DCT
6:23-cv-00132
PerformancePartners LLC v. Verkada Inc
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: PerformancePartners LLC (Texas)
- Defendant: Verkada, Inc. (Delaware)
- Plaintiff’s Counsel: GARTEISER HONEA, PLLC
- Case Identification: 6:23-cv-00132, W.D. Tex., 03/01/2023
- Venue Allegations: Plaintiff alleges venue is proper because Defendant maintains a regular and established business presence in the district, including a physical office in Austin, Texas.
- Core Dispute: Plaintiff alleges that Defendant’s license plate recognition (LPR) solutions for security and access control infringe a patent related to methods for managing vehicle entry and exit from a defined area.
- Technical Context: The technology at issue involves automated systems for identifying vehicles at ingress and egress points of a controlled area, matching entry and exit data to authorize passage, and handling exceptions.
- Key Procedural History: The complaint notes the patent-in-suit was assigned from the inventor to Performance Partners LLC (New Hampshire) in 2009, and subsequently from the New Hampshire entity to the current Texas-based Plaintiff in February 2023. It also states the patent has been cited as relevant prior art in patent applications by Siemens, Amazon, and Micron.
Case Timeline
| Date | Event |
|---|---|
| 2005-08-02 | ’435 Patent Priority Date |
| 2009-04-28 | ’435 Patent Issue Date |
| 2023-03-01 | Complaint Filing Date |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 7,525,435 - METHOD, APPARATUS, AND SYSTEM FOR SECURING AREAS OF USE OF VEHICLES
- Patent Identification: U.S. Patent No. 7,525,435, “METHOD, APPARATUS, AND SYSTEM FOR SECURING AREAS OF USE OF VEHICLES,” issued April 28, 2009.
The Invention Explained
- Problem Addressed: The patent describes a need for more effective systems to identify, monitor, and control vehicle access to secured areas like parking lots, storage areas, or government facilities. The inventor contends that, at the time, there were no systems available that could adequately meet these security objectives (’435 Patent, col. 2:8-20).
- The Patented Solution: The invention is a system that secures a defined area by creating a unique record for each vehicle upon entry and verifying that record upon exit. This record can be based on an existing "Onboard Identity" (OI) device (e.g., an RFID tag) or by capturing the vehicle's physical features (e.g., license plate, make, model) to create a "Characteristics Identity" (CI) (’435 Patent, col. 3:4-14). This identity is then associated with a system-generated "Signature" (SI) and potentially encoded onto a physical or electronic "Ticket/Tag" given to the driver. To exit, the system re-captures the vehicle's identity and compares it with the stored entry data to confirm a match before permitting departure (’435 Patent, col. 4:56-60).
- Technical Importance: The claimed approach sought to improve upon then-conventional access control methods like physical cards or basic transponders, which the complaint alleges were susceptible to circumvention (Compl. ¶¶ 15-16).
Key Claims at a Glance
- The complaint asserts independent claim 8 (’435 Patent, col. 12:1-41; Compl. ¶34).
- Claim 8 Elements:
- A method for managing vehicle entry and exit, comprising monitoring access points to detect vehicles.
- Obtaining and storing "entering vehicle identification information" comprising at least one "electronically readable unique repeatable distinguishing characteristic."
- Offering the entering vehicle a "security option" that includes creating a unique random code, forming a "Ticket/Tag" with that code, and providing the Ticket/Tag to an agent of the vehicle.
- Obtaining "exiting vehicle identification information" from the exiting vehicle.
- Comparing the entering and exiting information to confirm a match.
- Permitting exit for matching vehicles.
- Subjecting non-matching vehicles to a "resolution process."
- The complaint does not explicitly reserve the right to assert dependent claims.
III. The Accused Instrumentality
Product Identification
- The "Verkada LPR Solution" and "Verkada Command" software platform (Compl. p. 11).
Functionality and Market Context
- The accused instrumentality is a system that uses cameras with "edge-based processing and computer vision technology to capture license plate numbers" in real-time (Compl. p. 11). The system is marketed for security applications such as "Gatehouse and entry station security" and "Tolling booths" (Compl. p. 12). A diagram provided in the complaint illustrates a dual-camera setup, with one "LPR camera" capturing a high-contrast image of the license plate and a "context camera" capturing a wider image of the vehicle and its surroundings (Compl. p. 11). The system allows users to create a searchable list of plates and integrate with third-party tolling and ticketing systems via APIs (Compl. ¶30, p. 14).
IV. Analysis of Infringement Allegations
’435 Patent Infringement Allegations
| Claim Element (from Independent Claim 8) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| monitoring points of access to an area so as to detect entering and exiting vehicles | Defendant's system uses cameras located at points of ingress and egress of areas like parking facilities to monitor and detect entering and exiting vehicles. | ¶36 | col. 5:1-4 |
| obtaining from each said entering vehicle, entering vehicle identification information comprising at least one electronically readable unique repeatable distinguishing characteristic of said entering vehicle and storing said entering vehicle information in an information management system | The system's ANPR-equipped cameras obtain vehicle license plate data, which is alleged to be the claimed "distinguishing characteristic," and store this information in a database. | ¶38 | col. 3:9-14 |
| offering said entering vehicle a security option comprising: (i) creating a unique random code... (ii) forming a Ticket/Tag incorporating said unique random code; and (iii) providing said Ticket/Tag to an agent of said entering vehicle... | The system allegedly assigns a "ticket or transaction number" to each vehicle, associates it with the license plate data, and can form a paper or electronic "ticket or receipt" that is provided to the driver. | ¶39 | col. 9:61-65 |
| obtaining from each said exiting vehicle, exiting vehicle identification information comprising said unique repeatable distinguishing characteristic of said exiting vehicle | The system's cameras at exit locations obtain the license plate data of exiting vehicles. | ¶40 | col. 4:56-60 |
| comparing the respective said exiting vehicle identification information with the stored said entering vehicle identification information in said information management system for matching information whereby vehicle identification is confirmed | The system is configured to compare the license plate data obtained from an exiting vehicle with the stored data from entering vehicles to confirm a match. | ¶41 | col. 6:6-12 |
| permitting exiting vehicles with said matching information to exit | In the event of a confirmed match, the system is configured to permit the vehicle to exit, for instance by fulfilling a transaction and allowing physical exit. A marketing image shows the system used for "Gatehouse and entry station security" (Compl. p. 12). | ¶42 | col. 6:12-14 |
| subjecting exiting vehicles without said matching information to a resolution process | In the event of a mismatch, the system subjects the vehicle to a resolution process, such as issuing an invoice for payment or detaining the vehicle. | ¶43 | col. 8:14-17 |
- Identified Points of Contention:
- Scope Questions: A central dispute may arise over the claim term "Ticket/Tag." The complaint alleges the accused system creates an "electronic ticket or receipt" (Compl. ¶39), but the provided marketing materials do not explicitly show such a feature being provided to the driver. The question for the court will be whether a backend database entry associating a license plate with a transaction identifier, without a distinct, user-facing token, can meet the "Ticket/Tag" limitation as described in the patent.
- Technical Questions: The complaint's allegation that the system performs the step of "offering said entering vehicle a security option" (Compl. ¶39) raises a functional question. Does the accused system’s automated process of capturing a license plate and creating an internal record constitute an "offering," or does the claim require a more explicit, interactive choice presented to the vehicle operator, as the patent's discussion of a "Ticket/Tag" may imply (’435 Patent, col. 6:53-56)?
V. Key Claim Terms for Construction
The Term: "Ticket/Tag"
Context and Importance: This term is critical because it appears to require the creation and provision of a specific medium to the vehicle's agent. The infringement allegation hinges on whether the accused system, which may operate primarily through automated license plate recognition without issuing a physical or electronic token to the user, generates anything that can be construed as a "Ticket/Tag."
Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The patent abstract states a "paper or electronic Ticket/Tag may be encoded," suggesting the form is not limited to a physical object. Claim 8 itself does not specify the form of the Ticket/Tag beyond it incorporating a "unique random code."
- Evidence for a Narrower Interpretation: The specification repeatedly refers to the Ticket/Tag as something "dispensed or issued from a dispensing device" and "provided to owner on transportable medium, e.g., parking ticket, etc." (’435 Patent, col. 6:60-61; col. 8:5-6). This language may support a narrower construction requiring a distinct, transferable medium, either physical or electronic.
The Term: "offering said entering vehicle a security option"
Context and Importance: The definition of "offering" will determine whether a fully automated, non-interactive system can infringe. Practitioners may focus on whether this requires an active choice to be presented to a user, or if it can be satisfied by a system's default mode of operation.
Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The claim language does not explicitly require user interaction or acceptance of the offer. An interpretation could be that the system "offers" the option simply by being available for use.
- Evidence for a Narrower Interpretation: The patent specification describes a flowchart where a "Security Option Exercised" step follows the detection of a vehicle, which could imply a decision point rather than an automatic process (’435 Patent, Fig. 1). The term "option" itself suggests a choice is available.
VI. Other Allegations
- Indirect Infringement: The complaint alleges inducement, stating that Defendant "induces such customers and/or individual users to directly infringe" by providing the accused systems and, by implication through its marketing materials, instructing them on how to use the systems in an infringing manner (Compl. ¶30, ¶34).
- Willful Infringement: The complaint alleges willfulness based on Defendant's continued infringement after receiving notice via the original complaint (Compl. ¶45). It further alleges willful blindness, asserting on information and belief that Defendant has a "policy or practice of not reviewing the patents of others" (Compl. ¶46).
VII. Analyst’s Conclusion: Key Questions for the Case
- A core issue will be one of definitional scope: can the term "Ticket/Tag," which the patent describes as a dispensed medium provided to a vehicle's agent, be construed to cover a purely backend data association between a license plate and a transaction ID within an automated LPR system?
- A key question of claim interpretation will be whether the accused system's automatic logging of vehicles constitutes "offering... a security option" as required by the claim, or if that language necessitates an explicit, user-facing choice or interaction that is not described in the complaint's exhibits.
- An evidentiary challenge will be to establish a functional match: the complaint alleges the creation and provision of an "electronic ticket or receipt," but the provided marketing materials focus on camera-based recognition. The case may turn on evidence of how the accused system actually operates in practice, particularly regarding any user-facing credentials or transaction records.