Arbor Systems LLC v. Accenture Ltd

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Arbor Systems LLC (New Mexico)
  • Defendant: Accenture Limited (Ireland)
  • Plaintiff’s Counsel: Rabicoff Law LLC
• Case Identification: 2:26-cv-00045, E.D. Tex., 01/22/2026
• Venue Allegations: Venue is alleged to be proper in the Eastern District of Texas because the defendant is a foreign corporation that has committed acts of patent infringement within the district.
• Core Dispute: Plaintiff alleges that Defendant infringes a patent related to Internet of Things (IoT) devices that use blockchain-based smart contracts for secure operation and inter-device contracting.
• Technical Context: The technology lies at the intersection of IoT and distributed ledger technology, aiming to provide a secure and automated framework for devices to transact and enforce agreements.
• Key Procedural History: The complaint does not mention any prior litigation, Inter Partes Review (IPR) proceedings, or licensing history related to the patent-in-suit.

Case Timeline

Date	Event
2017-05-12	’513 Patent Priority Date
2018-05-25	’513 Patent Application Filing Date
2019-02-05	’513 Patent Issue Date
2026-01-22	Complaint Filing Date

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

U.S. Patent No. 10,195,513 - *"Smart device"*

The patent-in-suit is U.S. Patent No. 10,195,513, issued on February 5, 2019 (the "'513 Patent").

The Invention Explained

• Problem Addressed: The patent background section notes the emergence of intelligent IoT devices in areas like sports and autonomous vehicles, and states that "fraudulent and harmful activities arising from hacked IOT devices have potential to cause major disruptions to the Internet" (’513 Patent, col. 1:5-18).
• The Patented Solution: The invention described is an IoT device comprising a processor, sensor, and wireless transceiver that is configured to use blockchain smart contracts to facilitate secure operations (’513 Patent, Abstract; col. 1:20-23). This system leverages the decentralized and cryptographically secure nature of blockchain to enable IoT devices to negotiate and enforce agreements with other machines, automating processes such as payments, data access, and transfer of ownership or rights (’513 Patent, col. 4:60-68; col. 19:5-20:53).
• Technical Importance: The described approach purports to create a secure and automated method for a growing number of interconnected devices to transact with one another without centralized control, addressing potential security vulnerabilities and operational bottlenecks.

Key Claims at a Glance

• The complaint does not specify which claims are asserted, instead referencing an attached but unprovided exhibit (Compl. ¶11). The ’513 Patent contains one independent claim, Claim 1.
• Independent Claim 1:
  • An Internet of Things (IOT) device, comprising:
  • a processor;
  • a sensor coupled to the processor;
  • a transceiver; and
  • a module for processing a smart contract in a blockchain with the blockchain address, the processor storing tamperproof events on the blockchain or a side chain, the processor executing terms of the smart contract and a module for forming a contract between the processor and another machine.
• The complaint alleges infringement of "one or more claims" of the ’513 Patent, which may suggest an intent to assert dependent claims in addition to the independent claim (Compl. ¶11, Prayer for Relief ¶B).

III. The Accused Instrumentality

Product Identification

• The complaint does not identify any accused products or services by name. It refers to them generically as the "Exemplary Defendant Products" (Compl. ¶11, 16).

Functionality and Market Context

• The complaint does not describe any specific features or technical functionality of the accused products. It alleges, without detail, that the accused products "practice the technology claimed by the '513 Patent" and "satisfy all elements of the Exemplary '513 Patent Claims" by reference to claim charts in an unprovided exhibit (Compl. ¶16-17).
• No allegations regarding the commercial importance or market positioning of the accused products are made in the complaint.

IV. Analysis of Infringement Allegations

The complaint alleges direct and induced infringement of the ’513 Patent, but it does so by incorporating by reference claim charts from Exhibit 2, which was not provided with the filed complaint (Compl. ¶16-17). The complaint's narrative asserts that the "Exemplary Defendant Products" practice the claimed technology and satisfy all elements of the asserted claims, either literally or under the doctrine of equivalents (Compl. ¶11, 16). Without the referenced exhibit or any specific factual allegations mapping product features to claim limitations in the body of the complaint, a detailed analysis of the infringement theory is not possible based on the provided documents. No probative visual evidence provided in complaint.

• Identified Points of Contention:
  • Evidentiary Question: A threshold issue for the litigation will be the identification of the accused instrumentalities. The complaint's lack of specificity raises the question of what specific Accenture products, software platforms, or client-implemented systems are being accused of infringement and what evidence Plaintiff will offer to show they meet the limitations of the asserted claims.
  • Technical Question: A central technical dispute may concern whether any functionality within the accused products performs the specific actions required by Claim 1, namely "processing a smart contract" for the purpose of "forming a contract between the processor and another machine." The analysis will question whether the accused products engage in this type of automated, machine-to-machine contract formation or use blockchain for other purposes.
  • Scope Questions: Given that Accenture is primarily a services and consulting company, a potential dispute may arise over whether its software platforms or systems qualify as an "Internet of Things (IOT) device" as defined in the claims. The construction of this term, which requires a "sensor" (Claim 1), may be critical to determining infringement.

V. Key Claim Terms for Construction

The Term: "a module for processing a smart contract...and a module for forming a contract between the processor and another machine"

• Context and Importance: This term encapsulates the core functionality of the claimed invention. Practitioners may focus on this term because its construction will determine whether a general-purpose processor executing software instructions can infringe, and what specific actions are required for "forming a contract" between machines.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The specification discusses a wide array of smart contract applications, including insurance, supply chain management, and peer-to-peer transactions, suggesting "processing" and "forming a contract" could be interpreted broadly to cover various software-based implementations that automate blockchain-based agreements (’513 Patent, col. 5:1-28).
  • Evidence for a Narrower Interpretation: A defendant could argue that the specific context of "forming a contract between the processor and another machine" requires a direct, automated, machine-to-machine protocol, not merely a system that facilitates human-initiated smart contracts. The patent's detailed discussion of specific Ethereum protocols may be used to argue for a narrower scope tied to such implementations (’513 Patent, col. 23:32-42).

The Term: "Internet of Things (IOT) device"

• Context and Importance: The definition of this term is fundamental, as the accused instrumentality must be an "IOT device." The dispute may center on whether a server, a software platform, or a distributed system—as might be offered by Accenture—qualifies as such a device, particularly given the claim's requirement for a "sensor."
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The patent's summary describes an IoT device simply as including "a processor, sensor(s), and a wireless transceiver," and the specification provides a vast range of examples from wearable sports equipment to large-scale structural monitoring systems, which may support a broad definition (’513 Patent, col. 1:20-23; FIGs. 1B, 2B, 9-12).
  • Evidence for a Narrower Interpretation: A defendant may argue that the claim's explicit requirement for a "sensor" and the patent's numerous embodiments depicting tangible, physical objects (e.g., tennis rackets, gloves, smart bands) suggest that a purely software-based or back-end server system does not meet the claim's definition of an "IOT device" (’513 Patent, col. 3:12-16; FIGs. 7-11A).

VI. Other Allegations

• Indirect Infringement: The complaint alleges induced infringement, stating that at least since the filing of the suit, Accenture has knowingly encouraged infringement by selling the accused products and distributing "product literature and website materials" that allegedly instruct end users on how to use them in an infringing manner (Compl. ¶14-15).
• Willful Infringement: The complaint does not use the term "willful." However, it alleges that the service of the complaint and its attached (but unprovided) claim charts constitutes "Actual Knowledge of Infringement," which could form the basis for a claim of post-suit willful infringement and enhanced damages (Compl. ¶13-14).

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

• A primary issue will be one of evidentiary foundation: What specific Accenture products or services are accused, and what factual evidence will be presented to demonstrate that they meet each limitation of the asserted claims, particularly the requirements related to smart contract processing and machine-to-machine contract formation?
• A second core issue will be one of definitional scope: Can the term "Internet of Things (IOT) device," which as claimed requires a "sensor," be construed to read on the potentially software-based platforms or server-side systems that are the likely focus of an infringement action against a professional services firm like Accenture?