PublishedJune 5, 2017

Previewing ContentGuard v. Apple and Google at the Federal Circuit

This Thursday, June 8, the Federal Circuit will hold oral argument in ContentGuard Holdings, Inc. v. Apple, Inc. and in ContentGuard Holdings, Inc. v Google, Inc.  (The Google case also includes a number of major Android phone manufacturers, such as Samsung, HTC, and Motorola.)  Both cases have roughly similar histories, and both appeals deal with similar issues.  The patents deal with digital rights management technologies—technologies that control how content can be used and distributed.

These cases aren’t likely to break new ground in patent law—the issues being appealed are the standard issues.  However, this is exactly why they’re a good lens through which we can examine a typical patent litigation case.  In a series of posts this week, that’s what I’ll do—I’ll walk through the history of the cases, the issues being appealed, and summarize Thursday’s arguments.

Patent litigations are always complex, with a lot of (expensive) moving pieces.  So when you read this, remember—this is a typical case, not an unusual one.  A patent case going to trial will usually look something like this.  It’ll take several years, lots of lawyers, and lots of money.

A Little ContentGuard History

ContentGuard formed back in 2000, stemming from work done at (and a portfolio of patents generated by) Xerox PARC.  The company originally focused on pushing standards groups towards digital rights management (DRM) interoperability.  They succeeded in pushing the International Organization for Standardization (ISO) to include DRM interoperability into the MPEG video standard, for example.  

But, like many companies, when their own products didn’t succeed, they shifted to a patent licensing strategy.  The company bounced through several sets of hands, eventually being purchased by Pendrell in 2011.  Pendrell is one of the less-notorious non-practicing entities out there, but their fundamental business model is the same—buy patents or IP-licensing businesses and try to get people to pay them money to license their patents.

And Then The Lawsuits Began

In December 2013, ContentGuard sued Amazon, Apple, Blackberry, Huawei, and Motorola in the Eastern District of Texas.  (Amazon later settled.)  In January 2014, they added HTC and Samsung to their case.  In regards to the Android manufacturers, ContentGuard’s lawsuit focused on Google’s Play apps.  

In response, Google filed a declaratory judgment action in the Northern District of California, essentially trying to have the case tried in California rather than Texas.  Immediately afterwards, ContentGuard sued Google in the Eastern District of Texas.  After some legal maneuvering in California and Texas, the California case was stayed (i.e., put on hold) while the Texas cases went ahead in front of Judge Gilstrap.   

Constructing A Case

Early in the case, Amazon and Motorola filed a motion to dismiss ContentGuard’s case under 35 U.S.C. § 101, saying that ContentGuard’s patents were invalid because they claimed abstract ideas.  Judge Gilstrap delayed that motion while he went through the Markman process.  (Markman, named after the case where the procedure was set forth, is the process through which terms in the claims of a patent are given some kind of meaning.) After the Markman hearing, Judge Gilstrap issued a detailed order explaining how he had defined the terms.  

The patents deal with “trusted devices” and content “repositories,” and Judge Gilstrap defined those terms to require protection of “physical integrity,” “behavioral integrity,” and “communications integrity.”  In other words, to infringe ContentGuard’s patents, a device would have to prevent access to information from a non-trusted system, require a digital certificate to install software, and only communicate with other trusted systems.

The patents also talk about “usage rights.”  Judge Gilstrap, based on the description within the patent, construed “usage rights” to be a description of rights where the description is “attached or treated as attached” to the digital information.

With the key terms of the ContentGuard patents defined, the case continued to the next phase.

All Patents Have Abstracts, But Not All Patents Are Abstract

After the Markman order, Judge Gilstrap denied the § 101 motions Amazon and Motorola had filed, but invited them to re-file the motions taking his Markman order into account.  They took him up on his offer.

The basic test for § 101 eligibility after Alice has two steps.  First, is it directed to an abstract idea?  Second, does it show sufficient “inventive concept” to be something more than just the abstract idea?

Judge Gilstrap found that neither step was met.  He determined that the patents weren’t directed to the abstract idea of managing digital rights, but rather to a specific way of doing so.  And he found that, because the claims provide a particular solution to this problem with specific requirements and don’t foreclose all possible ways of implementing digital rights management, the claims provide something more than just the abstract idea of managing digital rights.   

Given this, Judge Gilstrap denied the motion to invalidate the patents as abstract under 35 U.S.C. § 101.

After Judge Gilstrap’s denial, Google and Apple filed “covered business method” and inter partes review petitions at the Patent Office, asserting that some of the asserted patents were invalid over the prior art and/or because they were abstract.  Many of the petitions were not instituted, with the Board (similar to Judge Gilstrap) pointing to the specific requirements recited in the claims to explain why the claims are not abstract.  Some of the petitions were instituted.  Ultimately, in those petitions, the existing claims were invalidated, but a new claim was added and found to be patentable, so the patent survived.

Trying To Prove Your Case

This brings us to the trials.  (I’m just going to summarize the trials here, rather than go into detail on the issues being litigated—I’ll get into more detail on those in later posts.)

First up was ContentGuard v. Google.  (The other Android makers had promised to abide by whatever result Google and Samsung achieved.)  Google faced five patents, while Samsung faced three.  There were two major issues:

  1. Did Google and Samsung’s devices infringe the ContentGuard patents?
  2. Did Google and Samsung prove that the ContentGuard patents were invalid?

After two weeks of trial, the jury answered “no” to both questions.  ContentGuard had asked for more than $500 million from Google and Samsung.  ContentGuard got to keep its patents, but no money.

Having struck out with Google and Samsung, ContentGuard turned to the Apple trial, one month later.  The same five patents were asserted, and the same two questions were on the table.

And the jury gave the same answers.  No money for ContentGuard, but they can keep their patents.

ContentGuard, unsurprisingly, wasn’t happy with the outcome.  First, they asked the judge to rule that the jury had been incorrect in their decision (referred to as “judgment as a matter of law” or JMOL.)  When that didn’t work, they appealed the cases to the Federal Circuit.  After ContentGuard appealed, Apple and Google cross-appealed on issues they had lost on.

And that brings us up to the present.

This Week in ContentGuard

As I mentioned above, the arguments for these appeals are taking place on Thursday.  ContentGuard’s appeals each focus on two issues.  First, in both the Apple and Google cases, ContentGuard objects to the Markman order as to how their patent is to be interpreted.  Second, for the Google case, ContentGuard objects to an argument they think Google made at trial that they claim is improper, while in the Apple case, ContentGuard claims that Apple failed to provide the right source code and that this prejudiced their trial.

Google and Apple also raise issues against ContentGuard.  Google denies that ContentGuard is right about claim construction or the argument at trial.  Google additionally claims that the ContentGuard patents are invalid under § 101 because they claim an abstract idea, and invalid under § 103 because they were obvious.  Finally, Google objects to a ruling that prevented them from seeing the inventors’ notes on the invention of the patents.

Apple similarly denies that ContentGuard is correct about claim construction and states that ContentGuard overinflates the importance of the evidence and that the trial procedure resolved the prejudice.  Apple also claims that the ContentGuard patents are invalid as abstract and over the prior art.

Tomorrow and Tomorrow and Tomorrow

Tomorrow, we’ll look at the issue of claim construction in this case in detail.  We’ll look at the claim terms at issue, some of the key evidence, and the district court’s ruling on claim construction.  Then, we’ll take a look at how the claim construction argument affects each side’s positions in the appeal.

Wednesday, we’ll take a look at the invalidity arguments being made, as well as the procedural disputes about improper arguments, prejudice in evidence production, and privileged inventors’ notes.

Finally, Thursday is the argument.  After it’s over, we’ll take a look at what happened in front of the Federal Circuit panel, and make some guesses as to how the appeal might go.

We hope you’ll join us this week as we look at the ContentGuard cases in more detail.

Josh Landau

Patent Counsel, CCIA

Joshua Landau is the Patent Counsel at the Computer & Communications Industry Association (CCIA), where he represents and advises the association regarding patent issues.  Mr. Landau joined CCIA from WilmerHale in 2017, where he represented clients in patent litigation, counseling, and prosecution, including trials in both district courts and before the PTAB.

Prior to his time at WilmerHale, Mr. Landau was a Legal Fellow on Senator Al Franken’s Judiciary staff, focusing on privacy and technology issues.  Mr. Landau received his J.D. from Georgetown University Law Center and his B.S.E.E. from the University of Michigan.  Before law school, he spent several years as an automotive engineer, during which time he co-invented technology leading to U.S. Patent No. 6,934,140.

Follow @PatentJosh on Twitter.

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