Torus Ventures LLC v. Classic Bank NA

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Torus Ventures LLC (Delaware)
  • Defendant: Classic Bank, N.A. (Texas)
  • Plaintiff’s Counsel: Rabicoff Law LLC
• Case Identification: 2:24-cv-00560, E.D. Tex., 07/19/2024
• Venue Allegations: Venue is alleged to be proper based on Defendant maintaining an established place of business in the district and having committed alleged acts of patent infringement there.
• Core Dispute: Plaintiff alleges that unspecified products and services offered by Defendant, a bank, infringe a patent related to a recursive security protocol for digital copyright control.
• Technical Context: The technology concerns multi-layered encryption methods for protecting digital content, such as software or media streams, from unauthorized use and distribution.
• Key Procedural History: The complaint does not mention any prior litigation, licensing history, or administrative proceedings related to the patent-in-suit.

Case Timeline

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 addresses the problem that traditional digital copyright protection relies on simple access control, which, once bypassed, offers little further protection, and that prior security systems made artificial distinctions between different types of digital data (e.g., executable code vs. media streams) (’844 Patent, col. 1:24-54, col. 2:30-41).
• The Patented Solution: The invention proposes a "recursive security protocol" where any digital bitstream can be protected. The protocol involves encrypting a bitstream, associating it with a decryption algorithm, and then being able to encrypt that entire combination with a second, outer layer of encryption (’844 Patent, Abstract; col. 2:55-65). This allows for security systems to be updated and layered on top of each other without stripping away previous protections, treating the security protocols themselves as just another form of digital data that can be encrypted (’844 Patent, col. 4:31-43).
• Technical Importance: This approach provided a method for creating flexible and updatable digital rights management (DRM) systems that are agnostic to the type of content being protected and can be reinforced with new security layers over time (’844 Patent, col. 4:31-48).

Key Claims at a Glance

• The complaint asserts infringement of one or more unspecified claims, referring to them as the "Exemplary '844 Patent Claims" contained in an unprovided exhibit (Compl. ¶11). Independent claim 1 is a representative method claim.
• Independent Claim 1 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;
  • associating a second decryption algorithm with the second bit stream.
• The complaint does not explicitly reserve the right to assert dependent claims but refers generally to "one or more claims" (Compl. ¶11).

III. The Accused Instrumentality

Product Identification

The complaint does not name specific accused products or services. It refers to them as the "Exemplary Defendant Products" which are identified in claim charts in an unprovided "Exhibit 2" (Compl. ¶11, ¶16).

Functionality and Market Context

The complaint does not describe the specific functionality of the accused products or services. It states that Defendant makes, uses, sells, and imports these products (Compl. ¶11) and provides "product literature and website materials" for them (Compl. ¶14). Given the Defendant is a bank, these instrumentalities are presumably related to financial services or software.

IV. Analysis of Infringement Allegations

The complaint alleges that the "Exemplary Defendant Products practice the technology claimed by the '844 Patent" and that they "satisfy all elements of the Exemplary '844 Patent Claims" (Compl. ¶16). However, the complaint provides no specific factual allegations in its body to support this conclusion. Instead, it incorporates by reference "the claim charts of Exhibit 2," which were not filed with the public complaint (Compl. ¶17). Without this exhibit, a detailed analysis of the infringement theory is not possible.

No probative visual evidence provided in complaint.

• Identified Points of Contention:
  • Applicability Question: A primary question will be how the accused banking products or services of Classic Bank, N.A. could be alleged to practice the "recursive security protocol for digital copyright control" as claimed in the '844 Patent. The patent is described in the context of protecting digital media and software applications from unauthorized copying and use (’844 Patent, col. 1:15-22; col. 4:49-54).
  • Technical Question: It will be necessary to determine what specific feature in the accused products allegedly performs the "recursive" step of encrypting an already-encrypted bitstream along with its associated decryption algorithm, as required by claims such as claim 1. The complaint provides no information on this point.

V. Key Claim Terms for Construction

The complaint does not provide sufficient detail for analysis of key claim terms. Without access to the asserted claims and the infringement allegations in the missing "Exhibit 2", identifying which terms will be central to the dispute is not feasible.

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). The specific instructions or materials are not detailed but are referenced as being part of "Exhibit 2" (Compl. ¶14).
• Willful Infringement: Willfulness allegations are based on knowledge obtained from the service of the complaint and its attached claim charts (Compl. ¶13). The complaint alleges that Defendant has continued to infringe despite this actual knowledge, supporting a claim for post-suit willful infringement (Compl. ¶14, ¶15).

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

1. A Foundational Evidentiary Question: The central issue at the outset is the lack of factual specificity in the public filing. The case will depend entirely on the contents of the unprovided "Exhibit 2," which presumably identifies the accused products and articulates the Plaintiff's infringement theory. Without it, the basis for the lawsuit is unknown.
2. A Core Question of Technical Applicability: Assuming the infringement theory is eventually detailed, the case will likely turn on whether a patent directed to "digital copyright control" can be read to cover the functionalities of commercial banking products. The dispute may focus on whether the security protocols used in banking, even if multi-layered, meet the specific "recursive" structure and purpose described and claimed in the '844 Patent.