Consolidated Transaction Processing LLC v. BPS Direct LLC

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Consolidated Transaction Processing LLC (Nevada)
  • Defendant: BPS Direct, LLC (Missouri)
  • Plaintiff’s Counsel: DEVLIN LAW FIRM LLC
• Case Identification: 1:23-cv-04172, N.D. Ill., 06/28/2023
• Venue Allegations: Venue is alleged to be proper based on Defendant maintaining an established place of business within the district, specifically a retail store located in Bolingbrook, Illinois.
• Core Dispute: Plaintiff alleges that Defendant’s e-commerce platform infringes patents related to systems and methods for aggregating product data from multiple distributors and using customer information to generate and send targeted product offerings.
• Technical Context: The technology addresses the e-commerce challenge of creating dynamic, personalized online catalogs by integrating real-time product data from various suppliers with specific user data, moving beyond the static, inventory-heavy models of early online retail.
• Key Procedural History: The patents-in-suit claim priority back to an application filed in 1999, suggesting a long history of prosecution. The complaint requests a declaration that the case is "exceptional" but does not allege pre-suit knowledge or other specific facts that typically underpin such a request.

Case Timeline

Date	Event
1999-06-30	Priority Date for ’846 & ’743 Patents
2013-03-12	U.S. Patent No. 8,396,743 Issued
2014-04-29	U.S. Patent No. 8,712,846 Issued
2023-06-28	Complaint Filed

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

U.S. Patent No. 8,712,846 - "Sending Targeted Product Offerings Based on Personal Information", issued April 29, 2014

The Invention Explained

• Problem Addressed: The patent describes the limitations of traditional commerce models, including the high costs and inflexibility of maintaining physical inventory and the static nature of early e-commerce, which often simply replaced paper catalogs without fundamentally changing the business process (’846 Patent, col. 2:63-3:14; Compl. ¶11).
• The Patented Solution: The invention proposes a centralized, computer-implemented system that solves this problem by receiving product data from a plurality of different distributors and customer data from a plurality of customers. Using this aggregated data, the system generates "user-specific product offerings" that are then conveyed to customers via automated messages (’846 Patent, Abstract; col. 3:44-52). This allows a merchant to offer a wide, dynamically updated range of products without holding inventory.
• Technical Importance: This technology represents a shift toward a more sophisticated e-commerce model that leverages data aggregation from multiple sources to enable personalized marketing and a "drop-shipping" style of fulfillment, increasing marketplace access for smaller distributors (Compl. ¶19).

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 requires:
  • A computer-implemented method for targeted product offering.
  • Receiving product data for a plurality of products from a plurality of distributors via a communications network.
  • Receiving customer data from a plurality of customers, where the data includes location information derived from a customer's IP address.
  • Generating, based at least in part on the customer data, user-specific product offerings.
  • Sending, by a computer, automated messages comprising the user-specific product offerings to customers.
• The complaint reserves the right to assert additional claims.

U.S. Patent No. 8,396,743 - "Sending Targeted Product Offerings Based on Personal Information", issued March 12, 2013

The Invention Explained

• Problem Addressed: As a parent to the ’846 Patent with a shared specification, this patent addresses the same technical problem: the inefficiency of prior art e-commerce systems that operated like traditional retailers with large inventories and offered static, non-personalized catalogs to customers (’743 Patent, col. 1:22-2:21; Compl. ¶18).
• The Patented Solution: The invention is a computer-implemented method for creating targeted offerings by combining product data from multiple distributors with customer data, which specifically includes location information derived from the customer's IP address (’743 Patent, col. 11:36-12:21). The system uses this combined information to dynamically generate and send user-specific offers.
• Technical Importance: The invention provided a framework for a more automated and customized online shopping experience, allowing businesses to dynamically select distributors and tailor pricing and product presentation to individual users or user groups (Compl. ¶15, ¶17).

Key Claims at a Glance

• The complaint asserts independent claim 1 and dependent claim 4 (Compl. ¶35).
• Independent Claim 1 of the ’743 Patent requires:
  • A computer-implemented method for targeted product offering.
  • Receiving product data for a plurality of products from a plurality of distributors.
  • Receiving customer data from a plurality of customers, including location information derived from an IP address.
  • Generating, at least in part from personal information concerning a customer location, at least one user-specific product offering.
  • Sending automated messages containing the user-specific product offering.
• The complaint reserves the right to assert additional claims.

III. The Accused Instrumentality

Product Identification

The complaint refers generally to the "Accused Instrumentalities," which appear to be the e-commerce systems, websites, and associated methods made, used, or provided by Defendant BPS Direct (Compl. ¶30, ¶35).

Functionality and Market Context

The complaint does not provide specific details on the functionality or architecture of the Accused Instrumentalities. The infringement allegations are premised on the belief that BPS Direct's e-commerce operations perform the functions recited in the patents-in-suit, such as utilizing customer and product data to generate and process online transactions and targeted advertisements (Compl. ¶22-24). The complaint alleges these types of automated and customized online shopping features provide significant commercial value and are crucial for merchants to distinguish themselves (Compl. ¶20).

IV. Analysis of Infringement Allegations

The complaint alleges that infringement details are provided in claim chart exhibits attached to the complaint (Compl. ¶30, ¶35). As these exhibits were not provided, a detailed element-by-element analysis is not possible. The narrative infringement theory, based on the complaint's text, is that Defendant's e-commerce system necessarily performs the steps of the asserted claims by operating an online retail business that sources products and markets them to customers over the internet.

No probative visual evidence provided in complaint.

• Identified Points of Contention:
  • Technical Questions: A primary point of contention will likely be factual and evidentiary. What evidence can Plaintiff produce to show that Defendant’s system architecture performs each specific step of the asserted claims? For example, does the system actually "receive product data from a plurality of distributors" in a manner that aligns with the patent's teachings, and does it "generat[e]" offerings that are "user-specific" based on "location information derived from an IP address"?
  • Scope Questions: The dispute may turn on the scope of the claims. For instance, does the defendant's method of sourcing products from multiple suppliers fall within the scope of "receiving product data from a plurality of distributors," as that phrase is used in the context of the patent's detailed description of a centralized database architecture? (’846 Patent, Fig. 1, col. 3:56-61).

V. Key Claim Terms for Construction

• The Term: "user-specific product offering"

• Context and Importance: This term is the central output of the claimed invention. Its construction will be critical to determining the threshold for infringement. The question is what degree of personalization or targeting is required for an "offering" to be "user-specific." Practitioners may focus on this term because if it is construed broadly to cover any generalized marketing (e.g., a seasonal sale), the claims may be vulnerable to prior art challenges; if construed narrowly, infringement may be difficult to prove.

• Intrinsic Evidence for Interpretation:

  • Evidence for a Broader Interpretation: The specification provides examples of generating different catalogs for broad user types, such as a "student" versus a "business person," which suggests that 1-to-1 personalization is not required (’846 Patent, col. 6:6-16).
  • Evidence for a Narrower Interpretation: The claim language explicitly links the generation of the offering to "customer data" that includes "location information derived from an IP address" (’846 Patent, cl. 1). This could support a narrower construction requiring the offering to be tailored based on the user's specific location or other personal data, not just a broad category.

• The Term: "receiving product data for a plurality of products from a plurality of distributors"

• Context and Importance: This limitation defines the required system input and architecture. The infringement analysis will depend on whether the defendant's supply chain and data management practices meet this definition. The core question is whether simply offering products for sale that originate from different suppliers is sufficient, or if a more specific technical integration is required.

• Intrinsic Evidence for Interpretation:

  • Evidence for a Broader Interpretation: The claim language itself does not specify the mechanism of receipt, which could support an interpretation covering any method of obtaining product information from more than one source for online display.
  • Evidence for a Narrower Interpretation: The detailed description depicts a specific architecture where a "Catalog Builder/Price Modeler" automatically receives and processes product information from distributors to build a centralized "Products Database" (’846 Patent, col. 5:21-41, Fig. 1). This could support a narrower construction that requires an automated, integrated data-ingestion system, potentially excluding more manual or ad-hoc methods of sourcing products.

VI. Other Allegations

• Indirect Infringement: The complaint uses the phrase "causing to be used" but does not plead a separate count for indirect infringement or allege specific facts to support the requisite knowledge and intent, such as referencing user manuals or marketing materials that instruct infringing use (Compl. ¶30, ¶35). The complaint does not provide sufficient detail for analysis of indirect infringement.
• Willful Infringement: The complaint does not contain an explicit allegation of willful infringement. It does, however, include a prayer for a declaration that the case is "exceptional" under 35 U.S.C. § 285, which is the basis for awarding attorney's fees (Compl. p. 9, ¶C). The complaint does not allege any facts, such as pre-suit notice of the patents or egregious conduct, to support this request.

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

• A central issue will be one of evidentiary proof and technical implementation: Can the Plaintiff demonstrate, through discovery, that the internal architecture and operation of the Defendant’s e-commerce platform maps onto the specific limitations of the asserted claims? Key will be showing not just that Defendant sells products online, but that its system specifically "receives" data from multiple distributors and "generates" offerings based on IP-derived location data as claimed.
• The case will also likely hinge on claim construction: The court's interpretation of the term "user-specific product offering" will be critical. Defining the required level of personalization—and whether it must be directly tied to a user's IP address—will substantially narrow or broaden the scope of conduct that can be found to infringe.
• A third key question is one of validity in view of the priority date: Given the 1999 priority date, the patents predate much of modern e-commerce. A key battleground may involve whether the claims, if construed broadly enough to cover the accused system, are also broad enough to read on prior art e-commerce systems that existed before the effective filing date.