017 LLC (Delaware)
  • Defendant: Barnes & Noble, Inc. (Delaware)
  • Plaintiff’s Counsel: Prince Lobel Tye LLP; Nelson Bumgardner Albritton P.C.
• Case Identification: 2:18-cv-00511, E.D. Tex., 11/17/2018
• Venue Allegations: Plaintiff alleges venue is proper in the Eastern District of Texas because Defendant Barnes & Noble, Inc. has regular and established places of business in the district and makes, uses, offers for sale, sells, and imports the accused products for customers within the district.
• Core Dispute: Plaintiff alleges that Defendant’s NOOK platform for lending eBooks infringes a patent related to a method and system for sharing digital media in a controlled, one-copy-at-a-time environment.
• Technical Context: The technology concerns systems for managing digital rights and applying principles analogous to the "first sale doctrine" to digital files, allowing for lending and sharing while preventing simultaneous use or unauthorized duplication.
• Key Procedural History: The complaint alleges that Defendant will be on notice of the patent upon service of a complaint in a separate matter (2:18-cv-00394), which may form the basis for a willfulness allegation.

Case Timeline

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

U.S. Patent No. 8,484,089 - "METHOD AND SYSTEM FOR A HOSTED DIGITAL MUSIC LIBRARY SHARING SERVICE"

• Patent Identification: U.S. Patent No. 8,484,089, "METHOD AND SYSTEM FOR A HOSTED DIGITAL MUSIC LIBRARY SHARING SERVICE", issued July 9, 2013 (’089 Patent).

The Invention Explained

• Problem Addressed: The patent addresses the legal and technical challenges of applying the "first sale doctrine"—which allows owners of physical copyrighted works like books or CDs to lend or resell them—to digital media. (’089 Patent, col. 1:20-50). Unlike physical items, digital files can be perfectly duplicated, and licensing agreements for digital downloads often prohibit sharing or resale, creating a need for a system that can facilitate legitimate sharing without enabling infringing copying. (’089 Patent, col. 1:32-44).
• The Patented Solution: The invention is a hosted web service that maintains a single, authoritative copy of a digital media file (e.g., a song) within its system. When a subscriber "borrows" the file, the service transfers access from the owner's account to the borrower's account and simultaneously makes the file inaccessible to the owner. (’089 Patent, col. 2:7-19). This process, illustrated in the flowchart of Figure 6, is designed to mimic the lending of a physical object by ensuring only one user can access the file at a time, thereby preserving the copyright holder's rights. (’089 Patent, col. 5:25-col. 6:33).
• Technical Importance: The described technical approach provides a framework for creating a controlled secondary market for digital goods, balancing consumer desire for sharing with the need for copyright enforcement in a digital context. (’089 Patent, col. 2:7-12).

Key Claims at a Glance

• The complaint asserts independent claims 1 and 10, as well as dependent claims 2, 5-7, 12, 14-16, and 19-20. (Compl. ¶¶10-12).
• Independent Claim 1 (Method Claim):
  • A computer-implemented method performed by a server hosting a web service for sharing a digital copy of media.
  • Receiving a request to borrow the digital copy from a borrower.
  • Verifying that the digital copy was purchased by the owner through an ecommerce store component of the web service and has not been downloaded to a personal computer by the owner.
  • If verification is successful, copying the digital copy from the owner's account to the borrower's account, thereby enabling access for the borrower.
  • And removing the digital copy from the account of the owner, thereby prohibiting access by the owner.
• The complaint does not explicitly reserve the right to assert other claims.

III. The Accused Instrumentality

Product Identification

• The "Accused NOOK® Platform," which is alleged to include the NOOK® book platform, NOOK®-branded tablets, and NOOK® eReader applications for iOS, Android, and Windows. (Compl. ¶8).

Functionality and Market Context

• The complaint alleges the Accused NOOK® Platform is implemented on servers controlled by B&N that manage the storage and distribution of eBooks. (Compl. ¶9). The core accused functionality is a feature that allows a "legitimate purchaser of an eBook to lend that eBook to another B&N customer." (Compl. ¶9). This lending process allegedly includes: (A) controlling the loan period, (B) preventing the lender from reading the eBook during the loan period, and (C) allowing the eBook to be lent only to a legitimate B&N customer. (Compl. ¶9).
  No probative visual evidence provided in complaint.

IV. Analysis of Infringement Allegations

’089 Patent Infringement Allegations

Identified Points of Contention

• Scope Questions: The patent is titled for a "Digital Music Library Sharing Service" and its specification primarily discusses sharing "songs" and "MP3s." A primary question will be whether the claim term "digital copy of media" can be construed to read on the "eBooks" managed by the accused platform.
• Technical Questions: Claim 1 requires "verifying that the digital copy... has not been downloaded to a personal computer by the owner" before allowing a loan. The complaint does not allege any facts suggesting the NOOK platform performs this specific check. The patent specification treats this as a critical step, stating that once a file is downloaded, it becomes "not sharable." ('089 Patent, col. 8:53-65, Fig. 11). The absence of this allegation raises a significant question about whether the accused system practices a required step of the claimed method.

V. Key Claim Terms for Construction

The Term: "removing the digital copy from the account of the owner"

• Context and Importance: This term is central to the mechanism that ensures only one person has access at a time. The dispute will likely focus on whether this requires a technical file deletion or move operation, versus simply changing an access permission flag. The complaint alleges the platform is "preventing the lender from reading the eBook" (Compl. ¶9), which B&N may argue is not the same as "removing the digital copy."
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The claim itself links this step to the functional outcome: "thereby prohibiting access to the digital copy by the owner." (col. 11:29-31). The patent specification suggests that a "copy and remove" operation can be a logical one, stating it "may simply be accomplished through an operating system 'move' primitive which adjusts source and target pointers." ('089 Patent, col. 2:55-61). This could support an interpretation where changing access rights is sufficient.
  • Evidence for a Narrower Interpretation: The specification repeatedly uses physical-world analogies and terms like "deleted or removed from the song owner's account" and "returns the digital copy to the owning subscriber." ('089 Patent, col. 2:19-26). Figure 6 explicitly shows a "Delete song from owner account" step (610). This language may support an argument that a more definite "removal" of the file itself, not just access rights, is required.

The Term: "digital copy of media"

• Context and Importance: The infringement case depends on this term covering eBooks. Practitioners may focus on this term because the patent's title, abstract, and detailed description are overwhelmingly focused on "digital music," "songs," and "MP3s." B&N will likely argue the invention is limited to audio files.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The claims use the general term "media," not "music." Further, the specification includes a broadening statement in its final section: "Other forms of digital media and data such as video, images, photos, podcasts, etc. may also be managed... in accordance with the techniques described herein." ('089 Patent, col. 10:35-39).
  • Evidence for a Narrower Interpretation: The title, abstract, background, and every figure and embodiment are exclusively directed to "digital music," "songs," or "phonorecords." An opponent could argue the single sentence mentioning other media types is boilerplate that cannot overcome the otherwise universal focus of the patent on music, and that the invention was conceived and described solely in that context.

VI. Other Allegations

• Indirect Infringement: The complaint alleges active inducement, stating B&N "intentionally instructs its customers to infringe" by providing "training videos, demonstrations, brochures, installation and user guides," and provides several URLs to B&N's website and YouTube channels as evidence. (Compl. ¶11). It also alleges contributory infringement, stating B&N knows the software on the NOOK Platform is "especially made or especially adapted for use in infringement... and not a staple article or commodity of commerce suitable for substantial noninfringing use." (Compl. ¶12).
• Willful Infringement: The complaint alleges B&N will have post-suit knowledge of the ’089 Patent upon service of the complaint and that its "continued actions would actively induce and contribute to the infringement." (Compl. ¶13).

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

1. A central issue will be one of "definitional scope": Can the term "digital copy of media", which arises from a patent almost exclusively focused on a "Digital Music Library Sharing Service," be construed broadly enough to encompass the "eBooks" at issue in the accused NOOK platform?
2. A key evidentiary question will be one of "factual compliance": Does the NOOK platform perform the specific verification step required by Claim 1—namely, checking that a digital copy "has not been downloaded to a personal computer" before permitting a loan? The complaint is silent on this potentially dispositive limitation.
3. The case may also turn on a question of "functional interpretation": Does B&N's alleged act of "preventing the lender from reading the eBook" satisfy the claim requirement of "removing the digital copy from the account of the owner," or is there a technical distinction that avoids infringement?