DCT

7:25-cv-00108

Wolverine Barcode IP LLC v. 7 Eleven Inc

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Key Events
Complaint

I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 7:25-cv-00207, W.D. Tex., 05/01/2025
  • Venue Allegations: Plaintiff alleges venue is proper because Defendant has a regular and established place of business in the district, has committed alleged acts of infringement there, and conducts substantial business in the forum.
  • Core Dispute: Plaintiff alleges that Defendant’s systems for conducting offline transactions using barcodes for personal identification infringe a patent related to offline commerce transaction methods.
  • Technical Context: The technology at issue relates to using barcode scanners, which are ubiquitous in retail environments, to process customer-specific barcodes for payment, as an alternative to cash, credit cards, or specialized NFC/RFID readers.
  • Key Procedural History: Plaintiff is a non-practicing entity. The complaint discloses that Plaintiff and its predecessors have entered into settlement licenses with other entities, but asserts these licenses did not involve admissions of infringement or authorize the production of a patented article, potentially to preemptively address patent marking defenses under 35 U.S.C. § 287.

Case Timeline

Date Event
2010-09-21 U.S. Patent No. 9,280,689 Priority Date
2016-03-08 U.S. Patent No. 9,280,689 Issued
2025-05-01 Complaint Filed

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

U.S. Patent No. 9,280,689 - Method and Apparatus for Conducting Offline Commerce Transactions, Issued March 8, 2016

The Invention Explained

  • Problem Addressed: The patent’s background section identifies the high processing costs that make conventional credit cards impractical for "micro payment" purchases (e.g., items costing cents or a few dollars) (’689 Patent, col. 1:24-30). It also notes that alternative technologies like RFID and NFC, while functional, require merchants to invest in special, non-ubiquitous card readers, limiting their adoption. (’689 Patent, col. 1:36-51).
  • The Patented Solution: The invention proposes a system that leverages the existing barcode scanners found at virtually all cash registers (’689 Patent, col. 2:48-51). It describes generating a unique "User ID Barcode" from a personal identifier like a cell phone number or credit card number (’689 Patent, col. 2:39-42). This barcode is prefixed with a "special character" to distinguish it from standard product barcodes, and can be displayed on a user's cell phone or printed on a card (’689 Patent, Abstract; col. 6:6-13). When scanned, this barcode allows a central "User Vendor Management Server" (UVM) to identify the user's account and process the transaction, bypassing conventional credit card networks for micro-payments (’689 Patent, Fig. 2(b)).
  • Technical Importance: The claimed approach sought to enable low-cost electronic payments for small-value goods by utilizing hardware infrastructure already deployed at mass scale in retail environments, thereby lowering the barrier to entry for merchants. (’689 Patent, col. 7:1-6).

Key Claims at a Glance

  • The complaint asserts infringement of claims 1-3. (Compl. ¶8).
  • Independent Claim 1 recites a method with the following essential elements:
    • Providing a personal code to a person.
    • Converting the personal code into a barcode format to form a "User ID Barcode" that includes at least one special character to distinguish it from a product barcode.
    • Storing the personal code in the User ID Barcode and in a "User Vendor Management Server."
    • Establishing a User Account in the server corresponding to the personal code.
    • Depositing funds into the account to establish a credit limit.
    • Conducting purchases by scanning product barcodes and the User ID Barcode at a vendor cash register.
    • Detecting the User ID Barcode at the vendor server and forwarding it with the purchase price to the User Vendor Management Server.
    • Comparing the purchase price with the funds in the User Account to determine if funds are available.
    • Sending an approval signal to the vendor server and forwarding it to the cash register if funds are sufficient.
    • Repeating the purchase steps for subsequent transactions.

III. The Accused Instrumentality

Product Identification

  • The complaint does not name a specific product, but generally accuses Defendant’s "systems, products, and services that conducting offline transactions that use a barcode as a method of personal identification." (Compl. ¶8).

Functionality and Market Context

  • The complaint alleges that Defendant "maintains, operates, and administers" the accused systems. (Compl. ¶8). These systems are alleged to perform methods for conducting offline transactions where a barcode is used as a form of personal identification, thereby enabling customers to make purchases. (Compl. ¶¶ 7-8). The complaint does not provide further technical detail on the specific operation of Defendant's systems or their market positioning.
  • No probative visual evidence provided in complaint.

IV. Analysis of Infringement Allegations

The complaint states that support for its infringement allegations may be found in a chart attached as Exhibit B. (Compl. ¶9). However, Exhibit B was not provided with the complaint document. In its absence, the infringement theory must be synthesized from the complaint's narrative allegations.

The core allegation is that Defendant’s systems practice the method of the ’689 patent by allowing customers to use a personal barcode for identification in an offline transaction. (Compl. ¶8). The theory suggests that Defendant's point-of-sale systems, when interacting with a customer's personal barcode (presumably from a mobile application), perform the steps of identifying the customer, verifying funds or credit, and approving the transaction in a manner that maps onto the elements of the asserted claims. (Compl. ¶8).

  • Identified Points of Contention:
    • Scope Questions: A central question may be whether Defendant's customer identification system uses a "personal code" (such as a phone number) that is "converted" into a barcode, as recited in the claim, or if it uses a different method, such as generating an arbitrary or temporary token. The analysis will also question whether the barcode used by Defendant includes a "special character" for the specific purpose of distinguishing it from product barcodes.
    • Technical Questions: The complaint does not provide evidence regarding the architecture of Defendant’s backend systems. A key technical question will be whether Defendant’s payment processing infrastructure functions as the claimed "User Vendor Management Server" by performing the specific sequence of receiving the User ID Barcode, comparing the purchase price to a pre-funded account, and sending a discrete approval signal back to the vendor.

V. Key Claim Terms for Construction

The Term: "personal code" (Claim 1)

  • Context and Importance: This term appears foundational to the invention. The specification repeatedly provides examples such as a "cell phone number or the credit card number" (’689 Patent, col. 2:40-41). The dispute may turn on whether this term is limited to pre-existing, personally-identifiable numbers or if it can be construed more broadly to cover any unique identifier assigned to a user by a system, such as a randomly generated account number.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The claim language itself, "providing a personal code to a person," could suggest that the code does not have to originate with the person but can be assigned to them.
    • Evidence for a Narrower Interpretation: The specification's consistent use of "cell phone number" and "credit card number" as the primary examples (’689 Patent, col. 5:44-48, col. 6:31-33), along with other identifiers like a "driving license number or the social security number" (’689 Patent, col. 3:1-3), may support an interpretation limited to numbers that are inherently personal to the user outside of the context of the transaction system itself.

The Term: "at least one special character to distinguish the barcode as a User ID Barcode from a product barcode" (Claim 1)

  • Context and Importance: This is a specific functional limitation. Infringement may depend on whether the barcode format used in the accused system contains a specific character, prefix, or flag field that serves this distinguishing purpose, as opposed to simply being a different symbology or data structure. Practitioners may focus on this term because it appears to be a clear, potentially binary point of comparison.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: A party might argue that any data field or format identifier within the barcode's data that allows the vendor server to differentiate it from a product scan meets this limitation, even if it is not a visible character like the "?" suggested in the specification.
    • Evidence for a Narrower Interpretation: The specification explicitly states, "The cell phone number or the credit card number is prefixed with a special character such as ‘?’ before they are converted into the barcode format," suggesting a specific implementation that involves adding a non-alphanumeric character to the underlying data string before encoding. (’689 Patent, col. 3:14-17).

VI. Other Allegations

  • Indirect Infringement: The complaint alleges inducement by asserting Defendant "actively encouraged or instructed others (e.g., its customers)" on how to use its products and services to cause infringement. (Compl. ¶10). Contributory infringement is alleged on the basis that there are "no substantial noninfringing uses for Defendant's products and services." (Compl. ¶11).
  • Willful Infringement: The complaint alleges Defendant has known of the patent "from at least the filing date of the lawsuit." (Compl. ¶¶ 10, 11). The prayer for relief requests a finding of willfulness and treble damages should discovery reveal that Defendant possessed pre-suit knowledge of the patent. (Compl. ¶ VI(e)).

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

  • A core issue will be one of definitional scope: Can the term "personal code," which the patent specification ties to identifiers like a cell phone number, be construed to cover the type of customer identifier used in Defendant's modern mobile payment application?
  • A key evidentiary question will be one of technical implementation: Does the barcode used in the accused system contain a "special character" or equivalent data flag specifically to distinguish it from a product barcode, as required by Claim 1?
  • A final dispositive issue may be one of architectural correspondence: Does Defendant's backend processing system operate as the claimed "User Vendor Management Server"—a self-contained system for managing pre-funded accounts and issuing approvals—or does it function as a pass-through or gateway to conventional payment networks, potentially placing it outside the claim's scope?