DCT
2:25-cv-00977
Alpha Modus Corp v. Retailnext Inc
Key Events
Complaint
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: Alpha Modus, Corp. (Florida)
- Defendant: RetailNext Inc. (Delaware)
- Plaintiff’s Counsel: Prince Lobel Tye LLP
- Case Identification: 2:25-cv-00977, E.D. Tex., 09/24/2025
- Venue Allegations: Plaintiff alleges venue is proper in the Eastern District of Texas because Defendant maintains a regular and established place of business in the district and has allegedly committed acts of patent infringement there.
- Core Dispute: Plaintiff alleges that Defendant’s in-store shopper analytics products and services infringe four patents related to monitoring and analyzing consumer behavior in real-time within a retail environment.
- Technical Context: The technology at issue involves using sensors, such as video cameras, to capture data about shoppers in brick-and-mortar stores, analyze that data in real-time, and use the analysis to influence purchasing decisions, optimize store layouts, and provide customer assistance.
- Key Procedural History: The complaint notes that Plaintiff has entered into intellectual property licensing agreements for its technology outside of litigation. The asserted patents are part of a continuation chain stemming from applications filed as early as 2014, which claim priority to a 2013 provisional application.
Case Timeline
| Date | Event |
|---|---|
| 2013-07-19 | Earliest Patent Priority Date ('825, '120, '550, '890 Patents) |
| 2014-07-18 | Parent Application Filing Date (for '825, '120, '890 Patents) |
| 2020-12-01 | '825 Patent Issued |
| 2021-06-22 | '890 Patent Issued |
| 2021-06-29 | '120 Patent Issued |
| 2024-07-16 | '550 Patent Issued |
| 2025-09-24 | Complaint Filing Date |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 10,853,825 - "Method for monitoring and analyzing behavior and uses thereof"
The Invention Explained
- Problem Addressed: The patent describes the challenge brick-and-mortar retailers face from online competitors and "showrooming," where customers examine products in-store but purchase them online (Compl. ¶ 19). This is attributed to the lack of real-time, personalized data about in-store consumer behavior, a tool readily available to online retailers ('825 Patent, col. 1:46-51, col. 2:16-24).
- The Patented Solution: The invention proposes a method to bridge this data gap by using information monitoring devices, particularly video cameras, within a retail store to gather information about shoppers (Compl. ¶ 22). The system captures demographic data (e.g., gender, age) and tracking data (e.g., movement, eye movement), analyzes it in real-time, and uses the analysis to trigger an interaction, such as sending a communication to a sales associate to engage with a specific customer ('825 Patent, Abstract; col. 4:37-44). FIG. 1 of the patent depicts the overall system architecture, showing various in-store devices (103, 107-110) connected to a cloud processing environment (102) ('825 Patent, Fig. 1).
- Technical Importance: This technology aims to provide physical retailers with the data-driven, real-time customer engagement capabilities previously limited to e-commerce (Compl. ¶ 20).
Key Claims at a Glance
- The complaint asserts at least independent Claim 1 (Compl. ¶ 70).
- Essential elements of Claim 1 include:
- Using one or more information monitoring devices, including video image devices, to gather information about a person at a retail store.
- Gathering a demographic characteristic (e.g., gender, age) and a tracking characteristic (e.g., movement, eye movement) of the person.
- Analyzing the gathered information in real time to generate a real time analysis.
- Utilizing the real time analysis to select a sales associate from a group of sales associates.
- Sending a communication to the selected sales associate that includes at least a portion of the gathered information or the real time analysis, enabling the associate to interact with the person.
U.S. Patent No. 11,049,120 - "Method And System For Generating A Layout For Placement Of Products In A Retail Store"
The Invention Explained
- Problem Addressed: The patent addresses the need for brick-and-mortar retailers to optimize the physical layout of their stores based on how consumers actually behave and interact with products, rather than relying on historical sales data alone (Compl. ¶¶ 29-30).
- The Patented Solution: The invention claims a method for dynamically improving store layouts by using monitoring devices to gather detailed information on shopping activities (Compl. ¶ 32). This includes tracking customer traffic patterns (movement, stops, duration of stops) and specific product interactions (what is viewed, picked up, or carried away) ('120 Patent, Abstract). This data is then used to generate a "layout analysis," which is utilized to modify the existing product layout to create a new, optimized one ('120 Patent, col. 2:50-54).
- Technical Importance: The method provides a systematic, data-driven approach to physical retail merchandising, allowing stores to adapt their layouts to observed consumer behavior (Compl. ¶ 28).
Key Claims at a Glance
- The complaint asserts at least independent Claim 1 (Compl. ¶ 94).
- Essential elements of Claim 1 include:
- Using information monitoring devices to gather information about shopping activities of persons at a retail store with a "first layout of products."
- Gathering "traffic information" (tracking movement, stops, duration) and "product interaction information" (products viewed, picked up, carried away).
- Analyzing the gathered information to generate a "layout analysis."
- Utilizing the layout analysis to modify the first layout to generate a "second layout" of the products.
U.S. Patent No. 12,039,550 - "Method for Enhancing Customer Shopping Experience in a Retail Store"
- Technology Synopsis: This patent describes a method for enhancing the in-store experience by first obtaining an "information analysis" of shopper activities (Compl. ¶ 44). This analysis is then provided to a "brand entity," which in turn uses it to enhance the customer's shopping experience through various forms of engagement, such as content on displays, interaction with a sales associate, or targeted marketing and coupons (Compl. ¶ 44(c)).
- Asserted Claims: Claim 1 (Compl. ¶ 117).
- Accused Features: The complaint alleges that the general shopper analytics technology of the Accused Products infringes this patent (Compl. ¶ 113).
U.S. Patent No. 11,042,890 - "Method And System For Customer Assistance In A Retail Store"
- Technology Synopsis: This patent discloses a method for providing customer assistance by gathering information about a customer's interaction with a specific product, including "object identification information" and "sentiment information" (Compl. ¶ 54). This data is analyzed in real-time to manage inventory and provide a real-time response, which can include directing the person to a location, engaging them via a display, alerting a sales associate, or providing marketing or coupons (Compl. ¶ 54(b)-(c)).
- Asserted Claims: Claim 1 (Compl. ¶ 141).
- Accused Features: The complaint alleges that the general shopper analytics technology of the Accused Products infringes this patent (Compl. ¶ 136).
III. The Accused Instrumentality
Product Identification
- The "Accused Products" are identified as RetailNext Aurora sensors, RetailNext Traffic 3.0, RetailNext Occupancy, RetailNext Shopper Journey, and other related shopper analytics products and services (Compl. ¶ 64).
Functionality and Market Context
- The complaint alleges these products provide in-store shopper analytics, including foot traffic analysis, occupancy monitoring, and shopper path and location tracking (Compl. ¶ 55). The system allegedly uses demographic information to segment store visitors and their shopping paths, allowing retailers to better understand consumer behavior (Compl. ¶ 56). Plaintiff alleges that these technologies provide Defendant and its customers with competitive advantages and substantial financial gains (Compl. ¶ 60).
IV. Analysis of Infringement Allegations
'825 Patent Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| using one or more information monitoring devices... comprise one or more video image devices, to gather information about a first person... | The Accused Products utilize one or more information monitoring devices, including video image devices, to gather information about persons in retail stores. | ¶65 | col. 4:62-65 |
| ...gathering a demographic characteristic of the first person... | The Accused Products collect demographic characteristics of persons in proximity to the information monitoring devices. | ¶67 | col. 5:50-54 |
| ...gathering a tracking characteristic of the first person... | The Accused Products collect tracking characteristics of persons in proximity to the information monitoring devices. | ¶67 | col. 5:56-62 |
| analyzing in real time... the information gathered... to generate a real time analysis... | The Accused Products analyze in real-time the information gathered by the information monitoring devices of persons in proximity to the devices. | ¶68 | col. 6:8-15 |
| utilizing the real time analysis to select a sales associate... and... sending a communication to the sales associate... | The real-time analysis generated by the Accused Products is utilized to select and send a communication to a sales associate. | ¶69 | col. 6:16-24 |
- Identified Points of Contention:
- Functional Questions: A central question may be whether the Accused Products, described as providing analytics (Compl. ¶ 55), perform the specific active step of "utilizing the real time analysis to select a sales associate" and "sending a communication" for the purpose of direct interaction, as required by Claim 1. The complaint alleges this functionality (Compl. ¶ 69), but the level of automation and specificity in the selection process will be a key factual issue. The complaint's visual evidence, such as FIG. 2, shows the output of a demographic analysis but does not depict the subsequent selection of or communication to a sales associate (Compl. p. 5).
- Scope Questions: The interpretation of "select a sales associate" could be a focal point. It raises the question of whether this requires an automated system to choose a specific, single employee from a group, or if it could be read more broadly to cover sending a general alert to a department or group of available associates.
'120 Patent Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| using one or more information monitoring devices to gather information about shopping activities... at a retail store, wherein the retail store has a first layout of products... | The Accused Products embody a method for gathering information about shopping activities of consumers in a retail store setting. | ¶90 | col. 8:23-28 |
| ...gathering traffic information of the persons... tracking movement of the persons... | The functions implemented by the Accused Products include gathering traffic information of the shoppers within the retail store, including movement of the shopper. | ¶92 | col. 8:31-36 |
| ...gathering product interaction information based upon type of interactions the persons had with one or more products... | The functions implemented by the Accused Products include gathering product interaction information of the products that the shopper interacts with in the store. | ¶92 | col. 8:43-48 |
| analyzing the information gathered... to generate a layout analysis... | The Accused Products generate layout information about the retail store. | ¶93 | col. 9:13-18 |
| utilizing the layout analysis to modify the first layout to generate a second layout of the products... | The Accused Products use the information gathered by the system in order to make recommendations to improve the layout of products in the store. | ¶93 | col. 9:19-21 |
- Identified Points of Contention:
- Direct Infringement Questions: A primary point of contention may be the final step of the claim: "utilizing the layout analysis to modify the first layout to generate a second layout." The complaint alleges the Accused Products "make recommendations to improve the layout" (Compl. ¶ 93). The question for the court will be whether providing a "recommendation" to a retailer constitutes "utilizing" the analysis to "modify" the layout, or if the modification is a separate act performed solely by the retailer (Defendant's customer). This could shift the dispute from one of direct infringement to indirect infringement. The system architecture shown in FIG. 1 does not depict any mechanism for automatically modifying a physical store layout (Compl. p. 7).
V. Key Claim Terms for Construction
The Term: "select a sales associate" ('825 Patent, Claim 1)
Context and Importance: This term is critical because it defines a key active step that distinguishes the claimed method from a passive data-gathering and analytics tool. The infringement analysis may turn on whether the accused system performs an automated and specific selection or merely provides data that a human manager could use to assign an associate.
Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The patent does not appear to explicitly limit how the selection is made, which could support an argument that any system that identifies a customer and alerts any sales associate meets the limitation. The patent states the system can be operable for "sending a communication to an employee...to signal the employee to interact with the customer" without specifying a one-to-one selection ('825 Patent, col. 4:37-41).
- Evidence for a Narrower Interpretation: The use of the verb "select" suggests a specific choice from a "group of sales associates" ('825 Patent, col. 22:3-4). This language may support a construction requiring an algorithm that chooses a particular associate based on criteria like proximity, expertise, or availability, rather than a general alert.
The Term: "utilizing the layout analysis to modify the first layout to generate a second layout" ('120 Patent, Claim 1)
Context and Importance: This is the culminating step of the claimed method. The viability of the direct infringement claim depends on whether the accused system, as a provider of analytics, performs this step. If "utilizing...to modify" is construed to mean that the system itself must execute or directly cause the modification, direct infringement may be difficult to establish.
Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: An argument could be made that generating a detailed, prescriptive layout recommendation that is then adopted by the retailer is a way of "utilizing the layout analysis to modify" the layout, even if a human performs the final implementation. The patent focuses on the generation of the analysis and its purpose for modification, without detailing the mechanism of modification itself ('120 Patent, Claim 1(c)).
- Evidence for a Narrower Interpretation: The claim language recites a complete method that includes the step of modifying the layout. This suggests the accused method itself must perform this step. The patent's summary describes a system for "monitoring and analyzing...to drive sales," which frames the system as an analytical tool, possibly leaving the physical act of modification outside its direct scope ('120 Patent, Abstract).
VI. Other Allegations
- Indirect Infringement: The complaint includes counts for induced infringement for all four patents. It alleges that Defendant knowingly induces its customers to use the Accused Products in an infringing manner, and that Defendant's "promotions and instructions, demonstrate Defendant's specific intent" (Compl. ¶¶ 84, 108, 131, 155).
- Willful Infringement: Willfulness is alleged for all four patents. The complaint bases this on Defendant's alleged knowledge of the patents "at least as early as the filing of this Complaint" and alleges that Defendant acted with "blatant disregard" for Plaintiff's patent rights (Compl. ¶¶ 75, 99, 122, 146).
VII. Analyst’s Conclusion: Key Questions for the Case
- A core issue will be one of agency and action: Do the Accused Products, which are presented as analytics platforms, actually perform the specific, active steps recited in the independent claims—such as "selecting a sales associate" and "utilizing... analysis to modify... layout"—or do they merely provide data that enables Defendant's customers to perform those actions, shifting the central dispute from direct to indirect infringement?
- A second key question will be one of evidentiary proof: What technical evidence will be presented to demonstrate that the Accused Products practice nuanced claim limitations, particularly the gathering of "sentiment information" as required by the '890 Patent and the specific selection logic for sales associates required by the '825 Patent?
- A third issue will be one of claim construction: The dispute may hinge on the scope given to verb-driven phrases like "select a sales associate" and "utilizing... to modify." Whether these terms are construed to require full automation by the accused system or can encompass providing recommendations for human action will be critical to the outcome.