AML IP LLC v. RaceTrac Inc

Case Overview: NPE Targets RaceTrac's Loyalty Program in East Texas

Plaintiff AML IP LLC, a Texas-based non-practicing entity (NPE), has filed a patent infringement lawsuit against RaceTrac Inc., a major U.S. operator of gasoline service stations and convenience stores. The suit, filed on April 17, 2026, in the U.S. District Court for the Eastern District of Texas, alleges that RaceTrac's customer loyalty program and associated mobile application infringe on a patent related to electronic commerce. This case is part of a broad, multi-year litigation campaign by AML IP, which has asserted the same patent against numerous other retail, restaurant, and e-commerce companies, including Dillard's, Costco, and MOD Pizza.

The technology at issue involves RaceTrac's systems for managing customer rewards and payments, specifically the "RaceTrac Rewards" program and its redesigned mobile app. This platform allows customers to earn points on purchases, redeem those points for fuel and in-store items, and process payments. The lawsuit contends these functions utilize the methods described in U.S. Patent No. 7,177,838. The '838 patent, titled "Method and apparatus for conducting electronic commerce transactions using electronic tokens," was filed in 2000 and generally claims a system for making purchases and micropayments using electronic tokens without needing direct online communication with a bank for each transaction. Critics, such as the Electronic Frontier Foundation, have characterized the patent as claiming the abstract idea of "e-money," a concept they argue is not a patentable invention.

The case (2:26-cv-00309) is being heard in the Marshall Division of the Eastern District of Texas, a venue notoriously popular with patent plaintiffs for its fast-moving dockets and experienced patent judges. The case has been assigned to District Judge Rodney Gilstrap, who manages one of the largest patent dockets in the country. The lawsuit's notability stems from its place within AML IP's sustained assertion campaign targeting a wide array of companies with a "vintage dot-com era" patent, a classic NPE strategy. The outcome of this and parallel cases may provide further insight into the viability of such patents, particularly those covering foundational e-commerce concepts, in a legal landscape shaped by the Supreme Court's Alice decision on patent eligibility.

As of 2026-05-04, the patent infringement litigation AML IP LLC v. RaceTrac Inc is in its earliest stages. Key developments are currently limited to the initial filing, but significant context can be drawn from the plaintiff's litigation history and public information about the patent-in-suit.

Filing & Initial Pleadings

• 2026-04-17: Complaint Filed
  Plaintiff AML IP LLC, a Texas-based non-practicing entity (NPE), filed a patent infringement complaint against RaceTrac Inc. in the U.S. District Court for the Eastern District of Texas. The suit alleges that RaceTrac's methods for conducting online commercial transactions and payments infringe upon U.S. Patent No. 7,177,838, titled "Method and apparatus for conducting electronic commerce transactions using electronic tokens."

• 2026-04-17: Case Assignment
  The case, docket number 2:26-cv-00309, was assigned to Chief Judge Rodney Gilstrap, a judge with extensive experience in patent litigation.

• 2026-04-20: Summons Issued
  A summons was issued for the defendant, RaceTrac Inc. As of early May 2026, RaceTrac's answer to the complaint has not yet been filed on the public docket, which is typical for this early stage of litigation.

Subsequent Proceedings & Current Posture

As the case was filed less than a month ago, there have been no substantive pre-trial motions, claim construction proceedings, significant discovery events, or trial activity. The case is currently open and active pending RaceTrac's response to the complaint.

Parallel Proceedings at the Patent Trial and Appeal Board (PTAB)

A search of the USPTO's Patent Trial and Appeal Board (PTAB) records indicates that no inter partes review (IPR) or post-grant review (PGR) proceedings have been filed to date challenging the validity of U.S. Patent No. 7,177,838.

However, the patent has previously drawn scrutiny. In 2019, the patent defensive organization Unified Patents awarded a $2,000 cash prize for a crowdsourced prior art submission related to the '838 patent, suggesting that a basis for a validity challenge may exist.

Litigation Context and Outlook

This lawsuit is part of a broad litigation campaign by AML IP LLC. The entity has filed numerous similar lawsuits against a wide range of companies in the retail, e-commerce, and service industries, asserting the same '838 patent. On the same day the RaceTrac suit was filed, AML IP also sued Cinemark, Marriott, and Callaway Golf on the '838 patent in the same district. This pattern is characteristic of an NPE seeking to monetize a patent portfolio through widespread licensing and settlement demands. Many of AML IP's previous cases have been resolved through early dismissals, likely indicating settlements.

The '838 patent itself is subject to significant validity questions. Its claims relate to using electronic tokens for online commerce, a concept critics argue is an unpatentable abstract idea. In March 2018, the Electronic Frontier Foundation (EFF) featured the '838 patent as a "Stupid Patent of the Month," contending that its claims are a "perfect example of a patent that is subject matter ineligible under 35 U.S.C. § 101" according to the Supreme Court's test in Alice Corp. v. CLS Bank.

Given this context, RaceTrac is likely to pursue a multi-pronged defense strategy, potentially including:

• Filing a motion to dismiss under 35 U.S.C. § 101, arguing the patent claims an abstract idea.
• Challenging the patent's validity at the PTAB by filing an IPR petition, which could lead to a stay of the district court case.
• Negotiating a settlement, consistent with the outcomes of many of AML IP's prior enforcement actions.

As of May 4, 2026, the counsel of record for plaintiff AML IP LLC is as follows. The case was filed recently on April 17, 2026, and as of this date, only one attorney has formally appeared on the docket for the plaintiff.

Plaintiff's Counsel

• Name: William P. Ramey, III
  • Role: Lead Counsel. As the sole signatory on the complaint and the founding partner of the firm representing the plaintiff in a widespread litigation campaign, he is considered the lead attorney.
  • Firm: Ramey LLP (Houston, Texas).
  • Note on Experience: William Ramey is a prolific patent litigator who frequently represents patent assertion entities, including AML IP, in numerous infringement campaigns across the country. He has been repeatedly selected as a "Super Lawyer" for intellectual property litigation in Texas. Recently, Mr. Ramey and his firm have faced court sanctions in other districts for their litigation conduct.

As of May 4, 2026, counsel for the defendant, RaceTrac Inc., has not yet filed a notice of appearance in the case of AML IP LLC v. RaceTrac Inc., No. 2:26-cv-00309, in the U.S. District Court for the Eastern District of Texas.

The complaint was filed on April 17, 2026, and a summons was issued to RaceTrac on April 20, 2026. An examination of the public docket reveals no responsive pleadings or notices of appearance from any law firm on behalf of the defendant.

Typically, a defendant has 21 days to respond to a complaint after service of the summons, meaning RaceTrac's answer or other response, along with its counsel's appearance, is not due until mid-May 2026.

This section will be updated once counsel for RaceTrac formally appears in the case.