Ethor IP Corp v. Ritual Tech Inc

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Ethor IP Corporation (Delaware)
  • Defendant: Ritual Technologies, Inc. (Canadian)
  • Plaintiff’s Counsel: Connor Lee & Shumaker PLLC
• Case Identification: 4:24-cv-02700, S.D. Tex., 07/19/2024
• Venue Allegations: Venue is alleged to be proper on the basis that the defendant is a foreign corporation that has committed acts of infringement and transacted business in the judicial district.
• Core Dispute: Plaintiff alleges that Defendant’s online ordering platform and associated services infringe a patent related to the integration of diverse, non-compatible point-of-sale systems.
• Technical Context: The technology addresses the challenge of creating a unified software platform, such as for online ordering, that can communicate with and normalize data from multiple, disparate point-of-sale (POS) systems used by different merchants.
• Key Procedural History: The complaint notes that in June 2019, the Patent Trial and Appeal Board (PTAB), in a decision regarding the application that issued as the patent-in-suit, found the invention to be a "technology improvement" and that prior art failed to disclose key elements. The complaint also alleges that Plaintiff provided Defendant with notice of the patent in October 2023.

Case Timeline

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

U.S. Patent No. 10,460,363 - "System, Method, and Computer Program for Integrating Diverse Point of Sale Systems"

The Invention Explained

• Problem Addressed: The patent's background section describes the difficulty faced by retailers, such as franchises, that use a variety of different POS systems across their locations. These systems are often incompatible and cannot "talk to each other," which complicates efforts to implement chain-wide initiatives like a unified online ordering platform, requiring multiple costly and inefficient custom integrations (’363 Patent, col. 1:12-28; Compl. ¶¶12-14).
• The Patented Solution: The invention proposes a system architecture to solve this problem. It uses software components called "point of sale agents" that are linked to each diverse POS system. These agents communicate with a central "order manager" and are responsible for "mapping" the non-compatible data from each distinct POS system into a "common data model." This creates a standardized, unified layer that allows for centralized management of orders, promotions, and data analytics across otherwise incompatible systems (’363 Patent, Abstract; col. 2:31-44). Figure 1 of the patent illustrates this architecture, showing individual POS systems (e.g., POS #1, POS #2) each communicating through a respective POS Agent to a central cloud environment containing the Order Manager and various databases (’363 Patent, Fig. 1).
• Technical Importance: This architectural approach allowed retailers to leverage their existing, heterogeneous POS hardware and software for modern e-commerce functions without undertaking a complete and costly overhaul of their legacy systems (Compl. ¶¶22-23).

Key Claims at a Glance

• The complaint asserts direct infringement of at least independent claims 1 (a system) and 9 (a method), along with several dependent claims (Compl. ¶58).
• Independent Claim 1 (System) requires:
  • A first computer processor that communicates with a plurality of diverse POS systems (which generate non-compatible data) using a "point of sale agent."
  • A second computer processor, linked to the first, that operates an "order manager."
  • A memory storage unit with a POS database that provides a "common data model" with fields for a POS system identifier, pricing, and promotions.
  • The "point of sale agent" receives the non-compatible data and maps it to the common data model.
• Independent Claim 9 (Method) requires:
  • Mapping non-compatible data from diverse POS systems to a "common data model" (with fields for an identifier, pricing, and promotions).
  • Communicating the data between each diverse POS system and an "order manager" using one or more "point of sale agents."

III. The Accused Instrumentality

Product Identification

• The "Ritual Accused Products," defined as the Ritual App, Ritual Online Ordering, and any other Ritual products that include POS data-mapping features (Compl. ¶47).

Functionality and Market Context

• The Ritual platform is an online and mobile service that allows consumers to place pickup orders from various restaurants (Compl. ¶39). The complaint alleges that the platform’s key function is its ability to integrate with multiple, diverse third-party POS systems, including those from Square, Clover, Toast, and Lightspeed (Compl. ¶48-49). A screenshot from Defendant’s support website lists over a dozen diverse third-party POS systems with which the Ritual platform can integrate (Compl. ¶49, p. 13). Orders placed by consumers via the Ritual app or a restaurant's website are allegedly sent directly to the restaurant's own POS system (Compl. ¶43). The service also includes a "Partner Portal," which is a content management system for restaurants to view analytics and manage their menus, offers, and loyalty programs (Compl. ¶¶46, 50).

IV. Analysis of Infringement Allegations

’363 Patent Infringement Allegations

| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality - | Complaint Citation | Patent Citation |
|:--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |:-----------------------|:-------------------|
| a first computer processor in communication with the plurality of diverse point of sale systems, wherein each diverse point of sale system... generates non-compatible point of sale data... - | The Ritual platform is alleged to be integrated with multiple diverse POS systems, such as Square and Clover, which generate non-compatible data. - | ¶59 | col. 4:26-29 |
| ...the first computer processor configured to communicate with each of the plurality of diverse point of sale systems using a point of sale agent; - | The complaint alleges a processor in the Ritual platform executes instructions comprising an "agent" that facilitates communication with each diverse POS system. A diagram titled 'How it works' illustrates a three-step process where a customer order is accepted by the restaurant via its 'POS system or your own device' (Compl. ¶43, p. 11). | ¶60 | col. 4:30-34 |
| a second computer processor linked to the first computer processor, the second computer processor configured to operate an order manager; - | The Ritual platform is alleged to include a second processor configured to operate an order manager for facilitating orders, with the processors being linked to enable the real-time functionality of the Partner Portal. - | ¶¶61-62 | col. 4:29-30 |
| a memory storage unit for storing a point of sale database, wherein the point of sale database provides a common data model configured to be recognized by the order manager, the common data model including fields corresponding to at least one of a point of sale system identifier, pricing, and promotions, | The platform allegedly uses a memory unit storing a database with a common data model. Evidence cited includes the standardization of product data (e.g., category, price) in the app and the Partner Portal's features for identifying restaurants and managing "Offers" and "Loyalty+" (promotions). A screenshot of a 'Latte' product listing in the accused app shows standardized data fields including a product name, description, and price (Compl. ¶64, p. 16). | ¶¶63-64, ¶66-68 | col. 6:15-20 |
| wherein the point of sale agent receives the non-compatible point of sale data from each of the plurality of diverse point of sale systems and the order manager, the point of sale agent further configured to map the point of sale data to the common data model. - | The complaint alleges that the "point-of-sale agent" in the Ritual products receives non-compatible data and is configured to map that data to the common data model. - | ¶69 | col. 6:1-5 |

• Identified Points of Contention:
  • Scope Questions: The claims recite "a first computer processor" and "a second computer processor." A potential point of dispute may be whether the defendant’s distributed, cloud-based server architecture maps cleanly onto this claimed structure, or whether the system functions as a more integrated whole that does not have processors performing these distinct roles.
  • Technical Questions: A central technical question is what evidence supports the allegation that Ritual’s platform performs the specific "mapping" function recited in the claims. The complaint asserts that an "agent" maps "non-compatible" data to a "common data model" (Compl. ¶69), but the litigation will turn on evidence demonstrating that the technical mechanism of Ritual's integration aligns with the patent’s specific teachings, rather than constituting a different, non-infringing form of API-based communication.

V. Key Claim Terms for Construction

• The Term: "point of sale agent"

  • Context and Importance: This term defines the core functional component that bridges the gap between the disparate POS systems and the central manager. Its construction will be critical, as it determines what kind of software architecture falls within the claim scope. Practitioners may focus on this term because its definition will dictate whether a cloud-based API service can be considered an "agent" in the same way as the potentially localized software component depicted in the patent's figures (’363 Patent, Fig. 1).
  • Intrinsic Evidence for a Broader Interpretation: The specification provides a functional definition, stating the agent is "operable to communicate point of sale data... by mapping the point of sale data to a common data model" (’363 Patent, col. 2:39-44), which may support an interpretation covering any component that performs this function, regardless of its specific implementation.
  • Intrinsic Evidence for a Narrower Interpretation: The specification also states that agents "may be provided on site at the business location" (’363 Patent, col. 6:33-35), and Figure 1 depicts the agents as distinct blocks within the "Business Location," separate from the central cloud infrastructure. This could support a narrower construction requiring a discrete software component located with the POS system.

• The Term: "common data model"

  • Context and Importance: The existence and nature of this "model" is a prerequisite for infringement. The dispute will likely focus on whether Ritual's method of standardizing data for its platform meets the specific requirements of this claim term.
  • Intrinsic Evidence for a Broader Interpretation: The patent describes the model's purpose broadly as enabling data from diverse systems to "conform to a single common data encapsulation that can be recognized by the order manager" (’363 Patent, col. 6:5-9), suggesting any unifying data structure could qualify.
  • Intrinsic Evidence for a Narrower Interpretation: Claim 1 requires the model to include "fields corresponding to at least one of a point of sale system identifier, pricing, and promotions" (’363 Patent, col. 11:1-3). An argument could be made that this requires a specific, structured schema, and that a more flexible or ad-hoc data standardization approach would not meet this limitation.

VI. Other Allegations

• Indirect Infringement: The complaint alleges both induced and contributory infringement. Inducement is based on allegations that Ritual provides instructions and customer support materials that direct its restaurant customers in the U.S. to use the accused platform in an infringing manner (Compl. ¶¶71-72). Contributory infringement is based on allegations that the accused products are specially made and adapted for infringement and have no substantial non-infringing use (Compl. ¶73, ¶75).
• Willful Infringement: The complaint alleges that Ritual had knowledge of the ’363 Patent and its alleged infringement as of October 2023, when Ethor allegedly contacted Ritual (Compl. ¶¶51-52). This forms the basis for a claim of post-suit, and potentially pre-suit, willful infringement.

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

• A core issue will be one of architectural equivalence: does Ritual's cloud-based integration platform, which connects to various POS systems via their APIs, embody the specific "point of sale agent" and "order manager" architecture recited in the claims, or does it represent a different technological approach to solving the same problem?
• A second central question will be one of claim construction and scope: can the term "point of sale agent," which the patent at times depicts as a component at a merchant's physical location, be construed broadly enough to read on the distributed, server-side services that likely constitute Ritual's integration technology?
• Finally, a key evidentiary question will be one of technical proof: beyond showing that Ritual's platform integrates with diverse POS systems, what direct evidence can the plaintiff present to demonstrate that this integration is achieved through the claimed method of "mapping non-compatible point of sale data to a common data model," as opposed to other known methods of inter-system communication?