DCT

6:22-cv-01037

Alto Dynamics LLC v. Stockx LLC

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I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 6:22-cv-01037, W.D. Tex., 10/05/2022
  • Venue Allegations: Plaintiff alleges venue is proper because Defendant has maintained established and regular places of business in the Western District of Texas, including facilities in San Antonio, Austin, and Dallas, and has committed acts of patent infringement within the District.
  • Core Dispute: Plaintiff alleges that Defendant’s online e-commerce platform and associated mobile applications infringe nine U.S. patents related to foundational web technologies, including database searching, user activity monitoring, stateless authentication, automatic data extraction, and targeted online advertising.
  • Technical Context: The technologies at issue relate to core functionalities of modern e-commerce websites and online marketplaces, governing how users search for products, how their activity is tracked for personalization, and how secure access is managed.
  • Key Procedural History: The complaint does not mention any prior litigation, Inter Partes Review (IPR) proceedings, or licensing history related to the asserted patents.

Case Timeline

Date Event
2000-02-09 Priority Date for U.S. Patent No. 6,604,100
2000-08-21 Priority Date for U.S. Patent No. 6,757,662
2001-03-20 Priority Date for U.S. Patent No. 6,662,190
2001-04-19 Priority Date for U.S. Patent No. RE46,513
2002-04-02 Priority Date for U.S. Patent No. 6,691,103
2002-12-18 Priority Date for U.S. Patent No. 7,152,018
2003-08-05 U.S. Patent No. 6,604,100 Issued
2003-12-09 U.S. Patent No. 6,662,190 Issued
2004-02-10 U.S. Patent No. 6,691,103 Issued
2004-06-29 U.S. Patent No. 6,757,662 Issued
2006-01-05 Priority Date for U.S. Patent No. 7,657,531
2006-11-07 Priority Date for U.S. Patent No. 7,392,160
2006-12-19 U.S. Patent No. 7,152,018 Issued
2008-06-24 U.S. Patent No. 7,392,160 Issued
2010-01-21 Priority Date for U.S. Patent No. 8,051,098
2010-02-02 U.S. Patent No. 7,657,531 Issued
2011-11-01 U.S. Patent No. 8,051,098 Issued
2017-08-15 U.S. Patent No. RE46,513 Issued
2018-01-01 Defendant allegedly began doing business in Texas (approx.)
2022-08-23 Alleged date of first indirect infringement for several patents
2022-10-05 Complaint Filing Date

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

U.S. Patent No. 6,691,103 - "Method For Searching A Database, Search Engine System For Searching A Database, And Method Of Providing A Key Table For Use By A Search Engine For A Database"

The Invention Explained

  • Problem Addressed: The patent describes the technical challenge of efficiently searching large relational databases, such as name-and-address databases, where search terms may not be exact or complete, noting that conventional "distance-based" approaches can be computationally intensive and slow (U.S. Patent No. 6,691,103, col. 1:16-22, 1:32-48).
  • The Patented Solution: The invention proposes a method to improve search efficiency by first ordering the multiple elements of a user's search query based on the "expected size of the corresponding search results." The system then executes the search by first using the most restrictive criterion (the one expected to return the smallest set of results) to narrow the dataset before applying the other, broader search elements (U.S. Patent No. 6,691,103, col. 2:40-58). This sequence aims to reduce the computational load of subsequent search operations.
  • Technical Importance: This approach seeks to improve the speed of complex database queries with inexact terms by leveraging the structure of indexed relational databases in a more efficient sequence than a standard multi-part query might otherwise achieve (U.S. Patent No. 6,691,103, col. 2:26-31).

Key Claims at a Glance

  • The complaint asserts independent claim 1 (Compl. ¶27).
  • The essential elements of claim 1 include:
    • Receiving a search criteria including a plurality of search elements corresponding to record elements of a database.
    • Ordering the search elements based upon an expected size of the corresponding search results from the database.
    • Searching the database with a first search element, which is expected to provide a first group of search results.
    • Searching the database with a second search element after the first search, where the second element is expected to provide a second group of search results that is larger than the first group.
  • The complaint does not explicitly reserve the right to assert dependent claims for this patent.

U.S. Patent No. 7,392,160 - "System And Method For Monitoring Usage Patterns"

The Invention Explained

  • Problem Addressed: The patent addresses the challenge of monitoring user activity and maintaining user-specific information (a "profile") in a client-server environment, such as the internet, where the communication protocol (e.g., HTTP) is inherently "stateless," meaning the server does not retain information about a user from one request to the next (U.S. Patent No. 7,152,018, col. 1:24-34).
  • The Patented Solution: The invention describes a method using a "state object" (akin to a web cookie) that contains a profile of the user's usage. This object is stored on the client's machine. With each subsequent user interaction, the state object is passed to the central server, which can then modify the profile to reflect the new interaction and pass the updated object back to the client. The server can also "audit" the profile to analyze user behavior and deliver personalized services or information (U.S. Patent No. 7,392,160, Abstract).
  • Technical Importance: This client-side state management technique enables personalization and user tracking in stateless environments without requiring the server to store and manage session data for every user, thereby reducing server-side resource requirements (U.S. Patent No. 7,152,018, col. 1:35-47).

Key Claims at a Glance

  • The complaint asserts independent claim 1 (Compl. ¶37).
  • The essential elements of claim 1 include:
    • Providing at least one state object that includes a profile representative of user usage.
    • Storing the state object at a client location.
    • Passing the state object to a central server with each subsequent interaction.
    • Receiving the state object back from the central server, wherein the profile is modified to reflect the interaction.
    • The central server auditing the passed state object and performing analysis on the profile to direct services or information to the client location.
  • The complaint does not explicitly reserve the right to assert dependent claims for this patent.

U.S. Patent No. 8,051,098 - "Systems And Methods For State-Less Authentication"

  • Technology Synopsis: This patent describes a method for authenticating a user to access multiple resources without requiring repeated authorization communications. It involves establishing a temporary secure session to verify logon information and then generating a "security context" unique to the user, which is then used for subsequent access requests without needing to contact the original logon component again (Compl. ¶52, ¶56).
  • Asserted Claims: At least claim 1 is asserted (Compl. ¶55).
  • Accused Features: The accused features are Defendant's "secure communication sessions between user computing device and a logon component on its online sales platform" for user authentication (Compl. ¶54, ¶56).

U.S. Reissue Patent No. RE46,513 - "Systems and Methods For State-Less Authentication"

  • Technology Synopsis: This patent, a reissue of U.S. Patent No. 7,020,645, also relates to stateless authentication. It describes generating a "security context" containing a plaintext header (with an ID, key handle, and algorithm identifier) and an encrypted body. This context is provided to the user and sent back to the processing system with a resource access request (Compl. ¶63, ¶67).
  • Asserted Claims: At least claim 16 is asserted (Compl. ¶66).
  • Accused Features: The accused features are Defendant's user authentication processes, including the use of "user login processes and secured sessions" to enable access to resources (Compl. ¶65, ¶67).

U.S. Patent No. 6,662,190 - "Learning Automatic Data Extraction System"

  • Technology Synopsis: The patent discloses a method for automatically extracting data from a text file into a structured record file. The method involves parsing an "area of interest" in a text file, identifying values that match a known vocabulary, forming a record with those values, and then "gleaning" a second set of values from the list that do not match the vocabulary and adding them to the record, thereby learning new values (U.S. Patent No. 6,662,190, Abstract; Compl. ¶85).
  • Asserted Claims: At least claim 1 is asserted (Compl. ¶84).
  • Accused Features: The accused features include the text mining capabilities used in Defendant's resume uploading feature (Compl. ¶83, ¶85).

U.S. Patent No. 7,152,018 - "System And Method For Monitoring Usage Patterns"

  • Technology Synopsis: Similar to the '160 Patent, this patent describes monitoring user usage patterns via a client-side state object. A distinction is that the profile modification is performed by "one of one or more scripts" or programs executed at the client location, which "preclud[es] manipulation of the profile by the server" (Compl. ¶96).
  • Asserted Claims: At least claim 1 is asserted (Compl. ¶95).
  • Accused Features: The accused feature is Defendant's use of cookies to track user activities and preferences on its online sales platform (Compl. ¶94, ¶96).

U.S. Patent No. 7,657,531 - "Systems And Methods For State-Less Authentication"

  • Technology Synopsis: This patent describes a method for renewing an expiring security context. It involves receiving the context and a renewal request, verifying their validity, comparing the expiration time to the current time, and generating an updated security context if the user's identity and authorization are verified against stored information (Compl. ¶110, ¶114).
  • Asserted Claims: At least claim 1 is asserted (Compl. ¶113).
  • Accused Features: The accused features are Defendant's "secure communication sessions between user computing device and a logon component on its online sales platform" (Compl. ¶112, ¶114).

U.S. Patent No. 6,757,662 - "Method And System For Display Advertisement Qualification And Notification"

  • Technology Synopsis: The patent discloses a method for providing targeted advertisements. An advertisement is triggered if a user's request contains a relevant "part identification" and the user is associated with a "pre-determined desired group" but not a "pre-determined no-show group" (Compl. ¶121, ¶125).
  • Asserted Claims: At least claim 1 is asserted (Compl. ¶124).
  • Accused Features: The accused features are the functionalities on the StockX platform that display "customized advertisements and electronic product placement" (Compl. ¶123, ¶125).

U.S. Patent No. 6,604,100 - "Method for converting relational data into a structured document"

  • Technology Synopsis: This patent describes a method for converting data from a relational database into a structured document (e.g., XML). The process involves storing a "view query" that defines the structured view, receiving a user query against that view, composing them into an executable query, and then executing it to generate the structured document (U.S. Patent No. 6,604,100, Abstract; Compl. ¶136).
  • Asserted Claims: At least claim 1 is asserted (Compl. ¶135).
  • Accused Features: The accused features are Defendant's "database searching and viewing capabilities" (Compl. ¶136).

III. The Accused Instrumentality

Product Identification

  • The Accused Instrumentalities are identified as the website https://stockx.com/, its associated mobile applications, and the related hardware and software that provide their functionality (Compl. ¶17).

Functionality and Market Context

  • The complaint alleges the Accused Instrumentalities constitute an online sales platform that allows users to search, view, and purchase items (Compl. ¶17). Key technical functions identified include tracking user activities and preferences through mechanisms like cookies, providing website and user authentication via login processes, delivering customized advertisements, and offering users a browsing history. The complaint references a screenshot of the search experience on the platform. (Compl. ¶17, Ex. O). It also references a screenshot of the login process, which relates to the user authentication functionality. (Compl. ¶17, Ex. M). The complaint does not contain allegations regarding the specific market share or commercial positioning of the platform beyond its general function as an "online sales platform" (Compl. ¶17, ¶36).

IV. Analysis of Infringement Allegations

U.S. Patent No. 6,691,103 Infringement Allegations

Claim Element (from Independent Claim 1) Alleged Infringing Functionality Complaint Citation Patent Citation
a method for searching a database... comprising the steps of: receiving a search criteria including a plurality of search elements... The Accused Instrumentalities allegedly perform and allow users to perform a method for searching a database by receiving a search criteria from a user. ¶27 col. 2:44-49
ordering the search elements of said search criteria based upon an expected size of the corresponding search results from said database; The Accused Instrumentalities allegedly order the search elements of the received search criteria based on the expected size of the results. ¶27 col. 2:49-52
and searching said database with one of said search elements, which is expected to provide a first group of said search results, before searching said database with another one of said search elements, which is expected to provide a second group of said search results, said second group being larger in size than said first group. The Accused Instrumentalities allegedly perform the database search sequentially, starting with the search element expected to produce the smallest result set before applying elements expected to produce larger result sets. ¶27 col. 2:52-58

U.S. Patent No. 7,392,160 Infringement Allegations

Claim Element (from Independent Claim 1) Alleged Infringing Functionality Complaint Citation Patent Citation
a method for monitoring user usage patterns of a system, comprising the steps of: providing at least one state object, the object including a profile representative of user usage, The Accused Instrumentalities allegedly track user activities and preferences by providing a state object (e.g., a cookie) containing a user profile. ¶38 col. 4:1-5
storing the state object at a client location, The state object is allegedly stored on the user's device. ¶38 col. 4:6-7
passing, to a central server, the state object with each subsequent interaction initiation, The state object is allegedly passed to Defendant's server with each user interaction. ¶38 col. 4:8-10
and receiving, from the central server, the state object along with the response of the central server, wherein the profile is modified to reflect the interaction between the client location and the central server, The state object is allegedly received back from the server with a modified profile reflecting the user's interaction. ¶38 col. 4:11-15
and wherein the central server audits the state object/profile passed to it, and performs analysis on the audited profile in order to direct services and/or information suited to the profile to the client location. Defendant's central server allegedly audits the profile in the state object and performs analysis to direct services or information to the user. ¶38 col. 4:16-21

Identified Points of Contention

  • Scope Questions: The infringement allegations for both the ’103 and ’160 patents are presented in a conclusory manner, largely tracking the language of the asserted claims without mapping them to specific, observable operations of the accused platform. This raises the question of whether standard e-commerce functionalities, such as multi-field database searches or the use of common personalization cookies, fall within the scope of the claims, or if the claims require more specific, non-conventional technical implementations.
  • Technical Questions: For the ’103 Patent, a central technical question is what evidence the complaint provides that the accused platform performs an explicit "ordering" of search terms "based upon an expected size" of results, as opposed to a database's own internal query optimizer making such efficiency decisions implicitly. For the ’160 Patent, a similar question arises regarding the "audits... and performs analysis" limitation: what evidence shows that the accused platform's use of cookies involves the specific auditing and analysis functions required by the claim, beyond generic activity tracking for personalization?

V. Key Claim Terms for Construction

U.S. Patent No. 6,691,103

  • The Term: "ordering the search elements... based upon an expected size of the corresponding search results"
  • Context and Importance: This phrase recites the core functional step of the asserted method claim. Its construction will be central to determining whether the claim covers any system that processes multi-term queries in an efficient sequence (potentially including standard database optimizers) or is limited to systems that perform a discrete, pre-search analysis and reordering of query terms.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The patent's summary describes the invention's purpose as achieving "high efficiency in constructing a set of database entries that potentially match a search target" (U.S. Patent No. 6,691,103, col. 2:35-37). Parties may argue this focus on the result (efficiency) supports a broader functional interpretation.
    • Evidence for a Narrower Interpretation: The claim language presents "ordering" and "searching" as distinct, sequential steps. The summary of the invention also describes "ordering the search elements... before searching the database" (U.S. Patent No. 6,691,103, col. 2:49-54), which may support a narrower construction requiring a specific sequence of operations rather than just an efficient outcome.

U.S. Patent No. 7,392,160

  • The Term: "state object"
  • Context and Importance: The infringement theory hinges on the allegation that Defendant's use of cookies constitutes use of a "state object" (Compl. ¶38). The definition of this term is therefore critical. Practitioners may focus on this term because its scope will determine if the claim reads on the ubiquitous and conventional use of HTTP cookies for session management and personalization.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: A related patent in the same family, U.S. Patent No. 7,152,018, explicitly discusses the context of HTTP as a "stateless transfer method" and describes the invention in the context of "an extension to the HTTP protocol that allows the server to store a state object on the client browser," referring to this object as a "cookie" (U.S. Patent No. 7,152,018, col. 1:24-31). This suggests the patentee understood "state object" to encompass cookies.
    • Evidence for a Narrower Interpretation: Parties may argue that the term "object" implies a specific data structure with properties beyond the simple key-value pairs of a standard cookie, potentially pointing to specific embodiments in the specification that describe a more complex structure for the profile.

VI. Other Allegations

  • Indirect Infringement: For the ’160 patent and others, the complaint alleges induced infringement based on Defendant's alleged actions of "advising or directing personnel, contractors, or end-users" and "distributing instructions that guide users to use the Accused Instrumentalities" (Compl. ¶39). Contributory infringement is alleged on the basis that the accused platform has "special features that are specially designed to be used in an infringing way and that have no substantial uses other than ones that infringe" (Compl. ¶40).
  • Willful Infringement: Willfulness is alleged for several patents, including the ’160 patent. The complaint bases this allegation on Defendant's alleged knowledge of the patents at least as of the filing of the action (Compl. ¶41) and an asserted policy of "not reviewing the patents of others," which Plaintiff characterizes as willful blindness (Compl. ¶42). The complaint further alleges Defendant's actions were "at least objectively reckless" (Compl. ¶43).

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

  • A core issue will be one of evidentiary sufficiency: The complaint's infringement allegations largely mirror the language of the claims without providing detailed factual support linking them to the specific operations of the accused platform. A key question for the case will be whether discovery yields evidence that the accused platform performs the precise technical steps recited in the claims, such as explicitly ordering search queries by expected result size (’103 Patent) or performing a specific form of profile auditing (’160 Patent), or if its functions are technically distinguishable.
  • A second central issue will likely be one of patent eligibility: The asserted patents cover functionalities—such as database searching, user authentication, and activity tracking via cookies—that are foundational to modern e-commerce. This raises a fundamental question under 35 U.S.C. § 101: are the claims directed to patent-eligible technical improvements to computer functionality, or to abstract ideas (e.g., organizing data efficiently, monitoring user behavior) implemented using conventional computer components? The complaint's pre-emptive assertions that the claims are not abstract suggests this will be a primary focus of the dispute (Compl. ¶23, ¶34).