DCT
2:19-cv-00017
Flectere LLC v. Costco Wholesale Corp
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: Flectere LLC (Texas)
- Defendant: Costco Wholesale Corporation (Washington)
- Plaintiff’s Counsel: Rabicoff Law LLC
- Case Identification: 2:19-cv-00017, E.D. Tex., 01/18/2019
- Venue Allegations: Plaintiff alleges venue is proper in the Eastern District of Texas because Defendant operates retail stores and has a regular and established place of business in the district.
- Core Dispute: Plaintiff alleges that Defendant’s e-commerce website, specifically its online checkout process and product display features, infringes two patents related to computerized form processing and dynamic web page formatting.
- Technical Context: The patents-in-suit relate to early web application technologies for ensuring data integrity in electronic forms and providing user-customizable content presentation.
- Key Procedural History: Post-filing, both patents-in-suit were subject to Inter Partes Review (IPR) proceedings. In IPR2020-00402, all claims (1-32) of the ’506 Patent were cancelled, with the certificate issued on October 8, 2021. In IPR2020-00400, all claims (1-24) of the ’094 Patent were cancelled, with the certificate issued on October 13, 2021. The cancellation of all asserted claims is a case-dispositive event.
Case Timeline
| Date | Event |
|---|---|
| 1997-09-12 | ’506 Patent Priority Date |
| 1999-05-27 | ’094 Patent Priority Date |
| 2001-08-07 | ’506 Patent Issue Date |
| 2002-06-04 | ’094 Patent Issue Date |
| 2019-01-18 | Complaint Filing Date |
| 2021-10-08 | IPR Certificate Issued Cancelling All Claims of ’506 Patent |
| 2021-10-13 | IPR Certificate Issued Cancelling All Claims of ’094 Patent |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 6,272,506 - "Computerized Verification Form Processing System and Method," issued August 7, 2001
The Invention Explained
- Problem Addressed: The patent describes a deficiency in early computerized forms where changing a data entry completely overwrites the original value, eliminating any record of the change. This was problematic in regulated industries, such as pharmaceuticals, where FDA regulations required a clear audit trail for any data modifications, akin to crossing out an error on paper and initialing it (Compl. ¶10; ’506 Patent, col. 2:32-41).
- The Patented Solution: The invention proposes a system that monitors for changes in a form’s data fields. When a change is detected, it prompts the user to authorize or “sign off” on the modification, for example by entering their initials or a digital signature. The system then stores a record of the original value, the new value, the user's authorization, and a timestamp, thereby creating a "clear audit trail" for all data entry events (’506 Patent, col. 2:50-59, Fig. 13).
- Technical Importance: The technology aimed to provide a method for electronic record-keeping systems to comply with the stringent data integrity and traceability requirements of regulatory bodies like the FDA in a paperless environment (’506 Patent, col. 4:54-65).
Key Claims at a Glance
- The complaint asserts independent Claim 11 (Compl. ¶18).
- Essential elements of Claim 11 include:
- a database for storing at least one form including one or more fields;
- a viewer for viewing a stored form;
- a data entry device for allowing a user to enter information into the fields of the form;
- a monitoring routine configured to actively monitor whether previously entered information in a field of the form is being changed by the user; and
- a field modification verification routine configured to, on the viewer, prompt the user to sign off on any such change.
U.S. Patent No. 6,401,094 - "System and Method for Presenting Information in Accordance with User Preference," issued June 4, 2002
The Invention Explained
- Problem Addressed: The patent notes that most websites at the time were static, presenting information to all users in the same format. This one-size-fits-all approach did not account for different users' "personality traits" or preferences for how information should be presented (Compl. ¶15; ’094 Patent, col. 1:49-54).
- The Patented Solution: The invention describes a system that stores information in a database and dynamically generates a web page formatted according to a user's selected preference. A user can specify a preference (e.g., corresponding to a "personality trait"), and the system retrieves the underlying information and formats it in accordance with that preference before sending the customized page to the user's workstation (’094 Patent, Abstract; col. 2:13-20).
- Technical Importance: The technology describes an architecture for creating dynamic, user-centric web applications that tailor the user experience beyond just the content, moving away from the static, designer-dictated presentation model prevalent at the time (’094 Patent, col. 2:3-6).
Key Claims at a Glance
- The complaint asserts independent Claim 13 (Compl. ¶28).
- Essential elements of Claim 13 include:
- (a) storing the information;
- (b) permitting the user to specify the preference through the workstation and receiving a request for the information and an indication of the preference;
- (c) retrieving the information from a database server;
- (d) dynamically formatting the information in accordance with the preference to form custom-formatted information; and
- (e) sending the custom-formatted information to the workstation.
III. The Accused Instrumentality
Product Identification
The accused instrumentality is the Costco e-commerce website, www.costco.com (Compl. ¶¶ 18, 28). Specifically, the allegations target the payment processing portal for the ’506 Patent and the product search results pages for the ’094 Patent.
Functionality and Market Context
- The payment processing portal is a web-based form where customers enter shipping and payment information to complete a purchase. The complaint highlights an "Address Verification" feature, which may suggest a standardized version of a manually entered address and prompt the user to select one (Compl. ¶23). Figure 5 shows a dialog box prompting a user to select between an "Entered Address" and a "Suggested Address" (Compl. ¶23, Fig. 5).
- The product search results pages display items for sale. These pages include user interface controls that allow a user to switch the presentation of search results between a "Grid" view and a "List" view, altering the visual layout of the products on the page (Compl. ¶30). Figure 11 in the complaint depicts the user interface for selecting between these views (Compl. ¶30, Fig. 11).
IV. Analysis of Infringement Allegations
’506 Patent Infringement Allegations
| Claim Element (from Independent Claim 11) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| a database for storing at least one form including one or more fields | Costco's system internally stores data entered by users into the checkout form. | ¶19 | col. 4:21-23 |
| a viewer for viewing a stored form | The user's web browser displays the checkout form to the user. | ¶20 | col. 4:23-24 |
| a data entry device for allowing a user to enter information into the fields of the form | The website allows users to enter data, such as a street address, into the form fields. | ¶21 | col. 4:24-26 |
| a monitoring routine configured to actively monitor whether previously entered information...is being changed | The website portal allegedly monitors whether previously entered information is being changed by users. | ¶22 | col. 4:32-35 |
| a field modification verification routine configured to...prompt the user to sign off on any such change | The "Address Verification" pop-up asks users to confirm a shipping address, which the complaint alleges constitutes a prompt to "sign off." | ¶23 | col. 4:36-39 |
Identified Points of Contention
- Scope Questions: A central question is whether the accused "Address Verification" feature (Compl. Fig. 5) constitutes a "sign off" as contemplated by the patent. The patent specification consistently frames "sign off" in the context of creating a regulatory audit trail via initials or a signature (’506 Patent, col. 2:42-48, Fig. 6). The accused functionality, which prompts a user to select between a manually entered address and a system-suggested one, raises the question of whether it performs the same function as the claimed authorization step.
- Technical Questions: The complaint alleges the system "actively monitor[s]" for changes but primarily points to the address verification feature as evidence (Compl. ¶22). It is a question of fact whether this feature is triggered by real-time monitoring of individual field changes, as the claim requires, or by a validation check upon form submission, which may represent a different technical operation.
’094 Patent Infringement Allegations
| Claim Element (from Independent Claim 13) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| (a) storing the information | Costco's website maintains a backend database that stores product and other information. | ¶29 | col. 2:20-22 |
| (b) permitting the user to specify the preference...and receiving...an indication of the preference | The website allows users to select a "Grid" or "List" view for search results, which the complaint alleges is a "preference." | ¶30 | col. 2:31-35 |
| (c) retrieving the information from a database server | The website retrieves and displays search results from its database when a user performs a search. | ¶31 | col. 2:22-24 |
| (d) dynamically formatting the information in accordance with the preference to form custom-formatted information | The website arranges the search results into a grid or list format based on the user's selection. Figure 13 shows the "Grid View" and Figure 14 shows the "List View." | ¶32, Figs. 13-14 | col. 2:17-20 |
| (e) sending the custom-formatted information to the workstation | The website displays the updated grid or list format of the webpage in the user's browser. | ¶33 | col. 2:17-20 |
Identified Points of Contention
- Scope Questions: The infringement theory hinges on whether selecting a "Grid/List view" toggle qualifies as specifying a "preference" under the patent's definition. The patent specification repeatedly links the "preference" to a user's "personality traits" (e.g., amiable, analytical) that dictate the overall style and tone of the page (’094 Patent, col. 2:18, Abstract). This raises the question of whether the claim term is limited to such personality-based selections or if it can be read broadly to cover any user-selected formatting option.
V. Key Claim Terms for Construction
’506 Patent
- The Term: "sign off on any such change"
- Context and Importance: This term is the lynchpin of the asserted infringement theory. The definition will determine whether the accused "Address Verification" feature, which asks users to choose between two versions of an address, meets this claim limitation.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: A party might argue that the plain and ordinary meaning of "sign off" could encompass any user action that confirms or approves a change.
- Evidence for a Narrower Interpretation: The specification provides substantial context suggesting a narrower meaning tied to regulatory compliance. It discusses FDA requirements for an audit trail and describes embodiments that use a "digital biometric signature or initial capture" or prompt the user to "Enter initials" (’506 Patent, col. 2:35-40, Fig. 6). This may support an interpretation that "sign off" requires a formal act of user authentication, not merely a selection from a list.
’094 Patent
- The Term: "preference"
- Context and Importance: The construction of this term is critical to the infringement analysis for the ’094 Patent. The case turns on whether a simple user interface toggle for layout (Grid/List) falls within the scope of "preference" as used in the claims.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The claim language itself does not explicitly limit the term "preference" to any particular type. One could argue it encompasses any user-selected option that alters the format of information.
- Evidence for a Narrower Interpretation: The specification, including the abstract and detailed description, consistently describes the "preference" as being based on a user's "personality traits" (’094 Patent, Abstract; col. 2:18; col. 5:46-51). Figure 3 illustrates four such personality types (Amiable, Expressive, Analytical, Driver). This evidence suggests the term may be limited to a more substantive, style-defining choice rather than a simple layout toggle.
VI. Other Allegations
- Indirect Infringement: The complaint alleges inducement for both patents based on Costco providing "access to support for, training and instructions for, its website to its customers" (Compl. ¶¶ 24, 34). These allegations do not point to specific instructions that would encourage infringing acts.
- Willful Infringement: The complaint does not allege facts supporting pre-suit knowledge of the patents by Costco. The prayer for relief requests enhanced damages for willful infringement, which suggests the claim is likely based on alleged infringement continuing after the filing of the lawsuit (Compl. p. 20, ¶D).
VII. Analyst’s Conclusion: Key Questions for the Case
Given the procedural posture, the viability of the entire case is the foremost question. Setting that aside, the dispute would have focused on fundamental questions of claim scope.
- A threshold issue is mootness: given that all asserted claims of both patents-in-suit were cancelled in post-filing IPR proceedings, a central question is whether a viable cause of action remains.
- For the ’506 Patent, a core issue would have been one of definitional scope: can the claim term "sign off", rooted in the patent's context of creating a formal, regulatory-compliant audit trail, be construed to cover a standard e-commerce "address verification" prompt where a user selects between two address options?
- For the ’094 Patent, a key question would have been one of technical scope: can the term "preference", which the patent repeatedly describes as being based on user "personality traits" to drive a holistic page format, be construed to read on a common user interface toggle that merely switches between a "Grid" and "List" layout?