DCT
0:19-cv-02855
CellTrust Corp v. ionLake LLC
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: CellTrust Corporation (Delaware)
- Defendant: ionLake, LLC (Minnesota); Derrick Girard (individual); Wade Girard (individual)
- Plaintiff’s Counsel: Venjuris, P.C.; Lathrop GPM LLP
- Case Identification: 19-cv-02855, D. Minn., 10/30/2020
- Venue Allegations: Venue is asserted in the District of Minnesota based on the Defendants' residence, principal place of business, and the occurrence of a substantial part of the events giving rise to the claims within the district.
- Core Dispute: Plaintiff alleges that Defendant’s MyRepChat product, a communication platform, infringes patents related to the tracking and archiving of mobile communications for regulatory compliance.
- Technical Context: The technology addresses the growing need for enterprises, particularly in regulated industries like finance, to capture, monitor, and archive employee communications conducted on mobile devices.
- Key Procedural History: The complaint alleges that Defendants had pre-suit knowledge of the patents-in-suit. Specifically, it cites a February 2018 email in which Defendant Derrick Girard allegedly acknowledged the ’012 Patent and its relevance. It also alleges Defendants were aware of the ’837 Patent upon its notice of allowance in June 2020 and its subsequent issuance.
Case Timeline
| Date | Event |
|---|---|
| 2013-05-20 | Priority Date for U.S. Patent Nos. 9,775,012 and 10,778,837 |
| 2017-09-26 | U.S. Patent No. 9,775,012 Issues |
| 2018-02-28 | Defendants allegedly gain knowledge of the ’012 Patent |
| 2020-06-23 | Defendants allegedly aware of ’837 Patent notice of allowance |
| 2020-09-15 | U.S. Patent No. 10,778,837 Issues |
| 2020-10-30 | Complaint Filed |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 9,775,012 - "System and Method for Tracking SMS Messages"
- Issued: September 26, 2017
The Invention Explained
- Problem Addressed: The patent describes the difficulty for enterprises, especially in regulated industries like finance (e.g., FINRA), to track and archive SMS messages for audit and compliance purposes, a problem exacerbated by "Bring Your Own Device" (BYOD) policies (’837 Patent, col. 2:3-9, 42-55).
- The Patented Solution: The invention provides a system where a "virtual number," separate from the device's carrier-assigned number, is associated with a software application on an employee's (subscriber's) mobile device. Communications to or from this virtual number are routed through a central server or gateway, which logs the message and can send a copy to an archiving system before forwarding it to the intended recipient (’971 Patent, Abstract; ’837 Patent, FIG. 1A).
- Technical Importance: This architecture allows an enterprise to retain control and a record of business communications without interfering with the standard functionality of the employee's personal mobile device (’837 Patent, col. 2:56-62).
Key Claims at a Glance
- The complaint asserts independent claims 1, 7, 13, and 20 (’971 Patent, col. 35:54-36:6; Compl. ¶19).
- Independent Claim 1 (Method):
- Receiving at a server a communication originated from a telephone.
- The communication is sent by the telephone to a virtual number associated with a software module configured to run on a mobile device.
- At the server, sending the communication to an electronic-discovery system.
- The complaint reserves the right to assert various dependent claims (Compl. ¶19).
U.S. Patent No. 10,778,837 - "System and Method for Tracking and Archiving Mobile Communications"
- Issued: September 15, 2020
The Invention Explained
- Problem Addressed: As a continuation of the ’012 Patent, the ’837 Patent addresses the same core problem: the lack of a simple, native solution for enterprises to trace and archive mobile communications like SMS to meet regulatory and compliance requirements (’837 Patent, col. 2:3-9).
- The Patented Solution: The patent describes a system centered on a gateway that tracks communications between a standard mobile device and a "subscriber mobile device" running a specific software module. The gateway is configured to route communications between the devices and, critically, to send a copy of the communications to an Enterprise Information Archiving (EIA) system (’837 Patent, Abstract, col. 3:40-54). The system is designed to handle both inbound and outbound messages relative to the subscriber device.
- Technical Importance: The invention provides a centralized method for enterprises to monitor mobile business communications, giving them an audit trail for compliance that is otherwise difficult to obtain from public carrier networks (’837 Patent, col. 2:56-62).
Key Claims at a Glance
- The complaint asserts independent claims 1, 11, and 20 (’837 Patent, col. 42:56-44:50; Compl. ¶26).
- Independent Claim 1 (Method):
- Associating a subscriber business number with a subscriber software module configured to run on a subscriber mobile device.
- At a gateway, receiving a communication sent from a mobile device to the subscriber business number.
- The gateway is configured to send the communication to the subscriber software module and to an Enterprise Information Archiving system.
- The complaint reserves the right to assert various dependent claims (Compl. ¶26).
III. The Accused Instrumentality
Product Identification
- The accused instrumentality is "ionLake's MyRepChat product and service" (Compl. ¶18).
Functionality and Market Context
- The complaint alleges MyRepChat is a platform that allows a user to track text message communications occurring between a third-party telephone and a "virtual number" that is associated with a mobile application on the user's device (Compl. ¶18).
- It is alleged that the platform captures these text message conversations and can send them to Enterprise Information Archiving (EIA) systems, which are used for e-Discovery (Compl. ¶18). The product is explicitly marketed as a solution for subscribers to "meet the stringent requirements of the financial industry" (Compl. ¶18).
- No probative visual evidence provided in complaint.
IV. Analysis of Infringement Allegations
'012 Patent Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| receiving at a server a communication originated from a telephone | The MyRepChat platform allegedly acts as a server that receives text message communications. | ¶18 | col. 36:1-3 |
| wherein the communication is sent by the telephone to a virtual number associated with a software module configured to run on a mobile device | The communications are allegedly sent to a virtual number that is associated with the MyRepChat mobile app on a subscriber's device. | ¶18 | col. 36:4-7 |
| at the server, sending the communication to an electronic-discovery system | The MyRepChat platform is allegedly capable of sending the captured text message conversations to EIA systems used for e-Discovery. | ¶18 | col. 36:8-10 |
'837 Patent Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| associating a subscriber business number with a subscriber software module configured to run on a subscriber mobile device | The MyRepChat service allegedly utilizes a "virtual number" that is associated with its mobile app, which runs on a subscriber's device. | ¶18 | col. 42:58-61 |
| at a gateway, receiving a communication sent from a mobile device to the subscriber business number associated with the subscriber software module | The MyRepChat platform allegedly functions as a gateway, receiving text messages sent from a telephone to the virtual number associated with the app. | ¶18 | col. 42:62-65 |
| wherein the gateway is configured to send the communication to the subscriber software module... and to an Enterprise Information Archiving system | The platform is allegedly configured to send captured communications to the app on the subscriber's device and to external EIA systems for e-Discovery. | ¶18 | col. 43:1-3 |
- Identified Points of Contention:
- Scope Question: A potential point of contention may be whether the "MyRepChat product and service" as a whole constitutes the claimed "server" or "gateway," or if its distributed architecture could allow Defendants to argue that no single entity performs all the claimed steps.
- Technical Question: The infringement analysis will depend on the specific data flows within the MyRepChat system. A key question is whether the communication is sent to the archiving system in a manner that meets the claim limitation, for instance, whether the "EIA systems used for e-Discovery" (Compl. ¶18) fall within the scope of the claimed "electronic-discovery system".
V. Key Claim Terms for Construction
The Term: "electronic-discovery system" (’012 Patent, Claim 1)
- Context and Importance: The complaint alleges that MyRepChat sends communications to "EIA systems used for e-Discovery" (Compl. ¶18). The viability of the infringement claim hinges on this feature. Practitioners may focus on this term because its scope will determine whether standard archiving solutions, like those allegedly used with MyRepChat, satisfy this limitation.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The patent specification repeatedly links the invention to satisfying compliance and audit requirements for regulated industries, suggesting a broad, functional definition related to archiving for legal or regulatory review (’837 Patent, col. 2:42-55).
- Evidence for a Narrower Interpretation: The specification lists specific, commercially known archiving platforms such as "HP Autonomy, Global Relay, ArcMail, IBM Content Collector, Smarsh or Symantec Enterprise Vault" ('837 Patent, col. 9:15-18). A party could argue the term should be limited to such dedicated, enterprise-grade systems.
The Term: "subscriber business number" (’837 Patent, Claim 1)
- Context and Importance: The infringement allegation relies on the "virtual number" provided by MyRepChat (Compl. ¶18) being equivalent to the claimed "subscriber business number". The definition of this term is therefore central to the dispute.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The specification appears to use the terms "long code," "virtual phone number," and "subscriber business number" interchangeably to refer to a number, distinct from the carrier-assigned SIM number, that is used to route communications through the patented system (’837 Patent, col. 3:14-16, col. 6:21-26).
- Evidence for a Narrower Interpretation: Figure 3 of the patent depicts a business card that explicitly labels a "Business Number" (302). A party might argue this implies the term requires a number that is formally designated or promoted as a "business" number, rather than any generic virtual number.
VI. Other Allegations
- Indirect Infringement: The complaint alleges induced infringement under 35 U.S.C. § 271(b) against the individual defendants, Derrick Girard and Wade Girard (Compl. ¶¶ 33, 41, 47). The allegations are based on their purported personal roles in directing ionLake to make, market, and sell the MyRepChat product, thereby knowingly encouraging infringement by the company and its users (Compl. ¶¶ 34, 48).
- Willful Infringement: Willfulness is alleged for both patents. For the ’012 Patent, the allegation is based on pre-suit knowledge, citing a February 28, 2018 email as evidence that Defendants knew of the patent and its relevance to their product (Compl. ¶¶ 21-22). For the ’837 Patent, willfulness is based on alleged knowledge of the patent's notice of allowance and subsequent issuance, followed by continued infringement (Compl. ¶¶ 28-29).
VII. Analyst’s Conclusion: Key Questions for the Case
- A central issue will be one of claim construction and scope: can the term "electronic-discovery system", as used in the patents, be construed to read on the "EIA systems" that the MyRepChat product allegedly integrates with, or can Defendants argue for a narrower definition that their system does not meet?
- A key evidentiary question will be one of technical operation: the case will require a detailed factual analysis of the MyRepChat system's architecture and data flows to determine if ionLake, as a single entity, performs all steps of the asserted method claims.
- The dispute over willful infringement will be a significant focus, given the complaint's specific factual allegations of pre-suit knowledge, particularly the 2018 email concerning the ’012 Patent. The ability of CellTrust to substantiate these allegations could substantially impact potential damages.