DCT
2:24-cv-01056
Alpha Modus Corp v. Wakefern Food Corp
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: Alpha Modus, Corp. (Florida)
- Defendant: Wakefern Food Corp. (New Jersey) and Shelf Nine LLC (Delaware)
- Plaintiff’s Counsel: Dickinson Wright PLLC
- Case Identification: 2:24-cv-01056, E.D. Tex., 12/17/2024
- Venue Allegations: Plaintiff alleges venue is proper because Defendants offer the accused products to customers in the Eastern District of Texas. Plaintiff further alleges that Defendant Wakefern Food has previously consented to jurisdiction and venue in the district in prior litigation.
- Core Dispute: Plaintiff alleges that in-store digital display systems, provided by Shelf Nine and used by Wakefern Food, infringe five patents related to using sensors and cameras to analyze consumer behavior in real-time for the purpose of targeted marketing and inventory management.
- Technical Context: The technology at issue falls within the retail analytics and "retail media network" sector, where physical stores use data-driven methods analogous to e-commerce to personalize shopper experiences and influence purchasing decisions.
- Key Procedural History: The complaint notes that Plaintiff has entered into licensing agreements for its patented technology with other entities, which may suggest a broader monetization strategy for its portfolio. No prior litigation between the parties or administrative challenges to the patents (e.g., IPRs) are mentioned.
Case Timeline
| Date | Event |
|---|---|
| 2013-07-19 | Earliest Priority Date for all Patents-in-Suit |
| 2019-07-23 | ’571 Patent Issued |
| 2020 | Defendant Shelf Nine Founded |
| 2020-12-01 | ’825 Patent Issued |
| 2021-04-13 | ’672 Patent Issued |
| 2021-06-22 | ’890 Patent Issued |
| 2022-04-12 | ’880 Patent Issued |
| 2023-10 | VSBLTY completes acquisition of Shelf Nine |
| 2024-01-11 | Plaintiff licenses patent portfolio to GZ6G Technologies Corp. |
| 2024-12-17 | Complaint Filed |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 10,360,571
- Patent Identification: U.S. Patent No. 10,360,571, "Method For Monitoring And Analyzing Behavior And Uses Thereof," issued July 23, 2019. (Compl. ¶18).
- The Invention Explained:
- Problem Addressed: The patent’s background section describes the challenge faced by brick-and-mortar retailers from online competition, particularly the phenomenon of "showrooming," where consumers inspect products in-store but purchase them online. (’571 Patent, col. 1:41-48). These physical retailers lack the real-time data needed to deliver the personalized marketing common in e-commerce. (’571 Patent, col. 2:9-16).
- The Patented Solution: The invention proposes a method using in-store "information monitoring devices," such as video cameras, to collect data about shoppers, including their demographics (age, gender), sentiment (e.g., happy, sad), and movement. (’571 Patent, col. 9:56-64, 10:1-6). This data is analyzed in real-time to provide a response, such as engaging the shopper with targeted content on a display or providing a digital coupon, thereby influencing the immediate purchase decision. (’571 Patent, Abstract; col. 4:1-14). Figure 1 of the patent illustrates the overall system architecture, showing various in-store devices (103, 107) communicating with a cloud-based analysis system (102). (’571 Patent, Fig. 1).
- Technical Importance: The technology represents an effort to bridge the data gap between online and physical retail by bringing the dynamic, data-driven personalization of e-commerce into the brick-and-mortar environment. (Compl. ¶24).
- Key Claims at a Glance:
- The complaint asserts at least Claim 1. (Compl. ¶93).
- Independent Claim 1 is a method claim comprising the essential elements of:
- Using information monitoring devices (including video image devices) to gather information about persons at a location.
- Gathering specific information types: a demographic characteristic (gender, age), a sentiment characteristic, and a tracking characteristic (movement, eye movement).
- Providing an opt-out option to the persons.
- Analyzing the gathered information in real time for persons who have not opted out.
- Providing a real-time response based on the analysis, selected from a group including engaging the person via a display, sending a communication to a second person, providing marketing information, or providing a coupon. (Compl. ¶27).
U.S. Patent No. 10,853,825
- Patent Identification: U.S. Patent No. 10,853,825, "Method for monitoring and analyzing behavior and uses thereof," issued December 1, 2020. (Compl. ¶28).
- The Invention Explained:
- Problem Addressed: The patent addresses the same challenge as its parent '571 Patent: the inability of brick-and-mortar stores to provide the real-time, personalized customer experiences leveraged by online retailers. (Compl. ¶¶34-35).
- The Patented Solution: This invention also uses monitoring devices to gather and analyze real-time data on a shopper's demographic and tracking characteristics. (’825 Patent, Abstract). However, the claimed solution differs in its output. Instead of focusing solely on an automated digital response to the shopper, this method uses the real-time analysis to select a human "sales associate" and sends a communication to that associate, enabling them to "directly interact with the first person in response to the communication." (’825 Patent, col. 22:1-12).
- Technical Importance: This approach aims to enhance the in-store experience not just through automated displays, but by empowering human sales staff with actionable, real-time data about specific customers. (Compl. ¶37).
- Key Claims at a Glance:
- The complaint asserts at least Claim 1. (Compl. ¶117).
- Independent Claim 1 is a method claim comprising the essential elements of:
- Using information monitoring devices (including video image devices) to gather information about a "first person" at a retail store.
- Gathering a demographic characteristic (gender, age) and a tracking characteristic (movement, eye movement) of the first person.
- Analyzing this information in real time to generate an analysis of the first person.
- Utilizing the real-time analysis to select a sales associate.
- Sending a communication to the selected sales associate that includes at least a portion of the gathered information or the analysis, enabling the associate to interact with the person. (Compl. ¶38).
Additional Patents-in-Suit: Multi-Patent Capsules
U.S. Patent No. 10,977,672
- Patent Identification: "Method And System For Real-Time Inventory Management, Marketing, And Advertising In A Retail Store," issued April 13, 2021. (Compl. ¶39).
- Technology Synopsis: This patent claims a system for real-time retail functions. It describes a server that uses image recognition to identify the inventory on a display, determines and displays pricing information, receives real-time data about a nearby customer, and generates a promotion for that customer based on behavioral analytics. (Compl. ¶¶48-49).
- Asserted Claims: At least Claim 1. (Compl. ¶141).
- Accused Features: The "digital smart screens" of the Accused Products, which are alleged to comprise the claimed system. (Compl. ¶136).
U.S. Patent No. 11,042,890
- Patent Identification: "Method And System For Customer Assistance In A Retail Store," issued June 22, 2021. (Compl. ¶50).
- Technology Synopsis: This patent claims a method for enhancing customer assistance by gathering "object identification information" of a product a person is interested in, along with the person's "sentiment information" regarding that product. The method then analyzes this information and provides a real-time response, such as sending a communication to the person or to a second person (e.g., a store employee) to facilitate an interaction. (Compl. ¶¶58-59).
- Asserted Claims: At least Claim 1. (Compl. ¶165).
- Accused Features: The Accused Products are alleged to practice this method. (Compl. ¶160).
U.S. Patent No. 11,301,880
- Patent Identification: "Method And System For Inventory Management In A Retail Store," issued April 12, 2022. (Compl. ¶60).
- Technology Synopsis: This patent claims a method for inventory management based on shopper behavior. The method involves gathering "product interaction information" (e.g., products being picked up or carried away) and "object identification information." This data is analyzed in real-time to manage inventory, and a response is sent to a retail person, such as a communication to check inventory levels or restock a product. (Compl. ¶¶69-70).
- Asserted Claims: At least Claim 1. (Compl. ¶189).
- Accused Features: The Accused Products are alleged to practice this method. (Compl. ¶184).
III. The Accused Instrumentality
- Product Identification: The "Accused Products" are identified as digital displays or "digital smart screens" provided by Defendant Shelf Nine and implemented and utilized by Defendant Wakefern Food in its brick-and-mortar retail stores. (Compl. ¶¶80-81, 88).
- Functionality and Market Context: The complaint alleges these are "motion-activated" displays placed in locations such as grocery checkout aisles and throughout retail stores. (Compl. ¶78). Functionally, they are alleged to use "information monitoring devices," including video cameras, to gather demographic, sentiment, and tracking data from nearby shoppers. (Compl. ¶¶89, 91). This collected data is then allegedly analyzed by connected servers or databases. (Compl. ¶90). The complaint includes a map from Shelf Nine's website indicating customer locations across the United States, including Texas, where its products and services are offered. (Compl. p. 3). Plaintiff alleges that Wakefern is the largest retailer-owned cooperative in the U.S. and that its implementation of the accused technology has "significantly contributed to its retail efficiency and profitability." (Compl. ¶¶72, 82).
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 in a group of persons at a location, wherein... (iii) the one or more information monitoring 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 Wakefern's retail stores. | ¶89 | col. 9:11-19 |
| (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. | ¶91 | col. 9:56-64 |
| (v) ...gathering a sentiment characteristic of the persons...using the one or more video image devices | The Accused Products collect sentiment characteristics of persons in proximity to the devices. | ¶91 | col. 9:56-64 |
| (vi) ...gathering a tracking characteristic of the persons...selected from a group consisting of movement...eye movement...and combinations thereof | The Accused Products collect tracking characteristics of persons in proximity to the devices. | ¶91 | col. 10:1-6 |
| (b) providing an opt-out option to the persons in the group of persons... | The Accused Products provide an opt-out option to persons in proximity to the devices. | ¶92 | col. 11:36-39 |
| (c) analyzing in real time...the information gathered...of the persons...except for the subset of opt-out persons | The Accused Products are connected to servers and/or databases which analyze the gathered information from those who have not opted out. | ¶¶90, 92 | col. 4:1-14 |
| (d) providing a response in real time based upon the analyzed information... | The Accused Products are operated in a way that embodies the patented invention, which includes providing a real-time response. | ¶¶88, 93 | col. 12:62-67 |
- Identified Points of Contention:
- Functional Questions: The complaint alleges the collection of demographic, sentiment, and tracking data, but it provides minimal detail on the specific "response" generated in real time as required by claim element 1(d). A key evidentiary question will be whether the Accused Products actually perform one of the four claimed response actions (e.g., engaging with tailored content, sending a communication, providing marketing, or offering a coupon) based on the real-time analysis.
- Scope Questions: What evidence will show that the "opt-out option" (Compl. ¶92) provided by the accused system meets the claim limitation requiring management of a "subset of the opt-out persons" after receipt of an "affirmation"? The specific mechanism of the opt-out feature may be a point of dispute.
’825 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 a first person in a group of persons at a retail store... | The Accused Products utilize one or more information monitoring devices, including video image devices, to gather information about persons in Wakefern's retail stores. | ¶113 | col. 9:11-19 |
| (iv) ...gathering a demographic characteristic of the first person...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. | ¶115 | col. 9:56-64 |
| (v) ...gathering a tracking characteristic of the first person...selected from a group consisting of movement...eye movement...and combinations thereof | The Accused Products collect tracking characteristics of persons in proximity to the devices. | ¶115 | col. 10:1-6 |
| (b) analyzing in real time...the information gathered...to generate a real time analysis of the first person | The Accused Products include systems connected to a server and/or databases, which analyze the information gathered. | ¶114 | col. 4:1-14 |
| (c) utilizing the real time analysis to select a sales associate... | The complaint does not provide sufficient detail for analysis of this specific element. | col. 18:30-41 | |
| (d) sending a communication to the sales associate...wherein the sales representative can then directly interact with the first person... | The complaint does not provide sufficient detail for analysis of this specific element. | col. 18:30-41 |
- Identified Points of Contention:
- Technical Questions: The complaint's allegations for the '825 Patent are largely parallel to those for the '571 Patent. However, Claim 1 of the '825 patent requires the distinct steps of selecting and sending a communication to a sales associate. A primary evidentiary question will be whether the Accused Products perform this function at all, as the complaint offers no specific facts to support these claim elements.
- Scope Questions: Can the general allegation that the system gathers information on "persons" (Compl. ¶113) satisfy the more specific claim requirement of gathering information about a "first person in a group of persons"? The mechanism by which the system isolates and analyzes an individual will likely be scrutinized.
V. Key Claim Terms for Construction
The Term: "analyzing in real time" (present in asserted claims of '571, '825, '890, '880 Patents)
- Context and Importance: The "real time" nature of the analysis and response is a core inventive concept purported to distinguish the patents from prior art methods that rely on historical data. The temporal scope of this term—whether it means instantaneous, near-instantaneous, or within a single shopping session—will be critical to determining infringement.
- Evidence for a Broader Interpretation: The specification does not provide an explicit numerical definition, which may support an interpretation based on the plain and ordinary meaning, allowing for some processing delay.
- Evidence for a Narrower Interpretation: The patent states the goal is to "directly influence their purchasing decision" (’571 Patent, col. 2:38-39). This context suggests the analysis and subsequent response must occur quickly enough to affect a consumer's behavior while they are still considering a purchase in the store, weighing against an interpretation that would allow for post-session analysis.
The Term: "sales associate" (present in asserted claim of '825 Patent)
- Context and Importance: This term is the central limitation distinguishing the asserted claim of the '825 patent from the other patents-in-suit. The infringement theory for this patent hinges on whether the accused system communicates with a person meeting this definition. Practitioners may focus on this term because the complaint lacks factual allegations supporting this specific functionality.
- Evidence for a Broader Interpretation: A defendant may argue for a plain and ordinary meaning that could encompass any store employee.
- Evidence for a Narrower Interpretation: The patent describes the system alerting a "nearby employee" and providing them with a "profile of the customer" so the associate can "better serve the customer" and be "better prepared to successfully answer any questions." (’825 Patent, col. 18:30-41). This language may support a narrower construction requiring a human employee tasked with proactive customer interaction and sales, as opposed to a cashier or stock clerk.
VI. Other Allegations
- Indirect Infringement: The complaint asserts induced infringement for all five patents-in-suit. It alleges that Defendants knowingly induce others (e.g., Wakefern employees and customers) to use the Accused Products in an infringing manner. (Compl. ¶¶103, 127). The factual basis alleged is the business partnership between the defendants and the use of the products in Wakefern's stores "consistent with Defendants' promotions and instructions." (Compl. ¶¶107, 131).
- Willful Infringement: Willfulness is alleged for all patents. The complaint primarily bases this on post-suit knowledge, stating that Defendants have been aware of the patents "at least as early as the filing of this Complaint." (Compl. ¶83). It also makes a conclusory allegation of pre-suit knowledge or willful blindness based on the "business relationship between Wakefern Food and Shelf Nine." (Compl. ¶97).
VII. Analyst’s Conclusion: Key Questions for the Case
- A core evidentiary question will be one of system functionality: What specific actions do the accused digital display systems perform in response to analyzing shopper data? The complaint alleges data collection, but is sparse on the details of the resulting "response" (for the '571 patent) or the "communication to a sales associate" (for the '825 patent), which are critical limitations in the asserted claims.
- A central issue of claim construction will be one of temporal scope: What is the meaning of "real time" as used across the asserted patents? The patent specifications frame the invention as influencing an immediate purchasing decision, which may support a construction requiring near-instantaneous analysis and response—a standard against which the accused system's actual performance will be measured.
- A key question for the indirect infringement and willfulness claims will be one of intent and knowledge: Beyond the existence of a business partnership, what specific evidence can Plaintiff produce to demonstrate that Defendants had pre-suit knowledge of the patents or provided specific instructions that encouraged infringing uses of the accused systems?