District Judge Colleen McMahon denied defendant Soundmouse, Ltd.’s motion for summary judgment of non-infringement of U.S. Patent No. 7,346,472 , 7,660,700, No. 7,949,494, and No. 8,214,175 (collectively “the Patents-in-Suit”) because defendant’s alleged infringing activities occur outside of the United States, so no liability under 35 U.S.C. § 271(a) attaches.

Plaintiff Blue Spike owns the Patents-in-Suit directed to methods for identifying digital information and material “solely on the perceptual characteristics of the material in order to combat piracy without being detected by the pirate.” Soundmouse uses its “Music Recognition electronic system, components, and software” to provide music recognition services to its customers, who send their content to Soundmouse in the United Kingdom via live feed, electronic file, or physical media. Soundmouse applies a digital fingerprint to the music, compares it to their database, and publishes its comparison on its website. Soundmouse argued that Section 271 does not apply because Soundmouse performs all audio and music recognition outside of the United States. Blue Spike alleges that Soundmouse infringes its product claims of the Patents-in-Suit because Soundmouse’s system is “used” in the United States by customers who transmit content from the United States for processing and receive processed content back. The court found that Soundmouse’s assertion was premature and was best settled after claim construction—which had not been performed in the Eastern District of Texas, where the case was originally filed. The court found that there is a genuine issue of fact concerning “the nature of the interface between the U.S. based customers and Soundmouse’s operations in the UK” and therefore denied the motion for summary judgment and immediately scheduled claim construction. The court noted that all other activity was stayed pending claim construction, stating that claim construction is the “first order of business in a patent case in THIS court.”

Case: Blue Spike, LLC v. Soundmouse Ltd, No. 14 Civ. 2243 (CM), 2014 BL 350523, (S.D.N.Y. Dec. 2, 2014)