Consolidated Transaction Processing LLC v. LL Bean Inc

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Consolidated Transaction Processing LLC (Nevada)
  • Defendant: L.L. Bean, Inc. (Maine)
  • Plaintiff’s Counsel: Devlin Law Firm LLC
• Case Identification: 1:23-cv-04183, N.D. Ill., 06/28/2023
• Venue Allegations: Venue is alleged to be proper in the Northern District of Illinois because L.L. Bean maintains an established place of business in the district, including a retail store in Oak Brook, Illinois.
• Core Dispute: Plaintiff alleges that Defendant’s e-commerce website and associated transaction processing systems infringe patents related to generating and sending targeted product offerings based on customer and product data.
• Technical Context: The technology concerns early e-commerce systems designed to overcome the limitations of static, inventory-heavy retail models by dynamically creating personalized customer experiences using data from multiple sources.
• Key Procedural History: The complaint does not mention any prior litigation, inter partes review (IPR) proceedings, or specific licensing history concerning the patents-in-suit. Both patents-in-suit are subject to a terminal disclaimer.

Case Timeline

Date	Event
1999-06-30	Earliest Priority Date for ’846 and ’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 prior art e-commerce as being a simple replacement for catalog or infomercial advertising, where businesses still maintained their own costly physical inventory and offered static product listings to all customers (Compl. ¶¶11, 18; ’846 Patent, col. 3:6-23). This approach lacked personalization and the ability to dynamically aggregate offerings from various sources (Compl. ¶18).
• The Patented Solution: The invention is a system that improves on prior e-commerce by receiving product data from multiple distributors and, in parallel, receiving customer data that includes personal information. These two data streams are then used by a computer to generate a "user-specific product offering" which is conveyed to the customer via automated messages (Compl. ¶12; ’846 Patent, Abstract, col. 3:44-52). The system is designed to create customized online catalogs and pricing for different user segments (e.g., students versus business customers) from a single underlying system (’846 Patent, col. 6:6-16).
• Technical Importance: This approach aimed to shift e-commerce from a static, one-to-many broadcast model to a dynamic, one-to-one personalized model, improving efficiency by avoiding the need for the central merchant to hold inventory and increasing relevance for the shopper (Compl. ¶¶14, 19).

Key Claims at a Glance

• The complaint asserts independent claim 1 and dependent claims 3 and 4 (Compl. ¶30).
• Independent Claim 1 recites a computer-implemented method with the key elements of:
  • Receiving product data for a plurality of products from a plurality of distributors.
  • Receiving customer data, including location information derived from an IP address.
  • Generating, at least in part from the customer data, user-specific product offerings.
  • Sending automated messages comprising the user-specific product offerings.
• The complaint does not specify which additional claims it may assert.

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

The Invention Explained

• Problem Addressed: The ’743 Patent shares a common specification with the ’846 Patent and thus addresses the same technical problem: the high costs and lack of personalization in early e-commerce systems that operated like digital versions of mail-order catalogs (Compl. ¶¶11, 18; ’743 Patent, col. 3:6-23).
• The Patented Solution: The solution is a transaction processing system that integrates product data from multiple distributors with personal customer data to create targeted offers (’743 Patent, Abstract). The system architecture, as shown in Figure 1, includes distinct modules for an Online Shopping System, an Order Processing System, and a Catalog Builder/Price Modeler that work together to aggregate data and generate dynamic electronic catalogs (’743 Patent, Fig. 1, col. 4:50-58).
• Technical Importance: The invention provided a framework for a more sophisticated e-commerce "backbone" that could select from a plurality of distributors to fulfill an order, enabling a wider range of product offerings and more competitive, dynamic pricing (Compl. ¶19; ’743 Patent, col. 9:8-14).

Key Claims at a Glance

• The complaint asserts independent claim 1 and dependent claim 4 (Compl. ¶35).
• Independent Claim 1 recites a computer-implemented method with the key elements of:
  • Receiving product data for a plurality of products from a plurality of distributors.
  • Receiving customer data, 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 comprising the user-specific product offering.
• The complaint does not specify which additional claims it may assert.

III. The Accused Instrumentality

• Product Identification: The "Accused Instrumentalities" are identified as L.L. Bean’s e-commerce website (llbean.com) and the associated backend systems for transaction processing (Compl. ¶30, ¶35).
• Functionality and Market Context: The complaint alleges that L.L. Bean’s systems provide an online shopping experience with "automation and user-specific customization" (Compl. ¶20). This is allegedly achieved by using product data and customer information together to create a "more personalized shopping experience" than prior static catalogs (Compl. ¶18). The complaint asserts that such personalized systems are crucial for businesses to distinguish themselves in the modern online retail market (Compl. ¶20). 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 filed with the complaint (Compl. ¶30, ¶35). Therefore, a detailed claim chart analysis is not possible.

The narrative infringement theory is that L.L. Bean’s e-commerce platform directly infringes by performing the steps of the asserted claims (Compl. ¶¶30, 35). This theory appears to be that the L.L. Bean website and its systems (1) receive product data (e.g., from its warehouses or suppliers), (2) receive customer data (e.g., through user accounts, cookies, and IP addresses), (3) use that data to generate personalized product recommendations or offers, and (4) send or display those offers to the customer through the website or other automated messages.

• Identified Points of Contention:
  • Scope Questions: A central question may be whether a single, vertically integrated retailer like L.L. Bean, which primarily sells its own branded products, can be said to "receiv[e] product data... from a plurality of distributors" as required by the claims. The patent specifications appear to contemplate a system that aggregates data from multiple, distinct third-party entities to create a marketplace (’743 Patent, Fig. 5, col. 9:26-44).
  • Technical Questions: The complaint does not provide specific evidence that L.L. Bean’s system generates offerings based on "location information derived from an IP address," as required by both asserted independent claims. The infringement analysis may turn on factual evidence of whether L.L. Bean’s personalization engine actually uses IP-based geolocation for this purpose, as opposed to other data points like purchase history or browsing activity.

V. Key Claim Terms for Construction

For U.S. Patent Nos. 8,712,846 and 8,396,743

• The Term: "a plurality of distributors"

• Context and Importance: This term appears in the first element of both asserted independent claims. Its construction is critical because if it is construed to require multiple, separate commercial entities providing product data, it raises the question of whether L.L. Bean's primarily first-party retail operation meets the limitation.

• Intrinsic Evidence for Interpretation:

  • Evidence for a Broader Interpretation: The patents do not explicitly define "distributor." A party could argue the term should be given its plain and ordinary meaning, which might encompass any source of product data, including different internal divisions or warehouses of a single company.
  • Evidence for a Narrower Interpretation: The specification repeatedly discusses selecting a distributor from multiple options based on factors like price, availability, and shipping speed, which strongly implies distinct commercial entities competing to fill an order (’743 Patent, col. 9:26-44). Figure 5 depicts distinct "DISTRIBUTOR 1," "DISTRIBUTOR 2," etc., further supporting an interpretation of separate entities (’743 Patent, Fig. 5).

• The Term: "user-specific product offering"

• Context and Importance: This term defines the output of the claimed method. The dispute will likely focus on the degree of personalization required to meet this limitation. Practitioners may focus on this term because its definition will determine whether generic recommendation algorithms (e.g., "Customers who bought X also bought Y") are sufficient to infringe, or if a more targeted offering is required.

• Intrinsic Evidence for Interpretation:

  • Evidence for a Broader Interpretation: The claims themselves do not specify a level of specificity. An offering could be considered "user-specific" if it is based on any piece of data unique to that user, such as their IP address-derived location.
  • Evidence for a Narrower Interpretation: The specification provides examples of generating distinct catalogs for different user types, such as "a catalog of products appropriate for students with academic pricing" versus a catalog for business people with "corporate discounts" (’846 Patent, col. 6:6-16). This suggests the "offering" is more than a single recommended product and may involve a customized pricing and product selection scheme.

VI. Other Allegations

• Indirect Infringement: The complaint’s counts focus on direct infringement (Compl. ¶¶30, 35). The phrasing "causing to be used" is included but is not supported by specific factual allegations of knowledge or intent required to plead induced infringement.
• Willful Infringement: The complaint does not explicitly allege willful infringement. However, the prayer for relief requests a declaration that the case is "exceptional under 35 U.S.C. § 285" and an award of attorneys' fees, which often accompanies findings of willful infringement or other litigation misconduct (Compl. ¶C, p. 9).

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

• A core issue will be one of definitional scope: can the claim term "a plurality of distributors," which the patent specification describes in the context of a multi-vendor marketplace, be construed to read on the operations of a single, vertically integrated retailer like L.L. Bean?
• A key evidentiary question will be one of factual proof: what evidence will be presented to show that L.L. Bean’s personalization algorithms specifically use "location information derived from an IP address" to generate product offerings, as explicitly required by the asserted independent claims, and is there a demonstrable link between that data input and the resulting offer?
• A central procedural question will be one of pleading sufficiency: given the complaint's high-level allegations and its reliance on unfiled exhibits for technical detail, a threshold issue may be whether the pleading provides sufficient factual content to state a plausible claim for relief against L.L. Bean under the Twombly/Iqbal standard.