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In Re Innovatio Ip Ventures

August 22, 2012


The opinion of the court was delivered by: James F. Holderman, Chief Judge:



Plaintiff Innovatio IP Ventures, LLC ("Innovatio") has sued various hotels, coffee shops, restaurants, supermarkets, and other commercial users of wireless internet technology located throughout the United States (collectively, the "Wireless Network Users"). (See Dkt. No. 198 ("Second Am. Compl.").) Innovatio alleges that, by making wireless internet available to their customers or using it to manage internal processes, the Wireless Network Users infringe various claims of seventeen patents owned by Innovatio. (Id. ¶¶ 48-81.) In addition, several manufactures of the products that the Wireless Network Users use to provide wireless internet (collectively, the "Manufacturers") have brought declaratory judgment actions against Innovatio seeking a declaration that their products, and the networks or systems of which they are a part, do not infringe Innovatio's patents. See Compl. (Dkt. No. 1), Cisco Sys., Inc. v. Innovatio IP Ventures, No. 11-cv-9309 (N.D. Ill. May 13, 2011). All claims and parties were consolidated before this court by the Judicial Panel on Multidistrict Litigation. (Dkt. No. 1.) Pending before the court is Innovatio's motion titled "Rule 16(c)(2) Motion for Entry of Protocol for Collection of Electronic Evidence and Preliminary Ruling on Admissibility of Evidence Collected Therefrom." (Dkt. No. 329.) For the reasons explained below, that motion is granted.


The standard for the operation of wireless networks that access the internet is established by the Institute of Electrical and Electronic Engineers ("IEEE"), and is known as IEEE 802.11, or "WiFi." As discovery has proceeded in this case, Innovatio has been using commercially-available Wi-Fi network analyzers to collect information about the Wireless Network Users' allegedly infringing Wi-Fi networks. (Dkt. No. 329, at 2.) That process, which is known in the industry as "sniffing," requires Innovatio's technicians to enter the Wireless Network Users' premises during business hours with a laptop computer and a Riverbed AirPcap Nx packet capture adapter (or a similar device). (Id.) The packet capture adapter can intercept data packets that are traveling wirelessly between the Wi-Fi router provided by the Wireless Network Users and any devices that may be communicating with it, such as a customer's laptop, smartphone, or tablet computer. Innovatio then uses Wireshark network packet analyzer software to analyze the data packets, revealing information about the configuration of the network and the devices in the network. The data packets also include any substantive information that customers using the Wi-Fi network may have been transmitting during the interception of the data packets, including e-mails, pictures, videos, passwords, financial information, private documents, and anything else a customer could transmit to the internet. Innovatio contends that the information it collects will assist in proving its infringement claims.

Before continuing to incur the expense of additional sniffing, Innovatio sought permission to obtain a preliminary ruling on the admissibility of the information that it gains in the sniffing process. (Dkt. No. 290.) The court granted permission to Innovatio to seek an admissibility ruling (Dkt. No. 323), but expressed some concern that Innovatio's sniffing may implicate the privacy interests of the customers using the Wi-Fi networks under the federal Wiretap Act. 18 U.S.C. §§ 2510-2522. Accordingly, the court ordered Innovatio's motion to describe its proposed sniffing protocol in detail and to address the applicability of the Wiretap Act. Innovatio has submitted a proposed protocol under seal (Dkt. No. 329, Ex. A), and now requests that the court approve that protocol and issue a preliminary ruling on the admissibility of any evidence Innovatio may gather through the use of that protocol.


I. The Federal Wiretap Act

The Federal Wiretap Act provides that, with certain exceptions, "any person who . . . intentionally intercepts . . . any wire, oral, or electronic communication" shall be subject to criminal and civil liability. 18 U.S.C. § 2511(1)(a); see also 18 U.S.C. § 2520(a). An "electronic communication" includes "any transfer of signals, writing, images, sounds, data or intelligence of any nature transmitted in whole or in part by a wire, radio, electromagnetic, photoelectronic or photooptical system that affects interstate or foreign commerce." Neither party disputes that the allegedly infringing Wi-Fi networks transmit information using radio waves (which are a type of electromagnetic radiation), and thus transmit "electronic communications."

Nonetheless, Innovatio contends that the Wiretap Act does not apply because it has altered the source code of the Wireshark software so that it no longer intercepts the contents of any third-party communication.*fn1 The Wiretap Act provides that "'intercept' means the aural or other acquisition of the contents of any wire, electronic, or oral communication through the use of any electronic, mechanical, or other device." 18 U.S.C. § 2510(4). The "contents" of a communication are "any information concerning the substance, purport, or meaning of that communication." 18 U.S.C. § 2510(8). According to Innovatio, its modified Wireshark software "overwrites the data payload (i.e. the 'substance' of the [Wi-Fi] communication) before the results are provided to the user," while still collecting the header information that it needs to analyze the configuration of the wireless network (such as the source of the data packet, the destination of the packet, the packet length, and the checksum*fn2 ). (Dkt. No. 329, at 4.) Innovatio thus contends that it is not acquiring the contents of any communication, and that its sniffing does not violate the Wiretap Act.

In response, the defendants*fn3 argue that the process of "overwriting" the data payload implies that Innovatio initially captures the data payload before deleting it. According to the defendants' expert, James Edward Hung, the mere act of initially recording the data payload is sufficient to complete the acquisition of the data, regardless of whether the intercepted data is later overwritten before it is used. (Dkt. No. 349, Ex. 5 ("Hung Decl. ¶ 12).) The defendants thus contend that Innovatio's proposed protocol intercepts the contents of the communication. In support of that argument, the defendants note that § 2511(1)(d) of the Wiretap Act contains a separate provision prohibiting the use of intercepted communications and that, to avoid redundancy with that section, § 2511(1)(a)'s prohibition on interception must not require the use of the communication as an element of the offense. See Noel v. Hall, 568 F.3d 743, 749 (9th Cir. 2009) ("No new interception occurs when a person listens to or copies the communication that has already been captured or redirected. Any subsequent use of the recorded conversation is governed not by the prohibition on interception, but by the prohibition in § 2511(c) and (d) on the 'use' and 'disclos[ure]' of intercepted wire communications.").

Innovatio replies, however, that the defendants have misunderstood the relevant technology. According to Innovatio's expert, Ray Nettleton, all Wi-Fi devices necessarily store an entire received data packet, including the packet's substantive communications, while the device processes the packet. (Dkt. No. 384, Ex. U ("Nettleton Decl.") ¶ 40.) During processing, if the Wi-Fi device determines that the data packet is not addressed to it or has been corrupted during transmission, the packet is deleted. (Id. ¶¶ 42-46.) Prior to that point, the entire data packet is retained only in the WiFi device's random access memory, and is not stored in a permanent medium. (Id. ¶ 47.) The entire process is momentary, so deleted packets are retained in memory for no more than milliseconds. (Id.

¶ 48.) Innovatio proposes to automatically overwrite all substantive communications in the data packets that it intercepts, making its protocol "intercept" substantive communications only to the extent that a normal Wi-Fi device would intercept all communications on a Wi-Fi network to which it is connected. (Id. ¶ 54.) If its proposal runs afoul of the Wiretap Act, Innovatio argues, then all Wi-Fi devices necessarily violate the Act whenever they are connected to a Wi-Fi network that also includes devices belonging to a another party, an absurd result.

In essence, Innovatio asks the court to conclude that a communication is not "intercepted" until it has been recorded in a permanent medium. The court is hesitant to adopt that conclusion, first because that requirement is nowhere found in the Wiretap Act. Moreover, an individual's online activity can be chilled merely by the knowledge that a third party has the power to acquire, however briefly, the contents of his communications. See Amati v. City of Woodstock, 829 F. Supp. 998, 1008 (N.D. Ill. 1993) (holding that the privacy interests of an individual whose conversations come under the power of another are implicated "even if the individual was assured no one would listen to his conversations, because the individual's privacy interests are no longer ...

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