DCT
1:21-cv-00534
BearBox LLC v. Lancium LLC
Key Events
Amended Complaint
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: BearBox LLC and Austin Storms (Louisiana)
- Defendant: Lancium LLC (Delaware/Texas), Michael T. McNamara (California), and Raymond E. Cline, Jr. (Texas)
- Plaintiff’s Counsel: Marshall, Gerstein & Borun LLP; Ashby & Geddes
- Case Identification: 1:21-cv-00534, D. Del., 02/16/2022
- Venue Allegations: Venue is asserted in the District of Delaware based on Defendant Lancium LLC being a Delaware limited liability company and subject to personal jurisdiction in the district.
- Core Dispute: Plaintiffs allege that Defendants misappropriated their proprietary technology for energy-efficient cryptocurrency mining and wrongfully filed for and obtained a patent on that technology, and seek to have the patent's inventorship corrected to name Plaintiff Austin Storms as the sole or joint inventor.
- Technical Context: The technology at issue involves dynamically adjusting the power consumption of large-scale computational loads, such as cryptocurrency mining data centers, to take advantage of variable energy pricing and improve electrical grid stability.
- Key Procedural History: The complaint notes that Defendant Lancium previously filed a patent infringement lawsuit against Layer1 Technologies, Inc. in the Western District of Texas, asserting the patent-at-suit. That case settled, and the parties subsequently entered into a licensing agreement. Plaintiffs allege they first became aware of the patent-at-suit through a press release about that prior litigation.
Case Timeline
| Date | Event |
|---|---|
| 2018-Late | Plaintiff Storms alleges conception of the BearBox technology began. |
| 2019-05-09 | Plaintiff Storms' final alleged communication with Defendant McNamara regarding the technology. |
| 2019-10-28 | Earliest Priority Date (’433 Patent, from Provisional App. No. 62/927,119). |
| 2019-12-04 | '433 Patent application filed (App. No. 16/702,931). |
| 2020-03-31 | U.S. Patent No. 10,608,433 issues. |
| 2020-06-19 | Defendants announce their Smart Response™ software qualified as a "Controllable Load Resource." |
| 2020-08-14 | Defendant Lancium sues Layer1 Technologies for infringement of the '433 Patent. |
| 2020-08-17 | Plaintiffs allege they first became aware of the '433 Patent. |
| 2021-03-05 | The Lancium v. Layer1 lawsuit is dismissed pursuant to a settlement. |
| 2022-02-16 | Complaint Filing Date (Second Amended Complaint). |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 10,608,433 - "Methods and Systems for Adjusting Power Consumption Based on a Fixed-Duration Power Option Agreement"
- Patent Identification: U.S. Patent No. 10,608,433, "Methods and Systems for Adjusting Power Consumption Based on a Fixed-Duration Power Option Agreement," issued March 31, 2020.
The Invention Explained
- Problem Addressed: The patent addresses the economic inefficiencies faced by power generation stations, particularly those using intermittent renewable sources like wind and solar. These stations often must sell power at very low or even negative prices during periods of low grid demand or oversupply, a process known as curtailment (’433 Patent, col. 4:32-50).
- The Patented Solution: The invention is a system that allows a large, flexible electrical load (such as a datacenter) to enter into a "power option agreement" with a power entity. A control system monitors conditions and receives data from this agreement, which specifies minimum power consumption thresholds for set time intervals. The system then determines a "performance strategy" for the datacenter's computing systems to ensure their power consumption meets or exceeds these minimums, allowing the load to act as a dispatchable resource that helps balance the grid (’433 Patent, Abstract; col. 5:45-6:3).
- Technical Importance: This approach allows large energy consumers to monetize their ability to vary their load, providing valuable grid-stabilization services while gaining access to lower-cost energy that might otherwise be wasted (’433 Patent, col. 12:37-43).
Key Claims at a Glance
- The complaint asserts that all inventions claimed in the '433 patent were conceived by Plaintiff Storms (Compl. ¶¶ 46, 59). Independent claim 1 is representative.
- Independent Claim 1 recites a system comprising:
- A set of computing systems configured to perform computational operations using power from a power grid.
- A control system configured to:
- monitor a set of conditions;
- receive power option data based on a power option agreement, specifying minimum power thresholds and associated time intervals;
- determine a performance strategy based on the power option data and monitored conditions;
- the performance strategy includes a power consumption target for each time interval that is equal to or greater than the minimum power threshold; and
- provide instructions to the computing systems to perform operations based on the performance strategy.
- The complaint does not explicitly reserve the right to assert other claims, as its primary counts are for correction of inventorship.
III. The Accused Instrumentality
Product Identification
- The complaint does not allege infringement by a specific product. Instead, the central dispute concerns the inventorship of the technology claimed in the '433 Patent itself and embodied in Defendant Lancium's "Smart Response™" software (Compl. ¶¶ 4, 38-39).
Functionality and Market Context
- Plaintiffs allege that Defendants used proprietary information disclosed by Plaintiff Storms to modify their existing "Smart Response™" software to incorporate the allegedly stolen technology (Compl. ¶¶ 38-39). This technology enables data centers to function as a "Controllable Load Resource (CLR)," allowing them to be dispatched by grid operators like ERCOT to absorb excess energy and earn revenue (Compl. ¶ 49). The complaint alleges that after obtaining the '433 Patent on this technology, Defendants asserted it against a competitor, Layer1 Technologies, and subsequently entered into a license agreement with them (Compl. ¶¶ 52, 57).
IV. Analysis of Inventorship Allegations
Because this is a correction of inventorship action, not a patent infringement action, the following chart maps the elements of the patent's primary claim to the specific technological concepts Plaintiffs allege Austin Storms conceived and disclosed to Defendants.
No probative visual evidence provided in complaint.
'433 Patent Inventorship Allegations
| Claim Element (from Independent Claim 1) | Plaintiff's Alleged Contribution / Prior Conception | Complaint Citation | Patent Citation |
|---|---|---|---|
| a set of computing systems, wherein the set of computing systems is configured to perform computational operations using power from a power grid | Plaintiffs developed proprietary technology relating to energy-efficient cryptocurrency mining systems, which include a housing for a plurality of miners (such as ASICs) under the direction of a smart controller. | ¶¶ 2, 30 | col. 5:45-49 |
| a control system configured to: monitor a set of conditions | In BearBox's technology, a controller monitors various external factors, such as current and expected energy demand/pricing information, cryptocurrency pricing, and network hashrate. | ¶31 | col. 5:50-51 |
| receive power option data based, at least in part, on a power option agreement, wherein the power option data specify: (i) a set of minimum power thresholds, and (ii) a set of time intervals | Storms provided modeled data sets to mimic real-world variables including energy prices, time intervals, and power thresholds. | ¶34 | col. 5:52-58 |
| determine a performance strategy for the set of computing systems based on a combination of at least a portion of the power option data and at least one condition in the set of conditions | Based on monitored external factors, the BearBox controller determines appropriate times to mine cryptocurrency in accordance with a desired performance strategy (for example, profitability thresholds). | ¶31 | col. 5:59-6:3 |
| wherein the performance strategy comprises a power consumption target for the set of computing systems for each time interval... wherein each power consumption target is equal to or greater than the minimum power threshold | The BearBox controller initiates mining by powering on a number of miners based on various conditions, which corresponds to meeting a power consumption level determined by the performance strategy. | ¶31 | col. 6:1-6 |
| provide instructions to the set of computing systems to perform one or more computational operations based on the performance strategy | At the appropriate times, the controller initiates mining by powering on a number of miners. | ¶31 | col. 6:7-10 |
- Identified Points of Contention:
- Scope Questions: The case raises the question of whether the specific concepts allegedly disclosed by Storms for optimizing cryptocurrency mining profitability are coextensive with the broader, more abstractly-claimed invention in the '433 Patent, which relates to "computational operations" and "power option agreements" generally.
- Evidentiary Questions: A central question for the court will be what corroborating evidence, beyond Plaintiff Storms' own declarations, exists to prove that he conceived of each element of the claimed invention and communicated that conception to the Defendants before the patent's priority date.
V. Key Claim Terms for Construction
The Term: "power option agreement"
Context and Importance: This term is the foundation of claim 1. Its definition will be critical to determining what constitutes the "invention." Practitioners may focus on this term because the dispute will likely turn on whether the alleged disclosures by Storms—which involved "modeled data sets" for "energy prices, time intervals, and power thresholds"—constitute a complete conception of the claimed "power option agreement."
Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The specification states that the agreement is between a "power entity" and a "load," where the power entity can be a "grid operator, power generation station, or local control station" (’433 Patent, col. 43:46-50). This suggests a potentially broad range of formal or informal arrangements could qualify.
- Evidence for a Narrower Interpretation: The detailed examples focus on formal agreements that give a power entity the "right, but not obligation, to reduce the amount of power delivered" in exchange for a "monetary consideration" (’433 Patent, col. 43:56-44:2). This could support a narrower construction requiring a specific contractual quid pro quo.
The Term: "performance strategy"
Context and Importance: This term defines the output of the control system's logic. Proving conception of the invention will require showing that Storms conceived of a process that maps to this claimed "strategy."
Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The patent states the strategy "can involve aspects related to the assignment, transfer, and performance of computational operations" and can be based on priorities, revenue, and deadlines (’433 Patent, col. 49:3-15). This supports a broad interpretation covering various forms of operational planning.
- Evidence for a Narrower Interpretation: The claims require the strategy to comprise a "power consumption target" that is "equal to or greater than the minimum power threshold" (’433 Patent, col. 6:1-6). This links the strategy directly and necessarily to the power thresholds from the option agreement, which may support a narrower interpretation that the strategy must be, at its core, a power compliance plan, not just a general profitability optimization.
VI. Other Allegations
The complaint does not allege patent infringement. Instead, it includes several counts related to the alleged misappropriation of the underlying technology:
- Trade Secret Misappropriation: Plaintiffs allege that the disclosed "system designs, diagrams, data, and know-how" constituted trade secrets under both the federal Defend Trade Secrets Act and the Louisiana Uniform Trade Secrets Act (Compl. ¶¶ 66-74, 75-83). The complaint alleges that Storms took reasonable measures to keep the information secret, including using confidentiality notices in emails and securing data on a password-protected computer (Compl. ¶¶ 35, 70).
- Conversion and Unjust Enrichment: Plaintiffs bring claims for conversion, alleging Defendants intentionally assumed "dominion and control over BearBox's technology" (Compl. ¶¶ 85-90), and for unjust enrichment, alleging Defendants have profited from this wrongful conduct without compensating Plaintiffs (Compl. ¶¶ 91-101).
VII. Analyst’s Conclusion: Key Questions for the Case
This case is not a standard patent infringement dispute but rather a contest over ownership and inventorship. The outcome will likely depend on the court's resolution of two central questions:
- A core question will be one of evidentiary proof: What contemporaneous, corroborating evidence can Plaintiffs produce to demonstrate that Austin Storms not only conceived of the complete invention as claimed in the '433 Patent, but also that this conception was sufficiently definite and was communicated to the Defendants prior to their own alleged conception and the patent's filing date?
- A key legal and technical question will be one of completeness of conception: Does the technology that Plaintiff Storms allegedly disclosed—a system for optimizing the profitability of a cryptocurrency mine based on energy prices—satisfy every element of the patent's more abstract claims, particularly the specific limitations related to a "power option agreement" and the resulting "performance strategy"? The court will have to determine if there is a complete identity between the alleged disclosure and the final claimed invention.