DCT
1:18-cv-01815
Valentine Communications LLC v. Six Continents Hotels Inc
Key Events
Amended Complaint
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: Valentine Communications, LLC (Delaware)
- Defendant: Six Continents Hotels, Inc. (Delaware)
- Plaintiff’s Counsel: Watson LLP
- Case Identification: 1:18-cv-01815, N.D. Ga., 05/29/2018
- Venue Allegations: Plaintiff alleges venue is proper because Defendant has committed acts of infringement in the Northern District of Georgia and maintains a regular and established place of business in the district.
- Core Dispute: Plaintiff alleges that Defendant’s IHG Mobile App infringes two patents related to methods for providing location-based discounts and for collecting and using data on a mobile device to deliver offers.
- Technical Context: The technology at issue addresses mobile e-commerce systems that provide dynamic, criteria-based offers to users, a central feature in the competitive online travel and hospitality booking industry.
- Key Procedural History: The operative pleading is a Second Amended Complaint. The patents-in-suit claim priority back to a 2003 provisional application, establishing an early priority date in the field of mobile commerce.
Case Timeline
| Date | Event |
|---|---|
| 2003-06-16 | Earliest Priority Date (’672 Patent) |
| 2004-06-15 | Priority Date (’785 Patent) |
| 2013-10-29 | U.S. Patent No. 8,567,672 Issued |
| 2013-11-26 | U.S. Patent No. 8,590,785 Issued |
| 2018-05-29 | Complaint Filing Date |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 8,567,672 - "Location Based Discounts" (issued Oct. 29, 2013)
The Invention Explained
- Problem Addressed: The patent describes conventional e-commerce systems as being inflexible, often forcing buyers to focus only on price while ignoring other important criteria like delivery time, quality, or warranty terms. These systems also limit a seller's ability to understand and cater to the non-price-related needs of potential buyers (’672 Patent, col. 1:45-54).
- The Patented Solution: The invention proposes a more dynamic, multi-criteria e-commerce system where sellers can define deals based on a variety of parameters, not just price. A user can then input their specific buying criteria, and the system matches them with corresponding seller offers (’672 Patent, col. 3:7-20). The system is designed to provide both buyers and sellers with more control and information to facilitate more efficient transactions (’672 Patent, Abstract).
- Technical Importance: The technology conceptualized a sophisticated electronic marketplace that moved beyond simple price-based auctions toward a multi-attribute negotiation model, aiming to better align complex commercial needs with tailored offers.
Key Claims at a Glance
- The complaint asserts independent claim 18 (Compl. ¶11).
- Claim 18 recites a non-transitory computer-readable storage medium with instructions for a method of providing a discount, the key steps of which include:
- Receiving real-time location information of a user device based on user consent.
- Receiving user-defined search criteria (e.g., quantity, date range).
- Receiving a discount offered by a seller (including pricing and quantity available in a date range).
- Matching the discount to the user based on quantity, date range, and a user-specified location.
- Accessing a user account with past transactional information and a stored payment method.
- Presenting a discount that requires redemption within a preset time period or based on availability.
- The complaint does not explicitly reserve the right to assert other claims, though this is common practice in patent litigation.
U.S. Patent No. 8,590,785 - "Discounts in a Mobile Device" (issued Nov. 26, 2013)
The Invention Explained
- Problem Addressed: The patent identifies that buyers often operate independently, leading to missed opportunities for group discounts. It notes the inconvenience for individual consumers to coordinate their purchasing activities to gain collective bargaining power (’785 Patent, col. 2:26-31).
- The Patented Solution: The invention describes a system for a mobile device that facilitates group buying. It involves prompting a user to accept terms regarding data collection, generating purchasing and location-based data on the device, and transmitting that data to a third party. In response, the device receives targeted offers, effectively using aggregated data to enable discounts (’785 Patent, Abstract; col. 4:20-43).
- Technical Importance: This patent addresses an early model for mobile-based group purchasing platforms, where user data is leveraged to create collective buying power and deliver targeted commercial offers.
Key Claims at a Glance
- The complaint asserts independent claim 1 (Compl. ¶33).
- Claim 1 recites a mobile device comprising a storage medium with instructions and other components, which collectively:
- Prompt a user to accept terms and conditions regarding data collection, use, and protection.
- Inform the user that collection of some information cannot be blocked.
- Generate purchasing data (e.g., from credit/debit card use).
- Include a location-based service module to generate location data.
- Include a wireless transmitter to transmit location data and a subset of purchasing data to a third party.
- Receive an offer in response to the data transmission.
- The complaint does not explicitly reserve the right to assert other claims.
III. The Accused Instrumentality
Product Identification
The IHG Mobile App ("Accused Instrumentality") (Compl. ¶11, ¶33).
Functionality and Market Context
- The complaint alleges the IHG Mobile App operates on mobile phones and provides users with the ability to search for and book hotel rooms, which are services offered by Defendant (Compl. ¶12, ¶15). The app is alleged to provide discounts and rewards to users (Compl. ¶13).
- Key alleged technical functions include receiving user-defined criteria such as number of rooms, guests, and dates (Compl. ¶15-16); matching available discounts to those criteria (Compl. ¶19); obtaining user consent to a privacy policy for data collection (Compl. ¶14, ¶36); generating purchasing data from bookings (Compl. ¶38); using a location-based module to generate location data (Compl. ¶39); and transmitting user data to third parties (Compl. ¶40). The app is also alleged to provide access to user accounts containing past transactional information ("My Bookings") and stored payment methods (Compl. ¶21-22).
- No probative visual evidence provided in complaint.
IV. Analysis of Infringement Allegations
’672 Patent Infringement Allegations
| Claim Element (from Independent Claim 18) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| receiving real-time location information of the user device when the user has consented to having information associated with the user device collected by a third party; | The app provides an option to agree to a privacy policy, which states that a server collects location information associated with the user device and shares it with third-party vendors. | ¶14 | col. 27:8-11 |
| receiving user-defined search criteria sent by the user device, wherein the criteria includes... a quantity of a product or service, and at least one date range... | IHG servers receive user-defined criteria from the app, including number of rooms, guests (quantity), and a date range for the stay. | ¶15, ¶16 | col. 27:12-19 |
| receiving a discount offered by at least one seller, the discount including pricing information... and a quantity... available for delivery... within a given date range... | The app receives and presents discount and reward offers from sellers, including pricing information and the quantity of product (rooms and guests) for a given date range. | ¶17, ¶18 | col. 27:20-26 |
| ...matches the discount to the user based on... the quantity..., the date range..., and a location specified by the user... | The app matches the discount to the user based on the user-defined criteria (quantity, date range) and the service is performed at the location specified by the user (the hotel). | ¶19, ¶20 | col. 27:29-39 |
| accessing by way of the user device an account with past transactional information and a stored payment method associated with the user; | The app provides a user account facility ("My Bookings") that stores past transactional information and also stores a payment method like a credit card. | ¶21, ¶22 | col. 27:40-43 |
| presenting the discount that requires the user to redeem the discount within a preset time period or based on availability of the product or service. | The app requires the user to redeem reward points within a present time period, and the discount is subject to the availability of rooms. | ¶23 | col. 28:1-4 |
’785 Patent Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| prompt a user to accept terms and conditions... as a requirement to activate a service... | The app prompts the user to accept terms and conditions to activate the hotel booking service. | ¶35 | col. 22:7-10 |
| wherein the terms and conditions provide notice to the user regarding... how information collected... will be used... will be protected, and... that collection of at least some of the information... cannot be blocked... | The app's Privacy Policy provides notice on how collected information will be used and protected, and also provides notice that some information (e.g., IP address) is collected automatically and cannot be blocked. | ¶36, ¶37 | col. 22:11-19 |
| generate purchasing data associated with the user that includes information about products or services purchased by way of a credit or debit card; | The app generates purchasing data that includes details about products (e.g., hotel price details) purchased with a credit or debit card. | ¶38 | col. 22:20-23 |
| a location-based service module executable to generate location-based data... | The app includes a location-based module using cell tower, satellite, or WiFi signals to generate location data corresponding to the user's activities and location. | ¶39 | col. 22:24-27 |
| a wireless transmitter that... transmits the location-based data to a third party, [and] automatically transmits at least a subset of the purchasing data. | The app, running on a mobile phone, includes a wireless transmitter to transmit location information to a third party (e.g., a phone carrier) and automatically transmits a subset of purchasing data (e.g., hotel information). | ¶40, ¶41 | col. 22:29-33 |
| receives an offer for the product or service in response to the transmission of the subset of purchasing data... | The mobile device running the app receives an offer (e.g., discounts, rewards, hotel booking) in response to the data transmission, in accordance with a search function. | ¶42 | col. 23:3-8 |
Identified Points of Contention
- Scope Questions: A central question for the '672 patent will be whether the distributed architecture of the IHG app and its servers maps onto the specific sequence of steps recited in claim 18. For instance, the claim requires a set of instructions that performs multiple steps of receiving and matching. The court may need to determine if these steps are all performed by the accused app on the user's device, or if actions performed by Defendant's remote servers can satisfy limitations of a claim directed to a "computer-readable storage medium."
- Technical Questions: For the '785 patent, the interpretation of "third party" will be critical. The complaint alleges transmission to a "phone carrier" (Compl. ¶40). A point of contention may be whether a data conduit like a carrier qualifies as a "third party" in the context of the patent's commercial ecosystem, or if the term implies an entity that uses the data for a commercial purpose, such as a partner or advertiser.
V. Key Claim Terms for Construction
Term: "receiving a discount offered by at least one seller" (’672 Patent, Claim 18)
- Context and Importance: The location of this "receiving" step—whether it occurs on the user's mobile device or on a remote server—is fundamental to the infringement analysis. The claim is for a storage medium (e.g., the app), and if this step occurs only on a server, it could raise questions of divided infringement. Practitioners may focus on this term to determine if the claim requires all recited functions to be performed by the single accused "instrumentality."
- Intrinsic Evidence for a Broader Interpretation: The specification describes a system with multiple components, including a central server and client computers (e.g., ’672 Patent, Fig. 7). This distributed architecture may support an interpretation that "receiving" can occur at any part of the system operated by the defendant.
- Intrinsic Evidence for a Narrower Interpretation: The claim is directed to a "non-transitory computer-readable storage medium having embodied thereon instructions." A defendant may argue that this structure requires the instructions on the medium itself to perform the "receiving" step, suggesting the action must occur locally on the user's device where the app is stored.
Term: "a wireless transmitter that... transmits the location-based data to a third party" (’785 Patent, Claim 1)
- Context and Importance: The identity of the "third party" is crucial. If it is construed narrowly to mean a commercial partner that uses the data, alleging transmission to a "phone carrier" may not be sufficient to prove infringement. The viability of the infringement theory for the '785 patent could depend heavily on this construction.
- Intrinsic Evidence for a Broader Interpretation: The plain and ordinary meaning of "third party" is any entity not party to the primary interaction (e.g., the user and the service provider). The claim language itself does not appear to further qualify the term, which may support reading it to include any external entity, such as a data carrier.
- Intrinsic Evidence for a Narrower Interpretation: The patent's background and summary discuss creating a commercial ecosystem for group buying and rewards (’785 Patent, col. 2:48-60). A defendant may argue that this context limits "third party" to participants in that ecosystem (e.g., other sellers, advertisers) and excludes passive data conduits that do not use the substance of the data.
VI. Other Allegations
Indirect Infringement
The complaint's prayers for relief request injunctions against contributory and induced infringement (Compl., p. 6, 9). However, the factual allegations within the infringement counts primarily articulate a theory of direct infringement and do not set forth specific facts to support the knowledge and intent required for indirect infringement claims.
Willful Infringement
The complaint alleges that, upon information and belief, Defendant had knowledge of the patents-in-suit and that its infringement was therefore willful (Compl. ¶26, ¶45). The complaint does not allege specific facts supporting pre-suit knowledge, such as prior correspondence or citation in other proceedings.
VII. Analyst’s Conclusion: Key Questions for the Case
- A core issue will be one of architectural mapping: can Plaintiff demonstrate that the functions performed across the IHG Mobile App (client) and its backend systems (server) satisfy, in the correct sequence, every limitation of a patent claim directed to a single "computer-readable storage medium"?
- The case may also turn on a question of definitional scope: does the term "third party," within the context of transmitting user data for commercial offers as described in the '785 patent, encompass a telecommunications carrier acting as a mere data conduit, or is it limited to an entity that actively participates in the commercial ecosystem?
- A central evidentiary question will be what proof is offered to show that the accused app and its associated systems perform the specific technical steps as claimed. Allegations based on the language of privacy policies and general app functions will need to be substantiated with evidence of the system's actual operation.