Consolidated Transaction Processing LLC v. Tractor Supply Co

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Consolidated Transaction Processing LLC (Nevada)
  • Defendant: Tractor Supply Company (Delaware)
  • Plaintiff’s Counsel: SHEA | BEATY PLLC
• Case Identification: 4:25-cv-00025, E.D. Tex., 01/08/2025
• Venue Allegations: Plaintiff alleges venue is proper in the Eastern District of Texas because Defendant Tractor Supply Company maintains an established place of business in the district, specifically a retail store in Paris, Texas.
• Core Dispute: Plaintiff alleges that Defendant’s e-commerce website and associated systems infringe patents related to methods for generating targeted product offerings by receiving product data from multiple distributors and using customer-specific location data.
• Technical Context: The technology at issue concerns e-commerce platforms that aggregate product information from various suppliers and use customer data to create personalized, dynamic online shopping experiences.
• Key Procedural History: The patents-in-suit claim priority back to an application filed in 1999. The complaint preemptively argues that the asserted claims are directed to patent-eligible subject matter and are not merely an abstract idea, suggesting an anticipation of a defense under 35 U.S.C. § 101.

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" (Issued April 29, 2014)

The Invention Explained

• Problem Addressed: The patent describes the limitations of traditional commerce models, such as brick-and-mortar stores and mail-order catalogs, which suffered from high inventory costs, limited geographic reach, and an inability to provide personalized customer experiences (’846 Patent, col. 1:25-54). Early e-commerce systems often replicated these issues by still maintaining their own inventory and offering static, one-size-fits-all web pages (’846 Patent, col. 3:6-14).
• The Patented Solution: The invention proposes a centralized, computer-implemented system that aggregates product data from a "plurality of distributors" and combines it with customer data, including location information derived from a user's IP address. This combined data is used to generate and send "user-specific product offerings" to customers via automated messages, creating a dynamic and personalized shopping environment without the need for the central merchant to hold inventory (’846 Patent, Abstract; col. 3:40-52).
• Technical Importance: This approach represents a shift from e-commerce as a simple digital catalog to a more sophisticated, data-driven model that can select from multiple suppliers to fulfill an order and tailor the user experience in real-time (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 recites a computer-implemented method comprising the essential elements 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, with the customer data including 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 to one or more of the 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: The '743 patent addresses the same technical problems as the '846 patent, citing the inefficiencies of traditional retail and the static nature of early e-commerce systems (’743 Patent, col. 1:24-2:20).
• The Patented Solution: The described solution is a nearly identical system for aggregating product data from multiple distributors and using customer location data (derived from an IP address) to generate personalized product offerings. The core inventive concept focuses on the dynamic creation of an e-commerce experience based on integrating these two distinct data sources (’743 Patent, Abstract; Fig. 1).
• Technical Importance: As with the '846 Patent, the invention’s contribution is its method for creating a more flexible and personalized e-commerce system that can leverage a network of suppliers rather than a single inventory source (Compl. ¶19-21).

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 elements of:
  • 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, with the customer data including 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 to one or more customers.

III. The Accused Instrumentality

Product Identification

The accused instrumentalities are Defendant’s website, https://www.tractorsupply.com, and the associated backend servers, databases, and software that power its e-commerce operations (Compl. ¶9).

Functionality and Market Context

The complaint alleges that the accused website functions as an e-commerce platform that offers products for sale to customers throughout the United States (Compl. ¶5, ¶9). The infringement theory rests on the allegation that this platform performs the steps of the patented methods, including receiving product and customer data and generating targeted offerings (Compl. ¶32, ¶37). The complaint asserts that such customized online shopping experiences provide significant commercial value and are crucial for businesses to distinguish themselves in the crowded online marketplace (Compl. ¶22).

IV. Analysis of Infringement Allegations

The complaint references preliminary claim charts in Exhibits 3 and 4, which were not provided with the complaint filing. The infringement theory, as described in the body of the complaint, is summarized below. No probative visual evidence provided in complaint.

• '846 Patent and '743 Patent Infringement Allegations

  • The complaint alleges that Tractor Supply's e-commerce system directly infringes the asserted claims by performing each step of the claimed methods (Compl. ¶32, ¶37). The narrative theory suggests that Defendant's systems receive product data (e.g., product information, pricing, inventory levels) from a "plurality of distributors" (Compl. ¶14). When a customer visits "tractorsupply.com", the system is alleged to receive customer data, including location information that the patent claims can be derived from the user's IP address (’846 Patent, col. 12:8-13). The system then allegedly uses this location information to "generate... user-specific product offerings," which are then sent as "automated messages" (i.e., the rendered webpage) to the customer's computer (Compl. ¶14).

• Identified Points of Contention

  • Factual Question: A primary point of dispute may be whether the accused system actually receives product data "from a plurality of distributors." The case may turn on evidence of Defendant’s supply chain architecture and whether it constitutes a multi-distributor system as contemplated by the patents.
  • Scope Question: The analysis will question whether the accused system’s functionality meets the claim limitation of "generating... user-specific product offering... from the personal information concerning a customer location" (’743 Patent, col. 12:46-49). The dispute may focus on whether displaying location-based shipping information or local store availability constitutes generating a "product offering," or if the claim requires the fundamental price or product itself to be altered based on location.

V. Key Claim Terms for Construction

"plurality of distributors"

• Context and Importance: This term is foundational to the infringement case. If Tractor Supply is determined to be the single source of its product data (e.g., selling from its own inventory), infringement of this element may fail. Practitioners may focus on this term to determine if Defendant's network of suppliers, drop-shippers, or vendors qualifies as distinct "distributors."
• Intrinsic Evidence for a Broader Interpretation: The specification mentions "a plurality of individual vendors," which could be argued to encompass a wide range of third-party product sources beyond traditional wholesale distributors (’846 Patent, col. 5:55-59).
• Intrinsic Evidence for a Narrower Interpretation: The detailed description focuses on a "Distributor Selection" logic that chooses among multiple distributors for the same product based on criteria like price and availability, which could suggest that "distributors" must be competing sources for overlapping goods (’846 Patent, col. 9:8-44).

"generating... user-specific product offering... from the... customer location"

• Context and Importance: This term requires a causal link between the customer's location data and the creation of the product offer itself. The viability of the infringement claim depends on whether the accused system uses location data to actually construct the offering, not merely for collateral functions like checkout calculations.
• Intrinsic Evidence for a Broader Interpretation: The patent claims the offering is generated "at least in part" from the location information, which Plaintiff may argue covers any modification to the user-facing presentation, such as displaying local availability or promotions (’743 Patent, col. 12:46-47).
• Intrinsic Evidence for a Narrower Interpretation: The specification provides examples of generating entirely different "catalogs" with different pricing structures (e.g., academic vs. corporate pricing), suggesting "generating" requires a more substantive modification of the product mix or price than simply displaying logistical information (’846 Patent, col. 5:61-6:16).

VI. Other Allegations

The complaint does not contain specific counts for indirect or willful infringement. It does include a prayer for a declaration that the case is exceptional under 35 U.S.C. § 285, which provides a basis for seeking attorneys' fees (Compl. p. 9).

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

• A central evidentiary question will be one of system architecture: Does the accused "tractorsupply.com" platform operate as a single-merchant storefront, or does it in fact aggregate and process product data from a "plurality of distributors" in a manner that maps onto the patent claims?
• A key question of claim scope and function will be: Does the accused system "generate" a "user-specific product offering" directly "from" a customer's IP-derived location, as the claims require? Or is location data used for downstream purposes (like calculating shipping costs) that may fall outside the scope of creating the offering itself?
• An underlying issue, foreshadowed by the complaint, will be one of patent eligibility: Are the claims directed to a specific improvement in computer functionality, or do they claim the abstract idea of targeted marketing using generic computer components, raising a potential challenge under 35 U.S.C. § 101?