DCT
1:18-cv-03919
Energy Innovation Co LLC v. NCR Corp
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: Energy Innovation Company, LLC (Nevada)
- Defendant: NCR Corporation (Maryland)
- Plaintiff’s Counsel: Foundation Law Group LLP
- Case Identification: 1:18-cv-0466, S.D. Cal., 03/04/2018
- Venue Allegations: Plaintiff alleges venue is proper because Defendant conducts business and has allegedly committed acts of infringement in the Southern District of California.
- Core Dispute: Plaintiff alleges that Defendant’s "Copient Solution" functionality infringes a patent related to customer loyalty systems that identify customers using pre-existing identifiers at the point of sale.
- Technical Context: The technology concerns retail and marketing systems that track customer purchases for loyalty programs and data analysis without requiring the issuance of a new, proprietary membership card.
- Key Procedural History: The complaint alleges that Defendant’s accused "Copient Solution" functionality was previously licensed under the patent-in-suit. It also claims the patent has generated significant licensing revenue, suggesting a history of monetization.
Case Timeline
| Date | Event |
|---|---|
| 1997-07-17 | Earliest Priority Date for '933 Patent |
| 2000-09-19 | U.S. Patent No. 6,119,933 Issues |
| 2018-03-04 | Complaint Filed |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 6,119,933 - Method and Apparatus for Customer Loyalty and Marketing Analysis
Issued: September 19, 2000
The Invention Explained
- Problem Addressed: The patent describes a need for a customer loyalty system that avoids the friction and cost associated with requiring customers to sign up for and carry a new, single-purpose membership card to participate in a rewards program ('933 Patent, col. 2:45-51).
- The Patented Solution: The invention proposes a method and system where a customer can be identified at a point-of-sale (POS) terminal using a variety of pre-existing identifiers, such as a credit card, driver's license, or checking account number ('933 Patent, col. 1:21-36). This identification allows customer transaction data to be captured and stored in a local database, which can then be periodically uploaded to a central data warehouse for marketing analysis without inconveniencing the customer with a new card ('933 Patent, col. 1:37-47, col. 1:55-65; Fig. 1).
- Technical Importance: The claimed approach sought to increase customer participation in loyalty programs by lowering the barrier to entry and to reduce operational costs for businesses by leveraging existing identification methods ('933 Patent, col. 2:64-col. 3:2).
Key Claims at a Glance
- The complaint asserts independent Claim 1 (Compl. ¶10).
- The essential elements of Claim 1 are:
- obtaining from a customer customer identifying information such as name, address and phone number;
- selecting a customer identification means, said means not requiring assignment of a new customer identification number; and
- using said customer identification means to record customer transactions details in a database local to a point-of-sale location.
III. The Accused Instrumentality
Product Identification
- Defendant's "Copient Solution" functionality (Compl. ¶10).
Functionality and Market Context
- The complaint alleges that the Copient Solution is a system or method for customer loyalty and marketing analysis that employs the method covered by Claim 1 of the ’933 Patent (Compl. ¶10).
- The complaint does not provide specific technical details about the operation of the Copient Solution.
- A central allegation is that this same functionality was "previously licensed under the '933 patent," suggesting a prior relationship between the parties concerning the patented technology (Compl. ¶10).
IV. Analysis of Infringement Allegations
No probative visual evidence provided in complaint.
The complaint alleges infringement of Claim 1 but does not include a detailed claim chart exhibit. The allegations are summarized below based on the complaint's narrative.
'933 Patent Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| obtaining from a customer customer identifying information such as name, address and phone number; | The complaint alleges on information and belief that the Copient Solution employs the method of Claim 1, which includes this step. | ¶9-10 | col. 11:35-42 |
| selecting a customer identification means, said means not requiring assignment of a new customer identification number; | The Copient Solution allegedly utilizes a customer identification means that does not require giving the customer a new, unique number for the loyalty system. | ¶9-10 | col. 11:43-46 |
| using said customer identification means to record customer transactions details in a database local to a point-of-sale location. | The Copient Solution allegedly uses the customer's identifier to log transaction details in a database that is local to the point-of-sale. | ¶9-10 | col. 11:47-50 |
- Identified Points of Contention:
- Evidentiary Questions: The complaint's infringement allegations are made on "information and belief" and reference an "Exhibit B" which was not included with the pleading (Compl. ¶10). A primary issue will be whether Plaintiff can produce sufficient evidence demonstrating that the accused Copient Solution performs each of the claimed steps.
- Technical Questions: A key factual question relates to the allegation of a prior license (Compl. ¶10). If the Copient Solution was previously licensed, the dispute may center on whether the product's functionality has changed since the license was terminated or expired, or whether the current use falls outside the scope of any prior agreement.
- Scope Questions: The interpretation of "database local to a point-of-sale location" may be contested. The question is whether this requires a database on the physical POS device or allows for a server within the same retail establishment, especially in the context of modern cloud-based or networked architectures.
V. Key Claim Terms for Construction
The Term: "customer identification means, said means not requiring assignment of a new customer identification number"
Context and Importance: This term is the central feature of the claimed invention, distinguishing it from systems that issue proprietary loyalty cards. Its construction will determine whether systems that link existing identifiers (e.g., a phone number) to a newly-created internal account ID still fall within the claim's scope.
Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The specification provides numerous examples of pre-existing identifiers, such as "a credit card, government-issued id, or checking account," suggesting the focus is on avoiding any new number or card being issued to the customer for the transaction ('933 Patent, Abstract; col. 1:44-47).
- Evidence for a Narrower Interpretation: A party could argue that the claim requires that no new number be assigned at all, even internally. The claim recites that the means itself does not require the assignment, which could be argued to preclude any backend process where a new unique identifier is generated and associated with the customer's pre-existing information.
The Term: "database local to a point-of-sale location"
Context and Importance: This architectural limitation is critical in determining whether the claim reads on modern, highly-distributed, or cloud-based retail systems.
Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The specification describes the local database as being "generally at the retail establishment or quickly accessible to the retail establishment," which could support an interpretation that includes a server on a local area network within the store, not just on the POS device itself ('933 Patent, col. 1:38-40).
- Evidence for a Narrower Interpretation: The patent consistently distinguishes between the "local database" and a "central data warehouse" that is "periodically updated" ('933 Patent, col. 1:55-58, col. 13:13-16). This distinction may support an argument that "local" implies a storage capability that is distinct from, and not in constant real-time communication with, a remote central server.
VI. Other Allegations
- Indirect Infringement: The complaint alleges active inducement, stating Defendant had "full knowledge of the '933 patent" and specifically intended for its customers to infringe (Compl. ¶¶ 11, 13). The allegation of a prior license, if proven, would strongly support the element of knowledge.
- Willful Infringement: Willfulness is alleged based on Defendant’s knowledge of the ’933 Patent (Compl. ¶14). The prior license is the most significant fact supporting this allegation, as it would establish pre-suit knowledge of the patent and its relevance to the accused product.
VII. Analyst’s Conclusion: Key Questions for the Case
- A central issue will be the impact of the alleged prior license. The case will likely turn on the history of the parties' relationship: why was a product previously licensed now accused of infringement? The terms of the prior agreement, the reasons for its cessation, and any changes to the accused product's functionality will be paramount.
- A key evidentiary question will be one of technical proof: can the Plaintiff demonstrate that the current "Copient Solution" actually practices every element of Claim 1? The sparse factual allegations in the complaint suggest discovery will be critical to establishing the operational details of the accused system.
- A dispositive legal question will involve the definitional scope of the claim language, particularly whether a system that links a customer's pre-existing identifier to a newly generated internal account number is still a "means not requiring assignment of a new customer identification number."