DCT
1:22-cv-01345
Hanshow America Inc v. SES imagotag GmbH
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: Hanshow America Inc. (New York) and Hanshow Technology Co., Ltd. (China)
- Defendant: SES-imagotag GmbH (Austria)
- Plaintiff’s Counsel: Mayer Brown LLP; Arch & Lake LLP
- Case Identification: 1:22-cv-01345, E.D. Va., 11/23/2022
- Venue Allegations: Venue is asserted based on Defendant being a foreign corporation that has not designated a U.S. agent for service of process.
- Core Dispute: Plaintiffs seek a declaratory judgment that their Electronic Shelf Label products do not infringe three U.S. patents owned by Defendant, a direct competitor.
- Technical Context: The technology concerns electronic shelf label (ESL) systems used in retail, focusing on methods for power management and communication between labels, base stations, and other devices like customer smartphones.
- Key Procedural History: Plaintiffs allege that this U.S. action follows a "hostile patent assertion campaign" by Defendant, including litigation in Germany on a related European patent where a court-appointed expert found non-infringement, and recent letters from Defendant to Plaintiffs' U.S. customers threatening litigation.
Case Timeline
| Date | Event |
|---|---|
| 2015-12-10 | Priority Date for ’916, ’583, and ’669 Patents |
| 2020-06-09 | Issue Date for U.S. Patent 10,679,583 |
| 2020-08-25 | Issue Date for U.S. Patent 10,755,669 |
| 2022-05-09 | SES-imagotag files German patent action against Hanshow |
| 2022-06-01 | Court-ordered inspection of Hanshow products in Germany |
| 2022-07-19 | Issue Date for U.S. Patent 11,392,916 |
| 2022-09-19 | German court-appointed expert issues opinion of non-infringement |
| 2022-11-18 | SES-imagotag allegedly sends letters to Hanshow's U.S. customers |
| 2022-11-23 | Complaint for Declaratory Judgment filed |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 11,392,916, “Display device for displaying a price and/or product information,” Issued July 19, 2022
The Invention Explained
- Problem Addressed: Traditional retail checkout processes can be inefficient. Providing products with individual RFID labels for automated detection is expensive, and manual barcode scanning is slow. The patent identifies a need for a more efficient way to detect and process products for checkout (Compl. ¶14; ’916 Patent, col. 1:11-52).
- The Patented Solution: The invention proposes a system where the electronic shelf label (ESL) itself stores the product data. A customer uses a "self-checkout device" (e.g., a smartphone) to communicate directly with the ESL via a second, short-range radio interface (like NFC). The ESL, upon receiving a "self-checkout request," transmits the product data to the customer's device for processing, streamlining the checkout procedure at the shelf location (’916 Patent, Abstract; col. 2:45-67). The patent also describes controlling the availability of this data transfer, for instance, to manage promotions or stock levels (’916 Patent, col. 6:47-56).
- Technical Importance: This approach shifts the point of checkout from a central counter to the product's location on the shelf, leveraging the existing ESL infrastructure and customers' personal devices to create a decentralized and potentially more efficient retail experience (’916 Patent, col. 2:58-67).
Key Claims at a Glance
- The complaint asserts non-infringement of claims 1-11, with claim 1 being the sole independent claim (Compl. ¶6).
- Independent Claim 1 Essential Elements:
- A display device (ESL) with a memory stage for storing a product data set received from a base station via a first radio interface.
- A second radio interface (e.g., RFID/NFC) for communication with a self-checkout device.
- The display device is configured to process a self-checkout request from the self-checkout device to transmit the product data set via the second radio interface.
- The memory stage also comprises an "availability data set" associated with the product data set.
- The display device is configured to check the availability data set when processing the self-checkout request and "only transmit the product data set (PD) when the product is available."
- The complaint seeks a declaration of non-infringement for dependent claims 2-11 as well (Compl. ¶53).
U.S. Patent No. 10,679,583, “Display device having a controllable deep-sleep mode,” Issued June 9, 2020
The Invention Explained
- Problem Addressed: Battery-powered ESLs require extremely low energy consumption to maximize service life. The patent discloses that conventional communication protocols, while energy-efficient for routine price updates, may lack the responsiveness needed for other operational situations (’583 Patent, col. 1:25-54).
- The Patented Solution: The invention describes an ESL with two distinct radio interfaces. The first communicates with a base station according to a rigid, power-saving time-slot protocol. A second, different interface (e.g., NFC) allows for on-demand communication with a separate device to control the ESL's states, such as waking it from a "storage state" (a deep-sleep mode) where the primary radio is inactive. This dual-interface system enables both long-term power efficiency and immediate, on-demand control (’583 Patent, Abstract; col. 2:31-56).
- Technical Importance: This architecture provides a way to manage the lifecycle of an ESL, allowing it to be placed in a near-zero power state for storage or shipping and then be activated and provisioned in the field using a local device, bypassing the constraints of the primary network protocol (’583 Patent, col. 2:6-14).
Key Claims at a Glance
- The complaint asserts non-infringement of claims 1-16, with claim 1 being the sole independent claim (Compl. ¶6).
- Independent Claim 1 Essential Elements:
- A display device with a first radio interface for communicating with a base station.
- A second radio interface (e.g., NFC/RFID) for communicating with a different device to "start the readiness of the processing stage to receive data via the first radio" interface.
- The device is designed to assume a "storage state" after first exiting a "delivery state."
- In the storage state, the processing stage is "not ready to receive data" via the first radio interface.
- By contrast with the delivery state, in the storage state the device "now already has a network key for communication with the base station," which was received via the second radio interface.
- The complaint seeks a declaration of non-infringement for dependent claims 2-16 as well (Compl. ¶69).
U.S. Patent No. 10,755,669, “Display device having a controllable processing stage,” Issued August 25, 2020
- Technology Synopsis: This patent, related to the ’583 Patent, describes a display device with a primary radio interface and an additional interface. The technology focuses on using the additional interface to manage the device's operational states, including a "delivery state" where the device cannot independently connect to the primary network, and using the additional interface to provide a network key to enable a connection setup (’669 Patent, Claim 1).
- Asserted Claims: The complaint asserts non-infringement of claims 1-13, with claim 1 being independent (Compl. ¶6).
- Accused Features: Hanshow alleges its products do not have a "delivery state" where the device cannot switch to an active state by itself, and that its products do not receive a network key via the additional interface for the purpose of setting up a connection with the base station as claimed (Compl. ¶¶ 74-75).
III. The Accused Instrumentality
- Product Identification: The "Hanshow Products-at-Issue" include the Stellar, Nowa, Lumina Aqua, and Nebular product series of Electronic Shelf Labels (ESL) (Compl. ¶27).
- Functionality and Market Context:
- The complaint describes these products as ESL devices used for the research, development, production, and sale of systems for displaying retail information (Compl. ¶4).
- The core of the dispute centers on the specific radio communication functions of these devices and how they manage power states and data exchange (Compl. ¶24).
- Hanshow positions its technology as "its own innovative technology" and asserts that its products are sold and used throughout the world, including in the United States, in competition with Defendant SES-imagotag (Compl. ¶¶ 1, 4, 5). The complaint does not provide specific technical details on the operation of the accused products beyond the assertions of non-infringement.
IV. Analysis of Infringement Allegations
No probative visual evidence provided in complaint.
’916 Patent Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Non-Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| ...the display device (2-19) is configured to process a self-checkout request received from the self-checkout device (57) for transmitting the product data set (PD) via the second radio interface (45) to the self-checkout device (57)... | Hanshow alleges its products fail to meet this limitation, suggesting they do not process a "self-checkout request" to transmit a product data set as required. | ¶42 | col. 16:7-14 |
| ...the memory stage (50) comprises an availability data set (VD) associated with the product data set (PD) and configured to control the availability of the product data set (PD)... | Hanshow alleges its products fail to meet this limitation, suggesting they do not contain an "availability data set" that controls the availability of the product data set. | ¶43 | col. 16:15-18 |
| ...the display device (2-19) is configured to check the availability data set (VD) when processing of the self-checkout request and only transmit the product data set (PD) when the product is available. | Hanshow alleges its products fail to meet this limitation, suggesting they do not perform the claimed conditional logic of checking an availability data set before transmission. | ¶44 | col. 16:19-23 |
- Identified Points of Contention:
- Functional Questions: A central question will be whether the accused Hanshow products perform the specific functions recited in the claim. Does any communication from a customer's device to a Hanshow ESL constitute a "self-checkout request"? Do the Hanshow products employ a mechanism analogous to the claimed "availability data set (VD)" to control data transmission?
- Evidentiary Questions: The resolution will depend on evidence detailing the software and hardware architecture of the Hanshow products, specifically how they handle communication via their secondary interface and what logic governs data transmission.
’583 Patent Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Non-Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| ...a second radio interface... to start the readiness of the processing stage to receive data via the first radio [interface] for a delivery state and a storage state of the display device... | Hanshow alleges its products fail to meet this limitation, suggesting their second radio interface is not used to initiate readiness for the primary radio in the manner claimed. | ¶58 | col. 14:19-26 |
| ...the processing stage is not ready to receive data by means of the first radio interface in the storage state and by contrast with the delivery state, the display device now already has a network key for communication with the base station, wherein the network key was received via said second radio interface and stored prior to entry into the storage stage... | Hanshow alleges its products do not have a "storage state" where the primary radio is inactive but a network key, previously received via the second interface, is already present. | ¶59 | col. 14:32-41 |
| ...the presence of the storage state is ascertained with the aid of a value in a storage, such that correct steps can be taken for continued operation after a renewed activation. | Hanshow alleges its products do not ascertain a "storage state" using a stored value to enable resumption of operation as claimed. | ¶60 | col. 14:42-46 |
- Identified Points of Contention:
- Scope Questions: The definitions of "storage state" and "delivery state" will be critical. The case may turn on whether the accused products' low-power modes meet the specific functional and sequential requirements of these claimed states.
- Technical Questions: Does the architecture of the Hanshow products align with the patent's specific sequence of receiving a network key via the second interface before entering the "storage state"? The dispute raises factual questions about the precise operational modes and state transitions within the accused devices.
V. Key Claim Terms for Construction
For the ’916 Patent
- The Term: "availability data set (VD)"
- Context and Importance: This term is central to Hanshow's non-infringement argument. The infringement analysis depends on whether the accused products contain a data structure that meets this definition and is used to "control the availability" of the product data set. Practitioners may focus on this term because it appears to require a specific control mechanism beyond simply storing the product data itself.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The patent states the availability data set is "linked to the product data set" and can be "a component of the product data set or exist separately from the latter" (’916 Patent, col. 6:47-63), which could support arguing that any flag or value indicating stock status qualifies.
- Evidence for a Narrower Interpretation: Claim 1 requires the device to "check the availability data set... and only transmit... when the product is available," suggesting it is a distinct logical input for a conditional transmission, not just informational data. The specification discusses using it to control offers limited by time or amount, implying a specific control function (’916 Patent, col. 7:40-54).
For the ’583 Patent
- The Term: "storage state"
- Context and Importance: The existence and characteristics of a "storage state" in the accused products are a core point of dispute. A finding of infringement requires the accused products to have a state that is distinct from a "delivery state" and has the specific properties required by the claim (e.g., first radio is off, but a network key received via the second radio is present).
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The patent describes the storage state broadly as an "operating state, specifically an absolute resting state, in which practically no power uptake exists" (’583 Patent, col. 2:9-11). This could support arguing that any deep-sleep mode qualifies.
- Evidence for a Narrower Interpretation: Claim 1 imposes specific, sequential conditions: the state is entered after a "delivery state," the first radio is not ready, and a network key "was received via said second radio interface and stored prior to entry into the storage stage" (’583 Patent, col. 14:32-41). This provides strong support for a narrower definition tied to a specific lifecycle and provisioning sequence.
VI. Other Allegations
- Indirect Infringement: The complaint preemptively denies any indirect infringement. Plaintiffs state they have not actively encouraged or induced infringement and do not contributorily infringe because their products do not meet all limitations of the independent claims and therefore have substantial non-infringing uses (Compl. ¶¶ 48, 50, 64, 66).
- Willful Infringement: The complaint does not contain an allegation of willfulness. As a declaratory judgment action, Plaintiffs instead build a record against a future willfulness claim by affirmatively pleading a "good-faith belief of non-infringement," citing, among other things, the favorable opinion from the expert in the related German litigation (Compl. ¶¶ 32, 49, 65).
VII. Analyst’s Conclusion: Key Questions for the Case
- A core issue will be one of functional operation: Do the accused Hanshow ESLs, when interacting with customer devices or being provisioned, perform the specific, multi-step logical processes required by the claims? For the '916 patent, this centers on whether the products check a dedicated "availability data set" before transmitting product data. For the '583 and '669 patents, it is whether the products' power-saving modes and startup sequences match the patent's definitions of "storage state" and "delivery state."
- A second key question will be one of definitional scope: Can the terms "storage state" and "self-checkout request" be construed broadly enough to read on the features of the accused products? The outcome will likely depend on whether the court adopts a narrow, step-by-step definition based on the patent's specific embodiments or a broader, more functional definition.
- An early procedural question will be the impact of foreign proceedings: To what extent, if any, will the court consider the non-binding opinion of the German court's technical expert? While not controlling, Plaintiffs have positioned it as a central pillar of their good-faith belief of non-infringement, potentially influencing questions of case strength and litigation conduct.