) NONEND INVENTIONS N.V., ) ) Plaintiff, ) ) V. ) ) SPOTIFY USA INC., a Delaware ) Corporation; SPOTIFY LIMITED, a United) Kingdom Corporation; SPOTIFY ) TECHNOLOGY SARL, a Luxembourg ) Corporation; and SPOTIFY AB, a Swedish ) Corporation, ) ) Defendants. ) Civil Action No. 12-1041-GMS Civil Action No. 13-389-GMS ORDER CONSTRUING THE TERMS OF U.S. PATENT NOS. 7,587,508, 7,590,752, 7,779,138, 8,090,862, 8,099,513, and 8,266,315 After having considered the submissions of the parties and hearing oral argument on the matter, IT IS HEREBY ORDERED, ADJUDGED, and DECREED that, as used in the asserted claims of U.S. Patent Nos. 7,587,508 (the "'508 patent"), 7,590,752 (the "'752 patent"), 7,779,138 (the '"138 patent"), 8,090,862 ('"the 862 patent"), 8,099,513 (the "'513 patent"), and 8,266,315 (the '"315 patent"): 1. The term "streaming (n.)" is construed to mean "the continuous transmission of data packages that may be played by the receiver while the transmission is occurring." The Plaintiff, Nonend Inventions N.V. ("Nonend"), proposes that this term be construed as "transmission of content that may be played by the receiver while the transmission is occurring." (D.I. 36, Ex. B at 1.) The Defendants, Spotify USA Inc., Spotify Limited, Spotify ' '
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i I I i i t l I I i I j I I l I f f I I J Technology Sarl, and Spotify AB ("Spotify"), suggest the construction "[t]he continuous transmission of data packages that are received by a receiver in sequential order and played by the receiver while the transmission is occurring." (Id.) For the reasons that follow, the court adopts a combination of both parties proposed constructions. The parties' proposed constructions differ regarding four issues: (1) whether "data packages" or "content" are transferred; (2) whether the transmission must be continuous; (3) whether the data packages or content are received in sequential order; and (4) whether the data packages or content must be played by the receiver as they are being transmitted. (D.1. 39 at 5; D.I. 40 at 10.) As the Federal Circuit has recognized, the specification is "the single best guide to the meaning of a disputed term." Phillips v. AWH Corp., 415 F.3d 1303, 1315 (Fed. Cir. 2005) (citation omitted). Thus, the court consults the specification of the '508 patent. 1 The specification states categorically that "[ c ]ontent namely is generally divided into smaller data packages that are subsequently transmitted." ('508 patent, 2:38-40.) The specification bolsters this by explaining, for instance, that "[ s ]treaming video and streaming audio are known internet applications in which data packages with contents are transmitted from a server or station to clients or consumers." (Id. at 7:2-4.) Thus, while Nonend is indeed correct that content is transmitted, it is more accurate to state that data packages are transmitted since the specification makes clear that data packages are the component units of content. Regarding continuity, the specification states that "[t]he special thing about these data packages is that the time sequence of the various packages is of importance .... Additionally, the The specifications of the patents-in-suit are virtually identical. (D.l. 36 at 1, n.1.) Thus, in keeping with the parties' preference, (D.l. 39 at 2, n.2; D.l. 40 at 1, n.1), the court cites to the specification of the '508 patent, unless otherwise noted. 2 f I I I r I I I I l I continuity of the data flow is of importance, as otherwise the broadcast will falter." (Id. at 7:4- 9.) Although, as Nonend points out, the claims do not explicitly mention continuous and I I sequential content transmission, the specification's description of the invention is clear and must be considered in determining the scope of the invention. The repetition in the specification of I the "importance" of continuity indicates that continuity must be an aspect of the invention. As is the case with continuity, the specification explains repeatedly that the sequential order of data packages is "of importance." Nonend is correct, however, that the specification does not indicate that this be a feature of every embodiment. (D.I. 39 at 6.) For instance, the specification states at the outset that "[i]n case of streaming audio or video application the sequential order of several data packages is of importance because en route delaying during the transmission of a data package results in an irregular broadcast." (Id. at 2:40-43.) This mention of sequential order is cabined to streaming audio and video applications and the language is not sufficiently broad to suggest that it is intended to constrain the very character of the invention. Likewise, the specification also states that "[d]uring data transfer, particularly during data transfer wherein the sequential order is of importance, such as for instance streaming audio and streaming video in internet applications, an optimal data connection is of great importance." (Id. at 6:12-16.) This instance again limits the importance of sequential order to streaming audio and video. Thus, the court concludes that, contrary to Spotify's arguments, streaming does not require that data packages be received in sequential order. Just as Nonend has the right of the sequential order issue, Nonend is also correct that the data packages need not be played as they are being transmitted. Spotify argues that since the patentees distinguished the prior art on the basis that the prior art requires that the entire file be 3 f l downloaded, they necessarily disclaimed the possibility that the invention permits downloading a song for later playback. (D.I. 40 at 12-13.) The court is not convinced by this argument. The excerpt of the file history to which Spotify refers states: As a preliminary matter, Applicant submits that Henzerling does not even disclose "streaming content," as recited in each of the independent claims. Henzerling also fails to teach or suggest making streaming content "ready for play-back," as recited in the pending claims. Instead, Henzerling deals with the traditional transmission and receipt of entire data files, albeit between music players. "Once stored in memory 52, the user may play the music file at his leisure." (Henzerling, col. 3, line 63-64.) Thus, in Henzerling's music players, only after an entire file has been downloaded may it be made ready for play-back or transmission. ('138 patent file history, Jan. 5, 2010 Amendment, p.15.) Contrary to Spotify's reading, there is nothing in this excerpt suggesting the instant invention cannot permit the entire file to be downloaded before being played. As the last sentence makes clear, the prior art required that the entire file be downloaded while the instant invention contains no such requirement. The fact that an invention does not require a feature does not mean that it cannot permit that feature, however. There is no evidence for Spotify's assertion that the content must be played as it is transmitted in order to constitute streaming within the meaning of the invention. 2. The term "streaming (adj.)" is construed to mean "transmitted continuously and may be played by the receiver while the transmission is occurring." Nonend argues that this term should be construed as "transmitted and may be played by the receiver while the transmission is occurring." (D.I. 39 at 5.) Spotify contends, however, that this term should be construed as "transmitted continuously and received in sequential order by a receiver and played by the receiver while the transmission is occurring." (D.I. 40 at 10.) For the same reasons provided in the court's construction of "streaming (n.)," the court construes 4 "streaming (adj.)" as "transmitted continuously and may be played by the receiver while the transmission is occurring." 3. The term "streamed" is construed to mean "transmitted continuously and may be played by the receiver while the transmission is occurring." In keeping with its proposed constructions for the streaming terms, Nonend proposes that this term be construed as "transmitted and may be played by the receiver while the transmission is occurring." (D.I. 39 at 5.) Spotify contends that this term should be construed as "transmitted continuously and received in sequential order by a receiver and played by the receiver while the transmission is occurring." (D.I. 40 at 10.) For the same reasons provided in the construction of "streaming (n.)," the court construes this term as "transmitted continuously and may be played by the receiver while the transmission is occurring." 4. The term "network" is construed to mean "a group of nodes." N onend proposes that the meaning of this term is evident and thus, the term should be given its plain and ordinary meaning. Spotify argues, however, that this term should be construed as "a group of interconnected peer nodes". (D .I. 40 at 17.) Spotify also argues that the construction of this term must take into account the patentees' alleged disclaimer of hierarchic systems and thus, the term must be limited to peer-to-peer systems. (Id at 18.) The court concludes that "network" should be construed as "a group of nodes." Spotify's argument that "network" must be limited to peer-to-peer systems is problematic for a few reasons. First, although the patentees criticize systems that require hierarchy, (see, e.g., 1 :36-50), there is no indication in the patent that the invention cannot encompass both hierarchical systems and peer-to-peer systems. Likewise, the fact that the patentees discuss the 5 I advantages of peer-to-peer systems, (see, e.g., 2:12-15), does not mean that the invention must be limited to peer-to-peer systems. It is possible for the invention to "at least partially remove the drawbacks [of hierarchical systems] mentioned explicitly or implicitly" in the patent, (1 :54-55), by incorporating the peer-to-peer systems that the patentees praise, while also including hierarchical networks. Thus, in order for the court to find that the patentees disclaimed hierarchical networks, something more than just criticism of hierarchy-only systems and praise of peer-to-peer systems is needed. See Teleflex, Inc. v. Ficosa N Am. Corp., 299 F.3d 1313, 1325 (Fed. Cir. 2002) (Explaining that disclaimer requires "including in the specification expressions of manifest exclusion or restriction, representing a clear disavowal of claim scope."); Epistar Corp. v. ITC, 566 F.3d 1321, 1335 (Fed. Cir. 2009) ("A patentee's discussion of the shortcomings of certain techniques is not a disavowal of the use of those techniques in a manner consistent with the claimed invention.") The explicit disclaimer required is not present here. Indeed, the specification is not inconsistent with Nonend's assertion that the invention involves a "hybrid," which is to say "a combination of two different kinds of networks, where there are elements of both client/server and peer-to-peer. ... " (D.I. 59 at 5.) Second, as Nonend points out, if "network" is construed as "a group of interconnected peer nodes" then the term "peer-to-peer network" in the '508 patent becomes "peer-to-peer group of interconnected peer nodes." This is a tautology and the presence of "peer" in Spotify's construction of "network" would render the "peer-to-peer" in "peer-to-peer network" superfluous. This contravenes the well-established principle that a construction should give effect to all of a claim's terms. See, e.g., Merck & Co. v. Teva Pharms. USA, Inc., 395 F.3d 1364, 1372 (Fed. Cir. 2005). Third, were "network" to be construed as Spotify suggests, then the 6 I i term "network of media players" from claim 33 of the '513 patent would become "group of interconnected peer nodes of media players." As Nonend rightly observes, this would violate the doctrine of claim differentiation because of dependent claim 40. Claim 40 of the '513 patent, which depends from claim 33, states "[t]he method of claim 33, wherein the media player and the other media players in the network are peer systems." (18:28-29.) Thus, claim 40 implies that the network contemplated in claim 33 encompasses more than peer systems. See, e.g., Phillips, 415 F.3d at 1315 ("[T]he presence of a dependent claim that adds a particular limitation gives rise to a presumption that the limitation in question is not present in the independent claim.") Spotify offers no explanation at all regarding how to reconcile dependent claim 40 with its insistence on construing "network" as limited to peer-to-peer systems. (D.I. 40 at 17-18; D.I. 43 at 13-14.) Having established that a "network" must encompass more than just peer-to-peer systems, the court proceeds to construction. Contrary to Nonend's arguments, the court is not convinced that a jury would understand the term in the specialized context of the patents-in-suit and the invention. Thus, the court consults the specification for guidance as to what a "network" is. Such guidance can be found where the patentees state that "[t]he larger the network becomes, i.e. the more nodes, the more capacity will be available and the quicker the network potentially may become, without expansion of the capacity of the server, by using the device according to the invention." (6:24-28.) As this part of the specification makes clear, a "network" consists of nodes and should be construed accordingly. 5. The term "peer-to-peer network" is construed to mean "a group of peer-to- peer nodes." 7 Nonend argues that this term requires no construction because its ordinary meaning is sufficient. (D.I. 39 at 13.) Spotify advances the construction "a network of peer nodes." (D.I. 40 at 17.) As the court explains above, "network" is construed as "group of nodes." "Peer-to- peer" in the instant term merely clarifies what kind of nodes are in the group. Indeed, the '508 patent's abstract states that "a peer-to-peer network compris[es] a receiver peer node and a plurality of transmitter peer nodes." Thus, the court construes a "peer-to-peer network" simply as a group of peer-to-peer nodes. 6. The term "network of media players" is construed to mean "a group of nodes that connect media players." As with the other network terms, Nonend argues that this term need not be construed. (D.I. 39 at 13-15.) Spotify, on the other hand, argues that this term should be construed as "a group of interconnected peer nodes for connecting media players." With "network" having been construed as "group of nodes," the court concludes that a "network of media players" is simply a group of nodes that connect media players. 7. The term "peer system" is given its plain and ordinary meaning. Nonend proposes that this term be given its plain and ordinary meaning, (D.I. 39 at 15- 16), while Spotify proposes the construction "a peer-to-peer network" because it argues that "'peer system' is just another way of saying a group of peer nodes," (D.1. 40 at 18). The court concludes that "peer system" should be given its plain and ordinary meaning. As Nonend points out, (D.I. 39 at 16), claim 40 of the '513 patent contains both "network" and "peer systems," suggesting that a network is not equivalent to a system: "[t]he method of claim 33 wherein the media player and other media players in the network are peer 8 systems." (18:28-29.) Also, as Nonend observes, if "system" just means "network" and "network" means "a group of interconnected peer nodes," as Spotify suggests, then "peer systems" becomes "a peer-to-peer group of interconnected peer nodes." (D.I. 39 at 16.) This renders the "peer" language in claim 40 superfluous. For these reasons, the court cannot adopt Spotify' s proposed construction. Ultimately, the court gives "peer system" its plain and ordinary meaning. "System" is used in several instances in the patent in ways that suggest its meaning is broad and depends on what modifier precedes it. (See, e.g., 1:45 ("hierarchical system"); 4:37-38 ("traffic information system" and "route navigation system"); 15:4 ("media player system"); 18:28-29 ("peer systems").) Thus, it is readily apparent that a "peer system" is merely a system consisting of peer nodes. 8. The term "a system for distributing media content" is given its plain and ordinary meaning. Nonend argues that this term should be given its plain and ordinary meaning, (DJ. 39 at 15), while Spotify suggests "a network of peer nodes used to transmit audio or video content," (D.I. 40 at 17). As with "peer system," the court gives this term its plain and ordinary meaning. The court cannot accept Spotify's proposed construction because, as explained above in the construction of "network," the court rejects Spotify's attempt to cabin this and other terms to the peer-to-peer context. In addition, for reasons detailed in the construction of "peer system," the court must reject Spotify's argument that "system" is equivalent to "network." 9. The term "peer node" is construed to mean "a node in a network that can act as a transmitter (server) of data packages at one moment or as a receiver 9 I l (client) of data packages at another moment and changes its role on its own initiative." Nonend argues that this term does not need construction because "the claim language as a whole provides the meaning of 'peer node."' (D.I. 39 at 17-18.) Spotify, however, advances the construction "[a] node in a network that can act as a transmitter (server) of data packages at one moment or as a receiver (client) of data packages at another moment and changes its role on its own initiative." (D.I. 40 at 13.) The court adopts Spotify's proposed construction. Spotify's proposed construction incorporates the features that the specification indicates peer nodes possess. First, the specification makes clear that peer nodes can act both as servers and receivers at their own initiative, stating that "[i]n conformity with the device according to the invention it is namely possible that the same peer at one moment acts as a server having a second peer as client and at another moment acts as client of the second peer now acting as server, without a control being at the basis thereof. The two devices change role on their own initiative." (2:25-30.) Second, as the court explained in its construction of the streaming terms, data packages are what are transmitted by servers to receivers. Thus, Spotify's reference to data packages in its proposed construction is appropriate. Nonend does not actually dispute the accuracy of Spotify's proposed construction and instead insists that the claim language is sufficient. (D.I. 39 at 18.) As the court explained in construing "network," however, providing the jury with guidance is particularly important when a complex, specialized set of patents is at issue as they are here. Thus, the court adopts Spotify's proposed construction. 10. The term "consumer node" is construed to mean "a node that is provided with software to receive content and to deliver it to other nodes requesting 10 l such, independent of the source." Nonend suggests that this term be construed as "a node that is provided with software to receive content and to deliver it to other nodes requesting such, independent of the source." (D.I. 39 at 12.) Spotify's proposed construction is very similar: "a peer node that is provided with software to receive content and to deliver it to other nodes requesting such, independent of the source." (D.I. 40 at 17.) The difference between the two parties' constructions is that Spotify maintains that the court must construe "consumer node" as a "peer node" while Nonend requires no such limitation. The court concludes that Nonend's proposed construction is correct. The specification states simply of consumer nodes that "[ c ]entral in the network are the consumer nodes. Said nodes are provided with software to receive content and to deliver it to other nodes requesting such independent of the source." (5:3-5.) This statement is clear and there is no requirement that the consumer node be a peer node. Thus, the court declines to read into the patent a limitation that is not justified by the intrinsic evidence. 11. The term "device" is given its plain and ordinary meaning. Nonend holds that this term is self-evident and simply means "any type of equipment that can met the limitations of each claim," (D.I. 39 at 17-18), but Spotify proposes that "device" be construed as equivalent to "peer node," (D.I. 40 at 14). The court concludes that Nonend has the right of this and that "device" is used in the common dictionary sense in the patent. As Spotify notes, there are some instances in which the specification describes a "device" in ways that suggests it is equivalent to a peer node. For instance, the specification explains that "independent devices according to the invention are able to provide other independent devices according to the invention with data so that for instance data that are available to a network are 11 I [ l quickly accessible to any give [sic] device in a network." (2:5-9.) The specification also states that a device has a "transmission routine for transmitting data packages to receiving devices in the data network[.]" (3:8-13.) Even if "device" can mean "peer node," however, there is no indication in the specification that "device" should be cabined to only "peer node." Likewise, there is no indication in the prosecution history that "device" should be limited to "peer node." Spotify correctly notes, (D.I. 40 at 15), that the examiner characterized "peer node" as a "device" in the April 27, 2009 notice of allowance for the '508 patent. ('508 patent file history, April 27, 2009 Notice of Allowance at 2.) As Nonend rightly points out though, the examiner also characterized "computer readable medium" as a "device." (Id) This suggests that "device" was understood in the generic, broad sense, rather than as limited to "peer node." 12. The term "production node" is construed to mean "a node transmitting content to other nodes when they request such." Nonend contends that this term should be construed as "a node that initially provides the content to the network and can transmit content to another node when requested." (D.I. 39 at 10.) Spotify argues that the proper construction is "a peer node that transmits content to other nodes when they request such." (D.1. 40 at 15.) Spotify incorporates "peer" into its construction because of its stance that the invention disclaims hierarchic systems and only peer-to-peer systems are within the invention's scope. For the following reasons, the court adopts Spotify's proposed construction except that the court excludes the limitation to peer-to-peer systems. The specification states that "[t]he first node is a node transmitting content to other nodes when they request such. Such a node is further called [a] production node." (4:62-64.) Spotify's construction mirrors the specification almost exactly, save for the added limitation that 12 the node be a peer node. As discussed above in the construction of "network," the court is unconvinced by Spotify' s insistence that the invention be limited to peer-to-peer systems, rather than hierarchic systems. Thus, the court will not limit "production node" to peer-to-peer systems and construes this term as "a node transmitting content to other nodes when they request such." Nonend's proposed construction erroneously requires that the production node "initially provide[] the content to the network[.]" There is no support in the specification for this. As Nonend points out, the specification does state that a production node should be "able to adapt the content, add content itself (for instance subtitling in a certain language in a streaming video content) or generate its own content[.]" (5:38-45.) That the production node adapts, adds, or generates content does not mean that it is mandatorily always the origin of the content, however. 13. The term "central node" is construed to mean "a node that controls other nodes in a hierarchic system." Nonend proposes that this term be construed as "a node that controls data transmission among other nodes in a hierarchic system," (D.1. 39 at 11), while Spotify suggests the construction "a node that controls other nodes in a hierarchic system," (D.I. 40 at 16). Thus, the parties agree that a "central node" controls other nodes. They disagree, however, regarding whether the central node has full control of other nodes or controls only an aspect of the other nodes. The court concludes that Spotify is correct because the specification plainly states that the central node controls each node in a hierarchic system. According to the specification, "a network ... of nodes is known from U.S. Pat. No. 5,511,167 which nodes, however, are each part of a hierarchic system. Each node is centrally controlled here by means of a central node." (1 :36-39.) 13 14. The term "autonomously" is given its plain and ordinary meaning. Nonend asserts that no construction is needed for this term, (D.I. 39 at 19), but Spotify suggests "on its own initiative and independent of other nodes," (D.I. 40 at 19). The court concludes that Nonend is correct and there is no need to construe this term. As with the other terms to be construed, the court consults the specification for guidance on what "autonomously" means. The specification states "[s]aid second consumer node may get its content from either the production node, or from the first consumer node, whichever data connection it judges as being the better one. Special however is that the consumer node is able to act entirely autonomous and independent of the production node." (5:41-46.) The specification also states that "[a] new node might at its own initiative, entirely autonomously, go look for an even better connection." (5:50-51.) These portions of the specification make clear what the patentees meant by "autonomously" and this is sufficient. See, e.g., Phillips, 415 F.3d at 1312 ("It is both unjust to the public and an evasion of the law to construe an invention in a manner different from the plain import of its terms.") In addition, Spotify's proposed construction goes a step too far in requiring that "autonomously" mean independent of all other nodes. The specification speaks only of independence from the production node in explaining what constitutes autonomy. 15. The term "first communication channel" is construed to mean "a first connection via a transmission medium." Both parties' proposed constructions are very similar. Nonend suggests "a first connection via a transmission medium." (D.I. 39 at 8.) Spotify proposes "a first connection via a transmission medium to a first peer node." (D.I. 40 at 19.) Thus, the parties' disagree only regarding whether there must be a connection from the media player to a first peer node. For the 14 following reasons, the court concludes that Nonend is correct. "First communication channel" appears in multiple claims of the '862 patent. Claim 1 is representative and provides that the first communication channel is "operationally coupled to the receiving media player." (15:4-8 ("[R]eceiving one or more data packages corresponding to at least a part of the item of content over a first communication channel operationally coupled to the receiving media player[.]").) It also provides that content is streamed to the media player over two communication channels. (15: 15-21 ("[M]aking incoming content received over the first communication channel ready for processing and play-back at the receiving media player, such that part of the item of content is streamed to a stream target at the receiving media player, while another part of the item of content is being received by the receiving media player over the second communication channel.").) The claim contains no discussion of what the receiving media player is connected to through the first and second communication channels. Spotify argues that the patentees contemplated a peer-to-peer system and as a result, the receiving media player can only be connected to a peer. (D.I. 40 at 19-20.) The court has rejected Spotify's characterization of the patents-in-suit as limited to peer-to-peer systems, however. Accordingly, the court rejects Spotify' s attempt to require that the receiving media player be connected to a peer node. 16. The term "second communication channel" is construed to mean "a second connection via a transmission medium." Nonend proposes that this term be construed as "a second connection via a transmission medium," (D.I. 39 at 8), while Spotify argues that the proper construction is "second connection via a transmission medium to a second peer node," (D.I. 40 at 19). For the same reasons 15 J
I I provided in the construction of "first communication channel," the court adopts Nonend's proposed construction. Dated: August _I_, 2014 16
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