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

Background

BSD sued Amazon.com, Amazon Web Services, Inc., and Twitch Interactive, Inc. for patent infringement involving U.S. Patent No. 6,389,473, titled “Network Media Streaming.” The patent describes real-time transmission of video and audio using common internet and server infrastructure rather than expensive dedicated broadcasting equipment.

The parties asked the court to construe one term in the patent: “real-time broadcasting.” BSD proposed defining the term as “simultaneous transmission of data to one or more clients matching the human perception of time or proceeding at the same rate as a physical or external process which allows for some, but not limitless, delay.” Amazon proposed the shorter construction previously used in related litigation: “simultaneous transmission of data to one or more clients matching the human perception of time or proceeding at the same rate as a physical or external process.”

Prior Litigation and Collateral Estoppel

In an earlier related proceeding involving the same patent, Judge Paul Grewal construed “real-time broadcasting” using the definition proposed by Amazon here. That court concluded that the term required simultaneous transmission, but not simultaneous receipt, and that the term allowed some delay while requiring the transmission generally to match the event being broadcast. After a jury found that the patent was not invalid but that Apple did not infringe, Judge Grewal denied BSD’s motion for judgment as a matter of law and again applied the same construction. The Federal Circuit affirmed.

BSD later stipulated to use the same construction in another case involving the patent and a different defendant. The court stated that BSD therefore had three opportunities to present its arguments about the meaning of the term: in the earlier claim-construction proceeding, in its post-trial motion, and in the later case in which it stipulated to the construction.

Collateral estoppel, also called issue preclusion, prevents a party from relitigating an issue when the issue was necessarily decided in an earlier proceeding, the earlier proceeding ended with a final judgment on the merits, and the party being barred was a party or was legally connected to a party in the earlier proceeding. The court found all three requirements satisfied. The issue was identical, it had been litigated and decided in the earlier proceeding and addressed again in the post-trial ruling, the earlier case ended in a final judgment affirmed on appeal, and BSD was the same company that had previously been known as Emblaze.

Independent Analysis of the Construction

The court also considered BSD’s arguments independently. It rejected BSD’s request to add language about delay because the existing construction already contemplated some delay—delay consistent with human perception of time or the rate of a physical or external process. The court found the proposed phrase “some, but not limitless, delay” redundant and potentially confusing because it could suggest that any amount of delay was covered so long as it was not unlimited.

The court relied on the patent’s specification, which emphasized minimal necessary transmission and decoding delay. Although the specification discussed particular delay periods, including a preferred maximum of twenty seconds, the court declined to add a twenty-second limitation to the claim construction because claim language should not be limited solely by material appearing in the specification.

Ruling

Judge Hiam H. Orrick held that BSD was collaterally estopped from relitigating the construction of “real-time broadcasting.” He also independently concluded that Amazon’s proposed construction was the most accurate. The court adopted this construction: “simultaneous transmission of data to one or more clients matching the human perception of time or proceeding at the same rate as a physical or external process.”