TecSec, Incorporated v. International Business Machines Corporation et al, No. 1:2010cv00115 - Document 879 (E.D. Va. 2017)

Court Description: MEMORANDUM OPINION re: Adobe Systems Inc.'s Motion for Summary Judgment, (Dkt. No. 864), and Motion to Strike Portions of the Declaration of Mark Jones, (Dkt. No. 871). Signed by District Judge Liam O'Grady on 05/23/17. (pmil, )

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TecSec, Incorporated v. International Business Machines Corporation et al Doc. 879 IE 1 r J MAY 23 2017 IN THE UNITED STATES DISTRICT COUR||p FOR THE EASTERN DISTRICT OF VIRC Alexandria Division n'\ 1 i i ..J Tecsec, Inc., Ai FXANDRIA.V:' 3iN;A Plaintiff, Civil Action No. 1:10-cv-l 15 Hon. Liam O'Grady V. Hon. Theresa Buchanan Adobe Systems Inc., et al. Defendants. MEMORANDUM OPINION This matter comes before the Court on Defendant Adobe Systems Inc.'s Motion for Summary Judgment, (Dkt. No. 864), and Motion to Strike portions ofthe Declaration ofMark Jones. (Dkt. No. 871). Defendant seeks judgment as amatter oflaw that Plaintiff's asserted claims are invalid under 35 U.S.C. § 101. For the reasons discussed below, the Court DENIES the Motions. I. Background^ Plaintiff TecSec, Inc. accuses the Defendant of infringing onfour ofPlaintiffs related patents: U.S. Patent Nos. 5,369,702 (the "'702 Patent"); 5,680,452 (the "'452 Patent"); 5,717,755 (the "'755 Patent"); and 5,898,781 (the "'781 Patent") (collectively, the "DCOM Patents"). The DCOM Patents articulate a multi-level encryption method and system that allows encrypted files to be nested within other encrypted files. See Dkt. No. 869, Exh. 1("'702 Patent") at4:25-28. "In addition to multi-level encryption, the DCOM Patents further limit ^The history ofthis case is well known to the parties and well-articulated in the prior decisions ofthe Court and the Federal Circuit Court ofAppeals. See, e.g., TecSec, Inc. v. Adobe Sys. Inc., 658 F. App'x 570, 572-75 (Fed. Cir. 2016) (^'TecSec IF). Accordingly, the Court limits its background to the issue presented in the present Motion. Dockets.Justia.com access by using labels inthe form ofa field ofcharacters attached tothe encrypted files." Dkt. No. 869, at 11. The parties agree that claims 1and 8 inthe '702Patent are representative of the asserted method and system claims, respectively, for purposes of an analysis under 35 U.S.C. § 101. Claim 1 of the '702 Patent describes: A method for providing multi-level multimedia security in a datanetwork, comprising the steps of: A) accessing an object-oriented key manager; B) selecting an object to encrypt; C) selecting a label for the object; D) selecting an encryption algorithm; E) encrypting the object according to the encryption algorithm; F) labellmg the encrypted object; G) reading the object label; H) determining access authorization based on the object label; and I) decrypting the objectif access authorization is granted. '702 Patent at 12:1. Claim 8 of the '702 Patent describes: A system for providing multi-level multimedia security in a datanetwork, comprising: A) digital logic means, the digital logic means comprising: 1) a system memory means for storing data; 2) an encryption algorithm module, comprising logic for converting unencrypted objects into encrypted objects,the encryption algoritto module being electronically connected to the system memory means for accessing data stored in the first system memory; 3) an objectlabelling subsystem, comprising logic means for limiting object access, subject to label conditions, the object labelling subsystem being electronicallyconnected to the system memory means for accessing data stored in the system memory means and the object labelling subsystem being further electronically connected to the encryption algorithm module to accept inputs from the encryption algorithm module; 4) a decryption algorithm module, comprising logic for converting encrypted objects into unencrypted objects, the decryption algorithm module being electronically connected to the system memory means for accessing data storedin the system memory means; and 5) an object label identification subsystem, comprising logic for limiting object access, subject to label conditions, the object label identification subsystem being electronically connected to the system memory means for accessing datastored in the system memory means and the object label identification subsystem being further electronically connected to the decryption algorithm module to accept inputs from the decryption algorithm module; B) the encryption algorithm module working inconjunction with the object labelling subsystem to create anencrypted object such that the object label identification subsystem limits access to an encrypted object. '702 Patent at 12:8. The matter has been extensively litigated before this Court and the Court ofAppeals for the Federal Circuit. Through these appeals, many ofthe claims inthe representative patents have been construed. In 2013, the Federal Circuit Court of Appeals construed a number of theterms inthe context ofa 35 U.S.C. § 112 challenge. TecSec, Inc. v. Int'lBus. Mack Corp., 731 F.3d 1336 (2013) CTecSec F). The Federal Circuit construed the terms "multi-level multimedia security", "system memory means", "digital logic means", as well as other "means-plusfimction" terms. Id. at 1344-1350. With respect to the "means" terms, theFederal Circuit found that § 112 was not implicated because the "[t]he defendants have failed to show by clear and convincing evidence that the #702 Patent specification fails to disclose corresponding structure for the fourteen computer-implemented means-plus-fimction limitations." Id. at 1349. Rather, the "specification disclose[d] the specific software products and how to use those products to implement the claimed functions[.]" Id Rejecting the notion that the examples amounted to "black box" software disclosures, the Federal Circuit found that "the examples here provide detailed prose that shows how the specific software products operate to implement the claimed functions." Id. In2016, the Federal Circuit construed a number ofadditional terms inthe representative patents in an appeal from the district court's grant ofsummary judgment on non-infiingement. TecSec, Inc. v. Adobe Systems Inc., 658 Fed. App'x 570 (2016) Q^'TecSec IF). The Fourth Circuit construed terms for "selecting alabel", "label", and "object-oriented key manager".^ The Federal Circuit determined that "'selecting a label for the object' inthe DCOM patents should be given its plain meaning, without arequirement that the label exist prior to being selected." Id. at 578. The Federal Circuit construed the word "label" consistent withthe express definition of that term set forth inthe specification ofthe '702 Patent. Id. at 579. Further, the Federal Circuit found that "[t]he district court's construction of'label,' with which we agree, isbroad enough to encompass a label which identifies different classes or groups ofusers authorized to access the object." Id. at 580. TheFederal Circuit also "construe[d] the term 'object-oriented key manager' to mean 'a software component that manages the encryption ofan object by performing one ormore ofthe fimctions ofgenerating, distributing, changing, replacing, storing, checking on, and destroying cryptographic keys.'" Id. at 582. The Federal Circuit rejected Defendant-Appellee's argument that it did not infnnge the "object-oriented key manager." Id. The court found that it could not "conclude as a matter of law that Adobe is entitled to summaryjudgment of non-infringement" because "Adobe's Acrobat products include a security handler inthe form ofa software module ^The Federal Circuitdid not disturb the districtcourt's construction of "object","accessauthorization", or "display header". which implements various aspects ofthe encryption process and controls access to the contents of encrypted documents." Id. Following the Federal Circuits remand tothis Court in TecSec //, Defendant moved under 35 U.S.C. § 101 for a finding that the DCOM Patents are directed to impermissibly abstract subject matter, do not contain an inventive concept, and are therefore invalid as a matter oflaw. II. Legal Standard 35 U.S.C. § 101, states that "[w]hoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvements thereof, may obtain a patent therefor, subject tothe conditions and requirements ofthis title." Courts have read this provision to contain implicit exceptions for abstract ideas, laws ofnature, and natural phenomena. Alice Corp. Pty. Ltd. v. CLS Bank Int'l, 134 S.Ct. 2347,2354 (2014) (citation omitted). These three exceptions are the "basic tools ofscientific and technological work... [and] monopolization ofthose tools through the grant ofa patent might tend to impede innovation more than it would tend to promote it..." Id. (quoting Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289,1293 (2012)). The § 101 eligibility inquiry proceeds intwo steps. Id. at 2355. First, the court determines whether the patents at issue are directed to an abstract idea, law ofnature, ornatural phenomenon. Id. Ifthey are not directed to one ofthese excepted classes ofsubject matter, the inquiry ends. Id. Iftheir focus ison one ofthese categories, however, the court proceeds to the second step, where it "consider[s] the elements ofeach claim both individually and asanordered combinationto detennine whether the additional elements provide an 'inventive concept' that ensures the patent "in practice amounts to significantly more than a patent upon the [abstract idea] itself." Id. (quotations and citations omitted). Ifthe claims do not sufficiently narrow the scope ofthe patent by providing this "inventive concept," then the patent is rendered ineligible. Id. Patent eligibility under 35 U.S.C. § 101 is a question of law. OIP Techs., Inc. v. Amazon.com, Inc., lU F.3d 1359,1362 (Fed. Cir. 2015). Patent eligibility may be decided on a motion for summary judgment. See, e.g., Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d 1350 (Fed. Cir. 2016) (affirming grant ofsummary judgment on § 101 eligibility determination). A "plausible claim for relief ina patent infringement case necessarily requires a valid patent. [Without one,] there can be no infringement." Intellectual Ventures I LLC v. Erie Indem. Co., No. 2:14-CV-220, 2016 WL4147300, at *3 (W.D. Pa. Aug. 4, 2016) (citing In re Bilski, 545 F. 3d 943, 851 (Fed. Cir. 2008), aff'dsub nom Bilski v. Kappos, 561 U.S. 593 (2010)). HI. Discussion For the reasons discussed below, the Courtfinds that the DCOM Patents are not directed to an abstract idea, lawof nature, or natural phenomenon. Thisfinding ends the § 101 analysis and merits judgment in favor of the Plaintiff. See Alice, 134 S.Ct. at 2354 (2014). Defendant contends that the claims of the DCOM Patents recite functions, such as encrypting/decrypting, labelling, embedding, and determining access authorization, along with generic computing and programming components. InDefendant's view "the claims are disembodied from any particular, letalone new, manner of achieving theresults of these functions." Dkt. No. 865 at 15. Specifically, Defendant argues that multi-level.,. security" term, as construed bythe Federal Circuit, impermissibly provides no restriction onhow the result ofthatsecurity and nesting of files is accomplished. Id. Defendant also argues thattheclaims fail to specify how labels are selected, applied, or how the"object-oriented key manager" performs itsfunctions. Id. at 17. Defendant highlights that thedistrict court previously remarked that theDCOM Patents are "exceptionally broad, and provide little detail regarding how a person ofordinary skill inthe art would implement the claimed invention." Dkt. No. 772 at 12 n. 10. Finally, Defendant argues that the claims are not targeted to a computer-specific problem. Rather, they are analogous to placing a document in two different sealed envelopes in order to produce multi-level security. Plaintiff counters thatDefendant has grossly generalized theDCOM Patents. Plaintiff contends that the express language ofthe claims, the detailed specification, and the Federal Circuit's claim constructions evince the specific and concrete nature of the DCOM Patents. Specifically, Plaintiffavers that the DCOM Patents describe a specific way ofperforming encryption and the nesting ofmultiple encryptions which is both patent-eligible and not addressed by prior art. Furthermore, Plaintiffnotes that the DCOM Patents do not preempt the entire field of managing objects using multiple levels of encryption. Rather, the DCOM Patents include limitations such as the use of an "object-oriented keymanager." Plaintiffargues that there are other ways to achieve multiple levels of encryption without resort to the method represented in the DCOM Patents. The Court recently conducted a detailed § 101 analysis in Virginia Innovation Scis. Inc. V. Amazon.com, Inc.,2017 WL 64147, at *1 (E.D. Va. Jan. 5, 2017). In that case, the Court found that a family ofpatents that cover a method, system, and apparatus for transferring video signals firom a network to a mobile device and then converting those signals ina manner that allows them to be reproduced onan "alternative display terminal" were notdirected to patent- eligible subject matter. Id. The Court noted that "[ajrticulating the scope ofa patent's subject matter is not a precise science. Courts must becareful not to overgeneralize claims because, 'if carried to its extreme, [itwould make] all inventions un-patentable because all inventions can be reduced to underlying principles of nature.'" Id. at *5 (quoting Diamond v. Diehr, 450 U.S. 175, 189 n.l2 (1981)). TheCourt further observed that"courts have held repeatedly that a patentholder 'must do morethan merely show... an unconventional idea,they must show an unconventional embodiment of that idea.'" Id. at *8 (quotingNetflix, Inc. v. Rovi Corp., 114 F.Supp.Sd 927, 940 (N.D. Cal. 2015), affd'^o. 2015-1917, Fed.Appx. , 2016 WL 6575091 at *1 (Fed. Cir. Nov. 7,2016) (emphasis in original)). Finally, the Court recognized that"[p]reemption is the touchstone of the § 101 inquiry." Id. The Court applied these principles and found thatthe family of patents in Virginia Innovation Sciences was targeted to an abstract idea. The Court reasoned that because the "claims encompass every mobile telephone, every video signal received bythat phone, and every HD display terminal sold onthe market" they impermissibly preempted anentire field ofideas. Id. at *10. Furthermore, the Court found thatthe patents were not targeted to an inherently digital fimction: "One could imagine performing the same function through a projection or magnification device." Id. Thus, the patents amounted to"performing abstract ideas ina digital medium ratherthan creating solutions to computer-centric problems." Id. By contrast, Plaintiffhas adequately pleaded inthis case that the patents create a solution to a computer-centric problem which isnot addressed by the prior art. Despite Defendant's assertions, theclaims are not reducible to putting a sealed envelope (single-level encryption) into a second sealed envelope (multi-level encryption) for extra security. Rather, theclaims provide a specific solution to implementing the multiple levels ofnested security through the "objectoriented key manager." They offer a solution to a problem, multiple users inmultiple locations accessing information atdifferent security levels from a central repository, which would not exist butfortheubiquity of computer technology. This difference distinguishes the DCOM Patents from the family ofpatents at issue in Virginia Innovation Sciences which the Court found analogous to physical projection or magnification. See Virginia Innovation Scis. Inc., 2017 WL 64147, at *10 (finding patents invalid which "are akin to performing abstract ideas in adigital medium rather than creating solutions to computer-centric problems."). With respect to preemption, the DCOM Patents are again readily distinguishable from the overbroad patents in Virginia Innovation Sciences. There, the holder ofthe patent offered no information about the specific flmctions ofthe terminal toconvert digital information from one medium to another. Thus, the broad language ofthepatent swept up"[p]ast, present, and future models" ofthe idea. Id. Here, Plaintiff does not allege that their patents foreclose all forms of multi-level security. Rather, the DCOM Patents preempt systems which make use ofthe specific method ofan "object-oriented key manager." Defendant has also previously argued that the patent term does not preempt all multi-level encryption methods. Defendant represented to the Federal Circuitthat its Acrobat software did not infringe the "object-oriented key manager" term because "Acrobat does not store or distribute anykeys" in its multi-level encryption system. TecSec //, 658 Fed. App'x at 581. The Federal Circuitand district court claim construction reinforces the distinctions with Virginia Innovation Sciences. See Synopsys, Inc. v. Mentor Graphics Corp., 839 F.3d 1138, 1149 (Fed. Cir. 2016) ("The § 101 inquiry must focus on the language ofthe Asserted Claims themselves."). While the district court previously opined thattheDCOM Patents are "exceptionally broad, and provide little detail regarding how aperson ofordinary skill in the art would implement the claimed invention[,]" see Dkt. No. 772 at 12 n. 10, the Federal Circuit vacated and remanded that decision. See TecSec //, 658 F. App'x at 585. In the sameopinion, the Federal Circuitfound that fact issuesexistedas to whether Defendant's use of a software "security handler" to control the encryption process constituted an "object-oriented key manager" encryption system. Id. at 582. To reach this conclusion, the Federal Circuit not only had to construe "object-oriented key manager" in order to compare itto the technology employed by the Defendant, but also had to recognize that some, but not all, multi-level encryption methods could infringe the DCOM Patents. The Federal Circuit's findings in 2013 are stronger evidence still that theDCOM Patents are not abstract. In construing the claim limitations thatemploy the term "means" thecourt found that "the specification discloses the specific software products and how touse those products to implement the claimed fimctions ...." TecSec /, 731 F.3d at 1349.^ The Federal Circuit favorably cited three examples ofthe precise implementation ofthe "object-oriented key manager" software with respect to word-processing applications. Id The Court also rejected the argument that these examples only disclosed generic software. Rather, the Court found that "short ofproviding source code, it isdifficult to envision a more detailed disclosure" than the examples provided by the Plaintiff Id. The decisions ofthe Federal Circuit confirm that the DCOM Patents are addressed to a computer-specific problem. Furthermore, the particular method ofencryption identified in the patents is manifest in some computer application examples but does not foreclose the entire field ofcomputer encryption. For these reasons, the DCOM Patents are directed to an inventive concept and are not impermissibly abstract. Consequently, summary judgment pursuant to 35 U.S.C. § 101 is not warranted. ^While the relevant portion of TecSec I addressed indefiniteness pursuant to35 U.S.C. § 112, the analysis is germane to the § 101 inquuy. Pursuant to § 112, "[c]omputer-implemented means-plus-function claims are indefinite unless the specification discloses an algorithm toperform the flmction associated with the limitation." Noah Sys., 675 F.3d at 1319. [SJimply disclosing ablack box that performs the recited fimction "is not a sufficient explanation ofthe algorithm required to render the means-plus-fiinction term definite." Inre TLI Commc'm LLC Patent Litig., 87 F.Supp. 3d773, 800 (E.D. Va. 2015), qff*d, 823 F.3d 607 (Fed. Cir. 2016) (quoting ^«gwe, 755 F.3d at 1338). Similarly, this Court has held that a "black box" patent for video technology was abstract under § 101. See Virginia Innovation Scis. Inc., 2017 WL 64147, at *10. IV. Conclusion For the foregomg reasons, the Court DENIES the Motion for Summary Judgment. (Dkt. No. 864). The Court further DENIES Defendant's Motion to Strike portions ofthe Declaration of Mark Jones. (Dkt. No. 871). Liam O'Siady Ma)^S, 2017 Alexandria, Virginia United St^s District Judge

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