Digital Streaming Companies Win Patent Dispute

MARSHALL, Texas (CN) — A federal judge dismissed five patent infringement lawsuits over the licensing of digital media content on streaming platforms like Amazon and Netflix, finding the patent holder asserted claims for an abstract idea that was not an inventive concept.

On Monday, U.S. District Judge Robert Schroeder III granted motions to dismiss filed by Amazon.com, Amazon Digital Services and Netflix.

Uniloc USA Inc. and Uniloc Luxembourg S.A. originally sued Netflix, Amazon, Google, HBO and Hulu LLC in separate lawsuits in May 2016 in Eastern Texas federal court.

The company claimed the defendants’ digital media content distribution systems infringed on its patent. The lawsuits were later consolidated into a single action.

Uniloc is a computer security and copy-protection software company. The company has frequently been accused of being a patent troll by the targets of its infringement lawsuits.

Its patent involving the concept of “product activation” in software was ruled invalid by the Patent Trial and Appeal Board last year, according to tech news site Ars Technica.

The disputed patent relevant to Monday’s ruling is entitled “system and method for adjustable licensing of digital products.” It relates to the adjusting of software usage under a license in terms of the number of devices that may access the licensed product over time. Such adjustment may be used to accommodate the usage patterns of consumers, for promotional reasons or to control abusive copying, the patent explains.

Judge Schroeder’s ruling looked at an example of a licensing scheme under the patent.

“The licensing scheme starts on the day of initial authorization of the license and prescribes a first five-day period in which a maximum of five devices are permitted to access the content, a second 25-day period with a new upper limit of seven devices, and a third, indefinite period with another new upper limit of 11 devices,” the opinion states. “The specification of the ’960 Patent explains that the upper limit of devices may rise or fall over time and may be keyed to the date of initial authorization or some other fixed date. The kind of license…can be referred to as a ‘time-adjustable license.’”

The claimed invention under the disputed patent is a method for managing and implementing the time-adjustable license using a computer.

The core of the dispute is whether the claims of the Uniloc patent are directed to ineligible subject matter – an abstract concept.

In the motions to dismiss joined by HBO, Google and Hulu, Amazon and Netflix asserted the general business concept of allowing customers to use multiple copies of a licensed product is an abstract idea.

Amazon and the other media companies said the patent claims did not provide any improvement in computer functionality but instead addressed a customer-service problem for businesses that license software. They also argued the claimed invention did not require the use of a computer and that it could be performed by humans.

Uniloc, however, countered that the patent claims involve a non-abstract means to stop the pirating of software and also accommodate dynamically changing use patterns of license customers over time.

But Judge Schroeder sided with the digital media companies as to the abstractness of the patent in dispute.

“The time-adjustable license is an abstract idea because licensing is a fundamental economic practice and because licenses are abstract exchanges of intangible contractual obligations,” he wrote. “Further, the claims of the ’960 Patent are not directed to specific improvements in the functioning of a computer.”

The judge also analyzed the patent’s independent claims to see if they provided an inventive concept.

“The method can be summarized as: receiving an access request for a licensed digital product, verifying the license, checking to see if the device is authorized and then either granting access if the device is already authorized or, if not, granting access after ensuring that the number of presently authorized devices is less than the number that is permitted to be authorized. This amounts to no more than instructions to implement the time-adjustable license on a computer and cannot rescue the patent eligibility of claims 1, 22 or 25. In sum, the independent claims of the ’960 Patent are drawn to patent-ineligible subject matter,” Schroeder said.

In looking at the dependent claims of the patent, Schroeder likewise ruled that they lacked an inventive concept.

“In sum, the claims of the ’960 Patent instruct the person of ordinary skill to implement the time-adjustable license using a computer. ‘Stating an abstract idea while adding the words ‘apply it with a computer’’ is ‘not enough for patent eligibility,’” he concluded, dismissing Uniloc’s infringement claims.

Uniloc’s attorneys did not respond Wednesday to an email request for comment on the ruling.

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