DCT
6:14-cv-00032
Property Disclosure Tech LLC v. Jbgoodwin Realtors Inc
Key Events
Complaint
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: Property Disclosure Technologies LLC (Delaware)
- Defendant: Jbgoodwin Realtors, Inc. (Texas)
- Plaintiff’s Counsel: BUETHER JOE & CARPENTER, LLC
- Case Identification: 6:14-cv-00032, E.D. Tex., 01/21/2014
- Venue Allegations: Plaintiff alleges venue is proper because Defendant maintains regular and established places of business in the district, transacts business in the district, and has listed property for sale within the district.
- Core Dispute: Plaintiff alleges that Defendant’s real estate website infringes patents related to a method for systematically compiling, categorizing, and reporting real estate condition information.
- Technical Context: The technology addresses the need for a standardized and comprehensive method for disclosing potential detrimental conditions associated with real estate properties to parties in a transaction.
- Key Procedural History: Both patents-in-suit claim priority from the same 2000 provisional application and are part of the same patent family, with the ’530 Patent being a continuation of the application that issued as the ’167 Patent.
Case Timeline
| Date | Event |
|---|---|
| 2000-06-23 | Earliest Priority Date for ’167 and ’530 Patents |
| 2009-09-01 | ’167 Patent Issue Date |
| 2011-05-17 | ’530 Patent Issue Date |
| 2014-01-21 | Complaint Filing Date |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 7,584,167 - “Real Estate Disclosure Reporting Method” (Issued Sep. 1, 2009)
The Invention Explained
- Problem Addressed: The patent’s background section states that the historical process for disclosing real estate conditions has been a "fragmented topic," lacking a "single, universal disclosure report" (’167 Patent, col. 2:37-40). This fragmentation creates potential liability for sellers and brokers and leaves buyers with incomplete information (’167 Patent, col. 1:26-33).
- The Patented Solution: The invention provides a systematic method to solve this problem by first compiling a comprehensive list of potential "items of disclosure" (IDs) and then organizing them into logical "condition categories" (’167 Patent, col. 2:50-54). For a specific property, the method involves researching which of these items are known to exist and then generating a structured report that discloses the known items according to the pre-defined categories (’167 Patent, Abstract; FIG. 1A).
- Technical Importance: The method aimed to standardize the disclosure process, providing a more reliable and comprehensive tool for real estate professionals to shield themselves from liability and for buyers to better understand a property's condition (’167 Patent, col. 1:29-36).
Key Claims at a Glance
- The complaint explicitly asserts infringement of Claim 1, an independent method claim (Compl. ¶10).
- The essential elements of Claim 1 are:
- compiling a plurality of items of disclosure;
- relating said items of disclosure according to a plurality of condition categories;
- researching a particular property to determine a plurality of known ones of said items of disclosure; and
- disclosing said known ones according to said condition categories.
- The complaint alleges infringement of "one or more claims," reserving the right to assert additional claims (Compl. ¶10).
U.S. Patent No. 7,945,530 - “Real Estate Disclosure Reporting Method” (Issued May 17, 2011)
The Invention Explained
- Problem Addressed: Like its parent patent, the ’530 Patent addresses the problem of fragmented and non-universal real estate disclosure reports, which can have a "material impact on the property's value or the decision to buy or lend" (’530 Patent, col. 2:48-50).
- The Patented Solution: This patent claims a method focused on the creation and use of a disclosure form. The method involves identifying a condition category (e.g., site, environmental), creating a disclosure form that lists items related to that category, researching a property by accessing public databases online to find known items, and then indicating those known items on the form to generate a report (’530 Patent, Claim 2).
- Technical Importance: The invention provides a concrete application of the systematic disclosure concept, particularly adapted for implementation via the Internet by specifying the use of online public agency databases for research (’530 Patent, Claim 2).
Key Claims at a Glance
- The complaint explicitly asserts infringement of Claim 2, an independent method claim (Compl. ¶14).
- The essential elements of Claim 2 are:
- identifying a condition category, wherein the category is at least one of site, environmental and natural conditions;
- creating a disclosure form listing items of disclosure that relate to the category;
- researching a particular property by accessing a plurality of public agency databases over the Internet to determine known items;
- indicating the known items of disclosure on the disclosure form; and
- generating a report of the known items.
- The complaint alleges infringement of "one or more claims," reserving the right to assert additional claims (Compl. ¶14).
III. The Accused Instrumentality
Product Identification
The accused instrumentality is Defendant's computer-implemented website, http://www.jbgoodwin.com (Compl. ¶10, ¶14).
Functionality and Market Context
- The complaint alleges the website provides "computerized real estate searching and reporting functionality" (Compl. ¶10, ¶14).
- No probative visual evidence provided in complaint.
- The complaint does not provide specific details on how the accused website operates or what specific features perform the claimed method steps. It alleges that Defendant "created, developed, supports and operates" the website as part of its real estate business (Compl. ¶11, ¶15).
IV. Analysis of Infringement Allegations
The complaint provides a generalized theory of infringement without detailed element-by-element mapping. The following charts summarize the allegations based on the complaint's broad assertion that the accused website performs the claimed methods.
’167 Patent Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| compiling a plurality of items of disclosure | The website's searching and reporting functionality allegedly compiles data points about real estate properties. | ¶10 | col. 2:51-52 |
| relating said items of disclosure according to a plurality of condition categories | The website's reporting functionality allegedly organizes or categorizes the compiled property data. | ¶10 | col. 2:52-54 |
| researching a particular property to determine a plurality of known ones of said items of disclosure | The website's "searching" functionality allegedly performs research on a specific property. | ¶10 | col. 2:54-56 |
| disclosing said known ones according to said condition categories | The website's "reporting" functionality allegedly discloses the results of the research in a categorized format. | ¶10 | col. 2:56-57 |
’530 Patent Infringement Allegations
| Claim Element (from Independent Claim 2) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| identifying a condition category, wherein the condition category is at least one of site, environmental and natural conditions | The website's functionality allegedly identifies and uses categories related to site, environmental, or natural conditions. | ¶14 | col. 23:42-45 |
| creating a disclosure form listing a plurality of items of disclosure that relate to the condition category | The website allegedly generates a webpage or report display that functions as a "disclosure form" listing property attributes. | ¶14 | col. 23:46-48 |
| researching a particular property... wherein the researching step accesses a plurality of public agency databases over the Internet | The website's searching functionality is alleged to access external public agency databases online to gather property information. | ¶14 | col. 23:49-53 |
| indicating the known items of disclosure on the disclosure form | The website's reporting function allegedly marks or otherwise indicates the found information on its webpage display. | ¶14 | col. 23:54-55 |
| generating a report of the known items of disclosure | The final webpage display containing the disclosed information allegedly constitutes the generated report. | ¶14 | col. 23:56-57 |
Identified Points of Contention
- Evidentiary Questions: The complaint lacks specific factual allegations or evidence (such as screenshots) demonstrating how the accused website performs each claimed step. A primary point of contention will be whether Plaintiff can prove that the website’s general search-and-display functions meet the specific structural and functional requirements of the claims.
- Technical Questions: A key question for the ’530 Patent is what constitutes "access[ing] a plurality of public agency databases." Does the accused website directly query government databases, or does it rely on third-party aggregators (e.g., an MLS), and would the latter meet the claim limitation?
- Scope Questions: The case may turn on whether a standard real estate search website can be said to perform the patented methods. For example, does displaying property features on a webpage constitute "disclosing said known ones according to said condition categories" as claimed in the ’167 Patent, or does the claim require a more formal, structured reporting process as described in the specification?
V. Key Claim Terms for Construction
The complaint does not identify any specific claim terms as being in dispute. However, based on the technology and allegations, the following terms may be central to the litigation.
"items of disclosure" (’167 Patent, Claim 1; ’530 Patent, Claim 2)
- Context and Importance: This term defines the fundamental unit of information in the patented system. Its scope is critical, as a broad definition could encompass any fact about a property, while a narrow one might limit the claims to formal, legally mandated disclosures.
- Intrinsic Evidence for a Broader Interpretation: The specification provides extensive lists of potential "items of disclosure" across ten categories, including "death on property," "Megan's Law Notice," and "zoning issues," suggesting the term is meant to be comprehensive (’167 Patent, Appendix A; FIGS. 10A-J).
- Intrinsic Evidence for a Narrower Interpretation: The Background section heavily emphasizes the legal and regulatory framework for disclosures, noting that "Federal and state laws [and] lender policies" create the demand for such a system, which could support an argument that the term is tied to information relevant to those formal contexts (’167 Patent, col. 1:21-26).
"condition categories" (’167 Patent, Claim 1; ’530 Patent, Claim 2)
- Context and Importance: The organization of information into categories is presented as a key solution to the "fragmented" nature of prior art disclosures. The definition of this term will determine the structural requirements for an infringing system. Practitioners may focus on this term because its construction will dictate whether any simple grouping of data on a website infringes, or if a more rigorous classification scheme is required.
- Intrinsic Evidence for a Broader Interpretation: The claim requires only "a plurality of condition categories," and the specification describes a process of defining categories based on "commonalities" among items, which could support a reading on any logical grouping of data (’167 Patent, col. 5:45-51).
- Intrinsic Evidence for a Narrower Interpretation: The detailed flowcharts for defining and classifying categories (e.g., FIGS. 5A-B, 6A-B) and the specific ten categories provided as an embodiment (e.g., Distress, Legal, Environmental) could be used to argue that the term requires a specific, hierarchical, and logically exclusive classification system, not just an ad-hoc arrangement of information (’167 Patent, col. 3:25-34).
VI. Other Allegations
Indirect Infringement
The complaint alleges inducement of infringement, stating that Defendant encourages its "End Users" to use the website's functionality, which in turn causes them to directly infringe the patents (Compl. ¶12, ¶16).
Willful Infringement
The complaint seeks enhanced damages under 35 U.S.C. § 284 (Compl. p. 5, ¶4). The factual basis for willfulness includes an allegation of post-suit knowledge from the date of the complaint, as well as a potential allegation of pre-suit knowledge based on the inventor’s status as a "well-known economist and property damages consultant" (Compl. ¶12, ¶16).
VII. Analyst’s Conclusion: Key Questions for the Case
- A central issue will be one of evidentiary proof: given the complaint's lack of specific factual support, can the Plaintiff produce evidence that the Defendant's conventional real estate website performs the discrete, structured steps of the patented methods, such as systematically "compiling" and "relating" data into "condition categories"?
- The case will also involve a question of technical operation: does the accused website's search function "access... a plurality of public agency databases over the Internet," as explicitly required by Claim 2 of the ’530 Patent, or does it primarily draw data from private sources like an MLS, potentially placing it outside the scope of that claim?
- Ultimately, the dispute may turn on definitional scope: can abstract terms like "items of disclosure" and "disclosure form" be construed broadly enough to read on the data points and dynamic web pages of a standard property search engine, or are they limited by the specification to a more formal, comprehensive, and standardized reporting system designed to replace fragmented legal disclosures?