DISH Network Corporation v. Wistaria Trading Ltd.

1. Case Identification

• Case #: IPR2019-01305
• Patent #: 9,934,408
• Filed: July 8, 2019
• Petitioner(s): DISH Network Corporation, DISH Network L.L.C., and DISH Network Service L.L.C.
• Patent Owner(s): Wistaria Trading Ltd.
• Challenged Claims: 1, 6, 8, and 17

2. Patent Overview

• Title: Secure personal content server
• Brief Description: The ’408 patent describes a system for the secure distribution of digital media content using a "local content server" (LCS). The system uses watermarks as "indicia of authenticity" to manage content, storing authenticated content at full quality, denying storage to content with indicia of non-authenticity, and degrading the quality of content that lacks any watermark.

3. Grounds for Unpatentability

Ground 1: Obviousness over Yeung, Levine, and Rhoads - Claims 1, 6, 8, and 17 are obvious over Yeung in view of Levine and further in view of Rhoads.

• Prior Art Relied Upon: Yeung (Patent 6,668,246), Levine (Patent 6,345,100), and Rhoads (Patent 6,311,214).
• Core Argument for this Ground:
  • Prior Art Mapping: Petitioner argued that the combination of these three references teaches every limitation of the challenged claims.
    • Yeung was argued to disclose the foundational system: a three-tier architecture for secure content distribution including a client platform that functions as the claimed "LCS." This client platform securely stores content, employs content protection mechanisms (descrambling, access control), has a processor, and possesses a unique network identifier (e.g., MAC address) that serves as the "LCS identification code." Yeung also teaches providing conditional access by delivering full or "lesser quality" content based on successful key replication, mapping to the patent's conditional access framework.
    • Levine was argued to provide the specific watermark detection and interpretation logic, which maps to the claimed "indicia indicating authenticity." Levine discloses a watermark decoder with comparison logic to determine if a watermark is present and, if so, whether it matches an expected, authentic watermark. A match indicates authenticity, while a mismatch indicates a lack of authenticity. The absence of a watermark is also detectable.
    • Rhoads was argued to teach the conditional actions taken based on the watermark's status. Rhoads describes a music appliance designed to permissively record (store) content only when an authorizing watermark is present. Conversely, it teaches restrictively refusing to record content from an unauthorized source that lacks the necessary watermark. Rhoads also discloses providing "lower quality" playback, mapping to the degradation limitation.
  • Motivation to Combine: A Person of Ordinary Skill in the Art (POSA) would combine these references because they all address the same field of digital rights management and offer complementary solutions to known problems. A POSA would have been motivated to integrate Levine's specific watermark authentication logic into Yeung's general secure distribution framework to improve security and traceability. Furthermore, a POSA would have found it obvious to apply the permissive/restrictive rules from Rhoads (e.g., store if authentic, block if not) to the combined Yeung/Levine system as a well-known and predictable method for enforcing content usage rights.
  • Expectation of Success: A POSA would have had a reasonable expectation of success because combining these known elements—a content distribution system, a watermark authentication method, and conditional access rules—was a simple substitution of one known technique for another to achieve a predictable result.

4. Key Claim Construction Positions

• "local content server system (LCS)": Petitioner argued this term should be construed broadly as "a device or software application which can securely store a collection of value-added digital content," where "value-added" simply means content for which there is any market demand. This broad construction was central to mapping the term to Yeung's "client platform."
• "LCS identification code": Petitioner proposed this means "a code that identifies the LCS." This non-limiting construction allowed Petitioner to argue that a standard network identifier, like a MAC address inherent in Yeung's networked client platform, meets the limitation.
• "LCS domain": Petitioner asserted this term means "a secure medium or area where digital content can be stored, with an accompanying rule system for transfer of digital content in and out of the [secure medium or area]." This construction focuses on the functional rules rather than a specific physical structure, allowing Yeung's content protection mechanisms to satisfy the limitation.
• "content": Petitioner argued this term should be understood broadly as "data in digital format," consistent with the patent's own definition.

5. Arguments Regarding Discretionary Denial

• Petitioner argued that discretionary denial under §325(d) would be inappropriate. Although the Examiner was presented with the Yeung and Levine references during prosecution, they were part of a disclosure statement with over 300 references and were never substantively analyzed in the combination asserted in the petition. The petition presented the references in a new light, supported by expert testimony that was not before the Examiner. Furthermore, Petitioner argued that the patentee's arguments to overcome prior art during prosecution of a parent application relied on the term "legacy content," a limitation that does not appear in the challenged claims of the ’408 patent.

6. Relief Requested

• Petitioner requested the institution of an inter partes review and the cancellation of claims 1, 6, 8, and 17 of the ’408 patent as unpatentable.