Data Scape Limited, a non-practicing entity based in Ireland, has recently filed a wave of patent infringement lawsuits in the United States and Germany against leading technology companies including Amazon, Apple, Box, Citrix, Dell, Dropbox, Pandora, Spotify and others. Data Scape is suing these companies over their respective cloud-based data storage and synchronization services based on a portfolio of patents originally owned by Sony dating back to the late 1990s. Sony assigned the portfolio to Data Scape on March 3, 2017, and one family of patents in the portfolio, with priority stemming from a Japanese patent application filed in 1999, now includes at least 30 related patent applications, issued patents, and abandoned applications from countries around the world including the US, Korea, Europe, and China (see patent family tree in the graphic).
In the last few months, Data Scape has asserted up to eight U.S. patents from the total portfolio, including six patents in the 1999 family (highlighted in red), in 19 cases in the US. Interestingly, unlike most high-volume NPE campaigns, Data Scape has also sued several companies in Germany alleging infringement of two European patents from the family. Launching international patent litigation out of the gate certainly raises the stakes, and leaves one to wonder whether Data Scape has a deep pockets litigation funder. Or perhaps Sony has some sort of revenue sharing agreement with Data Scape, given that for years Sony has engaged in a range of patent monetization and profiteering strategies (e.g., InterTrust, Intellectual Ventures, media patent pools, etc.).
In the US, Data Scape has filed cases in five different jurisdictions: (1) Western District of Texas (defendants Box, Dell, Dropbox, Verizon), (2) District of Colorado (defendants F5 Networks, Amazon), (3) Eastern District of Texas (defendants Dell, SAP, Fujitsu, PFU (EMEA)), (4) Central District of California (defendants Western Digital, Apple, Citrix, Spotify, Pandora Media, Teradata), and (5) Eastern District of California (defendant Barracuda)). In its Complaints in the US lawsuits, Data Scape has asserted infringement by defendants based on syncing data (e.g., documents, music files, etc.) across servers and between multiple devices. In particular, Data Scape alleges infringement of cloud-based or datacenter services such as Box services (Platform, for Business, for Individuals & Teams, Sync, Drive), Dropbox Business, a multitude of Amazon products and devices (e.g., Amazon Kindle, Amazon Photo, Amazon Drive, Amazon Prime Music, Kindle, Amazon servers, etc.), F5’s BIG-IP software and hardware, and Apple iCloud, just to name a few. In Europe, it appears that three separate cases have been filed before the Düsseldorf Regional Court against Apple, Amazon, and Spotify. In the case against Spotify, only the German patent corresponding to EP2752851 appears to be asserted, while both the German patents corresponding to EP2752851 and EP2755152 appear to be asserted against Apple and Amazon.
This patent litigation campaign showcases the type of litigation abuse that technology companies have decried for years. All of the Data Scape patents describe technology for (just wait for it… a blast from the past) ripping audio tracks from CDs to hard disk drives. Yep, that’s right – CD ripping. Does anyone even do that anymore? There’s no question that ripping CDs is far, far afield from modern cloud-based file sharing/syncing and data center replication technologies (which did not even exist when the first Sony Japanese patent was filed). And yet Sony, and now Data Scape, has amassed a huge worldwide portfolio on CD ripping with new patents still issuing today, with patent term extensions into 2023. Such extensions enable more lawsuits and potentially more patent royalties by stretching the boundaries of these patents to try to bolster cases against cloud-based defendants. Just take a look at one of the earlier issued US patents in the family, US 7617537, as a prime example. As if that’s not enough, Data Scape has several pending patent applications (rendered in orange in the family tree graphic). With the trend in directed prosecution to draft continuation applications that read on existing products, Data Scape will surely look to further contort the boundaries of its patent portfolio to add to its roster of litigation defendants.
Unless Data Scape is looking to settle on the cheap (which seems unlikely in light of the German patent strikes) it will be interesting to see how these cases unfold. For example, it is quite possible that some of litigants will seek a Multidistrict Litigation (MDL) order to consolidate the US cases into one jurisdiction. And it seems certain that, with the relatively new restrictions on venue, some defendants will seek a dismissal and transfer to another district court. For example, while both Amazon and F5 Networks were sued by Data Scape in Colorado, both are headquartered in Washington State, so a Motion to Transfer Venue to the Western District of Washington seems likely. Also, expect several IPRs to be filed with the Patent Trial and Appeal Board seeking to invalidate the Data Scape patents. Some defendants may file IPRs on their own, or turn to Unified Patents to do so.
Contributing Author: Bart Eppenauer