DCT
3:18-cv-00466
Energy Innovation Co LLC v. NCR Corp
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: Energy Innovation Company, LLC (Nevada)
- Defendant: NCR Corporation (Maryland)
- Plaintiff’s Counsel: Foundation Law Group LLP
- Case Identification: 3:18-cv-00466, S.D. Cal., 03/04/2018
- Venue Allegations: Venue is alleged to be proper in the Southern District of California because Defendant has allegedly committed infringing acts within the district.
- Core Dispute: Plaintiff alleges that Defendant’s "Copient Solution" platform infringes a patent related to customer loyalty and marketing analysis systems.
- Technical Context: The technology concerns point-of-sale systems that identify customers for loyalty programs using their pre-existing identification, such as a credit card, rather than requiring a new, proprietary membership card.
- Key Procedural History: The complaint alleges that the accused "Copient Solution" functionality was "previously licensed under the '933 patent." This history may be central to the dispute, particularly for allegations of knowledge and willfulness. The complaint also notes that the patent has generated significant licensing revenue.
Case Timeline
| Date | Event |
|---|---|
| 1997-07-17 | '933 Patent Priority Date |
| 2000-09-19 | '933 Patent Issue Date |
| 2018-03-04 | Complaint Filing Date |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 6,119,933 - Method and Apparatus for Customer Loyalty and Marketing Analysis, issued September 19, 2000
The Invention Explained
- Problem Addressed: The patent identifies the inconvenience and cost associated with prior art loyalty programs that required customers to obtain and carry a new, custom-issued membership card to participate (’933 Patent, col. 2:46-51).
- The Patented Solution: The invention describes a system that allows a customer to be identified at a point-of-sale (POS) terminal using a variety of pre-existing identifiers, such as a credit card, checking account number, or government-issued ID, thereby eliminating the need for a new, single-purpose loyalty card (’933 Patent, Abstract). Transaction data linked to this identifier is captured in a local database and can be aggregated in a central data warehouse for analysis by the retailer (’933 Patent, col. 1:21-54).
- Technical Importance: By leveraging identification methods already possessed by the customer, the patented approach aimed to reduce barriers to entry for loyalty program participation and lower the operational costs for retailers (’933 Patent, col. 2:46-51).
Key Claims at a Glance
- The complaint asserts infringement of Claim 1 of the ’933 Patent (Compl. ¶10).
- Independent Claim 1 requires:
- obtaining from a customer customer identifying information such as name, address and phone number;
- selecting a customer identification means, said means not requiring assignment of a new customer identification number; and
- using said customer identification means to record customer transactions details in a database local to a point-of-sale location.
- The complaint does not explicitly reserve the right to assert dependent claims, but its infringement allegations are not limited to Claim 1 in the prayer for relief (Compl. ¶ A).
III. The Accused Instrumentality
Product Identification
- Defendant's "Copient Solution" functionality (Compl. ¶10).
Functionality and Market Context
- The complaint alleges that the "Copient Solution" employs the method covered by Claim 1 of the ’933 patent (Compl. ¶10). The complaint does not provide sufficient detail for analysis of the specific technical operation of the Copient Solution. The central factual allegation regarding its functionality is that it was "previously licensed under the '933 patent," suggesting its operation aligns with the patented method (Compl. ¶10). No probative visual evidence provided in complaint.
IV. Analysis of Infringement Allegations
’933 Patent Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| obtaining from a customer customer identifying information such as name, address and phone number; | The complaint alleges that the accused "Copient Solution" functionality performs this step. | ¶9 | col. 12:36-39 |
| selecting a customer identification means, said means not requiring assignment of a new customer identification number; | The complaint alleges that the accused "Copient Solution" functionality employs an identification means that does not require a new number to be assigned to the customer. | ¶9 | col. 12:40-43 |
| using said customer identification means to record customer transactions details in a database local to a point-of-sale location. | The complaint alleges that the accused "Copient Solution" functionality uses the customer's identifier to record transaction details in a local POS database. | ¶9 | col. 12:44-47 |
Identified Points of Contention
- Scope Questions: The interpretation of "database local to a point-of-sale location" may be a central dispute. A question for the court is whether this term can be construed to cover modern, cloud-based retail systems where the database is accessed remotely from the POS terminal, or if it requires a database to be physically present at the retail site. The patent’s description of data being collected from the retail site for a separate "data warehouse" may support a narrower, physically local interpretation (’933 Patent, Abstract).
- Factual Questions: A primary factual question stems from the allegation of a prior license (Compl. ¶10). The infringement analysis may depend on the terms of that agreement, whether it was terminated, and whether the currently accused "Copient Solution" is the same functionality that was previously licensed.
V. Key Claim Terms for Construction
The Term: "customer identification means, said means not requiring assignment of a new customer identification number" (Claim 1)
- Context and Importance: This term is the core of the asserted novelty, distinguishing the invention from systems that issue proprietary loyalty cards. The outcome of the case may depend on whether the identifier used by the "Copient Solution" is considered a pre-existing one or one that is effectively "newly assigned."
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The specification provides a non-exhaustive list of potential identifiers, including "a credit card, government-issued id, or checking account," suggesting the term covers any identifier the customer already possesses (’933 Patent, Abstract). Claim 2 further specifies "a pre-existing checking account number, or a pre-existing credit card number," which may support a broad reading of the independent claim.
- Evidence for a Narrower Interpretation: The patent also mentions a "smartcard" as a potential input device, which a customer might not possess pre-association with the loyalty system (’933 Patent, col. 2:16-18). A party could argue that if an existing number (like a credit card number) is algorithmically transformed into a new, internal ID for the system, that internal ID constitutes a "new customer identification number."
The Term: "database local to a point-of-sale location" (Claim 1)
- Context and Importance: This term dictates the required system architecture. Practitioners may focus on this term because the prevalence of centralized, cloud-based databases in modern retail systems raises the question of whether such architectures meet the "local" limitation.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: A party could argue "local to" is functional, not necessarily physical, meaning it is the database with which the POS device directly interacts to record the transaction, regardless of its physical location.
- Evidence for a Narrower Interpretation: The specification states that after data is read by the POS device, "it is compared against a local database which is generally at the retail establishment or quickly accessible to the retail establishment" (’933 Patent, col. 1:44-48). This language suggests a requirement of physical proximity to the POS location.
VI. Other Allegations
Indirect Infringement
- The complaint alleges induced infringement, asserting that Defendant had "full knowledge of the '933 patent" and specifically intended for its customers to use the accused systems in an infringing manner (Compl. ¶13). The allegation of a prior license is the primary fact offered in support of knowledge and intent.
Willful Infringement
- The complaint alleges that Defendant's infringement has been deliberate and willful, based on knowledge of the ’933 patent (Compl. ¶14). The alleged prior license provides a strong basis for pre-suit knowledge.
VII. Analyst’s Conclusion: Key Questions for the Case
- A central issue appears to be one of historical fact and contract: what were the specific terms of the alleged prior license for the "Copient Solution," did that license terminate, and does the currently accused product employ the same functionality covered by that agreement? The answers to these questions may be more determinative than a purely technical infringement analysis.
- A key legal question will be one of claim scope in a modern context: can the term "database local to a point-of-sale location," drafted in the late 1990s, be construed to read on the centralized, cloud-based data architectures common in today's retail technology?
- An important evidentiary question will be one of operational equivalence: what evidence will Plaintiff provide to demonstrate that the "Copient Solution" in fact performs each step of the claimed method, particularly its use of a pre-existing customer identifier without assigning a new one?