DCT
1:25-cv-10004
Alpha Modus Corp v. Cooler Screens Inc
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: Alpha Modus, Corp. (Florida)
- Defendant: Cooler Screens, Inc. (Delaware)
- Plaintiff’s Counsel: Prince Lobel Tye LLP
- Case Identification: 1:25-cv-10004, N.D. Ill., 08/21/2025
- Venue Allegations: Plaintiff alleges venue is proper in the Northern District of Illinois because Defendant maintains its principal place of business in Chicago, within the district.
- Core Dispute: Plaintiff alleges that Defendant’s digital smart screens for retail environments infringe three patents related to real-time analysis of consumer behavior for targeted marketing and inventory management.
- Technical Context: The technology at issue uses in-store sensors, cameras, and displays to provide brick-and-mortar retailers with data-driven marketing and analytics capabilities comparable to those used by online retailers.
- Key Procedural History: The complaint alleges that Defendant had pre-suit knowledge of the patents-in-suit. Plaintiff asserts that its inventors demonstrated the technology to Walgreens while Defendant's co-founder was President and CEO of Walgreens. The complaint further alleges that Plaintiff and Defendant engaged in licensing discussions in early 2020, during which Defendant was informed of the patents. Plaintiff also notes it has sued Defendant’s customers, Walgreens and Kroger, in separate litigation.
Case Timeline
| Date | Event |
|---|---|
| 2013-07-19 | Priority Date for ’571, ’672, and ’890 Patents |
| 2019-07-23 | ’571 Patent Issued |
| 2020-01-01 | Approximate start of licensing discussions between Alpha Modus and Cooler Screens |
| 2020-02-01 | Alpha Modus sent first notice letter to Walgreens regarding Patents-in-Suit |
| 2021-04-13 | ’672 Patent Issued |
| 2021-06-22 | ’890 Patent Issued |
| 2023-07-01 | Alpha Modus sent second notice letter to Walgreens |
| 2023-08-01 | Alpha Modus sent follow-up letter to Walgreens |
| 2024-01-11 | Alpha Modus announces licensing agreement with GZ6G Technologies Corp. |
| 2025-08-21 | Complaint Filed |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 10,360,571 - "Method For Monitoring And Analyzing Behavior And Uses Thereof"
The Invention Explained
- Problem Addressed: The patent's background describes the challenge brick-and-mortar retailers face from online competition, particularly the phenomenon of "showrooming," where consumers examine products in-store but purchase them online from a competitor (’571 Patent, col. 1:41-48). These retailers lack the real-time data needed to deliver personalized marketing that can influence a consumer's purchasing decision at a critical moment (Compl. ¶25).
- The Patented Solution: The invention is a method that uses "information monitoring devices" such as cameras within a retail store to collect real-time data about shoppers, including their demographics (age, gender), sentiment (e.g., happiness), and tracking information (movement) (’571 Patent, col. 2:48-58). This collected data is then analyzed in real-time to trigger a response, such as displaying targeted advertising on a screen or providing a coupon, thereby creating a more engaging and personalized in-store experience (’571 Patent, Abstract; FIG. 1).
- Technical Importance: This technology was designed to provide physical retailers with the kind of data-driven, dynamic marketing tools that were previously the domain of e-commerce, allowing them to counter online trends and better engage with in-store customers (Compl. ¶26).
Key Claims at a Glance
- The complaint asserts infringement of at least Claim 1 (Compl. ¶74).
- Independent Claim 1 recites a method comprising the key steps of:
- Using information monitoring devices (including video image devices) to gather demographic, sentiment, and tracking characteristics of persons at a location.
- Providing an opt-out option for those persons.
- Analyzing in real time the gathered information for persons who have not opted out.
- Providing a response in real time based on the analysis, where the response is selected from a group including engaging the person via a display, sending a communication to a store employee, providing marketing information, or providing a coupon.
U.S. Patent No. 10,977,672 - "Method And System For Real-Time Inventory Management, Marketing, And Advertising In A Retail Store"
The Invention Explained
- Problem Addressed: The patent addresses the difficulty brick-and-mortar retailers have in providing the real-time, personalized experiences offered by online retailers, which limits their ability to dynamically adjust marketing and inventory strategies in response to immediate consumer behavior (Compl. ¶35-36).
- The Patented Solution: The invention is a system comprising a server that performs several integrated functions at a visual display location. It uses image recognition to identify the inventory of products on a shelf, displays product and pricing information on a screen, receives real-time data about a customer from monitoring devices, and uses that data to generate a targeted promotion for the customer based on "behavioral analytics" (’672 Patent, Abstract; col. 10:1-10).
- Technical Importance: The claimed system integrates point-of-sale marketing directly with real-time inventory awareness and behavioral analysis, allowing a retailer to create promotions that are responsive not only to who the customer is, but also to what products are physically present on the shelf (Compl. ¶37).
Key Claims at a Glance
- The complaint asserts infringement of at least Claim 1 (Compl. ¶98).
- Independent Claim 1 recites a system comprising a server with processors and memory storing instructions to cause the server to:
- Identify, via image recognition, an inventory of retail products at a visual display location.
- Display information about those products on the visual display.
- Determine and display, in real-time, current pricing information for the products.
- Receive real-time data of a customer from information monitoring devices.
- Generate a promotion for the customer based on behavioral analytics.
U.S. Patent No. 11,042,890 - "Method And System For Customer Assistance In A Retail Store"
The Invention Explained
- Technology Synopsis: This patent claims a method for enhancing customer assistance by using monitoring devices to gather information about a person's interaction with a specific product. The method involves gathering "object identification information" of a product the person is interested in and "sentiment information" of the person with respect to that product, analyzing the information in real-time, and providing a tailored response (Compl. ¶45, ¶48).
Key Claims at a Glance
- Asserted Claims: Independent Claim 1 (Compl. ¶123).
- Accused Features: The complaint alleges that Defendant’s digital smart screens and associated systems practice this method by gathering product identification and customer sentiment information and providing responsive marketing, coupons, or other engagement in real time (Compl. ¶120-122).
III. The Accused Instrumentality
Product Identification
- The "digital smart screens" and associated systems that Defendant implements in the stores of its retail partners, such as Walgreens and Kroger (Compl. ¶61). These are collectively referred to as the "Accused Products" (Compl. ¶61).
Functionality and Market Context
- The complaint alleges the Accused Products use "information monitoring devices, including video image devices," to collect demographic, sentiment, and tracking data from people in retail stores (Compl. ¶70, ¶72). This information is allegedly analyzed by a connected server or database to provide targeted content (Compl. ¶71). The complaint further alleges the systems use image recognition to identify inventory, display product and price information, and generate promotions for customers (Compl. ¶97).
- The complaint positions the Accused Products as "innovative retail technology solutions" (Compl. ¶50). It also notes a separate $200 million breach of contract lawsuit filed by Cooler Screens against its customer Walgreens related to the use of the Accused Products in Walgreens stores, suggesting a significant commercial scale (Compl. ¶62).
IV. Analysis of Infringement Allegations
’571 Patent Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| (a) using one or more information monitoring devices to gather information about persons... wherein... (iii) the one or more information monitoring devices comprise one or more video image devices; | The Accused Products allegedly utilize information monitoring devices, including video image devices, to gather information about persons in retail stores. | ¶70 | col. 22:45-47 |
| (iv)... gathering a demographic characteristic... selected from a group consisting of gender... approximate age... and combinations thereof, (v)... gathering a sentiment characteristic... | The Accused Products are alleged to collect demographic characteristics and sentiment characteristics of persons in proximity to the devices. The complaint provides a visual from the patent, FIG. 2, illustrating the type of demographic and sentiment analysis allegedly performed. (Compl. p. 6, FIG. 2). | ¶72 | col. 22:48-59 |
| (vi)... gathering a tracking characteristic... selected from a group consisting of movement of the persons... eye movement of the persons tracked... and combinations thereof, | The Accused Products are alleged to collect tracking characteristics of persons in proximity to the devices. | ¶72 | col. 22:60-67 |
| (b) providing an opt-out option to the persons... | The complaint alleges that the Accused Products provide an opt-out option to persons in proximity to the devices. | ¶73 | col. 22:3-6 |
| (c) analyzing in real time using (A) the server, (B) the one or more databases, or (C) both the information gathered... | The Accused Products are allegedly connected to a server and/or databases that analyze the gathered information. | ¶71 | col. 22:7-17 |
| (d) providing a response in real time based upon the analyzed information... | The complaint alleges that the Accused Products provide a real-time response, such as displaying marketing information or engaging the customer based on the analysis. | ¶122 | col. 22:19-38 |
Identified Points of Contention
- Scope Questions: Claim 1(d) requires providing a response from a specific, closed group of options (e.g., engaging via display, sending a communication to a second person, providing marketing, providing a coupon). An issue may arise regarding whether the accused system's alleged responses fall squarely within one of these enumerated categories.
- Technical Questions: Claim 1(b) requires "providing an opt-out option." The complaint makes a conclusory allegation on this point. A factual question for the court will be what specific mechanism, if any, the Accused Products employ for an opt-out and whether that mechanism satisfies the claim limitation as understood from the patent's specification.
’672 Patent Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| A system for real-time inventory management, marketing, and advertising... comprising: (a) a server comprising... | The Accused Products allegedly embody a system for real-time inventory management, marketing, and advertising, and utilize a server with processors and memory. The complaint includes FIG. 1 from the patent, a system diagram showing interconnected devices and a server, which it alleges represents the Accused Products' architecture. (Compl. p. 9, FIG. 1). | ¶95, ¶96 | col. 22:1-5 |
| (A) identify, via image recognition, an inventory of one or more retail products physically located at the first visual display location... | The Accused Products are alleged to perform functions including identifying an inventory of retail products via image recognition. | ¶97 | col. 22:6-9 |
| (B) display, on the first visual display, information about one or more of the one or more retail products... | The complaint alleges the Accused Products display information about the products on the visual display. | ¶97 | col. 22:10-13 |
| (C) determine, in real-time, current pricing information... (D) display... the current pricing information... | The Accused Products are alleged to determine and display current pricing information in real time. | ¶97 | col. 22:14-20 |
| (E) receive, using one or more information monitoring devices at the first visual display location, real-time data of a customer, | The complaint alleges the system receives real-time data of a customer using information monitoring devices. | ¶97 | col. 22:21-24 |
| (F) generate a promotion of one or more of the one or more retail products... for the customer based on behavioral analytics. | The Accused Products are alleged to generate promotions for the customer based on behavioral analytics. | ¶97 | col. 22:25-28 |
Identified Points of Contention
- Scope Questions: Claim 1(F) requires generating a promotion "based on behavioral analytics." The construction of this term will be a central issue, raising the question of what level of data processing and analysis is required to meet this limitation.
- Technical Questions: A key factual question will be whether the Accused Products actually "identify, via image recognition, an inventory" as required by Claim 1(A). The court may need to examine whether the system uses true image recognition for this purpose or relies on other data sources, such as a pre-loaded planogram or manual input, which may not satisfy the claim element.
V. Key Claim Terms for Construction
For the ’571 Patent
- The Term: "analyzing in real time"
- Context and Importance: This term appears in claim 1(c) and is central to the patent's purported advance over prior art methods that relied on historical or after-the-fact data. Practitioners may focus on this term because its definition will determine whether the accused system's processing architecture and latency meet the claimed requirement for immediate, responsive analysis.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The specification repeatedly describes the goal of influencing the "consumer buying cycle" and delivering a message at the "right time" to influence a purchasing decision, which suggests a functional rather than a strictly technical, low-latency definition (’571 Patent, col. 1:36-40).
- Evidence for a Narrower Interpretation: The patent contrasts its "real-time" solution with "after-the-fact" POS data, suggesting that "real time" means analysis occurs prior to the completion of the purchase and during the customer's interaction with the product or display (’571 Patent, col. 2:28-32).
For the ’672 Patent
- The Term: "behavioral analytics"
- Context and Importance: This term in claim 1(F) is the direct input for the claimed "generate a promotion" step. The scope of this term is critical because it defines the necessary link between the data collected about a customer and the promotion that is ultimately presented.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The specification, which the ’672 patent incorporates, describes using information such as "customer reaction, dwell time, location, and interaction with the display" to determine the right message, suggesting "behavioral analytics" could encompass a wide range of observed customer actions (’571 Patent, col. 10:28-32).
- Evidence for a Narrower Interpretation: A defendant could argue that the term "analytics" requires more than simple data collection, potentially pointing to the specification's mention of "machine learning algorithms" as an example of the sophisticated processing required to optimize and personalize messages (’571 Patent, col. 10:28).
VI. Other Allegations
- Indirect Infringement: The complaint alleges induced infringement for all three patents. It asserts that Cooler Screens knowingly encourages, directs, and aids its customers, including Walgreens, to use the Accused Products in a manner that directly infringes the patents, consistent with Defendant's own promotions and instructions (Compl. ¶84, ¶89, ¶108, ¶113, ¶133, ¶138).
- Willful Infringement: Willfulness is alleged for all three patents based on purported pre-suit knowledge. The complaint alleges that Defendant's co-founder was aware of the patented technology from his time as CEO of Walgreens (Compl. ¶51-52) and that Defendant was directly informed of the patents and their relevance during licensing discussions with Plaintiff in February 2020 (Compl. ¶78, ¶102, ¶127). The complaint characterizes Defendant's subsequent actions as "blatant disregard for Alpha Modus's patent rights" (Compl. ¶79, ¶103).
VII. Analyst’s Conclusion: Key Questions for the Case
- A key evidentiary question will be one of technical implementation: does the accused system identify inventory "via image recognition" as expressly required by Claim 1 of the ’672 patent, or does it rely on alternative data sources such as planograms or database lookups, potentially creating a dispositive mismatch on a core technical element?
- A central issue will be one of functional equivalence: does the accused system's process of gathering general customer data and displaying advertisements perform the specific, multi-part logical method required by Claim 1 of the ’571 patent, including the collection of demographic, sentiment, and tracking data to trigger a response from a narrowly defined set of options?
- A critical question for damages will be one of scienter: given the complaint's detailed allegations of Defendant's pre-suit knowledge—stemming from both direct licensing negotiations in 2020 and the alleged awareness of its co-founder—what was Defendant’s state of mind regarding potential infringement when it commercialized and continued to sell the Accused Products?