Consolidated Transaction Processing LLC v. Target Corp

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Consolidated Transaction Processing LLC (Nevada)
  • Defendant: Target Corporation (Minnesota)
  • Plaintiff’s Counsel: DEVLIN LAW FIRM LLC
• Case Identification: 1:22-cv-06814, N.D. Ill., 12/05/2022
• Venue Allegations: Plaintiff alleges venue is proper in the Northern District of Illinois because Defendant Target Corporation maintains established places of business, specifically retail stores, within the district.
• Core Dispute: Plaintiff alleges that Defendant’s e-commerce system for processing online transactions infringes patents related to aggregating product data from multiple sources and using customer data to generate user-specific product offerings.
• Technical Context: The technology at issue addresses methods for creating dynamic and personalized online retail experiences, moving beyond static, inventory-heavy e-commerce models.
• Key Procedural History: The patents-in-suit claim priority back to a 1999 application and are part of a larger family of patents resulting from a long prosecution history. The complaint does not mention any prior litigation, inter partes review (IPR) proceedings, or licensing history related to these patents.

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 describes prior art e-commerce systems as being inefficient, similar to traditional retail models that require maintaining costly inventory in warehouses. These systems used the internet primarily as a static advertising medium, akin to a print catalog, which limited their ability to personalize the shopping experience or adapt quickly to market changes (Compl. ¶11; ’846 Patent, col. 2:63-3:14).
• The Patented Solution: The invention proposes a centralized transaction processing system that aggregates product data from multiple, distinct distributors and combines it with personal information collected from customers. This integrated data is then used to dynamically generate and send user-specific product offerings via automated messages, creating a more personalized and efficient e-commerce platform (’846 Patent, Abstract; ’846 Patent, col. 3:44-52). A key feature is the ability to build and continually update a product database from these multiple distributor sources, allowing for dynamic catalog and price generation (’846 Patent, col. 5:22-50).
• Technical Importance: This approach is presented as an improvement that allows a merchant to offer a wider array of products without the financial risk of carrying inventory, while using customer data to create a more tailored online shopping experience (Compl. ¶19-¶20).

Key Claims at a Glance

• The complaint asserts independent claim 1 and dependent claims 3 and 4 (Compl. ¶30).
• Independent Claim 1 of the ’846 Patent recites these essential elements:
  • A computer-implemented method for targeted product offering.
  • 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.
  • Sending, by a computer, automated messages comprising the user-specific product offerings to the one or more of the customers.
• The complaint reserves the right to assert additional claims (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, an ancestor of the ’846 Patent, addresses the same technical problem: the inflexibility and high overhead of early e-commerce systems that maintained their own inventory and offered a one-size-fits-all, non-interactive user experience (’743 Patent, col. 2:51-3:14).
• The Patented Solution: The solution is a transaction processing system designed to interface with multiple distributors to source product data and with customers to gather personal data. The system uses this information to dynamically generate customized electronic catalogs and price products using a rule-based algorithm, thereby personalizing the offerings for different users (e.g., a student versus a business person) (’743 Patent, Abstract; ’743 Patent, col. 5:61-6:16).
• Technical Importance: The invention is described as enabling a more sophisticated e-commerce model where product offerings and prices can be adjusted in real-time based on distributor data and customer profiles, a significant step beyond static online storefronts (Compl. ¶14-¶15).

Key Claims at a Glance

• The complaint asserts independent claim 1 and dependent claim 4 (Compl. ¶35).
• Independent Claim 1 of the ’743 Patent recites these essential elements:
  • A computer-implemented method for targeted product offering.
  • 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.
  • Sending, by a computer, automated messages comprising the at least one user-specific product offering to the one or more customers.
• The complaint reserves the right to assert additional claims (Compl. ¶35).

III. The Accused Instrumentality

Product Identification

• The complaint identifies the accused technology as the "Accused Instrumentalities" but does not name a specific Target product, service, or system in the body of the complaint. It refers to "preliminary and exemplary claim charts" in Exhibits 3 and 4 for the details of infringement (Compl. ¶30, ¶35). These exhibits were not included with the complaint document.

Functionality and Market Context

• Based on the nature of the patents-in-suit and the defendant, the accused instrumentalities are understood to be Target's e-commerce platform, including its website (Target.com) and associated backend systems for processing online orders and personalizing customer experiences. The complaint alleges that the automation and user-specific customization provided by such systems are crucial for businesses to distinguish themselves in the modern online retail market (Compl. ¶20). The complaint does not provide specific details regarding the technical operation of Target's systems. No probative visual evidence provided in complaint.

IV. Analysis of Infringement Allegations

The complaint alleges that Target directly infringes at least claims 1, 3, and 4 of the ’846 Patent and claims 1 and 4 of the ’743 Patent (Compl. ¶30, ¶35). However, the specific factual basis for these allegations is stated to be detailed in external Exhibits 3 and 4, which were not provided with the complaint. The body of the complaint does not contain a narrative description of the alleged infringement or sufficient technical detail to permit the construction of an infringement chart or a substantive analysis of the plaintiff's infringement theory.

V. Key Claim Terms for Construction

• The Term: "plurality of distributors"

  • Context and Importance: This term appears in the independent claims of both patents and is fundamental to the patented architecture. The infringement analysis will depend on whether Target's e-commerce operations, including its supply chain and any third-party marketplace sellers, can be characterized as receiving product data from a "plurality of distributors."
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The patents do not provide a narrow definition, referring to "distributors/vendors" and describing a system that can select from among them to fill an order, which could arguably encompass any distinct product source, including third-party sellers or even separate corporate suppliers (’743 Patent, Fig. 1; ’743 Patent, col. 9:10-13).
    • Evidence for a Narrower Interpretation: The specification's discussion of selecting a distributor based on criteria like profit margin, shipping speed, and price could suggest that "distributors" are independent, competing commercial entities, a definition that a defendant might argue does not apply to its integrated, internal supply chain (’743 Patent, col. 9:26-44).

• The Term: "user-specific product offering"

  • Context and Importance: This term defines the output of the claimed method. Its construction will determine what type of personalization meets the claim limitation. Practitioners may focus on this term to dispute whether dynamically generated web content, such as a personalized homepage, constitutes an "offering" that is "sent" in a "message," as required by the claims.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The specification describes generating "customized portfolios" for "targeted advertising, purchase incentives, specialized promotions, or competitive pricing," which could support a broad reading covering various forms of personalization (’846 Patent, col. 5:15-20).
    • Evidence for a Narrower Interpretation: The claims require "sending...automated messages comprising the...offering." A defendant may argue this requires a discrete communication (like an email or text message), as distinct from merely displaying personalized content on a website. Dependent claim 2 of both patents, which adds limitations like a "coupon" or "promotional offer," might be used to argue about the scope of the independent claim.

• The Term: "location information derived from an IP address"

  • Context and Importance: This is a specific technical requirement for the customer data used in generating the offering. The case may turn on evidence of whether the accused system actually uses IP-based geolocation for personalization, as opposed to other sources like user-provided addresses or mobile device GPS data.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The term "derived from" could be interpreted to mean that IP-based location is merely one of several inputs into a broader location-determination algorithm.
    • Evidence for a Narrower Interpretation: The patent explicitly links the customer's IP address to identification and the generation of offerings, stating the system uses "the customer's IP...address, IP host name, personal information, etc." (’846 Patent, col. 11:13-16). A defendant could argue its system does not use IP data in this claimed manner for generating offerings.

VI. Other Allegations

• Indirect Infringement: The complaint does not contain allegations of indirect infringement (inducement or contributory infringement). The infringement counts allege direct infringement (Compl. ¶30, ¶35).
• Willful Infringement: The complaint does not explicitly allege willful infringement or seek enhanced damages under 35 U.S.C. § 284. It does, however, request a declaration that the case is "exceptional" and an award of attorneys' fees under 35 U.S.C. § 285 (Compl. p. 9, Prayer C). No facts supporting pre- or post-suit knowledge of the patents are alleged in the complaint.

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

1. A definitional question of structure: Can the term "plurality of distributors", as described in the patents, be construed to read on the supply chain and third-party seller relationships of a large, integrated retailer like Target? The outcome of this construction will be pivotal for the infringement analysis.
2. An evidentiary question of technical operation: What evidence will show that the accused e-commerce platform performs the specific process recited in the claims—namely, using customer "location information derived from an IP address" as an input to "generat[e]" a "user-specific product offering" that is then "sen[t]" in an "automated message"? A mismatch in the actual data flow or personalization logic of the accused system could present a significant hurdle for the plaintiff.
3. A procedural question of sufficiency: As the complaint's factual allegations of infringement are deferred to external exhibits not filed with the court, a threshold issue may arise regarding whether the pleading, on its face, provides the "short and plain statement of the claim showing that the pleader is entitled to relief" required by federal procedural rules.