DCT
2:22-cv-00006
Estech Systems IP LLC v. 99 Cents Only Stores LLC
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: Estech Systems IP, LLC (Texas)
- Defendant: 99 Cents Only Stores, LLC (California) and 99 Cents Only Stores Texas, Inc. (Delaware)
- Plaintiff’s Counsel: WILLIAMS SIMONS & LANDIS PLLC
- Case Identification: 2:22-cv-00006, E.D. Tex., 01/04/2022
- Venue Allegations: Plaintiff alleges venue is proper in the Eastern District of Texas because Defendants conduct substantial business in the district and maintain at least one regular and established place of business there.
- Core Dispute: Plaintiff alleges that Defendant’s VoIP telephone systems and associated networking equipment infringe four patents related to VoIP phone directories, quality of service, voicemail, and caller ID features.
- Technical Context: The technology at issue is Voice over Internet Protocol (VoIP), which enables voice communications over data networks and is a foundational technology for modern business telephone systems.
- Key Procedural History: The complaint was filed after Inter Partes Review (IPR) proceedings were initiated against two of the four asserted patents. U.S. Patent No. 8,391,298 was challenged in IPR2021-00574, and U.S. Patent No. 6,067,349 was challenged in IPR2021-00573. According to the patents’ Inter Partes Review Certificates, all asserted claims of both patents have since been cancelled, which may raise significant questions about the viability of the infringement counts for those patents.
Case Timeline
| Date | Event |
|---|---|
| 1997-12-31 | Priority Date for ’349 Patent |
| 2000-05-23 | Issue Date for ’349 Patent |
| 2001-02-01 | Priority Date for ’298, ’684, and ’699 Patents |
| 2006-06-27 | Issue Date for ’684 Patent |
| 2006-10-17 | Issue Date for ’699 Patent |
| 2013-03-05 | Issue Date for ’298 Patent |
| 2021-03-05 | IPR filed against ’298 Patent (IPR2021-00574) |
| 2021-03-05 | IPR filed against ’349 Patent (IPR2021-00573) |
| 2022-01-04 | Complaint Filing Date |
| 2023-06-30 | IPR Certificate Issued for ’349 Patent |
| 2025-02-12 | IPR Certificate Issued for ’298 Patent |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 8,391,298 - "Phone Directory in a Voice Over IP Telephone System", Issued March 5, 2013
The Invention Explained
- Problem Addressed: The complaint does not specify a problem from the patent's background, but the described invention addresses the need for users in a multi-site VoIP system to easily access and dial extensions located at different physical sites connected over a wide area network (Compl. ¶22).
- The Patented Solution: The patent describes a system architecture with multiple local area networks (LANs) connected by a wide area network (WAN). A server on one LAN stores a list of telecommunications extensions, which a user on another LAN can access, view, and select from to initiate a call (Compl. ¶22; ’298 Patent, Fig. 3). This allows for a centralized or distributed phone directory that is accessible across different corporate locations.
- Technical Importance: The invention aims to improve the usability of geographically distributed VoIP systems by providing a unified directory service, which enhances the functionality of such information processing systems (Compl. ¶23).
Key Claims at a Glance
- The complaint asserts infringement of at least Claim 1 (Compl. ¶31).
- The essential elements of independent claim 1 are alleged to include:
- A system with first, second, and third LANs coupled with a WAN.
- VoIP telephony devices connected to the LANs, with associated telecommunications extensions coupled to the second and third LANs.
- Servers located in the second LAN that store telecommunications extensions accessible across the WAN.
- Circuitry in the VoIP devices that enables a user to observe a list of extensions, automatically call a selected extension from the list, and select between observing extensions on the second LAN or the third LAN.
U.S. Patent No. 7,068,684 - "Quality of Service in a Voice Over IP Telephone System", Issued June 27, 2006
The Invention Explained
- Problem Addressed: On a shared network, large data transfers can consume bandwidth and interfere with real-time voice traffic, causing degraded audio quality, jitter, and latency (’684 Patent, col. 1:11-67).
- The Patented Solution: The patent describes a system where a VoIP telephone, connected between a workstation (e.g., a PC) and the network, can monitor network conditions and "throttle" the data being sent from the workstation. This is done to prioritize the voice data and ensure a higher quality of service for the telephone call (Compl. ¶44; ’684 Patent, col. 2:10-20).
- Technical Importance: This technology provides a method for managing network congestion at the endpoint, which is critical for maintaining business-grade call quality in VoIP systems that share infrastructure with data-intensive applications (Compl. ¶45).
Key Claims at a Glance
- The complaint asserts infringement of at least Claim 36 (Compl. ¶52).
- The essential elements of independent claim 36 are alleged to include:
- Communicating audio information for VoIP calls between VoIP devices and VoIP servers.
- Workstations transferring data through the VoIP telephony devices.
- Throttling data sent from the workstations to the VoIP devices to increase the rate of audio information transfer.
- The throttling comprises reducing a future amount of data from the workstation if the amount of data exceeds a predetermined threshold.
U.S. Patent No. 7,123,699 - "Voice Mail in a Voice Over IP Telephone System", Issued October 17, 2006
- Technology Synopsis: The patent describes an information handling system for managing voicemail across different networks. It enables a user on a second LAN to receive a notification of, access, and listen to a voicemail message that is stored in a voicemail system on a first LAN, with the connection being made over a WAN (Compl. ¶64-65).
- Asserted Claims: At least Claim 1 (Compl. ¶73).
- Accused Features: The complaint alleges that Defendants' VoIP servers store voicemail on a first LAN, and their VoIP telephony devices on a second LAN provide a sensory indication of new messages and allow users to access and listen to them over a WAN (Compl. ¶70-71).
U.S. Patent No. 6,067,349 - "Dialing Using Caller ID", Issued May 23, 2000
- Technology Synopsis: The patent describes a telephone and voicemail system that captures a caller's Caller ID information and associates it with the voicemail message they leave. This integration allows the message recipient to automatically initiate a call back to the original caller while listening to the voicemail message (’349 Patent, Abstract; Compl. ¶86).
- Asserted Claims: At least Claim 12 (Compl. ¶92).
- Accused Features: The complaint alleges Defendants' VoIP and voicemail infrastructure is configured to receive caller-ID information, associate it with a voicemail message, and enable the recipient to automatically call back the caller while listening to the message (Compl. ¶90-91).
III. The Accused Instrumentality
- Product Identification: The complaint identifies the accused products as "VoIP telephone systems and networking equipment utilized by Defendants," referred to collectively as the "Accused Instrumentalities" (Compl. ¶25).
- Functionality and Market Context: The Accused Instrumentalities are described as providing VoIP-based voice calling and data-networking services to VoIP telephony devices within the Defendants' business operations (Compl. ¶26). The complaint does not identify specific product models or manufacturers, nor does it provide details on market context beyond their use by the Defendants. No probative visual evidence provided in complaint.
IV. Analysis of Infringement Allegations
’298 Patent Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| a system with first, second and third LANs that are coupled with a WAN | The Accused Instrumentalities use first, second, and third LANs that are coupled with a WAN. | ¶27 | col. 4:59-65 |
| VoIP telephony devices connected to LANs, the VoIP telephony devices having telecommunications extensions associated therewith, the telecommunications extensions being coupled to the second and third LANs | The Accused Instrumentalities include VoIP telephony devices connected to LANs, with associated extensions coupled to the second and third LANs. | ¶28 | col. 7:5-13 |
| servers in the second LAN that store telecommunications extensions accessed across the WAN | The Accused Instrumentalities include servers in the second LAN that store telecommunications extensions accessed across the WAN. | ¶30 | col. 4:5-10 |
| circuitry (i) enabling users of VoIP telephony devices to observe a list of telecommunications extensions | The VoIP telephony devices include circuitry enabling users to observe a list of telecommunications extensions. | ¶29 | col. 12:1-5 |
| circuitry... (ii) to automatically call one of the telecommunications extensions in response to a user selecting one of the telecommunications extensions from the list | The VoIP telephony devices include circuitry to automatically call a selected extension from the list. | ¶29 | col. 9:1-5 |
| circuitry... (iii) enabling the user to select between observing the list of telecommunications extensions coupled to the second LAN or the third LAN | The VoIP telephony devices include circuitry enabling the user to select between observing the list of extensions on the second LAN or the third LAN. | ¶29 | col. 11:3-12 |
- Identified Points of Contention:
- Scope Questions: The complaint's assertion of a "first, second, and third LAN" architecture (Compl. ¶27) is conclusory. A key question will be whether the Defendants' actual network topology can be mapped to this specific, tripartite LAN structure as defined in the patent, or if it uses a different architecture that falls outside the claim's scope.
- Technical Questions: The complaint does not provide evidence detailing how the accused system enables a user to "select between observing" lists from two different LANs. The central factual dispute will likely concern whether the accused directory function provides this specific claimed capability.
’684 Patent Infringement Allegations
| Claim Element (from Independent Claim 36) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| communicating audio information for VoIP-based voice calls... between at least VoIP telephony devices and VoIP servers | The Accused Instrumentalities include VoIP servers and devices that communicate audio information for VoIP calls. | ¶49 | col. 4:14-20 |
| workstations... that send and receive data from data servers... that transfer data through VoIP telephony devices | The Accused Instrumentalities include workstations that transfer data through VoIP telephony devices. | ¶50 | col. 4:1-12 |
| sufficiently throttle data sent from workstations to VoIP telephony devices to increase a rate of transfer of audio information | The Accused Instrumentalities sufficiently throttle data sent from workstations to VoIP devices to increase the rate of audio information transfer. | ¶51 | col. 2:25-30 |
| the data throttling comprises reducing a future amount of data from being transferred from the workstation if the amount of data exceeds a predetermined threshold | The data throttling reduces a future amount of data from the workstation if the amount of data exceeds a predetermined threshold. | ¶51 | col. 1:50-56 |
- Identified Points of Contention:
- Scope Questions: The term "throttle" is central. The patent specification describes a specific method of creating network collisions ("jabbering") to achieve throttling (’684 Patent, col. 13:4-14:14). The dispute will likely focus on whether "throttle" should be construed narrowly to require this specific mechanism, or more broadly to cover any form of Quality of Service (QoS) data prioritization.
- Technical Questions: The complaint asserts that the accused system throttles data by "reducing a future amount of data... if the amount of data exceeds a predetermined threshold" (Compl. ¶51). A primary technical question is what evidence demonstrates that the accused system performs this specific conditional logic, as opposed to a more general data-shaping or prioritization scheme.
V. Key Claim Terms for Construction
For the ’298 Patent:
- The Term: "LAN" (and the required structure of "first, second, and third LANs")
- Context and Importance: The claim requires a specific network topology involving three distinct LANs connected by a WAN. The definition of "LAN" is critical for determining whether the defendant's network architecture, which may be virtualized or physically consolidated, meets this structural limitation.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The specification may use "LAN" in a general sense to refer to any local collection of networked devices, which could support an argument that different network segments or subnets satisfy the limitation.
- Evidence for a Narrower Interpretation: The patent's figures and description point to geographically separate offices (e.g., "Dallas 301," "Detroit 302") each containing a LAN, suggesting a "LAN" is a physically distinct and geographically local network (’298 Patent, Fig. 3, col. 4:59-65).
For the ’684 Patent:
- The Term: "throttle"
- Context and Importance: Infringement of the asserted claim hinges on whether the accused system performs this function. Practitioners may focus on this term because its construction will determine whether generic QoS prioritization methods are sufficient to infringe, or if a more specific mechanism is required.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The term itself may be argued to have a plain and ordinary meaning encompassing any method of restricting data flow to improve performance.
- Evidence for a Narrower Interpretation: The detailed description teaches a specific method of throttling by "flooding the network with collisions" or "jabbering" (’684 Patent, col. 13:4-14:14). This explicit embodiment could be used to argue that "throttle" should be limited to this disclosed mechanism or equivalents thereof.
VI. Other Allegations
- Indirect Infringement: The complaint alleges both induced and contributory infringement for all asserted patents. The inducement claims are based on allegations that Defendants advised, directed, and provided instructions to end-users (e.g., employees) to use the Accused Instrumentalities in an infringing manner (Compl. ¶34, 55, 76). The contributory infringement claims allege that the accused systems have "special features" that are "specially designed" for infringement and are not staple articles of commerce (Compl. ¶35, 56, 77).
- Willful Infringement: Willfulness is alleged for all asserted patents. The allegations are based on Defendants having knowledge of the patents "at least as of the date when they were notified of the filing of this action," establishing a basis only for post-suit willfulness (Compl. ¶36, 57, 78). The complaint also pleads willful blindness, alleging Defendants have a "policy or practice of not reviewing the patents of others" (Compl. ¶37, 58, 79).
VII. Analyst’s Conclusion: Key Questions for the Case
- A dispositive issue will be one of patent viability: Given that the asserted claims of U.S. Patent Nos. 8,391,298 and 6,067,349 were cancelled in IPR proceedings instituted prior to the filing of this lawsuit, a threshold question for the court will be whether the infringement counts based on these patents can proceed.
- For the remaining patents, a key evidentiary question will be one of technical specificity: The complaint makes conclusory infringement allegations that mirror the claim language without providing detailed evidence of how the accused systems actually function. A central issue will be whether Plaintiff can produce evidence demonstrating that Defendants' systems perform the specific "throttling" mechanism of the ’684 patent and the cross-LAN voicemail access of the ’699 patent.
- Assuming the case proceeds, a core legal issue will be one of claim scope: The dispute will likely turn on the construction of key terms. A primary focus will be whether "throttle" in the ’684 patent is limited to the "jabbering" embodiment disclosed in the specification or covers broader QoS techniques, a determination that could be outcome-determinative for infringement.