Sensormatic Electronics LLC v. Prosegur Security USA Inc

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Sensormatic Electronics, LLC (Nevada)
  • Defendant: Prosegur Security USA, Inc. (Delaware)
  • Plaintiff’s Counsel: Young Conaway Stargatt & Taylor, LLP; ArentFox Schiff LLP
• Case Identification: 1:23-cv-00028, D. Del., 01/11/2023
• 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.
• Core Dispute: Plaintiff alleges that Defendant’s retail anti-theft tags infringe a patent related to a modular sensor system with an integrated locking mechanism.
• Technical Context: The technology pertains to Electronic Article Surveillance (EAS) systems, specifically the design of reusable hard tags affixed to merchandise to prevent theft.
• Key Procedural History: The complaint alleges pre-suit notice was provided to the Defendant on at least two occasions. Significantly, after the complaint was filed, the asserted patent underwent an ex parte reexamination, which concluded on March 19, 2024. The reexamination resulted in the cancellation of claim 11—the specific claim asserted in the complaint—and the amendment of independent claim 1, upon which claim 11 depended. This procedural event fundamentally alters the patent claims at issue in the litigation.

Case Timeline

Date	Event
2016-05-11	'683 Patent Priority Date
2017-08-15	'683 Patent Issue Date
2022-02-28	Plaintiff allegedly sent notice letter to Defendant
2022-05-06	Plaintiff allegedly sent claim chart to Defendant
2023-01-11	Complaint Filing Date
2024-03-19	'683 Patent Ex Parte Reexamination Certificate Issued

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

U.S. Patent No. 9,734,683 - "Modular and adaptable sensor system with integrated lock," Issued August 15, 2017 ('683 Patent)

The Invention Explained

• Problem Addressed: The patent describes the difficulty and confusion faced by retail employees and customers when dealing with a wide variety of anti-theft hard tags and detaching methods. This complexity is identified as a particular obstacle for emerging retail environments like customer "self check-out" and for efficient "source tagging" at manufacturing facilities. (Compl., Ex. A, '683 Patent, col. 1:12-38).
• The Patented Solution: The invention is a one-piece pin tag with an integrated locking mechanism designed for simplicity and automation. The core mechanism involves a user-depressed button (a "first structure") that, upon being pushed into the tag's housing, causes a separate internal "retention element" (a "second structure") to slide at an angle (e.g., perpendicularly) to engage a flange on the button, thereby locking a pin in place through an article of clothing. A magnetic detacher can later be used to pull the retention element back, releasing the button and the pin. ('683 Patent, Abstract; col. 4:57-col. 5:9).
• Technical Importance: The design aimed to provide a "single platform" solution that improves usability, safety (by hiding the pin), and throughput in both manual and automated retail checkout environments. ('683 Patent, col. 4:48-56).

Key Claims at a Glance

• The complaint asserts dependent claim 11. (Compl. ¶14). However, the subsequent reexamination certificate cancelled claim 11. ('683 Reexam. Cert., col. 2:59). The case will therefore likely proceed on the amended version of independent claim 1, which now incorporates limitations from the original dependent claims.
• Amended Independent Claim 1 (as amended by the '683 Reexamination Certificate) requires a method with the following essential elements:
  • moving a first structure with a flange in a first direction;
  • sliding a chamfered surface of the flange against a chamfered surface of a second structure to move the second structure in a second direction away from the first structure;
  • the movement of the second structure must be "linear and perpendicular to the first direction";
  • resiliently biasing the second structure toward the first structure after it has moved a certain distance; and
  • retaining the first structure in its position via an engagement between the second structure and the flange. ('683 Reexam. Cert., col. 2:1-19).

III. The Accused Instrumentality

Product Identification

• The accused product is identified as the "nanotag pin tag" ("nanotag"). (Compl. ¶1).

Functionality and Market Context

• The complaint alleges that the nanotag is a product that Defendant Prosegur manufactures, uses, sells, or imports into the United States. (Compl. ¶1). It is identified as a product for "electronic-article-surveillance." (Compl. ¶18). The complaint does not provide sufficient detail for analysis of the specific internal mechanics or operation of the nanotag.

IV. Analysis of Infringement Allegations

The complaint references a claim chart attached as Exhibit B purporting to show infringement of claim 11 by the nanotag. (Compl. ¶17). This exhibit was not provided. In its narrative allegations, the complaint asserts that Defendant's nanotag products infringe because their use involves practicing the patented method of claim 11. (Compl. ¶14, 17).

No probative visual evidence provided in complaint.

• Identified Points of Contention:
  • Procedural Question: A threshold issue is the legal effect of the post-complaint cancellation of asserted claim 11. The litigation cannot proceed on a cancelled claim, raising the question of whether Plaintiff will seek to amend its complaint to assert the amended claims from the reexamination certificate.
  • Scope Questions: Assuming the case proceeds on amended claim 1, the analysis will focus on the claim's new, narrower language. A central question will be whether the term "perpendicular", added during reexamination to overcome prior art, reads on the movement of the locking components within the accused nanotag.
  • Technical Questions: What evidence demonstrates that the accused nanotag operates using the specific two-part, perpendicular-motion mechanism recited in the amended claims? The dispute will require a technical comparison between the internal structure of the nanotag and the claim elements, particularly the "first structure with a flange," the "second structure," and their precise relative movements.

V. Key Claim Terms for Construction

Analysis is based on the language of amended claim 1 from the reexamination certificate, as it is the likely basis for any ongoing dispute.

• The Term: "second structure movement in the second direction is linear and perpendicular to the first direction"
• Context and Importance: This limitation was added to independent claim 1 during reexamination, suggesting it was critical for establishing patentability. Its construction will be a central point of contention. Practitioners may focus on this term because any deviation from a "linear and perpendicular" motion in the accused device could be a basis for a non-infringement argument.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The original specification describes the movement as "perpendicular or angled relative to the directions of travels... for the button," which could suggest that minor deviations from perfect perpendicularity are within the scope of the invention. ('683 Patent, col. 5:61-65).
  • Evidence for a Narrower Interpretation: The explicit addition of "linear and perpendicular" to the independent claim during a reexamination proceeding creates a strong inference that the applicant intended to narrow the claim scope to precisely this geometric relationship to overcome prior art. The patent figures, such as Figure 2, depict a clear perpendicular relationship between the vertical movement of button (108, direction 204) and the horizontal movement of the retention element (218, direction 222). ('683 Patent, Fig. 2).

VI. Other Allegations

• Indirect Infringement: The complaint alleges induced infringement based on Defendant providing "instructional, product, and technical materials" and a website that allegedly show customers how to use the nanotag in an infringing manner. (Compl. ¶18). It further alleges contributory infringement, asserting the nanotag is especially made for infringing use, is a material part of the invention, and is not a staple article of commerce with substantial non-infringing uses. (Compl. ¶19).
• Willful Infringement: The willfulness claim is based on alleged pre-suit knowledge. The complaint alleges that Defendant has known of the '683 patent since at least February 28, 2022, following a letter from the Plaintiff, and that it received a claim chart on May 6, 2022, detailing the alleged infringement. (Compl. ¶15, 20).

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

1. Impact of Reexamination: The primary issue is procedural: how will the case proceed now that the only asserted claim (claim 11) has been cancelled? The viability of Sensormatic's suit will depend on its ability to amend its infringement contentions to target the newly-amended claims that survived reexamination.
2. Scope of "Perpendicular" Motion: Should the case move forward on the amended claims, a core issue will be one of claim scope: was the term "perpendicular," added to the independent claim during reexamination to secure patentability, intended to be a strict geometric limitation? The court's construction of this term will likely be dispositive of infringement.
3. Evidentiary Question of Operation: The ultimate infringement question will be factual: does the internal mechanism of Prosegur's "nanotag" actually operate by moving a "second structure" in a "linear and perpendicular" direction relative to a "first structure," as narrowly required by the amended patent claim?