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`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
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`––––––––––
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`––––––––––
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`NETFLIX, INC. AND HULU, LLC,
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`Petitioners,
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`v.
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`DIVX, LLC,
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`Patent Owner.
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`––––––––––
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`Case No. IPR2020-00614
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`U.S. Patent 7,295,673
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`––––––––––
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`Declaration of Patrick McDaniel, Ph.D.
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`Table of Contents
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`I.
`
`BACKGROUND AND QUALIFICATIONS ................................................. 4
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`A.
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`Compensation ........................................................................................ 8
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`B. Materials and Other Information Considered ....................................... 8
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`II.
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`UNDERSTANDING OF THE LAW .............................................................. 8
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`A.
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`Legal Standard for Prior Art .................................................................. 8
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`B.
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`C.
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`Anticipation and Prior Art ..................................................................... 9
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`Obviousness ......................................................................................... 11
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`D.
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`Legal Standard for Claim Construction .............................................. 16
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`III. LEVEL OF ORDINARY SKILL IN THE ART ........................................... 21
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`IV. OVERVIEW OF THE TECHNOLOGY ....................................................... 23
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`A. Video Compression ............................................................................. 24
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`B.
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`C.
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`Partial Encryption ................................................................................ 25
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`Key Management ................................................................................ 27
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`D. Multiplexed DRM Information ........................................................... 29
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`V.
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`THE ’673 PATENT ....................................................................................... 29
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`A. Overview ............................................................................................. 30
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`B.
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`C.
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`Prosecution History ............................................................................. 34
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`Challenged Claims .............................................................................. 36
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`VI. CLAIM CONSTRUCTION .......................................................................... 36
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`VII. SUMMARY OF THE PRIOR ART .............................................................. 37
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`A.
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`Invalidity Grounds ............................................................................... 37
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`B.
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`U.S. Patent No. 5,574,785 (“Ueno”) (Exhibit 1004) .......................... 39
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`C.
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`U.S. Patent No. 6,957,350 (“Demos”) (Exhibit 1006) ........................ 42
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`D. U.S. Patent No. 7,151,832 (“Fetkovich”) (Exhibit 1005) ................... 45
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`VIII. INVALIDITY ................................................................................................ 48
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`A. Ground 1: Ueno in View of Fetkovich and Demos ............................ 49
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`1. Motivation to Combine ............................................................. 49
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`2.
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`3.
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`4.
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`5.
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`6.
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`7.
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`8.
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`9.
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`Independent Claim 1 ................................................................. 76
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`Dependent Claim 2.................................................................. 123
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`Dependent Claim 3.................................................................. 125
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`Dependent Claim 4.................................................................. 128
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`Dependent Claim 5.................................................................. 130
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`Dependent Claim 6.................................................................. 131
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`Dependent Claim 9.................................................................. 134
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`Dependent Claim 10 ............................................................... 138
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`10. Dependent Claim 13 ............................................................... 141
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`11.
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`Independent Claim 14 ............................................................. 148
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`12. Dependent Claim 15 ............................................................... 166
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`13. Dependent Claim 16 ............................................................... 167
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`14. Dependent Claim 17 ............................................................... 168
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`15. Dependent Claim 18 ............................................................... 170
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`16. Dependent Claim 19 ............................................................... 171
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`IX. RESERVATION OF RIGHTS .................................................................... 172
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`I, Patrick McDaniel, declare as follows:
`
`
`1. My name is Patrick McDaniel. I am a Professor of Computer Science
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`at Pennsylvania State University and Director of the Institute for Network and
`
`Security Research. I have prepared this report as an expert witness retained by
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`Netflix, Inc. and Hulu, LLC. In this report I give my opinions as to whether certain
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`claims of U.S. Patent No. 7,295,673 (“the ’673 patent”) are invalid. I provide
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`technical bases for these opinions as appropriate.
`
`2.
`
`This report contains statements of my opinions formed to date and the
`
`bases and reasons for those opinions. I may offer additional opinions based on
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`further review of materials in this case, including opinions and/or testimony of
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`other expert witnesses. I make this declaration based upon my own personal
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`knowledge and, if called upon to testify, would testify competently to the matters
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`contained herein.
`
`I.
`
`BACKGROUND AND QUALIFICATIONS
`
`3.
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`This section contains a summary of my educational background,
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`career history, publications, and other relevant qualifications. My full curriculum
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`vitae is attached as Appendix 1 to this declaration.
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`4.
`
`Since 2017, I have been the William L. Weiss Professor of
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`Information and Communications Technology in the School of Electrical
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`Engineering and Computer Science at Pennsylvania State University in University
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`Park, PA. I am also the director of the Institute for Network and Security Research,
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`and founder and co-director of the Systems and Internet Infrastructure Security
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`Laboratory, a research laboratory focused on the study of security in diverse
`
`network and computer environments. My research efforts primarily involve
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`cryptography, key management, computer systems, network management,
`
`authentication, systems security, and technical public policy.
`
`5.
`
`Before my current position, I was an Assistant Professor (2004-2007),
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`Associate Professor (2007-2011), Full Professor (2011-2015), and Distinguished
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`Professor of Computer Science and Engineering at Pennsylvania State University
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`(2015-2017). Since 2004, I have taught several courses in the field of computer
`
`systems, systems programming, networks, and network and computer security at
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`both the undergraduate and graduate level. I created and continue to maintain
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`several of these courses for Penn State University.
`
`6.
`
`From 2003-2009, I was also an Adjunct Professor at the Stern School
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`of Business at New York University in New York, NY. At the Stern School of
`
`Business, I taught courses in computer and network security and online privacy.
`
`7. My qualifications for forming the opinions in this report are
`
`summarized here. I earned a Ph.D. in Computer Science and Engineering from
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`University of Michigan, Ann Arbor in 2001. I earned a Bachelor of Science degree
`
`
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`in Computer Science from Ohio University in 1989 and a Master of Science
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`degree, also in Computer Science, from Ball State University in 1991.
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`8.
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`I am a Fellow of the Association for Computing Machinery (ACM)
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`(the leading professional association for computer science) and the Institute for
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`Electrical and Electronics Engineering (IEEE) (the leading professional association
`
`for computer engineering).
`
`9.
`
`I was also the Program Manager (PM) and lead scientist for the Cyber
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`Security Collaborative Research Alliance (CRA) from 2013 to 2018. The CRA is
`
`led by Penn State University and includes faculty and researchers from the Army
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`Research Laboratory, Carnegie Mellon University, Indiana University, the
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`University of California-Davis, and the University of California-Riverside. This
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`initiative is a major research project aimed at developing a new science of cyber-
`
`security for military networks, computers, and installations.
`
`10.
`
`I have served as an advisor to several Ph.D. and master’s degree
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`candidates, several of whom have gone on to become professors at various
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`institutions such as North Carolina State University, the University of Oregon, and
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`the Georgia Institute of Technology. I am currently an advisor to two Ph.D.
`
`candidates and a number of master’s students.
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`11. Before joining Pennsylvania State University as a professor, I was a
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`software developer and project manager for companies in the networking industry
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`
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`including Applied Innovation, Inc. and Primary Access Corporation. I was also a
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`senior researcher at AT&T Research-Labs. As part of my duties in these industrial
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`positions, I informed, reviewed and formed corporate policies and practices
`
`relating to the deployment and subsequent management of software systems such
`
`as those sold and supported by Oracle.
`
`12.
`
`I have published extensively in the field of network and security
`
`management, computer systems, authentication, systems security, applied
`
`cryptography, and network security. I have published well over 200 papers which
`
`have been cited over 26,000 times. In addition to writing several articles for
`
`industry journals and conferences, I have authored portions of numerous books
`
`related to computer systems, applied cryptography, and network security. I have
`
`served on the editorial boards of several peer-reviewed journals including ACM
`
`Transactions on Internet Technology, for which I was the Editor-in-Chief. I was
`
`also an Associate Editor for ACM Transactions on Information and System
`
`Security and IEEE Transactions of Software Engineering, two highly-regarded
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`journals in the field. A complete list of my publications in the last 10 years, as well
`
`as a list of editorial positions can be found in my curriculum vitae, which is
`
`attached as Appendix 1.
`
`13. Over the last 20 years I have frequently taught classes in security and
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`software systems including, among others, introduction to computer and network
`
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`security, advanced network security, and mobile system security. The courses
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`covered topics in basic security and cryptography that relate to many of the issues
`
`relevant to this case including the selection and use of encryption, securing media,
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`and access control. I have also discussed streaming video in course of my teaching.
`
`A. Compensation
`
`14. For my efforts in connection with the preparation of this declaration I
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`have been compensated at my standard rate of $600/hour for this type of consulting
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`activity. My compensation is in no way contingent on the results of these or any
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`other proceedings relating to the above-captioned patent.
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`B. Materials and Other Information Considered
`
`15.
`
`I have considered information from various sources in forming my
`
`opinions. I have reviewed and considered each of the exhibits listed in the attached
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`Appendix 2 (Materials Considered) in forming my opinions.
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`II. UNDERSTANDING OF THE LAW
`
`16.
`
`I have applied the following legal principles provided to me by
`
`counsel in arriving at the opinions set forth in this report.
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`A. Legal Standard for Prior Art
`
`17.
`
`I am not an attorney. I have been informed by attorneys of the relevant
`
`legal principles and have applied them to arrive at the opinions set forth in this
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`declaration.
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`18.
`
`I understand that the petitioner for inter partes review may request the
`
`cancelation of one or more claims of a patent based on grounds available under 35
`
`U.S.C. § 102 and 35 U.S.C. § 103 using prior art that consists of patents and
`
`printed publications.
`
`B. Anticipation and Prior Art
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`19.
`
`I understand that § 102 specifies when a challenged claim is invalid
`
`for lacking novelty over the prior art, and that this concept is also known as
`
`“anticipation.” I understand that a prior art reference anticipates a challenged
`
`claim, and thus renders it invalid by anticipation, if all elements of the challenged
`
`claim are disclosed in the prior art reference. I understand the disclosure in the
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`prior art reference can be either explicit or inherent, meaning it is necessarily
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`present or implied. I understand that the prior art reference does not have to use the
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`same words as the challenged claim, but all of the requirements of the claim must
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`be disclosed so that a person of ordinary skill in the art could make and use the
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`claimed subject-matter.
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`20.
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`In addition, I understand that § 102 also defines what is available for
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`use as a prior art reference to a challenged claim.
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`21. Under § 102(a), a challenged claim is anticipated if it was patented or
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`described in a printed publication in the United States or a foreign country before
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`the challenged claim’s date of invention.
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`22. Under § 102(b), a challenged claim is anticipated if it was patented or
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`described in a printed publication in the United States or a foreign country more
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`than one year prior to the challenged patent’s filing date.
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`23. Under § 102(e), a challenged claim is anticipated if it was described in
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`published patent application that was filed by another in the United States before
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`the challenge claim’s date of invention, or was described in a patent granted to
`
`another that was filed in the United States before the challenged claim’s date of
`
`invention.
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`24.
`
`I understand that a challenged claim’s date of invention is presumed
`
`to be the challenged patent’s filing date. I also understand that the patent owner
`
`may establish an earlier invention date and “swear behind” prior art defined by §
`
`102(a) or § 102(e) by proving (with corroborated evidence) the actual date on
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`which the named inventors conceived of the subject matter of the challenged claim
`
`and proving that the inventors were diligent in reducing the subject matter to
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`practice.
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`25.
`
`I understand that the filing date of patent is generally the filing date of
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`the application filed in the United States that issued as the patent. However, I
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`understand that a patent may be granted an earlier effective filing date if the patent
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`owner properly claimed priority to an earlier patent application.
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`26.
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`I understand that when a challenged claim covers several structures,
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`either generically or as alternatives, the claim is deemed anticipated if any of the
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`structures within the scope of the claim is found in the prior art reference.
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`27.
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`I understand that when a challenged claim requires selection of an
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`element from a list of alternatives, the prior art teaches the element if one of the
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`alternatives is taught by the prior art.
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`C. Obviousness
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`28.
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`I understand that even if a challenged claim is not anticipated, it is still
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`invalid if the differences between the claimed subject matter and the prior art are
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`such that the claimed subject matter would have been obvious to a person of
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`ordinary skill in the pertinent art at the time the alleged invention.
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`29.
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`I understand that obviousness must be determined with respect to the
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`challenged claim as a whole.
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`30.
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`I understand that one cannot rely on hindsight in deciding whether a
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`claim is obvious.
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`31.
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`I also understand that an obviousness analysis includes the
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`consideration of factors such as (1) the scope and content of the prior art, (2) the
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`differences between the prior art and the challenged claim, (3) the level of ordinary
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`skill in the pertinent art, and (4) “secondary” or “objective” evidence of non-
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`obviousness.
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`32. Secondary or objective evidence of non-obviousness includes
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`evidence of: (1) a long felt but unmet need in the prior art that was satisfied by the
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`claimed invention; (2) commercial success or the lack of commercial success of
`
`the claimed invention; (3) unexpected results achieved by the claimed invention;
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`(4) praise of the claimed invention by others skilled in the art; (5) taking of licenses
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`under the patent by others; (6) deliberate copying of the claimed invention; and (7)
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`contemporaneous and independent invention by others. However, I understand that
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`there must be a relationship between any secondary evidence of non-obviousness
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`and the claimed invention.
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`33.
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`I understand that a challenged claim can be invalid for obviousness
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`over a combination of prior art references if a reason existed (at the time of the
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`alleged invention) that would have prompted a person of ordinary skill in the art to
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`combine elements of the prior art in the manner required by the challenged claim. I
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`understand that this requirement is also referred to as a “motivation to combine,”
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`“suggestion to combine,” or “reason to combine,” and that there are several
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`rationales that meet this requirement.
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`34.
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`I understand that the prior art references themselves may provide a
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`motivation to combine, but other times simple common sense can link two or more
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`prior art references. I further understand that obviousness analysis recognizes that
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`market demand, rather than scientific literature, often drives innovation, and that a
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`motivation to combine references may come from market forces.
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`35.
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`I understand obviousness to include, for instance, scenarios where
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`known techniques are simply applied to other devices, systems, or processes to
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`improve them in an expected or known way. I also understand that practical and
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`common-sense considerations should be applied a proper obviousness analysis. For
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`instance, familiar items may have obvious uses beyond their primary purposes.
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`36.
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`I understand that the combination of familiar elements according to
`
`known methods is obvious when it yields predictable results. For instance,
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`obviousness bars patentability of a predictable variation of a technique even if the
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`technique originated in another field of endeavor. This is because design incentives
`
`and other market forces can prompt variations of it, and predictable variations are
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`not the product of innovation, but rather ordinary skill and common sense.
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`37.
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`I understand that a particular combination may be obvious if it was
`
`obvious to try the combination. For example, when there is a design need or
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`market pressure to solve a problem and there are a finite number of identified,
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`predictable solutions, a person of ordinary skill has good reason to pursue the
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`known options within his or her technical grasp. This would result in something
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`obvious because the result is the product not of innovation but of ordinary skill and
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`common sense. However, I understand that it may not be obvious to try a
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`combination when it involves unpredictable technologies.
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`38.
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`It is further my understanding that a proper obviousness analysis
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`focuses on what was known or obvious to a person of ordinary skill in the art, not
`
`just the patentee. Accordingly, I understand that any need or problem known in the
`
`field of endeavor at the time of invention and addressed by the patent can provide a
`
`reason for combining the elements in the manner claimed.
`
`39.
`
`It is my understanding that the Manual of Patent Examining Procedure
`
`§2143 sets forth the following as exemplary rationales that support a conclusion of
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`obviousness:
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`• Combining prior art elements according to known methods to yield
`
`predictable results;
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`• Simple substitution of one known element for another to obtain predictable
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`results;
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`• Use of known technique to improve similar devices (methods, or products)
`
`in the same way;
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`• Applying a known technique to a known device (method, or product) ready
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`for improvement to yield predictable results;
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`• Choosing from a finite number of identified, predictable solutions, with a
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`reasonable expectation of success;
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`• Known work in one field of endeavor may prompt variations of it for use in
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`either the same field or a different one based on design incentives or other
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`market forces if the variations are predictable to one of ordinary skill in the
`
`art;
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`• Some teaching, suggestion, or motivation in the prior art that would have led
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`one of ordinary skill to modify the prior art reference or to combine prior art
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`reference teachings to arrive at the claimed invention.
`
`40. A person of ordinary skill in the art looking to overcome a problem
`
`will often use the teachings of multiple publications together like pieces of a
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`puzzle, even though the prior art does not necessarily fit perfectly together.
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`Therefore, I understand that references for obviousness need not fit perfectly
`
`together like puzzle pieces. Instead, I understand that obviousness analysis takes
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`into account inferences, creative steps, common sense, and practical logic and
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`applications that a person of ordinary skill in the art would employ under the
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`circumstances.
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`41.
`
`I understand that a claim can be obvious in light of a single reference,
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`if the elements of the challenged claim that are not explicitly or inherently
`
`disclosed in the reference can be supplied by the common sense of one of skill in
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`the art.
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`42.
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`I understand that obviousness also bars the patentability of applying
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`known or obvious design choices to the prior art. One cannot patent merely
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`substituting one prior art element for another if the substitution can be made with
`
`predictable results. Likewise, combining prior art techniques that are interoperable
`
`with respect to one another is generally obvious and not patentable.
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`43.
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`In sum, my understanding is that obviousness invalidates claims that
`
`merely recite combinations of, or obvious variations of, prior art teachings using
`
`understanding and knowledge of one of skill in the art at the time and motivated by
`
`the general problem facing the inventor at the time. Under this analysis, the prior
`
`art references themselves, or any need or problem known in the field of endeavor
`
`at the time of the invention, can provide a reason for combining the elements of or
`
`attempting obvious variations on prior art references in the claimed manner.
`
`D. Legal Standard for Claim Construction
`
`44.
`
`I understand that before any invalidity analysis can be properly
`
`performed, the scope and meaning of the challenged claims must be determined by
`
`claim construction.
`
`45.
`
`I understand that a patent may include two types of claims,
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`independent claims and dependent claims. I understand that an independent claim
`
`stands alone and includes only the limitations it recites. I understand that a
`
`dependent claim depends from an independent claim or another dependent claim. I
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`understand that a dependent claim includes all the limitations that it recites in
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`addition to the limitations recited in the claim (or claims) from which it depends.
`
`46.
`
`In comparing the challenged claims to the prior art, I have carefully
`
`considered the patent and its file history in light of the understanding of a person of
`
`skill at the time of the alleged invention.
`
`47.
`
`I understand that to determine how a person of ordinary skill would
`
`have understood a claim term, one should look to sources available at the time of
`
`the alleged invention that show what a person of skill in the art would have
`
`understood disputed claim language to mean. It is my understanding that this may
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`include what is called “intrinsic” evidence as well as “extrinsic” evidence.
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`48.
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`I understand that, in construing a claim term, one should primarily
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`rely on intrinsic patent evidence, which includes the words of the claims
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`themselves, the remainder of the patent specification, and the prosecution history. I
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`understand that extrinsic evidence, which is evidence external to the patent and the
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`prosecution history, may also be useful in interpreting patent claims when the
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`intrinsic evidence itself is insufficient. I understand that extrinsic evidence may
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`include principles, concepts, terms, and other resources available to those of skill
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`in the art at the time of the invention.
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`49.
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`I understand that words or terms should be given their ordinary and
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`accepted meaning unless it appears that the inventors were using them to mean
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`something else or something more specific. I understand that to determine whether
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`a term has special meaning, the claims, the patent specification, and the
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`prosecution history are particularly important, and may show that the inventor gave
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`a term a particular definition or intentionally disclaimed, disavowed, or
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`surrendered claim scope.
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`50.
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`I understand that the claims of a patent define the scope of the rights
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`conferred by the patent. I understand that because the claims point out and
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`distinctly claim the subject matter which the inventors regard as their invention,
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`claim construction analysis must begin with and is focused on the claim language
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`itself. I understand that the context of the term within the claim as well as other
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`claims of the patent can inform the meaning of a claim term. For example, because
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`claim terms are normally used consistently throughout the patent, how a term is
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`used in one claim can often inform the meaning of the same term in other claims.
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`Differences among claims or claim terms can also be a useful guide in
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`understanding the meaning of particular claim terms.
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`51.
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`I understand that a claim term should be construed not only in the
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`context of the particular claim in which the disputed term appears, but in the
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`context of the entire patent, including the entire specification. I understand that
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`because the specification is a primary basis for construing the claims, a correct
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`construction must align with the specification.
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`52.
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`I understand that the prosecution history of the patent as well as art
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`incorporated by reference or otherwise cited during the prosecution history are also
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`highly relevant in construing claim terms. For instance, art cited by or incorporated
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`by reference may indicate how the inventor and others of skill in the art at the time
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`of the invention understood certain terms and concepts. Additionally, the
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`prosecution history may show that the inventors disclaimed or disavowed claim
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`scope or further explained the meaning of a claim term.
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`53. With regard to extrinsic evidence, I understand that all evidence
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`external to the patent and prosecution history, including expert and inventor
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`testimony, dictionaries, and learned treatises, can also be considered. For example,
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`technical dictionaries may indicate how one of skill in the art used or understood
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`the claim terms. However, I understand that extrinsic evidence is considered to be
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`less reliable than intrinsic evidence, and for that reason is generally given less
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`weight than intrinsic evidence.
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`54.
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`I understand that in general, a term or phrase found in the introductory
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`words or preamble of the claim, should be construed as a limitation if it recites
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`essential structure or steps, or is necessary to give meaning to the claim. For
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`instance, I understand preamble language may limit claim scope: (i) if dependence
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`on a preamble phrase for antecedent basis indicates a reliance on both the preamble
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`and claim body to define the claimed invention; (ii) if reference to the preamble is
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`necessary to understand limitations or terms in the claim body; or (iii) if the
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`preamble recites additional structure or steps that the specification identifies as
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`important.
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`55. On the other hand, I understand that a preamble term or phrase is not
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`limiting where a challenged claim defines a structurally complete invention in the
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`claim body and uses the preamble only to state a purpose or intended use for the
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`invention. I understand that to make this determination, one should review the
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`entire patent to gain an understanding of what the inventors claim they invented
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`and intended to encompass in the claims.
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`56.
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`I understand that 35 U.S.C. § 112 ¶ 6 created an exception to the
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`general rule of claim construction called a “means plus function” limitation. These
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`types of terms and limitations should be interpreted to cover only the
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`corresponding structure described in the specification, and equivalents thereof. I
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`also understand that a limitation is presumed to be a means plus function limitation
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`if (a) the claim limitation uses the phrase “means for”; (b) the “means for” is
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`modified by functional language; and (c) the phrase “means for” is not modified by
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`sufficient structure for achieving the specified function.
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`57.
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`I understand that a structure is considered structurally equivalent to
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`the corresponding structure identified in the specification only if the difference
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`between them are insubstantial. For instance, if the structure performs the same
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`function in substantially the same way to achieve substantially the same result. I
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`further understand that a structural equivalent must have been available at the time
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`of the issuance of the claim.
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`III. LEVEL OF ORDINARY SKILL IN THE ART
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`58.
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`In forming my opinions on obviousness and determining the
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`characteristics of a hypothetical person of ordinary skill in the art (“POSITA”) of
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`the ’673 patent at the time of the claimed invention, I considered obviousness and
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`the level of ordinary skill in the art from October 23, 2002, the date of the
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`provisional application of the ’673 patent, through July 8, 2003, the date the
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`application for the ’673 patent was filed. See Ex. 1001. I understand that
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`Petitioners are not aware of any claim by the Patent Owner that the ’673 patent is
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`entitled to an earlier priority date. My opinions regarding obviousness and the
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`level of skill would not materially change if the challenged claims were entitled to
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`a priority date a y