Uniloc USA, Inc. v. Amazon.com, Inc.

243 F. Supp. 3d 797, 2017 WL 1049595, 2017 U.S. Dist. LEXIS 39800
CourtDistrict Court, E.D. Texas
DecidedMarch 20, 2017
DocketCIVIL ACTION NO. 2:16-CV-00570-RWS (LEAD), CIVIL ACTION NO. 2:16-CV-00571-RWS, CIVIL ACTION NO. 2:16-CV-00572-RWS, CIVIL ACTION NO. 2:16-CV-00573-RWS, CIVIL ACTION. NO. 2:16-CV-00574-RWS
StatusPublished
Cited by1 cases

This text of 243 F. Supp. 3d 797 (Uniloc USA, Inc. v. Amazon.com, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Uniloc USA, Inc. v. Amazon.com, Inc., 243 F. Supp. 3d 797, 2017 WL 1049595, 2017 U.S. Dist. LEXIS 39800 (E.D. Tex. 2017).

Opinion

MEMORANDUM OPINION AND ORDER

ROBERT W. SCHROEDER III, UNITED STATES DISTRICT JUDGE

Before the Court are Defendant Netflix Inc.’s Motion, to Dismiss (Case No. 2:16-cv-574, Docket No. 15) and Defendants Amazon.com, Inc. and Amazon Digital Services, Inc.’s (collectively, “Amazon”) Motion to Dismiss Pursuant to Fed. R. Civ. P. 12(b)(6) for Lack of Patentable Subject Matter Under 35 U.S.C. § 101 (Docket No. 20)1, which is joined by the other Defendants in this consolidated action.2 Amazon’s motion argues that the case should be dismissed because the asserted patent claims ineligible subject matter under 35 U.S.C. § 101 and Alice Corp. v, CLS Bank Int’l, — U.S. -, 134 S.Ct. 2347, 189 L.Ed.2d 296 (2014). Netflix’s motion joins Amazon’s and further argues that the case should be dismissed because the Complaint pleads insufficient facts to state a claim under Federal Rule of Civil Procedure 8. The Court GRANTS Amazon’s motion (Docket No. 20). Netflix’s motion is GRANTED-IN-PART to‘the extent it seeks relief ünder 35 U.S.C. § 101 and is otherwise DENIED as moot.

BACKGROUND

This is a consolidation of five patent-infringement actions in which Plaintiffs Uniloc USA, Inc. and Uniloc Luxembourg S.A. (collectively, “Uniloc”) assert infringement of U.S. Patent -No. 8,566,960 (“the ’960 Patent”); entitled “System and Method for Adjustable Licensing of Digital Products.” The Defendants are providers of. digital media content, and Plaintiffs generally allege that the Defendants’ digital media content distribution systems infringe the '960 Patent.

The ’960 Patent relates to “systems and methods to enable the monitoring and adjusting software usage under a software license.” ’960 Patent, col. 1:18-20. The ’960 Patent explains that a license can be adjustable over time in terms of the number ’ of devices that may access the licensed product. Id. at col. 3:41-42 (“The techniques described herein allow for a changing number of device installations on a per [801]*801license basis over time.”). It further explains that the adjustment may be desirable to accommodate the natural usage patterns of users, for promotional reasons or to control abusive copying. Id. at col. 1:61-2:2, 6:13-20, 6:36-40.

The three independent claims of the ’960 Patent recite a system (claim 1), a method (claim 22) and a computer program product (claim 25) “for adjusting a license for a digital product over time.” Id. at col. 11:57-58,13:32-33. Claim 22 and its dependent claims 23 and 24 provide:

22.A method for adjusting a license for a digital product over time, the license comprising at least one allowed copy count corresponding to a maximum number of devices authorized for use with the digital product, comprising:
receiving a request for authorization to use the digital product on a given device;
verifying that a license data associated with the digital product is valid based at least in part on a device identity generated by sampling physical parameters of the given device;
in response to the device identity already being on a record, allowing the digital product to be used on the given device;
in response to the device identity not being on the record, setting the allowed copy count to a first upper limit for a first time period, the allowed copy count corresponding to a maximum number of devices authorized to use the digital product;
calculating a device count corresponding to total number of devices already authorized for use with the digital product; and
when the calculated device count is less that the first upper limit, allowing the digital product to be used on the given device.
23. The method of claim 22, further comprising:
in response to the device identity not being on the record, after the first time period has expired, setting the allowed copy count to a second upper limit for a second time period;
recalculating the device count; and
when the recalculated device count is less than the second upper limit, allowing the digital product to be used on the given device.
24. The method of claim 23, further comprising:
in response to the device identity not being on the record, after the second time period has expired, setting the allowed copy count to a third upper limit;
recalculating the device count; and
when the recalculated device count is less than the third upper limit, allowing the digital product to be used on the given device.

Id. at 13:32-14:23.

Figure 1 of the ’960 Patent provides the core features or “rules” of an “example license” to be implemented by the claimed method:

[802]*802Example license Rules
License allows:
• 5 devices to be added within the first 6 days of the initial authorization date and time.
• 7 devices to be added within the first 30 days of the initial authorization date and time.
* 11 devices to be allowed in total.
* Indefinite numbers of re-authorizations for devices already authorized.

Id. at Figure 1. The example shows a licensing scheme by which the number of devices that may access the digital content grows over time. 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 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. See id. at col. 6:13:20. The kind of license shown in Figure 1 can be referred to as a “time-adjustable license.”

As claims 22-24 show, the claimed invention of the ’960 Patent is a system or method for managing and implementing the time-adjustable license using a computer as exemplified in Figure 2. Id. at col. 4:42-45 (“FIG. 2 shows an example embodiment of a software system that is designed to manage and implement the rules under a license, such as, for example, the licensing terms 60 described in FIG. 1.”).

LEGAL STANDARD

Federal Rule of Civil Procedure 12(b)(6)

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Related

Uniloc 2017 LLC v. Hulu, LLC
966 F.3d 1295 (Federal Circuit, 2020)

Cite This Page — Counsel Stack

Bluebook (online)
243 F. Supp. 3d 797, 2017 WL 1049595, 2017 U.S. Dist. LEXIS 39800, Counsel Stack Legal Research, https://law.counselstack.com/opinion/uniloc-usa-inc-v-amazoncom-inc-txed-2017.