DCT

1:24-cv-00755

PerdiemCo LLC v. Quartix Inc

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I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 1:24-cv-00755, N.D. Ill., 01/29/2024
  • Venue Allegations: Plaintiff alleges venue is proper because Defendant maintains a regular and established place of business in the Northern District of Illinois and has committed the alleged acts of infringement within the district.
  • Core Dispute: Plaintiff alleges that Defendant’s vehicle tracking system and associated mobile application infringe nine U.S. patents related to location tracking, geofencing, and the controlled conveyance of event notifications based on multiple levels of administrative privilege.
  • Technical Context: The technology at issue involves using GPS and geofencing to monitor vehicle fleets and send automated alerts, a key function for logistics, productivity, and safety management in the transportation industry.
  • Key Procedural History: The complaint notes that the asserted patent portfolio has been licensed to over two dozen entities and has been the subject of prior litigation in the Eastern District of Texas. In that prior litigation involving related patents, thirteen Inter Partes Review (IPR) petitions were filed, and the patents were found to contain patent-eligible subject matter under 35 U.S.C. § 101. The complaint also highlights that during prosecution of the lead patent, the USPTO explicitly considered and overcame a § 101 rejection.

Case Timeline

Date Event
2005-12-23 Patent Priority Date for all Patents-in-Suit
2017-06-13 U.S. Patent No. 9,680,941 Issued
2018-01-16 U.S. Patent No. 9,871,874 Issued
2018-07-10 U.S. Patent No. 10,021,198 Issued
2019-08-27 U.S. Patent No. 10,397,789 Issued
2020-01-28 U.S. Patent No. 10,602,364 Issued
2020-10-27 U.S. Patent No. 10,819,809 Issued
2021-07-13 U.S. Patent No. 11,064,038 Issued
2022-04-26 U.S. Patent No. 11,316,937 Issued
2023-08-01 U.S. Patent No. 11,716,595 Issued
2024-01-29 Complaint Filed

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

U.S. Patent No. 9,680,941 - "Location Tracking System Conveying Event Information Based on Administrator Authorizations," Issued June 13, 2017

The Invention Explained

  • Problem Addressed: The patent background describes a need for a system that can correlate events with the location of objects and convey information about those events to specific computing devices, overcoming the limitations of prior location-aware applications that were predetermined in function and did not allow for user-defined events and access controls (’941 Patent, col. 2:53-59). The complaint frames the problem as the need to convey location information efficiently while protecting user privacy (Compl. ¶18).
  • The Patented Solution: The invention is a location tracking system that allows for multiple levels of administration. A top-level administrator for the service provider can define groups of users (e.g., different customers), and a second-level administrator within each group (e.g., the customer) can then define location-based events (like geofence entries/exits) and control precisely who receives notifications for those events via an access list (’941 Patent, col. 13:22-67). This structure allows a customer to manage their own users and privacy settings independently of the service provider and other customers (Compl. ¶¶ 37-39).
  • Technical Importance: This hierarchical administrative structure provided a way for location-tracking service providers to offer customers granular, self-service control over privacy and notification settings, an improvement over generic, one-size-fits-all tracking systems (Compl. ¶¶ 36, 53).

Key Claims at a Glance

  • The complaint asserts independent claim 1 and reserves the right to assert dependent claims (Compl. ¶82, ¶83).
  • Essential Elements of Independent Claim 1:
    • A location tracking system comprising one or more servers.
    • The servers are configured to store information for groups of users of mobile devices based on group identification codes.
    • A first administrator has a first level of administrative privilege to define the groups of users.
    • A user in each group is authorized to be a second administrator with a second level of administrative privilege.
    • The first administrator does not perform the administrative functions of the second administrator.
    • The second administrator performs functions including setting a zone for an event and specifying an information access code (an access list).
    • The system compares location information with the zone to determine if an event occurred and conveys an alert based on the access list.

U.S. Patent No. 9,871,874 - "A Multi-Level Database Management System and Method for an Object Tracking Service That Protects User Privacy," Issued January 16, 2018

The Invention Explained

  • Problem Addressed: The patent addresses the same general problem as the ’941 Patent: the need for a flexible, user-configurable location tracking system that allows for granular control over who can receive sensitive location information (’874 Patent, col. 2:53-59; Compl. ¶18).
  • The Patented Solution: This patent formalizes the system architecture around a database management system (DBMS) that enforces the multi-level administrative privileges. A first-level administrator uses the DBMS to define groups and assign a second-level administrator. The second-level administrator then uses the DBMS to define zones, events, and access lists for their specific group (’874 Patent, Abstract, col. 13:22-67). The system is designed such that the second administrator's control over their group is independent of the first administrator and other group administrators (Compl. ¶¶ 37-38).
  • Technical Importance: The claimed method provides a specific, structured database approach for implementing a privacy-centric, multi-tenant location tracking service, enabling customers to manage their own data and alerts securely (Compl. ¶¶ 36, 39).

Key Claims at a Glance

  • The complaint asserts independent claims 11 and 44, as well as dependent claim 45 (Compl. ¶99).
  • Essential Elements of Independent Claim 11 (Method):
    • A method using a database management system for a mobile device tracking service.
    • Checking a first level of administrative privilege for a first administrator.
    • The first administrator performs functions including specifying a plurality of groups of users.
    • The first administrator gives a second level of administrative privilege to an authorized user in a group.
    • The first administrator does not exercise the second level of privilege.
    • Checking the second level of privilege for the authorized user.
    • The authorized user performs functions including setting an event condition and specifying an access list of recipients.
    • Conveying a notification based on the access list when the event condition is met.
  • Essential Elements of Independent Claim 44 (System):
    • A system with one or more servers configured to perform the steps of the method in claim 11.

Multi-Patent Capsules

U.S. Patent No. 10,021,198 - "Software-Based Mobile Tracking Service with Video Streaming When Events Occur," Issued July 10, 2018

  • Technology Synopsis: This patent describes a location tracking system where the occurrence of a defined location-based event can trigger the transmission of video. The system uses a multi-level administrative structure to control access to both location data and the associated video streams (’198 Patent, col. 2:7-17, col. 24:12-14).
  • Asserted Claims: Claim 1 (Compl. ¶116).
  • Accused Features: The complaint alleges infringement by the Accused Instrumentalities, which are described as providing mobile communications technology for the transportation industry (Compl. ¶15, ¶114).

U.S. Patent No. 10,397,789 - "Method for Controlling Conveyance of Event Information About Carriers of Mobile Device Based on Location Information Received from Location Information Sources Used by the Mobile Devices," Issued August 27, 2019

  • Technology Synopsis: This patent focuses on a method for defining location-based events and managing the conveyance of event information among computing devices. The system uses access control codes to manage accessibility to object location information, zone information, and event information (’789 Patent, Abstract).
  • Asserted Claims: Claim 12 (Compl. ¶133).
  • Accused Features: The complaint alleges infringement by the Accused Instrumentalities' provision of tracking products and services for the transportation industry (Compl. ¶15, ¶131).

U.S. Patent No. 10,602,364 - "Method for Conveyance of Event Information to Individuals Interested Devices Having Phone Numbers," Issued January 28, 2020

  • Technology Synopsis: This patent describes a method where location-based event notifications are sent to recipients identified by phone numbers. The system architecture uses the previously described multi-level administrative privileges to control who can define events and who receives the resulting notifications (’364 Patent, Abstract; Compl. ¶¶ 37-39).
  • Asserted Claims: Claim 3 (Compl. ¶150).
  • Accused Features: The complaint alleges infringement by the Accused Instrumentalities' geofencing and notification features (Compl. ¶¶ 34-35, 148).

U.S. Patent No. 10,819,809 - "Method for Controlling Conveyance of Event Notifications in Sub-Groups Defined Within Groups Based on Multiple Levels of Administrative Privileges," Issued October 27, 2020

  • Technology Synopsis: This patent adds a further layer to the administrative hierarchy, describing a method for defining sub-groups within larger groups. This allows for even more granular control over event notifications, where a sub-group administrator can manage alerts for their specific sub-group, independent of the main group administrator (’809 Patent, Abstract).
  • Asserted Claims: Claim 1 (Compl. ¶167).
  • Accused Features: The complaint alleges infringement by the Accused Instrumentalities' features for creating multiple levels of administrative privileges and access control (Compl. ¶36, ¶165).

U.S. Patent No. 11,064,038 - "Method for Tracking Mobile Objects Based on Event Conditions Met at Mobile Object Locations," Issued July 13, 2021

  • Technology Synopsis: This patent reiterates the core method of defining events based on a relationship between an object's location and a user-defined zone. It emphasizes the use of access codes to manage the conveyance of event information to specific, authorized computing devices (’038 Patent, Abstract).
  • Asserted Claims: Claim 1 (Compl. ¶184).
  • Accused Features: The complaint alleges infringement by the Accused Instrumentalities' geofencing claims, which send notifications when a mobile object crosses a boundary (Compl. ¶34-35, ¶182).

U.S. Patent No. 11,316,937 - "Method for Tracking Events Based on Mobile Device Location and Sensor Event Conditions," Issued April 26, 2022

  • Technology Synopsis: This patent expands the types of triggering events beyond just location. It describes a method where an event can be triggered by sensor data (e.g., from a camera) in addition to, or instead of, location data, with the resulting notifications managed by the multi-level administrative system (’937 Patent, Abstract).
  • Asserted Claims: Claim 1 (Compl. ¶201).
  • Accused Features: The complaint alleges infringement by the Accused Instrumentalities, which provide tracking services that may incorporate various event conditions (Compl. ¶15, ¶199).

U.S. Patent No. 11,716,595 - "A Method for Conveying Event Information Based on Roles Assigned to Users of a Location Tracking Service," Issued August 1, 2023

  • Technology Synopsis: This patent focuses on the assignment of roles (e.g., administrator, user) to control the flow of event information in a tracking service. The roles are tied to the multi-level access control system to manage who can define events and who can receive notifications (’595 Patent, Abstract).
  • Asserted Claims: Claim 1 (Compl. ¶218).
  • Accused Features: The complaint alleges infringement by the Accused Instrumentalities' implementation of user roles and access control levels for tracking and notifications (Compl. ¶36, ¶216).

III. The Accused Instrumentality

Product Identification

The Quartix Vehicle Tracking System ("Accused System") and the associated Quartix Vehicle Tracking Mobile App (Compl. ¶73).

Functionality and Market Context

The Accused System is a fleet management and vehicle tracking product that provides customers with a "real-time overview" of their vehicles through dashboards and management tools (Compl. ¶73). A screenshot from the Quartix website describes features including custom Key Performance Indicator (KPI) alerts and site-based data to track vehicle arrivals and departures (Compl. ¶73). A separate screenshot of the mobile application on the Google Play store indicates it allows users to view their vehicles in real time while mobile (Compl. ¶73). The complaint alleges these instrumentalities are mobile communications technology products and services for the transportation industry (Compl. ¶15).

IV. Analysis of Infringement Allegations

The complaint alleges that the Accused Instrumentalities practice the "Geofencing Claims," which involve tracking mobile objects, defining zones (geofences), and sending notifications when an object crosses a boundary, all managed through a system of multi-level administrative privileges (Compl. ¶¶ 34-36). The core infringement theory is that the Accused System's servers and databases, which provide tracking services to its customers, map onto the claimed hierarchical system of administrators and access controls (Compl. ¶¶ 49-54).

'941 Patent Infringement Allegations

Claim Element (from Independent Claim 1) Alleged Infringing Functionality Complaint Citation Patent Citation
A location tracking system ... comprising: one or more servers capable of receiving identifiers and location information for a plurality of mobile devices... The Quartix system uses servers and databases to receive location data from GPS devices installed in customer vehicles (assets). ¶49 col. 5:61-6:12
...the one or more servers configured to: store in one or more databases information for groups of users... The Quartix system is provided to customers, each of whom constitutes a group of users who track assets belonging to that group. ¶51 col. 5:34-46
a first administrator having a first level of administrative privilege... said first level of administrative privilege being used to... define the groups of users... Quartix, as the service provider and system administrator, performs a first set of administrative functions, such as identifying customers as distinct groups of users. ¶54 col. 13:17-21
a user in each group being authorized to be a second administrator of a plurality of second administrators, each second administrator having a corresponding second level of administrative privilege associated with a group... Each Quartix customer (a group) has a group administrator who performs a second set of administrative functions at the group level. ¶54 col. 5:65-6:12
...the first administrator does not perform the administrative functions performed under the second level of administrative privilege... Each customer/group administrator's control over notifications is exercised independently of the system administrator (Quartix). ¶55 col. 5:40-46
...the second administrator performs a second set of administrative functions that include... setting... a zone... for an event... The group administrator (customer) sets geofences and event conditions for their group of vehicles. ¶54 col. 8:6-16
specifying an information access code, said information access code comprising an access list... The group administrator (customer) sets access lists that identify which recipients in the group receive notifications. ¶54 col. 7:49-8:35
comparing the location information with the zone... to determine whether the event occurred; and conveying an alert... based on the access list... The Quartix servers compare vehicle GPS locations with customer-defined geofences to detect an event (e.g., entry/exit) and send alerts only to recipients on the access list. ¶50, ¶52 col. 10:7-13:7

'874 Patent Infringement Allegations

Claim Element (from Independent Claim 11) Alleged Infringing Functionality Complaint Citation Patent Citation
A method ... using a database management system... The Quartix system uses servers and databases to provide its tracking service. ¶49 col. 13:21-24
checking a first level of administrative privilege for a first administrator of the mobile device tracking service... Quartix, as the service provider, acts as the first administrator with a first level of privilege. ¶54 col. 5:47-61
the first administrator performing a first set of administrative functions... said first set of administrative functions including specifying a plurality of groups of users... Quartix establishes its customers as distinct groups within its system. ¶54 col. 13:17-61
the first administrator giving a second level of administrative privilege to an authorized user in a group of the plurality of groups... Quartix designates a group administrator (e.g., the primary contact) for each customer. ¶54 col. 17:59-66
wherein the first administrator does not exercise the second level of administrative privilege... Control by the customer/group administrator is independent of Quartix. ¶55 col. 5:40-46
checking the second level of administrative privilege for the authorized user... The Quartix system checks the credentials of the customer's group administrator before allowing access to administrative functions. ¶54 col. 7:41-47
the authorized user performing a second set of administrative functions... including setting an event condition... and specifying an access list... The customer/group administrator sets geofences, event triggers, and defines who receives alerts via an access list. ¶54 col. 2:26-31
conveying a notification based on the access list... The Quartix system sends notifications only to users specified on the access list when a geofence event occurs. ¶52 col. 10:7-13:7

Identified Points of Contention

  • Scope Questions: A central issue may be whether the user roles and permissions in the Quartix system (e.g., a primary account holder vs. individual vehicle drivers) constitute the claimed "first level" and "second level" of "administrative privilege." The defense could argue that the patents require a more specific hierarchical structure than what is present in a standard multi-tenant software-as-a-service product. The question for the court will be whether the claims cover a general multi-tenant architecture or are limited to the specific two-tiered system administrator/group administrator structure described in the specification.
  • Technical Questions: What evidence does the complaint provide that the Accused System's architecture separates administrative functions in the specific manner required by the claims, such as the limitation that "the first administrator does not exercise the second level of administrative privilege"? The analysis will turn on how control is partitioned between Quartix (the service provider) and its customers in the accused platform.

V. Key Claim Terms for Construction

  • The Term: "administrative privilege" (and its "first level" and "second level")
  • Context and Importance: This term is the central feature of the asserted independent claims and appears to be the primary basis for distinguishing the invention from conventional tracking systems. The definition of what constitutes distinct "levels" of privilege, and whether the first administrator is truly firewalled from the second administrator's functions, will likely be critical to the infringement analysis. Practitioners may focus on this term because it appears to be the core inventive concept asserted against what might otherwise be characterized as a generic geofencing system.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The claims themselves do not narrowly define the term, referring generally to a "first level" and a "second level" used to perform distinct sets of functions (e.g., ’941 Patent, col. 24:1-15). This may support an argument that any system with two distinct tiers of user permissions (e.g., provider vs. customer) infringes.
    • Evidence for a Narrower Interpretation: The specification repeatedly and consistently describes a specific two-tier structure: a top-level "system/service administrator" who manages customers as "groups," and a lower-level "group administrator" within each customer group who manages that group's zones, events, and access lists (’941 Patent, col. 5:46-6:12; 13:17-61). The abstract of the ’874 Patent explicitly refers to a "multi-level database management system." This may support a narrower construction requiring this specific hierarchical arrangement.

VI. Other Allegations

  • Indirect Infringement: The complaint alleges inducement of infringement under 35 U.S.C. § 271(b), based on Defendant's alleged provision of "instruction materials, engineering support, customer support, customer training," and user guides that direct and encourage customers to use the Accused Instrumentalities in an infringing manner (Compl. ¶¶ 87-88).
  • Willful Infringement: The complaint alleges willful infringement based on Defendant's awareness of the patents-in-suit as of the filing and service of the complaint (Compl. ¶¶ 85, 92). It further alleges a basis for exceptionality based on Defendant's purported "policies or practices" of "not substantively investigating or responding to written notices of patent infringement" (Compl. ¶94).

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

  • A core issue will be one of definitional scope: can the claimed "first level" and "second level" of "administrative privilege" be construed to cover the user permission and account management structure of the Quartix platform, or do the patents require a more specific, structurally distinct hierarchy than what the accused system implements?
  • A second key issue will be patent eligibility: despite the complaint's extensive arguments citing prior litigation and prosecution history, the case will likely involve a challenge under 35 U.S.C. § 101. The question will be whether the claims, which recite a specific structure of rules for managing and conveying location data, are directed to the abstract idea of managing information, and if so, whether the multi-level administrative privilege structure constitutes an inventive concept sufficient to render the claims patent-eligible.