Published On: August 14th, 2019Categories: Featured Litigation Cases

In this post, we take a look at how Orosteam LLC’s patent was proven invalid by Actiontec Electronics, Inc.

An Orosteam LLC patent was proven to be invalid by Actiontec Electronics, Inc.

OROSTREAM LLC (hereafter “Orostream”) is a non-practicing entity with its principal place of business in Texas. On June 16, 1998, U.S. patent Nos. 5,828,837 and 5,768,508 were granted.  These patents were later assigned in 2015 to Orostream. In the last four years, Orostream has filed over thirty (30) patent lawsuits against leading organizations in the field of network system and information transfer, such as, AOL, Fox News, World Wrestling Entertainment, NFL Enterprises, Target, Dropbox and Discovery Communication, to name a few. In many of those cases the Defendants were able to prove that the claims of the ‘837 patent were invalid.

ACTIONTEC ELECTRONICS, INC. (hereafter “Actiontec”) is a corporation organized and existing under the laws of the State of California. Actiontec sells gigabit ethernet fiber, Wi-Fi routers, WI-FI gateways and wireless display devices.  They also provide broadband and wireless services. On March 27, 2019, Orostream filed a patent litigation suit (3:19-cv-01607 ) against Actiontec in the U.S. District Court for the Northern District of California for infringement of claim 26 of their 508’ patent. Moreover, Orostream stated that the Court had personal jurisdiction over the Actiontec, as they are located and do business in the State of California.

On April 26, 2019, Actiontec filed a Motion for dismissal of complaint on the grounds for failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6).

Claim 26 of ‘508 patent states:

“A method of connecting an information provider and a user node of a computer network, the method, performed by a master program, comprising the steps of: registering the user node at a master node; receiving, through the master node, a node ID from the user node; accessing a master database for profile information corresponding to the node ID; and transmitting to the user node, through the master node, a target information reference corresponding to the accessed profile information, wherein the target information reference is a pointer to target information to be delivered to the user node while transferring non-target information without additional communication delay.”

In its Motion, Actiontec stated that claim 26 does not mention any specific kind of hardware or software that was used to collect or transmit the information from and to the user. They further argued that the method specified in claim 26 was an abstract idea regarding delivering targeted information to a user based on information gathered about the user. Actiontec supported their argument by stating that the concept of gathering information about one’s intended market and attempting to customize the information then provided was as old as the saying, “know your audience”. As such, Actiontec argues that the ’508 patent be declared invalid and that the Motion to Dismissal be granted.

On August 2, 2019, Judge Vince Chhabria ruled that claim 26 of ‘508 patent lacked an inventive concept that would transform the idea into a patent eligible application and that the steps described in the claim were abstract and obvious.  Therefore, the Judge declared claim 26 of ‘506 patent invalid and granting the Motion to Dismissal.

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