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

United States Court of Appeals, Federal Circuit

November 1, 2017

TWO-WAY MEDIA LTD., Plaintiff-Appellant
v.
COMCAST CABLE COMMUNICATIONS, LLC, COMCAST INTERACTIVE MEDIA LLC, VERIZON SERVICES CORP., VERIZON ONLINE LLC, Defendants-Appellees

         Appeals from the United States District Court for the District of Delaware in Nos. 1:14-cv-01006-RGA, 1:14-cv-01212-RGA, Judge Richard G. Andrews.

          Michael F. Heim, Heim, Payne & Chorush, LLP, Houston, TX, argued for plaintiff-appellant. Also represented by Robert Allan Bullwinkel, Micah John Howe, Leslie Payne; Parker C. Folse, III, Rachel S. Black, Jenna Farleigh, Susman Godfrey LLP, Seattle, WA; Shawn Daniel Blackburn, Joseph Samuel Grinstein, Houston, TX.

          Brian Lee Ferrall, Keker & Van Nest, LLP, San Francisco, CA, argued for all defendants-appellees. Defendants-appellees Comcast Cable Communications, LLC, Comcast Interactive Media LLC also represented by Daniel E. Jackson, Leo L. Lam, David Justin Rosen.

          Thomas M. Dunham, Winston & Strawn LLP, Washington, DC, for defendants-appellees Verizon Services Corp., Verizon Online LLC. Also represented by Sarah J. Kalemeris, Kurt A Mathas, Chicago, IL; Anup Misra, New York, NY.

          Before Lourie, Reyna, and Hughes, Circuit Judges.

          Reyna, Circuit Judge.

         Two-Way Media Ltd. appeals from a decision of the United States District Court for the District of Delaware that found the claims of the asserted patents to be directed to patent ineligible subject matter under 35 U.S.C. § 101. Because the claims are directed to abstract ideas and contain no additional elements that transform the nature of the claims into a patent-eligible application of the abstract ideas, we affirm.

         Background

         A. Technical Background

         The patents-in-suit are related as a series of continuation applications, and thus share substantially the same specification. U.S. Patent No. 5, 778, 187 ("'187 patent") issued first, followed by U.S. Patent Nos. 5, 983, 005 ("'005 patent"), then 6, 119, 163 (not at issue here), then 6, 434, 622 ("'622 patent"), and then 7, 266, 686 ("'686 patent"). The patents are entitled "Multicasting Method and Apparatus, " and generally relate to a system for streaming audio/visual data over a communications system like the internet. Claim 1 of the '187 patent is representative of all claims of the '187 patent and '005 patent, claims 1 and 29 of the '622 patent, and claims 1, 22, 26, and 30 of the '686 patent are representative of their respective patents.

         The patents explain that internet systems typically operate on a point-to-point, or unicast, basis. In unicast systems, a message is converted into a series of addressed packets which are routed from a source node to a destination node. But these unicast systems lack the capability to broadcast a message from a source node to all the other recipients in a network, as this type of operation could easily overload the network.

         IP Multicasting, in contrast, provides a way to transmit one packet of information to multiple recipients. In such a system, packets destined for several recipients are encapsulated in a unicast packet and forwarded from a source to a point in a network where the packets are replicated and forwarded on to all desired recipients. A multicast packet can be routed from a source node through a plurality of multicast routers to one or more devices receiving the multicast packets. The packet can then be distributed to all the host computers that are members of the multicast group. The patents explain that this technology had previously been used to provide internet-based audio/visual conferencing servicing as well as radio-like broadcasts to interested parties.

         The patents describe the invention as an improved scalable architecture for delivering real-time information. Embedded in the architecture is a control mechanism that provides for the management and administration of users who are to receive real-time information. Figure 1 provides a schematic diagram depicting an overview of the system:

         Image Omitted

          J.A. 80. In this system, the Primary Servers and Media Servers are interconnected by the internet. The Control Servers connect users with Media Servers using a series of message exchanges. The patents also describe monitoring network conditions and generating records about the real-time streams.

          The parties agree that claim 1 of the '187 patent is representative of the claims of the '187 patent and '005 patent. It recites:

1. A method for transmitting message packets over a communications network comprising the steps of:
converting a plurality of streams of audio and/or visual information into a plurality of streams of addressed digital packets complying with the specifications of a network communication protocol,
for each stream, routing such stream to one or more users,
controlling the routing of the stream of packets in response to selection signals received from the users, and
monitoring the reception of packets by the users and accumulating records that indicate which streams of packets were received by which users, wherein at least one stream of packets comprises an audio and/or visual selection and the records that are accumulated indicate the time that a user starts receiving the audio and/or visual selection and the time that the user stops receiving the audio and/or visual selection.

J.A. 111 at col. 18 ll. 17-34; J.A. 114 (certificate of correction). Two-Way Media asserts that the claims of the '622 patent are directed to the features described in the specification, but are claimed more broadly. For example, claim 29 recites:

29. A method for forwarding real-time information to one or more users having access to a communications network comprising:
processing one or more streams of audio or visual information into one or more streams of packets for forwarding over the communications network, wherein at least one stream of ...

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