United States: More Defendants Added To Realtime's Expansive Data And Video Compression Campaign

Last Updated: May 9 2018
Article by RPX Corporation

The past two weeks have seen a barrage of new complaints filed in the long-running campaign litigated by Realtime Data LLC (RTD) and its subsidiary Realtime Adaptive Streaming LLC (RAS). RTD asserted overlapping subsets of patents from its data compression portfolio in new cases against Cloudera (1:18-cv-00653), Huawei (6:18-cv-00182), and IBM (6:18-cv-00188). Meanwhile, RAS filed complaints asserting overlapping subsets of patents from its video compression portfolio against Alphabet (Google) (2:18-cv-03629), Avaya (1:18-cv-01046), Broadcom (1:18-cv-01048), and Wowza Media (1:18-cv-00927). With these new cases, the number of defendants in this sprawling litigation campaign now approaches 100, with the number of patents asserted holding steady at just shy of 40 and the number of petitions for inter partes review (IPR) of various of those patents topping 50.

Most of those patents-in-campaign have been developed and asserted by RTD and are generally related to data compression, with others related to accelerated loading of operating systems and applications upon system boot or application launch. At issue in RTD's recent complaints are the defendants' cloud computing systems—e.g., Cloudera Enterprise, Huawei OceanStor, and IBM Aspera. RAS has asserted members of a family of homegrown patents, received by March 2017 assignment from RTD, as well as two developed elsewhere. The accused products throughout the campaign have included long lists of streaming services, and products used to facilitate delivery of them, that operate in compliance with the H.264 and/or H.265 video compression standards—e.g., the YouTube app, Avaya's Video Collaboration Solution, Broadcom's Set-top Box Solutions, and Wowza's Streaming Engine.

Members of the family of RAS homegrown patents asserted in this campaign have issued between June 2008 and September 2017, with an earliest estimated priority date in February 2001. The same three patents (7,386,046; 8,934,535; 9,769,477) from this family are asserted in all of RAS's recent complaints. The patents name Stephen J. McErlain and James J. Fallon as inventors. Early corporate filings in Texas identify Fallon as having been a manager of RTD, but more recent filings omit Fallon in favor of McErlain. McErlain, together with New York lawyers Gerald Padian and Richard Tashjian, is identified as having formed "Adaptive Streaming LLC" in Texas in May 2016, changing that entity's name to RAS in February 2017, just before RTD assigned the video compression family of patents to it.

Prior defendants accused of infringing RAS's video compression patents include DISH Network (Sling TV), Amazon, Hulu, Cisco, Haivision Network Video, Brightcove, Polycom, Netflix, Sony, Apple, Adobe, and Samsung, added in that order since RAS began suing defendants in this campaign last August. But, it was not until the cases filed against Netflix and Sony (filed concurrently in November 2017) that RAS began asserting a hybrid video coding patent (8,634,462), which issued to named inventors Hans-Georg Musmann (a German professor, now with emeritus status at Leibniz Universität Hannover, involved in developing the MP3 standard) and Matthias Narroschke (also a German professor, at Weisbaden, and apparently a former student of Musmann who identifies later employment with Panasonic and VISCODA) and a video processing patent (9,578,298), which issued in February 2017 with estimated priority date in June 2010 to an Italian affiliate of Sisvel International S.A., a European patent licensing firm that manages several patent pools involving wireless technologies such as Wi-Fi, 3G, and LTE along with various operating company partners. Currently available USPTO records do not reflect the assignment of either the '462 or the '298 patent to RAS, but RAS pleads ownership. Each comprises a family of one and is asserted in the new complaints against Google and Wowza.

Two RTD patents (9,054,728; 9,116,908) are asserted against Cloudera, Huawei, and IBM, while two more (8,717,203; 9,667,751) are asserted against Cloudera and Huawei and one other (7,415,530) is asserted just in the complaint against IBM. The patents have all been previously asserted in the campaign, and each names Fallon as an inventor, some with McErlain alone and some with McErlain and others. All but the '203 patent have seen claims challenged among the 50-plus petitions for IPR filed against patents asserted in this campaign. In mid-March, the PTAB issued final decisions in three IPRs brought by Apple against RTD (IPR2016-01737, IPR2016-01738, IPR2016-01739), all of which challenged the validity of a single data compression patent (8,880,862, in RTD's portfolio but not related by prosecution to the patents asserted in RTD's new complaints) that the NPE has asserted against Apple in the campaign. The PTAB collectively cancelled all 117 original claims from the '862 patent in those decisions, also granting the NPE's motion to amend and adding substitute claims 118-218. The Board's decision to allow Realtime Data's additional claims follows in the wake of the Federal Circuit's October 2017 decision in Aqua Products, which effectively shifted the burden of proof as to the unpatentability of new or amended claims from the patent owner to the petitioner (thus upending existing PTAB practices).

RTD was formed in New York in May 1999 by Padian and Tashjian; RTD declares in some of its complaints that it also uses the name "IXO, LLC". The NPE was also registered in Texas in May 2011, with McErlain listed as its manager in that state along with Tashjian and Padian (with the latter listed in Texas state records as "Gerald Padiak"). Texas state filings suggest that RTD is 89.649 percent owned by Realtime Data Compression Systems, Inc., another New York entity controlled by Tashjian and Padian.

RTD's larger litigation campaign, begun well before its RAS subsidiary joined the fray last August, has taken a long, complicated path to its present state. 2017 alone saw a jury verdict in RTD's favor against Riverbed Technologies, a final written decision cancelling claims from the same patent Riverbed was found to infringe, the transfer of multiple existing RTD cases (typically out of Texas to California) in light of the US Supreme Court's TC Heartland decision on proper venue in patent cases, the filing of many new cases by both RTD and RAS in an increasingly varied set of district courts, and preparation for an early 2018 trial in Texas against NetApp and SolidFire—a trial taken off calendar after a January 31 settlement between the parties. More detailed background on this campaign's twists and turns can be found on RPX Insight here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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