DCT
4:23-cv-01798
OBM Inc v. Lancium LLC
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: OBM, Inc. (Delaware)
- Defendant: Lancium LLC (Texas)
- Plaintiff’s Counsel: Womble Bond Dickinson (US) LLP
- Case Identification: 4:23-cv-01798, S.D. Tex., 05/16/2023
- Venue Allegations: Venue is asserted as proper in the Southern District of Texas because Defendant Lancium LLC resides in this District.
- Core Dispute: Plaintiff OBM, Inc. seeks a declaratory judgment that its "Foreman" software platform does not infringe Defendant Lancium LLC's patent related to systems for adjusting the power consumption of large-scale energy users based on power option agreements.
- Technical Context: The technology operates at the intersection of large-scale computing (such as cryptocurrency mining) and electric grid management, enabling power-intensive facilities to participate in demand-response programs.
- Key Procedural History: The complaint alleges that Lancium, which has a history of asserting the patent-in-suit against other cryptocurrency software companies, approached OBM with allegations of potential infringement. Subsequent communications, including a letter identifying the patent and proposed business terms that would allegedly require OBM to exit the energy curtailment market, created what OBM asserts is a justiciable controversy warranting a declaratory judgment of non-infringement.
Case Timeline
| Date | Event |
|---|---|
| 2018-01-01 (approx.) | OBM begins providing its Foreman software platform |
| 2019-10-28 | U.S. Patent No. 10,608,433 Priority Date |
| 2020-03-31 | U.S. Patent No. 10,608,433 Issue Date |
| 2022-11-17 | Lancium representatives meet with OBM, stating Foreman could be infringing |
| 2023-04-03 | Lancium's counsel sends letter to OBM identifying the '433 patent |
| 2023-05-09 | Lancium proposes business terms allegedly precluding OBM from energy curtailment |
| 2023-05-16 | Complaint for Declaratory Judgment filed |
II. Technology and Patent(s)-in-Suit Analysis
- Patent Identification: U.S. Patent No. 10,608,433, "Methods and Systems for Adjusting Power Consumption Based on a Fixed-Duration Power Option Agreement", issued on March 31, 2020 (the "’433 Patent").
U.S. Patent No. 10,608,433 - "Methods and Systems for Adjusting Power Consumption Based on a Fixed-Duration Power Option Agreement"
The Invention Explained
- Problem Addressed: The patent's background section describes the problem of "curtailment," where electric grid operators must sometimes direct power generators—particularly renewable sources like wind and solar farms—to reduce their output to maintain grid stability, leading to wasted energy and financial losses for the generator ('433 Patent, col. 5:1-11).
- The Patented Solution: The invention is a control system that allows a large, flexible power consumer (e.g., a datacenter) to enter into a "power option agreement" with a power entity (e.g., a grid operator) ('433 Patent, col. 5:45-50). The system receives data defining the terms of this agreement, such as minimum power consumption thresholds for set time intervals, monitors a set of conditions, and then determines and executes a "performance strategy" to adjust the load's power consumption in compliance with the agreement ('433 Patent, Abstract; Fig. 13). This transforms the power consumer into a controllable load that can help stabilize the grid.
- Technical Importance: The technology creates a mechanism for large power consumers to monetize their operational flexibility, providing a valuable grid-balancing service and creating a market for what would otherwise be curtailed or economically inefficient energy ('433 Patent, col. 5:12-44).
Key Claims at a Glance
- The complaint seeks a declaratory judgment of non-infringement as to all claims of the '433 Patent (Compl. ¶33; Prayer for Relief ¶B). Independent claim 1 is representative of the system claims.
- Independent Claim 1 requires:
- A set of computing systems configured to perform computational operations using power from a power grid.
- A control system configured to monitor conditions and receive "power option data" based on a "power option agreement," with the data specifying a set of minimum power thresholds and associated time intervals.
- The control system must, in response, "determine a performance strategy" based on the power option data and monitored conditions, where the strategy includes a power consumption target equal to or greater than the minimum threshold.
- The control system must then provide instructions to the set of computing systems to operate based on that performance strategy.
III. The Accused Instrumentality
Product Identification
- The accused instrumentality is OBM's "Foreman" software management platform (Compl. ¶13).
Functionality and Market Context
- Foreman is a software platform used for the remote monitoring, management, and automation of cryptocurrency mining facilities, including ASIC and GPU machines (Compl. ¶13).
- The complaint identifies a specific "Power Control" feature that "provides a customer with the ability to adjust its energy consumption at a site to a specific megawatt target" (Compl. ¶15).
- It is alleged to have functionality that assists its customers in Texas with qualifying as a "Controllable Load Resource" (CLR) under the Electric Reliability Council of Texas (ERCOT), which involves passing ERCOT's Security-Constrained Economic Dispatch (SCED) qualification test (Compl. ¶12, ¶15). This places the accused product directly in the grid demand-response market.
IV. Analysis of Infringement Allegations
No probative visual evidence provided in complaint.
Because this is a declaratory judgment action filed by the accused infringer, the complaint frames the dispute as one of non-infringement. The following table outlines how a patentee (Lancium) might construct an infringement argument by mapping the described functionality of the Foreman software onto the elements of a representative claim.
'433 Patent Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| a set of computing systems, wherein the set of computing systems is configured to perform computational operations using power from a power grid | The ASIC and GPU cryptocurrency mining machines that are managed by the Foreman software at customer sites. | ¶13 | col. 59:2-5 |
| a control system configured to... | The OBM Foreman software management platform. | ¶13 | col. 59:6-7 |
| monitor a set of conditions | The complaint does not provide sufficient detail for analysis of this element, but this function is necessarily implied for the "Power Control" feature to operate. | ¶15 | col. 59:8 |
| receive power option data based, at least in part, on a power option agreement, wherein the power option data specify: (i) a set of minimum power thresholds, and (ii) a set of time intervals... | The Foreman software receives a "specific megawatt target" and assists customers in participating in ERCOT's CLR program, which involves responding to dispatch instructions. This target and the program rules function as the claimed "power option data." | ¶12, ¶15 | col. 59:9-14 |
| responsive to receiving the power option data, determine a performance strategy for the set of computing systems based on a combination of at least a portion of the power option data and at least one condition... | The "Power Control" feature's function of adjusting energy consumption to meet a target constitutes the determination of a performance strategy. | ¶15 | col. 59:15-24 |
| provide instructions to the set of computing systems to perform one or more computational operations based on the performance strategy | Foreman provides for the automation of mining machines, which would include the control instructions necessary to adjust power consumption in line with the determined strategy. | ¶13 | col. 59:25-28 |
- Identified Points of Contention:
- Scope Questions: A central dispute may be whether a customer's participation in a regulated grid program like ERCOT's CLR program constitutes a "power option agreement" as that term is used in the patent. OBM may argue the patent contemplates a specific type of bilateral contract, whereas Lancium may argue the ERCOT program is a functional equivalent.
- Technical Questions: The complaint's description of the Foreman "Power Control" feature as adjusting to a "specific megawatt target" (Compl. ¶15) raises the question of whether the software itself "determines" a strategy, or if it merely executes a static target set by a human operator. The claim requires the control system to perform the determination based on data and conditions.
- Technical Questions: The complaint does not specify what, if any, "conditions" the Foreman software monitors beyond what is necessary to meet a power target. The '433 patent describes a system that may analyze a variety of economic and operational conditions ('433 Patent, col. 48:7-60), and a lack of such monitoring in the Foreman platform could support a non-infringement argument.
V. Key Claim Terms for Construction
The Term: "power option agreement"
Context and Importance: This term appears in the preamble and body of claim 1 and is central to the invention's context. The question of whether the commercial and regulatory arrangements of OBM's customers (e.g., participation as a CLR with ERCOT) fall within this definition will be critical to the infringement analysis.
Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The specification describes the agreement in functional terms as giving a "power entity" the "right, but not obligation, to reduce the amount of power delivered" to a load ('433 Patent, col. 44:50-58). A party could argue that any arrangement achieving this functional outcome, including participation in a regulated market program, meets the definition.
- Evidence for a Narrower Interpretation: The patent repeatedly refers to "fixed-duration" and "dynamic" power option agreements, and the claims require the system to receive "power option data" based on this agreement ('433 Patent, Title; col. 59:9-11). A party could argue this implies a specific, data-driven contractual instrument, potentially narrower than a general participation in a grid reliability program.
The Term: "determine a performance strategy"
Context and Importance: This term defines the level of intelligence and autonomy required of the accused "control system." Practitioners may focus on this term because if the Foreman software is a passive tool that only executes human-inputted targets, it may not perform this claimed function.
Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The patent states the "performance strategy comprises a power consumption target" ('433 Patent, col. 59:20-22). This could support an argument that any system logic that results in the adoption of a power target is "determining" a strategy.
- Evidence for a Narrower Interpretation: The claim requires the determination to be "based on a combination of at least a portion of the power option data and at least one condition in the set of conditions" ('433 Patent, col. 59:17-19). Furthermore, the specification describes an "operations and environment analysis module" (310) that analyzes numerous factors, suggesting an active, multi-variate analysis rather than passive implementation of a single data point ('433 Patent, col. 25:50-65).
VI. Other Allegations
- Indirect Infringement: The complaint seeks a declaration of non-infringement for indirect liability (contributory and induced) (Compl. ¶33). Lancium would likely base a counterclaim for inducement on allegations that OBM provides its Foreman software with knowledge of the '433 patent and with the intent that its customers use the "Power Control" feature to perform the patented method, as allegedly instructed by OBM's marketing and support materials (Compl. ¶13, ¶15).
- Willful Infringement: While not formally alleged by a patentee, the complaint establishes facts that would support a future willfulness claim by Lancium. The complaint states that Lancium's counsel sent a letter to OBM on April 3, 2023, which "specifically identified and attached the Patent-in-Suit," providing OBM with pre-suit knowledge (Compl. ¶23).
VII. Analyst’s Conclusion: Key Questions for the Case
- A core issue will be one of definitional scope: Can the term "power option agreement", which is described in the patent with contractual and data-centric characteristics, be construed to cover a customer's participation in a regulated public utility program like ERCOT's Controllable Load Resource market? The outcome of this construction could be dispositive.
- A key evidentiary question will be one of technical operation: Does OBM's Foreman platform autonomously "determine a performance strategy" by analyzing a combination of power targets and other "conditions", or does it function as a more basic tool that executes a single "specific megawatt target" (Compl. ¶15) dictated by a user? The degree of automation and decision-making within the accused software will be a focal point of the infringement analysis.