Schoeneckers Inc v. Kobie Marketing Inc

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Schoeneckers, Inc. d/b/a BI Worldwide (Minnesota)
  • Defendant: Kobie Marketing, Inc. (Delaware)
  • Plaintiff’s Counsel: Richards, Layton & Finger, P.A.; Carlson Caspers Vandenburgh & Lindquist PA
• Case Identification: 1:25-cv-01263, D. Del., 10/15/2025
• Venue Allegations: Venue is alleged to be proper in the District of Delaware because the Defendant is a Delaware corporation and is therefore deemed to reside in the district.
• Core Dispute: Plaintiff alleges that Defendant’s customer loyalty and gamification platform infringes three patents related to portable and customizable software for providing incentives to website visitors.
• Technical Context: The technology at issue falls within the "gamification" sector, where online platforms use game-like mechanics such as points and leaderboards to increase user engagement and customer loyalty.
• Key Procedural History: The complaint notes pre-suit correspondence, stating that Plaintiff first contacted Defendant regarding the patents-in-suit on May 17, 2023. After a follow-up in May 2024, Defendant responded on September 25, 2025, stating it did not believe it was infringing but providing no explanation. This exchange may form the basis for the complaint's allegations of willful infringement.

Case Timeline

Date	Event
2007-07-18	Earliest Patent Priority Date ('764, '421, '339 Patents)
2007	Bunchball Nitro Platform Launch Date
2014-07-01	'764 Patent Issue Date
2017-10-03	'421 Patent Issue Date
2018	Bunchball Acquired by BI Worldwide
2022-11-15	'339 Patent Issue Date
2023-05-17	Plaintiff Notifies Defendant of Alleged Infringement
2024-05	Plaintiff Follows Up with Defendant
2025-09-25	Defendant Denies Infringement
2025-10-15	Complaint Filing Date

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

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 problem where websites wanting to offer user incentives had to develop their own software from scratch or hire a third party to do so, resulting in applications that were written for a particular website and were not easily portable or customizable ('764 Patent, col. 1:25-39).
• The Patented Solution: The invention is a system for embedding a "portable incentive application" onto a "first site" (e.g., a retailer's website) that is provided from a "second site" (e.g., a platform provider's server) ('764 Patent, col. 3:36-49). This architecture allows a website owner to easily incorporate and customize features like points, leaderboards, and achievements without needing to develop the underlying software, which is managed by the second site ('764 Patent, col. 4:45-51; Fig. 20).
• Technical Importance: This approach enabled the widespread adoption of "gamification" features by decoupling the complex incentive logic from the host website, offering a scalable solution for increasing user engagement (Compl. ¶8).

Key Claims at a Glance

• The complaint asserts at least independent method Claim 10.
• The essential elements of this method claim include:
  • Providing an incentive application from a network site over a data network to a first Web site and a second Web site.
  • Embedding the application in the first and second Web sites.
  • Receiving activity information of viewers from both sites.
  • Awarding incentive information based on that activity.
  • Providing the awarded incentive information back to the viewers at the respective Web sites to incentivize further activity.
• The complaint does not explicitly reserve the right to assert dependent claims.

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, this patent addresses the same technical challenge: the lack of a "universally portable incentive application" that can be used on any website and is easily customizable ('421 Patent, col. 1:35-49).
• The Patented Solution: The patent describes a method where a central "network site" receives activity information from a viewer on a "first website," awards incentive information based on that activity, and provides it back to an "incentive application embedded in the first website" ('421 Patent, Claim 12). The solution can be implemented either by embedding a software object or via an Application Programming Interface (API) that calls routines from the network site ('421 Patent, col. 4:50-65).
• Technical Importance: This method provides a centralized system for managing user engagement across multiple different websites, creating a portable and consistent user experience (Compl. ¶8).

Key Claims at a Glance

• The complaint asserts at least independent method Claim 12.
• The essential elements of this method claim include:
  • Receiving and storing, at a network site, activity information of a viewer from a first website.
  • Awarding first incentive information to the viewer based on that activity.
  • Providing the awarded incentive information to an incentive application embedded in the first website for display.
  • Repeating these steps for a second viewer on a second website.
• The complaint does not explicitly reserve the right to assert dependent claims.

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: This patent, which is part of the same family as the '764 and '421 patents, claims a method for providing a portable, embeddable incentive application to third-party websites ('339 Patent, col. 1:35-51). The system involves an "incentive application system" with a server that embeds the application on a "first network site," sends and receives user activity information, generates an incentive screen, and displays awarded incentives to drive further user engagement ('339 Patent, Claim 21).
• Asserted Claims: At least independent method Claim 21 (Compl. ¶45).
• Accused Features: The complaint accuses Defendant's gamification platform, which it alleges is used by Defendant's clients to incentivize their own customers' use of their websites (Compl. ¶10, 45).

III. The Accused Instrumentality

Product Identification

The accused instrumentality is Defendant's "gamification platform," which includes products marketed as "Kobie Alchemy Loyalty Cloud," "Loyalty Data," and "Loyalty Decisioning" (Compl. ¶10).

Functionality and Market Context

The platform is alleged to be a system that "incentivizes customers to use its clients' websites" (Compl. ¶10). The complaint references marketing materials describing the platform's ability to deliver "loyalty experiences," provide "actionable loyalty insights," and achieve "seamless digital integration" (Compl. ¶10). Exhibit I from the complaint, a webpage printout, advertises the "Kobie Alchemy Loyalty Cloud" (Compl. ¶10, fn. 2). Another visual, Exhibit K, is described as a printout showing how the platform implements "Loyalty Decisioning" (Compl. ¶10, fn. 4). The complaint alleges that this platform directly competes with the Plaintiff's "Bunchball Nitro" platform (Compl. ¶10).

IV. Analysis of Infringement Allegations

The complaint references claim chart exhibits (D, E, and F) that were not attached to the publicly filed document. Therefore, the infringement allegations are summarized below in prose based on the complaint's narrative.

'764 Patent Infringement Allegations

The complaint alleges that Defendant infringes at least method claim 10 by making, using, selling, and importing its platform (Compl. ¶14). It asserts through a series of consecutive paragraphs that the "use of Defendant's system" satisfies each element of the claim, which are referenced using non-standard labels (e.g., "Element 10[p]," "Element 10[a]") that presumably correspond to a missing claim chart (Compl. ¶¶15-22). The narrative theory suggests that the operation of Defendant's platform performs the patented method of providing and embedding a portable incentive application.

'421 Patent Infringement Allegations

Similarly, for the '421 Patent, the complaint alleges infringement of at least method claim 12 (Compl. ¶30). The theory of infringement is parallel to that for the '764 patent, with allegations that the "use of Defendant's system" meets each limitation of the claim, again referenced by non-standard labels (e.g., "Element 12[p]," "Element 12[a]") (Compl. ¶¶31-37). The core allegation is that Defendant's platform performs the claimed method of receiving user activity data from a client website, awarding incentives, and providing those incentives back to an application on the client site.

Identified Points of Contention

• Scope Questions: The complaint asserts method claims against a "platform." A central question may be whether Defendant, as the platform provider, performs every step of the asserted methods itself, or whether its clients or their end-users perform some steps. This could raise complex issues of divided infringement and shift the focus from direct to indirect infringement.
• Technical Questions: The complaint's allegations are conclusory and lack specific technical details about how the accused platform operates. A key point of contention will be establishing the technical mechanism by which Defendant's platform integrates with its clients' websites and whether that mechanism meets claim limitations such as "embedding an incentive application."

V. Key Claim Terms for Construction

The Term: "embedding an incentive application on a first network site" (from '339 Patent, Claim 21)

• Context and Importance: This term is fundamental to the patents' architecture. The infringement analysis may turn on whether the accused platform's integration with client websites—which may occur via API calls rather than the transfer of a discrete software package—constitutes "embedding." Practitioners may focus on this term because Defendant could argue its cloud-based service model is distinct from the "embedded" application described in the patent.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The specification suggests that "embedding" can be functional, stating that an API can be used where the "actual portable incentive application itself need not generate the incentive screen in the first site...but rather an API is provided...that calls out routines or data from the second site" ('339 Patent, col. 4:58-65).
  • Evidence for a Narrower Interpretation: The specification also refers to embedding an application on a website that supports "OBJECT\EMBED tags," which implies a more literal, traditional form of software object embedding ('339 Patent, col. 7:36-38). The architectural diagram in Figure 20, which shows a "Portable Incentive Application" block residing on the "First Site," could also support a narrower construction ('339 Patent, Fig. 20).

The Term: "incentive information" (from '764 Patent, Claim 10; '421 Patent, Claim 12)

• Context and Importance: The definition of this term will determine what types of rewards or data qualify under the claims. A dispute may arise over whether general loyalty data or marketing analytics from the accused platform constitute the specific "incentive information" contemplated by the patents.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The claims themselves do not narrowly define the term, leaving it open to encompass any information awarded to a viewer to incentivize activity.
  • Evidence for a Narrower Interpretation: The specification provides numerous specific examples of incentive components, such as "points, leaderboard recognition, level status, achievement status, additional avatars, a virtual room, a friend-list" ('339 Patent, col. 4:47-51). Defendant may argue that "incentive information" should be limited to these specific gamification-style rewards rather than broader commercial loyalty benefits.

VI. Other Allegations

Indirect Infringement

The complaint alleges both induced and contributory infringement for all three patents. The inducement theory is based on allegations that Defendant "directly encourages its customers to use the platform in a way that results in infringement" (e.g., Compl. ¶24, 39, 54). The contributory infringement theory alleges the platform is not a "staple article of commerce suitable for substantial non-infringing uses" (e.g., Compl. ¶24, 39, 54).

Willful Infringement

Willfulness is alleged for all three patents based on pre-suit knowledge. The complaint alleges that Defendant was notified of the patents-in-suit and its alleged infringement on May 17, 2023, more than two years before the complaint was filed (Compl. ¶11, 25, 40, 55).

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

• A core issue will be one of technical implementation: does the architecture of Defendant's cloud-based loyalty platform, which likely integrates with client sites via APIs, satisfy the "embedding" and information-awarding steps of the asserted method claims, or is there a fundamental mismatch in how the technology operates compared to the system described in the patents?
• A second key question will be one of evidentiary proof: can Plaintiff produce technical evidence beyond the marketing materials cited in the complaint to demonstrate that the accused platform performs each specific function required by the claims, particularly given the conclusory nature of the infringement allegations?
• Finally, the case may turn on a question of infringement theory: given that the accused platform is used by Defendant's clients to engage their end-users, a central legal question will be whether any potential infringement is direct (performed entirely by Defendant) or indirect (induced or contributed to by Defendant), a determination that will depend heavily on claim construction and the specific actions of each party in the ecosystem.