DataCloud Tech LLC v. Groupon Inc

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: DataCloud Technologies, LLC (Georgia)
  • Defendant: Groupon, Inc. (Delaware corporation with principal place of business in Illinois)
  • Plaintiff’s Counsel: Rozier Hardt McDonough PLLC
• Case Identification: 1:24-cv-13143, N.D. Ill., 12/20/2024
• Venue Allegations: Plaintiff alleges venue is proper in the Northern District of Illinois because Defendant maintains its principal place of business, conducts substantial business, and has a regular and established place of business within the district.
• Core Dispute: Plaintiff alleges that Defendant’s Groupon Android application and its website infrastructure infringe two patents related to methods for organizing digital information for users and for managing network communications to provide client anonymity.
• Technical Context: The patents address foundational challenges in internet-era data management: organizing the high volume of information sent to users and protecting user privacy during network communications.
• Key Procedural History: The complaint notes that Plaintiff sent a letter to Defendant on December 15, 2020, identifying the asserted patents. This pre-suit notification could form the basis for an allegation of willful infringement.

Case Timeline

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

U.S. Patent No. 6,651,063 - Data Organization And Management System And Method (Issued Nov. 18, 2003)

The Invention Explained

• Problem Addressed: The patent’s background section describes the increasing difficulty for consumers and businesses to organize the "proliferation of information," such as product guides, warranties, and solicitations, which are often misplaced or stored in inefficient, decentralized systems like physical filing cabinets (ʼ063 Patent, col. 1:13-28).
• The Patented Solution: The invention proposes a system where information providers (e.g., retailers) send pre-categorized "information packs" to a recipient's "User Data Repository." This allows for automatic initial organization. The system is designed to allow the user to further process the information, such as by creating "custom" categories, and to communicate this new categorization back to a central processing station or the original provider, so that subsequent information from that same provider is automatically sorted according to the user's custom preference (ʼ063 Patent, Abstract; col. 4:26-55).
• Technical Importance: The technology aimed to shift the primary burden of data organization from the end-user to the information provider, streamlining the management of digital records for products and services (ʼ063 Patent, col. 2:5-10).

Key Claims at a Glance

• The complaint asserts infringement of at least independent method Claim 4 (Compl. ¶28).
• Claim 4 includes the essential steps of:
  • Storing information in an "information pack."
  • Associating the pack with a user destination address, a category identifier, and a provider identifier.
  • Communicating the pack over a network to a user's "data repository" and placing it in a location corresponding to its category identifier.
  • After communication, creating a "custom location" in the repository, placing the information pack there, and associating it with a "custom category identifier."
  • Sending a "custom category signal" to a "processing station" which then analyzes the provider identifier of subsequent information packs and, upon a match, automatically places them in the user's "custom location."
• The complaint reserves the right to assert other claims (Compl. ¶27).

U.S. Patent No. 7,209,959 - Apparatus, System, And Method For Communicating To A Network Through A Virtual Domain Providing Anonymity To A Client Communicating On The Network (Issued Apr. 24, 2007)

The Invention Explained

• Problem Addressed: The patent identifies the privacy risks inherent in the internet's design, where a user's activity, IP address, and other information can be recorded and traced by servers, leading to unwanted solicitations and "cookies" (’959 Patent, col. 1:57-col. 2:2).
• The Patented Solution: The invention describes a three-part system—a "deceiver," a "controller," and a "forwarder"—that works together to anonymize a client's communication session. The client's request is intercepted by the deceiver and sent to the controller, which resolves the destination address and assigns a forwarder to act as an intermediary. The forwarder's IP address is sent back to the client, which then communicates with the forwarder, believing it to be the destination. The forwarder relays traffic, masking the client's and the destination server's true IP addresses from each other ('959 Patent, Abstract; col. 2:35-47).
• Technical Importance: The described method provides a mechanism for ad-hoc, session-based anonymity that is distinct from simple proxy servers, by creating a "virtual domain" where neither the client nor the server is aware of the other's true network identity ('959 Patent, col. 2:48-54).

Key Claims at a Glance

• The complaint asserts infringement of at least independent method Claim 1 (Compl. ¶38).
• Claim 1 includes the essential steps of:
  • In response to a client request, setting up a "forwarding session" using a "forwarder" disposed between the client and a destination server.
  • Implementing the session such that "neither the client or the destination server is aware of the employment of the forwarder."
  • Employing a "controller" to communicate with the forwarder and a domain name server to resolve the destination website's name.
  • Employing a "deceiver" to receive the client's initial request and initiate the controller's query to the domain name server.
  • Initiating the forwarding session in response to the controller receiving the resolved name from the domain name server.
• The complaint reserves the right to assert other claims (Compl. ¶37).

III. The Accused Instrumentality

Product Identification

• The complaint identifies two accused instrumentalities: (1) the "Groupon Android app" and (2) "Groupon systems for supporting multiple domain names on the same website infrastructure ('Groupon website infrastructure')" (Compl. ¶19).

Functionality and Market Context

• The complaint alleges the Groupon Android app functions as a system for providing information (e.g., deals, coupons) to users, which involves storing and communicating that information in a manner that allegedly aligns with the steps of the '063 Patent's claims (Compl. ¶28). The complaint provides a screenshot of the app's page on the Google Play store, which describes it as a source for "1,000s of Fun and Affordable Experiences" (Compl. p. 6, Figure 1).
• The Groupon website infrastructure is alleged to provide a method of network communication for its various websites (e.g., groupon.com, api.groupon.com). The complaint alleges this infrastructure uses components like a "front-end server switch" and a "firewall" to establish a "forwarding session" between a user (client) and Groupon's servers (destination server) in a way that allegedly practices the claims of the '959 Patent (Compl. ¶38). The complaint does not contain allegations regarding the specific market positioning of this infrastructure beyond its use in supporting Groupon's primary business.

IV. Analysis of Infringement Allegations

The complaint alleges that the Groupon Android app infringes the '063 Patent by performing the steps of Claim 4. The complaint provides Figure 1, a screenshot from the Google Play store, to show that Defendant makes, uses, and offers for sale the accused app (Compl. p. 6, Figure 1). The core of the infringement theory is that when a user interacts with deals in the app, the app's system performs the patented method of information organization and categorization.

'063 Patent Infringement Allegations

• Identified Points of Contention:
  • Scope Questions: A central question may be whether Groupon's user account and preference features constitute the specific architecture of a "user data repository" and a "processing station" as defined and depicted in the '063 Patent. The patent describes a distinct structure including a "Quarantine Area" and a "Firewall/Filter" (ʼ063 Patent, Fig. 1), which may differ from a standard application's user profile system.
  • Technical Questions: The complaint alleges the final, complex feedback loop of Claim 4, where a user's custom categorization of one deal automatically directs future deals from the same merchant into that custom location. A key question for the court will be what evidence demonstrates that the Groupon app's backend performs this specific, multi-step analysis and re-routing function, rather than simply using a more general recommendation algorithm.

'959 Patent Infringement Allegations

• Identified Points of Contention:
  • Scope Questions: The complaint maps the claimed terms "deceiver," "controller," and "forwarder" onto conventional network components like "router," "firewall," and "front-end server switch." A primary dispute will likely be whether Groupon's use of standard networking infrastructure, such as load balancing or a content delivery network (CDN), falls within the scope of the specific three-part architecture claimed in the '959 Patent.
  • Technical Questions: What evidence supports the allegation that Groupon's system makes the client and server "unaware" of the intermediary in the particular manner required by the claim? The patent describes a specific process of IP address substitution to create a "virtual domain" ('959 Patent, col. 7:46-52), which raises the question of whether this is functionally different from common technologies like Network Address Translation (NAT) or standard proxying.

V. Key Claim Terms for Construction

• For the '063 Patent:

  • The Term: "user data repository"
  • Context and Importance: This term is the foundation of the '063 Patent's system. Its construction is critical because the infringement case depends on whether a user's account within the Groupon app qualifies as this specific structure. Practitioners may focus on this term because its definition will determine if a modern app's architecture maps onto the patent's more formalized system.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The specification provides a high-level definition as a "Personal information storage and retrieval area, in which information is stored in a compartmentalized or categorized format" ('063 Patent, col. 2:55-59), which could be argued to encompass a variety of user account systems.
    • Evidence for a Narrower Interpretation: The patent figures and detailed description consistently depict the "user data repository" as a specific system containing a "Quarantine Area," a "Firewall/Filter," and a "Private Area" ('063 Patent, Fig. 1; col. 7:29-36). This could support a narrower construction requiring these distinct functional zones, not just a general user profile.

• For the '959 Patent:

  • The Term: "neither the client or the destination server is aware of the employment of the forwarder"
  • Context and Importance: This limitation defines the core anonymity function of the invention. The case may turn on whether the type of "unawareness" present in Groupon's network architecture is the same as that contemplated by the patent.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: A party might argue this language covers any scenario where the end-client's software and the destination server's software do not have explicit knowledge of an intermediary, a common situation in complex networks.
    • Evidence for a Narrower Interpretation: The specification links this "unawareness" to the creation of a "virtual domain" where the client and server "do not technically exist to each other" because a "deceiver" has transparently substituted the forwarder's IP address for the destination's ('959 Patent, col. 7:46-52). This suggests a specific technical method for achieving unawareness, potentially distinguishing it from standard network proxying.

VI. Other Allegations

• Willful Infringement: The complaint does not use the word "willful," but it lays a foundation for such a claim. It alleges that Defendant had pre-suit knowledge of the patents via a letter dated December 15, 2020 (Compl. ¶20). Furthermore, the prayer for relief requests that the court declare the case "exceptional" and award attorneys' fees under 35 U.S.C. § 285, which is relief often granted in cases of willful infringement (Compl. ¶42.D).

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

1. A core issue will be one of definitional scope: can the term "user data repository", which the '063 Patent describes as a structured system with quarantine and private zones, be construed to read on a modern mobile application's user account and preference-management features?
2. A key evidentiary question will be one of technical operation: does the complaint provide a sufficient factual basis to suggest that Groupon’s standard network infrastructure performs the specific, coordinated functions of the "deceiver", "controller", and "forwarder" as claimed in the '959 patent, or is there a fundamental mismatch between conventional network architecture and the patent's specialized system for anonymity?
3. A central challenge for the plaintiff will be to substantiate its conclusory allegations: can it produce evidence demonstrating that the accused systems perform the precise, multi-step feedback loops and communication protocols recited in the asserted method claims, moving beyond a high-level mapping of product features to claim language?