DatRec LLC v. Adp Inc

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: DatRec, LLC (Texas)
  • Defendant: ADP, LLC. (Delaware)
  • Plaintiff’s Counsel: Ramey LLP
• Case Identification: 7:25-cv-00495, W.D. Tex., 10/27/2025
• Venue Allegations: Plaintiff alleges venue is proper based on Defendant having a regular and established place of business within the Western District of Texas and having committed acts of infringement in the district.
• Core Dispute: Plaintiff alleges that Defendant’s workforce management platform infringes a patent related to methods for secure communication over a public network by verifying user identities.
• Technical Context: The technology addresses the need for trusted communications over public networks by creating a system to authenticate a user's identity based on corroborating data provided by a plurality of individuals.
• Key Procedural History: The complaint discloses that Plaintiff has entered into prior settlement licenses with other entities. It argues that these settlements, which did not include admissions of infringement, do not trigger patent marking requirements under 35 U.S.C. § 287.

Case Timeline

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

U.S. Patent No. 8,381,309 - "Methods and Systems for Secure Communication Over a Public Network"

• Patent Identification: U.S. Patent No. 8,381,309, "Methods and Systems for Secure Communication Over a Public Network," issued February 19, 2013 (’309 Patent).

The Invention Explained

• Problem Addressed: The patent describes a need to improve security in online communications, where users are often exposed to "non-secure connections and to communications from unreliable or falsely-identified senders" (’309 Patent, col. 1:21-25).
• The Patented Solution: The invention proposes a method and system to verify a user's identity to enable secure communication. This is achieved by creating a database where identity data for an individual is entered by a plurality of other related individuals (e.g., family members) (’309 Patent, Abstract; col. 19:15-20). The system then determines a "level of reliability" for the identity data based on the "degree of similarity" between the data points entered by these different people, effectively crowdsourcing verification (’309 Patent, col. 19:26-30). Based on this verification, different "levels of permitted communication" can be defined between users (’309 Patent, col. 19:33-37).
• Technical Importance: This approach seeks to improve confidence in a user's identity beyond self-declaration by creating a trust score based on corroboration from a network of known relations (’309 Patent, col. 1:63-65).

Key Claims at a Glance

• The complaint asserts claims 1-17 (Compl. ¶8). Claim 1 is the sole independent method claim.
• Claim 1 Elements:
  • Providing a database with verified data relating to an individual's identity, where the database is constructed by:
  • Permitting multiple individuals related to the subject individual to enter data about them, with the data comprising a personal identifier and "relationship data indicative of a family tree."
  • Generating an "individual-associated data set (IDS)" from this entered data.
  • Verifying the IDS by "determining the level of reliability based on a degree of similarity between data on the individual entered by different individuals."
  • Compiling the verified IDSs to construct the database.
  • Defining one or more levels of permitted communication for the verified individual based on the verification.
• The complaint alleges infringement of dependent claims 2-17, which add further limitations related to personalized exposure mechanisms and data scoring (Compl. ¶8).

III. The Accused Instrumentality

Product Identification

The complaint identifies "ADP Workforce Now" and related systems and services as the accused instrumentality (Compl. ¶10).

Functionality and Market Context

The complaint describes the accused product as a "system and methods for secure communication over a public network" (Compl. ¶8). It alleges that ADP instructs its customers on how to use these systems for such secure communication purposes (Compl. ¶10). The complaint does not provide specific details on the technical operation of the accused product's authentication or communication features, instead referencing a security guide available on Defendant's website (Compl. ¶11).

IV. Analysis of Infringement Allegations

The complaint alleges that Defendant directly infringes, induces infringement, and contributes to the infringement of claims 1-17 of the ’309 Patent (Compl. ¶¶8, 10, 11). It states that detailed support for these allegations is contained in a preliminary claim chart attached as Exhibit B (Compl. ¶9). However, this exhibit was not provided with the filed complaint. The complaint's narrative theory is that ADP's operation of the "ADP Workforce Now" platform constitutes use of a system for secure communication that practices the patented method (Compl. ¶8).

No probative visual evidence provided in complaint.

• Identified Points of Contention: The pleadings raise several questions that may become central to the infringement analysis.
  • Scope Questions: A primary question may be whether the patent's concept of building an identity database from data "indicative of a family tree" and entered by "related individuals" can be read to cover an enterprise human resources system like ADP Workforce Now, which authenticates employees within a corporate organizational structure. The interpretation of "family tree" and "related individuals" will be critical.
  • Technical Questions: A key factual dispute may concern whether the accused ADP system performs the specific step of "determining the level of reliability based on a degree of similarity between data on the individual entered by different individuals," as required by Claim 1. The complaint does not offer specific factual allegations detailing how ADP's authentication mechanism performs this comparative, multi-source verification process.

V. Key Claim Terms for Construction

• The Term: "relationship data indicative of a family tree" (Claim 1)

• Context and Importance: This term is central to the claimed method of data collection for identity verification. The infringement case may hinge on whether data structures within an enterprise software system (e.g., reporting hierarchies, team assignments) can be construed as being "indicative of a family tree."

• Intrinsic Evidence for Interpretation:

  • Evidence for a Broader Interpretation: The specification includes "business colleagues or associates" in its description of "related individuals," which may support an argument that the claimed "relationship data" is not strictly limited to familial ties (’309 Patent, col. 5:51-52).
  • Evidence for a Narrower Interpretation: The claim language itself explicitly uses the term "family tree." The patent specification provides numerous examples focused on familial relationships, such as parents, siblings, cousins, and grandparents, and refers to the concept of a "‘single family tree’ that links all data" (’309 Patent, col. 5:42-48; col. 7:21-23). This may support a narrower construction limited to data describing kinship.

• The Term: "verifying the IDS for the individual by determining the level of reliability based on a degree of similarity between data on the individual entered by different individuals" (Claim 1)

• Context and Importance: This clause recites the core technical step for authenticating user identity. Practitioners may focus on this term because the dispute will likely involve a technical comparison between ADP's authentication methods and this specific claim requirement for a comparison-based reliability score.

• Intrinsic Evidence for Interpretation:

  • Evidence for a Broader Interpretation: A party might argue this language covers any process that cross-references data from more than one source to assign a confidence or verification status to an identity.
  • Evidence for a Narrower Interpretation: The specification describes a detailed process of comparing data strings, ascribing reliability scores based on the degree of match, and potentially requesting more information or rejecting data if reliability is too low (’309 Patent, col. 10:47-67; FIG. 3A). This suggests a specific, iterative, multi-source data corroboration process, which could support a narrower definition than a standard identity check.

VI. Other Allegations

• Indirect Infringement: The complaint alleges induced infringement, stating that ADP encourages its customers to infringe by providing instructions on using "ADP Workforce Now" for secure communication through its website and product manuals (Compl. ¶10). Contributory infringement is alleged on the grounds that the accused service is not a staple commercial product and its "only reasonable use is an infringing use" (Compl. ¶11).
• Willful Infringement: Willfulness allegations are based on Defendant's knowledge of the ’309 Patent from "at least the filing date of the lawsuit" (Compl. ¶¶10-11). Plaintiff reserves the right to amend the complaint if discovery reveals evidence of pre-suit knowledge (Compl. ¶10, n.1).

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

The resolution of this case may depend on the court’s determination of the following open questions:

• A core issue will be one of definitional scope: Can the patent's verification framework, which is described in the context of a social or familial "relationship web" and "family tree," be construed to cover the authentication of employees within a corporate human resources platform?
• A key evidentiary question will be one of technical implementation: What evidence will be presented to demonstrate that the accused "ADP Workforce Now" system performs the specific claimed method of generating a "level of reliability" by calculating the "degree of similarity" between identity data entered by multiple different users, as opposed to employing more conventional enterprise authentication techniques?