Consolidated Transaction Processing LLC v. Caleres Inc

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Consolidated Transaction Processing LLC (Nevada)
  • Defendant: Caleres, Inc. (Missouri)
  • Plaintiff’s Counsel: Devlin Law Firm LLC
• Case Identification: 1:23-cv-04176, N.D. Ill., 06/28/2023
• Venue Allegations: Plaintiff alleges venue is proper because Defendant maintains an established place of business in the district, specifically identifying a Famous Footwear retail store in Chicago, Illinois.
• Core Dispute: Plaintiff alleges that Defendant’s e-commerce systems infringe patents related to generating personalized product catalogs by aggregating data from multiple product sources and combining it with user-specific information.
• Technical Context: The technology relates to early-stage e-commerce systems designed to overcome the limitations of static online catalogs by dynamically creating tailored shopping experiences based on real-time product and customer data.
• Key Procedural History: The patents-in-suit claim priority back to a 1999 application and are the result of a long chain of continuation and divisional applications. The complaint does not mention any prior litigation, licensing, or inter partes review proceedings involving these patents.

Case Timeline

Date	Event
1999-06-30	Earliest Patent Priority Date ('846 and '743 Patents)
2013-03-12	U.S. Patent No. 8,396,743 Issues
2014-04-29	U.S. Patent No. 8,712,846 Issues
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 Apr. 29, 2014)

The Invention Explained

• Problem Addressed: The patent describes the state of e-commerce in the late 1990s as a hybrid model where online storefronts still relied on maintaining physical inventory, inheriting the high costs and inflexibility of traditional retail (Compl. ¶11; '846 Patent, col. 3:6-22). Prior art systems offered static catalogs to all users, failing to aggregate product offerings from multiple sources or personalize the experience (Compl. ¶18).
• The Patented Solution: The invention proposes a centralized transaction processing system that receives product data from a "plurality of distributors" and customer data (including location information derived from an IP address) from a "plurality of customers" ('846 Patent, Abstract). The system then uses this combined data to generate and send "user-specific product offerings," moving beyond a one-size-fits-all online catalog ('846 Patent, col. 4:50-57). The overall architecture, depicted in Figure 1 of the patent, shows how customer and distributor inputs are processed through a central system to generate customized outputs and manage orders ('846 Patent, Fig. 1).
• Technical Importance: This approach aimed to create a more efficient e-commerce model by enabling a merchant to offer a wider, dynamically updated range of products from multiple suppliers without holding the inventory itself, while simultaneously creating a more personalized shopping experience for the customer (Compl. ¶19).

Key Claims at a Glance

• The complaint asserts independent claim 1 and dependent claims 3 and 4 (Compl. ¶30).
• Independent Claim 1 requires a computer-implemented method comprising:
  • receiving product data for a plurality of products from a plurality of distributors;
  • receiving customer data from a plurality of customers, where the customer data includes location information derived from an IP address;
  • generating, based at least in part on the customer data, user-specific product offerings; and
  • sending automated messages containing the user-specific product offerings.

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

The Invention Explained

• Problem Addressed: As part of the same patent family, the '743 Patent addresses the identical technical problem as the '846 Patent: the high costs, inventory risks, and lack of personalization in early e-commerce systems that mimicked traditional retail and catalog sales models ('743 Patent, col. 2:62-3:5).
• The Patented Solution: The '743 Patent discloses the same centralized processing system that integrates product data from multiple distributors with customer data to create dynamic, personalized electronic catalogs ('743 Patent, col. 4:50-57). The solution enables a merchant to select a distributor for a given product based on criteria like price, availability, or shipping speed, thereby improving market access for a wider range of suppliers (Compl. ¶17, ¶19; '743 Patent, col. 9:47-58).
• Technical Importance: The invention provided a framework for a more sophisticated, data-driven approach to e-commerce, allowing for dynamic pricing, real-time catalog generation, and tailored marketing based on aggregated data from otherwise separate market participants (Compl. ¶14-16).

Key Claims at a Glance

• The complaint asserts independent claim 1 and dependent claim 4 (Compl. ¶35).
• Independent Claim 1 requires a computer-implemented method comprising:
  • 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, based at least in part on personal information about a customer's location, a user-specific product offering; and
  • sending automated messages containing the user-specific product offering.

III. The Accused Instrumentality

Product Identification

The complaint does not name a specific product, website, or service. It refers generally to "the Accused Instrumentalities" that Defendant Caleres, Inc. is "making, using, providing, and/or causing to be used" (Compl. ¶30, ¶35).

Functionality and Market Context

The complaint does not describe the specific functionality of any Caleres product. Instead, it alleges in general terms that Caleres's business practices involve the "utilization of product data from a plurality of distributors and personal information of customers in generating electronic catalogs of user-specific product offerings" (Compl. ¶21). Caleres is a publicly-traded corporation that owns and operates numerous footwear brands and retail outlets, including Famous Footwear (Compl. ¶3, ¶7). The allegations imply that the e-commerce platforms for Caleres's brands are the accused instrumentalities.

IV. Analysis of Infringement Allegations

The complaint references preliminary claim charts in Exhibits 3 and 4, which were not attached to the publicly filed document. Therefore, a detailed, element-by-element analysis is not possible based on the provided documents.

The complaint’s narrative theory of infringement for both the '846 and '743 Patents is that the "Accused Instrumentalities" perform the patented methods. The allegations contend that Defendant’s systems receive product data from multiple sources and customer data (which includes personal information), and then manipulate this data to generate and display user-specific product offerings and targeted advertising (Compl. ¶21-24). This process is alleged to directly infringe at least claim 1 of both asserted patents (Compl. ¶30, ¶35). The complaint does not provide specific factual support linking these general allegations to the actual operation of any of Defendant's specific e-commerce platforms.

• Identified Points of Contention:
  • Scope Questions: The dispute may center on whether a large, vertically-integrated retailer like Caleres, which sells products from its own portfolio of brands, can be said to use "a plurality of distributors" in the manner contemplated by the patents. The patents appear to describe a system that connects a central merchant with distinct, third-party suppliers ('846 Patent, col. 9:26-44).
  • Technical Questions: A central evidentiary question will be whether the complaint can show that Defendant's systems generate "user-specific product offerings" based specifically on "location information derived from an IP address," as required by the independent claims. The defense may argue that its personalization features, if any, rely on different data (e.g., purchase history, browsing behavior) or operate in a technically distinct manner from the claimed method.

V. Key Claim Terms for Construction

"plurality of distributors" (Claim 1 of '846 and '743 Patents)

• Context and Importance: This term is fundamental to the patent's architecture, which is premised on aggregating data from multiple, distinct sources. The viability of the infringement claim may depend on whether Defendant's business model, which involves selling goods from its own various brands, meets this limitation.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The patents do not explicitly define "distributor." Plaintiff may argue that different brands or operating divisions within the Caleres corporate structure, each with its own inventory and pricing, function as separate "distributors" from the perspective of the central e-commerce platform.
  • Evidence for a Narrower Interpretation: The specification repeatedly discusses selecting a distributor based on competing factors like "profit margin," "shipping speed," and "availability," which implies distinct, independent commercial entities ('743 Patent, col. 9:26-44). The patent also describes distributors "who may otherwise be excluded in favor of more established entities," suggesting the term refers to third-party suppliers, not internal brands of a single retailer (Compl. ¶19).

"user-specific product offering" generated from "location information" (Claim 1 of '846 and '743 Patents)

• Context and Importance: This phrase links the personalization aspect of the invention directly to a specific type of customer data (IP address-based location). Practitioners may focus on this term because it appears to be a key point of novelty over generic e-commerce personalization. Plaintiff must prove that Defendant's system not only personalizes offers but does so using this specific data input as claimed.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: Plaintiff could argue that any personalization that varies by geographic region, and which uses IP-geotargeting as an input (a common web practice), meets this limitation, even if other factors are also used.
  • Evidence for a Narrower Interpretation: The specification provides examples such as offering "academic pricing" to a student or "corporate discounts" to a business person, suggesting a highly targeted offering based on a user's specific profile rather than simple geographic sorting ('846 Patent, col. 6:6-16). Defendant may argue that this implies a more granular level of specificity than what its systems provide.

VI. Other Allegations

Willful Infringement

The complaint does not contain an explicit allegation of willful infringement. However, it does request a declaration that the case is "exceptional under 35 U.S.C. § 285" and an award of attorneys' fees (Compl., Prayer for Relief ¶C). The complaint provides no factual basis for this request, such as allegations of pre-suit knowledge of the patents or egregious conduct.

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

1. A core issue will be one of definitional scope: can the term "plurality of distributors", which the patent describes in the context of a marketplace of competing suppliers, be construed to cover the internal brands of a single, integrated retail corporation?
2. A key evidentiary question will be one of technical implementation: does the complaint contain (or can discovery reveal) evidence that Defendant’s e-commerce platforms generate personalized offers using the specific mechanism required by the claims—namely, using a customer's "location information derived from an IP address"—or do they rely on other, more common personalization techniques?
3. A significant procedural question will be pleading sufficiency: does the complaint, which lacks identification of any specific accused product and relies on non-provided exhibits, meet the plausibility standard required to survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6)?