Consolidated Transaction Processing LLC v. Finish Line

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Consolidated Transaction Processing LLC (Nevada)
  • Defendant: The Finish Line, Inc. d/b/a Finish Line and JD Sports (Indiana)
  • Plaintiff’s Counsel: Devlin Law Firm LLC
• Case Identification: 1:23-cv-04179, N.D. Ill., 06/28/2023
• Venue Allegations: Venue is based on Defendant allegedly maintaining an established place of business in the district, specifically a retail store in Chicago, Illinois.
• Core Dispute: Plaintiff alleges that Defendant’s e-commerce platform infringes two patents related to systems and methods for aggregating product data from multiple distributors and using customer information to generate targeted online product offerings.
• Technical Context: The technology relates to personalized e-commerce, where customer data is used to dynamically create customized online shopping experiences and product catalogs, moving beyond static, one-size-fits-all online storefronts.
• Key Procedural History: The two patents-in-suit are part of the same patent family. U.S. Patent No. 8,712,846 is a continuation of the application that resulted in U.S. Patent No. 8,396,743, which itself is a divisional of an earlier application. This shared specification may lead to consistent claim construction rulings across both patents. The complaint seeks a declaration of an exceptional case, suggesting an intent to pursue attorneys' fees.

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 the prior art of e-commerce as a simple replacement for catalog advertising, with most businesses still burdened by the high costs and logistical challenges of maintaining their own physical inventory (Compl. ¶11; '846 Patent, col. 3:6-23). These early systems offered static, non-personalized experiences to all users (Compl. ¶18).
• The Patented Solution: The invention proposes a centralized system that receives product data from a "plurality of distributors" and personal information from a "plurality of customers" ('846 Patent, Abstract). It uses this combined data, including customer location information derived from an IP address, to dynamically generate and send "user-specific product offerings," thereby creating a personalized shopping experience without the need for the system operator to hold inventory ('846 Patent, col. 11:36-12:54).
• Technical Importance: The invention describes a shift from a simple online advertising model to a dynamic, data-driven e-commerce backbone capable of personalizing user experiences and optimizing the supply chain by selecting among different distributors in real-time (Compl. ¶14, ¶17).

Key Claims at a Glance

• The complaint asserts independent claim 1 and dependent claims 3 and 4 (Compl. ¶30).
• Independent Claim 1 (Method Claim) Elements:
  • 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, including location information derived from an IP address;
  • 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 customers.
• The complaint does not explicitly reserve the right to assert other claims.

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 a parent to the '846 Patent, this patent addresses the same technical problem: the limitations of early e-commerce systems that were inflexible, non-personalized, and reliant on costly physical inventory ('743 Patent, col. 2:62-3:23).
• The Patented Solution: The invention describes a transaction processing system that integrates product data from multiple distributors with customer data to create customized online catalogs and offerings ('743 Patent, col. 4:50-59). For example, the system could show a different catalog to a student versus a business person, with pricing dynamically adjusted by a rule-based algorithm ('743 Patent, col. 6:6-29).
• Technical Importance: The system provides a method for creating a more responsive and personalized online marketplace, allowing a merchant to offer a wider range of products and pricing options by aggregating data from multiple sources rather than relying on a single inventory (Compl. ¶19).

Key Claims at a Glance

• The complaint asserts independent claim 1 and dependent claim 4 (Compl. ¶35).
• Independent Claim 1 (Method Claim) Elements:
  • 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, including location information derived from an IP address;
  • generating, at least in part from the personal information concerning a customer location, at least one user-specific product offering; and
  • sending, by a computer, automated messages comprising the offering to customers.
• The complaint does not explicitly reserve the right to assert other claims.

III. The Accused Instrumentality

• Product Identification: The complaint identifies the accused instrumentality as the "Accused Instrumentalities," which appears to refer to Defendant Finish Line's e-commerce operations, including its website (jdsports.com and/or finishline.com) and the underlying systems that power it (Compl. ¶30, ¶35).
• Functionality and Market Context: The complaint alleges that Defendant's systems perform the patented methods by gathering product data from various sources and customer data from users to provide a customized online shopping experience (Compl. ¶20). The complaint contends that such automation and user-specific customization are crucial for businesses to distinguish themselves in the competitive online retail market (Compl. ¶20). No probative visual evidence provided in complaint.

IV. Analysis of Infringement Allegations

The complaint references preliminary claim charts in Exhibits 3 and 4 that detail the infringement allegations; however, these exhibits were not included with the provided complaint document (Compl. ¶30, ¶35). The following is a summary of the infringement theory based on the narrative of the complaint.

Plaintiff’s infringement theory appears to be that Defendant's e-commerce platform practices the methods claimed in the '846 and '743 patents. The complaint alleges that the patented inventions cover technologies for improving internet transactions by utilizing product data from multiple distributors and personal customer information to generate user-specific electronic catalogs (Compl. ¶21). The narrative suggests that Defendant's website and backend systems perform the claimed steps of: (1) receiving product data from its suppliers; (2) receiving customer data, which by implication includes IP addresses used for location information; (3) using this data to generate user-specific product offerings, such as targeted advertisements or customized web pages; and (4) sending these offerings to customers via automated messages, such as the display of the webpage itself (Compl. ¶12).

• Identified Points of Contention:
  • Technical Questions: A key factual question will be whether Defendant’s system "generat[es]" the product offerings "at least in part from the customer location information derived from an IP address," as required by claim 1 of both patents. The court will need to determine if there is a direct technical link between the IP-based location data and the specific products shown to a user, or if location is used for other purposes (e.g., estimating shipping or identifying nearby stores).
  • Scope Questions: The infringement analysis may turn on the definition of "plurality of distributors." The patents describe a system that can select among different distributors to fulfill an order for a single product based on criteria like price or availability ('743 Patent, col. 9:8-43; Fig. 5). A central question is whether Defendant's system operates as such an aggregator, or if it functions as a traditional retailer that simply sells products from many different brands, without selecting between competing distributors for the same item.

V. Key Claim Terms for Construction

• The Term: "user-specific product offering"

• Context and Importance: This term is central to the invention's purpose. Its construction will determine whether any form of online personalization (e.g., a targeted banner ad) meets the claim, or if a more comprehensive, dynamically-built catalog is required.

• Intrinsic Evidence for Interpretation:

  • Evidence for a Broader Interpretation: The claim language itself is general, and dependent claims in both patents recite specific examples like a "coupon," "promotional offer," or "rebate," which could suggest the independent claim is not limited to these and covers a wide range of offerings ('846 Patent, cl. 2; '743 Patent, cl. 2).
  • Evidence for a Narrower Interpretation: The specification describes generating "multiple catalogs from the same system" and displaying "user-specific interfaces," such as showing one catalog for students with academic pricing and another for business people with corporate discounts ('846 Patent, col. 5:61-6:16). This may support an argument that the "offering" must be a substantially customized catalog, not merely an isolated targeted promotion.

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

• Context and Importance: This term defines the data aggregation at the heart of the system. The interpretation will determine if a standard retail model (one company selling items from many brands) infringes, or if the claim is limited to a specific aggregator/marketplace model. Practitioners may focus on this term because it distinguishes the patented invention from conventional e-commerce.

• Intrinsic Evidence for Interpretation:

  • Evidence for a Broader Interpretation: The plain language does not explicitly require that the distributors offer identical products or that the system must select between them for every transaction.
  • Evidence for a Narrower Interpretation: The specification repeatedly emphasizes the advantage of selecting from a distributor based on criteria like "availability, price, shipping speed, or profit margins" for a given product ('846 Patent, col. 4:17-22). Figure 5 explicitly depicts a "Distributor Selection Logic" choosing between "Distributor 1," "Distributor 2," etc., for products that have "Overlap," which strongly suggests the system is designed to manage competing suppliers for the same items.

VI. Other Allegations

• Indirect Infringement: The complaint does not contain allegations of indirect or induced infringement. The infringement counts are limited to direct infringement (Compl. ¶30, ¶35).
• Willful Infringement: The complaint does not explicitly allege willful infringement. However, it does request "a declaration that this case is exceptional under 35 U.S.C. § 285, and an award of CTP’s reasonable attorneys’ fees" (Compl., Prayer for Relief ¶C). An exceptional case finding can be based on inequitable conduct, litigation misconduct, or, in some circumstances, willful infringement, but the complaint does not specify the basis for this request.

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

1. A central issue will be one of definitional scope: Can the term "plurality of distributors", which the patent specification illustrates as competing suppliers for overlapping products, be construed to read on a conventional retail model where a single entity (Finish Line) sells products sourced from multiple, non-competing brands?

2. A second core issue will be one of functional causality: What evidence can Plaintiff provide to demonstrate that Defendant’s e-commerce platform "generat[es]" its "user-specific product offerings" from the "customer location information derived from an IP address," as required by the claims, rather than merely using that location data for ancillary purposes like logistics or marketing analytics?

3. Finally, the case may turn on an evidentiary question regarding the "Accused Instrumentalities." Given the lack of specific product details in the complaint itself, discovery will be critical to determine if the actual, technical operation of Defendant's backend systems matches the specific methods of data aggregation, catalog generation, and real-time pricing described in the patents' shared specification.