Fed. Circ. Clears Netflix In WiLAN Streaming Patent Case
By Andrew Karpan
Law360 (December 14, 2020, 10:53 PM EST) -- Handing a win to Netflix, the Federal Circuit on Monday backed a lower court's finding that a WiLan unit's patent on streaming technology failed to pass muster under the U.S. Supreme Court's 2014 Alice decision.
In a nonprecedential opinion, a three-judge panel of the appellate court told Adaptive Streaming Inc., a wholly-owned subsidiary of WiLAN, that a patent it owned on "digital video processing techniques" was too abstract for protection under patent law, affirming U.S. District Judge David O. Carter's decision last year to dismiss the company's case against Netflix in California federal court.
Adaptive Streaming sued Netflix in July 2019, alleging it infringed a patent covering video processing innovations that were allegedly a decade ahead of the streaming platforms that would be developed by companies like Netflix, YouTube and Hulu, according to the initial complaint. The patent was granted by the U.S. Patent and Trademark Office in 2006 to Luxxon Corp. and eventually was acquired by Adaptive Streaming.
On Monday, the appeals panel found that Judge Carter was right to find that the patent didn't pass the two-step Alice test, which requires courts to first look at whether a patent deals with an abstract concept, and if so, then check whether it adds an inventive concept to the abstract idea to determine eligibility.
The panel had found that Adaptive Streaming's patent easily failed both. Writing for the panel, U.S. Circuit Judge Richard G. Taranto curtly dismissed the far-reaching innovations that Adaptive Streaming was claiming to own.
"[The asserted patent claims] do not incorporate anything more that would suffice to transform their subject matter into an eligible application of the abstract idea," Judge Taranto wrote.
Additionally, the claims failed in light of precedential rulings the Federal Circuit made in 2017, which found that ideas which merely involve encoding and decoding image data were abstract under the Alice framework, including a ruling that tossed streaming patents that had been asserted against Comcast and Verizon.
Adaptive Streaming had argued that Judge Carter could only come to such a conclusion by "simplifying" the claims its patent made, but Judge Taranto wrote that the panel disagreed and found, instead, it was the patent itself that was too simple.
"In particular, there is no identification in the claims or written description of specific, unconventional encoding, decoding, compression, or broadcasting techniques," Judge Taranto wrote.
WiLAN Inc. is a patent licensing business whose collection of technology patents won it a still-contested $85 million jury verdict against Apple earlier this year. Upon purchase of the patent at issue in 2019, WiLAN celebrated the technology as "the primary way in which video is delivered over the Internet today," according to a press release.
A representative for Netflix declined to comment on the ruling. Adaptive Streaming did not respond to a request for comment on Monday.
The patent-in-suit is U.S. Patent No. 7,047,305.
U.S. Circuit Judges Richard G. Taranto, Raymond C. Clevenger and Sharon Prost sat on the panel for the Federal Circuit.
Adaptive Streaming Inc. is represented by Paul J. Skiermont, Mieke Malmberg and Alexander Gasser of Skiermont Derby LLP.
Netflix is represented by Michael S. Kwun of Kwun Bhansali Lazarus LLP.
The case is Adaptive Streaming Inc. v. Netflix Inc., case number 20-1310, in the U.S. Court of Appeals for the Federal Circuit.
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