DCT

6:24-cv-00103

Advanced Transactions LLC v. DSW Shoe Warehouse Inc

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I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 6:24-cv-00103, W.D. Tex., 02/26/2024
  • Venue Allegations: Plaintiff alleges venue is proper because Defendant DSW operates multiple retail stores within the Western District of Texas, including in Waco and Austin, and has employees in the district, thereby committing alleged acts of infringement and maintaining a regular and established place of business in the district.
  • Core Dispute: Plaintiff alleges that Defendant’s digital marketing and e-commerce systems, including its marketing emails, mobile applications, and website, infringe eight U.S. patents related to email campaign management, global e-commerce systems, and mobile processing of electronic credits.
  • Technical Context: The patents-in-suit cover foundational technologies in digital marketing and mobile commerce, concerning the generation and tracking of personalized email campaigns and the use of portable electronic devices to manage and redeem digital coupons and rewards.
  • Key Procedural History: The complaint alleges that Plaintiff provided Defendant with pre-suit notice of the patents-in-suit via a letter dated March 24, 2023, which included a draft of the complaint, forming the basis for allegations of willful infringement.

Case Timeline

Date Event
2000-04-25 Priority Date for U.S. Patent Nos. 7,065,555; 7,386,594; 7,693,950
2000-10-06 Priority Date for U.S. Patent Nos. 7,979,057; 8,175,519; 9,747,608; 10,783,529
2001-02-21 Priority Date for U.S. Patent No. 8,150,736
2006-06-20 U.S. Patent No. 7065555 Issues
2008-06-10 U.S. Patent No. 7386594 Issues
2010-04-06 U.S. Patent No. 7693950 Issues
2011-07-12 U.S. Patent No. 7979057 Issues
2012-04-03 U.S. Patent No. 8150736 Issues
2012-05-08 U.S. Patent No. 8175519 Issues
2017-08-29 U.S. Patent No. 9747608 Issues
2020-09-22 U.S. Patent No. 10783529 Issues
2023-03-24 Plaintiff allegedly sends notice letter to Defendant
2024-02-26 Complaint Filed

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

U.S. Patent No. 7,065,555 - "System and Method Related to Generating and Tracking an Email Campaign"

  • Patent Identification: U.S. Patent No. 7,065,555, "System and Method Related to Generating and Tracking an Email Campaign," issued June 20, 2006.

The Invention Explained

  • Problem Addressed: The patent's background describes the increasing importance of internet marketing while noting difficulties in tailoring large numbers of emails for "more effective contact" and in "measuring success of the email campaign" once initiated (Compl. ¶24; ’555 Patent, col. 1:15-43). The patent states a need for "an efficient way to create and track a email campaign" (Compl. ¶25; ’555 Patent, col. 1:44-45).
  • The Patented Solution: The invention is a system for generating and tracking an email campaign, comprising a generator to create a template from a target database, an engine to generate and send custom emails from that template, and a tracker to receive and log responses to the sent emails (’555 Patent, Abstract; Fig. 2). This automates the process of creating personalized, trackable mass-marketing emails.
  • Technical Importance: The described system provided a structured, automated approach to creating, distributing, and analyzing the performance of large-scale, personalized email marketing campaigns.

Key Claims at a Glance

  • The complaint asserts at least independent claim 1 (Compl. ¶94).
  • The essential elements of independent claim 1 are:
    • A method for conducting an email campaign, comprising the steps of:
    • receiving an email target database;
    • generating an email campaign template related to at least one email target in the received email target database;
    • sending to each of the at least one email target a corresponding custom email, wherein the custom email is formed from the email campaign template; and
    • tracking the custom email sent to each of the at least one email target.

U.S. Patent No. 7,386,594 - "System and method related to generating an email campaign"

  • Patent Identification: U.S. Patent No. 7,386,594, "System and method related to generating an email campaign," issued June 10, 2008.

The Invention Explained

  • Problem Addressed: The complaint states that the specification of the ’594 Patent is the same as that of the ’555 Patent and addresses the same problems of creating and tracking efficient email campaigns (Compl. ¶32; ’594 Patent, col. 1:15-45).
  • The Patented Solution: The solution is a system for generating and tracking an email campaign, which involves creating a template from a target database, using an engine to generate and send customized emails, and employing a tracker to monitor responses (’594 Patent, Abstract; Fig. 2). The claims of the ’594 Patent provide a more detailed breakdown of the "template" into a "message template" and a "configuration file."
  • Technical Importance: This patent family refined the concept of automated email marketing by more specifically defining the data structures (e.g., separating message content from recipient data) used to generate personalized campaigns.

Key Claims at a Glance

  • The complaint asserts at least independent claim 1 (Compl. ¶106).
  • The essential elements of independent claim 1 are:
    • A method for conducting an email campaign, comprising the steps of:
    • receiving an email target database;
    • generating an email campaign template related to at least one email target in the received email target database, wherein the step of generating an email campaign template comprises the step of generating a message template; and
    • sending to each of the at least one email target a corresponding custom email, wherein the custom email is formed from the email campaign template.

U.S. Patent No. 7,693,950 - "System and Method Related to Generating and Tracking an Email Campaign"

  • Patent Identification: U.S. Patent No. 7,693,950, "System and Method Related to Generating and Tracking an Email Campaign," issued April 6, 2010 (Compl. ¶33).
  • Technology Synopsis: This patent, sharing a specification with the '555 and '594 patents, describes a method for producing a custom email template. The method involves receiving email addresses for target recipients and then producing a configuration file (containing recipient data and a custom URL) and a message file (containing the textual message with custom tags) (Compl. ¶¶37-38, 118-122).
  • Asserted Claims: At least claim 21 is asserted (Compl. ¶116).
  • Accused Features: The DSW email servers are accused of producing custom email templates by receiving email addresses and generating configuration and message files to create personalized marketing emails (Compl. ¶¶117-122).

U.S. Patent No. 7,979,057 - "Third-Party Provider Method and System"

  • Patent Identification: U.S. Patent No. 7,979,057, "Third-Party Provider Method and System," issued July 12, 2011 (Compl. ¶39).
  • Technology Synopsis: The patent addresses problems with traditional paper coupons and proprietary in-store marketing systems by describing a method for processing negotiable economic credits (e.g., coupons, rewards) on a wireless hand-held device (Compl. ¶¶44, 47-49). The method involves storing a filter on the device, receiving a credit from a wireless network based on the filter, storing the credit, and then transferring it via the wireless network for redemption (Compl. ¶¶128-132).
  • Asserted Claims: At least claim 1 is asserted (Compl. ¶126).
  • Accused Features: The DSW mobile applications on smartphones are accused of infringing by enabling users to process DSW coupons, rewards, and gift cards, including storing, receiving, retrieving, and transferring these electronic credits (Compl. ¶127).

U.S. Patent No. 8,150,736 - "Global Electronic Commerce System"

  • Patent Identification: U.S. Patent No. 8,150,736, "Global Electronic Commerce System," issued April 3, 2012 (Compl. ¶51).
  • Technology Synopsis: The patent describes a global e-commerce system that overcomes barriers of language and locale by using a single, multi-version database (Compl. ¶¶57, 60). The asserted method involves a computing system receiving a web page request that includes a "locale identifier value," using that value to retrieve a version of marketing information specific to that locale, and generating a web page with that information (Compl. ¶¶143-145).
  • Asserted Claims: At least claim 1 is asserted (Compl. ¶142).
  • Accused Features: DSW's webserver system is accused of receiving requests with locale identifiers (e.g., from a search for "dsw store locator near Waco, TX") and in response, generating and transmitting a web page with locale-specific marketing, such as a list of stores in Texas (Compl. ¶¶143-146, p. 117).

U.S. Patent No. 8,175,519 - "Third-Party Provider Method and System"

  • Patent Identification: U.S. Patent No. 8,175,519, "Third-Party Provider Method and System," issued May 8, 2012 (Compl. ¶68).
  • Technology Synopsis: This patent, from the same family as the ’057 patent, describes a method for managing negotiable economic credits on a wireless handheld device (Compl. ¶73). The asserted method involves requesting a credit using the device, receiving it, storing it in memory, retrieving it, and then sending it for use, followed by receiving a message indicating the credit was utilized (Compl. ¶¶151-156).
  • Asserted Claims: At least claim 22 is asserted (Compl. ¶150).
  • Accused Features: The DSW mobile applications are accused of allowing users to request, receive, store, retrieve, and send negotiable economic credits like DSW Rewards and coupons (Compl. ¶¶151-156). Screenshots show the app displaying available rewards and an option to pay with a gift card (Compl. p. 126-127).

U.S. Patent No. 9,747,608 - "Third-Party Provider Method and System"

  • Patent Identification: U.S. Patent No. 9,747,608, "Third-Party Provider Method and System," issued August 29, 2017 (Compl. ¶74).
  • Technology Synopsis: This patent, from the same family as the '057 and ’519 patents, describes a method of using a portable electronic device to interact with a point-of-sale (POS) system (Compl. ¶79). The method includes the device transmitting a request for a data structure corresponding to an account, receiving the data structure (which encodes a credit and authentication information), detecting a transaction, and transmitting the credit information to a POS device (Compl. ¶¶161-164).
  • Asserted Claims: At least claim 10 is asserted (Compl. ¶160).
  • Accused Features: The DSW mobile applications are accused of performing these steps, allowing a user to request and receive account-based rewards and then transmit that information to a POS device for use in a transaction (Compl. ¶¶161-164).

U.S. Patent No. 10,783,529 - "Third-Party Provider Method and System"

  • Patent Identification: U.S. Patent No. 10,783,529, "Third-Party Provider Method and System," issued September 22, 2020 (Compl. ¶80).
  • Technology Synopsis: This patent, from the same family as the '057, '519, and ’608 patents, also relates to processing economic credits on a portable device (Compl. ¶85). The asserted method involves storing a data structure on the device that encodes the credit and authentication information, detecting that a user has initiated a transaction, and in response, transmitting the credit and authentication information to a POS device to apply a discount (Compl. ¶¶176-178).
  • Asserted Claims: At least claim 8 is asserted (Compl. ¶175).
  • Accused Features: The DSW mobile applications are accused of storing user rewards and coupons, detecting when a user is making a purchase, and transmitting the credit information to a POS to apply the associated discount (Compl. ¶¶176-179).

III. The Accused Instrumentality

Product Identification

The accused instrumentalities are collectively referred to as the "DSW Marketing Products and Services" and the underlying "DSW Marketing System" (Compl. ¶¶7-8). Specific components include DSW Marketing Emails, DSW Mobile Apps for iOS and Android, the DSW website (dsw.com), DSW online and in-store shopping services, and the DSW Rewards program (Compl. ¶7).

Functionality and Market Context

The accused services constitute DSW's digital customer engagement and e-commerce platform. The marketing emails deliver promotions to a database of subscribers, allegedly using tracking pixels to monitor user engagement (Compl. ¶¶95, 102, p. 49). The website and mobile apps provide a unified interface for customers to browse products, manage their rewards account, and conduct transactions (Compl. ¶¶127, 143). The complaint presents a screenshot from the DSW mobile app showing a "Rewards" screen with available offers such as "$10 Off" (Compl. ¶127, p. 93). The mobile apps are alleged to process "negotiable economic credits" such as coupons, rewards, and gift cards, enabling their use in both online and in-store transactions (Compl. ¶127).

IV. Analysis of Infringement Allegations

'555 Patent Infringement Allegations

Claim Element (from Independent Claim 1) Alleged Infringing Functionality Complaint Citation Patent Citation
receiving an email target database DSW's system receives customer data, including email addresses, when users sign up for accounts or marketing communications. A screenshot shows the "BECOME A MEMBER" page where users enter their email (Compl. p. 36). ¶96 col. 10:45-50
generating an email campaign template related to at least one email target in the received email target database The DSW system generates a template for its marketing emails. A screenshot of a promotional email with a standardized layout is provided as evidence of such a template (Compl. p. 39). ¶97 col. 10:51-54
sending to each of the at least one email target a corresponding custom email...formed from the email campaign template The system sends personalized emails to users, such as the "YOU'RE ON THE LIST" email that includes a unique offer code for the recipient (Compl. p. 45). ¶101 col. 10:55-58
tracking the custom email sent to each of the at least one email target DSW's privacy policy states it uses tracking pixels and clear gifs embedded in emails to track user engagement and activity, such as clicks on links within the email (Compl. p. 49). ¶102 col. 10:59-62

Identified Points of Contention

  • Scope Questions: The complaint alleges that DSW's privacy policy describing the tracking of user engagement with emails satisfies the "tracking the custom email" limitation (Compl. ¶102). A potential point of contention is whether tracking user actions resulting from an email (e.g., link clicks) is the same as "tracking the...email" itself as required by the claim language.
  • Technical Questions: What evidence does the complaint provide that the accused system performs these four steps as a single, integrated method? The infringement theory relies on assembling discrete functionalities (user sign-up, email blasts, analytics) described in marketing materials and privacy policies into the claimed method.

'594 Patent Infringement Allegations

Claim Element (from Independent Claim 1) Alleged Infringing Functionality Complaint Citation Patent Citation
receiving an email target database DSW's system receives a database of email targets when customers provide their personal information through sign-up forms (Compl. p. 58). ¶108 col. 10:45-50
generating an email campaign template related to at least one email target...wherein the step of generating an email campaign template...comprises the step of generating a message template The DSW system allegedly generates an email campaign template that includes a message template, evidenced by the standardized marketing email shown in the complaint (Compl. p. 61, 63). ¶¶109-110 col. 11:15-20
wherein the step of generating an email campaign template...comprises the step of generating a configuration file to contain data related to each of the at least one email target, wherein the data is insertable in the generated message template The complaint alleges the generation of a configuration file containing recipient-specific data (e.g., images, links, text) that is insertable into the message template, citing an HTML code excerpt (Compl. p. 65). ¶111 col. 11:18-24
sending to each of the at least one email target a corresponding custom email, wherein the custom email is formed from the email campaign template The system sends a custom email to each target, formed from the template, as shown in the screenshot of the personalized "YOU'RE ON THE LIST" email (Compl. p. 68). ¶112 col. 11:25-28

Identified Points of Contention

  • Scope Questions: Claim 1 of the ’594 Patent requires the generation of both a "message template" and a "configuration file." A key issue will be whether DSW's system uses such a distinct, two-part data structure or a more integrated process that might not map directly onto these separate claim limitations.
  • Technical Questions: The complaint cites the same marketing email as evidence for both the "message template" and the "configuration file" (Compl. ¶¶110-111). A question for the court will be what technical evidence supports the allegation that these are generated as separate, distinct components as the claim structure suggests.

V. Key Claim Terms for Construction

For '555 and '594 Patents

  • The Term: "email campaign template"
  • Context and Importance: This term is central to the infringement analysis for the email-related patents. The scope of "template" will be critical, particularly in the ’594 Patent where it is further defined as comprising a "message template" and a "configuration file." Practitioners may focus on whether this requires a specific two-part data structure or if it can read on more common mail-merge functionalities.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The '555 patent specification describes the invention's purpose as providing an "efficient way to create and track a email campaign," which may suggest the term should be interpreted broadly to cover any system that automates this process (’555 Patent, col. 1:44-45).
    • Evidence for a Narrower Interpretation: The specification explicitly illustrates the template as being formed from two distinct components: a "Text Message" file (containing tags) and a ".cfg File" (containing invariant and variant data) (’555 Patent, Fig. 3A). This could support a narrower construction requiring a bifurcated data structure.

VI. Other Allegations

Indirect Infringement

The complaint alleges induced infringement for the patents related to mobile transactions (e.g., ’057, ’608) (Compl. ¶¶135, 168). The allegations are based on DSW instructing and encouraging its customers to download and use the DSW iOS and Android Apps in their intended, allegedly infringing manner (Compl. ¶¶137, 170).

Willful Infringement

Willfulness is alleged for all patents-in-suit based on pre-suit knowledge. The complaint states that Plaintiff's counsel sent DSW a notice letter on March 24, 2023, that identified the patents-in-suit and included a draft of the complaint, nearly a year before the suit was filed (Compl. ¶¶86, 90). The complaint alleges DSW continued its infringing activities after receiving this notice (Compl. ¶90).

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

  • A core issue will be one of structural correspondence: For the email-related patents, does the accused DSW marketing system technically operate by generating a distinct "message template" and "configuration file" as claimed, or does it use a more integrated data-handling process? The case may turn on whether the complaint’s evidence, drawn from marketing materials and privacy policies, can be substantiated with technical evidence showing a direct mapping to the claimed system architecture.
  • A second key issue will be one of technological evolution: For the patents concerning mobile transactions, a central question will be whether claims drafted in the context of early mobile devices (e.g., PDAs) can be construed to cover modern smartphone applications. The dispute may focus on whether a cloud-based rewards system, where credits are accessed by an app, meets claim limitations that describe credits being received and stored "in a memory of the hand held device."