In re Innovatio IP Ventures, LLC Patent Litigation

Citations: 886 F. Supp. 2d 888; 2012 WL 3594400Docket: MDL No. 2303; Case No. 11 C 9308

Court: District Court, N.D. Illinois; August 22, 2012; Federal District Court

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Plaintiff Innovatio IP Ventures, LLC has filed a lawsuit against various commercial users of wireless internet, alleging infringement of seventeen patents due to their provision and management of Wi-Fi services. Additionally, manufacturers of Wi-Fi products have initiated declaratory judgment actions against Innovatio to assert that their products do not infringe Innovatio's patents. The cases have been consolidated in this court by the Judicial Panel on Multidistrict Litigation.

Innovatio has proposed a motion for a protocol regarding the collection of electronic evidence through a process termed "sniffing," which involves using Wi-Fi network analyzers to gather data from the Wireless Network Users’ Wi-Fi networks. This data collection requires technicians to enter the premises and utilize a packet capture adapter to intercept data packets exchanged between the users' Wi-Fi routers and their devices. The captured packets may contain sensitive information transmitted by customers, which Innovatio claims will support its infringement allegations.

The court has granted Innovatio permission to seek a ruling on the admissibility of evidence collected through this sniffing process but raised concerns about potential violations of customer privacy under the federal Wiretap Act. Consequently, Innovatio was instructed to detail its proposed sniffing protocol and address the Wiretap Act's implications. Innovatio has submitted this protocol under seal and seeks the court's approval along with a preliminary ruling on the admissibility of the evidence it collects.

The Federal Wiretap Act imposes criminal and civil liability on individuals who intentionally intercept wire, oral, or electronic communications, with specific exceptions (18 U.S.C. 2511(l)(a); 18 U.S.C. 2520(a)). An “electronic communication” encompasses any transmission of signals or data via wire or electromagnetic systems affecting interstate or foreign commerce. Both parties agree that the contested Wi-Fi networks use radio waves, qualifying as electronic communications. Innovatio argues that its modified Wireshark software does not violate the Wiretap Act because it overwrites the payload data of communications while retaining only header information for analysis. The Act defines “intercept” as acquiring the contents of any communication using any device (18 U.S.C. 2510(4)), and the “contents” are defined as information concerning the substance of the communication (18 U.S.C. 2510(8)).

Defendants counter that Innovatio's overwriting process indicates it initially captures the data payload, thus completing the acquisition, regardless of subsequent deletion. The defendants' expert asserts that recording the data payload constitutes interception. They reference 18 U.S.C. 2511(l)(d), which prohibits the use of intercepted communications, arguing that the prohibition on interception in 2511(l)(a) does not require the use of the communication as part of the offense. They assert that once a communication is captured, any further actions regarding it fall under separate prohibitions on use and disclosure. In contrast, Innovatio claims the defendants misunderstand the technology. Innovatio's expert explains that Wi-Fi devices temporarily store entire data packets in memory during processing, but delete them if they are not addressed to the device or are corrupted, with the retention occurring only for milliseconds and not in permanent storage.

Innovatio proposes a protocol that would overwrite all substantive communications in intercepted data packets, claiming its method simply mirrors the interception capabilities of typical Wi-Fi devices. Innovatio argues that if this approach violates the Wiretap Act, then all Wi-Fi devices would similarly violate the Act when connected to networks including other users, which Innovatio deems absurd. It contends that a communication should not be considered "intercepted" until it is permanently recorded. However, the court expresses skepticism about this interpretation, noting that such a requirement is not established in the Wiretap Act. Moreover, an individual's online privacy can be compromised by the mere potential for third-party access to their communications. The court cites precedent indicating that acquisition occurs when wire communication contents are captured in any form.

Despite this, the court does not need to define "intercept" or resolve the experts' disagreement since Innovatio’s protocol arguably fits within an exception to the Wiretap Act, which permits interception of communications that are readily accessible to the public. Most users' Wi-Fi networks are open to public access, but the key issue is whether the electronic communications over these networks are configured for public accessibility. The only relevant case is In re Google Inc. Street View Electronic Communications Litigation, where the court found that data packets from unencrypted home Wi-Fi networks were not readily accessible to the public without advanced technology. The court held that such communications are intended to be private, similar to cellular technology, which is designed to prevent third-party monitoring.

The court's ruling was based on the acceptance that data packets transmitted via unencrypted Wi-Fi networks can only be intercepted using advanced packet sniffing technology. However, this assumption was challenged as being inaccurate. Innovatio utilized a publicly available Riverbed AirPcap Nx packet capture adapter, costing $698, and a more basic adapter for $198. The software needed to analyze the captured data, Wireshark, is free and open-source. With these tools, any individual within range of an unencrypted Wi-Fi network can intercept communications, highlighting the vulnerability of such networks, particularly those in commercial settings. Despite the general public's lack of awareness regarding the ease of interception and their belief in privacy while using unencrypted Wi-Fi, this expectation does not affect the legal definition of accessibility under the Wiretap Act. The statute does not require that the public be aware of the accessibility for it to be considered "readily accessible." Thus, since data packets over unencrypted networks can be easily intercepted using basic equipment, the Wiretap Act does not apply, allowing Innovatio's protocol to legally access those communications. This situation reflects the ongoing challenge of legal frameworks adapting to technological advancements.

Sniffing technology's accessibility has evolved, and the court emphasizes that it is not responsible for updating the law to protect consumers from technological changes; only Congress can enact such updates. Acknowledging calls for amendments to the Wiretap Act regarding unencrypted communications, the court states that current interceptions over unencrypted Wi-Fi networks remain permissible until Congress intervenes.

Regarding the Pen Registers and Trap and Trace Devices Act, the defendants argue that Innovatio's proposed protocol violates this law, which prohibits the installation or use of devices that capture dialing and routing information without including communication content. However, the defendants provide minimal support for their claim, failing to cite relevant cases involving Wi-Fi packet capture devices.

The court notes that all Wi-Fi devices inherently receive addressing information, which raises concerns about legal violations under the Act. Furthermore, there is ambiguity about whether the Act applies to devices capable of collecting communication content, suggesting that such devices might be classified as electronic intercepting devices under the Wiretap Act instead.

Ultimately, the court concludes that Innovatio's sniffing protocol does not infringe upon either the Wiretap Act or the Pen Registers and Trap and Trace Devices Act, allowing the evidence collected through this protocol to be admissible in court, provided Innovatio can establish a proper foundation under the Federal Rules of Evidence.

Innovatio’s motion for entry of a protocol for collecting electronic evidence has been granted, allowing it to collect data from the defendants’ public-facing Wi-Fi networks as outlined in its proposed protocol. Innovatio's initial data collection efforts utilized software that preserved the contents of wireless communications. The court clarifies that “defendants” refers to both Wireless Internet Users and Manufacturers, who are technically declaratory judgment plaintiffs. Innovatio asserts that the defendants and their customers consented to its data collection methods; however, while the defendants agreed to the use of network analyzers for certain information, they did not consent to the collection of substantive communications over Wi-Fi networks. Innovatio claims evidence that some defendants require customers to waive privacy rights to access their networks, but does not provide specific details on the number of defendants or a legal analysis of the waivers in relation to the Wiretap Act. The court will not assume that all defendants require such waivers. Additionally, the court rejected the defendants' argument to apply the definition of “readily accessible to the general public” from 18 U.S.C. § 2510(16) to Wi-Fi networks, asserting that this definition pertains only to traditional radio services. The court will give the phrase its ordinary meaning and declines to address the issue of sniffing private networks since Innovatio's approved protocol pertains only to public-facing networks. The court encourages the parties to discuss and potentially agree on a protocol for sniffing private networks if desired.