Federal Circuit keeps cinema tech patent dispute in Texas
The US Court of Appeals for the Federal Circuit has declined to move a patent infringement dispute centring on cinematic technology out of Texas.
The decision, delivered on Thursday, December 17, means that the lawsuit will continue at the US District Court for the Eastern District of Texas where it was initially filed. At the centre of the dispute is image media blocks (IMBs). IMBs are a component used in digital cinema projection systems to produce picture and sound, resulting in the secure distribution of digital content.
American cinema operators Cinemark, AMC, and Regal incorporate IMBs into their equipment suites. In August 2019, software technology company Intertrust Technologies filed patent infringement complaints at the US District Court for the Eastern District of Texas against the three cinema operators.
Intertrust claimed that the cinema operators’ use of this equipment directly infringes the method and apparatus claims of 11 of its US patents. The asserted patents, which were granted between 2000 and 2017, cover the secure distribution of content in digital form.
However, also in 2019 and before Intertrust filed its lawsuits, Intertrust was sued by audio technology company Dolby.
In a complaint filed at the US District Court for the Northern District of California, Dolby asked the court to declare that its sale of IMBs to customers including the above three cinema operators did not infringe the IMB patents which were later asserted by Intertrust in its August 2019 lawsuits. Intertrust counterclaimed for patent infringement.
In light of this, Cinemark, AMC, and Regal sought to move their patent infringement disputes with Intertrust to the Northern District of California under the first-to-file rule.
In September 2020, the Texas court rejected this request, because the infringement alleged by Intertrust in those lawsuits did not “completely coincide” with that of the allegations made in the California proceedings with Dolby.
The first-to-file rule only applies where identical or highly related suits are filed in separate courts, the court said. Cinemark, AMC, and Regal sought mandamus review of the decision, but on Thursday the Federal Circuit sided with the Texas court.
The Federal Circuit agreed that the first-to-file rule applies where there is “complete or nearly complete overlap between two cases”. It added that the move must be convenient for the parties and witnesses, and it must also be in the interest of justice.
“Whereas the California action focuses on Dolby’s IMBs, these suits focus on petitioners’ use of equipment suites, some of which use IMBs made by producers other than Dolby,” the Federal Circuit said. As a result, the issues of infringement are not common between the cases and the resolution of the California lawsuit will not necessarily resolve Intertrust’s complaints against the cinema operators, it held.
Finally, the Federal Circuit noted that Cinemark is headquartered in Texas and the Texas court is also much closer to the headquarters of AMC and Regal than the California court is, which will make it more convenient for evidence to be produced as well as for witnesses to attend.
The US Court of Appeals for the Federal Circuit has declined to move a patent infringement dispute centring on cinematic technology out of Texas.
The decision, delivered on Thursday, December 17, means that the lawsuit will continue at the US District Court for the Eastern District of Texas where it was initially filed.
At the centre of the dispute is image media blocks (IMBs). IMBs are a component used in digital cinema projection systems to produce picture and sound, resulting in the secure distribution of digital content.
American cinema operators Cinemark, AMC, and Regal incorporate IMBs into their equipment suites.
In August 2019, software technology company Intertrust Technologies filed patent infringement complaints at the US District Court for the Eastern District of Texas against the three cinema operators.
Intertrust claimed that the cinema operators’ use of this equipment directly infringes the method and apparatus claims of 11 of its US patents. The asserted patents, which were granted between 2000 and 2017, cover the secure distribution of content in digital form.
However, also in 2019 and before Intertrust filed its lawsuits, Intertrust was sued by audio technology company Dolby.
In a complaint filed at the US District Court for the Northern District of California, Dolby asked the court to declare that its sale of IMBs to customers including the above three cinema operators did not infringe the IMB patents which were later asserted by Intertrust in its August 2019 lawsuits.
Intertrust counterclaimed for patent infringement.
In light of this, Cinemark, AMC, and Regal sought to move their patent infringement disputes with Intertrust to the Northern District of California under the first-to-file rule.
In September 2020, the Texas court rejected this request, because the infringement alleged by Intertrust in those lawsuits did not “completely coincide” with that of the allegations made in the California proceedings with Dolby.
The first-to-file rule only applies where identical or highly related suits are filed in separate courts, the court said.
Cinemark, AMC, and Regal sought mandamus review of the decision, but on Thursday the Federal Circuit sided with the Texas court.The Federal Circuit agreed that the first-to-file rule applies where there is “complete or nearly complete overlap between two cases”. It added that the move must be convenient for the parties and witnesses, and it must also be in the interest of justice.
“Whereas the California action focuses on Dolby’s IMBs, these suits focus on petitioners’ use of equipment suites, some of which use IMBs made by producers other than Dolby,” the Federal Circuit said. As a result, the issues of infringement are not common between the cases and the resolution of the California lawsuit will not necessarily resolve Intertrust’s complaints against the cinema operators, it held.
Finally, the Federal Circuit noted that Cinemark is headquartered in Texas and the Texas court is also much closer to the headquarters of AMC and Regal than the California court is, which will make it more convenient for evidence to be produced as well as for witnesses to attend.
