DCT
1:25-cv-00039
Schoeneckers Inc v. Epsilon Data Management LLC
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: Schoeneckers, Inc. d/b/a BI Worldwide (Minnesota)
- Defendant: Epsilon Data Management, LLC (Delaware)
- Plaintiff’s Counsel: Richards, Layton & Finger, P.A.
- Case Identification: 1:25-cv-00039, D. Del., 01/08/2025
- 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 judicial district.
- Core Dispute: Plaintiff alleges that Defendant’s Epsilon PeopleCloud gamification platform infringes patents related to portable and customizable incentive applications for websites.
- Technical Context: The technology at issue involves "gamification," the use of game-like mechanics such as points, leaderboards, and achievements to drive user engagement on third-party websites and applications.
- Key Procedural History: The complaint alleges that Plaintiff sent notice letters to Defendant identifying the patents-in-suit on May 18, 2023, and again on May 29, 2024, prior to filing suit. This alleged pre-suit knowledge forms the basis for the willfulness allegations.
Case Timeline
| Date | Event |
|---|---|
| 2007-07-18 | Priority Date for ’764, ’421, and ’339 Patents |
| 2007-01-01 | Bunchball Nitro platform launched |
| 2014-07-01 | ’764 Patent Issued |
| 2017-10-03 | ’421 Patent Issued |
| 2018-01-01 | Bunchball purchased by BI Worldwide |
| 2022-11-15 | ’339 Patent Issued |
| 2023-05-18 | Plaintiff sends first notice letter to Defendant |
| 2024-05-29 | Plaintiff sends second notice letter to Defendant |
| 2025-01-08 | Complaint Filed |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 8,768,764
- Patent Identification: U.S. Patent No. 8,768,764, "Method and System for Embedding a Portable and Customizable Incentive Application on a Website," issued July 1, 2014.
- The Invention Explained:
- Problem Addressed: The patent describes a market where each website wanting to offer user incentives had to independently develop its own custom software, which was neither portable to other websites nor easily customizable once created (’764 Patent, col. 1:26-44).
- The Patented Solution: The invention proposes a computer-implemented system where a "second site" (the incentive provider) offers a portable incentive application that can be embedded into a "first site" (the customer's website) (’764 Patent, Abstract). This application generates an incentive screen on the first site, tracks user activities, and awards incentives (e.g., points, achievements) based on logic and data managed by the second site, thereby providing a universal, customizable solution (’764 Patent, col. 3:33-54; FIG. 1).
- Technical Importance: This architecture enabled a scalable, platform-as-a-service model for website gamification, reducing the cost and complexity for individual website owners to implement engagement-driving features (’764 Patent, col. 1:45-48).
- Key Claims at a Glance:
- The complaint asserts at least independent method claim 10 (Compl. ¶19).
- Essential elements of claim 10 include:
- Providing an incentive application from a network site to a first and second Web site.
- Receiving and storing activity information of a first viewer on the first Web site and a second viewer on the second Web site.
- Awarding incentive information to each viewer based on their respective activity.
- Providing the awarded incentive information back to the respective viewer on their respective Web site to incentivize additional activity.
- The complaint reserves the right to assert additional claims (Compl. ¶19).
U.S. Patent No. 9,779,421
- Patent Identification: U.S. Patent No. 9,779,421, "Method and System for Embedding a Portable and Customizable Incentive Application on a Website," issued October 3, 2017.
- The Invention Explained:
- Problem Addressed: As a continuation of the application leading to the ’764 Patent, the ’421 Patent addresses the same problem of siloed, non-portable website incentive programs (’421 Patent, col. 1:28-46).
- The Patented Solution: The solution is materially the same as in the ’764 Patent, describing a system where an incentive provider hosts a portable application for use on third-party websites (’421 Patent, Abstract). This patent, however, places a specific focus on the use of an Application Programming Interface (API) as the mechanism for communication between the customer's website and the incentive provider's server (’421 Patent, col. 3:55-65).
- Technical Importance: The explicit inclusion of an API reflects a common and powerful method for integrating distinct web services, allowing for flexible data exchange without requiring the full application logic to reside on the customer's website (’421 Patent, col. 3:63-65).
- Key Claims at a Glance:
- The complaint asserts at least independent method claim 12 (Compl. ¶35).
- Essential elements of claim 12 include:
- Receiving and storing activity information of a viewer from a first website of a provider, where the information is received "using an application programming interface (API)."
- Awarding first incentive information to the viewer based on that activity.
- Providing the incentive information to a first incentive application embedded in the first website for display to the viewer.
- The complaint reserves the right to assert additional claims (Compl. ¶35).
Multi-Patent Capsule: U.S. Patent No. 11,501,339
- Patent Identification: U.S. Patent No. 11,501,339, "Method and System for Embedding a Portable and Customizable Incentive Application on a Website," issued November 15, 2022.
- Technology Synopsis: As a continuation in the same family, the ’339 patent describes the same core technology: a system for providing a portable, customizable incentive application, hosted by a "second site" (incentive provider), that is embedded in a "first site" (customer website). The system tracks user activity on the first site and awards incentives based on rules and data managed by the second site (’339 Patent, Abstract; col. 2:57-65).
- Asserted Claims: The complaint asserts at least independent method claim 21 (Compl. ¶¶50-51).
- Accused Features: The complaint alleges that the Epsilon PeopleCloud platform, which provides gamification and incentive features to its customers' websites, performs the method steps recited in the asserted claims (Compl. ¶¶12, 50-57).
III. The Accused Instrumentality
- Product Identification: The accused instrumentality is Defendant's "Epsilon PeopleCloud" gamification platform (Compl. ¶7).
- Functionality and Market Context:
- The complaint describes Epsilon PeopleCloud as a platform that "incentivizes individuals to use their websites" and is accessible to consumers through its customers' websites (Compl. ¶¶7, 12). No probative visual evidence provided in complaint. The complaint alleges that the platform's functionality infringes the patents-in-suit but refers to non-proffered exhibits (Exs. D-H) for detailed examples (Compl. ¶12).
- The complaint alleges that the Epsilon PeopleCloud platform directly competes with Plaintiff's "Bunchball Nitro" platform, which Plaintiff characterizes as the "leader in enterprise gamification platforms" (Compl. ¶¶11-12).
IV. Analysis of Infringement Allegations
The complaint alleges infringement of each claim element but provides no specific factual mapping in its narrative, instead referring to non-proffered claim chart exhibits (Exhibits I, J, and K) for its detailed theory (Compl. ¶¶19-27, 35-42, 50-57). The following analysis summarizes the infringement theory based on the general allegations.
’764 Patent Infringement Allegations
| Claim Element (from Independent Claim 10) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| providing an incentive application from a network site over a data network to a first Web site and a second Web site... | Epsilon provides its PeopleCloud platform from its network site for integration into its customers' websites. | ¶¶7, 12, 19 | col. 3:33-40 |
| receiving and storing, at the network site, activity information of a first viewer from a provider of a first Web site... | Epsilon's servers allegedly receive and store data about user activities occurring on its customers' websites. | ¶¶7, 12, 19 | col. 4:22-26 |
| awarding incentive information to the first viewer based on the retrieved activity information... | Epsilon's platform logic allegedly processes the user activity data and awards incentives like points or badges. | ¶¶7, 12, 19 | col. 4:6-14 |
| provide, using the incentive application at the first Web site, the first incentive information to the first viewer when the first viewer returns to visit the first Web site... | Epsilon's platform allegedly displays the awarded incentives to users on its customers' websites to encourage further engagement. | ¶¶7, 12, 19 | col. 3:54-61 |
- Identified Points of Contention:
- Architectural Question: A central question may be whether the client-server architecture of the Epsilon PeopleCloud platform maps onto the "first Web site" and "second Web site" structure recited in the claim. The complaint's lack of architectural detail leaves this as an open question for discovery.
- Evidentiary Question: The complaint does not specify the mechanism by which the accused platform "receiv[es] and stor[es] activity information." The evidence supporting the precise data flow and processing steps will be critical to proving infringement.
’421 Patent Infringement Allegations
| Claim Element (from Independent Claim 12) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| receiving and storing, at a network site, activity information of a first viewer from a first website... the activity information of the first viewer received from the first website using an application programming interface (API)... | Epsilon's servers allegedly receive and store user activity data from customer websites via an API. | ¶¶7, 12, 35 | col. 3:55-65 |
| awarding, by the network site, first incentive information to the first viewer based on the activity information of the first viewer; | Epsilon's platform logic allegedly processes this data to award incentives. | ¶¶7, 12, 35 | col. 4:6-14 |
| providing the first incentive information to a first incentive application embedded in the first website... to be displayed to the first viewer... | The awarded incentives are allegedly sent back for display within an application component operating on the customer's website. | ¶¶7, 12, 35 | col. 3:51-54 |
- Identified Points of Contention:
- Scope Question: The infringement analysis for the ’421 patent will likely focus on whether the communication protocol between Epsilon's platform and its customers' websites meets the claim limitation "using an application programming interface (API)." The construction of "API" will be a pivotal issue.
- Technical Question: What specific technical protocols and data structures are used for communication in the accused system? The complaint does not provide sufficient detail for analysis of whether this functionality constitutes an infringing "API."
V. Key Claim Terms for Construction
The Term: "incentive application... embedded in the first website" (’764 Patent, cl. 10; ’421 Patent, cl. 12)
- Context and Importance: This term defines the core relationship between the incentive provider's technology and the customer's website. Its construction will determine whether a loosely integrated modern web service infringes, or if a more tightly coupled, client-side component is required, potentially impacting the scope of all asserted patents.
- Intrinsic Evidence for a Broader Interpretation: The specification describes an API as an alternative to a "portable incentive application," which may suggest "application" is a broad term not tied to a specific implementation like a single software object (’421 Patent, col. 3:55-61).
- Intrinsic Evidence for a Narrower Interpretation: The specification discloses that a viewer can "embed the portable incentive application on any website that supports OBJECT\EMBED tags," which are specific client-side technologies (’421 Patent, col. 7:36-39). This may support an argument that "embedded" requires a specific form of technical integration.
The Term: "application programming interface (API)" (’421 Patent, cl. 12; ’339 Patent, cl. 21)
- Context and Importance: This limitation appears in the asserted claims of the two later patents and is absent from the asserted claim of the earliest patent. Practitioners may focus on this term because its construction could create a distinction in infringement exposure between the earlier and later patents.
- Intrinsic Evidence for a Broader Interpretation: The patent provides a broad, functional definition of an API as a "set of routines, protocols and tools for obtaining the necessary data and functions from the second site" (’421 Patent, col. 3:57-61). This could arguably cover a wide range of modern server-to-server communication methods.
- Intrinsic Evidence for a Narrower Interpretation: The specification presents the API as a mechanism where the first site "calls out routines or data from the second site as needed," which could be argued to require a specific client-initiated, call-and-response architecture rather than any generic data exchange (’421 Patent, col. 3:63-65).
VI. Other Allegations
- Indirect Infringement: The complaint alleges both induced and contributory infringement for all three patents. It asserts inducement based on allegations that Epsilon "directly encourages its customers to use the platform in a way that results in infringement" (Compl. ¶¶29, 44, 59). It asserts contributory infringement by alleging the platform is not a staple article of commerce with substantial non-infringing uses, as its "intended, normal use" is infringing (Compl. ¶¶29, 44, 59).
- Willful Infringement: Willfulness is alleged for all asserted patents. The factual basis for willfulness is Defendant's alleged pre-suit knowledge of the patents from notice letters sent by Plaintiff on May 18, 2023, and May 29, 2024 (Compl. ¶¶13-14, 30, 45, 59).
VII. Analyst’s Conclusion: Key Questions for the Case
- A core issue will be one of architectural mapping: Can the technical architecture of the accused Epsilon PeopleCloud platform be mapped onto the "first site" / "second site" structure of the claims, and does its method of data exchange with customer websites meet the specific "API" limitation recited in the ’421 and ’339 patents?
- A second key issue will be one of claim scope: How will the court construe the term "incentive application... embedded in the first website"? A narrow construction tied to older technologies like "OBJECT/EMBED" tags could present a significant challenge to the infringement case, while a broader construction covering modern web service integrations may support it.
- Finally, the case presents a fundamental evidentiary question: Because the complaint's technical infringement theory is contained entirely within unprovided exhibits, a central issue for litigation will be what facts emerge in discovery to substantiate the conclusory allegations that the accused platform performs each specific step of the claimed methods.