DCT
2:24-cv-00967
Droplets Inc v. AT&T Inc
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: Droplets, Inc. (Delaware)
- Defendant: AT&T Inc., AT&T Corp., AT&T Mobility LLC, and AT&T Services, Inc. (Delaware and New York)
- Plaintiff’s Counsel: Reichman Jorgensen Lehman & Feldberg LLP
- Case Identification: 2:24-cv-00967, E.D. Tex., 11/22/2024
- Venue Allegations: Plaintiff alleges venue is proper in the Eastern District of Texas because Defendant AT&T maintains a "regular and established place of business" in the district, including retail stores and other office locations.
- Core Dispute: Plaintiff alleges that Defendant’s website and mobile applications infringe a patent related to methods for delivering interactive graphical user interfaces over limited-bandwidth connections by updating portions of a display without reloading the entire page.
- Technical Context: The patent addresses a key limitation of early web technology prevalent during the dial-up internet era, where slow connection speeds made reloading entire webpages to update small pieces of information inefficient.
- Key Procedural History: The complaint notes that the asserted patent has a significant litigation history, including a favorable jury verdict against Sears, Overstock, and Kmart in 2015 and a $15 million jury verdict against Yahoo! Inc. in 2022 for infringement of the same patent. The patent also survived an inter partes reexamination proceeding, with a certificate issued in 2011 confirming the patentability of all original claims and adding new claims.
Case Timeline
| Date | Event |
|---|---|
| 1999-09-14 | ’745 Patent Priority Date |
| 2004-02-03 | ’745 Patent Issue Date |
| 2007-08-03 | Inter Partes Reexamination Filed |
| 2011-03-01 | Reexamination Certificate Issued |
| 2021-11-17 | Date of Observation for Accused Product Screenshots |
| 2021-11-20 | ’745 Patent Expiration Date |
| 2022-03-29 | Jury Verdict in Droplets Inc v. Yahoo Inc. |
| 2024-11-22 | Complaint Filing Date |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 6,687,745 - "System and method for delivering a graphical user interface of remote applications over a thin bandwidth connection"
- Patent Identification: U.S. Patent No. 6,687,745, "System and method for delivering a graphical user interface of remote applications over a thin bandwidth connection," issued February 3, 2004.
The Invention Explained
- Problem Addressed: The patent’s background describes the inefficiency of web applications in the late 1990s, where any change to the information on a page—such as an updated stock price—required a full reload of the entire page, causing significant delays over slow, dial-up connections (Compl. ¶¶16-17). This made real-time, interactive applications impractical (’745 Patent, col. 3:22-43).
- The Patented Solution: The invention proposes a client-server architecture where an initial webpage download includes a small piece of executable code (termed a "droplet"). This code establishes a separate, persistent communication channel with a remote application server. Through this channel, the server can send small packets of data to update only specific components of the user interface, while the application's business logic remains on the server. This creates the user experience of a responsive, locally-run application without requiring the bandwidth to download the entire application or constantly reload the page (’745 Patent, Abstract; col. 8:16-34).
- Technical Importance: This client-server model for partial page updates was a foundational concept for creating the rich, dynamic web applications that are now standard.
Key Claims at a Glance
- The complaint asserts infringement of claims 1-16 of the ’745 Patent (Compl. ¶31). Independent claim 1 is representative and contains the following essential elements:
- Retrieving first information from a source, where the information has embedded computer program code.
- Executing that code to establish a second communication connection to a second host computer.
- Retrieving, over that second connection, presentation information for an application.
- Presenting the application at the client computer using the retrieved presentation information.
- Storing an "interactive link" on the client computer that allows for selectively re-establishing the second communication connection.
III. The Accused Instrumentality
Product Identification
- The AT&T Website (www.att.com and its subdomains) and the AT&T Mobile Apps for iOS and Android devices (collectively, the "Accused Products") (Compl. ¶29).
Functionality and Market Context
- The complaint alleges that various interactive features of the Accused Products infringe the ’745 Patent. These features include "Search Suggest, Seach History, Filter and Sort, Compare, Likes, Load Page, Item Options, Menu, Trade-In, Account, and Checkout" (Compl. ¶29). These functionalities allow a user to interact with the website or app, causing content on the page to change dynamically without a full page refresh. For example, a screenshot provided in the complaint shows a "Filter & sort" panel that allows users to refine product search results, updating the displayed items in real-time (Compl. p. 10). The complaint asserts AT&T is a major technology and online retailer that incorporated the patented technology without authorization (Compl. ¶23).
IV. Analysis of Infringement Allegations
Claim Chart Summary
- The complaint provides a narrative infringement theory but does not include a claim chart exhibit. The following table summarizes the allegations for claim 1 based on the complaint's description.
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| retrieving, in response to a request of a client computer, over a first communication connection first information having computer program code embedded therein | A user's browser or mobile app retrieves the initial webpage or application code from AT&T's servers. | ¶29 | col. 4:56-64 |
| executing the embedded computer program code for establishing a second communication connection to a second host computer | Code within the AT&T website or app (e.g., JavaScript) executes to create a communication channel with AT&T's backend servers to handle dynamic data requests. | ¶29 | col. 8:5-15 |
| retrieving, over the second communication connection, third information including presentation information for presenting an application and fourth information | The browser or app sends a request for new data (e.g., applying a filter) and receives updated information from AT&T's servers to modify the display. A screenshot shows product filtering options that dynamically update the page (Compl. p. 10). | ¶29 | col. 8:16-22 |
| presenting, at the client computer, the application and the fourth information based upon the presentational information | The browser or app uses the received data to update the user interface, such as displaying a new set of sorted products or updated account information. | ¶29 | col. 8:16-22 |
| storing, on the client computer, an interactive link for selectively re-establishing the second communication connection to the second host computer | The complaint does not specify which feature of the Accused Products corresponds to the claimed "interactive link." The patent specification describes this as a downloadable object, such as an icon created via a drag-and-drop operation. | N/A | col. 8:22-34 |
Identified Points of Contention
- Scope Questions: A principal issue will be the scope of the term "interactive link". The patent specification heavily describes this element as a distinct, downloadable graphical object that a user can "drag and drop" onto their desktop to save for later use (’745 Patent, FIGS. 4A-4D). The question for the court will be whether this term can be construed more broadly to cover modern web constructs like a standard URL, a browser bookmark, or the persistent state of a single-page application, none of which are explicitly alleged to be created or stored in the manner described in the patent.
- Technical Questions: The complaint's infringement theory rests on mapping modern web architecture (e.g., AJAX calls) onto the claim language. A key technical question will be whether the accused AT&T system operates in a manner consistent with the patent's described architecture, particularly the distinction between a "first remote source" providing initial content and a "second host computer" running the application.
V. Key Claim Terms for Construction
- The Term: "interactive link"
- Context and Importance: This term is the lynchpin of the final step of independent claim 1. Its construction will be critical because the infringement case may depend on whether the functionalities of the Accused Products include an element that meets this definition. Practitioners may focus on this term because the detailed description in the patent appears to tie it to a specific implementation (a downloadable, graphical icon) that may not be present in modern web applications.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The claim language itself describes the link functionally as a means "for selectively re-establishing the second communication connection" (’745 Patent, col. 30:20-24). This functional language could support an argument that any mechanism that allows a user to return to the interactive session, such as a URL or bookmark, meets the limitation.
- Evidence for a Narrower Interpretation: The specification provides a detailed example of the "interactive link" being a graphical representation (icon 320) created when a user drags a "droplet handle" (icon 120') from the application window onto their desktop (’745 Patent, FIGS. 4A-4D; col. 16:36-51). This specific embodiment could be used to argue for a narrower construction that requires a distinct, downloadable, and storable object, not just a URL.
VI. Other Allegations
- Indirect Infringement: The complaint alleges that AT&T induced infringement by providing the Accused Products and encouraging or instructing users to use them in an infringing manner (Compl. ¶34). It also alleges contributory infringement by supplying the non-staple web and application code used by end-users to perform the patented methods (Compl. ¶35).
- Willful Infringement: Willfulness is alleged based on AT&T’s purported knowledge of the ’745 Patent. The complaint asserts that AT&T "has known, or should have known" of the patent and its infringement due to the public nature and prominence of Droplets' prior successful litigations against other major technology and retail companies (Compl. ¶32).
VII. Analyst’s Conclusion: Key Questions for the Case
- A core issue will be one of definitional scope: Can the term "interactive link", which the patent specification describes as a downloadable, icon-like object created via a "drag and drop" operation, be construed to cover modern web mechanisms like URLs or browser bookmarks that are fundamental to how users re-access web applications today?
- A second key issue will be one of technological translation: Does the architecture of the modern, dynamic AT&T website and mobile applications, developed long after the patent's 1999 priority date, map onto the specific sequence of claim elements drafted to solve a problem inherent to the dial-up internet era?
- A final question will be evidentiary: Given the patent's expiration in 2021, the dispute is limited to past damages. The outcome may therefore depend on the extent to which Droplets' prior litigation successes, particularly the $15 million verdict against Yahoo!, influence the assessment of a reasonable royalty for AT&T's alleged infringement during the relevant time period.