Arbor Systems LLC v. Streamr Network AG

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Arbor Systems LLC (New Mexico)
  • Defendant: Streamr Network AG (Switzerland)
  • Plaintiff’s Counsel: Rabicoff Law LLC
• Case Identification: 2:26-cv-00048, E.D. Tex., 01/22/2026
• Venue Allegations: Venue is alleged to be proper on the basis that the Defendant is a foreign corporation.
• Core Dispute: Plaintiff alleges that Defendant’s products and services infringe a patent related to Internet of Things (IoT) devices that utilize blockchain smart contracts for secure operation.
• Technical Context: The technology lies at the intersection of IoT hardware and decentralized blockchain networks, addressing secure machine-to-machine communication and automated transactions.
• Key Procedural History: The complaint does not mention any prior litigation, licensing history, or other significant procedural events related to the patent-in-suit.

Case Timeline

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

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

• Patent Identification: U.S. Patent No. 10,195,513, titled "Smart device", issued on February 5, 2019.

The Invention Explained

• Problem Addressed: The patent's background section identifies the technical challenges posed by the proliferation of IoT devices, including the potential for the volume of generated data to "overwhelm the Internet cloud" and the security risks of "fraudulent and harmful activities arising from hacked IOT devices" (’513 Patent, col. 1:12-18).
• The Patented Solution: The invention is an IoT device that integrates a processor, sensor(s), and a wireless transceiver with functionality for interacting with blockchain-based smart contracts (’513 Patent, Abstract; col. 1:20-23). This integration allows the device to securely and autonomously "negotiate and enforce agreements" with other machines using the immutable and decentralized nature of a blockchain, thereby addressing the stated security and data management problems (’513 Patent, col. 4:60-61). The patent envisions applications ranging from supply chain management to peer-to-peer energy transactions (’513 Patent, col. 5:24-28; FIGS. 14I-14J).
• Technical Importance: The described technology suggests a framework for enabling secure, autonomous, and auditable machine-to-machine (M2M) economic activity, a foundational concept for the broader vision of the Internet of Things.

Key Claims at a Glance

• The complaint asserts infringement of "one or more claims" but does not specify them in the body of the complaint, instead referring to an external exhibit (Compl. ¶11). The patent contains one independent claim, Claim 1.
• Independent Claim 1 recites 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 does not explicitly reserve the right to assert dependent claims, but the allegation of infringement of "one or more claims" leaves this possibility open (Compl. ¶11).

III. The Accused Instrumentality

Product Identification

The complaint does not identify any accused products, methods, or services by name in its main body (Compl. ¶1-19). It refers to "Exemplary Defendant Products" that are purportedly detailed in claim charts attached as "Exhibit 2" (Compl. ¶11, ¶16). This exhibit was not provided with the filed complaint.

Functionality and Market Context

The complaint does not provide sufficient detail for analysis of the accused instrumentality's specific functionality or market context. It alleges globally that the accused products "practice the technology claimed by the '513 Patent" (Compl. ¶16).

IV. Analysis of Infringement Allegations

The complaint alleges that Defendant’s "Exemplary Defendant Products" infringe the asserted claims of the ’513 Patent, either literally or under the doctrine of equivalents (Compl. ¶11). A detailed infringement theory is not presented in the text of the complaint; instead, the complaint incorporates by reference the allegations made in "the claim charts of Exhibit 2" (Compl. ¶17). As Exhibit 2 was not provided, a claim-by-claim analysis based on the complaint is not possible. The narrative infringement theory appears to be that the Defendant’s products constitute IoT devices that interact with a blockchain network to execute operations that meet the limitations of the asserted claims.

No probative visual evidence provided in complaint.

• Identified Points of Contention:
  • Scope Questions: The infringement analysis may raise the question of whether the software and network components of the Defendant's system constitute an "Internet of Things (IOT) device" as that term is used in the patent, which describes hardware elements like a "sensor" and "transceiver."
  • Technical Questions: A potential point of dispute could be whether the accused products contain a "module for forming a contract between the processor and another machine" as required by Claim 1. The analysis will question what evidence the complaint provides that the accused system's participation in a decentralized data network performs the specific function of contract formation, as distinct from general data transmission or processing.
  • Technical Questions: Further inquiry may focus on whether the accused device's processor itself performs the function of "storing tamperproof events on the blockchain," or if it merely transmits data to a broader network that performs this function, raising a question of potential divided infringement.

V. Key Claim Terms for Construction

The Term: "module for processing a smart contract"

• Context and Importance: This is a means-plus-function style limitation that is central to Claim 1. The construction of "module" will determine whether the claim requires a specific, identifiable software or hardware component within the accused device, or if the term can cover a more distributed functionality inherent in the device's interaction with a network. Practitioners may focus on this term because its scope could be outcome-determinative for infringement.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The patent does not provide a specific definition for "module," which may support a broad interpretation where any component that performs the recited function could satisfy the limitation (’513 Patent, col. 131:11-13).
  • Evidence for a Narrower Interpretation: The specification includes detailed flowcharts and descriptions of smart contracts that execute specific, conditional logic (e.g., FIGS. 13A-13B; '513 Patent, col. 19:5-20:47). An argument could be made that the "module" must be configured to process contracts with this level of complexity, rather than simply facilitating basic blockchain transactions.

The Term: "module for forming a contract"

• Context and Importance: This term is critical because it appears to require an active role in contract creation, not just execution. The dispute may center on whether participation in a data marketplace protocol, where terms of data exchange are set, constitutes "forming a contract."
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The claim language does not specify the complexity of the contract to be formed, which could support a construction that covers machine-to-machine agreements to exchange data for value, even if automated through a network protocol.
  • Evidence for a Narrower Interpretation: The patent's detailed description includes an extensive section on the formation of contracts that mirrors legal concepts of "Offer" and "Acceptance," including discussions of counteroffers and the UCC "sale of goods" (’513 Patent, col. 80:37-82:20). This could support a narrower construction requiring the "module" to perform functions analogous to these traditional contract formation steps.

VI. Other Allegations

• Indirect Infringement: The complaint alleges induced infringement, stating that Defendant distributes "product literature and website materials" that instruct end users on how to use its products in a manner that infringes the ’513 Patent (Compl. ¶14).
• Willful Infringement: The complaint does not use the term "willful." However, it alleges that the service of the complaint and its attached claim charts "constitutes actual knowledge of infringement," which may form the basis for a claim of post-filing willful infringement (Compl. ¶13).

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

• A core issue will be one of functional scope: can the operations of a decentralized data network, as allegedly implemented by the Defendant, be shown to perform the specific functions of "forming a contract" and "processing a smart contract" as recited in the patent's claims, or do those terms require discrete software components executing more formal, conditional logic?
• A key evidentiary question will be one of component architecture: what evidence will Plaintiff present to demonstrate that the accused instrumentality is an "IOT device" containing the claimed "processor," "sensor," and "transceiver," and that the claimed software "modules" reside and operate on that device, as opposed to being distributed functions of a wider network?