Transcend Shipping Systems LLC v. Hapag Lloyd America LLC

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Transcend Shipping Systems, LLC (Florida)
  • Defendant: Hapag-Lloyd AG (Germany) and Hapag-Lloyd (America) LLC (Delaware)
  • Plaintiff’s Counsel: Garteiser Honea, PLLC
• Case Identification: 6:20-cv-01195, W.D. Tex., 12/29/2020
• Venue Allegations: The complaint alleges venue is proper because Defendant Hapag-Lloyd AG is not a U.S. resident and can be sued in any judicial district. It further alleges that Defendant Hapag-Lloyd (America) LLC maintains an office in Texas and that both defendants conduct regular business in the state, with the cause of action arising from those contacts.
• Core Dispute: Plaintiff alleges that Defendant’s smart shipping containers, marketed as "Hapag-Lloyd LIVE," infringe five patents related to systems for tracking and monitoring shipment conveyance devices.
• Technical Context: The technology involves equipping shipping containers with GPS, sensors, and communication hardware to provide real-time location and environmental data, which is a significant feature for modern logistics and supply chain management.
• Key Procedural History: The complaint asserts that the patents are "pioneering" and have been cited as relevant prior art in over 130 subsequent U.S. patent applications by major technology and logistics companies. The complaint also notes that U.S. Patent No. 7,253,731 expired for nonpayment of maintenance fees but asserts that it remains enforceable for past damages.

Case Timeline

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

U.S. Patent No. 10,181,109 - "Apparatus and Method for Providing Shipment Information"

The Invention Explained

• Problem Addressed: The patent’s background section describes the limited means available for senders, carriers, or receivers to obtain timely information regarding shipments in transit, noting that "tremendous value can be found" in making such information accessible while a shipment is in progress (’109 Patent, col. 1:40-63).
• The Patented Solution: The invention is an apparatus integrated with a "shipment conveyance device," such as a shipping container, that provides autonomous, real-time reporting (’109 Patent, Abstract). The apparatus includes a GPS to determine its location, a receiver to automatically accept requests for information, a processor to generate a "message" containing location data in response to an event or a request, and a transmitter to send that message to an authorized party (’109 Patent, Fig. 1; Abstract).
• Technical Importance: This technology represents a shift toward providing automated, real-time supply chain visibility at the individual container level, moving beyond the limitations of periodic manual tracking or carrier-level updates (Compl. ¶20).

Key Claims at a Glance

• The complaint asserts independent claim 1 and dependent claims 8, 10, 13, and 14 (Compl. ¶47).
• The essential elements of independent claim 1 are:
  • An apparatus comprising a "shipment conveyance device" (shipping container, pallet, or luggage).
  • A "receiver".
  • A "global positioning device" located on the conveyance device to determine its position.
  • A "processor" that generates a "message" with position information in response to an event or a "request for information", where the request is "automatically received by the receiver".
  • A "transmitter" that sends the message to a communication device associated with an authorized owner or individual.

U.S. Patent No. 9,847,029 - "Apparatus and Method for Providing Shipment Information"

The Invention Explained

• Problem Addressed: Like its family members, the patent addresses the general need for real-time shipment information (’029 Patent, col. 1:40-63).
• The Patented Solution: This patent claims an apparatus on a conveyance device that integrates environmental sensors with location tracking (’029 Patent, Abstract). The processor generates a message that includes not only location data from a GPS but also information regarding the "occurrence of an event," such as a change in "a status of a shipment," "a temperature," or an "impact or force on the shipment conveyance device" (’029 Patent, Abstract; col. 3:39-44).
• Technical Importance: The integration of environmental sensing with location tracking allows for monitoring the condition of cargo, which is particularly important for temperature-sensitive goods (e.g., refrigerated pharmaceuticals) or fragile items (Compl. ¶20).

Key Claims at a Glance

• The complaint asserts claims 2, 12, 15, 18, and 19 (Compl. ¶64). Since claim 2 is dependent, independent claim 1 is implicitly at issue.
• The essential elements of independent claim 1 are:
  • An apparatus comprising a "shipment conveyance device" (shipping container, pallet, or luggage).
  • A "global positioning device" located on the conveyance device to determine its position.
  • A "processor" that processes information and generates a "message" containing position information and information regarding an event, such as a "status of a shipment", a "temperature", or an "impact or force".
  • A "transmitter" that transmits the message to a "communication device".

U.S. Patent No. 7,482,920 - "Apparatus and Method for Providing Shipment Information"

• Technology Synopsis: This patent describes an apparatus on a shipping container featuring a memory device for storing detailed shipment information (e.g., description of goods, sender/receiver info, handling instructions) (’920 Patent, Abstract). This stored data is combined with dynamically generated information, such as GPS location and event-based data, which is then processed and transmitted (’920 Patent, col. 12:2-20).
• Asserted Claims: Independent claims 1 and 9 are asserted (Compl. ¶80).
• Accused Features: The complaint alleges that Defendant's smart containers, equipped with Globe Tracker units, have a memory device that stores shipment data, which is combined with real-time GPS and sensor data for reporting to customers (Compl. ¶¶84-86).

U.S. Patent No. 10,796,268 - "Apparatus and Method for Providing Shipment Information"

• Technology Synopsis: This patent claims an apparatus on a conveyance device with a processor that generates a message containing information about the shipment itself in response to a request that is automatically received by a receiver (’268 Patent, Abstract). The apparatus then transmits this message to a communication device associated with an authorized owner or individual.
• Asserted Claims: Independent claim 1 is asserted (Compl. ¶99).
• Accused Features: The complaint alleges the accused Globe Tracker units include a processor that generates messages with shipment information in response to automated requests and transmits them to Defendant’s customers (Compl. ¶¶102, 104, 105).

U.S. Patent No. 7,253,731 - "Apparatus and Method for Providing Shipment Information"

• Technology Synopsis: As an early patent in the asserted family, this invention describes a foundational apparatus on a shipping container combining a memory device for storing shipment information, a GPS for location, a processing device for generating event-based messages (e.g., temperature, impact), and a transmitter (’731 Patent, Abstract). It establishes the core combination of onboard storage, sensing, processing, and communication for shipment monitoring.
• Asserted Claims: Independent claim 1 is asserted (Compl. ¶115).
• Accused Features: The accused smart containers are alleged to embody the claimed combination of features, including memory, GPS, processing of sensor data, and transmission of alerts to customers (Compl. ¶¶118, 119, 121).

III. The Accused Instrumentality

Product Identification

• The accused instrumentalities are Defendant's "smart containers," including "Reefer Cargo, Dry Cargo and/or Special Cargo," which are equipped with "Globe Tracker (GT) Communications Units" (Compl. ¶43). The associated service is marketed to customers as "Hapag-Lloyd LIVE" (Compl. ¶51).

Functionality and Market Context

• The smart containers are fitted with GT Sense Devices and GT Wireless Peripheral devices, which include a GPS for location tracking and various sensors for monitoring environmental conditions (Compl. ¶¶51, 54). The complaint provides a screenshot from Globe Tracker's website showing the "GT Sense Device" and noting its "Global cellular connectivity with a built in IoT wireless sensor gateway," which stores data when connectivity is unavailable and transmits it when restored (Compl. p. 27, Fig. 16). The system is alleged to monitor temperature, shock, humidity, door status, and motion, and to transmit alerts regarding these conditions or events like route deviations to a customer-facing dashboard or portal (Compl. ¶¶52, 54, 56). Defendant is reportedly outfitting its entire reefer fleet of approximately 100,000 containers with this technology as part of a corporate strategy to enhance supply chain transparency (Compl. p. 23, Fig. 12).

IV. Analysis of Infringement Allegations

10,181,109 Infringement Allegations

• Identified Points of Contention:
  • Scope Questions: A central issue may be the claim limitation "wherein the request for information is automatically received by the receiver." The complaint's allegations focus heavily on event-triggered reporting (e.g., alerts for temperature deviation), which is an alternative basis for generating a message under the claim ("in response to an occurrence of the event OR in response to a request"). It raises the question of whether the accused system's functionality meets the specific "request for information" pathway as claimed.
  • Technical Questions: What evidence does the complaint provide that the "processor" on the container itself generates the message, as opposed to transmitting raw data to a remote server which then generates the customer-facing alert? The distribution of processing between the onboard device and a back-end system will be a key factual question.

9,847,029 Infringement Allegations

• Identified Points of Contention:
  • Evidentiary Questions: The complaint alleges that the generated "message" contains information regarding temperature, impact, or force. A key factual question will be what specific data is contained in the electronic transmissions from the GT unit and whether it maps directly onto these claim limitations. The complaint provides screenshots of the user interface showing temperature profiles, which may support the allegation that temperature data is transmitted (Compl. p. 30, Fig. 18).
  • Technical Questions: Similar to the '109 patent, the analysis may focus on whether the onboard processor generates a message containing this specific event information, or if it merely transmits raw sensor data for processing and alert generation by a remote system.

V. Key Claim Terms for Construction

The Term: "processor which generates a message in response to an occurrence of the event" (’109 Patent, Claim 1)

• Context and Importance: This term is central to the infringement theory for all asserted patents. Its construction will determine whether the accused system’s architecture infringes. Practitioners may focus on this term because a key dispute could be whether the "processor" on the shipping container itself performs the claimed function, or if it merely acts as a data logger and transmitter, with the legally significant "message" being generated by Defendant's remote servers.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The patent specification describes the "shipment conveyance device computer" as being able to "provide and/or perform any of the processing routines or functionality described herein" (’109 Patent, col. 11:8-11), which could support a view that the onboard unit is capable of the full claimed function.
  • Evidence for a Narrower Interpretation: The claim requires the processor to generate the message. If the processor only forwards raw data (e.g., a GPS coordinate and a temperature reading) and a remote server composes the actual customer-facing alert, Defendant may argue that the claimed function is not performed by the processor on the device.

The Term: "automatically received by the receiver" (’109 Patent, Claim 1)

• Context and Importance: This limitation defines one of the two triggers for message generation in the '109 patent. The complaint alleges the accused system responds to events or requests (Compl. ¶52), but the provided evidence focuses more on event-triggered alerts. The meaning of a "request" being "automatically received" will be critical to proving infringement under this clause.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The patent abstract states the processor generates a message "in response to a request for information...wherein the request for information is automatically received by the receiver." This broad language could be read to cover any electronic request that is processed without manual intervention at the device itself, such as a customer clicking "refresh" on a web portal.
  • Evidence for a Narrower Interpretation: The term could be construed to require a machine-to-machine, non-ad-hoc process, such as a pre-scheduled electronic poll from a central server, which may not describe a customer initiating a data pull from a web interface. The specification does not provide specific examples to resolve this ambiguity.

VI. Other Allegations

• Indirect Infringement: The complaint alleges inducement of infringement by encouraging customers to use the accused systems in a manner that results in infringement and by providing technical support for their use (Compl. ¶¶48-49, 65-66).
• Willful Infringement: Willfulness is alleged based on notice of the patents occurring no later than the date of service of the complaint (Compl. ¶¶58, 74). The complaint also pleads willful blindness, alleging that Defendants have a policy or practice of not reviewing the patents of others to assess infringement (Compl. ¶¶59, 75).

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

• A core issue will be one of system architecture: does the "processor" located on the accused smart containers perform the claimed function of "generat[ing] a message in response to" an event, or does it transmit raw sensor and location data to a remote server where the legally operative "message" is constructed and formatted for the customer?
• A key question of claim scope will be whether a customer-initiated data request via a web portal satisfies the '109 patent's limitation of a "request for information [that] is automatically received by the receiver," particularly if the factual record shows that the primary function of the accused system is event-triggered alerting.
• An evidentiary question will be one of functional proof: what specific data do the accused devices transmit, and does that data contain the discrete "information regarding...a temperature, or an impact or force" as required by claims of the '029 patent, or merely raw sensor readings that are interpreted elsewhere?