B.S.D Crown, Ltd. v. Amazon.com, Inc.

Background

BSD Crown, Ltd. sued Amazon.com, Amazon Web Services, Inc., and Twitch Interactive, Inc. for allegedly infringing U.S. Patent No. 6,389,473, titled “Network Media Streaming.” The patent concerns real-time broadcasting of video and audio from a transmitting computer to client computers over a network.

The patent’s only independent claim describes providing a data stream, dividing it into slices of predetermined size, encoding the slices into indexed files, uploading them to a server at roughly the stream’s data rate, and allowing client computers to download them at a similar rate. BSD alleged that the patent improved earlier systems that required expensive dedicated encoders, servers, and other hardware. According to the allegations and patent specification discussed by the court, the claimed method instead used common network infrastructure and internet protocols, including the File Transfer Protocol and the Hypertext Transfer Protocol.

Amazon moved for judgment on the pleadings under Federal Rule of Civil Procedure 12(c). Amazon argued that the patent was invalid under 35 U.S.C. § 101 and the Supreme Court’s two-step framework from Alice Corp. v. CLS Bank International because Claim 1 was directed to the abstract idea of collecting, packaging, and transmitting data in real time and did not contain enough additional material to make it patent-eligible.

Court’s analysis

The court applied the two-step Alice framework. At step one, it considered whether Claim 1, viewed as a whole and in light of the specification, was directed to an abstract idea. The court rejected Amazon’s attempt to analyze individual claim steps separately. It found that the claim focused on a specific method of real-time broadcasting using network protocols, data slicing, and data-rate matching. In the court’s view, the claim was directed to improving data-transmission technology by replacing expensive dedicated hardware with network-based techniques, rather than to data transmission in the abstract.

The court distinguished cases in which computer-related patent claims merely stated a desired result or used computers as general-purpose tools. It found that Claim 1 explained how to achieve real-time broadcasting through the claimed network protocols and slicing method. The court also emphasized that the patent was limited to that particular method and did not cover every form of data transmission.

At step two, the court alternatively concluded that the claim contained an inventive concept even if it were characterized as directed to an abstract idea. The court identified the relevant combination as using network protocols and data slicing and matching to perform real-time data transmission without the dedicated hardware used in the prior art. The court stated that using known technologies in a nonconventional combination can provide an inventive concept. It also said that Amazon’s arguments about whether the claimed steps were inventive raised a factual issue that could not be resolved in Amazon’s favor at this stage.

Disposition

The court denied Amazon’s motion for judgment on the pleadings. It denied the motion both because Claim 1 was not directed to an abstract idea and, alternatively, because the claim contained an inventive concept sufficient to make it patent-eligible. The order did not decide whether Amazon infringed the patent or resolve the ultimate merits of BSD’s infringement allegations.

Important uncertainty

The supplied case metadata identifies Thomas Hixson as the judge, but the opinion text is signed by “William H. Orrick, United States District Judge.” This summary uses the judge named in the signature.