Kephart Consulting LLC v. Axxonsoft US Inc

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Kephart Consulting, LLC (Arizona)
  • Defendant: AxxonSoft US, Inc. (U.S. Virgin Islands)
  • Plaintiff’s Counsel: Banie & Ishimoto LLP; Ramey LLP
• Case Identification: 5:24-cv-06770, N.D. Cal., 03/06/2025
• Venue Allegations: Venue is alleged to be proper in the Northern District of California because Defendant maintains a regular and established place of business in San Jose and has committed alleged acts of infringement in the district.
• Core Dispute: Plaintiff alleges that Defendant’s security products and services infringe patents related to methods for proactively identifying persons of interest at large venues by comparing captured images to a database.
• Technical Context: The technology concerns proactive security systems for crowded public venues, such as stadiums, which use facial and license plate recognition to screen individuals against watchlists before or during an event.
• Key Procedural History: This First Amended Complaint was filed in response to Defendant's Motion to Dismiss a prior version of the complaint. The complaint states that Plaintiff is a non-practicing entity and that it and its predecessors-in-interest have entered into settlement licenses with other entities, which may be relevant to future disputes over patent marking and damages.

Case Timeline

Date	Event
2012-04-19	Priority Date for U.S. Patent No. 8,792,677
2012-04-19	Priority Date for U.S. Patent No. 10,248,849
2014-07-29	U.S. Patent No. 8,792,677 Issued
2019-04-02	U.S. Patent No. 10,248,849 Issued
2025-03-06	Complaint Filing Date

II. Technology and Patent(s)-in-Suit Analysis

U.S. Patent No. 8,792,677 - "Large Venue Security Method," issued July 29, 2014

The Invention Explained

• Problem Addressed: The patent’s background section describes security measures at sporting venues and other large gatherings as being primarily "outdated, reactive tactics" ( Compl. ¶9; ’677 Patent, col. 1:58-59). These methods rely on the visible presence of security to deter violence and can only respond to incidents after they occur, rather than proactively preventing them ('677 Patent, col. 1:60-62).
• The Patented Solution: The invention proposes a proactive security method where a photographic facial image is captured of each person seeking to enter a venue and is compared by a computer to a database of individuals "known to have been violent during similar events in the past" (’677 Patent, col. 2:30-33). If a match is detected, an alert is sent to law enforcement, who can then intervene before the person enters the venue (’677 Patent, Abstract). The system is also described as being able to link this facial data with ticket information, such as seat assignments, to locate individuals within the venue (’677 Patent, col. 3:31-51).
• Technical Importance: The claimed method represents a shift from a security posture of passive deterrence to one of active, data-driven pre-screening to identify potential threats before they can cause harm at a large public event (Compl. ¶9).

Key Claims at a Glance

• The complaint asserts infringement of one or more of claims 1-20 (Compl. ¶8). Independent claim 1 is representative and includes the following essential elements:
  • Compiling a computerized database of facial images of persons known to have been violent during similar past events.
  • Providing entry ports for persons to enter a venue.
  • Forming a photographic image of each person approaching an entry port.
  • Using a computer to compare the captured image to the database to detect a likely match.
  • Providing a video display for a law enforcement officer.
  • Alerting the officer of a detected match.
• The complaint does not explicitly reserve the right to assert dependent claims, but the broad reference to claims 1-20 suggests this is contemplated (Compl. ¶8).

U.S. Patent No. 10,248,849 - "Technique for Providing Security to an Area," issued April 2, 2019

The Invention Explained

• Problem Addressed: The ’849 Patent, which shares a specification with the ’677 Patent, addresses the same problem of reactive, rather than proactive, security at crowded venues (Compl. ¶17; ’849 Patent, col. 1:12-2:18).
• The Patented Solution: The solution is an enhanced version of the proactive screening method that explicitly incorporates reading vehicle license plates at parking area entry ports in addition to capturing facial images of attendees (’849 Patent, Abstract). A key feature of this invention is its distributed architecture, where a "fusion center" controlled by a second party (e.g., a law enforcement agency) manages the database of persons of interest, and the venue operator (a first party) sends captured images to that remote database for comparison (’849 Patent, col. 14:27-38; Fig. 6).
• Technical Importance: This technology expands the security perimeter from the venue entrance to the parking lot and contemplates a collaborative, multi-entity security model rather than a standalone system operated solely by the venue (Compl. ¶17).

Key Claims at a Glance

• The complaint asserts infringement of one or more of claims 1-23 (Compl. ¶16). Independent claim 1 is representative and includes the following essential elements:
  • Providing at least one entry port into a secure area.
  • Capturing a photographic image of each person approaching the entry port.
  • Comparing the captured image to a database of facial images of persons of interest to detect a likely match.
  • Alerting security or law enforcement of a detected match.
  • Wherein the comparing step includes transmitting the image to the database and receiving an alert in response.
  • Wherein the secure area is controlled by a first party and the database is controlled by a second party.
• The complaint’s reference to claims 1-23 suggests an intent to assert dependent claims as well (Compl. ¶16).

III. The Accused Instrumentality

Product Identification

The complaint does not identify any specific AxxonSoft products or services by name. It generally accuses "devices/products, methods, systems, and processor-readable media that infringe one or more claims" of the patents-in-suit (Compl. ¶8, ¶16).

Functionality and Market Context

The accused instrumentalities are alleged to provide "methods and systems/products for comparing captured facial images to a database of facial data for persons of interest and alerting security personnel" (Compl. ¶11, ¶19). The complaint does not provide further detail on the technical operation or market positioning of any specific AxxonSoft product. No probative visual evidence provided in complaint.

IV. Analysis of Infringement Allegations

The complaint references preliminary claim charts in Exhibits B and D, which were not provided with the filed complaint (Compl. ¶10, ¶18). The narrative infringement theory is summarized below.

The complaint alleges that AxxonSoft directly infringes by maintaining, operating, and administering systems that practice the patented methods (Compl. ¶8, ¶16). The core of the allegation is that AxxonSoft's products and services provide the functionality of capturing facial images, comparing them against a database of persons of interest, and generating alerts for security personnel when a match is found (Compl. ¶11, ¶19). This functionality is alleged to map onto the elements of the asserted claims of both the ’677 and ’849 Patents.

Identified Points of Contention

• Evidentiary Questions: The complaint's allegations are framed at a high level of generality and do not identify specific accused products. A central question for litigation will be whether discovery reveals that AxxonSoft's commercial products actually perform all steps of the asserted claims in the required manner.
• Scope Questions ('849 Patent): Independent claim 1 of the ’849 Patent requires that the "secure area is controlled by a first party" and the "database is controlled by a second party" ('849 Patent, col. 18:11-13). The infringement analysis may turn on whether the accused AxxonSoft systems are deployed in such a distributed architecture or are standalone systems where the venue operator controls both the premises and the database.
• Ambiguity in Pleading ('677 Patent): The complaint presents a potential inconsistency in its description of the ’677 Patent. Paragraph 7 describes it as relating to "comparing captured license plate images," while paragraph 9 describes it as relating to "comparing captured facial images" (Compl. ¶7, ¶9). While the patent specification discusses both, asserted independent claim 1 focuses on facial images. This ambiguity may require clarification as to the plaintiff's precise infringement theory for this patent.

V. Key Claim Terms for Construction

U.S. Patent No. 8,792,677

• The Term: "persons who are known to have been violent during similar events in the past" (from Claim 1)
• Context and Importance: This term defines the required content and character of the database. Its construction is critical because many commercial security systems may use more general-purpose "watchlists" or databases of "persons of interest." Practitioners may focus on whether an accused system that uses such a general database meets this more specific limitation.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The specification suggests the database may be expanded to "include facial images of persons subject to outstanding arrest warrants," which is a category of individuals not necessarily known to have been violent at past events ('677 Patent, col. 3:22-26).
  • Evidence for a Narrower Interpretation: The plain language of the claim is specific. The "SUMMARY OF THE INVENTION" section repeatedly frames the invention around compiling a database of "persons who are known to have been violent during similar events in the past," reinforcing a narrower purpose ('677 Patent, col. 2:30-33).

U.S. Patent No. 10,248,849

• The Term: "database is controlled by a second party" (from Claim 1)
• Context and Importance: This term is central to the distributed architecture claimed in the ’849 Patent. The infringement case against a particular product may succeed or fail based on its definition. Practitioners may focus on this term because a defendant could argue its product is a self-contained system where the user (the "first party") also controls the database, thus avoiding this limitation.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The term "controlled" is not explicitly defined, which could allow for an interpretation that includes a database hosted or managed by a third-party vendor (the "second party") on behalf of a customer (the "first party") in a cloud or SaaS environment.
  • Evidence for a Narrower Interpretation: The specification heavily features the concept of a "fusion center" that aggregates data from distinct entities like "homeland security, law enforcement agencies, and public safety departments" ('849 Patent, col. 14:35-37; Fig. 6). This context suggests "controlled by a second party" may require a formally separate operational entity, not merely a software vendor hosting data.

VI. Other Allegations

Indirect Infringement

The complaint alleges inducement by asserting that AxxonSoft "actively encouraged or instructed" its customers on how to use its products in an infringing manner (Compl. ¶11, ¶19). It also alleges contributory infringement by claiming the accused components "do not have any substantial non-infringing uses" (Compl. ¶12, ¶20).

Willful Infringement

Willfulness is pleaded conditionally. The prayer for relief asks the court to declare infringement willful and award treble damages only if "discovery reveals that Defendant knew" of the patents and its infringement (Compl. p. 8, ¶e). This suggests the allegations are based on potential post-suit knowledge rather than pre-suit notice.

VII. Analyst’s Conclusion: Key Questions for the Case

• A core issue will be one of evidentiary proof: given the complaint's lack of specificity, can the plaintiff demonstrate through discovery that specific AxxonSoft products perform every element of the asserted claims, particularly the complete methods as recited?
• A key architectural question will be one of definitional scope: can the term "database is controlled by a second party" in the ’849 Patent be construed to cover a vendor-hosted software-as-a-service model, or does it require a distinct operational entity like the "fusion center" described in the specification?
• A central claim construction dispute may be one of functional limitation: does the phrase "persons who are known to have been violent" in the ’677 Patent require a database specifically curated for this purpose, or can it be read broadly to cover general-purpose watchlists common in commercial security products?