DCT

2:25-cv-00709

Headwater Research LLC v. Cellco Partnership

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I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 2:25-cv-00709, E.D. Tex., 07/11/2025
  • Venue Allegations: Plaintiff alleges venue is proper in the Eastern District of Texas because Verizon has committed acts of infringement in the district, has a regular and established place of business there, and advertises and sells the accused products and services within the district.
  • Core Dispute: Plaintiff alleges that Defendant’s mobile devices, cellular networks, and related services infringe two patents related to managing and securing data communications between mobile devices and network servers.
  • Technical Context: The technology addresses the management of exploding mobile data demand by enabling granular, on-device control of network access for different applications, coordinated by a central network server.
  • Key Procedural History: The complaint alleges a detailed pre-suit history between Plaintiff's affiliate (ItsOn Inc.) and Defendant, beginning in 2009. This history includes an NDA, technical presentations on the patented technology, a paid evaluation and trial agreement, and the development of a Verizon-specific prototype. The complaint further alleges that Verizon ultimately misappropriated the disclosed technology after walking away from the partnership, citing a 2013 whistleblower lawsuit filed by a former Verizon employee.

Case Timeline

Date Event
2009-02-04 U.S. Patent No. 9,491,564 Priority Date
2009-03-02 U.S. Patent No. 9,232,403 Priority Date
2009-06-30 Headwater and Verizon enter into an NDA
2009-07-01 Headwater presents its technology to Verizon under the NDA
2009-08-31 Headwater presents a trial plan to Verizon executives
2009-10-xx Headwater provides a Detailed Patent Brief to Verizon
2010-xx-xx Verizon and ItsOn enter a Software License and Evaluation Trial Agreement
2011-xx-xx Headwater Research LLC is formed
2011-05-xx Headwater/ItsOn develop a Verizon-specific prototype and hold field trials
2011-06-xx Headwater provides an Updated Detailed Patent Brief to Verizon
2013-09-30 Whistleblower complaint filed against Verizon alleging misappropriation of ItsOn's IP
2016-01-05 U.S. Patent No. 9,232,403 Issues
2016-11-08 U.S. Patent No. 9,491,564 Issues
2025-07-11 Complaint Filing Date

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

U.S. Patent No. 9,232,403 - “Mobile device with common secure wireless message service serving multiple applications”, Issued January 5, 2016

The Invention Explained

  • Problem Addressed: The patent describes a technical environment where the rapid growth of mobile devices and data-intensive applications has "pressed for user capacity" and threatens to "consume the available capacity and degrade overall network service experience" (’403 Patent, col. 1:33-54). Managing this diverse traffic from numerous applications on a single device presents a significant challenge for network operators.
  • The Patented Solution: The invention proposes a system where a "device messaging agent" resides on the mobile device and communicates with a "network message server" (’403 Patent, Abstract). This architecture, depicted in figures like FIG. 16, creates a secure control channel separate from the main data traffic plane, allowing the network server to send policies and instructions to the agent on the device. The agent then enforces these policies, managing how different software applications (1602, 1604, 1605) can access the network, thereby enabling fine-grained control over data usage and service quality on a per-application basis (’403 Patent, col. 7:15-32).
  • Technical Importance: This device-side agent architecture provided a method for carriers to manage network load and offer differentiated services by controlling application behavior directly on the end-user device, rather than relying solely on less granular, network-centric control methods.

Key Claims at a Glance

  • The complaint asserts infringement of at least independent claim 1 (Compl. ¶56).
  • Essential elements of claim 1 include:
    • A mobile end-user device with a wireless wide-area network (WWAN) modem.
    • The device is configured to run a plurality of software applications.
    • A "device messaging agent" to receive secure inter-process communication messages from the software applications.
    • The agent has the "capability of creation of a network message server readable via the WWAN," which contains data for the corresponding application.
    • The agent maps the inter-process communication to the network message server to forward the application data.
  • The complaint does not explicitly reserve the right to assert other claims.

U.S. Patent No. 9,491,564 - “Mobile device and method with secure network messaging for authorized components”, Issued November 8, 2016

The Invention Explained

  • Problem Addressed: The patent addresses the need for a secure and managed way for software components on a mobile device to access network services. A key challenge is ensuring that only "authorized" components can communicate with the network and that this communication is secure and properly managed according to the user's service plan (’564 Patent, col. 5:58-6:7).
  • The Patented Solution: The invention describes a "device link agent" that runs in a "secure execution environment" on the mobile device. This agent communicates with authorized software components via an "inter-process software communication bus" and sends their data in "encrypted messages" to a network message server (’564 Patent, col. 167:10-23). This creates a secure and authenticated channel, preventing unauthorized software from accessing the network and ensuring that data transmissions comply with established policies managed by the network operator.
  • Technical Importance: This technology provided a framework for creating a trusted environment on a mobile device, allowing carriers to securely manage services and billing for specific, authorized applications, a critical function for offering sponsored data or differentiated service tiers.

Key Claims at a Glance

  • The complaint asserts infringement of at least independent claim 1 (Compl. ¶68).
  • Essential elements of claim 1 include:
    • A mobile end-user device comprising a wireless modem.
    • An "inter-process software communication bus" providing secure communication between an "executing device link agent" and a "plurality of software components."
    • The device link agent receives activity authorization information from a secure server.
    • The agent allows the authorized components to access the bus.
    • The agent is configured to maintain a secure message link through the wireless network to a message link server.
  • The complaint does not explicitly reserve the right to assert other claims.

III. The Accused Instrumentality

Product Identification

The Accused Instrumentalities are broadly defined as "mobile electronic devices, including mobile phones and tablets," as well as the "cellular networks, servers, and services" sold, supplied, and operated by Verizon (Compl. ¶1, ¶41).

Functionality and Market Context

  • The complaint alleges that the Accused Instrumentalities incorporate technology that benefits Verizon by "significantly reducing network congestion and/or improving the reliability of their networks" (Compl. ¶1). This is framed in the context of Verizon's marketing of its "most reliable 5G network" (Compl. ¶1).
  • The complaint includes a graphic illustrating the exponential growth of mobile data traffic, suggesting the accused functionality is critical for managing this demand (Compl. p. 6).
  • The complaint also provides a screenshot from Verizon's website showing its network coverage in the Eastern District of Texas, which serves to ground the venue allegations (Compl. p. 14, ¶47). This screenshot depicts a map of Marshall, Texas, with overlays for 5G and 4G LTE coverage.

IV. Analysis of Infringement Allegations

The complaint alleges that Verizon's mobile devices, networks, and services directly and indirectly infringe, at a minimum, claim 1 of the ’403 patent and claim 1 of the ’564 patent (Compl. ¶¶55, 67). The complaint references Exhibits 3, 4, 5, and 6 as containing claim charts detailing these infringement allegations; however, these exhibits were not filed with the complaint (Compl. ¶¶56, 68).

In the absence of the claim charts, the narrative infringement theory is based on the allegation that Verizon's devices and network services implement the patented systems for managing and securing application-specific data traffic. The complaint suggests that after being educated on Headwater's technology for "Application/Content Aware Service Access Control," where a "server controls service plan network access policies that are securely enforced on a networked device," Verizon implemented this functionality in its own products (Compl. ¶29, ¶35). The infringement theory appears to be that software and processes on Verizon's mobile devices function as the claimed "device messaging agent" or "device link agent," which communicate with Verizon's network servers to enforce data usage policies on a per-application basis.

V. Key Claim Terms for Construction

  • ’403 Patent: "device messaging agent"

    • Context and Importance: This is the core software component on the mobile device. Its definition is critical because the infringement analysis will depend on whether a specific set of processes or software on Verizon's devices collectively perform the functions of this "agent." Practitioners may focus on this term to dispute whether the accused functionality is a single, integrated "agent" as arguably described in the patent, or a collection of disparate operating system functions that do not meet the claim's requirements.
    • Intrinsic Evidence for Interpretation:
      • Evidence for a Broader Interpretation: The specification describes the agent as an element that "receives secure inter-process communication messages" and "maps" them to a network message server, suggesting a functional definition that could encompass various software implementations (’403 Patent, col. 163:44-55).
      • Evidence for a Narrower Interpretation: FIG. 16 depicts the "Service Processor" (115) as containing a suite of distinct agents (e.g., Policy Control Agent 1692, Billing Agent 1695). A defendant might argue this implies a specific, modular software architecture that is not present in its accused devices.

  • ’564 Patent: "secure execution environment"

    • Context and Importance: This term is central to the patent's focus on security. The dispute will likely center on what level of security or hardware/software isolation is required to constitute a "secure execution environment." Verizon could argue its standard OS security features do not rise to the level of the specific "environment" claimed by the patent.
    • Intrinsic Evidence for Interpretation:
      • Evidence for a Broader Interpretation: The claim language is not highly specific, which may support a broader functional interpretation covering any part of the device OS that provides protected memory or process isolation.
      • Evidence for a Narrower Interpretation: The specification discusses embodiments where the service processor is implemented in protected or secure memory "that is not accessible through less secure software and/or other security mechanisms" (’564 Patent, col. 27:16-22). This could be used to argue for a requirement of a specialized hardware-based secure zone, such as ARM TrustZone, which may not be used for the specific accused functionality.

VI. Other Allegations

  • Indirect Infringement: The complaint alleges that Verizon induces infringement by providing instructions to its customers on how to use the accused devices and services in an infringing manner (Compl. ¶58, ¶60, ¶70). The allegations also appear to support a theory of induced infringement by any vendors of the accused devices (Compl. ¶55, ¶67).
  • Willful Infringement: Willfulness allegations are based on extensive alleged pre-suit knowledge. The complaint details a multi-year business relationship from 2009-2013 where Headwater and its affiliate ItsOn allegedly disclosed the technology of the asserted patents to Verizon under an NDA, including via detailed patent briefs, presentations, and a licensed prototype (Compl. ¶¶16-29). The complaint further alleges that Verizon was told the technology was patent-pending and that it later "reverse-engineered the functionality" (Compl. ¶29, ¶32).

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

  1. Impact of Pre-Suit History: A central question will be the extent to which the alleged pre-suit relationship and alleged misappropriation of technology can be proven and used to support claims of copying and willful infringement. The outcome may depend heavily on the content of the disclosures made under the NDA and the evidence presented in the prior whistleblower lawsuit.
  2. Claim Construction and Scope: The case will likely turn on a battle over definitional scope. Can terms like "device messaging agent" and "secure execution environment", which are rooted in the patent’s specific architecture, be construed to read on the complex, multi-layered software and security features of a modern mobile operating system as implemented by Verizon?
  3. Evidentiary Proof of Infringement: Given the absence of claim charts in the initial pleading, a key question is what evidence Plaintiff will produce during discovery to demonstrate that the accused Verizon systems actually perform the specific steps of the asserted claims, particularly regarding the creation of a "network message server readable via the WWAN" and the operation of a "device link agent" in a "secure execution environment."