ALD Social, LLC v. Verkada, Inc.

Background

ALD Social alleged that Verkada’s Crowd Notifications system infringed claim 1 of U.S. Patent Nos. 9,198,054 and 9,402,158. The patents describe systems that monitor wireless traffic, collect location information from multiple wireless devices, assess whether the devices indicate a crowd-related safety risk, and issue alerts. ALD Social alleged direct infringement, both literally and under the doctrine of equivalents, and alleged that Verkada induced infringement.

Verkada’s product was described in the complaint as a camera system that detects overcrowding by identifying people in a camera frame. Users could receive alerts when the number of people in a frame exceeded a preset threshold.

Direct infringement

For literal infringement, every limitation in the patent claim must appear in the accused product. ALD Social’s claim charts offered two possible meanings for the patents’ reference to “wireless devices”: people or a camera system.

The court found it implausible to treat people as wireless devices because the patents require determining crowd risk by aggregating the locations of multiple wireless devices, while Verkada’s product uses image analysis to count people in a single frame. The court also found that treating the camera system as the wireless devices did not solve the problem. Under that theory, the claim charts alleged that the camera system located multiple people, not multiple camera systems. The court held that these allegations were inconsistent with infringement.

The court separately rejected ALD Social’s doctrine-of-equivalents theory. That doctrine can apply when an accused product does not literally meet a claim limitation but is equivalent in function, way, and result. The court found that ALD Social offered only a conclusory reference to the doctrine and did not explain how Verkada’s product was equivalent, particularly given the problems with the literal-infringement allegations.

Indirect infringement

The court also dismissed the induced-infringement theory. It found that the complaint did not allege that Verkada knew of the patents, knew that its product’s conduct constituted infringement, or caused another party to directly infringe. The court also noted that induced infringement must be based on an adequately pleaded direct-infringement claim.

Disposition

The court granted Verkada’s motion to dismiss for failure to state a claim. The order states that ALD Social had not pleaded enough facts to support a reasonable inference of either direct or indirect patent infringement. The court gave ALD Social 20 days to file an amended complaint, provided amendment would comply with counsel’s obligations under Federal Rule of Civil Procedure 11. The order disposed of Docket No. 12.