IP Law Daily, PATENT—D. Haw.: Induced infringement claims involving video-on-demand patent dismissed as vague and conclusory, (Nov 4, 2014)

By Mark Engstrom, J.D.

A developer of interactive media applications for cable television subscribers could not pursue induced infringement claims against cable companies that allegedly infringed a patent for the delivery of Internet-based “video-on-demand” services, the federal district court in Honolulu has ruled (Broadband iTV, Inc. v. Hawaiian Telecom, Inc., October 30, 2014, Kay, A.). The induced infringement claim was dismissed without prejudice.

Background. Broadband iTV sued four cable companies (Hawaiian Telecom, Time Warner Cable, Oceanic Time Warner Cable, and Time Warner Entertainment Company) for the infringement of U.S. Patent No. 7,631,336, titled “Method for Converting, Navigating and Displaying Video Content Uploaded from the Internet to a Digital TV Video-on-Demand Platform.” Broadband alleged that the cable companies were making and selling Broadband’s patented method for converting, navigating, and displaying video content in connection with the provision of digital television services, including video-on-demand services, to cable subscribers.

The court addressed two issues: (1) whether Broadband had sufficiently pleaded its claims for inducing infringement and (2) whether 35 U.S.C. §299 required the claims against Time Warner Cable, Oceanic Time Warner Cable, and Time Warner Entertainment Company (collectively, “TWC”) to be severed from the claims against Hawaiian Telecom (HTI).

Allegations of induced infringement. To state a viable claim for induced infringement, Broadband had to allege facts to show that: (1) the defendants had specifically intended that a third party would infringe the patent in suit and (2) the defendants knew that the third party’s actions would constitute patent infringement. In addition, the Supreme Court had clarified in Limelight Networks, Inc. v. Akamai Technologies, Inc., 134 S.Ct. 2111 (2014), that inducement liability could arise only if the asserted patent was directly infringed.

In this case, Broadband alleged in a vague and conclusory manner that the defendants had “directly infringed or induced infringement of one or more claims of the [asserted patent] by others.” Broadband did not allege “who” was induced to infringe or “what” infringing conduct was induced. Further, Broadband failed to allege facts to show that the defendants: (1) specifically intended to encourage third parties to infringe the patent in suit and (2) knew that the third parties’ conduct constituted patent infringement.

Because Broadband failed to adequately allege that the defendants had induced the infringement of the patent in suit, dismissal of the induced infringement claim was warranted.

Misjoinder, severence. The court noted that the America Invents Act prohibited joinder unless the asserted infringement by each defendant had arisen from “the same transaction [or] occurrence” involving “the same accused product.” In the court’s view, competitors could not be joined in a patent infringement action under 35 U.S.C. §299 if the plaintiff did not allege that the competitors had conspired or acted in concert.

In this case, TWC and HTI were competing cable television operators and Broadband failed to allege that TWC and HTI had acted in concert or conspired together. For that reason, Broadband could not sue TWC and HTI in the same action. Alleging that the cable companies were infringing the same product, system, or method was insufficient, by itself, to satisfy the demands of §299, the court explained. Consequently, the court concluded that the claims against TWC and the claims against HTI should be severed under 35 U.S.C. §299. Leave to amend was granted.

The case is Civ. No. 14-00169 ACK-RLP.

Attorneys: Frederick A. Tecce (Panitch, Schwarze, Belisario & Nadel) for Broadband iTV, Inc. Brandon H. Story (Bingham McCutchen LLP) for Hawaiian Telecom, Inc. Aaron Stiefel (Kaye Scholer LLP) for Oceanic Time Warner Cable, LLC, Time Warner Cable, Inc., and Time Warner Entertainment Company, LP.

Companies: Broadband iTV, Inc.; Hawaiian Telecom, Inc.; Oceanic Time Warner Cable, LLC; Time Warner Cable, Inc.; Time Warner Entertainment Company, LP

Cases: Patent HawaiiNews