DCT
6:20-cv-00497
WSOU Investments LLC v. ZTE Corp
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: WSOU Investments, LLC d/b/a Brazos Licensing and Development (Delaware)
- Defendant: ZTE Corporation (China), ZTE (USA) Inc. (New Jersey), and ZTE (TX), Inc. (Texas)
- Plaintiff’s Counsel: ETHERIDGE LAW GROUP, Group
- Case Identification: 6:20-cv-00497, W.D. Tex., 11/06/2020
- Venue Allegations: Venue is alleged to be proper based on Defendants ZTE (USA) and ZTE (TX) maintaining regular and established places of business within the district, and ZTE Corporation being a foreign entity. The complaint also alleges that Defendants have committed acts of infringement within the district.
- Core Dispute: Plaintiff alleges that Defendant’s mobile hotspots and smartphones infringe a patent related to using an intermediate mobile device to transfer a data message, such as an SMS, from a source device to a third device.
- Technical Context: The technology addresses data synchronization between devices by using a mobile terminal as a relay, leveraging the "store and forward" nature of SMS to circumvent the need for a continuous data connection.
- Key Procedural History: The patent-in-suit was subject to an Inter Partes Review (IPR) proceeding (IPR2021-00698) that was instituted after the filing of this complaint. The proceeding concluded with a certificate issued on September 5, 2023, confirming that all 45 claims of the patent are patentable.
Case Timeline
| Date | Event |
|---|---|
| 2001-08-30 | '505 Patent Priority Date |
| 2007-04-10 | '505 Patent Issue Date |
| 2019-10-15 | ZTE Blade Vantage 2 availability announced |
| 2019-11-20 | ZTE advertises Blade 10 and Axon 10 Pro |
| 2020-11-06 | First Amended Complaint Filing Date |
| 2021-03-31 | IPR filed against '505 Patent |
| 2023-09-05 | IPR Certificate confirms patentability of all claims |
II. Technology and Patent(s)-in-Suit Analysis
- Patent Identification: U.S. Patent No. 7,203,505, "MESSAGE TRANSFER FROM A SOURCE DEVICE VIA A MOBILE TERMINAL DEVICE TO A THIRD DEVICE," issued April 10, 2007. (’505 Patent)
The Invention Explained
- Problem Addressed: The patent describes a market where proprietary synchronization protocols made it difficult for devices from different manufacturers to communicate with each other, hindering data mobility. Furthermore, existing synchronization standards required a continuous data connection between a mobile device and the network, which was not always available or efficient. (’505 Patent, col. 1:12-25, 1:53-57).
- The Patented Solution: The invention proposes a method where a first device (e.g., a "personal server") transmits data to an "intermediate terminal device" (e.g., a mobile phone) over a short-range link. The intermediate device then formats this data into one or more SMS messages and transmits them over the cellular network to a second, remote device. This architecture, illustrated in Figure 1, leverages the "store and forward" nature of SMS, eliminating the need for a persistent connection between the intermediate device and the network. (’505 Patent, Abstract; col. 2:12-19, 2:61-67).
- Technical Importance: This approach enabled data synchronization for devices that only possessed short-range connectivity (e.g., Bluetooth or IR), allowing them to communicate with remote systems by using a nearby mobile phone as a gateway to the ubiquitous SMS network. (’505 Patent, col. 1:58-62).
Key Claims at a Glance
- The complaint asserts at least independent claim 1. (Compl. ¶43).
- Independent Claim 1 of the ’505 Patent recites a method with the following essential elements:
- obtaining, at a first terminal device, data to be synchronized with a second, remotely located, terminal device;
- transmitting the data from the first terminal device to an intermediate terminal device through a short-range connection;
- formatting the data into at least one SMS message in the intermediate terminal device; and
- transmitting the at least one SMS message from the intermediate terminal device to the second terminal device.
III. The Accused Instrumentality
Product Identification
- The complaint identifies the "Accused Products" as communication devices including mobile hotspots, such as the ZTE Z915 (also marketed as the T-Mobile Sonic 2.0) and the ZTE SyncUP DRIVE, and mobile phones, such as the ZTE Axon 10 Pro and ZTE Blade 10. (Compl. ¶¶26-27, 29-30).
Functionality and Market Context
- The complaint alleges that the accused hotspots and phones provide features to synchronize data between devices. (Compl. ¶32). Specifically, the ZTE Z915 mobile hotspot is alleged to connect to a computer via Wi-Fi, allowing a user to access an administrative interface through a web browser to compose and send SMS messages over the cellular network. (Compl. ¶¶34, 38). A promotional graphic for the SyncUP DRIVE shows its function is to "Turn your car into a Wi-Fi hotspot" allowing users to "Stream, call, and text on up to five devices." (Compl. ¶31, p. 8).
IV. Analysis of Infringement Allegations
The complaint’s infringement theory centers on using an accused ZTE hotspot as the "intermediate terminal device" to relay an SMS message from a computer (the "first terminal device") to a recipient's device (the "second terminal device"). A screenshot of a support document provides instructions for a user to "Send a new message (SMS)" by connecting a computer to the hotspot via Wi-Fi and using a web interface to send the message. (Compl. ¶34, p. 9).
'505 Patent Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| obtaining, at the first terminal device, data to be synchronized with the second remotely located terminal device; | A user on a computer (first terminal device) connected to the hotspot enters a text message into the hotspot's admin interface. | ¶38 | col. 6:55-57 |
| transmitting the data from the first terminal device to the intermediate terminal device through a short-range connection; | The computer connects to the ZTE mobile hotspot (intermediate device) via Wi-Fi, which is alleged to be a short-range connection, and transmits the message data to it. | ¶39, ¶41 | col. 6:58-60 |
| formatting the data to be synchronized into at least one SMS (Short Message Service) message in the intermediate terminal device; | The data (SMS) is transmitted through the ZTE hotspot device, which sends it as an SMS message. | ¶41 | col. 6:61-64 |
| and transmitting the at least one SMS message from the intermediate terminal device to the second remotely located terminal device. | The SMS is sent from the hotspot device to the recipient specified in the SMS number field (the second terminal device). | ¶42 | col. 6:65-66 |
- Identified Points of Contention:
- Scope Questions: A central issue may be whether Wi-Fi, the connection alleged in the complaint (Compl. ¶39), qualifies as a "short-range connection" under the patent's claim language. The patent specification provides "IR (Infrared) or Bluetooth" as examples. (’505 Patent, col. 3:6-7). The litigation may also focus on whether the complaint's mapping of devices (computer as "first terminal," hotspot as "intermediate") aligns with the patent's description, which primarily discusses a "personal server" that lacks long-range connectivity as the first device. (’505 Patent, col. 1:58-62).
- Technical Questions: A key technical question is where the claimed "formatting" step occurs. Claim 1 requires that the data be formatted in the intermediate terminal device. The complaint alleges a user accesses the hotspot's admin application from a computer's web browser to send the SMS. (Compl. ¶38). This raises the question of whether the data is formatted into an SMS structure on the computer before transmission, or if the hotspot itself performs this function after receiving raw data from the computer.
V. Key Claim Terms for Construction
The Term: "short-range connection"
- Context and Importance: The infringement reading depends on this term covering the Wi-Fi link between a computer and the accused hotspot. Practitioners may focus on this term because its scope is not explicitly defined, and the patent's only examples are Bluetooth and IR.
- Intrinsic Evidence for a Broader Interpretation: The claim uses the general term without limiting it to a specific protocol. (’505 Patent, col. 6:59). The term could be construed functionally to mean any local wireless connection suitable for linking a source device to a nearby mobile terminal for relay.
- Intrinsic Evidence for a Narrower Interpretation: The specification explicitly names only "IR (Infrared) or Bluetooth communication link." (’505 Patent, col. 7:12-13). A party could argue that this disclosure limits the scope to personal area network (PAN) technologies, as opposed to local area network (LAN) technologies like Wi-Fi.
The Term: "first terminal device"
- Context and Importance: The complaint identifies a general-purpose computer as the "first terminal device." The patent's motivation for the invention, however, stems from the limitations of "personal portable server devices" that only have short-range connections. (’505 Patent, col. 1:58-62). The case may turn on whether a device that has its own long-range connectivity (like a typical computer) can be the claimed "first terminal device."
- Intrinsic Evidence for a Broader Interpretation: The claim itself uses the broad term "first terminal device" without incorporating the limitations from the background section. (’505 Patent, col. 6:52).
- Intrinsic Evidence for a Narrower Interpretation: The problem-solution narrative of the patent is centered on a specific type of device—one unable to connect to a network on its own. (’505 Patent, col. 1:58-62). An argument could be made that the claims should be interpreted in light of this stated purpose, thereby excluding devices not facing this problem.
VI. Other Allegations
- Indirect Infringement: The complaint alleges active inducement, stating that ZTE provides product descriptions, manuals, and support documents (including instructions on how to send SMS messages via the hotspot) that instruct users on how to perform the infringing method. (Compl. ¶46). It also alleges contributory infringement, asserting the Accused Products are especially made for infringement and lack substantial non-infringing uses. (Compl. ¶47).
- Willful Infringement: The complaint alleges willfulness based on knowledge of the ’505 Patent "since at least the date of service of this Complaint," establishing a basis for post-suit willful infringement. (Compl. ¶45).
VII. Analyst’s Conclusion: Key Questions for the Case
A core issue will be one of definitional scope: can the term "short-range connection," exemplified in the patent with Bluetooth and IR, be construed to cover the Wi-Fi link alleged between a computer and the accused ZTE hotspot?
A key evidentiary question will be one of technical locus: does the accused hotspot perform the claimed step of "formatting" the data into an SMS message, or does it merely act as a transparent cellular modem for a message fully formed on the user's computer? The evidence presented in the complaint does not resolve this technical detail.
A third central question will concern the applicability of the patented scenario: does the use of a general-purpose computer (which typically has its own internet access) with a mobile hotspot align with the patent's concept of a "first terminal device," which the specification frames as a device whose primary limitation is a lack of long-range connectivity?