Gridley IP LLC v. Flywheel Software Inc

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Gridley IP LLC (Texas)
  • Defendant: Flywheel Software, Inc. (Delaware)
  • Plaintiff’s Counsel: Chong Law Firm PA; Sand, Sebolt & Wernow Co., LPA
• Case Identification: 1:20-cv-01738, D. Del., 12/22/2020
• Venue Allegations: Venue is alleged to be proper in the District of Delaware because the Defendant is a Delaware corporation and therefore resides in the district for patent venue purposes.
• Core Dispute: Plaintiff alleges that Defendant’s software and application for mapping population activity, such as for ride-hailing services, infringes patents related to using mobile device location data to predict consumer demand and manage the provision of services.
• Technical Context: The technology at issue involves analyzing the real-time location, speed, and direction of mobile devices to forecast the movement of people and thereby optimize the allocation of resources like vehicles or services.
• Key Procedural History: The complaint does not reference prior litigation or administrative challenges to the patents-in-suit. However, it includes extensive pre-emptive arguments and case law citations asserting that the claims are patent-eligible under 35 U.S.C. § 101 and are not directed to an abstract idea, which suggests an anticipation of a motion to dismiss on that basis.

Case Timeline

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

U.S. Patent No. 8,676,668

• Patent Identification: U.S. Patent No. 8,676,668, "METHOD FOR THE DETERMINATION OF A TIME, LOCATION, AND QUANTITY OF GOODS TO BE MADE AVAILABLE BASED ON MAPPED POPULATION ACTIVITY," issued March 18, 2014. (Compl. ¶10).

The Invention Explained

• Problem Addressed: The patent identifies the logistical challenge businesses face in providing goods or services to consumers at the proper time and place, noting that a failure to meet prompt demand, especially from crowds, can result in lost sales opportunities (Compl. ¶17; ’668 Patent, col. 1:10-21).
• The Patented Solution: The invention is a method that tracks wireless mobile devices to analyze population movement. It involves detecting devices, discerning their collective speed and direction to predict a future location, and then using that prediction to determine the optimal time, location, and quantity of goods or services to make available (Compl. ¶14; ’668 Patent, Abstract; Fig. 4). The system then presents this determination on a user interface for a service provider.
• Technical Importance: This approach sought to provide predictive intelligence to service providers (e.g., taxi services, food vendors) by modeling crowd behavior in near-real-time, enabling them to preemptively allocate resources to meet anticipated demand (’668 Patent, col. 2:11-35).

Key Claims at a Glance

• The complaint asserts independent claim 1 (Compl. ¶14).
• Essential elements of claim 1 include:
  • detecting wireless mobile devices within a geographic region at two or more different points in time;
  • discerning a location, speed and direction of the wireless mobile devices within the geographic region to discern a particular location toward which the wireless mobile devices are moving;
  • determining, based upon the discerned data, a time, a location, and a quantity of goods or services to be made available;
  • performing the determination using one or more processors of a computer network; and
  • presenting a result of the determination on a user interface of the computer network.
• The complaint does not explicitly reserve the right to assert dependent claims but does reserve the right to modify infringement theories (Compl. ¶66).

U.S. Patent No. 9,852,435

• Patent Identification: U.S. Patent No. 9,852,435, "TELEMETRICS BASED ON LOCATION AND TRACKING," issued December 26, 2017. (Compl. ¶11).

The Invention Explained

• Problem Addressed: The patent, which is a divisional of the '668 patent's application, addresses the same problem of matching service supply with unpredictable consumer demand (Compl. ¶17; ’435 Patent, col. 1:17-28).
• The Patented Solution: This invention is an apparatus (comprising a memory and processor) that refines the tracking of potential purchasers. After identifying a set of mobile devices moving toward a particular location, the system retrieves and applies demographic and historical data to filter that set, identifying a specific portion of users likely to desire a service. It then determines the quantity of goods or services needed for that filtered subset of users (’435 Patent, Abstract; col. 19:52-20:20).
• Technical Importance: The invention adds a layer of data-driven filtering to the core location-tracking technology, aiming to improve the accuracy of demand prediction by focusing not just on where crowds are going, but on the specific characteristics of the individuals within those crowds (’435 Patent, col. 6:5-15).

Key Claims at a Glance

• The complaint asserts independent claim 9 (Compl. ¶15).
• Essential elements of claim 9 include:
  • A memory and a processor configured to execute instructions to:
  • detect wireless mobile devices at different points in time;
  • discern their current location, speed, and direction of travel;
  • identify a set of devices estimated to be near a particular location at a specified future time;
  • retrieve demographic information related to the identified set;
  • retrieve historical information related to the identified set;
  • identify a portion of the identified set based on the demographic or historical information; and
  • determine a quantity of goods or services for users associated with that identified portion.
• The complaint does not explicitly reserve the right to assert dependent claims but reserves the right to modify infringement theories (Compl. ¶66).

III. The Accused Instrumentality

Product Identification

• The "Flywheel Software / App" system (the "Accused Product") (Compl. ¶36).

Functionality and Market Context

• The complaint alleges the Accused Product is a system for "mapping population activity" by, for example, "searching for drivers" (Compl. ¶36). Its functionality is described as continuously tracking the location of drivers' mobile devices over time (Compl. ¶37). This location, speed, and direction data is allegedly used to calculate estimated times of arrival (ETAs) and determine pickup locations for users (passengers) (Compl. ¶¶39, 41-42). The system is also alleged to retrieve driver-specific information such as names, pictures, and vehicle details (Compl. ¶¶52-53). No probative visual evidence provided in complaint.
• The complaint does not provide specific details on the Accused Product's market position, but its described functionality places it within the on-demand ride-hailing and logistics industry.

IV. Analysis of Infringement Allegations

The complaint references claim chart exhibits that are not provided; the following tables are constructed from the narrative infringement allegations contained within the complaint body.

’668 Patent Infringement Allegations

’435 Patent Infringement Allegations

Identified Points of Contention

• Scope Questions: For the ’668 Patent, a question is whether the accused product's use of a passenger-specified pickup location meets the claim limitation of "discerning a particular location toward which the wireless mobile devices are moving." The patent specification emphasizes predicting crowd movement, which may differ from responding to a direct user request. For the ’435 Patent, a central question will be whether "driver names and pictures" constitute "demographic information" and whether "reviews" and "vehicle type" constitute "historical information" as contemplated by the patent.
• Technical Questions: A key factual question for the '435 patent is how the accused system "identif[ies] a portion of the identified set" based on the retrieved data. The complaint's allegation is conclusory (Compl. ¶54) and may not reflect the actual function of the matchmaking algorithm, which could rely on proximity or other factors not explicitly recited.

V. Key Claim Terms for Construction

Term: "discerning a particular location toward which the wireless mobile devices are moving" (’668 Patent, Claim 1)

• Context and Importance: The infringement theory hinges on this term covering a ride-hailing driver moving toward a passenger's pickup point. Its construction is critical because if it is construed to require predictive analysis of aggregate, unprompted device movement, there may be a mismatch with the accused product's functionality, which appears to be responsive to a user's specific request.
• Intrinsic Evidence for a Broader Interpretation: The plain language of the claim is not expressly limited to aggregate crowd analysis and could arguably read on discerning the movement of a single device toward a known destination.
• Intrinsic Evidence for a Narrower Interpretation: The ’668 Patent’s detailed description repeatedly provides examples of analyzing the movement of "crowds" to predict demand at locations like airports or theaters, which may support an interpretation that the "discerning" requires a predictive, aggregate analysis rather than merely identifying a user-provided destination (’668 Patent, col. 2:3-29).

Term: "demographic information" (’435 Patent, Claim 9)

• Context and Importance: The complaint alleges that "driver names and pictures" satisfy this limitation (Compl. ¶52). The viability of the infringement allegation for this element depends on this interpretation. Practitioners may focus on this term because its definition could be outcome-determinative for infringement of the ’435 Patent.
• Intrinsic Evidence for a Broader Interpretation: An argument may be made that "demographic" is a broad term and that a name or picture can imply demographic traits such as gender or ethnicity, thus falling within a broad definition.
• Intrinsic Evidence for a Narrower Interpretation: The specification of the parent ’668 Patent, incorporated by reference, provides specific examples of demographic information, such as "the number of men or women in a certain age group" and "monetary income levels" (’668 Patent, col. 3:2-4, col. 4:31-32). This could support a narrower construction limited to statistical population characteristics, not individual-specific identifiers.

VI. Other Allegations

Indirect Infringement

• The complaint makes a conclusory allegation of induced infringement, stating Defendant encouraged acts that it knew constituted infringement (Compl. ¶61). The complaint does not plead specific facts to support this, such as references to user manuals or marketing materials that instruct users to perform the claimed steps.

Willful Infringement

• The complaint alleges that Defendant has had knowledge of the patents-in-suit "at least as of the service of the present Complaint" (Compl. ¶59). This allegation appears to be limited to post-filing willfulness and does not assert pre-suit knowledge of the patents or infringement.

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

• A core issue will be one of patent eligibility: given the complaint's extensive pre-emptive argument on the topic, a central question for the court will be whether the claims are directed to a patent-eligible improvement in computer functionality or to the patent-ineligible abstract idea of collecting, analyzing, and presenting location-based data.
• A second key issue will be one of definitional scope: the case may turn on whether claim terms rooted in the patent's context of aggregate crowd-flow analysis (e.g., "discerning a particular location toward which... devices are moving," "demographic information") can be construed to cover the specific functions of a modern, on-demand ride-hailing application that responds to individual user requests and uses driver-specific identifiers.
• A third key question will be evidentiary: for the '435 patent, the plaintiff will need to provide evidence that the accused system's matchmaking algorithm in fact "identifies a portion" of available drivers "based on" the alleged "demographic or historical information," rather than on other factors like simple proximity or dispatch efficiency. The complaint's current allegations on this point are not detailed.