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Vedanti and Max Sound vs. Google

August 13th, 2014 by Multimedia Mike

Vedanti Systems Limited (VSL) and Max Sound Coporation filed a lawsuit against Google recently. Ordinarily, I wouldn’t care about corporate legal battles. However, this one interests me because it’s multimedia-related. I’m curious to know how coding technology patents might hold up in a real court case.

Here’s the most entertaining complaint in the lawsuit:

Despite Google’s well-publicized Code of Conduct — “Don’t be Evil” — which it explains is “about doing the right thing,” “following the law,” and “acting honorably,” Google, in fact, has an established pattern of conduct which is the exact opposite of its claimed piety.

I wonder if this is the first known case in which Google has been sued over its long-obsoleted “Don’t be evil” mantra?

Researching The Plaintiffs

I think I made a mistake by assuming this lawsuit might have merit. My first order of business was to see what the plaintiff organizations have produced. I have a strong feeling that these might be run of the mill patent trolls.

VSL currently has a blank web page. Further, the Wayback Machine only has pages reaching back to 2011. The earliest page lists these claims against a plain black background (I’ve highlighted some of the more boisterous claims and the passages that make it appear that Vedanti doesn’t actually produce anything but is strictly an IP organization):

The inventions key :
The patent and software reduced any data content, without compressing, up to a 97% total reduction of the data which also produces a lossless result. This physics based invention is often called the Holy Grail.

Vedanti Systems Intellectual Property
Our strategic IP portfolio is granted in all of the world’s largest technology development and use countries. A major value indemnification of our licensee products is the early date of invention filing and subsequent Issue. Vedanti IP has an intrinsic 20 year patent protection and valuation in royalties and licensing. The original data transmission art has no prior art against it.

Vedanti Systems invented among other firsts, The Slice and Partitioning of Macroblocks within a RGB Tri level region in a frame to select or not, the pixel.

Vedanti Systems invention is used in nearly every wireless chipset and handset in the world

Our original pixel selection system revolutionized wireless handset communications. An example of this system “Slice” and “Macroblock Partitioning” is used throughout Satellite channel expansion, Wireless partitioning, Telecom – Video Conferencing, Surveillance Cameras, and 2010 developing Media applications.

Vedanti Systems is a Semiconductor based software, applications, and IP Continuations Intellectual Property company.

Let’s move onto the other plaintiff, Max Sound. They have a significantly more substantive website. They also have an Android app named Spins HD Audio, which appears to be little more than a music player based on the screenshots.

Max Sound also has a stock ticker symbol: MAXD. Something clicked into place when I looked up their ticker symbol: While worth only a few pennies, it was worth a few more pennies after this lawsuit was announced, which might be one of the motivations behind the lawsuit.

Here’s a trick I learned when I was looking for a new tech job last year: When I first look at a company’s website and am trying to figure out what they really do, I head straight to their jobs/careers page. A lot of corporate websites have way too much blathering corporatese that can be tough to cut through. But when I see what mix of talent and specific skills they are hoping to hire, that gives me a much better portrait of what the company does.

The reason I bring this up is because this tech company doesn’t seem to have jobs/careers page.

The Lawsuit
The core complaint centers around Patent 7974339: Optimized data transmission system and method. It was filed in July 2004 (or possibly as early as January 2002), issued in July 2011, and assigned (purchased?) by Vedanti in May 2012. The lawsuit alleges that nearly everything Google has ever produced (or, more accurately, purchased) leverages the patented technology.

The patent itself has 5 drawings. If you’ve ever seen a multimedia codec patent, or any whitepaper on a multimedia codec, you’ve seen these graphs before. E.g., “Raw pixels come in here -> some analysis happens here -> more analysis happens over here -> entropy coding -> final bitstream”. The text of a patent document isn’t meant to be particularly useful. I’ve tried to understand this stuff before and it never goes well. Skimming the text, I just see a blur of the words data, transmission, pixel, and matrix.

So I read the complaint to try to figure out what this is all about. To summarize the storyline as narrated by the lawsuit, some inventors were unhappy with the state of video compression in 2001 and endeavored to create something better. So they did, and called it the VSL codec. This codec is so far undocumented on the MultimediaWiki, so it probably has yet to be seen “in the wild”. Good luck finding hard technical data on it now since searches for “VSL codec” are overwhelmed by articles about this lawsuit. Also, the original codec probably wasn’t called VSL because VSL is apparently an IP organization formed much later.

Then, the protagonists of the lawsuit patented the codec. Then, years later, Google wanted to purchase a video codec that they could open source and use to supplant H.264.

The complaint goes on to allege that in 2010, Google specifically contacted VSL to possibly license or acquire this mysterious VSL technology. Google was allegedly allowed to study the technology, eventually decided not to continue discussions, and shipped back the proprietary materials.

Here’s where things get weird. When Google shipped back the materials, they allegedly shipped back a bunch of Post-It notes. The notes are alleged to contain a ton of incriminating evidence. The lawsuit claims that the notes contained such tidbits as:

  • Google was concerned that its infringement could be considered “recklessness” (the standard applicable to willful infringement);
  • Google personnel should “try” to destroy incriminating emails;
  • Google should consider a “design around” because it was facing a “risk of litigation.”

Actually, given Google’s acquisition of On2, I can totally believe that last one (On2’s codecs have famously contained a lot of weirdness which is commonly suspected to be attributable to designing around known patents).

Anyway, a lot of this case seems to hinge on the authenticity of these Post-It notes:

“65. The Post-It notes are unequivocal evidence of Google’s knowledge of the ’339 Patent and infringement by Defendants”

I wish I could find a stock photo of a stack of Post-It notes in an evidence bag.

I’ve worked at big technology companies. Big tech companies these days are very diligent about indoctrinating employees about IP liability issues. The reason this Post-It situation strikes me as odd is because the alleged contents of the notes basically outline everything the corporate lawyers tell you NOT to do.

Analysis
I’m trying to determine what specific algorithms and coding techniques. I guess I was expecting to see a specific claim that, “Our patent outlines this specific coding technique and here is unequivocal proof that Google A) uses the same technique, and B) specifically did so after looking at our patent.” I didn’t find that (well, a bit of part B, c.f., the Post-It note debacle), but maybe that’s not how these patent lawsuits operate. I’ve never kept up before.

Maybe it’s just a patent troll. Maybe it’s for the stock bump. I’m expecting to see pump-n-dump stock spam featuring the stock symbol MAXD anytime now.

I’ve never been interested in following a lawsuit case carefully before. I suddenly find myself wondering if I can subscribe to the RSS feed for this case? Too much to hope for. But I found this item through Pando and maybe they’ll stay on top of it.

Posted in Legal/Ethical | 14 Comments »

14 Responses

  1. Peter Says:

    Did they do a SWOT analysis on the product using Post-It notes? That’s plausible.

    Perhaps every Google-On2er ought to have one of these on his/her desk: http://www.usbgeek.com/products/usb-mini-paper-shredder

    “Get rid of any incriminating or confidential receipts, _sticky notes_, or business cards in a seconds notice.”

  2. Kostya Says:

    What about incriminating codec design?

  3. Brian Says:

    It is not a patent troll, nor a stock pump. In fact, the stock price has dropped since the release. Unfortunately, that is what most folks will likely think (and reasonably so) when they see a small company trying to take action against mighty Google. If you know business litigation like I do, you know that you will typically spend more in legal fees fighting then you can expect to recover….and that’s a big part of the approach by companies like Google. They don’t worry about IP’s of small entities, only those big enough (cash rich enough) to fight them. As such, it says a LOT that the plaintiffs legal firm accepted this on a contingency. They know how much they can expect to spend fighting Google, but are willing to take the risk. Google can easily afford to throw money away, so it’s unlikely they would choose to settle to avoid spending too much in legal fees, and they certainly will not want to set any precedence that might encourage others to suit in hope of negotiating settlements. It is likely that the evidence against Google is very, very strong.

    Max Sound is a company that has been bleeding through cash, but with an audio product that is industry changing. They are on the brink of sales growth, with deployment through cell phones, tablets, and other audio content devices. You can hear the technology’s benefits for yourself on their web page, and the potential market for that technology is huge. Note the names of the companies that they are working with; there’s some credible references there. The issue they seem to have is that of weak management; unfortunately, something not uncommon with most start up companies.

    Where this law suit comes in is an oddity. It really just seems to be almost a side project, with its own distinct timing and activity. I don’t see it as being part of the core Max Sound business planning, nor a “pump and dump”.

    I am a Max Sound shareholder, and have been for some time. There in lies my knowledge of the company, but my area of profession is not in the audio field. My understanding of legal matters comes through experience. Again, I think that the legal firm’s taking this case on a contingency, knowing full well how massive an undertaking it is to take on Google, says much about the strength of evidence. It might also speak toward the possibility that Google has in fact widely deployed this technology already (and I have no idea if that is true or not), which can risk the chance of having that technology frozen under an injunction, and a large court fee/award for it’s prior use. If it is a key part of the Google service’s mentioned, it would be quite a blow if they were suddenly forced to remove it.

  4. Hyena Says:

    Did you View Source on vedantisystems.com? It gave me a laugh.

  5. Brian Says:

    I just read a copy of the formal filed complaint, and it contains quite a bit of detail on the initial meetings and ongoing work between Google and VSL in 2010. In it, there are claims that Google has incorporated the VSL design into their video offerings, including YouTube, Google Chrome, and the Android system. You can download a public copy here:

    http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=6&ved=0CDwQFjAF&url=http%3A%2F%2Fdigitalcommons.law.scu.edu%2Fcgi%2Fviewcontent.cgi%3Farticle%3D1802%26context%3Dhistorical&ei=JZDtU8T-A8L8oASbiYFQ&usg=AFQjCNFTbI2asdXdrQYsXBMLJMx8_-tGhg&bvm=bv.73231344,d.cGU

  6. Multimedia Mike Says:

    @Hyena: I did view the source on Vedanti Systems’ site, which is always step #1 in understanding why the page doesn’t load. However, I didn’t see anything too humorous.

  7. Multimedia Mike Says:

    @Brian: Thanks for chiming in on this thread, and for posting that lawsuit link. I’m trying to determine if that’s a separate lawsuit than the one I posted from Scribd. They seem quite similar (down to the puerile “don’t be evil” complaint). The one you posted has some interesting unique tidbits, like the claim that VQ-based video codecs remained the standard up through 2010 (point 63 in the suit), which I would contest. Point 66 goes on to state that most codecs at the time were transform-based.

    I’m still having trouble understanding how Max Sound is connected to these suits.

    The lawsuits allege that VSL developed a VSL codec. I would be interested to see if that got out into the wild, and if there are binary codec programs and multimedia samples available.

  8. Brian Says:

    @Mike: My understanding is that the principal design engineer for VSL was introduced to Max Sound through a third party. Max Sound’s technology allows for a high definition analog quality audio that typically reduces the audio file size. They may have been looking at working together with VSL as a package. I believe that VSL did not have the resources to fight Google, where as Max Sound does, and I think that led to the acquisition of IPR rights from VSL, which was paid for by a combination of cash and MAXD stock. Note that Max Sound has also purchased the IPR rights to a company called Engineering Architectural Technology. This confused me, because EAT has nothing to do with audio or multimedia. I did some searching on the company, and discovered they had developed a technology that they claim Google stole as well. (By the way, I find the EAT technology quite interesting. It is similar to VSL in that they break a building design into segments. As I read it, it is a type of AutoCAD that will have a built in library database of the most common shapes and sizes, cut into small sections. This would allow an architect to essentially create a building design like attaching Lego pieces together. The software would have the construction details in each segment database, so after the shape was determined, it would calculate and display all the specific construction details, eliminating the need for the engineer to put them in. I think they estimated a design time reduction of 80% over conventional methods.) I would not be surprised to see another suit filed to address EAT’s claims.

  9. Peter Says:

    “big tech firms are the biggest and baddest shark infested waters in the world of business. They make “Liar’s Poker” look like Monopoly.” — President of VSL Communications Ltd. http://topfemaleexecs.com/2014/07/08/constance-nash/

  10. JamesW Says:

    @Mike,Hyena – I think the amusement comes from the fact that the source has an ‘out of business’ message commented out.

    Perhaps the company was about to go under, and this is death or glory?

  11. Multimedia Mike Says:

    @JamesW: Thanks, I had completely missed that.

  12. Brian Says:

    Injunctions issued in Germany against Android OEM’s:

    http://money.cnn.com/news/newsfeeds/articles/marketwire/11G021518-001.htm

  13. Brian Says:

    Here are published copies of the actual post-it notes referred to:

    https://www.scribd.com/doc/241383312/Google-Post-Its-Notes-from-Patent-Infringement-and-Trade-Secret-Lawsuits

  14. Multimedia Mike Says:

    @Brian: Thanks for keeping on top of this. Interesting stuff. Strange reading, at least (trying to reconcile the transcriptions with the contents of the notes).