Kaldren LLC v. Express Scripts Holding Co

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Kaldren LLC (Texas)
  • Defendant: Express Scripts Holding Company (Delaware)
  • Plaintiff’s Counsel: Stamoulis & Weinblatt LLC; Toler Law Group, PC
• Case Identification: 1:17-cv-01267, D. Del., 09/05/2017
• Venue Allegations: Venue is alleged to be proper as Defendant is a Delaware corporation.
• Core Dispute: Plaintiff alleges that Defendant’s use of a 2D bar code product infringes patents related to methods and systems for variably formatting digital data into a scannable pattern.
• Technical Context: The technology concerns encoding digital data into two-dimensional visual patterns, akin to QR codes, that can be printed on physical media and later scanned to retrieve the original data.
• Key Procedural History: The complaint notes that the two patents-in-suit are part of the same patent family, with the later-issued patent being a continuation of the application that led to the earlier patent. No other significant procedural events, such as prior litigation or administrative challenges, are mentioned in the complaint.

Case Timeline

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

U.S. Patent No. 6,820,807 - "Variable Formatting of Digital Data into a Pattern," Issued Nov. 23, 2004

The Invention Explained

• Problem Addressed: The patent describes prior art methods for storing machine-readable data on paper, such as bar codes, as being rigid and inefficient (U.S. Patent No. 6,820,807, col. 2:49-59). These methods allegedly fail to optimize data density and are not flexible enough to account for performance variations and imperfections found in common, off-the-shelf printers and scanners, leading to higher error rates or an inability to use the method in certain environments (’807 Patent, col. 2:50-59).
• The Patented Solution: The invention provides a method to format digital data into a two-dimensional pattern using user-selectable parameters. These parameters allow for varying the size and attributes of the data "spots" and their containing "cells" to optimize the pattern for any specific printer-scanner combination (’807 Patent, Abstract). The system also discloses using "markers" to aid in locating data cells during scanning and a separate header section, or "metasector," which contains information about the encoding format itself to facilitate a more robust decoding process (’807 Patent, Abstract; col. 5:31-43).
• Technical Importance: This technology aimed to more effectively link the physical world of paper with the digital world of computers by enabling higher-density data storage on physical media using standard office equipment (’807 Patent, col. 1:44-46).

Key Claims at a Glance

• The complaint asserts independent claim 20 and dependent claims 12 and 21 (Compl. ¶14).
• Independent Claim 20 (Method):
  • scanning a machine readable indicia comprising digital data values formatted into a two dimensional pattern;
  • extracting an address of the information resource from the machine readable indicia; and
  • retrieving the information resource for presentation to a user.
• The complaint reserves the right to assert additional claims as the case progresses (Compl. ¶17).

U.S. Patent No. 8,281,999 - "Variable Formatting of Digital Data into a Pattern," Issued Oct. 9, 2012

The Invention Explained

• Problem Addressed: As a continuation of the application leading to the ’807 Patent, the ’999 Patent addresses the same technical problem: the rigidity and sub-optimal data density of prior art methods for encoding digital data onto physical substrates for use with common printers and scanners (U.S. Patent No. 8,281,999, col. 2:55-67).
• The Patented Solution: The patent describes a communication system built around the same core technology of variably formatted 2D patterns. The solution employs "processing means" to decode the pattern, "imaging means" to capture it, and "communicating means" to act on the decoded information, such as contact data (’999 Patent, Abstract; Claims 1, 8). The use of a "landmark" and "metasector" to guide the decoding process is also a central feature (’999 Patent, Abstract).
• Technical Importance: The invention provides a system-level framework for using scannable 2D patterns to initiate digital communications or retrieve network resources, thereby integrating physical media with digital networks (’999 Patent, col. 1:40-42).

Key Claims at a Glance

• The complaint asserts independent claims 1 and 8, and dependent claims 4 and 5 (Compl. ¶21).
• Independent Claim 1 (System):
  • processing means for decoding a machine-readable code formatted into a two dimensional pattern where that machine-readable code contains contact information, whereby the contact information is derived;
  • imaging means for imaging a machine-readable code whereby the processing means decodes the image...; and
  • communicating means for communicating... using the contact information derived from the processing means.
• Independent Claim 8 (System):
  • processing means for decoding from an image of a machine-readable code, whereby said information used for contacting at least one entity is derived; and
  • a plurality of communicating means capable of communicating with at least one entity..., where one communicating means comprises a networking means for communicating with another computer on a network and where the information... is used by the networking means to derive additional information... to contact an entity...
• The complaint reserves the right to assert additional claims (Compl. ¶24).

III. The Accused Instrumentality

Product Identification

The complaint identifies the accused instrumentality as a "2D bar code product" ("Accused Product") that Defendant ESHC has used and tested (Compl. ¶¶14, 21).

Functionality and Market Context

The complaint does not provide sufficient detail for analysis of the Accused Product's specific functionality, features, or market context. It alleges only that the Defendant "used" or "uses" one or more products that infringe the patents-in-suit (Compl. ¶¶13, 20). No probative visual evidence provided in complaint.

IV. Analysis of Infringement Allegations

The complaint references claim-chart exhibits that are not provided. The narrative infringement theories are summarized below.

'807 Patent Infringement Allegations

The complaint alleges that ESHC directly infringes at least claim 20 of the ’807 Patent by using its Accused Product to perform a method for retrieving an information resource (Compl. ¶18). This allegedly includes the steps of scanning a 2D machine-readable indicia, extracting an address from that indicia, and retrieving the corresponding information resource for presentation to a user (Compl. ¶18).

'999 Patent Infringement Allegations

The complaint alleges that ESHC directly infringes at least claim 8 of the ’999 Patent by using its Accused Product, which allegedly embodies the claimed communication system (Compl. ¶26). This system is alleged to comprise processing means for decoding a 2D code containing contact information, imaging means for capturing an image of the code for the processing means, and communicating means that uses the derived contact information to communicate (Compl. ¶26). The complaint similarly alleges infringement of claim 1, which recites a similar system (Compl. ¶21).

Identified Points of Contention

• Factual Questions: A threshold issue for both patents will be the factual identification of the Accused Product and its specific operational characteristics. The complaint does not name a product or describe how it functions, which will be a primary focus of discovery.
• Scope Questions ('807 Patent): The dispute over claim 20 may turn on the definitions of "address" and "information resource." Questions may arise as to whether the data extracted from the accused 2D code functions as an "address" and whether the resulting data presented to the user constitutes an "information resource" within the meaning of the claim.
• Technical & Legal Questions ('999 Patent): Claims 1 and 8 of the ’999 patent recite claim elements in means-plus-function format (e.g., "processing means for..."). A central dispute will be identifying the corresponding structures (i.e., specific algorithms) disclosed in the patent specification that perform the claimed functions. The infringement analysis will then turn on whether the Accused Product contains structures that are the same as or structurally equivalent to those disclosed in the patent. The complaint provides no allegations regarding the specific structure or software architecture of the Accused Product.

V. Key Claim Terms for Construction

The Term: "information resource" (’807 Patent, Claim 20)

• Context and Importance: This term defines the object that is ultimately retrieved by the claimed method. Its scope is critical to determining whether the data presented by the accused system satisfies the final step of the claim.
• Evidence for a Broader Interpretation: The specification repeatedly refers to the data source as "computer files or other digital data" (’807 Patent, FIG. 1; col. 9:29-34), which may support a construction covering any form of digital content.
• Evidence for a Narrower Interpretation: The patent’s abstract and detailed description provide specific examples, such as "automatic launches of computer files" (’807 Patent, Abstract) or files that invoke applications like data communication or internet access (’807 Patent, col. 7:1-22). This may support a construction limited to specific types of functional or structured data rather than any arbitrary information.

The Term: "processing means for decoding..." (’999 Patent, Claims 1 & 8)

• Context and Importance: As a means-plus-function limitation, its scope is not merely its dictionary definition but is limited to the corresponding structure disclosed in the specification and its equivalents. Practitioners may focus on this term because the infringement analysis for the entire system depends on identifying this core structure.
• Intrinsic Evidence for Interpretation: The corresponding structure described in the specification is a multi-step algorithm for decoding. This process includes steps such as "find landmark," "find metasector," "decode metasector," and then using the information from the metasector to "decode main body of data" (’807 Patent, FIG. 17, incorporated by reference into the ’999 Patent). The scope of this claim element would therefore be confined to a system that performs decoding using this specific algorithmic structure or a structural equivalent.

VI. Other Allegations

Willful Infringement

The complaint does not explicitly use the term "willful." However, it alleges that Defendant has had knowledge of its infringement "since at least the date that ESHC was served with a copy of this Complaint" (Compl. ¶25). This allegation may form the basis for a claim of post-suit willful infringement and a request for enhanced damages under 35 U.S.C. §284.

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

1. A central evidentiary question will be one of factual identification: what specific product or system constitutes the "Accused Product," and what is its precise technical architecture and method of operation? The complaint's lack of detail on this point makes it the primary unresolved issue to be addressed in discovery.
2. A core issue for the '999 Patent will be one of structural equivalence: do the algorithms and software architecture used in the accused system perform the functions of decoding and communicating using structures that are the same as or equivalent to the specific multi-step, landmark-and-metasector-based decoding process disclosed in the patent specification?
3. A key legal question for the '807 Patent will be one of definitional scope: can the term "information resource" be broadly construed to cover any data presented to a user after scanning a 2D code, or is its meaning limited by the specification's examples to specific categories of data, such as executable files or structured contact information?