Thursday, November 11, 2010

No "internet radio" mastermind means no patent infringement.

Zamora Radio owns a patent (U.S. Patent No. 6,349,339) directed to "internet radio" technologies. It sued a number of internet radio companies (, CBS radio, Slacker, Pandora, Rhapsody, Realnetworks, DKCM, Soundpedia, AOL, Accuradio, and Yahoo).

As with all patent infringement lawsuits, claim construction was key. The technology at issue generally allows an internet radio provider to stream content (music, video, whatever) to a user, allowing the user to pause or skip forward, but not allowing the user to rewind. Thus, the system presents the user with a predetermined order of content and prevents the user from modifying that order or replaying particular content.

A key claim phrase in claim 1 concerned whether the user's computer or the internet radio company's computer set the predetermined order. The Court's earlier claim construction required the user's computer to set the order. Each of the defendants' systems used the defendants' servers to set the predetermined order. Plaintiff agreed that, given this claim construction, there was no infringement of claim 1.

Plaintiff requested a "consent judgment" be entered finding no infringement of claim 1. Presumably, plaintiff wanted judgement against it so it could seek appellate review from the Federal Circuit on the trial court's claim construction. Defendants opposed this request because they wanted a judgment of non-infringement on other claims as well (not just claim 1). The Court refused to enter the consent judgment because "there was obviously no consent from Defendants."

Each defendant asked for summary judgment of non-infringement on the remainder of the claims. The Court agreed and found various non-infringement arguments of the different defendants convincing for various reasons. But for each of the defendants (other than Pandora), the Court found that the doctrine of "divided infringement" was controlling. (I am guessing that Pandora did not make this argument (the briefs are under seal) because the Court did not address it in the order granting Pandora's summary judgment motion.)

Divided Infringement

Direct patent infringement requires that each element of a claimed invention is performed by a single entity. Sometimes, a claim is not directly infringed by a single entity, but 2 or more entities combined perform all of the steps of a claimed invention. If the 2 entities don't know if each other, and don't have any relationship, it can't be said that they jointly infringe the patent. But where 1 of the parties is the "mastermind" exercising "control or direction" over the entire infringement, liability will be found.

Here, 6 defendants (CBS and its parent company, AOL,, Realnetworks, and Rhapsody) argued that there was no such mastermind, and thus there could be no infringement.
“Infringement requires, as it always has, a showing that a defendant has practiced each and every element of the claimed invention.” BMC Resources, Inc. v. Paymentech, L.P., 498 F.3d 1373, 1380 (Fed. Cir. 2007) (internal citation omitted). Under the “divided infringement” theory, if a third party carries out one or more steps of the claim on the defendant’s behalf, the defendant can still be held liable if it controlled or directed the conduct of the acting third party. Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318, 1330 (Fed. Cir. 2008) (The “control and direction” standard is satisfied “where the law would traditionally held the accused direct infringer vicariously liable for the acts committed by another party that are required to complete performance of a claimed method.”). Moreover, “[m]aking information available to the third party, promoting the third party, instructing the third party, or facilitating or arranging for the third party’s involvement in the alleged infringement is not sufficient.” Emtel, Inc. v. Lipidlabs, Inc., 583 F. Supp. 2d 811, 839 (S.D. Tex. 2008); Muniauction, 532 F.3d at 1329-30.

Every asserted system claim of the ‘399 Patent requires, among other things, a “server arrangement” that provides data packets and a “user computing arrangement” that receives, stores, and executes instructions to use the data packets. Also, every asserted independent method claim requires that some steps of the method are performed at the server arrangement, while other steps must be performed at the user’s computer. Here, the “server arrangements” are provided by Defendants, while the accused “user computing arrangement” - the personal computers used by end-users of the Radio 2.0/ and Last.FM server application systems - are not provided by any of the Defendants. Furthermore, it is undisputed that there is nothing akin to an agency relationship between Defendants and users of Defendants' systems who provide and use the UCAs.

Accordingly, because the claims require multiple actors to meet the limitations of the accused claims and because there is no dispute that the parties involved do not control or direct each others' actions or their computers, Defendants are entitled to summary judgment of no infringement on this basis as well.
(The Court entered 3 separate orders on summary judgment. The above quote is from the Order granting summary judgment in favor of CBS, AOL, and

Summary judgment of non-infringement granted in favor of each defendant.

Zamora Radio, LLC v., et al., Case No. 09-20940, slip op. (S.D. Fla. Nov. 5, 2010) (Mag. Torres)

1 comment:

  1. Hilariously ironic that the internet radio companies were able to avoid patent infringement because people actually use their service. It brings a smile to my face to hear of a patent troll losing for a reason so simple.