DCT
1:20-cv-02679
Digital Verification Systems LLC v. AppExtremes LLC
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: Digital Verification Systems, LLC (Texas)
- Defendant: AppExtremes, LLC d/b/a Conga (Delaware)
- Plaintiff’s Counsel: Chavous Intellectual Property Law LLC
- Case Identification: 1:20-cv-02679, D. Colo., 09/02/2020
- Venue Allegations: Venue is alleged to be proper in the District of Colorado because Defendant Conga has its principal place of business and a registered agent in the district.
- Core Dispute: Plaintiff alleges that Defendant’s Conga Sign electronic signature product infringes a patent related to creating and embedding a verifiable digital identity within an electronic document.
- Technical Context: The technology concerns methods for authenticating electronic signatures, a function of significant commercial importance in digital contract execution, document management, and workflow automation.
- Key Procedural History: An Inter Partes Review proceeding (IPR2018-00746) concluded on May 1, 2020, prior to the filing of this complaint. The resulting IPR Certificate cancelled claims 23-39 of the patent-in-suit. The complaint, filed four months after the IPR conclusion, asserts infringement of claim 26, which is among the cancelled claims. The complaint does not mention the IPR proceeding or the cancellation of any claims.
Case Timeline
| Date | Event |
|---|---|
| 2008-01-02 | '860 Patent Priority Date (Application Filing Date) |
| 2015-06-09 | U.S. Patent No. 9,054,860 Issued |
| 2018-03-06 | IPR2018-00746 Filed against '860 Patent |
| 2020-05-01 | IPR Certificate Issued, Cancelling Claims 23-39 |
| 2020-09-02 | Complaint Filing Date |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 9,054,860 - "Digital Verified Identification System and Method"
- Patent Identification: U.S. Patent No. 9,054,860, "Digital Verified Identification System and Method," issued June 9, 2015.
The Invention Explained
- Problem Addressed: The patent’s background section identifies that conventional electronic signatures are "rather difficult to authenticate," creating an "arduous, if not impossible task to verify and/or authenticate the identity of the signatory to a respectable degree" ('860 Patent, col. 1:32-36).
- The Patented Solution: The invention proposes a system that generates a "digital identification module" using verification data provided by a user (e.g., name, password) ('860 Patent, col. 2:5-12). This module is then embedded into an electronic file. The module consists of a "primary component" (e.g., a visible digital signature) and "metadata components" (e.g., hidden verification data, timestamp, location), where the metadata can be revealed by interacting with the primary component, for example, by hovering a mouse over it ('860 Patent, col. 2:26-44, Fig. 6).
- Technical Importance: This approach aimed to create a self-contained, verifiable identity marker within a digital document, thereby enhancing the security and trustworthiness of electronic agreements ('860 Patent, col. 1:37-42).
Key Claims at a Glance
- The complaint asserts infringement of at least independent claims 1 and 26 (Compl. ¶¶21, 32). An IPR certificate issued prior to the complaint’s filing cancelled claims 23-39, which includes claim 26 ('860 Patent, IPR Certificate, p. 2).
- Independent Claim 1 (System Claim) recites:
- at least one digital identification module structured to be associated with at least one entity,
- a module generating assembly structured to receive at least one verification data element corresponding to the at least one entity and create said at least one digital identification module,
- said at least one digital identification module being disposable within at least one electronic file,
- said at least one digital identification module comprising at least one primary component structured to at least partially associate said digital identification module with said at least one entity, and
- said at least one digital identification module is cooperatively structured to be embedded within only a single electronic file.
III. The Accused Instrumentality
Product Identification
- The accused product is Conga Sign (Compl. ¶21).
Functionality and Market Context
- The complaint describes Conga Sign as a "digital verified identification system that allows for secure signing of documents virtually" (Compl. ¶22). The system is alleged to associate a "specialized username and password with each entity" (Compl. ¶23) and enables a user to create a signature by "choosing pre-typed signature or drawing a new signature" (Compl. ¶26). This signature is then embedded into a digital form or contract (Compl. ¶25). The complaint alleges Conga markets and sells these products to customers in Colorado and online (Compl. ¶6).
IV. Analysis of Infringement Allegations
'860 Patent Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| at least one digital identification module structured to be associated with at least one entity, | The Accused Product provides an electronic signature that is associated with an entity, who is identified by a username and password. | ¶23, ¶26 | col. 3:26-29 |
| a module generating assembly structured to receive at least one verification data element corresponding to the at least one entity and create said at least one digital identification module, | The Accused Product requires the entry of a username and password, which are alleged to be verification data elements used to create the digital identification module (i.e., the signature). The complaint includes a screenshot of the Conga login page showing username and password fields (Compl. p. 6). | ¶24 | col. 3:50-54 |
| said at least one digital identification module being disposable within at least one electronic file, | Conga advertises that its eSignature is a "secure, legally binding signature on a form or contract that is collected digitally." | ¶25 | col. 3:34-37 |
| said at least one digital identification module comprising at least one primary component structured to at least partially associate said digital identification module with said at least one entity, | The Accused Product allows a user to create a signature by choosing a pre-typed or drawing a new signature, which allegedly serves as the primary component. | ¶26 | col. 6:10-16 |
| said at least one digital identification module is cooperatively structured to be embedded within only a single electronic file. | The user must "agree to use and accept the electronic signatures to a particular document," which embeds the signature. The complaint provides a screenshot of an "Agree and Start Signing" button (Compl. p. 8). | ¶27 | col. 4:37-40 |
- Identified Points of Contention:
- Scope Questions: The complaint appears to equate the "digital identification module" with the user-created signature. However, the patent specification describes the module as an object containing both a visible "primary component" and hidden "metadata components" ('860 Patent, col. 2:26-37). A question for the court may be whether a simple digital signature image, without the alleged metadata structure, can meet the definition of a "digital identification module" as used in the patent.
- Technical Questions: Claim 1 requires the module to be "cooperatively structured to be embedded within only a single electronic file." The complaint alleges this element is met when a user agrees to sign a document (Compl. ¶27), but provides no technical evidence to support the "only a single" file limitation, which suggests a one-time-use or technically restricted characteristic ('860 Patent, col. 4:32-39). The analysis may turn on whether the accused Conga Sign signature possesses this restrictive technical property.
V. Key Claim Terms for Construction
The Term: "digital identification module"
- Context and Importance: This term is the central component of the claimed invention. Its construction will determine whether the accused product, which provides a digital signature, falls within the scope of the claims. Practitioners may focus on this term because the complaint's allegations center on a signature image, whereas the patent specification describes a more complex data structure.
- Intrinsic Evidence for a Broader Interpretation: The claim language itself only requires the module to comprise "at least one primary component," without explicitly requiring the "metadata components" described elsewhere in the patent ('860 Patent, col. 9:15-18).
- Intrinsic Evidence for a Narrower Interpretation: The specification consistently describes the invention as including both a primary component and metadata components that are revealed upon user interaction, such as a mouse-over event ('860 Patent, col. 2:26-44, Fig. 6). This may support an interpretation that a "digital identification module" must contain this dual structure.
The Term: "cooperatively structured to be embedded within only a single electronic file"
- Context and Importance: This limitation appears to distinguish the invention from a simple, copyable signature image. Infringement will depend on whether the Conga Sign product implements this specific technical constraint.
- Intrinsic Evidence for a Broader Interpretation: A party might argue that this language merely requires that the module is created with the intent of being embedded in one specific file at the time of signing, not that it is technically impossible to extract or reuse.
- Intrinsic Evidence for a Narrower Interpretation: The specification suggests a technical limitation, stating that in some embodiments, the module may be "automatically deleted, become inoperable, or otherwise be disposed in an inactive state" if it is used more than a pre-selected number of times or if the document content is altered ('860 Patent, col. 4:32-39, 4:45-51).
VI. Other Allegations
- Indirect Infringement: The complaint does not include a count for indirect infringement.
- Willful Infringement: The complaint alleges that Defendant "will have knowledge of infringement... upon the service of this Complaint" and that subsequent infringement "will thus be knowing and intentional" (Compl. ¶31). Plaintiff seeks enhanced damages for infringement occurring after service of the complaint (Compl., Prayer for Relief ¶5).
VII. Analyst’s Conclusion: Key Questions for the Case
- A threshold procedural and substantive issue will be the viability of the complaint's pleadings. The complaint asserts infringement of claim 26, which public records show was cancelled in an Inter Partes Review proceeding that concluded four months before the case was filed. How the court and parties address this assertion will be a primary focus.
- A core issue will be one of definitional scope: can the term "digital identification module", which the patent specification describes as a dual-structure object with both visible and hidden data components, be construed to read on the allegedly infringing digital signature functionality, which the complaint does not allege contains hidden metadata?
- A key evidentiary question will be one of technical proof: what evidence will be presented to demonstrate that the accused Conga Sign signature is "cooperatively structured to be embedded within only a single electronic file," a specific technical limitation that the complaint asserts but for which it provides no supporting operational details.