DCT

7:25-cv-00404

Wolverine Barcode IP LLC v. MacY's Inc

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Key Events
Amended Complaint

I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 7:25-cv-00404, W.D. Tex., 12/01/2025
  • Venue Allegations: Plaintiff alleges venue is proper based on Defendant maintaining a regular and established place of business in the district and committing acts of infringement there.
  • Core Dispute: Plaintiff alleges that Defendant’s systems and methods for conducting offline commerce transactions using a barcode for personal identification infringe a patent related to barcode-based payment systems.
  • Technical Context: The technology at issue involves using a unique, user-specific barcode—distinct from a product barcode—to identify a customer and process a payment from a centralized account, aiming to streamline transactions, particularly for micro-payments.
  • Key Procedural History: The complaint states that Plaintiff is a non-practicing entity. It also discloses that Plaintiff and its predecessors have previously entered into settlement licenses related to its patents, but asserts that none of these licenses were for the production of a patented article, a point relevant to potential patent marking defenses.

Case Timeline

Date Event
2010-09-21 U.S. Patent No. 9,280,689 Priority Date
2016-03-08 U.S. Patent No. 9,280,689 Issue Date
2025-12-01 Complaint Filing Date

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

U.S. Patent No. 9,280,689 - "Method and Apparatus for Doing Offline Commerce Transactions"

  • Patent Identification: U.S. Patent No. 9,280,689, "Method and Apparatus for Doing Offline Commerce Transactions," issued March 8, 2016.

The Invention Explained

  • Problem Addressed: The patent's background section describes the high transaction costs associated with conventional credit cards, which makes them impractical for "micro payment purchases" (e.g., items costing cents or a few dollars). It also notes the limited availability of alternative technologies like NFC readers at vendor sites, leaving cash as the primary, but less convenient, option for such transactions (’689 Patent, col. 1:21-30, col. 2:47-51).
  • The Patented Solution: The invention proposes a system centered on a "User ID Barcode" generated from a unique identifier like a cell phone number ('689 Patent, col. 2:39-41). This barcode is distinguished from product barcodes by a "special character" prefix or suffix, allowing it to be scanned by the same barcode readers already ubiquitous at retail cash registers ('689 Patent, col. 3:15-21). The scan initiates a transaction processed by a central "User Vendor Management Server (UVM)," which manages a user's pre-funded account or credit limit to approve the purchase, thereby bypassing traditional credit card processing networks ('689 Patent, Abstract; col. 3:26-45).
  • Technical Importance: The claimed solution leverages existing, widespread point-of-sale hardware (barcode scanners) to enable a novel electronic payment method, avoiding the capital investment and infrastructure changes required for deploying specialized hardware like NFC or RFID readers ('689 Patent, col. 2:47-51).

Key Claims at a Glance

  • The complaint asserts infringement of claims 1-3, with claim 1 being the sole independent claim ('689 Patent, col. 17:31-18:25; Compl. ¶8).
  • The essential elements of independent claim 1 include:
    • Providing a personal code to a user.
    • Converting the code into a "User ID Barcode" format that includes a "special character" to distinguish it from a product barcode.
    • Storing the code in a "User Vendor Management Server" (UVM Server) and establishing a corresponding "User Account."
    • Depositing funds into the User Account to establish a credit limit.
    • At a vendor, scanning both product barcodes and the User ID Barcode and transmitting the data to a vendor server.
    • The vendor server detecting the User ID Barcode and forwarding it with the purchase price to the UVM Server.
    • The UVM Server comparing the price with the funds in the User Account and, if sufficient, sending an approval signal back to the vendor server.
    • The vendor server forwarding the approval signal to the cash register.
    • Repeating these steps for subsequent purchases.
  • The complaint reserves the right to assert dependent claims 2 and 3 (Compl. ¶8).

III. The Accused Instrumentality

Product Identification

  • The complaint broadly accuses Defendant’s "systems, products, and services that conducting offline transactions that use a barcode as a method of personal identification" (Compl. ¶8).

Functionality and Market Context

  • The complaint does not provide sufficient detail for analysis of the accused instrumentality's specific features or operation. It alleges at a high level that Defendant "maintains, operates, and administers" systems that perform the infringing methods but does not identify a specific Macy's application, loyalty program, or payment process, nor does it describe how the accused systems technically function (Compl. ¶8).

IV. Analysis of Infringement Allegations

The complaint references a claim chart in an "Exhibit B" to support its infringement allegations; however, this exhibit was not included with the filed complaint (Compl. ¶9). The narrative allegations state that Defendant's systems infringe by "conducting offline transactions that use a barcode as a method of personal identification" in a manner that meets the limitations of one or more of claims 1-3 of the ’689 Patent (Compl. ¶8). No probative visual evidence provided in complaint.

Identified Points of Contention

  • Evidentiary Questions: A primary issue will be establishing the actual architecture and operation of the accused Macy's systems. The complaint does not specify whether the accused systems utilize a centralized "User Vendor Management Server" to manage a pre-funded "User Account" and transmit real-time approval signals to the cash register, as required by claim 1.
  • Scope Questions: The dispute may turn on whether a barcode used by Defendant (e.g., for a loyalty or rewards program) qualifies as the claimed "User ID Barcode." Specifically, does it contain a "special character" intended to distinguish it from product barcodes for the purpose of initiating a payment transaction from a dedicated account, or does it serve a different function, such as merely identifying a customer profile?

V. Key Claim Terms for Construction

The Term: "User Vendor Management Server" (UVM)

Context and Importance

This server is the central component of the claimed invention, responsible for managing accounts, processing transactions, and issuing approvals. The existence and functionality of an accused "UVM" is a prerequisite for infringement of claim 1.

Intrinsic Evidence for Interpretation

  • Evidence for a Broader Interpretation: Practitioners may argue that the term should not be limited to a single, monolithic server and could encompass any distributed, backend system that collectively performs the claimed functions of account management and transaction processing.
  • Evidence for a Narrower Interpretation: The specification describes the UVM as a specific system that "processes all purchasing transactions between the user and the vendor" and manages a distinct pre-paid or post-pay account, positioning it as an alternative to conventional credit card processing networks ('689 Patent, col. 3:26-30; Fig. 2(b)). This may support an interpretation requiring a dedicated financial transaction processing architecture, not merely a customer relationship management or loyalty database.

The Term: "User ID Barcode"

Context and Importance

This term defines the core instrument for user identification. Its construction will determine whether standard retail barcodes, such as those on loyalty cards, fall within the claim scope.

Intrinsic Evidence for Interpretation

  • Evidence for a Broader Interpretation: A party might argue that any barcode that uniquely identifies a user at a point of sale, and is not a product barcode, meets the general purpose of the term.
  • Evidence for a Narrower Interpretation: Claim 1 explicitly requires the barcode to include "at least one special character to distinguish the barcode as a User ID Barcode from a product barcode" ('689 Patent, col. 18:2-5). The specification reinforces this, stating the special character is "required so that the system can distinguish the User ID Barcode from the product data barcode" ('689 Patent, col. 3:18-21). This language may support a narrower construction requiring a specific, machine-readable formatting element for differentiation, rather than just contextual difference.

VI. Other Allegations

Indirect Infringement

  • The complaint alleges that Defendant induces infringement by encouraging customers to use its systems and contributorily infringes by providing systems with no substantial non-infringing uses (Compl. ¶¶ 10-11). For both counts, knowledge of the ’689 Patent is alleged to exist "from at least the filing date of the lawsuit" (Compl. ¶¶ 10-11).

Willful Infringement

  • The complaint does not allege pre-suit knowledge of the patent. It reserves the right to amend its willfulness allegations if discovery reveals such knowledge (Compl. ¶10, fn. 1; ¶ VI.e). This suggests the willfulness claim is currently based on alleged post-filing conduct.

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

  • A central issue will be one of technical and evidentiary alignment: What is the specific architecture of the accused Macy's system? The case will depend heavily on whether discovery reveals a backend system that functions as the claimed "User Vendor Management Server," managing a funded "User Account" and issuing real-time transaction approvals, or if it operates as a fundamentally different type of customer identification or loyalty system.
  • A key legal question will be one of definitional scope: How will the term "User ID Barcode," with its requirement for a "special character" to distinguish it from product barcodes, be construed? The resolution of this claim construction issue may determine whether a conventional loyalty program barcode can be considered an infringing instrumentality.