Venadium LLC v. Wizkids NECA LLC

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Venadium LLC (Texas)
  • Defendant: WizKids/NECA, LLC (New Jersey)
  • Plaintiff’s Counsel: Zimmerman Law Group; Corcoran IP Law, PLLC
• Case Identification: 2:17-cv-07310, D.N.J., 09/20/2017
• Venue Allegations: Venue is alleged to be proper based on Defendant having a regular and established place of business in the District of New Jersey.
• Core Dispute: Plaintiff alleges that Defendant’s website infringes a patent related to controlling software functionality through a digitally signed authorization protocol.
• Technical Context: The technology concerns methods for digital rights management (DRM) for computer software, particularly for the "shareware" distribution model where users can freely obtain software but must pay for full or continued use.
• Key Procedural History: The complaint does not mention any prior litigation, inter partes review proceedings, or licensing history related to the patent-in-suit.

Case Timeline

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

U.S. Patent No. 6,330,549 - "Protected Shareware", issued December 11, 2001

The Invention Explained

• Problem Addressed: The patent addresses the challenge of protecting computer software, especially informally distributed "shareware," from unauthorized use without resorting to cumbersome or unpopular anti-piracy mechanisms like physical "dongles" or copy protection schemes that limit legitimate user activities like system backups (U.S. Patent No. 6,330,549, col. 1:11-36).
• The Patented Solution: The invention proposes a system where "protective code" embedded within the software controls its functionality based on digitally signed "authorization messages" from a trusted source, such as a billing agency (’549 Patent, col. 2:39-46). The software contains a public key to verify the digital signature of the authorization message, confirming its authenticity before enabling protected features (’549 Patent, col. 3:30-44; Fig. 1). The system is also designed to perform an "integrity self-check" to ensure the protective code itself has not been altered (’549 Patent, col. 4:1-17).
• Technical Importance: This approach sought to create a more robust and automated enforcement mechanism for the "try-before-you-buy" shareware model, tying software activation directly to a verifiable, cryptographically secure payment or authorization event (’549 Patent, col. 4:30-40).

Key Claims at a Glance

• The complaint asserts infringement of "one or more claims" of the '549 Patent (Compl. ¶9). Independent claim 1 is representative of the core invention.
• Independent Claim 1 elements:
  • Inhibiting a functional feature of a computer program from running on a user computer.
  • The inhibition continues until the user computer receives an authorization message digitally signed by an authorized party using a secret key.
  • Providing the embedded protective code with access to the corresponding public checking key.
  • Running an integrity self-check on the computer program to confirm it is in an "anticipated state."
  • Communicating the authorization message to the user computer.
  • Applying the public key to authenticate the message.
  • Enabling the functional feature if the message is authenticated and the integrity check passes.
• Plaintiff reserves the right to modify its infringement theories and assert other claims as discovery progresses (Compl. ¶15).

III. The Accused Instrumentality

Product Identification

The complaint identifies the accused product as Defendant's website, https://wizkids.com/ (Compl. ¶10).

Functionality and Market Context

The complaint alleges that Defendant "makes, uses, sells, offers for sale, or imports one or more products that infringe" and identifies the website as the "Accused Product" (Compl. ¶¶9-10). No specific features, functions, or operational details of the website are described. The complaint does not provide any allegations regarding the website's commercial importance or market position. No probative visual evidence provided in complaint.

IV. Analysis of Infringement Allegations

The complaint alleges that Defendant directly infringes the ’549 Patent by "making and using (including testing) its Accused Product" (Compl. ¶12). However, it does not provide a narrative infringement theory or map any specific features of the accused website to the elements of the asserted claims. The complaint states that its infringement theory would be understood by a person of ordinary skill in the art upon review of the complaint, the patent, and an "Exhibit B" (Compl. ¶14). This Exhibit B, which presumably contains claim charts, was not attached to the complaint as filed with the court and is not available for analysis. As a result, the complaint contains only conclusory allegations of infringement without supporting factual detail.

Identified Points of Contention

• Scope Questions: The core of the dispute may center on whether the claims of the ’549 Patent, which describe an "executable computer program" with "embedded protective code" running on a "user computer" (’549 Patent, col. 8:46-59), can be construed to cover the operation of a commercial website. This raises the question of whether server-side code and browser interactions fall within the scope of a patent directed at client-side "shareware."
• Technical Questions: A central technical question will be whether the accused website employs any functionality corresponding to the claimed cryptographic process. Specifically, what evidence, if any, can Plaintiff provide to demonstrate that the website (1) inhibits functionality pending receipt of a (2) "digitally signed" authorization message, and (3) uses a public key to authenticate that message before (4) enabling the functionality, as required by claim 1.

V. Key Claim Terms for Construction

The Term: "computer program" including "embedded protective code"

• Context and Importance: This term appears central to the dispute, as the patent specification consistently discusses "executable computer programs" and "shareware" (e.g., ’549 Patent, col. 1:8, 1:51). Practitioners may focus on this term because the infringement allegation against a website (Compl. ¶10) suggests Plaintiff will argue for a broad construction that includes server-side applications and/or client-side web scripts, while Defendant may argue the term is limited to the standalone, executable software applications described in the patent.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The claims themselves do not explicitly limit the "computer program" to a specific type (e.g., "shareware" or "executable"), which may support an argument that the term should be given its plain and ordinary meaning, potentially encompassing any set of computer-readable instructions.
  • Evidence for a Narrower Interpretation: The patent’s background, summary, and detailed description heavily frame the invention in the context of distributable "shareware" programs installed on a "user's host computer" (’549 Patent, col. 4:65-67). Language discussing distribution models and installation on a "host computer" could be used to argue the claims are limited to that specific environment.

The Term: "authorization message that is digitally signed by an authorized party using a secret signing key"

• Context and Importance: This term defines the core security mechanism of the invention. The viability of the infringement case depends on whether any part of the accused website's operation can be characterized as using this specific cryptographic method.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The patent describes the "authorized party" as potentially being a "supplier controlled computer" or a "central billing agency" (’549 Patent, col. 3:25-27, col. 4:41-43), which could be argued to cover a modern e-commerce backend server.
  • Evidence for a Narrower Interpretation: The patent provides a specific implementation where an agent's authority is certified by a "superior authority" using a distinct second key pair (’549 Patent, Claim 2). This detailed, hierarchical cryptographic structure, illustrated in Figure 1, may be used to argue for a narrow construction that requires more than a generic secure login or transaction process.

VI. Other Allegations

Indirect Infringement

The complaint does not contain allegations of indirect infringement (i.e., induced or contributory infringement). Count I is explicitly for "Direct Infringement" (Compl. p. 2).

Willful Infringement

The complaint does not include a specific count for willful infringement. It alleges that Defendant has known of its infringement "Since at least the date that Defendant was served with a copy of this Complaint" (Compl. ¶16). This allegation could potentially support a claim for post-filing willfulness but does not allege pre-suit knowledge. The prayer for relief requests a judgment that the case is "exceptional under 35 U.S.C. § 285" (Compl., Prayer for Relief ¶D).

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

The disposition of this case will likely depend on the resolution of two fundamental issues:

1. A core issue will be one of definitional scope: Can the term "computer program," as described in a patent focused on protecting client-side executable shareware, be construed to cover the operation of a commercial, server-based website? The outcome of this claim construction question may be dispositive.

2. A key evidentiary question will be one of factual support: The complaint lacks any specific factual allegations detailing how the accused website performs the claimed infringement. A central issue will be whether Plaintiff can, through discovery, uncover evidence that the accused website actually uses a cryptographic method corresponding to the "digitally signed... authorization message" protocol that is the centerpiece of the patented invention.