DataWidget, LLC v

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: QuantumDigital, Inc. (Third-Party Plaintiff) (Texas)
  • Defendant: USADATA, Inc. (Third-Party Defendant) (New York)
  • Plaintiff’s Counsel: Jackson Walker LLP
• Case Identification: 6:20-cv-00672, W.D. Tex., 06/03/2021
• Venue Allegations: Venue is alleged to be proper based on USADATA being registered to do business in Texas, conducting substantial business in the state, and because a substantial part of the events giving rise to the complaint occurred in the district.
• Core Dispute: Third-Party Plaintiff QuantumDigital, the defendant in a patent infringement suit, alleges that its technology supplier, USADATA, is obligated to indemnify it against infringement claims because USADATA provided the accused technology.
• Technical Context: The technology concerns embeddable web widgets that allow an e-commerce website to sell filtered subsets of data (e.g., marketing leads) sourced from a remote, third-party database.
• Key Procedural History: The original patent infringement lawsuit was filed by DataWidget, LLC against QuantumDigital. This filing is a third-party complaint by QuantumDigital seeking indemnification from USADATA. The complaint notes that USADATA has also filed a separate declaratory judgment action against DataWidget in the District of Arizona regarding the same patent.

Case Timeline

Date	Event
2009-11-20	’557 Patent Priority Date
2011-07-18	QuantumDigital and USADATA enter into agreement for "Leads Module"
2018-10-16	’557 Patent Issue Date
2020-07-24	DataWidget sues QuantumDigital for infringement
2020-11-09	DataWidget files Amended Complaint against QuantumDigital
2020-12-14	DataWidget serves Preliminary Infringement Contentions
2021-03-26	USADATA files Declaratory Judgment action against DataWidget in Arizona
2021-06-03	QuantumDigital files Third-Party Complaint against USADATA

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

U.S. Patent No. 10,102,557 - System and method for selling customer-specific data subsets on a third-party website using a web widget, issued October 16, 2018

The Invention Explained

• Problem Addressed: The patent describes a situation where an e-commerce website (e.g., a "web-to-print" service) may wish to offer its customers access to large datasets, such as mailing lists, but is not in the business of maintaining such databases itself (’557 Patent, col. 3:37-46).
• The Patented Solution: The invention is a system architecture centered on a "data seller widget" embedded within the e-commerce vendor's website (’557 Patent, col. 1:31-35). This widget provides a user interface that communicates directly with a remote "data seller's" servers, allowing a customer to search, filter (e.g., by geography or demographics), and select a subset of data without leaving the e-commerce site (’557 Patent, Abstract; Fig. 1). The system is designed to allow the e-commerce vendor to act as a reseller, facilitating the purchase of the data subset as part of a larger transaction on its own site (’557 Patent, col. 3:41-46).
• Technical Importance: The technology provides a "plug-and-play" method for numerous e-commerce sites to integrate and resell data from a centralized, updated source without needing to host or manage the data locally (’557 Patent, col. 2:38-40, col. 2:26-32).

Key Claims at a Glance

• The complaint does not specify which claims are asserted. Independent claim 1 is analyzed here as a representative system claim.
• Essential Elements of Independent Claim 1:
  • An ecommerce vendor with an ecommerce server.
  • A data seller with a database server and a database.
  • A "data extraction widget" located on the ecommerce website.
  • A "first direct connection" between the widget and the ecommerce server.
  • A "second direct connection" between the widget and the database server, enabling a customer to extract a data subset.
  • A "third direct connection" between the database server and the ecommerce server for providing a sales price.
  • The widget provides the customer "direct access" to search and extract data.
  • The ecommerce vendor is configured to charge the customer for both the extracted data and its own "printing services" in a "single transaction."
• The complaint does not state whether dependent claims are asserted.

III. The Accused Instrumentality

Product Identification

The accused instrumentality is identified as QuantumDigital's "web-to-print solution" which incorporates an integrated component from USADATA known as the "Leads Module," "Plugin," or "data extraction widget" (Compl. ¶¶ 10, 14, 16).

Functionality and Market Context

The complaint alleges that QuantumDigital pays USADATA for the use of its "Leads Module" on QuantumDigital's website (Compl. ¶¶ 10-11). This module was allegedly "developed by USADATA and resides on USADATA's server(s)" (Compl. ¶15). The core functionality at issue is this module's role in providing access to USADATA's databases and servers (Compl. ¶14). QuantumDigital asserts that the infringement allegations made against it by DataWidget are "extensively based on" the functionality of this USADATA-provided technology and that without it, there would be no infringement claim (Compl. ¶¶ 14, 18).

IV. Analysis of Infringement Allegations

The third-party complaint does not contain detailed infringement allegations or a claim chart. It summarizes the infringement theory from the underlying lawsuit brought by DataWidget against QuantumDigital.

The narrative theory of infringement, as described in the complaint, is that QuantumDigital's system, by incorporating USADATA's "Leads Module," creates the three-part system claimed in the ’557 Patent (Compl. ¶16). In this arrangement, QuantumDigital is the "ecommerce vendor," USADATA is the "data seller," and the "Leads Module" is the "data extraction widget" (Compl. ¶¶14, 18). DataWidget's Preliminary Infringement Contentions allegedly identify the "Quantum Digital... web-to-print solution with USADATA... integration" as the infringing instrumentality (Compl. ¶16). The infringement claim appears to depend entirely on the "structure and functionality" of the technology supplied by USADATA (Compl. ¶18).

No probative visual evidence provided in complaint.

V. Key Claim Terms for Construction

"data extraction widget"

• Context and Importance: This term is central to the invention, and its construction will determine whether USADATA's "Leads Module" falls within the scope of the claims. The complaint repeatedly equates the accused "Leads Module" with the claimed "data extraction widget" (Compl. ¶¶14, 15).
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The specification defines "web widget" broadly as a "stand-alone application that can be embedded into a web page" and a "portable chunk of code" (’557 Patent, col. 4:38-41). This could support construing the term to cover a wide range of embedded software modules or plugins.
  • Evidence for a Narrower Interpretation: The patent also describes the widget as having specific lifecycle events, such as initialization with an "affiliate code" and a "dataset key" (’557 Patent, col. 6:18-49), and illustrates it with a GUI having specific tabs for "Geography" and "Demography" (’557 Patent, Figs. 3-5). A party could argue these features are required limitations.

"in a single transaction"

• Context and Importance: This limitation (from claim 1) connects the sale of the third-party data to the primary service of the e-commerce vendor. Whether QuantumDigital's checkout process, which incorporates the purchase of data via USADATA's module, constitutes a "single transaction" will be a key infringement question.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The patent describes a process where the host server places details of the data subset "in the user's shopping cart ready for checkout" along with other items, which suggests a standard, consolidated e-commerce checkout (’557 Patent, col. 7:13-16).
  • Evidence for a Narrower Interpretation: A party could argue the term implies a deeper technical integration, where the system must be configured to programmatically combine charges from two distinct commercial entities (the e-commerce vendor and the data seller) into a single, atomic financial event.

VI. Other Allegations

Indirect Infringement

The complaint alleges that in a separate lawsuit, USADATA itself averred that the original plaintiff, DataWidget, "allege[s] that USADATA contributes to and/or induces the infringement of the ’557 Patent" (Compl. ¶24). It also notes USADATA's acknowledgment that DataWidget alleges "USADATA customers that use the USADATA Plugin directly infringe the ’557 Patent" (Compl. ¶25). These allegations demonstrate that USADATA has knowledge of the patent and the ongoing infringement dispute.

Willful Infringement

The complaint does not mention a specific willfulness allegation from the underlying case. However, it establishes a factual basis that could support such a claim by alleging that QuantumDigital gave USADATA "timely notice" of the lawsuit and provided it with DataWidget's Preliminary Infringement Contentions (Compl. ¶¶ 19, 20). Furthermore, USADATA's own declaratory judgment action demonstrates its awareness of the patent and infringement allegations (Compl. ¶22).

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

• A primary issue raised by this specific complaint is one of commercial liability: Irrespective of the patent's validity or infringement, does the business agreement between QuantumDigital and USADATA—or equitable principles—obligate USADATA to defend and indemnify QuantumDigital against infringement claims arising from the very technology USADATA supplied?
• The core patent dispute will likely involve a question of divided infringement: The claimed system requires actions from three parties (customer, e-commerce vendor, data seller). A court will have to determine if the actions of QuantumDigital and USADATA are sufficiently directed or controlled by a single entity to constitute direct infringement, or if liability hinges on theories of indirect infringement, which require showing knowledge and intent.
• A central technical question will be one of functional and structural correspondence: Does USADATA's "Leads Module," as it operates within QuantumDigital's website, meet all the structural elements (e.g., the three "direct connections") and functional limitations (e.g., enabling a "single transaction" for both data and printing services) of the asserted claims in the ’557 Patent?