DCT

8:18-cv-02548

InVue Security Products Inc v. Vanguard Products Group Inc

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I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 8:18-cv-02548, M.D. Fla., 10/16/2018
  • Venue Allegations: Venue is alleged to be proper as the Defendant's principal place of business is located within the Middle District of Florida.
  • Core Dispute: Plaintiff alleges that Defendant’s retail merchandise security systems infringe eight patents related to technologies including optical communication for security tethers, mechanical sensor locking mechanisms, auxiliary device ports, and alarm sound chamber designs.
  • Technical Context: The dispute centers on anti-theft display systems for high-value consumer electronics, a market where retailers must balance robust security with the need for customers to physically interact with demonstration products.
  • Key Procedural History: The complaint alleges that Defendant had pre-suit knowledge of several patents-in-suit or their corresponding published applications, forming the basis for claims of willful infringement.

Case Timeline

Date Event
2014-01-23 Priority Date for U.S. Patent No. 9,972,178
2014-08-27 Priority Date for U.S. Patent No. 10,098,481
2015-05-28 Priority Date for U.S. Patent Nos. 9,818,274 and 10,062,253
2015-10-12 Priority Date for U.S. Patent Nos. 9,747,765; 9,805,564; and 10,043,358
2015-11-20 Priority Date for U.S. Patent No. 10,008,082
2017-08-29 U.S. Patent No. 9,747,765 Issued
2017-10-31 U.S. Patent No. 9,805,564 Issued
2017-11-14 U.S. Patent No. 9,818,274 Issued
2017-11-21 Defendant allegedly had actual knowledge of the ’274, ’765, and ’564 patents
2018-01-25 Defendant allegedly had actual knowledge of the application leading to the ’253 patent
2018-04-02 Defendant allegedly had actual notice of the publications related to the ’178 and ’082 patents
2018-04-10 Defendant allegedly had actual notice of the publication related to the ’481 patent
2018-04-27 Defendant allegedly had actual notice of the ’178 patent
2018-05-15 U.S. Patent No. 9,972,178 Issued
2018-06-26 U.S. Patent No. 10,008,082 Issued
2018-07-26 Defendant allegedly had actual knowledge of the application leading to the ’358 patent
2018-08-07 U.S. Patent No. 10,043,358 Issued
2018-08-28 U.S. Patent No. 10,062,253 Issued
2018-10-16 U.S. Patent No. 10,098,481 Issued
2018-10-16 Complaint Filed

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

U.S. Patent No. 9,818,274 - "Merchandise Security System with Optical Communication"

  • Issued: November 14, 2017

The Invention Explained

  • Problem Addressed: Retailers need to protect demonstration models of consumer electronics from theft while allowing potential customers to examine and operate them, which requires a physical security tether that can reliably detect tampering (U.S. Patent No. 10,062,253, col. 1:18-34).
  • The Patented Solution: The invention proposes a security system where a sensor attached to the merchandise and the security cable connecting it to a base both contain optical transceivers. These transceivers communicate via optical signals through the cable, creating a sense loop that is electrically isolated from any charging circuit, allowing the system to detect if the cable is cut or disconnected from the sensor (U.S. Patent No. 10,062,253, col. 5:58-6:14).
  • Technical Importance: Using optical signals for the sense loop, rather than electrical conductors, can potentially increase durability and simplify the design of rotating or swiveling connectors by avoiding the need for electrical slip rings for the security signal (U.S. Patent No. 10,062,253, col. 5:47-52).

Key Claims at a Glance

  • The complaint asserts at least independent claim 39 of the ’274 Patent (Compl. ¶45).
  • Essential elements of Claim 39 include:
    • A security system for securing an item of merchandise.
    • A sensor configured to be coupled to the item of merchandise, the sensor comprising an optical transceiver configured to transmit and receive data.
    • A cable configured to be connected to the sensor, the cable comprising an optical transceiver configured to transmit and receive data.
    • Wherein the optical transceivers are configured to communicate with one another for defining a sense loop between the cable and the sensor.

U.S. Patent No. 10,062,253 - "Merchandise Security System with Optical Communication"

  • Issued: August 28, 2018

The Invention Explained

  • Problem Addressed: As a continuation of the application leading to the '274 patent, this patent addresses the same problem of securing interactive retail merchandise from theft (Compl. ¶2; ’253 Patent, col. 1:18-34).
  • The Patented Solution: The patent describes a security system using a sensor and a cable, each with an optical transceiver. The transceivers communicate to establish a security sense loop; if this optical communication is broken (e.g., by cutting the cable or disconnecting the sensor), an alarm is triggered. The system is designed such that the security sense loop is electrically isolated from any circuit used to charge the merchandise (’253 Patent, col. 3:6-12; Fig. 1).
  • Technical Importance: This design allows security monitoring and power delivery to occur via a single tether but through distinct mechanisms (optical vs. electrical), which may enhance reliability and reduce the complexity of the electromechanical connection points (’253 Patent, col. 5:47-52).

Key Claims at a Glance

  • The complaint asserts at least independent claim 1 of the ’253 Patent (Compl. ¶81).
  • Essential elements of Claim 1 include:
    • A security system for securing an item of merchandise.
    • A sensor configured to be coupled to the item of merchandise, comprising an optical transceiver.
    • A charging circuit for providing power to the sensor and/or the item of merchandise.
    • A cable configured to be connected to the sensor, comprising an optical transceiver.
    • Wherein the optical transceiver of the cable and the optical transceiver of the sensor are configured to communicate optical signals with one another to detect disconnection of the cable from the sensor.

U.S. Patent No. 10,098,481 - "Systems and Methods for Locking a Sensor to a Base"

  • Issued: October 16, 2018

Technology Synopsis

The patent describes a mechanical locking system for a retail security display. The system features a base with at least one engagement member and a sensor with a complementary engagement member. A cam mechanism is used to move the base's engagement member to lock the sensor, while still permitting the sensor to rotate with respect to the base (’481 Patent, Abstract).

Asserted Claims & Accused Features

  • Asserted Claims: At least claim 52 (Compl. ¶118).
  • Accused Features: The accused products allegedly include a base ("pedestal") that removably supports a sensor, a cam mechanism, and at least one engagement member that releasably locks the sensor to the pedestal while allowing rotation (Compl. ¶¶120-122).

U.S. Patent No. 9,747,765 - "Recoiler for a Merchandise Security System"

  • Issued: August 29, 2017

Technology Synopsis

This patent discloses a merchandise security system comprising a sensor, a base with electrical contacts for charging, a cable, and an auxiliary port. This port allows a second, auxiliary device (e.g., a smartwatch) to be connected for security and charging, a practice referred to as "Cross-Merchandising." A security signal is transmitted through both the main cable and the auxiliary port to detect tampering with either device (’765 Patent, col. 5:41-6:11).

Asserted Claims & Accused Features

  • Asserted Claims: At least claim 1 (Compl. ¶159).
  • Accused Features: The complaint alleges the accused products' base includes an "Accessory Port" that enables "Cross Merchandising" by connecting to an auxiliary device and transmitting a security signal through it (Compl. ¶¶165-166).

U.S. Patent No. 9,805,564 - "Recoiler for a Merchandise Security System"

  • Issued: October 31, 2017

Technology Synopsis

As part of the same patent family as the '765 patent, this invention also relates to a security system with an auxiliary port. It focuses on the transmission of a single security signal through both the main tether cable and the auxiliary port to detect if the cable is cut, shorted, or disconnected, or if the auxiliary device is removed from the base (’564 Patent, col. 6:22-30).

Asserted Claims & Accused Features

  • Asserted Claims: At least claim 1 (Compl. ¶202).
  • Accused Features: The accused products are alleged to utilize a security signal transmitted through both the "cord reel tether" and the "Accessory Port" to detect various security events, including removal of the auxiliary device (Compl. ¶208).

U.S. Patent No. 10,043,358 - "Recoiler for a Merchandise Security System"

  • Issued: August 7, 2018

Technology Synopsis

This patent, also from the "Recoiler" family, describes a system where the base includes an auxiliary port that not only transmits a security signal to an auxiliary device but also transfers power to it. The system is designed to detect the removal of this auxiliary device from the base via the security signal sent through the port (’358 Patent, col. 2:24-30).

Asserted Claims & Accused Features

  • Asserted Claims: At least claim 1 (Compl. ¶242).
  • Accused Features: The accused products are alleged to have an auxiliary port that transfers power to an auxiliary device and utilizes a security signal to detect the device's removal from the base (Compl. ¶¶247-248).

U.S. Patent No. 9,972,178 - "Systems and Methods for Security Sensing in a Power Cable for an Article of Manufacture"

  • Issued: May 15, 2018

Technology Synopsis

This invention relates to the physical construction of a sensor. The sensor is comprised of an upper portion and a lower portion. The upper portion is configured to receive retaining arms for gripping the merchandise, while the lower portion includes a recess to receive the end of a power cable. When assembled, the upper portion is situated between the merchandise and the lower portion, securing both the retaining arms and the power cable in place.

Asserted Claims & Accused Features

  • Asserted Claims: At least claim 1 (Compl. ¶281).
  • Accused Features: The accused products allegedly include a sensor with an upper and lower portion, where the upper portion receives retaining arms and the end of a power cable is disposed between the upper and lower portions (Compl. ¶¶282-283).

U.S. Patent No. 10,008,082 - "Merchandise Security System with Sound Chamber"

  • Issued: June 26, 2018

Technology Synopsis

The patent details an alarm mechanism within a security base designed to maximize sound output. It claims a sound chamber where a cap (e.g., a piezoelectric element) is disposed at an angle relative to the chamber's bottom surface. This configuration directs sound toward the bottom surface and then out of an opening in the chamber, which in turn directs the sound toward an opening in the sidewall of the base, rather than downward into the mounting surface (’082 Patent, col. 7:19-31; col. 8:5-17).

Asserted Claims & Accused Features

  • Asserted Claims: At least claim 1 (Compl. ¶320).
  • Accused Features: The accused products' alarm is alleged to include a sound chamber with a cap disposed at an angle, designed to resonate and direct sound towards the bottom surface and out through openings in the chamber and the base's sidewall (Compl. ¶¶324-325).

III. The Accused Instrumentality

Product Identification

  • The accused products are merchandise security systems identified by Defendant as the "CR360" and "CR360-UTC" (Compl. ¶27).

Functionality and Market Context

  • The complaint alleges that the Accused Products are security systems for displaying retail merchandise. Their accused functionality includes a sensor and a tether cable that uses optical transceivers to detect if the cable is cut or disconnected (Compl. ¶26). One provided image shows a cable and sensor, which the complaint alleges each have an optical transceiver (Compl. p. 8). The systems are also alleged to feature a locking mechanism that secures the sensor to a base or "pedestal" while permitting rotation, an "Accessory Port" for connecting and securing auxiliary merchandise, and a dual alarm system located in both the sensor and the pedestal (Compl. ¶26; p. 10).

IV. Analysis of Infringement Allegations

U.S. Patent No. 9,818,274 Infringement Allegations

The complaint alleges that the Accused Products directly infringe at least claim 39 of the '274 patent (Compl. ¶45). The infringement theory is that the Accused Products constitute a security system for merchandise that includes a sensor and a "cord reel tether" (cable), where both components possess an optical transceiver (Compl. ¶47). It is alleged that these transceivers communicate to determine if the cable is cut or disconnected, triggering an alarm if such a security breach occurs (Compl. ¶48). The complaint provides an image allegedly showing a cable and sensor from an accused system, each with an optical transceiver, to support this contention (Compl. p. 8).

U.S. Patent No. 10,062,253 Infringement Allegations

Claim Element (from Independent Claim 1) Alleged Infringing Functionality Complaint Citation Patent Citation
A security system for securing an item of merchandise... The Accused Products are security systems for securing merchandise like phones or tablets. ¶82 col. 3:9-12
a sensor configured to be coupled to the item of merchandise, the sensor comprising an optical transceiver... The system includes a sensor that attaches to the merchandise and includes an optical transceiver. ¶83 col. 5:58-6:2
a charging circuit for providing power to the sensor and/or the item of merchandise... The Accused Products provide power to the displayed merchandise. ¶26 col. 3:13-17
a cable configured to be connected to the sensor, the cable comprising an optical transceiver... The system includes a cable ("cord reel tether") that connects to the sensor and contains an optical transceiver. ¶84 col. 5:58-6:2
wherein the optical transceiver of the cable and the optical transceiver of the sensor are configured to communicate optical signals with one another to detect disconnection of the cable from the sensor. The optical transceivers of the sensor and cable communicate optical signals to detect disconnection, which triggers an alarm. ¶85 col. 6:3-14
  • Identified Points of Contention:
    • Scope Questions: A central question may be the scope of "communicate optical signals." The court may need to determine if the functionality alleged in the complaint—which may be a simple light-based continuity check—meets the patent's potential requirement for a more complex data exchange between "transceivers."
    • Technical Questions: The analysis will likely depend on evidence showing the precise nature of the components identified as "optical transceivers" in the accused CR360 and CR360-UTC products and the specific signals, if any, that pass between them.

V. Key Claim Terms for Construction

  • The Term: "optical transceiver"
  • Context and Importance: This term appears in the asserted independent claims of both the '274 and '253 patents and is central to the primary infringement allegation. The definition will determine whether the accused products' light-emitting and light-detecting components meet the claim limitation. Practitioners may focus on this term because its construction could either broadly cover any device that sends and receives light or be limited to devices capable of modulated data communication.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The claims themselves recite that the transceivers are configured to "communicate optical signals" to "detect disconnection," which could be interpreted as requiring only the presence or absence of a light signal (’253 Patent, col. 10:43-47).
    • Evidence for a Narrower Interpretation: The specification discusses transmitting signals in "predetermined sequences or patterns and/or in the form of data" and converting optical signals into "electrical signals," suggesting a capability beyond a simple continuity check (’253 Patent, col. 5:35-42).

VI. Other Allegations

  • Indirect Infringement: The complaint pleads both contributory and induced infringement for all asserted patents. Inducement is based on allegations that Defendant provides instructional videos and training to its customers on how to use the Accused Products in an infringing manner (Compl. ¶¶70-71, 107). Contributory infringement is based on allegations that the Accused Products are not staple articles of commerce, are not suitable for substantial non-infringing use, and are especially made or adapted for infringing use (Compl. ¶¶57-59, 94-96).
  • Willful Infringement: Willfulness is alleged for all patents. The basis for these allegations includes Defendant’s alleged actual knowledge of most of the patents or their published applications prior to the suit being filed, stemming from alleged notification letters and monitoring of Plaintiff's patent prosecution activities (Compl. ¶¶32, 52-53, 89-90).

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

  • A core issue will be one of technological function: does the accused system's use of light emitters and detectors to verify a physical connection constitute "communicat[ing] optical signals" between "optical transceivers" as required by the '274 and '253 patents, or is there a functional distinction between a simple continuity check and the data-capable communication potentially contemplated by the patent specification?
  • A second key question will be one of evidentiary mapping: given the assertion of a large, diverse patent family against a single product line, the case will likely focus on whether the specific mechanical and electrical implementations in the CR360 and CR360-UTC products meet the detailed claim limitations for the various distinct inventions, such as the specific cam-driven locking mechanism of the '481 patent and the angled-cap sound chamber of the '082 patent.
  • The allegations of pre-suit notice for a majority of the asserted patents raise the question of willfulness: what evidence will be presented to establish Defendant's state of mind regarding infringement after allegedly being made aware of the patents, and how might that influence potential damages?