Selecting Compression Format in Streaming Digital Video Held Not Patent-Eligible: Adaptive Streaming Inc. v. Netflix, Inc.

Patent claims directed to distributing streaming video data in a first formal and then converting the data to a second format are not patent-eligible, said the court in Adaptive Streaming Inc. v. Netflix, Inc., Case No. SA CV 19-1450-DOC (KESx) (C.D. Cal. Nov. 19. 2019). The court thus granted the defendant’s Rule 12(b)(6) motion to dismiss, holding claims of U.S. Patent No. 7,047,305 (“Personal broadcasting system for audio and video data using a wide area network”) invalid under 35 U.S.C. § 101.

One lesson of this case is that even long claims with a lot of technical verbiage should not necessarily be expected to survive an Alice challenge. Here is independent claim 39 from the ’305 patent, discussed in the court’s opinion; the bolded limitations are those that the plaintiff argued, without success, represented a patent-eligible technical innovation:

A system to broadcast to at least one client device, the system comprising:

a processor; and

a broadcasting server coupled to the processor, the broadcasting server including:

an image retrieval portion to retrieve at least one incoming video signal having a first format;

a data structure usable to determine parameters for second compression formats for the at least one incoming video signal; and

at least one transcoding module coupled to the image retrieval portion and which has access to the data structure, the transcoding module being capable to transcode the at least one incoming video signal from the first format into multiple compressed output video signals having respective second compression formats based at least in part on the parameters;

wherein at least one of the second compression formats is more suitable for the at least one client device than the first format; and

wherein the multiple compressed output video signals having the at least one second compression format more suitable for the at least one client device can be provided by the broadcasting server, wherein any one of the multiple compressed output video signals can be selected to be presented at the at least one client device.

Under part one of the two-part Mayo/Alice patent-eligibility test, the defendant argued that the ’305 patent was directed to the allegedly long-standing abstract “idea of translating content into multiple formats.” The plaintiff argued that the patent solved the technical problem of converting a video signal in one format into multiple formats for different devices. The court agreed with the defendants, finding that “the asserted claims are directed to the abstract idea of collecting information and transcoding it into multiple formats.” The court relied on RecogniCorp, LLC v. Nintendo Co., Ltd (Fed. Cir. 2017), for the proposition that using known techniques for encoding and decoding data did not confer patent-eligibility. As in Electric Power Group, LLC v. Alstom S.A., (Fed. Cir. 2016), the claims simply applied generic computing technology.

Turning to part two of the patent-eligibility test, the court found that there was no significant additional innovation to render the abstract idea patent-eligible. The plaintiff’s purported technological innovations (see bolded language in claim 39 above) added nothing to “the abstract idea itself, namely collecting information and transcoding it into multiple formats.” Compression and transcoding were well known. Further, “generating video streams with different compression outputs is still simply transcoding into multiple formats,” and “[t]hat is the abstract idea.” (Emphasis in original.)

Lessons for Practice

This is a case to watch if it goes to the Federal Circuit. My own sense is that many district courts would have decided this motion differently, or at least would have been reluctant to dispose of this patent at the pleadings stage, and without claim construction.