Consolidated Transaction Processing LLC v. Eyemart Express LLC

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Consolidated Transaction Processing LLC (Nevada)
  • Defendant: Eyemart Express LLC (Delaware)
  • Plaintiff’s Counsel: Shea | Beaty
• Case Identification: 4:24-cv-00448, E.D. Tex., 05/17/2024
• Venue Allegations: Plaintiff alleges venue is proper because Defendant Eyemart Express maintains an established place of business in the district, specifically identifying a retail store location in Sherman, Texas.
• Core Dispute: Plaintiff alleges that Defendant’s e-commerce website and associated back-end systems infringe patents related to dynamically generating targeted product offerings based on customer and multi-distributor data.
• Technical Context: The technology addresses methods for personalizing the online shopping experience by moving beyond static digital catalogs to create customized product offerings for specific users.
• Key Procedural History: The patents-in-suit claim priority to an application filed in 1999 and are the result of a long chain of continuing applications. The complaint makes several arguments that the patented inventions are not directed to a patent-ineligible abstract idea, which may anticipate a line of defense.

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’s background section describes the limitations of early e-commerce and traditional retail models, which relied on static product catalogs, required merchants to hold costly and rapidly obsolescing inventory, and offered a non-interactive or personalized customer experience (Compl. ¶13; ’846 Patent, col. 2:22-3:24).
• The Patented Solution: The invention proposes a centralized, computer-implemented system that receives and aggregates product data from a "plurality of distributors" and customer data, including location information derived from an IP address, into a database. This combined information is used to dynamically generate "user-specific product offerings" which are then sent to customers via automated messages, such as customized web pages or emails ('846 Patent, Abstract; '846 Patent, col. 4:51-67). The system architecture, depicted in Figure 1, illustrates the flow of data between customers, various processing systems, databases, and distributors ('846 Patent, Fig. 1).
• Technical Importance: The technology aimed to improve the functioning of e-commerce computer systems by enabling a more dynamic retail model where a merchant could offer a wide range of products from multiple sources without holding inventory, while personalizing the offerings for each customer (Compl. ¶16, ¶21).

Key Claims at a Glance

• The complaint asserts independent claim 1 and dependent claims 3 and 4 (Compl. ¶32).
• The essential elements of independent claim 1 include:
  • A computer-implemented method for targeted product offering, comprising:
  • 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 data comprising location information derived from an IP address;
  • generating, based at least in part on the customer data, user-specific product offerings; and
  • sending automated messages comprising the user-specific product offerings to customers.

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

The Invention Explained

• Problem Addressed: As part of the same patent family and sharing a specification with the '846 Patent, the '743 Patent addresses the same technical problems of static, inventory-based e-commerce ('743 Patent, col. 2:22-3:24).
• The Patented Solution: The invention is a computer-implemented method for offering targeted products by receiving product data from multiple distributors and customer data (including location information derived from an IP address), and using this data to generate a "user-specific product offering" that is then sent to the customer ('743 Patent, Abstract; '743 Patent, col. 4:26-40). The method improves upon prior art systems that offered only static catalogs without aggregating data from multiple sources to create a personalized shopping experience (Compl. ¶20).
• Technical Importance: The invention provided a framework for a more flexible and efficient e-commerce backbone, allowing merchants to personalize the customer experience and select among various fulfillment options based on dynamic data (Compl. ¶19-21).

Key Claims at a Glance

• The complaint asserts independent claim 1 and dependent claim 4 (Compl. ¶37).
• The essential elements of independent claim 1 include:
  • A computer-implemented method for targeted product offering, comprising:
  • receiving product data for a plurality of products from a plurality of distributors;
  • receiving customer data, including location information derived from an IP address;
  • generating, at least in part from personal information concerning a customer location, at least one user-specific product offering; and
  • sending automated messages containing the user-specific product offering.

III. The Accused Instrumentality

Product Identification

The complaint identifies the "Accused Instrumentalities" as the Eyemart Express website (www.eyemartexpress.com) along with associated back-end servers and related computer systems operated by the Defendant (Compl. ¶9).

Functionality and Market Context

The complaint alleges that the Accused Instrumentalities constitute an e-commerce platform for selling products online (Compl. ¶9). The functionality is described as making, using, selling, and offering for sale products and services to customers, including those in the Eastern District of Texas (Compl. ¶5, ¶9). The complaint asserts that automation and user-specific customization are crucial for distinguishing businesses in the online marketplace, implying that the Accused Instrumentalities possess these valuable features (Compl. ¶22).

IV. Analysis of Infringement Allegations

The complaint references preliminary claim charts in Exhibits 3 and 4, which were not attached to the publicly filed document (Compl. ¶32, ¶37). The narrative infringement theory presented in the complaint for both the '846 and '743 patents is substantially the same. Plaintiff alleges that Defendant’s e-commerce system directly infringes the asserted method claims by performing all the required steps. This allegedly includes receiving product data (e.g., for eyeglasses and lenses from various brands), receiving customer data (including, implicitly, location data from a user's IP address when visiting the website), using that data to generate and display user-specific product offerings on the website, and sending automated messages (such as the web pages themselves or order confirmations) containing those offerings to customers (Compl. ¶14, ¶32, ¶37).

No probative visual evidence provided in complaint.

Identified Points of Contention

• Scope Questions: The claims require receiving data from a "plurality of distributors." A central question may be whether Eyemart Express's system, which functions as a direct-to-consumer retailer, sources products in a manner that meets this limitation as it was understood in the context of the 1999-priority patent. The complaint does not detail Defendant's supply chain.
• Technical Questions: The complaint alleges the generation of "user-specific" offerings based on "location information." A key factual question will be what evidence demonstrates that the accused website performs this specific type of personalization. For example, does the website alter pricing, product availability, or promotions based on a user's IP address, or does it present a uniform catalog to all visitors?

V. Key Claim Terms for Construction

Term: "plurality of distributors"

• Context and Importance: This term appears in the independent claims of both asserted patents and is fundamental to the patented architecture. The infringement analysis depends on whether Defendant's e-commerce operations, which involve selling products from multiple manufacturers, are legally and factually equivalent to a system that receives data from and selects among a "plurality of distributors."
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The patent specification sometimes uses broader, potentially interchangeable terms like "distributors/vendors" ('846 Patent, Fig. 1) and "suppliers of products" ('846 Patent, col. 5:50-51), which a plaintiff might argue should encompass manufacturers providing goods to a retailer.
  • Evidence for a Narrower Interpretation: The detailed description repeatedly explains a "distributor selection logic" that chooses a distributor to fill an order based on dynamic criteria like profit margin, shipping speed, and availability, suggesting a model where multiple independent entities compete to fulfill the same order ('846 Patent, col. 9:8-43). A defendant could argue this describes a fundamentally different business model than a single retailer sourcing from various brands.

Term: "user-specific product offering"

• Context and Importance: This term defines the degree of personalization required by the claims. Its construction will determine whether displaying a standard e-commerce catalog is sufficient to infringe, or if a higher level of active customization based on individual user data is necessary. Practitioners may focus on this term to dispute whether the accused system performs the claimed generation step.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The claim language requires the offering to be generated "at least in part from the customer data" ('846 Patent, cl. 1). A plaintiff might argue that any product information displayed to a specific user in response to their interaction with the site constitutes a "user-specific" offering.
  • Evidence for a Narrower Interpretation: The specification provides examples of significantly more granular personalization, such as generating different catalogs for students versus business professionals, complete with different pricing, and creating customized portfolios based on individual purchase patterns ('846 Patent, col. 5:14-20, col. 6:5-16). This may support a construction requiring more than simply responding to a generic product query.

VI. Other Allegations

Willful Infringement

The complaint does not contain an explicit allegation of willful infringement. However, the prayer for relief requests a declaration that the case is "exceptional under 35 U.S.C. § 285" and an award of attorneys' fees, which may be based on allegations of egregious infringement conduct (Compl., Prayer for Relief ¶C). The complaint does not allege pre-suit knowledge of the patents; the filing of the suit itself provides notice to the Defendant.

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

• A core issue will be one of definitional scope: does Defendant’s modern online retail platform, which sells products from multiple brands, fall within the scope of the patent claims’ requirement for a system that receives product data from a “plurality of distributors” as that term is defined by the 1999-era specification?
• A key evidentiary question will be one of technical proof: what evidence can Plaintiff provide to demonstrate that the accused website generates "user-specific product offerings" that are customized based on a user's "location information derived from an IP address," beyond the baseline functionality inherent to most modern e-commerce platforms?
• A central legal battle may concern patent eligibility: The complaint's pre-emptive defense of patentability suggests an anticipated challenge under 35 U.S.C. § 101. The court will likely have to determine whether the claims are directed to an abstract business practice and, if so, whether they contain a sufficient "inventive concept" rooted in technology to be patent-eligible.