Torus Ventures LLC v. Agility Bank National Association

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Torus Ventures LLC (Delaware)
  • Defendant: Agility Bank, National Association (Texas)
  • Plaintiff’s Counsel: Rabicoff Law LLC
• Case Identification: 2:24-cv-00503, E.D. Tex., 07/09/2024
• Venue Allegations: Plaintiff alleges venue is proper in the Eastern District of Texas because Defendant maintains an established place of business in the District.
• Core Dispute: Plaintiff alleges that Defendant’s digital security systems and methods infringe a patent related to a recursive security protocol for digital copyright control.
• Technical Context: The technology concerns multi-layered encryption systems designed to protect digital content, including software and media streams, from unauthorized use or disassembly.
• Key Procedural History: The complaint states that Plaintiff is the assignee of the patent-in-suit. No other significant procedural events, such as prior litigation or administrative proceedings involving the patent, are mentioned in the complaint.

Case Timeline

Date	Event
2002-06-20	’844 Patent Priority Date
2003-06-19	’844 Patent Application Filing Date
2007-04-10	’844 Patent Issue Date
2024-07-09	Complaint Filing Date

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

U.S. Patent No. 7,203,844 - "Method and system for a recursive security protocol for digital copyright control," issued April 10, 2007

The Invention Explained

• Problem Addressed: The patent’s background section identifies the challenge of protecting copyrighted works in an era of digital storage, where perfect, cost-effective copies can be made easily, undermining traditional copyright enforcement (U.S. Patent No. 7,203,844, col. 1:24-54). It further notes that prior art security systems often make "artificial distinctions between the various types of bit streams to be protected," limiting their flexibility (’844 Patent, col. 2:28-31).
• The Patented Solution: The invention proposes a "recursive" security protocol where a digital bitstream (e.g., software or media) is encrypted, and that encrypted result is then associated with its corresponding decryption algorithm. This entire package—the encrypted data plus its decryption instructions—is then encrypted again using a second algorithm, creating a layered and self-contained secure object (’844 Patent, Abstract; col. 2:54-68). This process is "recursive" because the protocol can be applied to any type of digital data, including the code for the security protocol itself, allowing it to be securely updated over time (’844 Patent, col. 4:19-31).
• Technical Importance: This approach provided a flexible framework for digital rights management (DRM) that could be updated to fix security holes by "subsum[ing]" an older security system within a newer one, without needing to alter hardware or strip the original protection (’844 Patent, col. 4:31-43).

Key Claims at a Glance

• The complaint does not identify specific claims, referring only to the "Exemplary '844 Patent Claims" (Compl. ¶11). Independent claim 1 is representative.
• Independent Claim 1 recites a method with the following essential elements:
  • encrypting a bitstream with a first encryption algorithm;
  • associating a first decryption algorithm with the encrypted bit stream;
  • encrypting both the encrypted bit stream and the first decryption algorithm with a second encryption algorithm to yield a second bit stream; and
  • associating a second decryption algorithm with the second bit stream.
• The complaint does not explicitly reserve the right to assert other claims, but its general reference to "one or more claims" suggests this possibility (Compl. ¶11).

III. The Accused Instrumentality

Product Identification

The complaint does not specifically name the accused products or services. It refers generally to "Defendant products identified in the charts incorporated into this Count" and "Exemplary Defendant Products" (Compl. ¶11, ¶16).

Functionality and Market Context

The complaint incorporates infringement allegations by reference to an "Exhibit 2," which is not attached to the publicly filed document (Compl. ¶17). As such, the complaint itself provides no specific technical details about the operation of the accused instrumentalities. Given that the Defendant is a bank, the accused products and services are presumably related to its digital banking platforms, data security infrastructure, or other systems for protecting digital assets and communications. No probative visual evidence provided in complaint.

IV. Analysis of Infringement Allegations

The complaint alleges that the "Exemplary Defendant Products" directly infringe the ’844 Patent, either literally or under the doctrine of equivalents (Compl. ¶11). However, it relies entirely on claim charts in an unattached "Exhibit 2" to provide the element-by-element mapping of the claims to the accused products (Compl. ¶16-17). The complaint states that "the Exemplary Defendant Products practice the technology claimed by the '844 Patent" and "satisfy all elements of the Exemplary '844 Patent Claims" (Compl. ¶16). Without access to Exhibit 2, a detailed analysis of the infringement theory is not possible based on the provided documents.

V. Key Claim Terms for Construction

• The Term: "recursive security protocol"

• Context and Importance: This term appears in the preamble of claim 1 and is part of the patent's title. Its construction is critical because it may inform the scope of all claim limitations that follow. The dispute may center on whether the accused system must exhibit the specific self-referencing and self-updating capabilities described in the specification to be considered "recursive."

• Intrinsic Evidence for Interpretation:

  • Evidence for a Broader Interpretation: The claims themselves do not explicitly require self-referencing. A party might argue that any multi-layered encryption process where one encrypted package is subsequently re-encrypted meets the claimed definition.
  • Evidence for a Narrower Interpretation: The specification defines a "Recursive Security Protocol" as one capable of securing itself and not depending "on an arbitrary distinction between digital data types" (’844 Patent, col. 2:48-52). A party could argue this specific self-protecting capability is a defining feature that must be present in an infringing system.

• The Term: "associating"

• Context and Importance: This term appears twice in independent claim 1 and is central to how the different encrypted layers and decryption algorithms are linked. Practitioners may focus on this term because its breadth is undefined in the claim language, raising questions about what level of connection is required between the data and the algorithm.

• Intrinsic Evidence for Interpretation:

  • Evidence for a Broader Interpretation: The specification does not provide a narrow definition, which may support an interpretation that any form of logical linking, bundling, or referencing one component from another constitutes "associating."
  • Evidence for a Narrower Interpretation: A party could argue that the figures, which show data blocks contained within other structures (e.g., ’844 Patent, Fig. 3, 6), imply that "associating" requires the components to be combined into a single, discrete data structure or file, rather than being merely linked by a pointer or reference.

VI. Other Allegations

• Indirect Infringement: The complaint alleges induced infringement, stating that Defendant distributes "product literature and website materials inducing end users and others to use its products in the customary and intended manner that infringes the '844 Patent" (Compl. ¶14).
• Willful Infringement: The complaint alleges Defendant has "actual knowledge of infringement" based on the service of the complaint and its attached claim charts (Compl. ¶13). It further alleges that "Despite such actual knowledge, Defendant continues to make, use, test, sell, offer for sale, market, and/or import" the infringing products, which may form the basis for a claim of post-suit willful infringement (Compl. ¶14).

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

1. A central issue will be one of definitional scope: Does the term "recursive security protocol", as used in the patent, require the specific self-updating and data-type-agnostic functionality described in the specification, or can it be construed more broadly to cover any system with multiple, nested layers of encryption?
2. A key evidentiary question will be what proof Plaintiff can adduce to show that Defendant’s accused banking systems perform the specific steps of the claims. Given the bare-bones nature of the complaint, the case will likely turn on evidence obtained in discovery demonstrating that the accused systems "associate" a first decryption algorithm with an encrypted bitstream and then "encrypt" that combined package, as opposed to simply using multiple, independent layers of encryption.
3. The infringement analysis will raise a technical question of operational correspondence: How does the accused system "associate" a decryption algorithm with an encrypted bitstream? The court will need to determine whether the method of association used by the Defendant—whether it be bundling, pointing, or another technique—falls within the scope of the claims as construed.