DCT
2:24-cv-00022
Alpha Modus Corp v. Kroger Co The
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: Alpha Modus, Corp. (Florida)
- Defendant: The Kroger Company (Ohio)
- Plaintiff’s Counsel: Dickinson Wright PLLC
- Case Identification: 2:24-cv-00022, E.D. Tex., 01/16/2024
- Venue Allegations: Venue is alleged to be proper based on Defendant Kroger operating multiple "regular and established places of business" within the Eastern District of Texas. The complaint also notes that Kroger has previously consented to jurisdiction and venue in the district in unrelated litigation.
- Core Dispute: Plaintiff alleges that Defendant’s in-store digital cooler screens infringe patents related to the use of sensors and real-time data analysis to monitor consumer behavior and deliver dynamic, targeted marketing.
- Technical Context: The technology at issue seeks to provide brick-and-mortar retailers with the data-driven, personalized marketing capabilities common in e-commerce, thereby countering the trend of in-store "showrooming."
- Key Procedural History: The complaint alleges that in January 2020, Plaintiff engaged in licensing discussions with Cooler Screens, the alleged supplier of the accused technology to Kroger. During these discussions, Cooler Screens was allegedly informed of the patents-in-suit but declined to take a license. The complaint also notes a recent, unrelated license agreement between Plaintiff and GZ6G Technologies Corp. as evidence of its commitment to disseminating its technology.
Case Timeline
| Date | Event |
|---|---|
| 2013-07-19 | Earliest Priority Date for ’571, ’672, and ’890 Patents |
| 2019-07-23 | ’571 Patent Issue Date |
| 2020-01-01 | Approx. Date of Alleged Licensing Discussions with Cooler Screens |
| 2021-04-13 | ’672 Patent Issue Date |
| 2021-06-22 | ’890 Patent Issue Date |
| 2024-01-11 | GZ6G Technologies License Agreement Date |
| 2024-01-16 | Complaint Filing Date |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 10,360,571 - "Method For Monitoring And Analyzing Behavior And Uses Thereof," issued July 23, 2019
The Invention Explained
- Problem Addressed: The patent identifies the challenge faced by brick-and-mortar retailers from "showrooming," where consumers inspect products in-store but purchase them online, often from a competitor ('571 Patent, col. 1:41-48). These physical stores lack the tools to gather real-time consumer data and provide the personalized shopping experiences that drive online sales (Compl. ¶28).
- The Patented Solution: The invention proposes a method using in-store "information monitoring devices," such as video cameras, to gather real-time information about shoppers, including demographic, sentiment, and tracking characteristics ('571 Patent, col. 4:22-34). This data is analyzed in real-time to provide targeted responses, such as personalized advertisements on displays or digital coupons, thereby enhancing the in-store experience and influencing purchasing decisions (Compl. ¶¶29-30).
- Technical Importance: The technology aimed to equip physical retailers with the dynamic, data-driven marketing capabilities of their e-commerce counterparts to better compete for consumer attention and sales (Compl. ¶28).
Key Claims at a Glance
- The complaint asserts at least independent Claim 1 (Compl. ¶74).
- The essential elements of Claim 1, a method claim, include:
- Using information monitoring devices (including video devices) to gather information about persons at a location.
- Gathering specific information types: a demographic characteristic (e.g., gender, age), a sentiment characteristic, and a tracking characteristic (e.g., movement, eye movement).
- Providing an opt-out option to persons.
- Analyzing in real time the gathered information for the non-opted-out persons.
- Providing a response in real time based on the analysis, selected from a group including engaging the person via a display, sending a communication to a second person (e.g., a store employee), providing marketing information, or providing a coupon.
- The complaint does not explicitly reserve the right to assert dependent claims but makes general allegations covering the patent.
U.S. Patent No. 10,977,672 - "Method And System For Real-Time Inventory Management, Marketing, And Advertising In A Retail Store," issued April 13, 2021
The Invention Explained
- Problem Addressed: The patent recognizes a gap in the ability of brick-and-mortar retailers to provide the real-time, personalized experiences commonly offered by online retailers, which leverage data to dynamically adjust marketing and inventory strategies (Compl. ¶39; '672 Patent, col. 1:49-54).
- The Patented Solution: The invention claims a system comprising a server that performs several integrated functions. It uses image recognition to identify the inventory of products at a specific visual display, determines and shows pricing and product information on that display, receives real-time data about a nearby customer, and then generates a targeted promotion for that customer based on behavioral analytics ('672 Patent, Abstract; Compl. ¶41).
- Technical Importance: This technology merges real-time inventory awareness with behavior-driven customer marketing at the physical point of sale, seeking to replicate the integrated and responsive nature of an online shopping platform (Compl. ¶40).
Key Claims at a Glance
- The complaint asserts at least independent Claim 1 (Compl. ¶98).
- The essential elements of Claim 1, a system claim, include:
- A server with processors and memory storing instructions that cause the server to:
- Identify, via image recognition, an inventory of retail products at a display location.
- Display information about the products on the visual display.
- Determine and display current pricing information on the visual display.
- Receive, using monitoring devices, real-time data of a customer.
- Generate a promotion for the customer based on behavioral analytics.
- The complaint does not explicitly reserve the right to assert dependent claims.
U.S. Patent No. 11,042,890 - "Method And System For Customer Assistance In A Retail Store," issued June 22, 2021
- Patent Identification: U.S. Patent No. 11,042,890, "Method And System For Customer Assistance In A Retail Store," issued June 22, 2021 (Compl. ¶43).
- Technology Synopsis: The patent addresses the need for brick-and-mortar stores to adapt to changing consumer behavior by integrating technology to analyze customer interactions with products in real-time (Compl. ¶49). The patented method uses monitoring devices to gather "object identification information" of a product a person is interested in, as well as "sentiment information" of the person, and then analyzes this data to manage inventory and provide a real-time response, such as targeted marketing or a coupon (Compl. ¶¶50-51, 52).
- Asserted Claims: At least Claim 1 is asserted (Compl. ¶123).
- Accused Features: The accused products are alleged to infringe by using monitoring devices to gather object identification and sentiment information, analyzing it in real time, and providing responsive marketing and coupons (Compl. ¶¶120-122).
III. The Accused Instrumentality
Product Identification
- The accused products are "digital smart screens" supplied by a third party, Cooler Screens, which Defendant Kroger has implemented and utilizes in its retail stores, particularly on cooler doors (Compl. ¶¶54, 61-62).
Functionality and Market Context
- The complaint alleges these digital screens replace traditional glass cooler doors and function as an integrated system for advertising and customer analysis. The system allegedly uses "information monitoring devices, including video image devices," to gather data on nearby shoppers, such as demographic and sentiment characteristics (Compl. ¶¶70, 72). This information is allegedly analyzed by a connected server, which then provides real-time responses, including targeted advertisements and promotions displayed directly on the screens (Compl. ¶¶71, 97, 122). The complaint includes a system architecture diagram, Figure 1, showing in-store devices connected to a cloud network (Compl. p. 6, FIG. 1).
- Kroger is alleged to have implemented the Accused Products in over 500 of its retail stores, and their use is alleged to have "significantly contributed to its retail efficiency and profitability" (Compl. ¶¶62-63).
IV. Analysis of Infringement Allegations
’571 Patent Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| (a) using one or more information monitoring devices to gather information about persons... wherein (iii) the ... devices comprise one or more video image devices | The Accused Products utilize one or more information monitoring devices, including video image devices, to gather information about persons in Kroger's retail stores. | ¶70 | col. 21:44-46 |
| (iv) ... gathering a demographic characteristic of the persons ... selected from a group consisting of gender ..., approximate age ..., and combinations thereof | The Accused Products collect demographic characteristics of persons in proximity to the devices. The complaint includes Figure 2, an exemplary image showing a system identifying a shopper's face and overlaying derived data such as gender and age. | ¶72; p. 6, FIG. 2 | col. 21:47-54 |
| (v) ... gathering a sentiment characteristic of the persons | The Accused Products collect sentiment characteristics of persons in proximity to the devices. | ¶72 | col. 21:55-59 |
| (vi) ... gathering a tracking characteristic of the persons | The Accused Products collect tracking characteristics of persons in proximity to the devices. | ¶72 | col. 21:60-67 |
| (b) providing an opt-out option to the persons | The Accused Products provide an opt-out option to persons in proximity to the devices. | ¶73 | col. 22:3-7 |
| (c) analyzing in real time ... the information gathered ... except for the subset of opt-out persons | The Accused Products analyze the information of those who have not opted out. The systems are operably connected to a server and/or databases for analysis. | ¶71, ¶73 | col. 22:8-19 |
| (d) providing a response in real time based upon the analyzed information | The complaint makes a general allegation that the Accused Products satisfy this element and embody the patented inventions of at least Claim 1. | ¶74, ¶75 | col. 22:20-41 |
’672 Patent Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| (a) a server comprising: (i) one or more server processors, and, (ii) a server memory storing computer-executable instructions that, when executed... cause the server to: | The Accused Products utilize a server with processors and memory to perform the functions covered by Claim 1. | ¶96 | col. 21:41-45 |
| (A) identify, via image recognition, an inventory of one or more retail products physically located at the first visual display location | The functions performed by the Accused Products' server include identifying, via image recognition, an inventory of retail products physically located at a display. | ¶97 | col. 21:50-53 |
| (B) display, on the first visual display, information about one or more of the ... retail products | The server functions include displaying information about the products. | ¶97 | col. 21:54-57 |
| (C) determine, in real-time, current pricing information... and (D) display, on the first visual display, the current pricing information | The server functions include determining and displaying current pricing information about the products. | ¶97 | col. 21:58-64 |
| (E) receive, using one or more information monitoring devices ... real-time data of a customer | The server functions include receiving real-time data of a customer using information monitoring devices. | ¶97 | col. 21:65-67 |
| (F) generate a promotion of one or more of the ... retail products ... for the customer based on behavioral analytics | The server functions include generating promotions for the customer based on behavioral analytics. | ¶97 | col. 22:1-4 |
Identified Points of Contention
- Technical Questions: A primary factual dispute may center on the actual technical capabilities of the Accused Products. For the ’571 Patent, what evidence supports the allegation that the system gathers "sentiment" and "tracking" characteristics, as opposed to only basic demographic data? For the ’672 Patent, a key question is whether the system truly uses "image recognition" to dynamically "identify... an inventory," or if it functions as a simpler digital sign that displays pre-loaded advertising content tied to inventory data from a separate, non-visual source.
- Scope Questions: The case may raise questions about the scope of "behavioral analytics" ('672 Patent) and "analyzing in real time" ('571 Patent). The court will have to determine if the specific operations of the accused system, once revealed in discovery, fall within the patent's definition of these terms.
V. Key Claim Terms for Construction
For the ’571 Patent
- The Term: "sentiment characteristic"
- Context and Importance: This term is critical because the infringement allegation hinges on whether the accused system does more than just identify demographics (age/gender) and actually assesses a shopper's emotional state. Practitioners may focus on this term because the technical feasibility and implementation of real-time sentiment analysis in a retail environment could be a significant point of dispute.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The specification describes using "demographic and facial expression intelligence" ('571 Patent, col. 2:57-59), which a plaintiff might argue encompasses a wide range of mood or reaction indicators beyond just named emotions.
- Evidence for a Narrower Interpretation: A defendant could point to specific disclosures, such as Figure 2, which lists discrete emotional states like "Happy," "Sad," "Anger," and "Surprise," to argue the term is limited to the recognition of these specific, defined emotions ('571 Patent, FIG. 2; col. 10:59-62).
For the ’672 Patent
- The Term: "identify, via image recognition, an inventory"
- Context and Importance: This phrase is the technological core of the '672 patent's system claim, distinguishing it from a standard digital display. The infringement case for this patent may succeed or fail based on whether the accused system is proven to visually identify products on the shelf, as opposed to merely displaying ads for products it knows are stocked based on a separate data feed.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The patent states the system is "capable of determining when customers pick up and put down products" using a camera, which could support a broader interpretation that any visual monitoring of product interaction meets the limitation ('672 Patent, col. 12:10-14).
- Evidence for a Narrower Interpretation: The specification describes an "Object Identification Module" and a database containing "image templates of each product that the retailer wishes to monitor" ('672 Patent, col. 12:5-32). A defendant may argue this requires a specific computer vision process that matches live camera images against a template database, a potentially high technical bar.
VI. Other Allegations
- Indirect Infringement: The complaint alleges induced infringement for all three patents. The theory of inducement is based on Kroger's alleged implementation and use of the Accused Products in its stores, which "encourages, directs, aids, and abets" infringement by customers and employees who interact with the system, thereby performing the steps of the patented methods (Compl. ¶¶87, 111, 136).
- Willful Infringement: Willfulness is alleged for all three patents. The claim is based on allegations that Kroger knew or was willfully blind to the infringement. This knowledge is primarily imputed to Kroger through its business relationship with its supplier, Cooler Screens, which was allegedly put on express notice of the patents-in-suit during licensing discussions with Alpha Modus in 2020 (Compl. ¶¶78-79, 102-103, 127-128).
VII. Analyst’s Conclusion: Key Questions for the Case
- A key evidentiary question will be one of technical operation: Do the accused "Cooler Screens" systems possess the sophisticated functionalities required by the claims—specifically, the ability to derive shopper "sentiment" from video feeds (per the '571 Patent) and the use of "image recognition" to dynamically identify product inventory on shelves (per the '672 Patent)—or do they operate as more conventional digital advertising systems?
- A central legal question will concern imputed knowledge: Can Plaintiff establish that Kroger possessed the requisite knowledge for willful and induced infringement based on alleged pre-suit licensing discussions that occurred not with Kroger, but with its third-party technology supplier?
- The outcome may also depend on definitional scope: How will the court construe key claim terms such as "behavioral analytics" and "identify, via image recognition, an inventory"? The degree to which the accused system's actual functions map onto the court's construction of these terms will be dispositive for the infringement analysis.