DCT
1:20-cv-00814
PayPal, Inc. vs RetailMeNot, Inc
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: PayPal, Inc. (Delaware)
- Defendant: RetailMeNot, Inc. (Delaware)
- Plaintiff’s Counsel: Fish & Richardson P.C.
- Case Identification: 6:20-cv-00339, W.D. Tex., 04/28/2020
- Venue Allegations: Venue is alleged to be proper in the Western District of Texas because Defendant RetailMeNot has a regular and established place of business in the district, which serves as its headquarters and decision-making hub, and where it employs hundreds of people.
- Core Dispute: Plaintiff alleges that Defendant’s website, mobile application, and browser extension infringe seven patents related to e-commerce technologies, including location-based services, data pre-fetching, and dynamic web page modification.
- Technical Context: The patents-in-suit cover technologies designed to enhance the online and mobile shopping experience by making it faster, more interactive, and contextually relevant to a user's physical location.
- Key Procedural History: The complaint notes that Defendant RetailMeNot is separately pursuing a patent infringement lawsuit against Honey Science Corp., a company recently acquired by Plaintiff PayPal. It also states that the parties had a prior business relationship in which RetailMeNot was a customer of PayPal.
Case Timeline
| Date | Event |
|---|---|
| 2000-03-30 | Earliest Priority Date ('961 & '937 Patents) |
| 2000-06-26 | Earliest Priority Date ('514 & '153 Patents) |
| 2005-05-27 | Earliest Priority Date ('923 & '248 Patents) |
| 2005-07-12 | Issue Date ('961 Patent) |
| 2006-02-22 | Priority Date ('905 Patent) |
| 2010-02-09 | Issue Date ('905 Patent) |
| 2010-04-06 | Issue Date ('937 Patent) |
| 2014-12-09 | Issue Date ('248 Patent) |
| 2015-06-09 | Issue Date ('514 Patent) |
| 2015-07-14 | Issue Date ('153 Patent) |
| 2017-05-16 | Issue Date ('923 Patent) |
| 2019-11-01 | Alleged "Near Me" feature configured on Mobile App (approx.) |
| 2020-04-28 | Complaint Filing Date |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 9,654,923 - "Location-Based Services"
- Issued: May 16, 2017
The Invention Explained
- Problem Addressed: The patent family addresses the need for improved systems for using location-based information on portable electronic devices to provide a variety of services to users ('248 Patent, col. 1:39-42).
- The Patented Solution: The invention is a method implemented on a mobile device where an application receives data defining a "geofence" (a virtual geographic boundary). The device monitors its own location, and upon determining it is inside the geofence, it alters its state by adding a user-interface element that is unavailable when the device is outside the geofence ('923 Patent, Abstract). The specification of the parent '248 patent provides examples of how an adaptable user interface can change menu items or other information based on location ('248 Patent, col. 2:1-17).
- Technical Importance: This technology allows mobile applications to become context-aware, presenting users with features, promotions, or information that are specifically relevant to their immediate physical surroundings.
Key Claims at a Glance
- The complaint asserts independent claim 1 (Compl. ¶49).
- The essential elements of Claim 1 are:
- A computer-implemented method executing on a mobile device.
- Executing an application that causes a user interface to be displayed.
- Receiving data defining a geofence over a network.
- Monitoring the mobile device's current location via sensors.
- Comparing the current location with the geofence boundaries.
- Determining that the current location is within the geofence.
- In response, altering the application's state by adding a user-interface element to the user interface, where this element is unavailable outside of the geofence.
- The complaint reserves the right to assert other claims by alleging infringement of "at least claim 1" (Compl. ¶48).
U.S. Patent No. 8,909,248 - "Location-Based Services"
- Issued: December 9, 2014
The Invention Explained
- Problem Addressed: The patent describes a need for improved ways to use location-based information to automate services and alerts on portable devices ('248 Patent, col. 1:39-42).
- The Patented Solution: The invention is a method for linking a "task" to a physical location on a mobile device. The method involves receiving a task, associating it with a location, and then automatically generating a geofence around that location. The device then tracks its position relative to this geofence and generates an alert related to the task when the device enters the geofenced area ('248 Patent, Abstract).
- Technical Importance: This approach automates location-based reminders and notifications by programmatically linking an action or piece of information (a "task") to a specific geographic area.
Key Claims at a Glance
- The complaint asserts independent claim 1 (Compl. ¶60).
- The essential elements of Claim 1 are:
- A method comprising receiving a task on a mobile device.
- Associating the task with a physical location using the mobile device.
- Automatically generating a geofence on the mobile device around the physical location.
- Tracking the current location of the mobile device relative to the geofence.
- Generating an alert associated with the task when the current location is within the geofence.
- The complaint reserves the right to assert other claims by alleging infringement of "at least claim 1" (Compl. ¶59).
U.S. Patent No. 7,659,905 - "Method and System to Pre-fetch Data in a Network"
- Technology Synopsis: The patent addresses network latency by pre-fetching data for web pages that a user is likely to navigate to next. Based on observed user navigation, the system transmits data for a subsequent page to the user's device and stores it in memory before the user explicitly requests that page, thereby speeding up the browsing experience ('905 Patent, Abstract).
- Asserted Claims: Independent claim 6 is asserted (Compl. ¶71).
- Accused Features: The RetailMeNot Website is accused of pre-fetching data, such as search results for pages 2 and 3, even while the user is still viewing page 1 (Compl. ¶¶72-73). The complaint includes a screenshot of network traffic analysis allegedly showing scripts being pre-fetched (Compl. p. 29).
U.S. Patent No. 6,917,961 - "Evolving Interactive Dialog Box for an Internet Web Page"
- Technology Synopsis: The technology aims to improve user interaction on a web page by avoiding full page reloads. It describes a method where a web page contains a first dialog box for data entry; upon user submission, this box is replaced by a second dialog box containing response data, all without changing or reloading the remainder of the web page ('961 Patent, Abstract).
- Asserted Claims: Independent claim 1 is asserted (Compl. ¶82).
- Accused Features: The RetailMeNot Website's "Cash Back" and "Send As" features are accused of using this method by collecting user data in a dialog box and then displaying a confirmation message in the same box without a page reload (Compl. ¶¶83-84).
U.S. Patent No. 7,693,937 - "System and Method for Modifying Display Components in an Internet Web Page Without Changing the Remainder of the Web Page"
- Technology Synopsis: Similar to the '961 Patent, this invention describes a method for changing the content of a "displayable component" (a browser-readable code component) on a web page in response to user input. The change occurs without reloading the rest of the page or redirecting the browser, allowing the updated component to be displayed concurrently with the unchanged remainder of the page ('937 Patent, Abstract).
- Asserted Claims: Independent claim 1 is asserted (Compl. ¶93).
- Accused Features: The same "Cash Back" and "Send As" features of the RetailMeNot Website are accused, alleging they use a displayable component that is modified in place after user input (Compl. ¶¶94-95).
U.S. Patent No. 9,053,514 - "System Supporting Promotion Browsing and Searching"
- Technology Synopsis: The patent describes a multi-party promotion system connecting buyers and sellers. The system includes a seller interface for multiple sellers to register promotions and a buyer interface that allows a buyer to browse and search the aggregated promotions. The system is capable of converting promotion data from different sellers into a local configuration ('514 Patent, Abstract).
- Asserted Claims: Independent claim 1 is asserted (Compl. ¶105).
- Accused Features: The RetailMeNot platform is accused of being an infringing system because it provides interfaces for sellers and affiliate networks to submit promotions and a buyer interface (website, app) for users to browse and search those aggregated promotions (Compl. ¶¶106-110).
U.S. Patent No. 9,082,153 - "Web Search and Promotion Search Engine Integration"
- Technology Synopsis: This patent details a searching system where a central server accesses product and promotion information from multiple, disparately configured seller computers. The server system converts this information to a local configuration and delivers selected data to a buyer's computer in response to a query. The data is described as including promotional and service charge amounts ('153 Patent, Abstract).
- Asserted Claims: Independent claim 1 is asserted (Compl. ¶119).
- Accused Features: The RetailMeNot search system is accused of infringing by coupling to seller and affiliate network computers, accessing promotion data in different formats, converting it to a uniform format, and using it to respond to buyer queries (Compl. ¶¶120-127).
III. The Accused Instrumentality
Product Identification
- The accused instrumentalities are the RetailMeNot Website (www.retailmenot.com), the RetailMeNot Mobile Application, and the RetailMeNot Browser Extension (also known as "Deal Finder" or "Genie") (Compl. ¶33).
Functionality and Market Context
- The complaint alleges that these three products are supported by a backend system that aggregates digital offers such as coupon codes, discounts, and cash back offers from merchants and third-party affiliate networks (Compl. ¶¶32, 34). The Website and Mobile Application are alleged to provide location-based services through a "Near Me" feature, which displays promotions on a map interface based on the user's geographic location (Compl. ¶¶37, 42-43). The complaint presents a screenshot from the RetailMeNot website showing the "Near Me" feature displaying deals on a map of New York City (Compl. p. 13). The Browser Extension is described as a tool that automatically finds and applies coupon codes and cash back offers during the checkout process on a retailer's website (Compl. ¶44).
IV. Analysis of Infringement Allegations
'923 Patent Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| A computer-implemented method executing on a mobile device, the method comprising: executing an application at the mobile device, the application causing display of a user interface at the mobile device; | The RetailMeNot Mobile Application and Website execute on a mobile device and display a user interface. | ¶50 | col. 10:1-12 |
| receiving, electronically over a network on the mobile device, data defining a geofence; | The application receives data defining geographic areas associated with location-based notifications. | ¶50 | col. 10:13-15 |
| monitoring, via sensors on the mobile device, a current location of the mobile device; and | The application monitors the current location of the mobile device via its sensors. | ¶50 | col. 10:16-18 |
| comparing the current location of the mobile device with boundaries of the geofence; determining, based on the comparing, that the current location of the mobile device is within the geofence; | The application compares the device's location to the geofence boundaries to determine when it is inside. | ¶50 | col. 10:19-23 |
| in accordance with determining that the current location is within the geofence, altering a state of the application on the mobile device, wherein the altering the state of the application includes adding a user-interface element to the user interface, the user interface element unavailable outside of the geofence... | When the device is determined to be within a geofence, the application outputs location-based notifications or displays interface elements (e.g., promotions in the "Near Me" feature) that are allegedly unavailable outside of that geographic area. | ¶50-51 | col. 10:24-32 |
'248 Patent Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| A method comprising: receiving a task on a mobile device; | The RetailMeNot Mobile Application and Website are configured to receive a task, which the complaint equates to a location-based notification or promotion. | ¶61 | col. 15:1-2 |
| associating, using the mobile device, the task with a physical location; | The task (the notification/promotion) is associated with a physical location, such as a merchant's store. | ¶61 | col. 15:3-4 |
| generating, automatically on the mobile device, a geofence around the physical location associated with the task; | The application automatically generates a geofence around the physical location associated with the promotion. | ¶61 | col. 15:5-7 |
| tracking a current location of the mobile device relative to the geofence; and | The application tracks the mobile device's location relative to the geofence. | ¶61 | col. 15:8-9 |
| generating an alert associated with the task when the current location is within the geofence. | The application generates an alert (the notification) when the device enters the geofence. The complaint references a marketing page describing RetailMeNot's geofencing capabilities (Compl. p. 25). | ¶61-62 | col. 15:10-12 |
Identified Points of Contention
- Scope Questions: For both the '923 and '248 patents, a central issue may be whether the commercial promotions and notifications delivered by the accused products fall within the scope of the patent claims. The defense may argue that the term "task" in the '248 Patent implies a user-defined action (e.g., a to-do list item) rather than a passively received advertisement. Similarly, for the '923 Patent, a question may arise as to whether the promotions shown in the "Near Me" feature constitute a "user-interface element unavailable outside of the geofence," or if the underlying interface element (e.g., the map) is always available but is simply populated with different data depending on location.
- Technical Questions: A key technical question will be what evidence the complaint provides that the accused applications perform the claimed steps "on the mobile device," as required by the claims of both patents. For instance, it raises the question of whether the geofence is generated and the location comparison is performed on the device itself, as claimed, or on a remote server.
V. Key Claim Terms for Construction
The Term: "task" ('248 Patent, Claim 1)
- Context and Importance: The infringement allegation for the '248 patent hinges on construing a location-based notification or promotion as a "task." Practitioners may focus on this term because its definition will determine whether the patent applies to location-based advertising or is limited to more specific, user-directed functions like location-based reminders.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The specification discusses a wide range of "location-based services," including providing information that may be commercial in nature ('248 Patent, col. 1:19-21). A "stop report" is described as a potential output, which is a system-generated piece of information rather than a user-created to-do item, suggesting "task" is not limited to user-initiated actions ('248 Patent, col. 15:5-15).
- Evidence for a Narrower Interpretation: The claim language "receiving a task on a mobile device" and "associating...the task with a physical location" could suggest an active process more akin to a user setting a reminder (e.g., "remind me to buy milk when I am near the grocery store") than passively receiving a coupon. The specification also mentions user orders, which supports an interpretation of a user-defined action ('248 Patent, col. 16:1-12).
The Term: "user-interface element unavailable outside of the geofence" ('923 Patent, Claim 1)
- Context and Importance: Infringement of the '923 patent requires that the UI element added upon entering a geofence be "unavailable" outside of it. The dispute will likely center on whether displaying location-specific deals on a map that is otherwise always accessible meets this "unavailable" limitation.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The parent '248 patent describes an "adaptable user interface" where the output version of information may change, including changing "at least one menu item" ('248 Patent, col. 2:6-17). This suggests that a change in the content or options of a UI element could meet the limitation, not just the appearance or disappearance of the entire element.
- Evidence for a Narrower Interpretation: The plain meaning of "unavailable" could be construed to mean that the UI element itself, not just its content, cannot be accessed or displayed when outside the geofence. The figures in the patent family primarily show high-level block diagrams, providing limited specific examples of what constitutes an "unavailable" element in an actual UI.
VI. Other Allegations
Indirect Infringement
- The complaint alleges induced infringement for all seven patents. The allegations are based on RetailMeNot providing instructions, manuals, and technical support for its products, as well as using its social media pages, to encourage end-users and others to perform the infringing acts (e.g., Compl. ¶¶ 52, 63, 74).
Willful Infringement
- Willfulness is alleged for all seven patents. The complaint alleges that RetailMeNot knew of the patents' existence while committing the infringing acts, based on both constructive notice via PayPal's virtual patent marking webpage and actual notice upon service of the complaint (e.g., Compl. ¶¶ 53-54, 64-65).
VII. Analyst’s Conclusion: Key Questions for the Case
- A core issue will be one of definitional scope: Can terms rooted in the patents' technical context, such as "task" ('248 Patent), be construed to cover the general-purpose promotional alerts and notifications of the accused mobile application, or is there a fundamental mismatch in the intended meaning?
- A second key issue will be one of technical implementation: For the location-based patents ('923 and '248), a central question will be whether the accused mobile application performs the claimed steps of generating a geofence and comparing location "on the mobile device," as required by the claims, or whether these functions are performed by a remote server.
- A third evidentiary question will concern the system architecture patents ('514 and '153): Does RetailMeNot's system, which aggregates promotions from merchants and various third-party affiliate networks, meet the specific claim limitations of a "seller interface" and data "conversion" as described in the patents, or does its reliance on a diverse, federated network of partners place its architecture outside the claim scope?