Cloud Systems Holdco IP LLC v. Schneider Electric Systems USA Inc

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Cloud Systems Holdco IP, LLC (Texas)
  • Defendant: Schneider Electric Systems USA, Inc. (Delaware)
  • Plaintiff’s Counsel: Ramey LLP
• Case Identification: 4:25-cv-03880, S.D. Tex., 08/15/2025
• Venue Allegations: Plaintiff alleges venue is proper in the Southern District of Texas because Defendant maintains a regular and established place of business in Houston and has committed alleged acts of infringement in the district.
• Core Dispute: Plaintiff, a non-practicing entity, alleges that Defendant’s systems for controlling and monitoring devices within an environment infringe a patent related to a server-client method for managing, routing, and controlling inter-device connections.
• Technical Context: The technology at issue relates to centralized, software-based control systems that manage complex environments (e.g., audio/visual installations, smart buildings) by creating a software model of the hardware, thereby abstracting its complexity from the end-user's control interface.
• Key Procedural History: The complaint discloses that Plaintiff is a non-practicing entity and that it and its predecessors-in-interest have previously entered into settlement licenses concerning its patents. This history may inform future damages theories and case strategies.

Case Timeline

Date	Event
2006-05-03	U.S. Patent No. 8,533,326 Priority Date
2013-09-10	U.S. Patent No. 8,533,326 Issue Date
2025-08-15	Complaint Filing Date

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

• Patent Identification: U.S. Patent No. 8533326, Method for managing, routing, and controlling devices and inter-device connections, issued September 10, 2013.

The Invention Explained

• Problem Addressed: The patent’s background section identifies the limitations of traditional audio/visual (A/V) management systems, describing them as “custom designed, closed-system, hardware specific solutions” that are ill-suited for modern environments requiring the management of numerous and varied data sources and output devices (’326 Patent, col. 2:57-62).
• The Patented Solution: The invention proposes a server-client architecture to solve this problem. A central server maintains a software-based “representation, or state model” of all devices within an environment, which the patent refers to as a “scene” (’326 Patent, col. 8:5-9). A user interacts with a control client, which displays a customized interface; user commands are sent to the server, which then translates them into specific instructions for the underlying hardware (e.g., switches, projectors) to establish connections and control device states (’326 Patent, Abstract).
• Technical Importance: This architecture decouples the user control interface from the physical hardware, aiming to provide a flexible, hardware-agnostic method for creating “adaptable, customized controls for sophisticated A/V systems” (’326 Patent, col. 3:6-8).

Key Claims at a Glance

• The complaint asserts independent claim 1 (’326 Patent, col. 38:1-30).
• The essential elements of independent claim 1 include:
  • Accessing a server via a control client and logging in as a user.
  • Rendering a control panel on the client that is "adapted to the environment based on said rights and said configuration data."
  • Creating a "user defined configuration" of devices.
  • Generating a "desired path" between devices based on an "environment model."
  • Identifying an event from an "event generator" and, in response, triggering and communicating commands to a "control switch" to interconnect a source and output device.
  • Commanding the source device to output a signal, which is then output on the output device.
• The complaint reserves the right to assert infringement of claims 1-20 (’326 Patent, Compl. ¶9).

III. The Accused Instrumentality

Product Identification

• The complaint identifies the accused instrumentalities generically as Defendant's "systems, products, and services for enabling a method for controlling an environment" (Compl. ¶9).

Functionality and Market Context

• The complaint does not provide sufficient detail for analysis of the specific functionality of the accused instrumentalities. It alleges at a high level that they involve "establishing communication between a server and a control client" to control an environment but offers no specific product names, technical specifications, or descriptions of operation (Compl. ¶11). No probative visual evidence provided in complaint.

IV. Analysis of Infringement Allegations

The complaint references a claim chart in Exhibit B but does not attach it (Compl. ¶10). In lieu of a claim chart, the complaint alleges infringement through a narrative theory. Plaintiff asserts that Defendant "maintains, operates, and administers systems, products, and services" that practice the claimed method for controlling an environment (Compl. ¶9). The alleged infringement includes direct use of the invention by Defendant, as well as inducement and contribution to infringement by Defendant's customers, who are allegedly instructed on how to use the products and services in an infringing manner (Compl. ¶9, ¶11, ¶12).

• Identified Points of Contention:
  • Evidentiary Questions: The complaint's primary characteristic is its lack of technical specificity regarding the accused products. A central point of contention will be whether discovery produces evidence that Defendant's systems actually perform each limitation of the asserted claims. For example, what evidence does the complaint provide that the accused systems generate a "desired path" based on an "environment model" as required by claim 1?
  • Scope Questions: The dispute may turn on the scope of the patent's claims. For instance, does the configuration of devices in Defendant’s system rise to the level of creating a "user defined configuration" and using an "environment model," or does it operate on a more direct, less abstracted basis?

V. Key Claim Terms for Construction

• The Term: "environment model"

• Context and Importance: This term appears central to the claimed invention, representing the software abstraction of the physical hardware. Its construction will be critical in determining whether Defendant's system, which may simply maintain a registry of devices, meets this limitation. Practitioners may focus on this term because it distinguishes the claimed invention from a simple remote control system.

• Intrinsic Evidence for Interpretation:

  • Evidence for a Broader Interpretation: The specification describes the model as representing "the devices 270 and other details of the presentation environment 110" (’326 Patent, col. 7:51-53). Plaintiff may argue this language supports a broad definition covering any data structure that stores information about devices and their available connections.
  • Evidence for a Narrower Interpretation: The specification also characterizes the model as a "full state model, or configuration model" that reflects the "current state or status of the server 100, including the present states or configurations of each individual device" (’326 Patent, col. 34:59-64). Defendant may cite this to argue for a narrower construction requiring a dynamic model that actively tracks the real-time status of all components.

• The Term: "rendering a control panel... adapted to the environment based on said rights and said configuration data"

• Context and Importance: This limitation requires the user interface to be customized based on both user permissions ("rights") and the specific environment ("configuration data"). The dispute will likely focus on the degree of adaptation required.

• Intrinsic Evidence for Interpretation:

  • Evidence for a Broader Interpretation: The specification notes that "the server 100 evaluates the capabilities of the control client 102 upon log-in and then provides a customized user interface" (’326 Patent, col. 13:35-38). This could support an interpretation where any role-based interface (e.g., showing different options for an administrator versus a standard user) satisfies the limitation.
  • Evidence for a Narrower Interpretation: The patent also describes generating an interface based on "the user, permission levels, presentation environment 100 and other factors" (’326 Patent, col. 12:10-12). This could support a narrower reading requiring a more dynamic interface that is specifically generated or modified based on the actual devices present in a given environment, not just on static user roles.

VI. Other Allegations

• Indirect Infringement: The complaint alleges inducement, asserting that Defendant "actively encouraged or instructed" customers on how to use its products in an infringing manner (Compl. ¶11). It also alleges contributory infringement, claiming the accused products are not staple articles of commerce and their "only reasonable use is an infringing use" (Compl. ¶12).
• Willful Infringement: Willfulness is predicated on the allegation that Defendant had knowledge of the ’326 Patent "from at least the issuance of the patent" (Compl. ¶11, ¶12). The prayer for relief requests a finding of willful infringement and treble damages (Compl. p. 6, ¶e).

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

• A central issue will be evidentiary: The complaint makes broad allegations without identifying specific accused products or describing their operation. The case will likely depend on whether facts developed during discovery can substantiate the claim that Defendant's systems perform each step of the patented method, particularly the creation and use of an "environment model" to generate control paths.
• A key legal question will be one of definitional scope: The case may turn on the construction of "environment model." The court's determination of whether this term can be construed broadly to cover any database of device connections, or narrowly to require a dynamic, real-time state-tracking system as detailed in the patent’s embodiments, could prove dispositive.