DCT

4:25-cv-00021

Consolidated Transaction Processing LLC v. Hibbett Retail Inc

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I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 4:25-cv-00021, E.D. Tex., 01/08/2025
  • Venue Allegations: Plaintiff alleges venue is proper because Defendant Hibbett Retail, Inc. maintains an established place of business in the Eastern District of Texas, specifically identifying a retail store location.
  • Core Dispute: Plaintiff alleges that Defendant’s e-commerce website infringes patents related to generating and sending targeted product offerings to customers based on their personal and location information.
  • Technical Context: The technology involves e-commerce systems that aggregate product data from multiple distributors and combine it with customer data to create dynamic, personalized electronic catalogs and targeted promotions.
  • Key Procedural History: The complaint notes that the patents-in-suit share a common specification and claim priority back to an application filed in 1999, positioning the inventions as early developments in personalized e-commerce. No other procedural events such as prior litigation or administrative proceedings are mentioned.

Case Timeline

Date Event
1999-06-30 Earliest Priority Date for ’846 and ’743 Patents
2013-03-12 U.S. Patent No. 8,396,743 Issued
2014-04-29 U.S. Patent No. 8,712,846 Issued
2025-01-08 Complaint Filed

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

U.S. Patent No. 8,712,846 - "Sending Targeted Product Offerings Based on Personal Information"

The Invention Explained

  • Problem Addressed: The patent describes the state of commerce in the late 1990s, noting that traditional retail models like physical stores and mail-order catalogs were costly, inflexible, and had limited geographic reach (Compl. ¶13; ’846 Patent, col. 1:24-2:21). Early e-commerce improved on this but still largely operated on a single-merchant model, requiring businesses to maintain their own costly inventory, which was particularly problematic for fast-evolving products like electronics (Compl. ¶13; ’846 Patent, col. 3:6-23).
  • The Patented Solution: The invention proposes a centralized, computer-implemented system that acts as an intermediary. It receives product data (e.g., price, availability) from a "plurality of distributors" and customer data (including location information derived from an IP address) from a "plurality of customers" (’846 Patent, Abstract). The system then uses this combined data to generate "user-specific product offerings" and sends them to customers via "automated messages" (’846 Patent, col. 12:41-54). This creates a dynamic, personalized shopping experience without the need for the system operator to hold physical inventory (Compl. ¶14).
  • Technical Importance: This approach enabled a more scalable and flexible e-commerce model, allowing a single online storefront to offer a vast catalog of products sourced from multiple, independent suppliers and to personalize the offerings for individual users (Compl. ¶¶16, 19).

Key Claims at a Glance

  • The complaint asserts independent claim 1 and dependent claims 3 and 4 (Compl. ¶32).
  • Independent Claim 1 recites a computer-implemented method comprising the essential steps of:
    • 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, where the data includes location information derived from an IP address associated with the customer.
    • Generating, based at least in part on the customer data, user-specific product offerings.
    • Sending, by a computer, automated messages that comprise the user-specific product offerings to the customers.

U.S. Patent No. 8,396,743 - "Sending Targeted Product Offerings Based on Personal Information"

The Invention Explained

  • Problem Addressed: The ’743 Patent, which shares a nearly identical specification with the ’846 Patent, addresses the same problems of inflexibility and high inventory costs associated with traditional retail and early, single-merchant e-commerce models (Compl. ¶20; ’743 Patent, col. 1:22-2:21, col. 3:6-23).
  • The Patented Solution: The solution is a computer-implemented method for targeted product offerings. The system receives product data from multiple distributors and customer data, including "location information" derived from an "IP address," to generate "user-specific product offering[s]" (’743 Patent, Abstract). These offerings are then sent to customers in "automated messages" (’743 Patent, col. 12:36-54).
  • Technical Importance: The invention provided a framework for creating aggregated, multi-supplier marketplaces with personalized customer interfaces, a significant departure from the static, one-size-fits-all online catalogs that were common at the time (Compl. ¶¶17-18).

Key Claims at a Glance

  • The complaint asserts independent claim 1 and dependent claim 4 (Compl. ¶37).
  • Independent Claim 1 recites a computer-implemented method comprising the essential steps of:
    • Receiving product data for a plurality of products from a plurality of distributors.
    • Receiving customer data from a plurality of customers, comprising 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.
    • Sending, by a computer, automated messages comprising the at least one user-specific product offering.

III. The Accused Instrumentality

Product Identification

The complaint identifies the "Accused Instrumentalities" as "one or more websites or web addresses including, but not limited to Northern Tool, stored and/or hosted on one or more servers owned or under the control of Hibbett" (Compl. ¶9).

Functionality and Market Context

The complaint does not provide specific details about the technical operation of the accused websites. The allegations imply the websites function as e-commerce platforms that offer products for sale over the internet (Compl. ¶9). The complaint asserts that such online businesses must distinguish themselves through "automation and user-specific customization," suggesting the accused websites provide some form of personalized shopping experience (Compl. ¶22). No probative visual evidence provided in complaint.

IV. Analysis of Infringement Allegations

The complaint alleges that the Accused Instrumentalities directly infringe the asserted patents but refers to "preliminary and exemplary claim charts" in Exhibits 3 and 4, which were not provided with the complaint (Compl. ¶¶32, 37). The narrative infringement theory, absent the specific evidence from the exhibits, is summarized below.

  • ’846 Patent Infringement Allegations
    The complaint alleges that Hibbett directly infringes at least claims 1, 3, and 4 of the ’846 Patent by "making, using, providing, and/or causing to be used the Accused Instrumentalities" (Compl. ¶32). The underlying theory is that Hibbett's e-commerce platform performs the steps of the claimed method: receiving product data from its suppliers (alleged to be a "plurality of distributors"), receiving customer data including IP addresses, using that data to generate targeted product displays or offers, and sending those offers to customers via its website or other automated messages (Compl. ¶¶14, 32).

  • ’743 Patent Infringement Allegations
    Similarly, the complaint alleges that Hibbett directly infringes at least claims 1 and 4 of the ’743 Patent through the operation of its e-commerce websites (Compl. ¶37). The infringement theory mirrors that for the ’846 Patent, contending that the accused websites implement the patented method of using customer location data to generate and transmit user-specific product offerings (Compl. ¶¶14, 37).

  • Identified Points of Contention:

    • Pleading Sufficiency: The complaint's infringement allegations are conclusory and rely entirely on references to external exhibits that are not included in the filing. This raises the question of whether the complaint, on its face, pleads sufficient facts to support a plausible claim for relief against Hibbett.
    • Factual Discrepancy: The complaint accuses Hibbett Retail, Inc. but identifies the accused instrumentality with a URL for "northerntool.com" (Compl. ¶9). This discrepancy raises a fundamental question about the factual basis for the allegations against this specific defendant.
    • Technical Questions: A key technical question is whether Hibbett's website actually generates "user-specific product offerings" based on "location information derived from an IP address," as specifically required by the asserted claims, or whether it employs different or more generic personalization techniques.
    • Scope Questions: The infringement case may depend on whether a conventional retailer's supply chain, where it sources products from various brands or suppliers for its own inventory, meets the claim requirement of receiving data from a "plurality of distributors." The patent specification describes a system that dynamically selects from among multiple distributors to fill a single order, which may suggest a different operational model than that of a standard retailer (see, e.g., ’846 Patent, col. 9:8-24).

V. Key Claim Terms for Construction

  • The Term: "plurality of distributors"

  • Context and Importance: This term appears in the first limitation of the independent claims and is foundational to the invention's distinction from a single-merchant e-commerce site. The viability of the infringement claim may depend on whether Hibbett's relationship with its product suppliers can be characterized as interacting with a "plurality of distributors" as contemplated by the patent.

  • Intrinsic Evidence for Interpretation:

    • Evidence for a Broader Interpretation: The specification refers to "individual vendors" (’846 Patent, col. 5:57) and "independent pick, pack, and ship distributors" (’846 Patent, col. 12:5-6), which could be argued to encompass any third-party entity that supplies product data to the system.
    • Evidence for a Narrower Interpretation: The detailed description depicts a "Distributor Selection sub-system" with "selection logic" that polls multiple distributors for price and availability for a given order and then selects the best one (’846 Patent, col. 9:8-24; Fig. 5). This could support a narrower construction requiring a system that facilitates real-time, order-by-order selection among competing suppliers, not merely a retailer sourcing from a portfolio of brands.

  • The Term: "user-specific product offering"

  • Context and Importance: This term defines the output of the claimed method. The infringement analysis will turn on whether the content displayed on the accused website constitutes an "offering" that is "user-specific" in the manner required by the claims.

  • Intrinsic Evidence for Interpretation:

    • Evidence for a Broader Interpretation: The term itself is general, and dependent claims add specific examples like coupons and promotional offers, which could imply the independent claim term is broader (’846 Patent, cl. 2). The specification also refers generally to generating "customized portfolios based on purchase patterns" (’846 Patent, col. 5:7-9).
    • Evidence for a Narrower Interpretation: Both asserted independent claims explicitly tie the generation of the offering to "location information derived from an IP address" (’846 Patent, cl. 1; ’743 Patent, cl. 1). The specification provides examples of highly specific targeting, such as showing "academic pricing" to a student versus "corporate discounts" to a business person, which may suggest the offering must be more than just a generically personalized recommendation (’846 Patent, col. 6:6-14).

VI. Other Allegations

  • Indirect Infringement: The complaint does not include a formal count for indirect infringement. While the infringement counts use the phrase "causing to be used," which can be associated with induced infringement, the complaint lacks the requisite factual allegations of knowledge and specific intent to encourage infringement by another party (Compl. ¶¶32, 37).
  • Willful Infringement: The complaint does not explicitly allege willful infringement or seek enhanced damages under 35 U.S.C. § 284. The prayer for relief includes a request for a declaration that the case is "exceptional" and an award of attorneys' fees under 35 U.S.C. § 285, which is a related but distinct legal standard (Compl. Prayer ¶C).

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

The resolution of this case will likely depend on the answers to several fundamental questions:

  1. Pleading Plausibility: A threshold issue will be one of procedural sufficiency: does the complaint, which relies on un-provided exhibits and contains a notable factual discrepancy regarding the accused website's URL, state a plausible claim for relief against Hibbett Retail?

  2. Definitional Scope: A core substantive issue will be one of claim construction: can the term "plurality of distributors", as described in a patent focused on a dynamic, multi-source selection model, be construed to read on a traditional retailer's practice of sourcing products from its various suppliers?

  3. Technical Infringement: A key evidentiary question will be one of functional specificity: does the accused e-commerce platform actually perform the specific function required by the claims—generating product offerings based on "location information derived from an IP address"—or is there a fundamental mismatch in the personalization technology used?