DCT

4:25-cv-04031

Rady v. Boston Consulting Group Inc

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Key Events
Amended Complaint

I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 4:25-cv-04031, S.D. Tex., 01/12/2026
  • Venue Allegations: Plaintiff alleges venue is proper in the Southern District of Texas because key defendants, such as Boston Consulting Group and De Beers Jewelers, maintain a regular and established place of business in the district and have allegedly committed acts of infringement there, including the sale, use, and promotion of the accused products.
  • Core Dispute: Plaintiff alleges that Defendants' asset tracking platforms (including Tracr, Origyn, and Valutrax) and associated scanning machines infringe patents related to creating unique, immutable digital fingerprints of physical objects using 3D and spectral data.
  • Technical Context: The technology enables creating a unique "digital twin" for physical items like diamonds and luxury goods, allowing for secure authentication and provenance tracking on a blockchain, which is significant for supply chain integrity and anti-counterfeiting efforts.
  • Key Procedural History: The complaint describes a history of alleged misappropriation, asserting that Plaintiff disclosed his invention to Defendants Boston Consulting Group and De Beers in confidence, who then allegedly used it to develop the accused Tracr platform. This action follows a prior lawsuit where a related "grandfather patent" was found invalid under 35 U.S.C. § 101, after which Plaintiff amended claims in pending applications that subsequently issued as the patents-in-suit. The complaint also includes separate counts seeking to correct the inventorship of two U.S. patents assigned to De Beers, which are alleged to have been derived from Plaintiff's invention.

**Case Timeline**

Date Event
2017-12-22 Earliest Priority Date for ’261 and ’496 Patents (Provisional filed)
2018-01-09 Plaintiff allegedly discloses invention to Defendant BCG
2018-01-18 Plaintiff allegedly provides unpublished patent application to BCG
2018-05-10 Defendant De Beers announces launch of the accused Tracr platform
2020-03-13 Plaintiff files first lawsuit on a related patent ('250 patent)
2020-08-01 Defendant BCG establishes the accused Origyn Foundation
2024-03-27 Federal Circuit affirms invalidity decision on '250 patent
2025-07-29 U.S. Patent No. 12,375,261 issues
2025-08-26 U.S. Patent No. 12,401,496 issues
2026-01-12 Complaint filed

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

U.S. Patent No. 12,375,261 - *"PHYSICAL ITEM MAPPING TO BLOCKCHAIN FRAMEWORK"*

The Invention Explained

  • Problem Addressed: The patent's background section identifies a fundamental problem with using blockchains for physical assets: they "breakdown when mapping to physical real-world items due to the requirement of having to trust some sort of the third party," which "immediately destroys/diminishes the use of blockchain" (’261 Patent, col. 1:11-18).
  • The Patented Solution: The invention proposes a framework to create and record unique digital signatures of physical items based on their intrinsic, random properties (’261 Patent, Abstract). It describes an apparatus containing "item analysis components," such as a spectral imager and a 3D scanner, which analyze an item to capture its unique physical features (e.g., imperfections, geometry) (’261 Patent, col. 3:51-61; Fig. 2). This data is used to generate a unique signature that is recorded on a blockchain, creating a trustless link between the physical object and its digital record (’261 Patent, col. 1:21-41).
  • Technical Importance: This approach creates an immutable "self-provenance" record for a physical object, solving a long-standing challenge for reliably tracking and authenticating high-value goods without relying on easily forged external markers (Compl. ¶¶25, 117).

Key Claims at a Glance

  • The complaint asserts independent claim 1 (’261 Patent, col. 19:24-45; Compl. ¶156).
  • Claim 1 of the ’261 patent recites an apparatus comprising:
    • a housing,
    • a spectral imaging camera, a light source, and a laser range scanner mounted in or on the housing,
    • a power source,
    • a processor in communication with the camera and scanner,
    • a non-transient computer-readable memory containing a plurality of pre-recorded unique digital signatures,
    • where each signature comprises a "digital combination of spectral data and 3D scan data" that maps the 3D physical features (e.g., anomalies, defects, inclusions) of a specific item.

U.S. Patent No. 12,401,496 - *"PHYSICAL ITEM MAPPING TO BLOCKCHAIN FRAMEWORK"*

The Invention Explained

  • Problem Addressed: The ’496 patent shares its specification with the ’261 patent and addresses the same problem of reliably linking physical items to a digital ledger without relying on a trusted third party (’496 Patent, col. 1:11-18).
  • The Patented Solution: The invention is claimed as a system with processors executing instructions from memory (’496 Patent, Claim 1). The instructions cause the system to use spectral and 3D scan data to identify and map an object's physical features, generate a unique signature based on the relative distances between those features, and then record that signature (’496 Patent, col. 19:20-32). The core technical concept is functionally identical to that of the ’261 Patent.
  • Technical Importance: The invention provides a system-level solution for creating a verifiable digital identity for physical objects, enabling secure supply chain management and authentication for items like diamonds and luxury goods (Compl. ¶¶117, 119).

Key Claims at a Glance

  • The complaint asserts independent claim 1 (’496 Patent, col. 19:12-32; Compl. ¶175).
  • Claim 1 of the ’496 patent recites a system comprising:
    • one or more processors, a spectral imaging camera, a laser range scanner, a light source, a non-transient computer-readable memory, and a connection to a computer network,
    • with the memory containing instructions that cause the processors to:
    • use spectral data and 3D scan data to identify and map physical features of an item in 3D coordinate space,
    • generate a unique signature for the item reflecting relative distances between its physical features, and
    • record the unique signature.

III. The Accused Instrumentality

Product Identification

The complaint names several accused instrumentalities: the "Tracr" platform and its associated "diamond scanning machines"; the "Origyn" platform and its "Origyn Minting Box"; the "Valutrax" platform, described as a "Tracr clone"; and Boston Consulting Group's "IoT Sensor Boxes" (Compl. ¶¶125, 144, 145, 150).

Functionality and Market Context

  • The complaint alleges that the accused scanning machines (used for Tracr, Origyn, and Valutrax) incorporate 3D scanners and spectral imaging cameras to capture data from physical objects like diamonds and luxury goods (Compl. ¶¶128, 144).
  • This captured data is allegedly processed to create a unique digital signature, or "fingerprint," by mapping the object's inherent physical features, such as shape and inclusions (Compl. ¶¶128, 131). This signature is then used to track the object and verify its identity and provenance against a database (Compl. ¶¶125-126).
  • BCG's "IoT Boxes" are described as systems that use the Tracr technology by processing 3D and spectral data received from scanners at client locations to create a digital fingerprint (Compl. ¶145).
  • The complaint positions Tracr as a commercially significant, "industry-leading platform" used by major industry players like De Beers and Signet Jewelers to track a majority of their diamond production (Compl. ¶¶89, 135).

IV. Analysis of Infringement Allegations

The complaint references claim-chart exhibits that are not provided; therefore, the infringement theory is summarized in prose.

U.S. Patent No. 12,375,261 Infringement Allegations

The complaint alleges that the accused scanning machines used by Defendants (e.g., the Origyn Minting Box, Tracr diamond scanners) are apparatuses that meet every limitation of claim 1 of the ’261 patent (Compl. ¶¶158, 159). It asserts these machines include a housing containing a 3D scanner ("laser range scanner"), a spectral imaging camera, a light source, a processor, and memory (Compl. ¶¶131, 144, 146). The memory is alleged to contain software that directs the processor to combine spectral and 3D data to create a unique signature based on an item's physical features, and also contains a database of pre-recorded signatures for comparison (Compl. ¶¶125, 131).

Identified Points of Contention

  • Scope Questions: A potential issue is whether the term "laser range scanner," as used in the patent, can be construed to read on the specific "3D scanners" employed in the accused devices (Compl. ¶128). The precise technology used by Defendants will be a key factual question.
  • Technical Questions: Claim 1 requires an apparatus with memory "containing a plurality of... pre-recorded... digital signatures." This raises the question of whether each accused scanning machine locally stores this database. The complaint describes comparing new scans to a central "Tracr database," which suggests a networked architecture that may not align with the claim's requirement for a self-contained apparatus (Compl. ¶125).

U.S. Patent No. 12,401,496 Infringement Allegations

The complaint alleges that the accused platforms and devices, including the Tracr and Valutrax platforms, the Origyn Minting Box, and BCG's IoT Boxes, are infringing systems under claim 1 of the ’496 patent (Compl. ¶¶177, 178, 182, 187). These systems are alleged to comprise processors and memory with instructions that cause them to use spectral and 3D scan data to generate and record a unique signature for a physical item (Compl. ¶176). For BCG's IoT Boxes, the infringement theory is that they contain a processor and memory with instructions to process data from external, client-located scanners to create the infringing signature (Compl. ¶159).

Identified Points of Contention

  • Scope Questions: Claim 1 recites "A system comprising... a spectral imaging camera, a laser range scanner...". This raises a question for instrumentalities like BCG's IoT Boxes, which are alleged to use data from external client scanners rather than physically including them (Compl. ¶158). The dispute may turn on whether the claimed "system" requires the physical scanning hardware to be part of the infringing product itself.
  • Technical Questions: The claim requires the system to "record said unique signature." The interpretation of "record" will be critical. It raises the question of whether this step must occur locally within the accused system or if transmitting the signature to a remote, distributed blockchain for confirmation and entry satisfies this limitation.

V. Key Claim Terms for Construction

  • The Term: "unique digital signature" (’261 patent, claim 1; ’496 patent, claim 1)

    • Context and Importance: This term defines the invention's core output. The outcome of the case may depend on whether the "digital twin" or "fingerprint" generated by the accused Tracr and Origyn platforms falls within its scope (Compl. ¶¶10, 128).
    • Intrinsic Evidence for a Broader Interpretation: The claims define the signature as a "digital combination of spectral data and 3D scan data" (’261 patent, col. 19:37-38) or as "reflecting relative distances between said physical features" (’496 patent, col. 19:27-28), which could support an interpretation covering any digital file derived from these physical inputs.
    • Intrinsic Evidence for a Narrower Interpretation: The specification provides a detailed example of re-orienting a diamond in virtual space to align and match a "triplet" of imperfections (’261 Patent, col. 5:1-12; col. 13:30-46). Defendants may argue that a "unique digital signature" must be generated using this specific method of geometric analysis and comparison, a method the complaint itself alleges Plaintiff disclosed to BCG (Compl. ¶48).

  • The Term: "apparatus comprising... a non-transient computer-readable memory containing a plurality of unique digital signatures" (’261 patent, claim 1)

    • Context and Importance: This term is central to the infringement analysis of the '261 patent, as it dictates the physical architecture required of an infringing device. Practitioners may focus on this term because the accused Tracr system appears to use a networked database, which may not be "contained" within each scanning apparatus (Compl. ¶125).
    • Intrinsic Evidence for a Broader Interpretation: Plaintiff may argue that "containing" can be met if the memory is configured to access and temporarily hold signatures from a network during operation, making the database functionally part of the apparatus.
    • Intrinsic Evidence for a Narrower Interpretation: A defendant would likely argue that the plain meaning of "containing" requires the plurality of pre-recorded signatures to be persistently stored in the local memory of the apparatus itself, distinguishing it from a device that merely accesses a remote database.

VI. Other Allegations

  • Indirect Infringement: The complaint alleges inducement against multiple defendants based on affirmative acts to encourage infringement. For instance, De Beers is accused of inducing its partners and customers by actively promoting the Tracr platform and training sales staff on its use, knowing it requires infringing scanning machines (Compl. ¶¶142, 170). BCG is accused of contributory infringement by manufacturing and selling its "IoT Boxes," which are alleged to be a material part of the invention with no substantial non-infringing use (Compl. ¶187).
  • Willful Infringement: The willfulness claim is based on alleged pre-suit knowledge and egregious conduct. The complaint contains a detailed narrative asserting that Plaintiff personally disclosed his invention and unpublished patent application to senior personnel at BCG and De Beers under a promise of confidentiality, and that the defendants then misappropriated the technology to build the accused Tracr platform (Compl. ¶¶47-59, 166). The complaint includes a screenshot of an online submission confirmation, corroborating an allegation that an anonymous whistleblower reported the alleged patent misappropriation to Defendant Anglo American (Compl. ¶77).

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

  • A central issue will be one of claim scope and patent eligibility: Given the § 101 invalidation of a parent patent, a primary question is whether the asserted claims—reciting a tangible "apparatus" with specific hardware like a "housing" and "spectral imaging camera"—are sufficiently concrete to be patent-eligible, and whether the largely software-driven accused platforms can be found to infringe these hardware-focused claims.
  • A key evidentiary question will be one of infringement architecture: Does the accused Tracr ecosystem rely on individual scanning machines that locally "contain" a database of signatures as required by the '261 patent's "apparatus" claim, or do they function as data-capture terminals for a centralized cloud platform, creating a potential mismatch with the claim language?
  • The case may also be heavily influenced by questions of inventorship and equity: The complaint's extensive narrative of alleged misappropriation and the separate counts to correct inventorship on De Beers' own patents frame the dispute beyond a technical infringement analysis. This raises crucial questions for the fact-finder regarding the origins of the Tracr technology and the defendants' state of mind, which are directly relevant to the claim of willful infringement.