IP Law Daily, PATENT—S.D. N.Y.: Deluxe Entertainment Group failed to show that infringed soundtrack coding patent for fighting piracy was invalid for obviousness, (Feb 4, 2014)

By Peter Reap, J.D., LL.M.

Deluxe Entertainment Services Group, the sole remaining defendant accused of infringing Medien Patent Verwaltung AG’s (“MPV’s”) U.S. Patent No. 7.187,633 (“the '633 patent”), failed to show that the patent, directed to soundtrack coding for fighting piracy, was invalid for obviousness, the federal district court in White Plains, New York, has ruled (Medien Patent Verwaltung AG v. Warner Bros. Entertainment Inc., January 29, 2014, McMahon, C.). The court rejected Deluxe’s proposed construction of the claim term “eliminating or making unreadable digital information in at least a part of said second section corresponding to said sequence of markings on said first section.” Instead, the term was properly construed in accordance with the plain meaning of the words it uses. Thus, MPV’s motion for summary judgment of infringement was granted and Deluxe’s cross motion was denied.

Background. MPV filed its original complaint against Deluxe, Warner Bros. Entertainment, Inc., and Technicolor Inc. on May 19, 2010, alleging infringement of the '633 patent. On February 11, 2013 the court granted summary judgment in favor of MPV, finding that Deluxe’s accused “FCT Sound” film coding system infringed Claim 19 of the '633 patent. Shortly after that ruling, MPV reached a favorable settlement with Warner Bros. and Technicolor.

Because Deluxe argued that the '633 patent was invalid, the court could not enter judgment after the finding of infringement. On April 26, 2013, the parties filed a joint stipulation in which (1) the parties agreed to treat Claim 19 of the '633 patent as the sole representative claim for purposes of resolving the liability issues in this case, and (2) Deluxe withdrew its affirmative defense and counterclaim that the '633 patent was invalid on any basis other than obviousness, and also withdrew its affirmative defenses of unenforceability, waiver, laches, and equitable estoppel. Accordingly, aside from damages, the only open issue in the case was obviousness.

The '633 patent, titled “Marking of a Data Medium Material for Information Intended for Reproduction,” issued on March 6, 2007 from an application filed on May 14, 2004. The patent claims priority to European Patent Application No. EP 03015888 filed July 11, 2003 and German Patent Application No. DE 20 2004 003 254 filed March 2, 2004.

In accordance with a preferred embodiment of the invention described in the patent, a motion picture film print is “individualized” by forming a sequence of markings in a portion of the analog soundtrack that represent an identification code for that particular print. In conjunction with the formation of markings in a portion of the analog soundtrack, the corresponding portion of the digital soundtrack is removed or otherwise rendered unreadable. This alteration of the digital soundtrack forces the film projection equipment to revert to the analog soundtrack and thus play back the audio markings with the analog soundtrack information.

Obviousness. The basis for Deluxe’s obviousness defense was seven prior art references. Each of Deluxe’s references had a date earlier than the earliest possible priority date of the '633 patent, so MPV did not dispute that the references qualify as prior art.

The primary reference in each combination was the Rosenberg patent, which was the only one of the seven references that had anything to do with coding film prints, according to the court. Rosenberg describes a method for optically implanting invisible and inaudible “location markers” in the analog soundtrack of a film print that can be used to calculate an identification number for the print. The patent, which issued from an application filed in 1990, dealt with an older type of film print that contained only an analog soundtrack, as opposed to the more modern film prints described in the '633 patent that contain both digital and analog soundtracks. Consequently, Rosenberg did not confront, let alone solve, the technical challenges of implementing an audio coding scheme on a film print having a default digital soundtrack and a redundant analog soundtrack.

Using Rosenberg as its primary reference, Deluxe separately relied on each of the other six references as disclosing the “eliminating or making unreadable digital information” element of Claim 19 of the '633 patent (Limitation (e)), which turned out to be the critical portion of the claim for obviousness purposes, the court noted.

The “method of marking a film medium” recited in Claim 19 of the '633 patent takes advantage of a number of well-known phenomena—notably the placement of markings on an analog film track that duplicates one or more digital tracks—via the following allegedly innovative step: “eliminating or making unreadable digital information in at least a part of said second section [of the film medium] corresponding to said sequence of markings on said first section.” This step was referred to as “Limitation (e)” in the report of Deluxe’s technical expert, Williams.

As discussed in the specification of the '633 patent, this involved purposefully eliminating or obscuring digital sound information on a film print. Doing so would cause standard movie theater projection equipment to revert temporarily to the back-up analog soundtrack, on which (according to the patent) there have been placed markings (audio codes) that can be read and played back by the projection equipment. Thus, the invention ensured that the embedded audio codes are included in any unauthorized copy of the film, along with the rest of the audio and video content presented by the projection equipment.

None of Deluxe’s references, combined with the Rosenberg patent, succeeded in showing obviousness of the '633 patent, the court held. The Sonys DFP-3000 QSG reference was illustrative. The DFP-3000 QSG is a user’s guide for a projection booth sound system of the type that could be used in a movie theater. Like the other secondary references, the DFP-3000 QSG describes the well-known ability to revert from playback of a digital signal to a redundant analog signal.

Deluxe’s argument that this prior art combination rendered Claim 19 obvious rested on an interpretation of Claim 19 under which the step of “eliminating or making unreadable digital information in at least part of said second section [of the film medium]” can be performed without doing anything at all to the digital portion of the film medium, but instead inhibiting the ability of the projection equipment to read information, the court observed.

According to Deluxe, DFP-3000 QSG teaches a method of rendering a movie projector incapable of reading digital soundtrack information by altering a feature of the projector — the LED that is used to read the film—rather than by doing anything to the “second section” (the digital portion) of the film medium itself. It was the opinion of Deluxe’s expert Williams that the claim was written from the perspective of the projector, and therefore should be construed as encompassing changes made to the projection equipment even if the film print itself is untouched.

The court rejected this interpretation of claim 19. Claim 19 expressly recites “[a] method of marking a film medium,” and implicitly requires that something be done to that film medium by specifying the location of the digital information that is to be eliminated or made unreadable, i. e., “in at least a part of said second section [of the film medium],” according to the court.

Deluxe’s strained reading of the claim terms contradicted the plain meaning of the words used by the patentee, had not a scintilla of intrinsic evidence to support it, and failed to comport with common sense, the court decided. It was so nonsensical that it contradicted representations made to the court by Deluxe earlier in the litigation. The court thus rejected Deluxe’s suggestion that any “plain meaning” reading of this limitation encompasses inhibiting a movie projector’s ability to read the digital soundtrack of a film medium without any alteration of the film medium itself.

The claim language required that the digital information contained on some portion of the second section of a film medium be either “eliminat[ed]” or “ma[de] unreadable.” Blocking off an LED used by a projector to read digital information on the film print did neither, the court explained. It did not “eliminate” the information from the film print, because the digital information is still right there on the print. It did not make that information “unreadable,” because any properly-operating film projector (i.e., one that has not had one of its integral parts—the LED — disabled or blocked) would be perfectly capable of reading it. Blocking off the LED merely rendered a particular piece of projection equipment temporarily incapable of reading the digital information—it did not make the digital information unreadable. That same film could be run through different projection equipment, or the blockage of the LED could be removed, and the digital information would be read without having to do anything to the film print. Moreover, Deluxe’s expert conceded as much.

Additionally, there was not a scintilla of support in the specification for the reading proposed by Deluxe’s expert. The specification described altering the digital soundtrack of a film medium—a piece of film, not a film projector.

Nonetheless, Deluxe insisted that the specification clearly disclosed manipulating projection equipment. It did not, the court said. There was not so much as a syllable in the specification that mentions manipulating projection equipment so that it could not read portions of the digital soundtrack as claimed in Claim 19—something very different from rendering the film itself unreadable.

The parties were expected to be ready for a trial on damages by March 15, 2014, according to the court. They could be called to trial at any time after that date on 48 hours’ notice.

The case is No. 10 Civ. 4119 (CM)(GWG).

Attorneys: Andrew Michael Riddles (Crowell & Moring LLP) for Medien Patent Verwaltung AG. Scott J. Bornstein (Greenberg Traurig, LLP) for Deluxe Entertainment Services Group, Inc.

Companies: Medien Patent Verwaltung AG; Deluxe Entertainment Services Group, Inc.

Cases: Patent NewYorkNews