EPT Records LLC A Texas Ltd Liability Co v. Buildtools Inc

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: EPT Records LLC (Texas)
  • Defendant: Buildtools, Inc. (Minnesota)
  • Plaintiff’s Counsel: One LLP
• Case Identification: 2:17-cv-00303, E.D. Tex., 04/12/2017
• Venue Allegations: Plaintiff alleges venue is proper in the Eastern District of Texas because Defendant regularly conducts business in the district and has committed the alleged infringing acts there.
• Core Dispute: Plaintiff alleges that Defendant’s cloud-based construction management software infringes a patent related to an online system for servicing customers of building contractors.
• Technical Context: The technology addresses the process of managing custom selections and contract modifications in the home building industry via a centralized online platform.
• Key Procedural History: The asserted patent is a continuation of an application filed in 2001, which is a continuation-in-part of an application filed in 2000, indicating a long development and prosecution history for the claimed subject matter.

Case Timeline

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

U.S. Patent No. 8,145,533 - Builders On-Line Assistant

• Issued: March 27, 2012

The Invention Explained

• Problem Addressed: The patent describes the traditional process for a home buyer to select options (e.g., fixtures, flooring, paint) as inefficient, time-consuming, and frustrating. It notes that customers are often a "captive market" to their builder's limited selections and pricing, while builders struggle to coordinate these choices with various subcontractors and trades. (’533 Patent, col. 1:21-29, col. 3:3-17).
• The Patented Solution: The invention provides a method and apparatus for an online system, operated by a "third-party website provider," to centralize this process. The system includes a customer-facing "first website" for viewing and selecting product options and a contractor-facing "second website" for managing customer information and contracts. This creates a central hub for managing selections and automatically updating contract terms based on those choices. (’533 Patent, Abstract; col. 4:56-65).
• Technical Importance: The invention aimed to replace a fragmented, manual, and often paper-based selection process with a unified, web-based platform to improve efficiency and transparency for home buyers, builders, and suppliers. (’533 Patent, col. 2:25-29).

Key Claims at a Glance

• The complaint asserts independent claim 11. (Compl. ¶8).
• Claim 11 requires an apparatus comprising:
  • a contract term establishment processor for establishing a pre-existing contract between a customer and a building contractor.
  • a first website provided by a third-party website provider for the customer to select product and service options.
  • a second website, associated with the first, for the building contractor to enter customer-related information.
  • a selection processor for receiving the customer's selections through the first website.
  • a contract term change processor for altering the pre-existing contract based on the customer's selections. (Compl. ¶8).
• The complaint does not explicitly reserve the right to assert dependent claims.

III. The Accused Instrumentality

Product Identification

• The accused instrumentality is "Defendant's cloud-based construction management software functionality." (Compl. ¶10).

Functionality and Market Context

• The complaint alleges that the accused software is a system that allows building contractors to manage construction projects. The relevant functionality is described as employing the method of the '533 patent, including establishing contracts, providing a web interface for customers to make selections, allowing contractors to manage project information, and processing contract changes based on those selections. (Compl. ¶10-15). The complaint does not contain specific allegations about the software's market position.

IV. Analysis of Infringement Allegations

The complaint references an "Exhibit B" containing visual evidence of infringement but does not attach the exhibit. The following chart summarizes the infringement allegations based on the complaint's textual description of what is allegedly shown in that exhibit.

• U.S. Patent No. 8,145,533 Infringement Allegations

• Identified Points of Contention:
  • Scope Questions: The complaint alleges infringement by Defendant's software, which is provided to building contractors. A potential question is whether Buildtools, Inc. itself functions as the claimed "third-party website provider," or if its software merely enables its builder-customers to act in that capacity. The claim requires the "third-party" to provide the websites.
  • Technical Questions: Claim 11 requires a "first website" and a "second website." A key technical question is whether the accused cloud-based software, which may present different user interfaces or portals for customers and contractors within a single application, constitutes two distinct "websites" as contemplated by the patent.

V. Key Claim Terms for Construction

• The Term: "third-party website provider"

  • Context and Importance: This term is foundational to the patent's architecture, which envisions an intermediary operating a platform for builders and their customers. The outcome of the infringement analysis may depend on whether Defendant, a software vendor providing a tool directly to builders, can be construed as a "third-party provider" in the relationship between the builder and the home-buying customer.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The specification suggests the system is operated on "one or more central processing units (CPUs) 12 and databases (DBs) 11" by the provider, which could describe a modern SaaS architecture. (’533 Patent, col. 4:56-59).
    • Evidence for a Narrower Interpretation: The patent repeatedly frames the interaction as between a "customer," a "builder," and the "third-party website provider," suggesting three distinct entities. The provider is described as a host for potentially many different builders. (’533 Patent, col. 5:12-16). This may suggest the provider cannot be the entity whose software is used by only one side (the builder).

• The Term: "first website" / "second website"

  • Context and Importance: The claim explicitly requires two websites. Practitioners may focus on this term because the accused product is a single "cloud-based construction management software" platform. The dispute will likely center on whether different user portals within a single software application (e.g., a customer login versus a builder login) meet the definition of two separate websites.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The patent describes the websites as interactive, where "information entered through one website may be made available to and be used by a user of another website." (’533 Patent, col. 4:63-67). This focus on interactive functionality could support an argument that logically separate, password-protected portals suffice.
    • Evidence for a Narrower Interpretation: The patent describes the "first website 16" and "second website 14" with distinct reference numbers in Figure 1 and discusses them as separate constructs, with the first being for the customer to access builder offerings and the second being a "personal webpages 32" for the customer. (’533 Patent, Fig. 1; col. 5:20-22; col. 6:58-65). However, claim 11 recites the second website is for the contractor's use, which aligns with other parts of the specification. This potential ambiguity could be a focus of construction.

VI. Other Allegations

• Indirect Infringement: The complaint alleges that Defendant actively induces infringement by providing its software to customers (builders) with "full knowledge of the '533 patent and the specific intent that its acts and the acts of its customers...infringe." (Compl. ¶16, 18).
• Willful Infringement: Willfulness is alleged to have occurred "at least since Defendant first learned about the '533 patent." (Compl. ¶19). This basis suggests the allegation may be predicated on notice from the complaint itself, but leaves open the possibility of proving pre-suit knowledge.

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

• A core issue will be one of definitional scope: can the term "third-party website provider", which the patent describes as an intermediary platform for multiple builders, be construed to read on a SaaS company that provides its software directly to individual building contractors for their own use?
• A key architectural question will be one of structural mapping: does the accused "cloud-based construction management software" embody the claimed architecture of a distinct "first website" and "second website", or does its implementation as a single, integrated platform with different user portals represent a fundamental mismatch with the claim language?