Case 1:19-cv-02077-UNA Document 1 Filed 11/01/19 Page 1 of 39 PageID #: 1
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
`
`B# ON DEMAND LLC, a California Limited
`Liability Company
`
`
`Plaintiff,
`
`v.
`
`SPOTIFY TECHNOLOGY S.A., a
`Luxembourg Public Limited Liability Company;
`SPOTIFY AB, a Swedish Corporation; and
`SPOTIFY USA, Inc., a Delaware Corporation
`
`
`Defendants.
`
`
`
`
`
`
`
`Case No.:
`
`
`
` JURY TRIAL DEMANDED
`
`
`
`B# On Demand LLC (“B#” or “Plaintiff”) files this action for patent infringement arising
`
`COMPLAINT
`
`under the Patent Laws of the United States of America, 35 U.S.C. § 100 et seq., seeks damages
`
`and injunctive relief, and alleges:
`
`THE PARTIES
`
`B# is a California Limited Liability Company with its office located at 668 North
`
`1.
`
`Coast Highway, Suite 1371, Laguna Beach, California, 92651.
`
`2.
`
`Spotify Technology S.A. (“Spotify Tech”) is a company organized under the laws
`
`of the Grand Duchy of Luxembourg, with its principal place of business at 42-44 Avenue de la
`
`Gare, L-1610 Luxembourg, Grand Duchy of Luxembourg.
`
`3.
`
`Spotify AB is a corporation organized under the laws of Sweden with its principal
`
`place of business at Regeringsgatan 19, SE-111 53 Stockholm, Sweden. On information and
`
`belief, Spotify AB is a wholly-owned subsidiary of Spotify Tech.
`
`4.
`
`Spotify USA, Inc. (“Spotify USA”) is a company organized under the laws of the
`
`State of Delaware with its principal place of business at 4 World Trade Center, 150 Greenwich
`
`1
`
`

`

`Case 1:19-cv-02077-UNA Document 1 Filed 11/01/19 Page 2 of 39 PageID #: 2
`
`Street, 62nd Floor, New York, New York, 10007. On information and belief, Spotify USA is a
`
`wholly-owned subsidiary of Spotify Tech and Spotify AB.
`
`5.
`
`This Complaint will refer to Spotify Tech, Spotify AB, and Spotify USA
`
`collectively as “Spotify” or “Defendants.”
`
`JURISDICTION AND VENUE
`
`6.
`
`This action arises under the Patent Laws of the United States, Title 35 of the United
`
`States Code, 35 U.S.C. § 100 et seq. This Court has subject-matter jurisdiction under 28 U.S.C.
`
`§§ 1331, 1332, and 1338(a).
`
`7.
`
`The Court has personal jurisdiction over Spotify because Spotify has committed
`
`and continues to commit acts of patent infringement in this District and/or has contributed to or
`
`induced acts of patent infringement by others in this District; regularly does business or solicits
`
`business in this District; enters into contracts with citizens and/or residents of this District; derives
`
`substantial revenue from its activities in this District; has purposefully established substantial,
`
`systematic, and continuous contacts with this District such that it should reasonably expect to be
`
`haled into court in this District; and/or has placed accused services into the stream of commerce
`
`knowing that some portion of such services would be sold, offered for sale, and/or used in this
`
`District. Indeed, on information and belief, Spotify USA resides in this District under 28 U.S.C.
`
`Section 1400(b) because Delaware is Spotify USA’s state of incorporation.
`
`8.
`
`Venue is proper in this District under 28 U.S.C. § 1400(b) and 28 U.S.C. § 1391(c).
`
`On information and belief, Spotify has committed acts of infringement in the District and/or has
`
`contributed to or induced acts of patent infringement by others in this District and resides in
`
`Delaware because Delaware is its state of incorporation. On information and belief, Spotify USA
`
`can be served with process through its registered agent in Delaware, National Registered Agents,
`
`2
`
`

`

`Case 1:19-cv-02077-UNA Document 1 Filed 11/01/19 Page 3 of 39 PageID #: 3
`
`Inc., 160 Green Tree Dr., Suite 101, Dover, Delaware 19904. Moreover, Spotify Tech and Spotify
`
`AB reside outside of the United States. Accordingly, venue is proper as to Spotify Tech and
`
`Spotify AB in any judicial district.
`
`FACTUAL ALLEGATIONS
`
`9.
`
`The Patents. B# is the assignee of and owns all right, title, and interest in and to
`
`the following patents: US7877412B2 (the “’412 Patent”); US8832149B2 (the “’149 Patent”);
`
`US9031985B2 (the “’985 Patent”); US9330242B2 (the “’242 Patent”); US9553880B2 (the “’880
`
`Patent”); and US9900323 (the “’323 Patent”) (collectively the “Patents-in-Suit”). All the Patents-
`
`in-Suit claim priority to U.S. patent application serial number 09/484,632, filed on January 18,
`
`2000.
`
`10.
`
`After five and a half years of prosecution, the ’412 Patent issued on January 25,
`
`2011 from an application filed on May 9, 2005. The ’412 Patent is presumed valid, and is
`
`subsisting. A true and correct copy of the ’412 Patent is attached as Exhibit A. During prosecution
`
`of the application regarding the ’412 Patent, the United States Patent and Trademark Office
`
`(“USPTO”) examiner, Shahid Alam, issued three office-action rejections.1 Indeed, on May 1,
`
`2009, and again on February 19, 2010, the examiner rejected certain pending claims of the
`
`application under 35 U.S.C. § 101 on the basis that the claimed inventions were directed to non-
`
`statutory subject matter for being “software per se.” On August 8, 2010, the applicant submitted
`
`an amendment to address the examiner’s February 19, 2010 rejection and the USPTO entered a
`
`Notice of Allowance on December 13, 2010.2
`
`11.
`
`After more than three years of prosecution, the ’149 Patent issued on September 9,
`
`                                                            
`1 Notably, Mr. Alam examined all the applications regarding the Patents-in-Suit.
`2 See generally, File History of the ’412 Patent available at
`https://portal.uspto.gov/pair/PublicPair.
`
`3
`
`

`

`Case 1:19-cv-02077-UNA Document 1 Filed 11/01/19 Page 4 of 39 PageID #: 4
`
`2014 from an application filed on January 21, 2011. The ’149 Patent is presumed valid, and is
`
`subsisting. A true and correct copy of the ’149 Patent is attached as Exhibit B. The applicant
`
`overcame four rejections of certain claims in the application regarding the ’149 Patent. One such
`
`rejection was dated July 3, 2014—weeks after the Supreme Court issued its decision in Alice Corp
`
`v. CLS Bank International on June 19, 2014. Despite having rejected claims in the application that
`
`resulted in the ’412 Patent on the basis of non-patentable subject matter, the examiner did not enter
`
`any such rejection of any claims of the application regarding the ’149 Patent.3
`
`12.
`
`After more than four years of prosecution, the ’985 Patent issued on May 12, 2015
`
`from an application filed on January 21, 2011. The ’985 Patent is presumed valid, and is
`
`subsisting. A true and correct copy of the ’985 Patent is attached as Exhibit C. In prosecuting the
`
`application regarding the ’985 Patent, the applicant overcame five USPTO rejections. Indeed, on
`
`June 19, 2013, the examiner entered one such rejection of certain claims of the application as being
`
`directed to non-statutory subject matter under 35 U.S.C. § 101. On September 9, 2013, the
`
`applicant submitted an amendment to address the examiner’s June 19, 2013 rejection. The
`
`examiner entered further rejections on December 19, 2013 and August 22, 2014, neither of which
`
`included a rejection on the basis of non-statutory subject matter.4
`
`13.
`
`The ’242 Patent issued on May 3, 2016 from an application filed on September 9,
`
`2014. The ’242 Patent is presumed valid, and is subsisting. A true and correct copy of the ’242
`
`Patent is attached as Exhibit D. On August 13, 2015, the examiner entered a rejection to certain
`
`claims of the ’242 Patent. The examiner entered a Notice of Allowance on December 22, 2015.5
`
`                                                            
`3 See generally, File History of the ’149 Patent available at
`https://portal.uspto.gov/pair/PublicPair.
`4 See generally, File History of the ’985 Patent available at
`https://portal.uspto.gov/pair/PublicPair.
`5 See generally, File History of the ’242 Patent available at
`https://portal.uspto.gov/pair/PublicPair.
`
`4
`
`

`

`Case 1:19-cv-02077-UNA Document 1 Filed 11/01/19 Page 5 of 39 PageID #: 5
`
`14.
`
`The ’880 Patent issued on January 24, 2017 from an application filed on January
`
`20, 2016. The ’880 Patent is presumed valid, and is subsisting. A true and correct copy of the ’880
`
`Patent is attached as Exhibit E. The application regarding the ’880 Patent was not subject to any
`
`rejections during prosecution.6
`
`15.
`
`The ’323 Patent issued on February 20, 2018 from an application filed on December
`
`12, 2016. The ’323 Patent, is presumed valid, and is subsisting. A true and correct copy of the ’323
`
`Patent is attached as Exhibit F. On May 18, 2017, the examiner entered the only rejection of the
`
`application regarding the ’323 Patent. On October 18, 2017, the applicant submitted an
`
`amendment with new claims and on December 1, 2017 the examiner entered a Notice of
`
`Allowance.7
`
`16.
`
` The Inventor. Dr. Gregg S. Homer is the inventor of the Patents-in-Suit. Dr.
`
`Homer is also a founder and member of B#. Dr. Homer has a broad educational and professional
`
`background. He received a Bachelor of Arts in English in 1976 from Immaculate Heart College
`
`and pursued a Master of Arts in creative writing also at Immaculate Heart. Dr. Homer received a
`
`Doctor of Jurisprudence (magna cum laude) from Loyola Law School in 1979. In 1999, Dr. Homer
`
`received a Master of Juridical Science from Stanford University. From 1999-2002, Dr. Homer
`
`pursued coursework in mathematics and economics at U.C.L.A. From 2002-2003, Dr. Homer
`
`pursued coursework towards a Master of Arts in Economics at Stanford University. In 2008, Dr.
`
`Homer was awarded an interdisciplinary academic doctorate from Stanford University in
`
`evolutionary neurology and economic game theory, writing his dissertation on the co-evolution of
`
`the neural system and social rules.
`
`                                                            
`6 See generally, File History of the ’880 Patent available at
`https://portal.uspto.gov/pair/PublicPair.
`7 See generally, File History of the ’323 Patent available at
`https://portal.uspto.gov/pair/PublicPair.
`
`5
`
`

`

`Case 1:19-cv-02077-UNA Document 1 Filed 11/01/19 Page 6 of 39 PageID #: 6
`
`17.
`
`Dr. Homer was also an adjunct professor of entertainment law at Stanford Law
`
`School from 1999-2003. Prior to that time, Dr. Homer had practiced entertainment law in Los
`
`Angeles for over twenty-five years, first as an associate with Sidley & Austin, then as a partner
`
`with Ziffren Brittenham & Branca, and still later as a founder and managing partner of
`
`Entertainment Law Group.
`
`18.
`
`As an entertainment lawyer, Dr. Homer represented many companies with respect
`
`to media technologies. In the early 1980s, as an associate with Sidley & Austin, Dr. Homer
`
`assisted the legendary Melville Nimmer in his appellate litigation of Sony Corp. of America v.
`
`Universal City Studios (aka “the Betamax case”). Dr. Homer also represented such media
`
`technology pioneers as Vestron Video (a pioneer in the field of home video production and
`
`distribution), Color Systems Technologies (a pioneer in film colorization), Introvision (a
`
`groundbreaking film process that allowed the filmmaker to insert a live performance into existing
`
`film footage), United Artist Theaters (a pioneer in satellite film and event distribution to movie
`
`theaters), WarnerActive (a pioneer in interactive games), and Michael Milken’s Knowledge
`
`Universe (a pioneer in educational software).
`
`19.
`
`Dr. Homer is also a prolific inventor. He began inventing at the age of twelve,
`
`when he sold his first invention to Hills Brothers Coffee—an espresso-grind coffee bag for instant
`
`steeped coffee. Besides the Patents-in-Suit, Dr. Homer is also an inventor of the following patents:
`
`US7500004 (deep and shallow packet inspection to track digital information over the internet);
`
`US6306127 and US8206379 (use of electromagnetic radiation to reduce stromal pigment density
`
`and alter human iris color); US9050116 (stimulating collagen production and retraction with
`
`intersecting beams of laser or other electromagnetic radiation); US10216733 (software programs
`
`that learn and automatically generate comments to legal documents); US8234405 (on demand text,
`
`6
`
`

`

`Case 1:19-cv-02077-UNA Document 1 Filed 11/01/19 Page 7 of 39 PageID #: 7
`
`audio, and video subscription systems); US9208290 (transmission of medical device parameters
`
`as volatile Random Access Memory files to limit reverse engineering); and US8747735
`
`(generation of wave energy detectable by human olfaction as scent). In all, Dr. Homer is the sole
`
`inventor on at least seventeen issued U.S. patents. Dr. Homer is also prosecuting patent
`
`applications regarding a laser treatment for glaucoma—the leading cause of blindness in the
`
`world—for which the early clinical data are highly promising. Meanwhile, Dr. Homer serves as
`
`the Chairman and Chief Science Officer of Stroma Medical Corporation, a company Dr. Homer
`
`founded in 2008 to commercialize his patented laser technology for alteration of eye color.
`
`BACKGROUND OF THE INVENTIONS
`
`20.
`
`State of the Art at or About the Time of the Inventions. Dr. Homer conceived of
`
`the inventions claimed in the Patents-in-Suit by early 1999 at latest. As frames of reference, the
`
`first videotape recording device was invented in 1951. The first commercial album on CD was
`
`released in 1982—52nd Street by Billy Joel. In 1987, the record labels adopted a standard format
`
`for audio CDs, the Red Book CD standard. Importantly, content saved to CD via the Red Book
`
`Audio CD specification was relatively unprotected against copying. The first website on the
`
`Internet did not go live until 1991. German researchers at the Fraunhofer Society released the
`
`MP3 compression and decompression (“CODEC”) software to the public in 1994. This was
`
`groundbreaking because it gave consumers the ability to compress and decompress large amounts
`
`of audio data, especially where memory space on computers was much smaller than it is today and
`
`Internet bandwidth to transmit digital files was still relatively limited. Panasonic and Toshiba
`
`introduced the first DVD players to the U.S. market in March 1997. Larry Page and Sergey Brin
`
`founded Google in September 1998. In 1999—the year Dr. Homer conceived of the inventions
`
`claimed in the Patents-in-Suit—Netflix was an online DVD rental store that mailed DVDs to its
`
`7
`
`

`

`Case 1:19-cv-02077-UNA Document 1 Filed 11/01/19 Page 8 of 39 PageID #: 8
`
`customers in response to online requests. Netflix’s biggest competitor was Blockbuster, a brick-
`
`and-mortar video rental store. Amazon, Inc. was an online bookstore that sold hard-copy books,
`
`physical-format music and videos, as well as consumer electronics, home improvement items,
`
`games, and toys. Apple iTunes did not exist. Indeed, Apple did not introduce the iPod music
`
`player until October of 2001 and did not launch iTunes until April of 2003. Smartphones did not
`
`exist. One of the largest-selling cellular telephones at the time was the Nokia 3210:
`
`
`
`
`Spotify did not exist. As explained below, online distribution of digital media was in its infancy.
`
`Much online distribution of digital media that did exist was illegal.
`
`21.
`
`In 1999 and early 2000, the Internet was experiencing both rapid growth and
`
`experimentation with various ways to capitalize on its potential. Even as late as 2000, only 44
`
`million U.S. households had any access to the Internet at all (i.e., 42% of U.S. households).
`
`Similarly, the MP3 CODEC was not yet broadly used to compress music files for Internet
`
`transmission. Instead, use of the MP3 format was largely limited to compressing music files for
`
`storage on personal computers or portable music players, which players first appeared in 1999.
`
`22.
`
`In 1999, “all-you-can-eat,” subscription-on-demand streaming platforms such as
`
`those disclosed and claimed in Dr. Homer’s Patents-in-Suit and that are now so ubiquitous (e.g.,
`
`8
`
`

`

`Case 1:19-cv-02077-UNA Document 1 Filed 11/01/19 Page 9 of 39 PageID #: 9
`
`Spotify) had yet to materialize. For example, Netflix did not introduce “all-you-can-eat,”
`
`subscription-on-demand streaming until 2007. By 2011, Netflix accounted for over 22% of all
`
`Internet traffic in North America and realized over $3.2 Billion in annual revenue. As explained
`
`in greater detail below, Spotify did not introduce “all-you-can-eat,” subscription-on-demand
`
`streaming of music in the United States until 2011.
`
`23.
`
`In 1999 and early 2000, media content was predominantly distributed either on
`
`physical media (e.g., audio CDs and audio-visual VHS cassettes and/or DVDs) or by means of
`
`broadcast transmission (e.g., radio and free-broadcast and pay/cable television). [See e.g. Ex. A,
`
`1:18-26.]8 Internet streaming was still in its infancy, consisting of the occasional live concert or
`
`sporting event, streamed in real time, with no access authorization requirement. On-demand
`
`media, in which a user is able to enjoy those media works he or she selects at times he or she
`
`wishes, was limited to physical media, purchased in stores, through the regular mail, or rented
`
`from brick-and-mortar enterprises such as Blockbuster. Indeed, during prosecution of the
`
`application that resulted in issuance of the ’149 Patent and in response to an Office Action dated
`
`May 6, 2014, Dr. Homer advised the United States Patent and Trademark Office (“USPTO”) on
`
`May 12, 2014:
`
`
`
`
`
`
`
`The priority date of the Application is Jan. 2000. At that time, most,
`if not all, media content was embodied on tangible media (such as
`paper, CDs, and DVDs), and consumers were reluctant to relinquish
`these tangible embodiments in favor of more ephemeral media (such
`as MP3 files). At that time, MP3 song files were ripped from CDs
`already owned by consumers (or downloaded from illegal bit torrent
`sites), not purchased from vendor library servers, so use was
`                                                            
`8 All the Patents-in-Suit share the same specification.
`
`9
`
`

`

`Case 1:19-cv-02077-UNA Document 1 Filed 11/01/19 Page 10 of 39 PageID #: 10
`
`unrestricted. See Cheng, iTunes Through the Ages, Ars Technica
`(Nov. 23, 2012) (attached hereto as Exhibit A). Consumers not
`ready for an MP3 on-demand model as taught by Katz, let alone one
`in which usage is restricted as suggested by Liu (in the context of
`Karaoke). The evolution of the MP3 on-demand model bears this
`out. The model was ultimately released in Apr. 2003, when Apple
`launched the iTunes Music Store. See id. Song files downloaded
`from the iTunes Store were encrypted with Apple's proprietary
`FairPlay DRM [Digital Rights Management]. See id. FairPlay
`limited copying to CDs and Apple devices, but imposed no
`restrictions on usage, such as the Play Parameters (i.e., elapsed
`calendar time, number of plays, elapsed play time, number of files
`played, or number of bits played). See id. Even these narrow copy
`limitations ultimately proved too restrictive to consumers, and in
`2009, Apple abandoned DRM entirely, and all media files sold
`through the iTunes Store were DRM-free. See id. To this day, media
`files distributed through pay-per-file on-demand models, as taught
`in Katz and exemplified by the iTunes Store, remain DRM-free.
`DRM restrictions on copying and usage are limited to so-called "all-
`you-can eat" subscription on-demand models, as exemplified by the
`Netflix, Spotify, Rhapsody, and Scribd.9
`
`24.
`
` As a result of distribution of content on physical media, in 1999 alone, the record
`
`industry generated approximately $14.6 billion in U.S. revenue from sales of physical media, and
`
`in 2000, movie distributors collected about $8.6 billion in revenues from home video sales.
`
`25.
`
`In 1999, unauthorized duplication of media had also become a growing concern.
`
`[Id. at 1:26-37.] In the early 1980s, the Sony Betamax case on which Dr. Homer worked addressed
`
`the use of VHS recorders to duplicate analog television broadcasts. In the late 1980s, the audio
`
`CD had gained popularity as a medium for digital audio recording. The susceptibility of digital
`
`media to duplication with little loss of fidelity only served to heighten industry-wide concerns over
`
`security and unauthorized copying. [Id.] These concerns were further inflamed by the popularity
`
`of the DVD in the late 1990s, which quickly overtook its analog predecessor, the VHS cassette.
`
`One system that attempted to address unauthorized duplication of digital contents was Digital
`
`Video Express (“DivX”). DivX was an initiative between the movie studios and the retailer Circuit
`
`                                                            
`9 File History of the ’149 Patent available at https://portal.uspto.gov/pair/PublicPair.
`
`10
`
`

`

`Case 1:19-cv-02077-UNA Document 1 Filed 11/01/19 Page 11 of 39 PageID #: 11
`
`City. It began in 1998 as an alternative to video rentals. Customers would pay to purchase a DivX
`
`DVD, but could only play such DVDs for 48 hours on a DivX player. The DivX system, like
`
`many systems at or about this time, was “closed” inasmuch as customers could not play DivX
`
`DVDs on standard DVD players and the hardware costs for DivX players were substantially higher
`
`than the hardware costs for standard players. Similarly, when Apple launched iTunes in 2003,
`
`the hardware costs for iPod players were substantially higher than for standard MP3 players at the
`
`time in part because the Apple ecosystem was “closed.”
`
`26.
`
`General Background of the Inventions. While teaching and studying at Stanford
`
`Law School in the late 1990s, Dr. Homer had the opportunity to study the Internet. In light of his
`
`media background and his fascination with media technologies and innovation, Dr. Homer saw
`
`the potential for secure access to and transmission of digital media files over the Internet, thereby
`
`improving both the speed and cost of consumer access to creative product. Dr. Homer was acutely
`
`aware, however, of the potential for unauthorized duplication on a scale that dwarfed that of
`
`physical media, as well as radio and television and broadcast media. Dr. Homer was particularly
`
`concerned that heightened piracy concerns would either defeat Internet distribution of media
`
`altogether, or would lead to technical controls that precluded any unauthorized re-transmission or
`
`duplication.
`
`27.
`
`Dr. Homer’s first attempt to address this concern was his invention of a system and
`
`method of recording the potentially unlawful Internet transmission of digital media files, as
`
`disclosed and claimed in U.S. Patent No. US7500004 (deep and shallow packet inspection to track
`
`digital information over the internet). Deep and shallow packet inspection enabled recording and
`
`reporting to the copyright owners of any such unlawful Internet transmission of digital media files
`
`for investigation and possible prosecution. This invention offered copyright owners an alternative
`
`11
`
`

`

`Case 1:19-cv-02077-UNA Document 1 Filed 11/01/19 Page 12 of 39 PageID #: 12
`
`to outright preclusion of unauthorized re-transmissions.
`
`28.
`
`Dr. Homer continued to ponder this intersection of Internet distribution and Digital
`
`Rights Management (“DRM”). He concluded that the ability to duplicate and distribute digital
`
`media files over the Internet at virtually zero cost and with extremely high fidelity created an
`
`environment uniquely suited to an “all-you-can-eat” subscription system, in which a user with
`
`appropriate authorizations could access and play all of the digital text, music, film, and other media
`
`files he or she selected at any time he or she wished on any compatible device and over multiple
`
`sessions. Through his inventions, Dr. Homer solved technical problems of secure access to,
`
`transmission of, and play of digital media files in non-physical format over a network having a
`
`distributed architecture. Unauthorized duplication could be managed by limited authorizations
`
`that would expire periodically if the user did not maintain the required conditions for secure access
`
`to, transmission of, and play of digital media files. In the case of digital media files streamed to
`
`the user over state of the art Internet speeds, secure access, transmission, and play could be
`
`achieved with buffered streaming, in which the media file is downloaded to and played from the
`
`Random Access Memory of the user’s device; and if the digital media file is not capable of being
`
`saved to the user’s storage media, access, transmission, and play could be discontinued through
`
`expiration of the user’s access authorization. For those users with older, and therefore slower or
`
`intermittent, Internet connections, digital media files could be saved to the user’s storage media
`
`for later playback, and each such later playback could require an authorization in the form of a
`
`digital key that would expire if not renewed or replaced.
`
`29.
`
`Dr. Homer’s system provided security in the form of DRM because even if a digital
`
`media file was duplicated, an authorization would be required to play it. The system also addressed
`
`unauthorized re-transmission, not by preventing such re-transmission, but by encouraging it and
`
`12
`
`

`

`Case 1:19-cv-02077-UNA Document 1 Filed 11/01/19 Page 13 of 39 PageID #: 13
`
`requiring an authorization for play, affording users the opportunity to freely share selected digital
`
`media files with their friends and family who would obtain their own authorizations. The
`
`authorizations in the Patents-in-Suit differed from the prior art inasmuch as a single authorization
`
`allowed access to, transmission of, and play of multiple digital media files over multiple sessions,
`
`instead of the single authorization for single works for single sessions that predominated the art at
`
`the time of the inventions. In other words, a single authorization for multiple files, which
`
`authorization is usable over multiple sessions, was novel and non-obvious. The system thus
`
`allowed users maximum access and usability while protecting the rights of copyright owners. In
`
`short, Dr. Homer solved technical problems associated with secure access to, transmission of, and
`
`play of digital content over the Internet by granting qualified users temporary access to digital
`
`libraries of media files and tethering those files to a proprietary software player (or player patch)
`
`and expiring authorizations, all within the context of a novel, distributed, network architecture
`
`capable of managing the massive digital traffic resulting from vast numbers of users accessing the
`
`same digital content libraries simultaneously over devices located all over the world. Disclosed
`
`embodiments of the authorizations in the Patents-in-Suit comprise, among other things, coding
`
`elements, encryption/decryption schemes for the content, and encryption/decryption keys. In 1999
`
`and early 2000, these systems and methods were revolutionary.
`
`30.
`
`The inventions in the Patents-in-Suit are directed to specific improvements in
`
`computer functionality, computer capabilities, networking functionality, and networking
`
`capabilities. Further, the inventions in the Patents-in-Suit are a functional improvement to the
`
`specific technological field of on-demand secure access to, transmission of, and play of digital
`
`media files in non-physical format over a network having a distributed architecture. The
`
`inventions in the Patents-in-Suit enabled secure access to, transmission of, and play of digital
`
`13
`
`

`

`Case 1:19-cv-02077-UNA Document 1 Filed 11/01/19 Page 14 of 39 PageID #: 14
`
`content over the Internet by granting qualified users temporary access to digital libraries of media
`
`files and tethering those files to a proprietary software player (or player patch) and expiring
`
`authorizations, all within the context of a novel, distributed, network architecture capable of
`
`managing the massive digital traffic resulting from vast numbers of users accessing the same
`
`digital content libraries simultaneously over devices located all over the world. Disclosed
`
`embodiments of the authorizations in the Patents-in-Suit comprise, among other things, coding
`
`elements, encryption/decryption schemes for the content, and encryption/decryption keys. The
`
`inventions in the Patents-in-Suit offer-up a functional improvement specific to the technological
`
`field of streaming of digital media files by streamlining and automating the functions of securing
`
`the access to, transmission of, and play of digital content over the Internet by granting qualified
`
`users temporary access to digital libraries of media files and tethering those files to a proprietary
`
`software player (or player patch) and expiring authorizations, all within the context of a novel,
`
`distributed, network architecture. The inventions in the Patents-in-Suit remove once-necessary
`
`human interventions and are directed to improvements in computer and network capabilities in
`
`which computers are not invoked merely as tools. As set forth above and in the following
`
`paragraphs, embodiments of the inventions in the Patents-in-Suit provided at least six distinct and
`
`significant advantages and improvements over the prior art, including without limitation the
`
`advantages and improvements set forth above and in the following paragraphs.
`
`31.
`
`First, the inventions in the Patents-in-Suit allow virtually any computing device
`
`(including, without limitation, PCs, tablets, smartphones, and smart TVs) to function as a node in
`
`a network to obtain access to vast stores of digital media and to play that digital media. For
`
`example, the Patents-in-Suit disclose and claim embodiments in which the player program can be
`
`implemented as a software program, a patch to an existing software player, or as a player program
`
`14
`
`

`

`Case 1:19-cv-02077-UNA Document 1 Filed 11/01/19 Page 15 of 39 PageID #: 15
`
`on any hardware and/or software device or appliance that the customer may use to access digital
`
`media files. [Id. at 2:7-9; 2:24-32; 4:24-30; 6:6-11; 7:23-35; 12:17-22.] In other words, the
`
`disclosed embodiments in the Patents-in-Suit are hardware-agnostic such that consumers could
`
`access and play content on any number of devices and were not limited to devices within a
`
`particular company’s “closed” ecosystem (e.g. Apple music files only being accessible on Apple
`
`devices). This had the advantage to consumers of allowing them access to digital media files from
`
`virtually any device, anywhere, at lower cost than “closed” systems. The advantage to content
`
`creators and providers is that it enabled them to achieve wide distribution of content without having
`
`to develop purpose-built hardware. In other words, content providers could transmit the player
`
`programs/patches of the Patents-in-Suit over a network or could provide the player programs to
`
`hardware manufacturers who would, in turn, incorporate the player programs into hardware
`
`designed, manufactured, and marketed by the hardware manufacturers. The Spotify application
`
`that is now included on smartphones is one such example.
`
`32.
`
`This was a vast improvement over prior art systems, such as DivX, and systems
`
`that came after Dr. Homer’s conception of the inventions, such as the Apple iPods/iTunes “closed”
`
`system. In short, the inventions of Patents-in-Suit allowed creation of “open” distribution systems
`
`for digital media.
`
`33.
`
`Second, the inventions of the Patents-in-Suit ensured security of the digital content
`
`both at the storage facilities of the providers (e.g. Spotify) and during transmission to and playback
`
`by customers. The Patents-in-Suit disclose and claim embodiments in which digital media files
`
`are protected by encryption. [Id. at 4:63-5:6; 6:65-7:35; 7:49-53; 8:12-21; 9:53-60; see also, e.g.,
`
`Ex. A, Claims 1-5; 8-10; 14-28; 30-33; 37-44; 49-56; Ex. B Claims 2; 18; 34; 50; 71; 87; Ex. C
`
`Claims 1-10; 12; 15; 18; 23; 27; 31; 35; 51; Ex. D Claims 1-81; Ex. E Claims 1-36; and Ex. F
`
`15
`
`

`

`Case 1:19-cv-02077-UNA Document 1 Filed 11/01/19 Page 16 of 39 PageID #: 16
`
`Claims 1-20.] For example, embodiments of the Patents-in-Suit disclose an “accession program”
`
`that obtains and maintains a library of digital media. [See e.g. Ex. A at 4:7-11; 4:56-5:7.]
`
`Embod