Realtime Data LLC v. Array Networks Inc.

Court of Appeals for the Federal Circuit·Decided August 2, 2023·No. 21-2251·Unpublished

Opinion

NOTE: This disposition is nonprecedential.

United States Court of Appeals for the Federal Circuit

REALTIME DATA LLC, DBA IXO, Plaintiff-Appellant

v.

ARRAY NETWORKS INC., NIMBUS DATA, INC., Defendants

FORTINET, INC., REDUXIO SYSTEMS, INC., QUEST SOFTWARE, INC., CTERA NETWORKS, LTD., ARYAKA NETWORKS, INC., OPEN TEXT, INC., MONGODB INC., EGNYTE, INC., PANZURA, INC.,

Defendants-Appellees

2021-2251

Appeal from the United States District Court for the District of Delaware in No. 1:17-cv-00800-CFC, Chief Judge Colm F. Connolly.

-----------------------------------------------

REALTIME DATA LLC, DBA IXO, Plaintiff-Appellant

v.

2 REALTIME DATA LLC v. ARRAY NETWORKS INC.

SPECTRA LOGIC CORPORATION, Defendant-Appellee

2021-2291

Appeal from the United States District Court for the District of Delaware in No. 1:17-cv-00925-CFC, Chief Judge Colm F. Connolly.

Decided: August 2, 2023

BRIAN DAVID LEDAHL, Russ August & Kabat, Los Angeles , CA, argued for plaintiff-appellant. Also represented by MARC A. FENSTER, PAUL ANTHONY KROEGER, REZA MIRZAIE, SHANI M. WILLIAMS.

JOHN NEUKOM, Debevoise & Plimpton LLP, San Francisco , CA, argued for all defendants-appellees. Defendant- appellee Fortinet, Inc. also represented by DOUGLAS R. NEMEC, Skadden, Arps, Slate, Meagher & Flom LLP, New York, NY; JAMES Y. PAK, Palo Alto, CA.

GUY YONAY, Pearl Cohen Zedek Latzer Baratz LLP, New York, NY, for defendants-appellees Reduxio Systems, Inc., CTERA Networks, Ltd.

ALTON GEORGE BURKHALTER, Burkhalter Kessler Clement & George LLP, Irvine, CA, for defendant-appellee Panzura, Inc. Also represented by MAHSA MICHELLE ROHANI.

THEODORE J. ANGELIS, K&L Gates LLP, Seattle, WA, for defendant-appellee Quest Software, Inc. Also

REALTIME DATA LLC v. ARRAY NETWORKS INC. 3

represented by NICHOLAS F. LENNING, ELIZABETH WEISKOPF.

JOSHUA M. MASUR, Zuber Lawler LLP, Redwood City, CA, for defendant-appellee Aryaka Networks, Inc.

TIMOTHY J. CARROLL, Venable LLP, Chicago, IL, for defendant -appellee Open Text, Inc. Also represented by LAURA A. WYTSMA, Los Angeles, CA.

HILARY L. PRESTON, Vinson & Elkins LLP, Austin, TX, for defendant-appellee MongoDB Inc. Also represented by PARKER DOUGLAS HANCOCK, Houston, TX.

RYAN T. BEARD, FisherBroyles LLP, Austin, TX, for defendant -appellee Egnyte, Inc. Also represented by CHRISTOPHER ROBERT KINKADE, Princeton, NJ.

ROBERT E. PURCELL, The Law Office of Robert E. Purcell , PLLC, Syracuse, NY, for defendant-appellee Spectra Logic Corporation.

GABRIEL K. BELL, Latham & Watkins LLP, Washington , DC, for amicus curiae Veritas Technologies LLC. Also represented by AMIT MAKKER, San Francisco, CA.

Before NEWMAN, REYNA, and TARANTO, Circuit Judges. Opinion for the court filed by Circuit Judge REYNA. Dissenting opinion filed by Circuit Judge NEWMAN. REYNA, Circuit Judge.

This case returns to us for the second time. Appellant Realtime sued several companies, including some of the Appellees, in the District of Delaware for infringing various combinations of five patents related to methods and 4 REALTIME DATA LLC v. ARRAY NETWORKS INC.

systems for data compression. Some of the Appellees moved to dismiss under Federal Rule of Civil Procedure 12(b)(6) for, among other things, failure to state a claim, arguing that the claims of the patents were patent ineligible under 35 U.S.C. § 101. The district court held a hearing and orally announced that all of the claims from the five patents were invalid under § 101. On appeal, this court vacated and remanded for the district court to provide a more detailed § 101 analysis. Realtime Data LLC v. Reduxio Systems, Inc., 831 F. App’x 492 (Fed. Cir. 2020) (“Realtime I”).

On remand, the district court issued a written opinion that found that the claims from all eight asserted patents (by then, Realtime had asserted three more patents and had added more parties) were invalid under § 101 because the claims were directed to an abstract idea. Realtime Data LLC v. Array Networks Inc., 537 F. Supp. 3d 591 (D. Del. 2021) (“Realtime II”). The court dismissed Realtime’s complaints but allowed Realtime to amend them, which it did— adding material and dropping a patent. On renewed motions to dismiss, the district court reaffirmed its prior analysis and dismissed the amended complaints—this time, without leave to amend. Realtime Data LLC v. Array Networks Inc., 556 F. Supp. 3d 424 (D. Del. 2021) (“Realtime III”).

Realtime appeals. For the reasons below, we affirm.

BACKGROUND

A. The Asserted Patents

The seven patents at issue here are U.S. Patent Nos.

9,054,728 (’728 patent), 8,933,825 (’825 patent), 8,717,203 (’203 patent), 9,116,908 (’908 patent), 7,415,530 (’530 patent ), 10,019,458 (’458 patent), and 9,667,751 (’751 patent). All generally relate to methods and systems for digital data compression. Appellant’s Br. 15. The seven patents can be broken into three families. Id.

REALTIME DATA LLC v. ARRAY NETWORKS INC. 5

The family 1 patents. The ’728, ’825, and ’203 patents are in the same family, share a specification, and are titled “Data Compression Systems and Methods.” 1 The patents address issues with lossless data compression techniques, including the “fundamental problem” of their “content sensitive behavior” or “data dependency,” which “implies that the compression ratio achieved is highly contingent upon the content of the data being compressed.” ’728 patent at 2:29–35. Another issue with lossless data compression techniques is that “there are significant variations in the compression ratio obtained when using a single lossless data compression technique for data streams having different data content and data size.” Id. at 2:41–45. According to the patents, although “conventional content dependent techniques,” which typically rely on file type descriptors appended to file names, for example, “.doc” or “.txt,” may be used to address these problems, those content dependent techniques had “[f]undamental limitations.” Id. at 2:65–3:19; see also Appellant’s Br. 17.

To avoid problems associated with data dependency and to improve efficacy, the patents describe “a system for data compression that looks beyond the file type descriptor, to the underlying data, to complete the desired compression .” Realtime I, 831 F. App’x at 493–94 (citing ’728 patent at 3:59–5:11). The system uses a combination of contentindependent and content-dependent data compression and decompression. See ’728 patent at Abstract, 1:34–37, 3:59– 62, 6:24–27.

The ’728 patent includes 25 claims. 2 Claim 25 recites:

1 Because these patents share a specification, when appropriate, we will refer to the ’728 patent specification for all three.

2 The district court implicitly treated a single claim from each asserted patent as representative. See, e.g., 6 REALTIME DATA LLC v. ARRAY NETWORKS INC.

25. A computer implemented method comprising:

analyzing, using a processor, data within a data block to identify one or more parameters or attributes of the data within the data block; determining, using the processor, whether to output the data block in a received form or in a compressed form; and outputting, using the processor, the data block in the received form or the compressed form based on the determination, wherein the outputting the data block in the compressed form comprises determining whether to compress the data block with content dependent data compression based on the one or more

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