DCT
3:03-cv-01924
Decisioningcom Inc v. Federated Dept Store
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: decisioning.com, Inc. (Delaware)
- Defendant: Federated Department Stores, Inc., et al. (Delaware, et al.)
- Plaintiff’s Counsel: Sowell Gray Stepp & Laffitte, LLC
- Case Identification: 3:03-cv-01924, D.S.C., 08/08/2006
- Venue Allegations: Venue is asserted on the basis that each defendant is subject to personal jurisdiction in the District of South Carolina and has committed acts of patent infringement within the district.
- Core Dispute: Plaintiff alleges that Defendants' e-commerce websites, which provide systems for consumers to apply for and obtain store credit cards online, infringe a patent directed to an automated system for processing financial account applications.
- Technical Context: The technology at issue enables the real-time, automated underwriting and approval of credit applications over a network without human intervention, a foundational process for modern online financial services.
- Key Procedural History: The original complaint was filed in 2003. This Amended Complaint, filed in August 2006, follows a March 2006 "Notice of Intent to Issue Reexamination Certificate" from the USPTO, which the complaint states confirmed the validity of the patent's claims. The reexamination's conclusion may have prompted the filing of this amended action against an expanded list of defendants.
Case Timeline
| Date | Event |
|---|---|
| 1993-08-27 | U.S. Patent No. 6,105,007 Priority Date |
| 2000-08-15 | U.S. Patent No. 6,105,007 Issue Date |
| 2006-03-27 | USPTO Confirms Validity in Reexamination |
| 2006-08-08 | Amended Complaint Filing Date |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 6,105,007 - “Automatic Financial Account Processing System”
- Patent Identification: U.S. Patent No. 6,105,007, “Automatic Financial Account Processing System,” issued August 15, 2000.
The Invention Explained
- Problem Addressed: The patent identifies the inconvenience and time required for consumers to conduct financial transactions, such as applying for a loan, which traditionally required a physical visit to a financial institution during business hours ('007 Patent, col. 1:22–34, 1:47–53).
- The Patented Solution: The invention proposes a "closed loop" automated system that allows a user at a remote interface to apply for a financial account. A computer controller manages the process: it gathers applicant information, accesses external databases (e.g., credit bureaus) to obtain data for an underwriting decision, determines in real-time whether to approve the application, and completes the transaction, all without human intervention ('007 Patent, Abstract; col. 2:36–54). The system architecture is depicted in the patent’s Figure 1, showing a central transaction processor connected to an underwriting model and various databases ('007 Patent, Fig. 1).
- Technical Importance: The technology aimed to replace a multi-step, human-dependent, and often delayed process with a fully automated, nearly instantaneous one, facilitating on-demand credit and account opening.
Key Claims at a Glance
- The complaint’s allegations most closely track independent claim 1.
- The essential elements of independent claim 1 include:
- A "remote interface" for an applicant to request an account and submit data.
- A "data processing system" with "establishment criteria" for evaluating an application, using data from the applicant and at least one external "database".
- A "communication network" linking the interface and the data processing system.
- The data processing system operating "without human assistance" to:
- receive applicant data.
- access the database(s).
- verify the applicant's identity.
- "compare" applicant and database information to "determine in real time" if the account is approved.
- "send a result" back to the applicant interface.
III. The Accused Instrumentality
Product Identification
- The systems and processes used on the websites of the "Retail Store Entities," including www.macys.com, www.bloomingdales.com, and others, that allow consumers to apply for and receive financial accounts, such as a store-branded credit card (Compl. ¶¶ 4, 12–19).
Functionality and Market Context
- The complaint alleges that Defendants' websites provide an interactive remote interface where consumers can apply for a credit card. The underlying systems allegedly operate automatically to receive applicant data, access databases for identity and credit information, determine in real time whether to approve the application, and inform the applicant of the decision (Compl. ¶10, ¶20). These online application services are described as a continuous and systematic part of Defendants' business operations in the district (Compl. ¶¶ 12–19).
IV. Analysis of Infringement Allegations
The complaint does not contain a formal claim chart. The infringement theory is presented in narrative paragraphs that track the language of the patent’s claims. No probative visual evidence provided in complaint.
'007 Patent Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| a. a remote interface adapted to: i. allow an applicant to remotely request an account; and ii. receive data from an applicant; | Defendants' websites ("Retail Store Web Sites") act as a remote interface allowing a credit card applicant to remotely request an account and submit data for the application. | ¶10, ¶20 | col. 5:42-45 |
| b. a data processing system with associated memory having establishment criteria... | Defendants operate systems and processes with access to databases and criteria to evaluate an applicant's identity and ability to comply with account requirements. | ¶10, ¶20 | col. 5:50-60 |
| c. a communication network electronically coupling said data processing system to said applicant interface; | The accused systems are accessible via the World Wide Web, which serves as the communication network connecting the applicant's interface to the defendants' back-end processing systems. | ¶4, ¶29 | col. 2:55-56 |
| d. without human assistance, said data processing system adapted to: ... compare... to determine in real time and without human assistance if the applicant's requested account is approved; | Defendants' systems allegedly perform all steps—receiving data, accessing databases, verifying identity, and comparing information to make an approval decision—in real time and without human assistance. | ¶10, ¶20 | col. 6:45-51 |
| v. send a result to the remote applicant interface informing the applicant whether or not establishment of the requested account was approved. | After the real-time determination, the system sends a result back to the applicant's remote interface, informing them of the approval or denial. | ¶10, ¶20 | col. 6:51-54 |
- Identified Points of Contention:
- Scope Questions: The patent’s specification frequently describes the "remote interface" as a physical "kiosk" ('007 Patent, col. 3:43, Fig. 2). A central dispute may be whether this term's scope is limited to such dedicated terminals or if it can be construed to cover general-purpose personal computers accessing Defendants' public websites, as alleged in the complaint. Plaintiff may point to broader language such as "a variety of communication and electronic routes" to support its position ('007 Patent, col. 3:10-11).
- Technical Questions: The complaint alleges the accused systems operate "in real time" and "without human assistance" (Compl. ¶10). The factual accuracy of this characterization will likely be contested. The litigation may require evidence on whether Defendants' systems involve batch processing, manual review queues for certain applications, or other forms of human intervention that could place their operation outside the scope of the claims.
V. Key Claim Terms for Construction
The Term: "remote interface"
- Context and Importance: The construction of this term is critical to determining whether the patent covers the accused instrumentalities (public websites accessed via personal computers) or is confined to the "kiosk" embodiment heavily featured in the patent.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The claim term itself is broad. The specification mentions that an applicant may apply "via a variety of communication and electronic routes" ('007 Patent, col. 3:10-11), which could be argued to encompass more than just a physical kiosk.
- Evidence for a Narrower Interpretation: The patent's detailed description and figures focus heavily on a physical "kiosk" as the preferred embodiment for the user interface ('007 Patent, col. 3:43-50; Figs. 2-3). A defendant may argue this context limits the term's scope.
The Term: "without human assistance"
- Context and Importance: This negative limitation is a core element of the claimed invention. Its meaning will define the required level of automation for a system to infringe.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: This could be interpreted as the core decision-making process being automated, even if humans perform setup or handle edge cases. The patent refers to processing "without human intervention, assistance or decision-making" ('007 Patent, col. 5:20-22).
- Evidence for a Narrower Interpretation: A defendant may argue this requires absolute automation from start to finish for a given transaction. The patent's emphasis on a completely "closed loop" process may support a stricter reading ('007 Patent, col. 2:38, 3:37-39).
VI. Other Allegations
- Indirect Infringement: The complaint alleges that Defendants induced and contributed to the infringement of the ’007 Patent (Compl. ¶29, ¶35). The alleged factual basis is that Defendants make, use, and offer for sale the infringing systems and processes, thereby inducing others (e.g., consumers) to use them.
- Willful Infringement: The complaint alleges that Defendants' infringement has been "deliberate, willful and wanton and with full and actual knowledge of the '007 Patent" (Compl. ¶32, ¶38). The complaint does not plead specific facts supporting pre-suit knowledge, such as a notice letter or prior litigation.
VII. Analyst’s Conclusion: Key Questions for the Case
- A core issue will be one of definitional scope: can the term "remote interface," described extensively in the patent in the context of a physical "kiosk," be construed to cover the accused systems, which are public websites accessed by consumers on their own computers?
- A key evidentiary question will be one of functional operation: does the accused online credit application process operate "without human assistance" and "in real time" as required by the claims, or does it incorporate backend human review, delays, or batch processing that distinguish it from the patented "closed loop" system?
- A central legal question will be the impact of reexamination: to what degree will the USPTO's confirmation of the patent's validity in the 2006 reexamination proceeding narrow the invalidity defenses available to the defendants and influence the court's view of the patent's overall strength?