Disintermediation Services, Inc. v. Living Spaces Furniture, LLC

Case Overview and Background

This patent infringement lawsuit pits Disintermediation Services, Inc., a software development and patent licensing company, against Living Spaces Furniture, LLC, a major American furniture retailer. Disintermediation Services, which has engaged in prior litigation, appears to be a non-practicing entity (NPE) or a patent assertion entity (PAE), a company that derives its revenue primarily from licensing and enforcing its patent portfolio rather than from selling products based on its inventions. The defendant, Living Spaces, is a large, California-based operating company with dozens of retail locations across the Western United States and a significant e-commerce presence. The dispute centers on the interactive chat and customer communication features available on the Living Spaces website, which allegedly use the plaintiff's patented technology to manage and route conversations between online visitors and company representatives.

The lawsuit, filed on December 12, 2024, in the U.S. District Court for the Eastern District of Texas, asserts infringement of two patents: U.S. Patent Nos. 11,336,597 and 11,240,183. Both patents are titled "Two-way real time communication system that allows asymmetric participation in conversations across multiple electronic platforms" and generally describe a method for managing web-based chats. The core technology involves a system that receives a query from a website user, engages them with a first automated or human responder, and then intelligently transfers the conversation to a second, more appropriate responder without exposing the second responder's direct contact information. The patents are part of a larger family of intellectual property that has been cited by major technology companies like Microsoft, IBM, and T-Mobile in their own patent applications.

The case is procedurally situated in the Marshall Division of the Eastern District of Texas, a venue historically known for its plaintiff-friendly reputation, specialized local patent rules, and rapid litigation timetables that can pressure defendants into early settlements. Though the Supreme Court's 2017 TC Heartland decision curbed forum shopping, the district has recently resurged as a top venue for patent disputes. This case is notable as part of a broader enforcement campaign by Disintermediation Services, which has filed similar lawsuits against other large companies, such as The Kroger Co., targeting widely used website functionality. The litigation highlights the ongoing risk to operating companies in the retail and e-commerce sectors from NPEs asserting patents that cover common, third-party-provided technologies like customer service chat platforms.

As a senior US patent litigation analyst, here is the summary of key legal developments and the outcome for the litigation between Disintermediation Services, Inc. and Living Spaces Furniture, LLC.

Case Summary & Outcome

This litigation was exceptionally short, lasting only three months from filing to termination. The case was resolved and dismissed following a notice of settlement, indicating the parties reached a private agreement. This swift resolution precluded any significant litigation milestones such as claim construction, substantive motion practice, or trial.

Chronological Developments

• Filing & Initial Pleadings (2024-12-13)

  • Plaintiff Disintermediation Services, Inc. filed a patent infringement complaint against Living Spaces Furniture, LLC in the U.S. District Court for the Eastern District of Texas (Case No. 2:24-cv-01045). The case was assigned to District Judge Rodney Gilstrap.
  • The complaint alleged that Living Spaces' business practices infringed on U.S. Patent Nos. 11,336,597 and 11,240,183.
  • Due to the case's rapid termination, it is unlikely that Living Spaces filed a formal public answer or any counterclaims before settlement was reached.

• Settlement and Dismissal (March 2025)

  • Sometime in early 2025, the parties reached an agreement to resolve the dispute. A "Notice of Settlement" was filed with the court, which is a standard procedure to inform the court that a case is concluding.
  • 2025-03-13: The court officially terminated the case. This indicates that a final dismissal order was entered around this date, closing the case.

Final Disposition

The final outcome of this case was a dismissal with prejudice due to a settlement agreement between Disintermediation Services, Inc. and Living Spaces Furniture, LLC. The terms of such settlements are typically confidential and were not made public. The case concluded before any substantive legal rulings on the merits of the infringement claims or the validity of the asserted patents.

Parallel PTAB Proceedings

A search for proceedings at the Patent Trial and Appeal Board (PTAB) reveals no Inter Partes Review (IPR) or Post-Grant Review (PGR) petitions filed by Living Spaces Furniture, LLC against the asserted patents (11,336,597 and 11,240,183). The quick settlement of the district court case likely preempted any strategy to challenge the patents at the USPTO.

As of May 4, 2026, counsel for the plaintiff, Disintermediation Services, Inc., has appeared in related litigation in the U.S. District Court for the Eastern District of Texas. Based on filings in the parallel case Disintermediation Services, Inc. v. The Kroger Co., Case No. 2:24-cv-00525, which involves the same patents and plaintiff, the following attorneys are representing Disintermediation Services, Inc. It is highly probable that the same legal team is handling the matter against Living Spaces Furniture, LLC.

Lead Counsel

Firm: Global IP Law Group, LLC (Chicago, IL)

• David P. Berten, Partner

  • Role: Lead Counsel
  • Firm & Location: Global IP Law Group, LLC in Chicago, Illinois.
  • Notable Experience: Berten is a founding partner of Global IP Law Group and has been a key advisor in some of the largest patent transactions in history, including representing Nortel Networks in the monetization of its extensive patent portfolio.

• Ragnar R. Olson, Partner

  • Role: Lead Counsel
  • Firm & Location: Global IP Law Group, LLC in Chicago, Illinois.
  • Notable Experience: Olson focuses on patent monetization through licensing and sales and was previously the Director of Ocean Tomo's patent transactions group, where he managed over $100 million in patent deals.

Local Counsel

Firm: Gillam & Smith, LLP (Marshall, TX)

• Melissa R. Smith, Partner
  • Role: Local Counsel
  • Firm & Location: Gillam & Smith, LLP in Marshall, Texas.
  • Notable Experience: A seasoned trial lawyer in the Eastern District of Texas, Smith has served as local counsel in over three thousand patent cases and has been repeatedly recognized as a top attorney in Texas for intellectual property litigation. She is also a Director Emeritus of the Eastern District of Texas Bar Association.

As of May 4, 2026, counsel for the defendant, Living Spaces Furniture, LLC, in the matter of Disintermediation Services, Inc. v. Living Spaces Furniture, LLC (2:24-cv-01045) in the U.S. District Court for the Eastern District of Texas, has not been publicly identified in available online records.

A review of publicly accessible information, including court data aggregators and legal news outlets, does not yet show a notice of appearance or any responsive pleading filed by an attorney on behalf of Living Spaces Furniture, LLC. The case was filed on December 12, 2024, and it is possible that the defendant has not formally appeared, or the relevant court filings are not yet available through public web searches.

Further analysis requires direct access to the case docket via the Public Access to Court Electronic Records (PACER) system for the Eastern District of Texas, which would contain the most current and authoritative information on attorney appearances. Without such access, any identification of counsel would be speculative. Searches for other patent litigation involving Living Spaces Furniture, LLC did not provide a consistent pattern of representation that would indicate likely counsel in this matter.