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Two-Way Media Ltd. v. Comcast Cable Communications, LLC

United States District Court, D. Delaware

May 13, 2015

TWO-WAY MEDIA LTD., Plaintiff,
v.
COMCAST CABLE COMMUNICATIONS, LLC, COMCAST INTERACTIVE MEDIA, LLC, NBCUNIVERSAL MEDIA, LLC, and NBCUNIVERSAL, LLC, Defendants.

REPORT AND RECOMMENDATION

MARY PAT THYNGE, Chief Magistrate Judge.

I. INTRODUCTION

On August 1, 2014, Two-Way Media Ltd. ("plaintiff") filed this action against the two groups of defendants, namely: Comcast Cable Communications, LLC and Comcast Interactive Media, LLC (collectively, "Comcast" or "defendants"); and NBCUniversal Media, LLC and NBCUniversal, LLC (collectively, "NBCU" or "defendants"), alleging both groups infringed U.S. Patents Nos. 6, 434, 622 (the "'622 patent") and 8, 539, 237 (the '"237 patent"), and that Comcast had additionally infringed U.S. Patent No. 7, 266, 686 (the "'686 patent"; collectively with the '622 patent and '237 patent, the "patents-in-suit"). Plaintiff sought a permanent injunction of all allegedly infringing activities by Comcast and NBCU, damages, and costs. Comcast and NBCU moved to dismiss claims of joint and wilful infringement from plaintiffs complaint on September 22, 2014. In response, plaintiff amended its complaint to remove the claim of wilful infringement and to supplement the claim of joint infringement with additional factual allegations.[1]

Pending before the court is Comcast and NBCU's motion to dismiss plaintiff's amended complaint for failure to state a claim for joint infringement under FED. R. CIV. P. 12(b)(6).[2] This court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1338(a) because this action arises under 35 U.S.C. § 101 et seq. [3] and personal jurisdiction over Comcast and NBCU because they availed themselves of Delaware corporate law.[4] Venue is proper pursuant to 28 U.S.C. §§ 1391(c) and 1400(b).[5] This Report and Recommendation is issued pursuant to 28 U.S.C. § 636(b)(1)(8), FED. R. CIV. P. 72(b)(1), and D. DEL. LR 72.1.[6] For the reasons stated below, it is recommended that defendants' motion be granted.

II. BACKGROUND

A. Parties

Plaintiff is a limited partnership existing under the laws of Colorado with its principal place of business in Colorado and its general partner existing under the laws of Delaware.[7] Comcast is a limited liability company existing under the laws of Delaware with its principal place of business in Pennsylvania. NBCU is a Delaware limited liability company wholly owned by Comcast and forms one of its operating units.[8]

B. Patents-in-Suit

Plaintiff asserts it holds all rights to the patents-in-suit by assignment from Netcast Communications Corp. in 2002. The three asserted patents arose from a series of applications claiming priority to May 9, 1996.[9] The '622 patent was issued on August 13, 2002 and claims an invention called "Multicasting Method and Apparatus." Reexamination certificates for the '622 patent were issued on September 12, 2006 and December 2, 2008. On September 4, 2007, the '686 patent was issued for an invention, also called "Multicasting Method and Apparatus." The '237 patent claims an invention called "Methods and Systems for Playing Media."[10]

Plaintiff represents the shared specification of the patents-in-suit describes a system for transmitting, receiving, and monitoring audio and video over the Internet. The patents purportedly relate to an interactive distributed client-server system that allows live audio and video streams to be sent to multiple users and enables commercial record keeping and marketing functions.[11]

According to plaintiff, its system works as follows. A central facility in its system receives and, if necessary, digitizes incoming audio and video signals and forwards them to various servers. In turn, the servers transmit the signals to users via the Internet or similar communications networks. The transmissions are monitored to ensure the reliability and accuracy of gathered usage statistics. The servers may play a role in ensuring that each user receives the particular stream of his choosing and that he receives the requested content at substantially the same time that the signals are transmitted from the central facility. Servers may also participate in gathering usage statistics, dynamically inserting advertising content into streams, and offering targeted product sales, such as buying music or concert tickets that relate to a song that is being streamed. Depending on demographics and geography, the signals in plaintiff's system pass through one or more intermediary servers before reaching users.[12]

C. Plaintiff's Allegations

Plaintiff avers Comcast and NBCU make, use, sell, market, provide, and support products and services for live streaming media that infringe the '622 and '237 patents. In addition, Comcast allegedly makes, sells, markets, provides, and supports products and services for live streaming media that infringe the '686 patent. The infringing activities concern television subscription services offered by Comcast and NBCU, dubbed TV Everywhere ("TV Everywhere").[13] These services allow subscribers to stream live TV content to digital platforms like computers, tablets, smartphones, and other devices via the Internet. Servers used by Comcast and NBCU for streaming allegedly generate detailed recordings and usage statistics about the TV Everywhere services.[14]

Plaintiff contends Comcast and NBCU also contract and have relationships exceeding mere arms-length cooperation with third parties, including Adobe Systems Inc., Conviva, Inc., and comScore, Inc., to "gather usage statistics" on their TV Everywhere services.[15] Comcast and NBCU transmit to these third parties messages generated by software running on the user devices and "direct or control" the third parties by requesting particular types of data on the delivery of the streaming content, such as commencement, duration, and termination of the stream.[16] Comcast and NBCU also direct or control the gathering of such statistics by offering their subscribers apps generating information that is ultimately transmitted to and used by the third parties to gather and process the statistical data.[17] Based on these contentions, plaintiff argues Comcast and NBCU in combination with one ...


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