Electronic Receipts Delivery Systems LLC v. Macy's Inc

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Electronic Receipts Delivery Systems, LLC (Texas)
  • Defendant: Macy's, Inc. (Delaware) and Macys.com, LLC (California)
  • Plaintiff’s Counsel: Kizzia & Johnson PLLC
• Case Identification: 2:18-cv-00090, E.D. Tex., 03/21/2018
• Venue Allegations: Plaintiff alleges venue is proper in the Eastern District of Texas because Defendant has a regular and established place of business in the district, citing a specific store location in Plano, Texas.
• Core Dispute: Plaintiff alleges that Defendant’s "eReceipts" system, which provides customers with digital receipts via email for in-store purchases, infringes a patent related to the automated issuance of digital receipts linked to credit card transactions.
• Technical Context: The technology at issue addresses the retail industry's shift from paper-based transaction records to more durable and manageable electronic formats, aiming to automate the process for consumers.
• Key Procedural History: A Post-Grant Review Certificate included with the patent, issued on February 10, 2022, indicates that all claims (1-20) of the ’551 Patent were cancelled by the U.S. Patent and Trademark Office. This cancellation occurred subsequent to the filing of this complaint.

Case Timeline

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

U.S. Patent No. 8,534,551 - "System and Method for Issuing Digital Receipts for Purchase Transactions Over a Network"

The Invention Explained

• Problem Addressed: The patent's background section describes paper receipts as problematic because they are often lost or discarded, complicating returns, warranty claims, expense tracking, and proof-of-purchase for rebates (’551 Patent, col. 2:5-16).
• The Patented Solution: The invention proposes a system where a customer can register to receive digital receipts in association with a credit card account. When a transaction is made using that card, the system automatically retrieves the customer’s pre-registered destination (e.g., an email address) and transmits a digital receipt without requiring further customer input at the point of sale (’551 Patent, Abstract; Fig. 6).
• Technical Importance: This approach sought to automate receipt management for consumers by linking the receipt-delivery process directly to the payment instrument, reducing the reliance on manual, paper-based record-keeping (’551 Patent, col. 2:17-23).

Key Claims at a Glance

• The complaint asserts independent claims 1 (method), 11 (system), and 16 (computer-readable medium) (’551 Patent, col. 11:56-12:56; Compl. ¶12).
• Independent Claim 1 (Method): The essential elements include:
  • Receiving a registration request to associate a credit card with digital receipts.
  • Storing a customer record in a database that links the credit card to a "destination."
  • Receiving transaction information from a point-of-sale terminal.
  • Retrieving the customer record from the database using the credit card information.
  • Initiating a charge to the credit card account.
  • Automatically transmitting a digital receipt to the destination "without input from the first customer."
• Independent Claim 11 (System): The essential elements describe a terminal comprising:
  • A communication mechanism to receive transaction information.
  • A database to store credit card and associated customer records, including a "destination for digital receipts."
  • Computing devices configured to verify the transaction, retrieve the customer record, determine the destination, and "automatically transmit" the digital receipt "without input from the customer."
• Independent Claim 16 (Computer-Readable Medium): This claim recites instructions for a computer to perform the steps outlined in method claim 1.
• The complaint reserves the right to assert dependent claims 2, 12, and 17, which add limitations related to providing solicitations with the digital receipt (Compl. ¶12).

III. The Accused Instrumentality

Product Identification

Defendant's "payment systems that issue digital receipts to customers upon completion of a payment transaction," referred to as the "eReceipts" system (Compl. ¶12).

Functionality and Market Context

The complaint alleges that customers can sign up for Macy's eReceipts, which associates their credit card account with an email address (Compl. ¶13). When a transaction is subsequently completed with that card, a digital receipt is automatically emailed to the customer (Compl. ¶18). The complaint includes a screenshot from Defendant's website illustrating the user preference setting to receive "Email receipts only," which requires a customer to have "signed up for eReceipts in a Macy's store" to be eligible (Compl. p. 5). This process is alleged to involve point-of-sale terminals connected to a server that stores customer records in a database (Compl. ¶13-14).

IV. Analysis of Infringement Allegations

’551 Patent Infringement Allegations (Claim 1)

’551 Patent Infringement Allegations (Claim 11)

Identified Points of Contention

• Scope Questions: A central question may concern the scope of "without input from the first customer." If the accused system requires any customer action at the point of sale for each transaction (e.g., confirming an email address on a PIN pad), it raises the question of whether this limitation is met. The complaint alleges the transmission is automatic once a customer has opted in (Compl. ¶18).
• Technical Questions: The complaint alleges infringement by a "System" that includes servers, databases, and POS terminals (Compl. ¶12-13). Evidence will be needed to establish that all claimed components of the system claims (e.g., Claim 11) are present and operate in the claimed manner within Defendant's infrastructure.

V. Key Claim Terms for Construction

• The Term: "automatically transmitting ... without input from the first customer" (Claim 1, Claim 11)
• Context and Importance: This phrase is critical to distinguishing the invention from systems that may require a customer to make a choice about receipt delivery during each transaction. Its construction will likely determine whether the accused "opt-in" system falls within the scope of the claims. Practitioners may focus on this term because the factual question of what happens at the point of sale for an opted-in customer is central to infringement.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The specification describes a one-time registration process, after which the system handles receipt delivery. For example, it states "the store clerk will ask the customer if he wants to opt into the receipt system so that he receives a digital receipt each time he makes a purchase" (’551 Patent, col. 8:30-34). This could support a reading where "without input" refers to any input after this initial opt-in.
  • Evidence for a Narrower Interpretation: The claim language itself, given its plain and ordinary meaning, could be argued to require absolutely no customer interaction related to the receipt at the POS terminal. The patent does not appear to explicitly define the phrase or provide embodiments that clarify the boundary between a one-time opt-in and per-transaction input.

VI. Other Allegations

• Indirect Infringement: The complaint alleges inducement to infringe (Compl. ¶12). This allegation appears to be based on Defendant providing the eReceipts system and encouraging its use. The complaint includes a screenshot from Defendant's customer service website with instructions on how to manage eReceipt preferences, which may be presented as evidence of instruction and encouragement (Compl. p. 5).
• Willful Infringement: The complaint does not plead specific facts to support a claim for willful infringement, such as allegations of pre-suit knowledge of the patent or objective recklessness.

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

• A threshold issue for the court will be one of mootness: Given that the U.S. Patent and Trademark Office cancelled all claims of the ’551 Patent in a post-grant proceeding after the complaint was filed, the primary question is whether a viable cause of action for past damages remains.
• Assuming the patent were valid, a key factual question would be one of automation: Does the accused Macy's eReceipts system operate "without input from the first customer" at the point of sale for an opted-in user, as required by the independent claims, or is a per-transaction confirmation or selection required that would place it outside the claim scope?
• A third issue concerns dependent claims: The infringement allegations for dependent claims 2 and 12 rest on whether solicitations included in the eReceipt, such as a link to a "Holiday Gift Guide" (Compl. p. 11), meet the claim requirement of being selected "based on the information about the transaction" (’551 Patent, col. 14:1-3). This raises an evidentiary question about the logic used to select and append such offers.