HY Ko Products Co LLC v. Hillman Group Inc

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Hy-Ko Products Company LLC (Michigan)
  • Defendant: The Hillman Group, Inc. (Delaware)
  • Plaintiff’s Counsel: Capshaw DeRieux, LLP; Squire Patton Boggs (US) LLP
• Case Identification: 2:21-cv-00197, E.D. Tex., 08/02/2021
• Venue Allegations: Plaintiff alleges venue is proper in the Eastern District of Texas because Defendant has committed acts of patent infringement in the district and maintains multiple regular and established places of business, including manufacturing and distribution facilities, and deploys numerous key duplication machines within the district.
• Core Dispute: Plaintiff alleges that Defendant’s PKOR and KeyKrafter key duplication machines infringe four patents related to automated key duplication technology that uses optical scanning to identify and cut keys.
• Technical Context: The technology relates to automated key duplication kiosks for retail environments, which aim to improve the accuracy and reliability of key cutting over traditional manual methods by using optical imaging and computer analysis.
• Key Procedural History: The complaint describes a long history of competition between the parties, including prior patent and antitrust litigation that settled in 2012. Plaintiff alleges that Defendant misappropriated confidential engineering drawings for Plaintiff’s competing "KID System" and subsequently launched the accused products. These allegations of prior knowledge and copying form the basis for claims of willful infringement.

Case Timeline

Date	Event
2006-01-23	Earliest Priority Date for all Asserted Patents
2012-Late	Prior patent and antitrust litigation between parties settles
2016	Defendant launches accused "KeyKrafter" machine
2017-05-23	U.S. Patent No. 9,656,332 Issues
2017-06-20	U.S. Patent No. 9,682,432 Issues
2017-06-27	U.S. Patent No. 9,687,920 Issues
2019-09-24	U.S. Patent No. 10,421,133 Issues
2021-08-02	Complaint Filing Date

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

U.S. Patent No. 9,656,332 - “Key Duplication Machine,” Issued May 23, 2017

The Invention Explained

• Problem Addressed: The patent describes the challenges of traditional key duplication, where retail employees must manually select a key blank and use a mechanical tracer to cut a new key. This process often results in errors ("miscuts") and customer frustration due to the difficulty in distinguishing between subtly different key blanks. (’332 Patent, col. 1:59-col. 2:21).
• The Patented Solution: The invention proposes an automated system that uses an "optical imaging device" to capture images of a master key. The system first captures a "silhouette image" using a backlight to analyze the key's profile and determine the correct key blank from a database. It then uses "at least one additional light" (e.g., front lighting) to capture a second image to quantify surface features, which informs the cutting process. (’332 Patent, Abstract; col. 3:15-27).
• Technical Importance: This dual-imaging approach automates both key blank identification and the gathering of cutting pattern data, aiming to reduce errors and eliminate the need for specialized operator skill in a retail setting (Compl. ¶¶ 37, 38).

Key Claims at a Glance

• The complaint asserts independent claim 1 and dependent claims 2, 4, 8, 9, 10, 11, and 13 (Compl. ¶103).
• Independent Claim 1 recites an identification system comprising:
  • An outer shell with a slot to receive a master key
  • A retention mechanism
  • A backlight
  • At least one additional light directed toward a front surface of the key
  • An optical imaging device configured to capture a "silhouette image" using the backlight and a "second image" using the additional light
  • Wherein the silhouette image is used to determine the proper key blank, and the second image is used to quantify surface features.

U.S. Patent No. 9,682,432 - “Key Duplication Machine,” Issued June 20, 2017

The Invention Explained

• Problem Addressed: In addition to the mechanical inaccuracies of prior art systems, the patent addresses the added complexity of modern automotive keys, which often contain electronic transponder chips required to start a vehicle. Traditional duplication methods require separate processes for mechanical cutting and electronic programming. (’432 Patent, col. 2:35-46).
• The Patented Solution: The invention integrates mechanical and electronic key duplication into a single machine. The system provides a "key load position" where an "imaging system" captures data for cutting the key's blade, and an "antenna" communicates with the key's transponder chip to read or write the necessary electronic code. (’432 Patent, Abstract; col. 35:9-17).
• Technical Importance: This integration allows a retail kiosk to perform both the physical cutting and electronic cloning of automotive keys in one process, providing a more convenient alternative to specialized locksmiths or auto dealerships (Compl. ¶¶ 41, 44).

Key Claims at a Glance

• The complaint asserts independent claims 1, 8, 13, and 20, along with numerous dependent claims (Compl. ¶114).
• Independent Claim 1 recites a method for identifying a key, comprising the steps of:
  • Providing a machine with an opening at a "key load position"
  • Providing an "antenna positioned on the machine for communicating with a transponder on the key"
  • Providing the machine with an "imaging system for capturing data related to said key at said key load position."

U.S. Patent No. 9,687,920 - “Key Duplication Machine,” Issued June 27, 2017 (Multi-Patent Capsule)

Technology Synopsis

This patent details the mechanical and optical components for precisely aligning and analyzing a master key. The invention describes a system with key positioner fingers that engage the key blade to ensure correct orientation before an optical imaging device captures an image. This focus on automated alignment is intended to improve the accuracy of the subsequent cutting operation by correcting for user error during key insertion. (’920 Patent, Abstract; col. 11:21-41).

Asserted Claims

Independent claims 1, 10, and 18 are asserted (Compl. ¶125).

Accused Features

The complaint broadly accuses the automated key identification, alignment, and cutting systems within the PKOR and KeyKrafter machines (Compl. ¶¶ 90, 124, 125).

U.S. Patent No. 10,421,133 - “Key Duplication Machine,” Issued September 24, 2019 (Multi-Patent Capsule)

Technology Synopsis

This patent claims an integrated key duplication machine comprising both an "optical key blank identification system" and a "key cutting system" that can interact and share information. A key feature is a single housing and retention mechanism where a key is held for both optical analysis and subsequent cutting, creating a unified workflow within one apparatus. (’133 Patent, Abstract; col. 32:31-45).

Asserted Claims

Independent claims 1, 11, and 24 are asserted (Compl. ¶136).

Accused Features

The accused PKOR and KeyKrafter machines are alleged to infringe by integrating optical scanning and key cutting functionalities within a single device (Compl. ¶¶ 90, 135, 136).

III. The Accused Instrumentality

Product Identification

Defendant’s "PKOR and KeyKrafter key duplication machines" (Compl. ¶90).

Functionality and Market Context

The accused products are described as "store associate assisted key duplication kiosk[s]" placed in retail stores (Compl. ¶¶ 90, 106). The complaint alleges these machines are pre-programmed and use on-screen instructions to guide an operator through the key duplication process (Compl. ¶93). Plaintiff alleges these machines were developed by Defendant after "copying many of Hy-Ko's KID machine's features" and represent Defendant's effort to modernize its technology in response to Plaintiff's innovations (Compl. ¶¶ 56, 58). No probative visual evidence provided in complaint.

IV. Analysis of Infringement Allegations

The complaint does not contain claim charts or provide a narrative technical theory of infringement in its body. It alleges infringement of the asserted patents and states that the accused products are "identified in Exhibits E and F," "Exhibits G and H," etc., which are not included with the public filing (Compl. ¶¶ 102, 113, 124, 135). The infringement analysis will depend entirely on evidence produced during discovery.

• Identified Points of Contention:
  • Evidentiary Question: A central issue will be whether Plaintiff can produce evidence mapping each element of the asserted claims onto the specific functionality of the accused PKOR and KeyKrafter machines. The complaint itself provides no such evidence, making discovery the critical phase for substantiating these allegations.
  • Scope Question (’332 Patent): A potential dispute may arise over whether the accused machines perform the specific two-step imaging process required by claim 1: first capturing a "silhouette image" with a backlight for blank identification, and then capturing a separate "second image" with "additional light" to analyze surface features. The case may question if the accused products use a different, unified scanning method that falls outside this claimed sequence.
  • Scope Question (’432 Patent): The analysis may focus on whether the accused products perform both imaging and transponder communication "at said key load position" as required by claim 1. This raises the question of whether the claim requires these actions to occur at the exact same physical point without moving the key, or if it can be construed to cover a broader station where the key is held for both operations.

V. Key Claim Terms for Construction

The Term: "silhouette image" (’332 Patent, Claim 1)

• Context and Importance: This term defines the primary image used for key blank identification. Its construction is critical because it may limit the type of image capture technology that infringes. Practitioners may focus on this term because Hillman could argue its machines use a more advanced imaging technique (e.g., a 3D scan) that does not create a "silhouette image," which is strongly associated in the patent with a 2D profile generated by a backlight.
• Intrinsic Evidence for a Broader Interpretation: The specification describes the goal as capturing an "optical image of a profile or silhouette of the master key," which could suggest the terms are interchangeable and cover any image capturing the key's profile (’332 Patent, col. 3:20-22).
• Intrinsic Evidence for a Narrower Interpretation: The detailed description repeatedly links the creation of the silhouette to the use of "backlighting" to create contrast, which may support an argument that the term is limited to images generated in this specific manner (’332 Patent, col. 7:16-25).

The Term: "at said key load position" (’432 Patent, Claim 1)

• Context and Importance: Claim 1 requires both the imaging system and the antenna to function "at said key load position." The definition will determine whether a machine that performs these two functions in sequentially different physical locations can infringe.
• Intrinsic Evidence for a Broader Interpretation: The patent does not explicitly define the term. A plaintiff may argue that "position" refers to the general station where the key is inserted and held, allowing for minor mechanical shifts between the imaging and antenna communication steps while still being at the same "position."
• Intrinsic Evidence for a Narrower Interpretation: A defendant may argue that the claim's recitation of capturing data and communicating with a transponder "at said key load position" implies a single, fixed location. The figures depicting an integrated antenna surrounding the key slot could be used to support an interpretation that the functions must occur simultaneously or without moving the key from a single point (’432 Patent, Fig. 27-29).

VI. Other Allegations

Indirect Infringement

The complaint alleges inducement by asserting that Defendant provides instructions, training materials, and on-screen user interfaces that direct retail store employees to use the accused machines in an infringing manner (Compl. ¶¶ 105, 116). Contributory infringement is alleged on the basis that the accused machines are specially made for key duplication and have no substantial non-infringing use (Compl. ¶106).

Willful Infringement

Willfulness is alleged based on Defendant’s alleged pre-suit knowledge of the patents. The complaint claims that Defendant received a memorandum in December 2017 that specifically identified the ’332, ’432, and ’920 patents. It further alleges that Defendant either investigated the patents and proceeded to infringe or was willfully blind to Plaintiff's patent rights (Compl. ¶¶ 100, 109).

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

• A primary issue will be one of evidentiary sufficiency: As the complaint’s infringement contentions rely entirely on unprovided exhibits, a central question for the litigation will be whether Plaintiff can produce sufficient technical evidence during discovery to demonstrate that the accused PKOR and KeyKrafter machines practice every element of the asserted claims.
• The case will likely involve a dispute over technological implementation: Does the accused systems' imaging technology fall within the scope of the claimed two-step process of the ’332 patent (a "silhouette image" followed by a "second image"), or does it employ a different method of data capture?
• A key question of definitional scope for the ’432 patent will be whether the term "key load position" requires optical imaging and transponder communication to occur at the exact same physical point, or if it can be construed more broadly to cover a general station where both operations are performed, potentially in sequence.