Consolidated Transaction Processing LLC v. Batteries Plus LLC

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Consolidated Transaction Processing LLC (Nevada)
  • Defendant: Batteries Plus LLC (Wisconsin)
  • Plaintiff’s Counsel: Beaty Legal PLLC
• Case Identification: 4:24-cv-00138, E.D. Tex., 02/16/2024
• Venue Allegations: Plaintiff alleges venue is proper because Defendant maintains an established place of business in the Eastern District of Texas, specifically citing a store location in Sherman, Texas.
• Core Dispute: Plaintiff alleges that Defendant’s e-commerce website and associated back-end systems infringe patents related to generating targeted product offerings based on aggregated distributor and customer data.
• Technical Context: The patents address early e-commerce methods for creating dynamic, personalized online catalogs by integrating product data from multiple distributors with specific user information.
• Key Procedural History: The complaint does not mention any prior litigation, inter partes review (IPR) proceedings, or licensing history related to the patents-in-suit. Both asserted patents claim priority from the same 1999 application and are subject to a terminal disclaimer.

Case Timeline

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

U.S. Patent No. 8,712,846, “Sending Targeted Product Offerings Based on Personal Information,” issued April 29, 2014

The Invention Explained

• Problem Addressed: The patent describes the shortcomings of both traditional retail and early e-commerce. Traditional "brick-and-mortar" and catalog-based businesses were costly, inflexible, and had limited reach, while early e-commerce businesses still often operated by maintaining their own costly inventory, using the internet primarily as a replacement for paper catalogs. (Compl. ¶¶13, 23; ’846 Patent, col. 1:22-3:21).
• The Patented Solution: The invention proposes a centralized, computer-implemented system that receives product data (e.g., price, availability) from a plurality of different distributors and customer data (e.g., personal and location information) from a plurality of customers. This aggregated data is then used to dynamically generate and send "user-specific product offerings" via automated messages, creating a personalized shopping experience without the need for the central merchant to hold inventory. (Compl. ¶14; ’846 Patent, Abstract; col. 3:44-52).
• Technical Importance: This approach enabled a more scalable and dynamic e-commerce model by aggregating disparate data sources in real-time to customize the user experience and product offerings. (Compl. ¶¶16, 21).

Key Claims at a Glance

• The complaint asserts independent claim 1 and dependent claims 3 and 4. (Compl. ¶32).
• Independent Claim 1 (Method):
  • receiving product data for a plurality of products from a plurality of distributors via a communications network;
  • receiving customer data from a plurality of customers, the customer data comprising location information derived from an IP address associated with one or more of the customers;
  • generating, at least in part from the customer data, user-specific product offerings from the plurality of products; and
  • sending, by a computer, automated messages comprising the user-specific product offerings.

U.S. Patent No. 8,396,743, “Sending Targeted Product Offerings Based on Personal Information,” issued March 12, 2013

The Invention Explained

• Problem Addressed: The patent identifies the same problems as its family member, the ’846 patent: the high costs, inventory risks, and static nature of both traditional retail and early e-commerce models which failed to leverage the full interactive potential of the internet. (Compl. ¶¶20, 23; ’743 Patent, col. 2:63-3:21).
• The Patented Solution: The invention describes a method and system for offering targeted products by receiving product data from multiple distributors and customer data, including "personal information about customers," from multiple customers. The system uses this combined data to generate "user-specific product offering[s]" and sends them to customers in automated messages. (’743 Patent, Abstract; col. 3:44-52). The specification gives an example of dynamically displaying different catalogs and pricing for a student versus a business person. (’743 Patent, col. 5:6-16).
• Technical Importance: The technology aimed to improve the "computerized backbone" of e-commerce by allowing a merchant to use aggregated product and customer data to create a more personalized and efficient shopping experience. (Compl. ¶20).

Key Claims at a Glance

• The complaint asserts independent claim 1 and dependent claim 4. (Compl. ¶37).
• Independent Claim 1 (Method):
  • receiving product data for a plurality of products from a plurality of distributors for the products via a communications network;
  • receiving customer data from a plurality of customers, the customer data comprising location information derived from an IP address associated with the customer;
  • generating, at least in part from the personal information concerning a customer location, at least one user-specific product offering from the plurality of products; and
  • sending, by a computer, automated messages comprising the at least one user-specific product offering.

III. The Accused Instrumentality

• Product Identification: The "Accused Instrumentalities" are identified as the Batteries Plus website (www.BatteriesPlus.com) and its "associated hardware and/or software, including but not limited to Batteries Plus' back-end servers and related computer systems." (Compl. ¶9).
• Functionality and Market Context: The complaint alleges that the Accused Instrumentalities constitute an e-commerce platform that allows customers to purchase products online. (Compl. ¶9). It is alleged that these systems provide "automation and user-specific customization" during the online shopping experience. (Compl. ¶22). The complaint does not provide further technical detail on the specific operation of the website's back-end systems. No probative visual evidence provided in complaint.

IV. Analysis of Infringement Allegations

The complaint alleges direct infringement of both the ’846 and ’743 patents but references claim charts in external exhibits that were not filed with the complaint. (Compl. ¶¶32, 37). Therefore, a detailed element-by-element analysis based on the pleading is not possible.

The narrative theory of infringement is that the Accused Instrumentalities practice the patented methods by operating an e-commerce system that receives product information (from its suppliers, alleged to be "distributors") and customer information (from users of the website) to generate and display product offerings to those users. (Compl. ¶¶9, 14, 22).

• Identified Points of Contention:
  • Factual Questions: A primary question will be whether the Accused Instrumentalities perform all the claimed steps. For example, what evidence demonstrates that the Batteries Plus system receives product data from a "plurality of distributors" in the manner contemplated by the patents, rather than from a single entity or its own inventory?
  • Scope Questions: The infringement analysis may turn on the interpretation of key claim terms. Does the Defendant’s standard e-commerce website, which may show products based on a user's search history or general promotions, constitute a "user-specific product offering" that is generated "at least in part from... location information derived from an IP address" as required by the claims? The connection between the IP-derived location data and the generated offering will likely be a central point of dispute.

V. Key Claim Terms for Construction

For the ’846 Patent and ’743 Patent:

• The Term: "location information derived from an IP address" (Claim 1 of both patents)

• Context and Importance: This term is critical because it defines the specific type of customer data required and links it to the infringement allegation. The viability of the infringement claim may depend on whether the accused system uses a customer's IP address to determine geographic location and whether that location data is then used as an input for generating product offerings. Practitioners may focus on the term "derived from," as its required level of directness could be dispositive.

• Intrinsic Evidence for Interpretation:

  • Evidence for a Broader Interpretation: The claim language "derived from" does not specify the method of derivation, suggesting that any location data that originates from or is calculated using an IP address could meet the limitation.
  • Evidence for a Narrower Interpretation: The specification discusses using the customer's IP address as a "unique identification number" to ensure different customers do not share shopping information. (’846 Patent, col. 11:13-16). A defendant may argue this context implies a more direct use of the IP address for session management or identification, not necessarily for generating geographically-targeted product offers as a primary function.

• The Term: "user-specific product offering" (Claim 1 of both patents)

• Context and Importance: The definition of this term is central to determining whether the accused website's functionality meets the "generating" and "sending" limitations. The dispute will likely focus on the required degree of specificity. Is a generally available promotion or a list of "best-selling" products considered "user-specific," or must the offering be uniquely tailored to an individual user's specific data, such as their IP-derived location?

• Intrinsic Evidence for Interpretation:

  • Evidence for a Broader Interpretation: The patent states that the system can generate customized portfolios for "targeted advertising, purchase incentives... specialized promotions, or competitive pricing," which could encompass a wide range of common e-commerce activities. (’846 Patent, col. 5:15-20).
  • Evidence for a Narrower Interpretation: The specification provides examples of highly specific offerings, such as a "catalog of mixed products appropriate for students with academic pricing" versus a catalog for a "business person... with available corporate discounts." (’846 Patent, col. 6:8-13). This could support a narrower construction requiring distinct catalogs or pricing tiers based on user-specific attributes, rather than generic personalization.

VI. Other Allegations

• Indirect Infringement: The complaint does not contain allegations of indirect infringement.
• Willful Infringement: The complaint does not explicitly allege willful infringement. However, the prayer for relief seeks a "declaration that this case is exceptional under 35 U.S.C. § 285," which allows for an award of attorney's fees. (Compl., Prayer for Relief ¶C). The complaint does not plead facts concerning pre- or post-suit knowledge of the patents that would typically support a willfulness claim.

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

This case appears to present foundational e-commerce patent claims against a modern retail website. The outcome will likely depend on the resolution of two central questions:

1. A core issue will be one of definitional scope: can key claim terms from a 1999-priority patent, such as "user-specific product offering" and "location information derived from an IP address," be construed to cover the functionalities of a standard 2024-era e-commerce website? The interpretation of these terms will determine whether common personalization features fall within the scope of the claims.

2. A key evidentiary question will be one of technical proof: what evidence can Plaintiff produce to demonstrate that the Batteries Plus back-end system actually performs the specific steps of the asserted claims? This includes showing a causal link between receiving IP-derived location data and the subsequent generation of a "user-specific" offering, a technical process for which the complaint currently provides no specific details.