Torus Ventures LLC v. Lone Star Bank

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Torus Ventures LLC (Delaware)
  • Defendant: Lone Star Bank (Texas)
  • Plaintiff’s Counsel: Rabicoff Law LLC
• Case Identification: 7:25-cv-00157, W.D. Tex., 04/08/2025
• Venue Allegations: Plaintiff alleges venue is proper because Defendant is incorporated in Texas, has an established place of business in the district, and has committed acts of patent infringement in the district.
• Core Dispute: Plaintiff alleges that Defendant’s unidentified products and services infringe a patent related to a recursive security protocol for protecting digital data.
• Technical Context: The technology at issue involves multi-layer encryption methods designed to control access to and prevent unauthorized duplication of digital content, such as software or media streams.
• Key Procedural History: The complaint does not mention any prior litigation, inter partes review proceedings, or licensing history related to the patent-in-suit. The complaint itself is alleged to provide the Defendant with actual knowledge of infringement for the purposes of willfulness.

Case Timeline

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

U.S. Patent No. 7,203,844 - “Method and system for a recursive security protocol for digital copyright control,” issued April 10, 2007

The Invention Explained

• Problem Addressed: The patent’s background section describes the challenge that digital technology poses to traditional copyright protection, as perfect, cost-effective copies of digital works can be made easily, unlike physical goods (ʼ844 Patent, col. 1:25-40). It also notes that prior art security systems often make “artificial distinctions between the various types of bit streams to be protected,” creating a need for a more universal protocol (ʼ844 Patent, col. 2:28-43).
• The Patented Solution: The invention proposes a “Recursive Security Protocol” where a digital bitstream is not just encrypted once, but is bundled with its decryption algorithm and then that entire package is encrypted again using a second algorithm ('844 Patent, Abstract; col. 2:62-67). Because the security protocol itself can be treated as a bitstream, it is “equally capable of securing itself,” allowing for security updates to be layered on top of older systems without stripping away existing protections ('844 Patent, col. 2:47-51, col. 4:18-31). This process is illustrated in the patent's descriptions of layered encryption and key management (ʼ844 Patent, FIG. 5).
• Technical Importance: This approach provided a conceptual framework for creating updatable and layered digital rights management (DRM) systems, where the security itself could evolve without requiring fundamental changes to the underlying hardware or protected content ('844 Patent, col. 4:32-41).

Key Claims at a Glance

• The complaint alleges infringement of “one or more claims” but does not identify any specific claims in the body of the complaint, instead incorporating by reference charts from an unprovided “Exhibit 2” (Compl. ¶11, ¶16).
• Independent claim 1, a representative method claim, includes the following essential elements:
  • encrypting a bitstream with a first encryption algorithm;
  • associating a first decryption algorithm with the encrypted bit stream;
  • encrypting both the encrypted bit stream and the first decryption algorithm with a second encryption algorithm to yield a second bit stream;
  • associating a second decryption algorithm with the second bit stream.
• The complaint does not explicitly reserve the right to assert dependent claims.

III. The Accused Instrumentality

Product Identification

The complaint does not identify any specific accused product, method, or service by name (Compl. ¶11). It refers generally to “Exemplary Defendant Products” that are allegedly made, used, sold, or imported by Defendant Lone Star Bank (Compl. ¶11).

Functionality and Market Context

The complaint does not provide sufficient detail for analysis of the accused instrumentality's functionality or market context.

IV. Analysis of Infringement Allegations

The complaint incorporates infringement allegations by reference to claim charts in an unprovided “Exhibit 2” and does not contain specific factual allegations in the body of the text mapping accused product features to claim elements (Compl. ¶16, ¶17). No probative visual evidence provided in complaint.

’844 Patent Infringement Allegations

Identified Points of Contention

• Evidentiary Questions: As the complaint lacks factual detail, a primary point of contention will be whether Plaintiff can produce evidence that Defendant’s systems perform the specific, multi-step encryption and association process required by the claims. The complaint does not explain how the security protocols of a bank relate to the patent's teachings.
• Technical Questions: A key question is whether any system used by the Defendant performs the "recursive" step of encrypting not just the data, but also the first decryption algorithm itself, as required by claim 1.

V. Key Claim Terms for Construction

• The Term: "recursive security protocol"

• Context and Importance: This term appears in the patent’s title and is central to its asserted novelty. The definition of "recursive" will be critical to determining the scope of the claims. Practitioners may focus on this term because its construction will determine whether the claims cover generic multi-layer encryption or are limited to the specific self-securing protocol described in the patent.

• Intrinsic Evidence for Interpretation:

  • Evidence for a Broader Interpretation: The patent summary describes a process of encrypting a bitstream, associating it with a decryption algorithm, and then repeating the process, which could be argued to cover any nested encryption scheme (ʼ844 Patent, col. 2:62-67).
  • Evidence for a Narrower Interpretation: The specification defines a recursive protocol as one that can be “equally capable of securing itself” because it does not make distinctions between data types (e.g., content vs. executable code) ('844 Patent, col. 2:47-51). This suggests "recursive" requires the protocol to be self-referential and updatable, a narrower meaning than simply "layered."

• The Term: "associating a ... decryption algorithm with the encrypted bit stream"

• Context and Importance: This step is recited twice in claim 1. How tightly the algorithm must be linked to the data—whether it requires physical bundling, a direct pointer, or a more abstract logical connection—is undefined and will be a key aspect of the infringement analysis.

• Intrinsic Evidence for Interpretation:

  • Evidence for a Broader Interpretation: The specification discusses scenarios where decryption keys are supplied separately by a licensing authority, which may support a broader interpretation that "associating" does not require the items to be stored or transmitted together (ʼ844 Patent, col. 10:7-10).
  • Evidence for a Narrower Interpretation: The language of claim 1, which requires "encrypting both the encrypted bit stream and the first decryption algorithm," suggests that the two components are treated as a single unit for the next encryption step, potentially implying a tighter, more direct association (ʼ844 Patent, col. 29:21-23).

VI. Other Allegations

• Indirect Infringement: The complaint alleges induced infringement, stating that Defendant sells the accused products and distributes "product literature and website materials" that instruct end users on how to use them in an infringing manner (Compl. ¶14, ¶15).
• Willful Infringement: Willfulness is alleged based on knowledge obtained from the service of the complaint itself, making it a claim for post-suit willful infringement (Compl. ¶13).

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

• A primary evidentiary question will be one of factual basis: given the complaint's lack of specificity, can the Plaintiff produce discovery evidence that maps the actual operations of the Defendant's (a bank's) data security systems to the specific, multi-step "recursive" process claimed in the patent?
• A core issue will be one of definitional scope: can the term "recursive security protocol", which is described in the patent in the context of digital copyright control, be construed to cover the general-purpose data security systems of a financial institution?
• The case may also turn on the construction of functional terms: what technical standard of proof is required to show that a decryption algorithm is "associated" with an encrypted bitstream in the manner required by the claims, and does the accused system meet that standard?