DCT

2:13-cv-00057

Lodsys Group LLC v. Crocs Inc

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Key Events
Complaint

I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 2:13-cv-00057, E.D. Tex., 01/29/2013
  • Venue Allegations: Plaintiff alleges venue is proper in the Eastern District of Texas because defendants reside in the district, a substantial part of the events giving rise to the claims occurred there, and/or defendants maintain a regular and established practice of business in the district.
  • Core Dispute: Plaintiff alleges that Defendants’ e-commerce websites, which feature live interactive chat functionalities, infringe patents related to systems for gathering customer feedback and designing products based on that information.
  • Technical Context: The technology relates to embedding interactive feedback mechanisms directly into products and services to create a continuous data-gathering channel between customers and vendors for product improvement.
  • Key Procedural History: The complaint alleges that defendants became aware of the infringing nature of their services upon receiving a notice letter from the plaintiff or upon the filing of the complaint, which forms the basis for the willfulness allegation. The asserted patents claim priority to an application filed in 1992.

Case Timeline

Date Event
1992-08-06 Earliest Priority Date for ’565 and ’078 Patents
2007-05-22 U.S. Patent No. 7,222,078 Issued
2009-11-17 U.S. Patent No. 7,620,565 Issued
2013-01-29 Complaint Filed

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

U.S. Patent No. 7,620,565 - "Customer-Based Product Design Module"

  • Patent Identification: U.S. Patent No. 7,620,565, titled "Customer-Based Product Design Module," issued November 17, 2009 (Compl. ¶9).

The Invention Explained

  • Problem Addressed: The patent family addresses the increasing speed of product development cycles, which creates a need for faster, more direct, and broader methods for gathering customer feedback than traditional market research can provide (’078 Patent, col. 1:16-34).
  • The Patented Solution: The invention describes a “Customer-Based Product Design Module” intended to be built into products and services. This module establishes a network of direct, two-way communication between the vendor and the customer, allowing the vendor to collect user feedback during the actual use of the product and use that data to drive iterative improvements (’078 Patent, Abstract; col. 2:21-39; Fig. 1).
  • Technical Importance: The technology proposes to transform products from static objects into active nodes in a continuous learning system, enabling data-driven product design and fostering a closer partnership between vendors and their customers (’078 Patent, col. 2:46-54).

Key Claims at a Glance

  • The complaint asserts infringement of at least claim 15 of the ’565 Patent (Compl. ¶¶10-13).
  • The complaint does not provide the language of the asserted claim.

U.S. Patent No. 7,222,078 - "Methods and Systems for Gathering Information from Units of a Commodity Across a Network"

  • Patent Identification: U.S. Patent No. 7,222,078, titled "Methods and Systems for Gathering Information from Units of a Commodity Across a Network," issued May 22, 2007 (Compl. ¶15).

The Invention Explained

  • Problem Addressed: As described for the ’565 Patent, the invention addresses the shortcomings of traditional product testing and market research, which are often too slow, expensive, and disconnected from the actual customer experience to keep pace with modern product development (’078 Patent, col. 1:16-34).
  • The Patented Solution: The invention discloses a system for gathering information from users of a “commodity” (i.e., a product or service). A user interface within each unit of the commodity facilitates a “two-way local interaction” to elicit the user’s perceptions. The results are stored in a local memory and transmitted via a communication element to a central location for collection and management (’078 Patent, Abstract; Fig. 17).
  • Technical Importance: This system architecture creates a framework for turning everyday products into an "interactive learning system that connects vendors, users and marketplaces worldwide," thereby accelerating product improvement based on direct user feedback (’078 Patent, col. 2:46-54).

Key Claims at a Glance

  • The complaint asserts infringement of at least claim 1 of the ’078 Patent (Compl. ¶¶16-19).
  • Independent claim 1 of the ’078 Patent recites the following essential elements for a system:
    • units of a commodity that can be used by respective users in different locations
    • a user interface, which is part of each unit, for two-way local interaction to elicit information about the user's perception of the commodity
    • a memory within each of the units of the commodity capable of storing results of the interaction
    • a communication element associated with each unit capable of carrying results to a central location
    • a component capable of managing the interactions and collecting the results at the central location

III. The Accused Instrumentality

Product Identification

Functionality and Market Context

  • The complaint identifies the specific accused functionality as the "live interactive chat features" available on the defendants' e-commerce websites (Compl. ¶¶10, 11, 12, 13, 16, 17, 18, 19). The complaint alleges that these features are used to implement the claimed systems for customer-based design and information gathering (Compl. ¶¶9, 15). The complaint does not provide further technical detail on the operation of these chat features or their market positioning beyond their presence on the defendants' commercial websites.

No probative visual evidence provided in complaint.

IV. Analysis of Infringement Allegations

The complaint alleges infringement of at least claim 15 of the ’565 Patent but does not provide the language of the claim, precluding the creation of a detailed claim chart summary. The complaint’s narrative theory is that the "live interactive chat features" on the defendants' websites meet the limitations of claim 15 (’565 Patent, col. 1:1-1:1).

U.S. Patent No. 7,222,078 Infringement Allegations

Claim Element (from Independent Claim 1) Alleged Infringing Functionality Complaint Citation Patent Citation
units of a commodity that can be used by respective users in different locations The defendants' websites, which the complaint frames as a service (a type of commodity) accessed by users from various geographic locations. ¶16 col. 15:60-63
a user interface, which is part of each of the units of the commodity, configured to provide a medium for two-way local interaction...to elicit...information about the user's perception of the commodity The "live interactive chat features" on the websites, which allegedly facilitate two-way communication to gather information from users. ¶16 col. 2:46-49
a memory within each of the units of the commodity capable of storing results of the two-way local interaction... The complaint does not specify the location of the allegedly infringing memory; it may allege that this element is met by memory on the user's local computer (e.g., browser cache) or on the defendants' servers. ¶16 col. 11:13-16
a communication element associated with each of the units of the commodity capable of carrying results...to a central location The internet connection and network protocols that transmit data from the user's computer to the defendants' servers operating the chat service. ¶16 col. 10:26-35
a component capable of managing the interactions of the users in different locations and collecting the results of the interactions at the central location The server-side software and infrastructure that hosts the live chat service, manages interactions with multiple users, and collects the resulting data. ¶16 col. 10:36-41
  • Identified Points of Contention:
    • Scope Questions: The infringement analysis may focus on whether the term "commodity", which is exemplified in the patent with physical devices like fax machines, can be construed to read on an e-commerce website. A further question is whether a "live interactive chat feature," often used for transactional customer support, performs the claimed function of eliciting user "perceptions of the commodity" for product design purposes.
    • Technical Questions: A potential dispute may arise over the claim limitation requiring a "memory within each of the units." If the "unit" is the user's computer, the central question will be whether the accused websites utilize memory on the user's device in a manner that satisfies this element, or if all substantive data storage occurs centrally on the defendants' servers, potentially creating a mismatch with the claimed architecture.

V. Key Claim Terms for Construction

  • The Term: "commodity"

  • Context and Importance: This term's construction is central to whether the patent applies to the accused websites. The patent's specification frequently uses physical electronic devices as examples, but the infringement theory applies the claim to software-based web services. Practitioners may focus on this term because its scope could determine the applicability of the patent to modern e-commerce.

  • Intrinsic Evidence for Interpretation:

    • Evidence for a Broader Interpretation: The specification states that the invention can be "built into certain products and services" and can transform "user interfaces in products, equipment, tools and toys," suggesting a broad application beyond any single embodiment (’078 Patent, col. 2:25-26, col. 2:46-49).
    • Evidence for a Narrower Interpretation: The detailed description and figures predominantly illustrate the invention as a physical module embedded in tangible hardware like fax machines, VCRs, and electronic typewriters, which could be argued to limit the term to such physical goods (’078 Patent, Figs. 2-5; col. 11:30-41).

  • The Term: "memory within each of the units of the commodity"

  • Context and Importance: This term is critical for determining whether the architecture of the accused websites matches the claimed system. Web applications often rely on central server-side storage rather than persistent storage on the user's device (the "unit"). Practitioners may focus on this term as a potential basis for a non-infringement argument.

  • Intrinsic Evidence for Interpretation:

    • Evidence for a Broader Interpretation: The claim language does not specify the type of memory (e.g., volatile vs. non-volatile) or the duration of storage. This could support an argument that transient storage in a user's browser cache or RAM is sufficient to meet the limitation.
    • Evidence for a Narrower Interpretation: The specification describes a self-contained "CB-PD Module" that includes its own "memory to run Customer Design Instruments (CDI), interact with the Customer and store the Aggregate Customer Desires (ACD) data," which may suggest a more structured and persistent storage capability within the user's unit than is typical for a web chat session (’078 Patent, col. 11:12-16).

VI. Other Allegations

  • Indirect Infringement: The complaint makes conclusory allegations of indirect infringement, including inducement of website users, but does not plead specific facts explaining how defendants allegedly instruct or encourage users to perform the claimed steps (Compl. ¶¶10, 16).
  • Willful Infringement: The complaint alleges that defendants' infringement became willful at the latest upon their receipt of a notice letter from Lodsys or the filing of the complaint. The claim is thus based on alleged post-suit or post-notice knowledge (Compl. ¶¶14, 20).

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

  • A core issue will be one of technological scope: can the claims of patents rooted in the 1990s concept of embedding physical feedback modules into electronic hardware be construed to cover modern, server-based "live chat" features on e-commerce websites? The case may turn on whether a website is a "commodity" and a chat session is a system for "eliciting...perceptions" in the manner claimed.
  • A key technical question will be one of architectural correspondence: does the accused web-based system, which likely relies on centralized server storage, satisfy the claim requirement for a "memory within each of the units," or is there a fundamental mismatch between the distributed architecture claimed in the patent and the client-server architecture of the accused websites?