Consolidated Transaction Processing LLC v. Johnny Was LLC

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Consolidated Transaction Processing LLC (Nevada)
  • Defendant: Johnny Was LLC (Delaware)
  • Plaintiff’s Counsel: DEVLIN LAW FIRM LLC
• Case Identification: 1:22-cv-02825, N.D. Ill., 05/27/2022
• Venue Allegations: Plaintiff alleges venue is proper because Defendant maintains an established place of business in the district, specifically a retail store in Chicago, Illinois.
• Core Dispute: Plaintiff alleges that Defendant’s e-commerce transaction processing systems infringe patents related to generating and sending user-specific, targeted product offerings based on aggregated customer and product data.
• Technical Context: The patents address methods for personalizing the online shopping experience by dynamically creating product catalogs and offers from a centralized database of products sourced from multiple distributors.
• Key Procedural History: The complaint does not allege any prior litigation, Inter Partes Review (IPR) proceedings, or specific licensing history concerning the patents-in-suit. The patents-in-suit share a common specification and are part of the same patent family.

Case Timeline

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

U.S. Patent No. 8,712,846 - "Sending Targeted Product Offerings Based on Personal Information" (Issued Apr. 29, 2014)

The Invention Explained

• Problem Addressed: The patent’s background section describes the limitations of traditional retail and early e-commerce models, which either relied on costly physical inventory or used the internet merely as a replacement for static paper catalogs, leading to high costs and an inability to dynamically respond to customer data (Compl. ¶11; ’846 Patent, col. 2:63-3:14).
• The Patented Solution: The invention is a system that aggregates product data from multiple distributors and customer data from multiple users into a centralized database. This combined data is then used by a "Catalog Builder/Price Modeler" to dynamically generate and send user-specific product offerings via automated messages, creating a personalized shopping experience without the retailer needing to hold inventory (’846 Patent, Abstract; col. 4:50-6:16).
• Technical Importance: This approach enabled a more automated and customized e-commerce system that could aggregate product offerings from various sources and tailor them to individual users or user groups (’846 Patent, col. 5:7-20; Compl. ¶¶14-16).

Key Claims at a Glance

• Independent Claim Asserted: Claim 1.
• Essential Elements of Claim 1:
  • A computer-implemented method for targeted product offering, comprising:
  • receiving product data for a plurality of products from a plurality of distributors for the products via a communications network;
  • receiving customer data from a plurality of customers, the customer data comprising location information associated with customers, the location information derived from an IP address associated with one or more of the customers;
  • generating, at least in part from the customer data, user-specific product offerings from the plurality of products; and
  • sending, by a computer, automated messages comprising the user-specific product offerings to the one or more of the customers.
• The complaint also asserts dependent claims 3 and 4 and notes the infringement allegations are "preliminary and exemplary" (Compl. ¶30).

U.S. Patent No. 8,396,743 - "Sending Targeted Product Offerings Based on Personal Information" (Issued Mar. 12, 2013)

The Invention Explained

• Problem Addressed: The ’743 Patent, sharing a specification with the ’846 Patent, identifies the same technical problems: the shortcomings of store-based and catalog retailing, and the failure of early e-commerce systems to move beyond a static, inventory-heavy model (’743 Patent, col. 1:21-2:21).
• The Patented Solution: The invention describes a computerized method to provide targeted product offerings by receiving product data from multiple distributors and customer data (including location information from an IP address), and using this information to generate user-specific offers that are then sent to customers via automated messages (’743 Patent, Abstract; col. 11:36-12:21).
• Technical Importance: The invention provided a technical framework for creating a more personalized and efficient online marketplace by aggregating data from disparate sources to create customized electronic catalogs (’743 Patent, col. 4:50-59; Compl. ¶19).

Key Claims at a Glance

• Independent Claim Asserted: Claim 1.
• Essential Elements of Claim 1:
  • A computer-implemented method for targeted product offering, comprising:
  • receiving product data for a plurality of products from a plurality of distributors for the products via a communications network;
  • receiving customer data from a plurality of customers, the customer data comprising location information associated with customers, the customer location information derived from an IP address associated with the customer;
  • generating, at least in part from the personal information concerning a customer location, at least one user-specific product offering from the plurality of products; and
  • sending, by a computer, automated messages comprising the at least one user-specific product offering to the one or more customers.
• The complaint also asserts dependent claim 4 and notes the infringement allegations are "preliminary and exemplary" (Compl. ¶35).

III. The Accused Instrumentality

Product Identification

• The complaint refers generally to the "Accused Instrumentalities" but does not name a specific software, platform, or service (Compl. ¶30). It is described as the e-commerce systems that Defendant Johnny Was uses to conduct online business transactions (Compl. ¶11).

Functionality and Market Context

• The complaint alleges that Defendant's systems engage in "electronic transaction processing over a communications network" and provide "internet transactions based on user-specific information and sending targeted product offerings" (Compl. ¶11). The complaint does not provide further detail on the specific functionality or technical operation of the accused systems, nor does it make allegations regarding their specific market position or commercial importance. No probative visual evidence provided in complaint.

IV. Analysis of Infringement Allegations

The complaint references "preliminary and exemplary claim charts" in Exhibits 3 and 4, which were not attached to the filed complaint document (Compl. ¶¶30, 35). In the absence of the claim charts, the infringement theory is based on the narrative allegations in the complaint.

Plaintiff’s infringement theory appears to be that Defendant's e-commerce website and associated back-end systems practice the methods claimed in the ’846 and ’743 patents (Compl. ¶¶30, 35). This theory alleges that Defendant’s systems receive product data (from its various brand suppliers, who are alleged to be the "plurality of distributors") and customer data (from website visitors, including IP-address-derived location information). The complaint further alleges that Defendant's systems use this data to generate and display "user-specific product offerings" and send "automated messages" (such as marketing emails or order confirmations) to customers, thereby infringing the asserted claims (Compl. ¶12, ¶23).

• Identified Points of Contention:
  • Technical Question: The complaint asserts that the patents solve problems related to aggregating data from a "plurality of distributors" to create dynamic catalogs (Compl. ¶14). A central question will be whether Defendant’s system, which appears to operate as a single retailer selling products it sources from multiple brands, performs the same function as the patented system, which the specification describes as a platform that can poll multiple distributors to select one to fill an order (’846 Patent, col. 9:8-25).
  • Scope Question: The patents claim the generation of a "user-specific product offering" based on customer data like location (’743 Patent, cl. 1). A key dispute may arise over whether standard e-commerce functionality, such as showing a user products they have browsed or displaying prices in local currency, meets the definition of this claim element, or if the term requires the more specific generation of distinct "catalogs" for different user types as described in the patent's embodiments (’846 Patent, col. 6:6-16).

V. Key Claim Terms for Construction

• The Term: "a plurality of distributors" (’846 Patent, cl. 1; ’743 Patent, cl. 1)

• Context and Importance: The infringement case may depend on whether Defendant, a single retailer, can be said to receive product data from a "plurality of distributors." The defense may argue that Johnny Was is a single entity, not an aggregator of third-party distributors as depicted in the patent.

• Intrinsic Evidence for Interpretation:

  • Evidence for a Broader Interpretation: The specification suggests the system is not limited to large, integrated distributors, stating that an "alternative system may be provided" for "small distributors or individual vendors" (’846 Patent, col. 5:52-59). Plaintiff may argue this language broadens the term to include a retailer’s relationship with its various brand suppliers.
  • Evidence for a Narrower Interpretation: The patent’s detailed description and figures heavily imply a system that actively selects from among multiple distributors to fill a single order, based on criteria like price and availability (’846 Patent, Fig. 5; col. 9:8-25). Defendant may argue this context narrows the term to entities that function as independent fulfillment sources within a unified marketplace, not simply suppliers to a single retailer.

• The Term: "user-specific product offering" (’846 Patent, cl. 1; ’743 Patent, cl. 1)

• Context and Importance: The viability of the infringement claim depends on whether the output of Defendant's e-commerce site constitutes a "user-specific product offering." Practitioners may focus on whether this term requires more than conventional personalization.

• Intrinsic Evidence for Interpretation:

  • Evidence for a Broader Interpretation: The claims require the offering to be generated "at least in part" from customer data, which could be argued to cover a wide range of personalization, including targeted advertisements or promotions based on browsing history (’846 Patent, cl. 1; col. 5:15-20).
  • Evidence for a Narrower Interpretation: The specification provides specific examples, such as showing a student a "catalog of mixed products appropriate for students with academic pricing" versus a business person seeing a catalog with "corporate discounts" (’846 Patent, col. 6:6-16). This may support a narrower construction requiring the generation of distinct, customized catalogs for different user profiles, rather than generic personalization.

VI. Other Allegations

• Willful Infringement: The complaint does not contain explicit allegations of willful infringement or pre-suit knowledge of the patents-in-suit. However, the prayer for relief requests "a declaration that this case is exceptional under 35 U.S.C. § 285," which is a remedy often associated with findings of willful infringement or other litigation misconduct (Compl. p. 9, ¶C). The complaint does not, however, plead specific facts to support this request.

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

The resolution of this dispute may turn on the following central questions:

1. A core question of structural equivalence: Can the patent claims, which describe a system for receiving data from and selecting among a "plurality of distributors," be read to cover the operations of a single online retailer that sources its inventory from various brand suppliers? The outcome may depend on whether the court construes "distributors" to mean independent fulfillment entities or more broadly as any product source.

2. A key question of definitional scope: Does the term "user-specific product offering," as generated from customer location data, encompass standard e-commerce personalization features? Or does the patent’s specification limit the term to the more complex, dynamic generation of unique catalogs with different pricing and product mixes for discrete classes of users?