DCT

1:23-cv-00686

Hand Held Products Inc v. TransCore LP

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I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 1:23-cv-00686, D. Del., 09/20/2023
  • Venue Allegations: Venue is alleged to be proper in the District of Delaware because Defendants are Delaware corporations, transact business in the district, have committed alleged acts of infringement in the district, and were party to an agreement that specified Delaware courts for resolving disputes.
  • Core Dispute: Plaintiff alleges that Defendant’s RFID tags and readers infringe eleven Honeywell patents and that Defendant breached a prior patent license agreement by failing to pay royalties on certain products.
  • Technical Context: The technology at issue is Radio Frequency Identification (RFID), which uses radio waves for object detection and tracking, a foundational technology in logistics, automated toll collection, and inventory management.
  • Key Procedural History: The complaint alleges a complex history between the parties, beginning with a 2008 cross-license agreement under which TransCore was to pay royalties for using certain Intermec (now Honeywell) RFID patents. Honeywell alleges that it discovered during a separate Delaware state court trial for breach of contract that TransCore had failed to pay royalties on certain products and had ceased all royalty payments in July 2019. The current suit asserts infringement of both licensed and unlicensed patents.

Case Timeline

Date Event
1999-09-21 Earliest Priority Date (’762, ’636 Patents)
1999-11-19 Earliest Priority Date (’408 Patent)
2000-06-01 Earliest Priority Date (’175 Patent)
2000-06-09 Earliest Priority Date (’711 Patent)
2000-09-25 Earliest Priority Date (’375 Patent)
2001-03-16 Earliest Priority Date (’509 Patent)
2001-07-10 ’408 Patent Issued
2001-09-11 ’762 Patent Issued
2001-11-20 ’636 Patent Issued
2002-04-09 ’711 Patent Issued
2002-04-16 ’375 Patent Issued
2003-03-18 ’175 Patent Issued
2003-10-28 ’509 Patent Issued
2006-10-31 Earliest Priority Date (’798 Patent)
2008-01-08 Parties enter Cross-License Agreement
2009-09-25 Earliest Priority Date (’784 Patent)
2010-05-04 ’798 Patent Issued
2012-03-26 Earliest Priority Date (’654 Patent)
2012-03-27 ’784 Patent Issued
2014-12-30 ’654 Patent Issued
2017-06-14 Earliest Priority Date (’968 Patent)
2019-07-01 TransCore allegedly stops paying royalties
2019-10-22 ’968 Patent Issued
2020-03-01 Honeywell files State Court Lawsuit
2023-03-01 State Court Lawsuit trial begins
2023-09-20 Complaint Filing Date

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

U.S. Patent No. 6,259,408 - “RFID Transponders With Paste Antennas And Flip-Chip Attachment”

  • Issued: July 10, 2001 (the “’408 Patent”)

The Invention Explained

  • Problem Addressed: The patent addresses the high cost of manufacturing conventional RFID transponders, which typically rely on a photolithographic process to etch metallic traces (like copper) onto a substrate to form an antenna (Compl. Ex. 7, col. 1:41-61).
  • The Patented Solution: The invention proposes a more cost-effective method where the antenna is formed by screening a "conductive paste material" (e.g., silver particles in a polymer binder) directly onto a substrate layer. An integrated circuit is then attached in a "flip-chip" configuration, with its electrical contacts aligned with the paste antenna (Compl. Ex. 7, Abstract, col. 2:16-24).
  • Technical Importance: This approach aimed to significantly reduce the manufacturing cost of RFID tags, a key factor in enabling their widespread adoption for high-volume, low-margin applications like inventory tracking (Compl. Ex. 7, col. 1:58-64).

Key Claims at a Glance

  • The complaint asserts independent claim 1 (Compl. ¶140).
  • Claim 1 Elements:
    • A radio frequency transponder, comprising: a substrate layer;
    • a radio frequency integrated circuit disposed in a flip-chip configuration affixed to said substrate layer facing downward toward said substrate layer; and
    • an antenna provided on said substrate layer in electrical connection with said radio frequency integrated circuit, said antenna being comprised of a conductive paste material.
  • The complaint does not explicitly reserve the right to assert dependent claims for this patent.

U.S. Patent No. 6,286,762 - “Method And Apparatus To Perform A Predefined Search On Data Carriers, Such As RFID Tags”

  • Issued: September 11, 2001 (the “’762 Patent”)

The Invention Explained

  • Problem Addressed: The patent’s background section describes the technical challenge of identifying a specific memory device from a group of such devices and the difficulty of associating data read from an RFID tag with a particular physical item or container (Compl. ¶82; Compl. Ex. 8, col. 2:10-20).
  • The Patented Solution: The invention is a data carrier reader capable of executing different search methods. These methods include an "inclusive search" to identify all tags whose data appears on a predefined list, and an "exclusive search" to identify tags whose data does not appear on the list. The reader is designed to provide a "consistent and intuitive output" to the user about the search results (Compl. ¶80; Compl. Ex. 8, Abstract).
  • Technical Importance: This functionality provides a technical solution for complex inventory and logistics tasks, such as verifying that all items in a shipment are present (inclusive search) or identifying items that are out of place (exclusive search) (Compl. Ex. 8, col. 2:34-46).

Key Claims at a Glance

  • The complaint asserts independent claim 1 (Compl. ¶151).
  • Claim 1 Elements:
    • A method of automatically searching RFID tags, comprising:
    • storing a number of characteristic data strings in a buffer;
    • reading a respective characteristic data string from each of a number of RFID tags; and
    • identifying any of the RFID tags that have the respective characteristic data strings that correspond to the characteristic data strings stored in the buffer after reading the respective characteristic data strings from at least two of the number of RFID tags.
  • The complaint does not explicitly reserve the right to assert dependent claims for this patent.

Multi-Patent Capsules

  • Patent Identification: U.S. Patent No. 6,318,636, “Method And Apparatus To Read Different Types of Data Carriers, Such RFID Tags and Machine-Readable Symbols, And A User Interface For The Same,” issued November 20, 2001 (the “’636 Patent”).

  • Technology Synopsis: The patent describes a data carrier reader with both an RFID reading section and a machine-readable symbol (e.g., barcode) reading section. The invention provides for a consistent user interface between the operating modes, which can include visual, aural, and tactile indicators (Compl. ¶86).

  • Asserted Claims: Claim 1 (independent method claim) is asserted (Compl. ¶163).

  • Accused Features: The "Accused Readers," such as the Encompass 6, are accused of infringement (Compl. ¶161).

  • Patent Identification: U.S. Patent No. 6,369,711, “Profile Corrected Label With RFID Transponder And Method For Making Same,” issued April 9, 2002 (the “’711 Patent”).

  • Technology Synopsis: The patent describes an RFID label with a "uniform printable surface." This is achieved by using a face sheet with increased rigidity that does not conform to the profile of the RFID transponder underneath, which masks the transponder's profile and provides a smoother surface for printing (Compl. ¶91).

  • Asserted Claims: Claim 1 (independent apparatus claim) is asserted (Compl. ¶174).

  • Accused Features: The "Accused Tags," such as the eGo Plus Micro Mini Sticker Tag, are accused of infringement (Compl. ¶172).

  • Patent Identification: U.S. Patent No. 6,371,375, “Method and Apparatus for Associating Data with a Wireless Memory Device,” issued April 16, 2002 (the “’375 Patent”).

  • Technology Synopsis: The patent describes a system for data storage and retrieval that combines a memory device (like an RFID tag) with a machine-readable symbol. The RFID tag stores a first identifier, and the symbol encodes a second identifier that is logically associable with the first, creating a dual-method identification system (Compl. ¶96).

  • Asserted Claims: Claim 1 (independent system claim) is asserted (Compl. ¶185).

  • Accused Features: The AT5105 Tag is accused of infringement (Compl. ¶183).

  • Patent Identification: U.S. Patent No. 6,535,175, “Adjustable Length Antenna System for RF Transponders,” issued March 18, 2003 (the “’175 Patent”).

  • Technology Synopsis: The patent describes an RF tag with an antenna that can be selectively tuned. The antenna includes components like tuning stubs or loading bars that are "physically alterable" (e.g., by punching or cutting) to vary the antenna's performance characteristics (Compl. ¶101).

  • Asserted Claims: Claim 1 (independent apparatus claim) is asserted (Compl. ¶195).

  • Accused Features: The "Accused Tags," including the eGo Plus Micro Mini Sticker Tag, are accused of infringement (Compl. ¶193).

  • Patent Identification: U.S. Patent No. 6,639,509, “System and Method for Communicating with an RFID Transponder with Reduced Noise and Interference,” issued October 28, 2003 (the “’509 Patent”).

  • Technology Synopsis: The patent describes an RFID interrogator architecture comprising a microcontroller, a digital signal processor (DSP) module, and a radio module. This partitioned design is adapted for processing signals and controlling radio operations to and from an RFID transponder (Compl. ¶106).

  • Asserted Claims: Claim 8 (independent method claim) is asserted (Compl. ¶206).

  • Accused Features: The "Accused Readers," including the Encompass 4, are accused of infringement (Compl. ¶204).

  • Patent Identification: U.S. Patent No. 7,710,798, “State Storage with Defined Retention Time,” issued May 4, 2010 (the “’798 Patent”).

  • Technology Synopsis: The patent describes a state storage device for an RFID tag that includes a capacitor coupled to a high impedance node. This configuration allows a bit condition (high or low) to be stored and dissipated at a controlled rate, for a defined period such as "no more than four seconds" (Compl. ¶111).

  • Asserted Claims: Claim 1 (independent apparatus claim) is asserted (Compl. ¶216).

  • Accused Features: The "Accused Tags," including the eGo Plus Micro Mini Sticker Tag, are accused of infringement (Compl. ¶215).

  • Patent Identification: U.S. Patent No. 8,141,784, “Encoded Information Reading Terminal with User-Configurable Multi-Protocol Wireless Communication Interface,” issued March 27, 2012 (the “’784 Patent”).

  • Technology Synopsis: The patent describes a terminal that includes a microprocessor, memory, an encoded information reading device (e.g., RFID reader), and a user-configurable wireless interface. The microprocessor can execute software to dynamically select a wireless communication protocol to optimize a user-defined criterion (Compl. ¶¶116, 226).

  • Asserted Claims: Claim 9 (independent apparatus claim) is asserted (Compl. ¶226).

  • Accused Features: The "Accused Readers," including the Encompass Reader 1, are accused of infringement (Compl. ¶225).

  • Patent Identification: U.S. Patent No. 8,919,654, “Encoded Information Reading Terminal with User-Configurable Multi-Protocol Wireless Communication Interface,” issued December 30, 2014 (the “’654 Patent”).

  • Technology Synopsis: This patent is related to the '784 patent and describes an apparatus with a microprocessor and a wireless interface. The apparatus is configured to execute a "wireless communication protocol selector software program" to dynamically select a network or protocol based on a user-defined criterion (Compl. ¶¶121, 236).

  • Asserted Claims: Claim 13 (independent apparatus claim) is asserted (Compl. ¶236).

  • Accused Features: The "Accused Readers," including the Encompass Reader 1, are accused of infringement (Compl. ¶235).

  • Patent Identification: U.S. Patent No. 10,452,968, “Method to Increase RFID Tag Sensitivity,” issued October 22, 2019 (the “’968 Patent”).

  • Technology Synopsis: The patent describes an RFID tag with improved sensitivity. It uses a circuit to vary the antenna's reflection coefficient, creating periods of high and low reflectance. This allows the antenna to "continuously harvest power while transmitting the reflected signal," by reducing reflectance during high reflectance periods to a level that still enables power reception (Compl. ¶¶126, 246).

  • Asserted Claims: Claim 11 (independent apparatus claim) is asserted (Compl. ¶246).

  • Accused Features: The "Accused Tags," including the eGo Plus Micro Mini Sticker Tag, are accused of infringement (Compl. ¶245).

III. The Accused Instrumentality

Product Identification

  • The complaint identifies two categories of accused products: "Accused Tags" and "Accused Readers" (Compl. ¶¶61, 67-68).
    • Accused Tags include the eGo Plus Micro Mini Sticker Tag and the AT5105 Tag (Compl. ¶¶55, 60).
    • Accused Readers include the Encompass 1, 4, 5, and 6 Readers (Compl. ¶62).

Functionality and Market Context

  • The eGo Plus Micro Mini Sticker Tag is described as a "beam-powered radio frequency identification (RFID) tag" suitable for automatic vehicle identification (AVI) applications like electronic toll collection, parking, and security access (Compl. ¶¶56-57). The complaint includes a marketing image listing features such as "Multiprotocol: Super eGo and ATA" and "Thin, flexible sticker format" (Compl. ¶58, Ex. 3).
  • The Encompass Readers are described as various types of RFID readers. The Encompass 1 is a "Rugged Tablet Reader" combining RFID technology with a tablet computer and providing WiFi, Bluetooth, GPS, and 4G connectivity (Compl. ¶64, Ex. 4). The Encompass 4 is a "dual-protocol reader," while the Encompass 5 and 6 are "multiprotocol" readers compatible with multiple industry standards (Compl. ¶¶65-66). The complaint contains a screenshot from a user guide for the Encompass 4 Reader (Compl. p. 17).

IV. Analysis of Infringement Allegations

’408 Patent Infringement Allegations

Claim Element (from Independent Claim 1) Alleged Infringing Functionality Complaint Citation Patent Citation
A radio frequency transponder, comprising: a substrate layer; The Accused Tags, such as the eGo Plus Micro Mini Sticker Tag, are described as having a "Thin, flexible sticker format" for mounting on surfaces like a windshield. ¶58 col. 2:12-15
a radio frequency integrated circuit disposed in a flip-chip configuration affixed to said substrate layer facing downward toward said substrate layer; The complaint alleges that the Accused Tags contain a radio frequency integrated circuit attached in this configuration. ¶141 col. 2:13-16
and an antenna provided on said substrate layer in electrical connection with said radio frequency integrated circuit, said antenna being comprised of a conductive paste material. The complaint alleges the antenna in the Accused Tags is made of a conductive paste material. The Accused Tags are marketed as "low-cost," consistent with the patent's stated goal of using conductive paste to reduce manufacturing costs. ¶56, ¶141 col. 2:16-24
  • Identified Points of Contention:
    • Evidentiary Questions: The complaint's allegations regarding the internal construction of the Accused Tags (e.g., the use of a "flip-chip configuration" and "conductive paste material") are conclusory and rely on an unattached claim chart exhibit. A central question for discovery will be to determine the actual materials and manufacturing methods used for the Accused Tags.
    • Scope Questions: A potential dispute may arise over the definition of "conductive paste material" and whether the material used by TransCore, if different from the silver-particle paste described in the patent's preferred embodiment, falls within the claim's scope.

’762 Patent Infringement Allegations

Claim Element (from Independent Claim 1) Alleged Infringing Functionality Complaint Citation Patent Citation
A method of automatically searching RFID tags, comprising: storing a number of characteristic data strings in a buffer; The Accused Readers, such as the Encompass 4, are described as "dual-protocol" or "multiprotocol" readers, which suggests a capability to store and process data strings corresponding to different tag types or search lists in an internal buffer. ¶65-66 col. 4:5-10
reading a respective characteristic data string from each of a number of RFID tags; The Accused Readers are alleged to read multiple protocols and formats, including TransCore Super eGo, eGo (ISO 18000-6B), and ATA/AAR/ISO 10374, thereby reading characteristic data strings from various tags. ¶64, ¶65 col. 4:43-46
and identifying any of the RFID tags that have the respective characteristic data strings that correspond to the characteristic data strings stored in the buffer after reading...from at least two of the number of RFID tags. The complaint alleges the Accused Readers perform the claimed method of identifying tags that correspond to stored data strings. ¶152 col. 4:47-51
  • Identified Points of Contention:
    • Functional Questions: The complaint alleges the Accused Readers perform the claimed method but provides no specific details on the software or hardware processes that execute the "storing," "reading," and "identifying" steps. A key question will be whether the operational logic of the Accused Readers performs the specific sequence of steps required by the claim.
    • Technical Questions: What constitutes a "characteristic data string" in the context of the Accused Readers' operation? The analysis may focus on whether the data processed by the readers for protocol identification or other functions qualifies as the "characteristic data strings" contemplated by the patent for search purposes.

V. Key Claim Terms for Construction

  • Term from ’408 Patent: "conductive paste material"

  • Context and Importance: This term is central to the patent's asserted novelty over prior art that used etched copper. The definition will determine whether TransCore's antenna material, whatever it may be, infringes. Practitioners may focus on this term because the patent contrasts it with "conventional etched copper" but also requires it to have resistivity "sufficiently low to provide... acceptable read range" (Compl. Ex. 7, Abstract).

  • Intrinsic Evidence for Interpretation:

    • Evidence for a Broader Interpretation: The claim itself does not limit the paste to a specific composition, only that it be a "conductive paste material." This may support a construction covering any printable, conductive compound used for an antenna, not just the specific one disclosed.
    • Evidence for a Narrower Interpretation: The specification provides a specific example of the paste as "silver particles loaded into a polymer resin binder in a solvent" (Compl. Ex. 7, col. 3:42-44). The abstract also defines it as having resistivity "greater than the resistivity of a conventional etched copper antenna" but still acceptably low (Compl. Ex. 7, Abstract). This could support a narrower construction limited to materials with similar compositions or within a specific resistivity range.

  • Term from ’762 Patent: "characteristic data strings"

  • Context and Importance: This term defines the data that is stored, read, and compared. Its construction is critical because the infringement analysis depends on whether the data processed by the Accused Readers (e.g., for protocol selection, unique identification) constitutes the "characteristic data strings" used in the claimed search method.

  • Intrinsic Evidence for Interpretation:

    • Evidence for a Broader Interpretation: The claims use the general term "characteristic data strings" without limitation. The specification refers to the RAM being able to "temporarily store characteristic data strings" which could be interpreted broadly to include any set of data used for comparison (Compl. Ex. 8, col. 4:6-9).
    • Evidence for a Narrower Interpretation: The specification discusses the problem of associating an RFID tag with a physical item, suggesting the "characteristic data strings" are identifiers for specific items or tags that are part of a search list (Compl. Ex. 8, col. 2:15-17). This context may support a narrower interpretation tied to user-defined search criteria rather than internal system data.

VI. Other Allegations

  • Indirect Infringement: The complaint alleges both induced and contributory infringement for all asserted patents. For inducement, it alleges TransCore sold the Accused Products with instructions on how to use them in an infringing manner and with the specific intent to cause infringement (e.g., Compl. ¶¶142, 153). For contributory infringement, it alleges TransCore knowingly provided a material part of the inventions (the Accused Products) that have no substantial non-infringing uses (e.g., Compl. ¶¶146, 158).
  • Willful Infringement: Willfulness is alleged for all asserted patents. For the seven "royalty-bearing" patents, the complaint alleges TransCore had actual knowledge since at least January 8, 2008, when they were listed in the license agreement (e.g., Compl. ¶¶143, 154). For the four unlicensed patents, the complaint alleges TransCore has been aware of the patents and infringement allegations since at least the filing of the original complaint on or around June 23, 2023, and continues to infringe (e.g., Compl. ¶¶219, 229).

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

  • A central issue will be the interplay between the breach of contract and patent infringement claims: for the seven licensed patents, the case will examine whether Honeywell's remedy lies in contract damages for unpaid royalties or in patent damages for infringement, a question that may depend on the status and interpretation of the 2008 license agreement.
  • A key question will be one of definitional scope: can terms like "conductive paste material" (’408 Patent), rooted in a specific cost-saving context, be construed to cover the materials used in TransCore’s modern, mass-produced RFID tags? Similarly, does the "automatic searching" method (’762 Patent) read on the protocol-handling and data-reading functions of the multi-protocol Accused Readers?
  • The case will likely turn on a fundamental evidentiary question: what are the specific, technical details of the Accused Products' internal construction and software operation? The complaint makes allegations based on external features and marketing materials, but the core infringement analysis will depend on evidence uncovered during discovery regarding how these products actually work.