District Judge Colleen McMahon construed a claim term in U.S. Patent 7,187,633, (“the ’633 patent”), relating anti-piracy coding in motion pictures and assigned to plaintiff Medien Patent Verwaltung (“MPV”), and held that claim 19 was not invalid for obviousness. The court provided the following construction:

“eliminating or making unreadable digital information in at least a part of said second section corresponding to said sequence of markings on said first section” means “mechanically or optically altering the film medium thereby removing at least part of the digital soundtrack or making it unreadable” which comports with the ordinary meaning of the claim term.

The ’633 patent is directed to a method of marking a “film medium” with unique markings placed in the soundtrack of the film print, which makes it possible to trace unauthorized copies of the motion picture back to the theater in which it was originally shown. The patent claims a method for purposely rendering a portion of the digital soundtrack unreadable, thereby forcing a reversion back to the analog soundtrack which has been marked with hidden audio codes. The markings produce a sound that is different from the sound reproduced by ordinary analog sound information, but is preferably imperceptible to the moviegoer or potential infringer.

Defendant Deluxe Entertainment Services Group’s (“Deluxe’s”), asserts that the patent is invalid based on a primary reference, U.S. Patent No. 5,080,479 (“Rosenberg patent”), which discloses a method for optically implanting invisible and inaudible “location markers” in an analog soundtrack that can be used to calculate an identification number for the print, combined with six different secondary references. The court held that the secondary prior art references do not disclose a method for altering the film medium to eliminate the digital information or render the digital information unreadable. The court specifically addressed three types of prior art: 1) prior art related to schemes for detecting and correcting errors in digital soundtracks (“the error correcting patents”), 2) the Seagrave patent, which discloses reverting from a digital soundtrack to an analog sound track, and 3) Sony DFP-3000, a user’s guide for a projection booth sound system that discusses reversion technology.

The court also held that a person of ordinary skill would not have understood the “error correcting patents” to disclose deliberately rendering the digital soundtrack unreadable to force reversion to the analog soundtrack. The court noted that the Seagrave patent combined with the Rosenberg patent probably presented the closest case of obviousness, but was convinced by MPV’s expert Charles Seagrave, the named inventor of the Seagrave patent, that the reversion method in the Seagrave patent is not the same as that claimed in the ’633 patent. The Seagrave patent discloses a method of eliminating the digital soundtrack by muting the sound, which makes the soundtrack inaudible, but not unreadable. Additionally, Mr. Seagrave explained that the inventors tested whether the system could revert to the analog soundtrack if there were too many errors in the digital soundtrack, but they did not contemplate purposely damaging the digital soundtrack to force reversion.

The court found that the Sony DFP-3000 manual—first disclosed after fact discovery— teaches that the reversion functionality should be tested by blocking the light-emitting diodes that the projector uses to read the digital soundtrack, thereby causing the system to revert to the analog soundtrack. That check can be done without affecting the digital medium, and instead inhibits the projection equipment. In light of this reference, the court had to construe the term “eliminating or making unreadable digital information in at least a part of said second section corresponding to said sequence of markings on said first section” to determine whether it encompassed manipulating the projector equipment. The court accepted MPV’s construction because it found that the claim language only encompasses manipulating the “digital information,” not the projection system.

Finally, the court found Deluxe’s expert’s opinion, that a person of skill in the art would have modified the prior art to create an anti-piracy method, unpersuasive. The court stated that those arguments were impermissible hindsight reconstructions; especially because the incentive for innovation was billions of dollars in lost profits from piracy.

Case: Medien Patent Verwaltung AG v. Warner Bros. Ent. Inc., No. 10 Civ. 4119 (CM)(GWG) (S.D.N.Y. January 29, 2014)