Torus Ventures LLC v. Golden Bank National Association

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Torus Ventures LLC (Delaware)
  • Defendant: Golden Bank National Association (Texas)
  • Plaintiff’s Counsel: Rabicoff Law LLC
• Case Identification: 2:24-cv-00990, E.D. Tex., 12/02/2024
• Venue Allegations: Plaintiff alleges venue is proper because Defendant maintains an established place of business in the Eastern District of Texas and has committed the alleged acts of patent infringement in the district.
• Core Dispute: Plaintiff alleges that Defendant infringes a patent related to a recursive security protocol for digital copyright and data control.
• Technical Context: The technology at issue falls within the field of digital rights management (DRM) and secure data processing, focusing on methods for protecting digital content through layered encryption.
• Key Procedural History: The complaint asserts that Plaintiff is the assignee of the patent-in-suit. The complaint frames its own service as constituting actual knowledge of infringement for the purposes of alleging post-suit willful and induced infringement.

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

• Patent Identification: U.S. Patent No. 7,203,844, issued April 10, 2007.

The Invention Explained

• Problem Addressed: The patent’s background section describes the challenge of protecting digital copyrighted works in an era where perfect, low-cost duplication is possible (’844 Patent, col. 1:24-44). It notes that prior art security systems often made artificial distinctions between different types of data (e.g., executable code versus media content), and lacked a method for the security protocol to protect itself (’844 Patent, col. 2:27-41).
• The Patented Solution: The patent proposes a “recursive security protocol” that treats all digital data as a bitstream. The core concept involves a nested encryption scheme: a bitstream is encrypted with a first algorithm, and that result is associated with a first decryption algorithm. This entire combination is then encrypted with a second algorithm to create a second, more secure bitstream (’844 Patent, Abstract; col. 2:54-68). This self-referencing or "recursive" property allows the protocol to be updated and to protect the decryption instructions themselves, not just the underlying content (’844 Patent, col. 2:45-48).
• Technical Importance: This layered approach was designed to provide a flexible and updatable security framework, allowing new security algorithms to be added "on top of existing systems" without requiring hardware changes (’844 Patent, col. 4:31-43).

Key Claims at a Glance

• The complaint asserts infringement of "one or more claims," including "Exemplary '844 Patent Claims" identified in an unprovided exhibit (Compl. ¶11). Independent claim 1 is representative of the method claims.
• Independent Claim 1:
  • A method for a recursive security protocol for protecting digital content, comprising:
  • 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 specify any dependent claims but alleges infringement of "one or more claims" of the ’844 Patent (Compl. ¶11).

III. The Accused Instrumentality

Product Identification

The complaint does not name a specific accused product, method, or service. It refers generally to "Defendant products identified in the charts incorporated into this Count" and "Exemplary Defendant Products," which are detailed in an exhibit that was not filed with the complaint (Compl. ¶11).

Functionality and Market Context

The complaint does not provide sufficient detail for analysis of the functionality of the accused instrumentality.

IV. Analysis of Infringement Allegations

The complaint alleges that infringement is detailed in claim charts provided as Exhibit 2; this exhibit was not included with the filed complaint (Compl. ¶16, ¶17). The narrative alleges that the unspecified "Exemplary Defendant Products" practice the technology claimed by the ’844 Patent and "satisfy all elements of the Exemplary '844 Patent Claims" (Compl. ¶16). No probative visual evidence provided in complaint.

• Identified Points of Contention:
  • Technical Questions: A central question will be whether the accused systems, presumably related to the Defendant's banking operations, actually perform the specific nested encryption required by the claims. Specifically, what evidence does the Plaintiff have that the Defendant’s systems encrypt not just data, but also the decryption algorithm associated with that data, as a single package, using a second layer of encryption?
  • Scope Questions: The patent is titled and described in the context of "digital copyright control" (’844 Patent, Title; col. 1:1-3). This raises the question of whether the patented methods, developed for media and software protection, can be read to cover the security protocols used in a financial services context.

V. Key Claim Terms for Construction

• The Term: "encrypting both the encrypted bit stream and the first decryption algorithm with a second encryption algorithm"
• Context and Importance: This phrase from independent claim 1 describes the core "recursive" step of the invention. The infringement analysis will likely depend on whether the Defendant's systems perform this specific, two-part encryption. Practitioners may focus on this term to determine if there is a technical match between the accused process and the claimed method.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: A party might argue that this language covers any system where a secure package is created containing encrypted data along with associated metadata (such as keys or access instructions) that is then subject to a further layer of encryption for transmission or storage. The specification refers broadly to protecting "any digital content" (’844 Patent, col. 4:12-13).
  • Evidence for a Narrower Interpretation: A party could argue the claim requires the literal encryption of the executable code of the "first decryption algorithm" itself, not merely a key or pointer. The patent summary states, "the bit stream is encrypted and this result is associated with a decryption algorithm. This combination is in turn encrypted..." (’844 Patent, col. 2:62-65), suggesting the algorithm and data are bundled before the second encryption step.

VI. Other Allegations

• Indirect Infringement: The complaint alleges induced infringement occurring "at least since being served by this Complaint" (Compl. ¶15). The factual basis alleged is Defendant’s sale and distribution of products along with "product literature and website materials" that allegedly instruct users how to use the products in an infringing manner (Compl. ¶14-15).
• Willful Infringement: Willfulness is alleged based on post-suit knowledge. The complaint asserts that its service "constitutes actual knowledge of infringement" and that Defendant's continued infringing activities thereafter are willful (Compl. ¶13-14).

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

• A primary issue will be one of evidentiary sufficiency: As the complaint lacks specific factual allegations mapping accused product features to claim limitations, the case will turn on whether discovery reveals that the Defendant's systems perform the precise technical steps of the asserted claims.
• A key legal and technical question will be one of operational equivalence: Do the security protocols used by the Defendant, which are likely focused on financial transaction integrity, perform the specific "recursive" method of the ’844 patent—namely, encapsulating and re-encrypting a decryption algorithm itself—or do they utilize different, more conventional layered security architectures that fall outside the scope of the claims?