Disintermediation Services, Inc. v. The Kroger Co. et al.

Patent Lawsuit Against Grocery Giant Kroger Swiftly Dismissed

In a brief but notable case, patent assertion entity Disintermediation Services, Inc. filed a lawsuit against The Kroger Co., one of the largest supermarket retailers in the United States, alleging infringement of two patents related to online communication systems. The lawsuit, filed in a popular venue for patent holders, targeted the e-commerce and digital customer service features of Kroger's online grocery platform. However, the case was abruptly concluded when the plaintiff voluntarily dismissed the suit with prejudice a little over a month after it was filed, strongly suggesting a rapid settlement between the parties.

The lawsuit was filed on July 11, 2024, in the U.S. District Court for the Eastern District of Texas, a court long known for its plaintiff-friendly reputation and fast-paced patent dockets. The case was assigned to Judge Rodney Gilstrap, who handles a significant portion of the nation's patent cases. The plaintiff, Disintermediation Services, Inc., is a non-practicing entity (NPE) that holds a portfolio of patents related to communication technologies and has filed suits against other companies. The accused services were Kroger's extensive online and mobile platforms that allow customers to order groceries for pickup or delivery, manage accounts, and interact with the company. These services allegedly infringed U.S. Patents 11,336,597 and 11,240,183, both titled "Two-way real time communication system that allows asymmetric participation in conversations across multiple electronic platforms." The technology generally covers systems for managing web-based conversations, for instance, between a customer on a website and various company representatives.

The case, Disintermediation Services, Inc. v. The Kroger Co. et al., No. 2:24-cv-00525, is notable primarily for its brevity. A voluntary dismissal with prejudice, filed by the plaintiff on August 14, 2024, permanently bars Disintermediation Services from re-filing the same claims against Kroger. Such a swift end to the litigation, filed before Kroger had even formally answered the complaint, points to an early and likely pre-negotiated resolution, such as a licensing agreement. This pattern of assertion by an NPE against a major operating company's core e-commerce infrastructure, followed by a quick exit, is a common litigation strategy in the technology and retail sectors. The case highlights the ongoing risk that customer-facing communication technologies pose for large enterprises.

Key Legal Developments and Outcome

The patent infringement litigation between Disintermediation Services, Inc. and The Kroger Co. was exceptionally brief, concluding just over a month after it was initiated. The case did not progress to substantive motion practice, claim construction, or discovery, with the docket reflecting only the initial complaint and a swift resolution through a voluntary dismissal, which strongly suggests a rapid out-of-court settlement.

Chronological Case History

• 2024-07-11: Complaint Filed
  Disintermediation Services, Inc. filed a patent infringement complaint against The Kroger Co. and Kroger Texas LP in the U.S. District Court for the Eastern District of Texas (Marshall Division). The lawsuit, assigned case number 2:24-cv-00525, asserted that Kroger's e-commerce platforms, including its website and mobile applications, infringed U.S. Patents 11,336,597 and 11,240,183. The case was assigned to Chief Judge Rodney Gilstrap. (Case No. 2:24-cv-00525, Dkt. 1).

• 2024-07-12: Summons Issued
  The court issued summons for the defendants, The Kroger Co. and Kroger Texas LP.

• 2024-08-14: Voluntary Dismissal with Prejudice
  Just 34 days after filing the complaint, Plaintiff Disintermediation Services, Inc. filed a Notice of Voluntary Dismissal. The dismissal was made with prejudice, meaning the plaintiff is permanently barred from bringing the same claims against Kroger in the future. Such a dismissal is typically indicative of a settlement between the parties, although the terms of any such agreement were not made public. (Case No. 2:24-cv-00525, Dkt. 9).

• 2024-08-15: Case Terminated
  Following the plaintiff's notice, the court clerk officially terminated the case.

Final Disposition

The case was fully resolved and terminated following the plaintiff's voluntary dismissal with prejudice on August 14, 2024. The filing of a dismissal "with prejudice" prevents Disintermediation Services from refiling the same infringement allegations against Kroger, bringing a final and binding end to the dispute. The swiftness of the dismissal, occurring before Kroger had filed an answer or any other responsive pleading, strongly points to an early settlement or licensing agreement concluded outside of court.

Parallel PTAB Proceedings

A search of the U.S. Patent and Trademark Office's Patent Trial and Appeal Board (PTAB) database reveals no Inter Partes Review (IPR) or Post-Grant Review (PGR) proceedings have been filed against either U.S. Patent 11,336,597 or 11,240,183. The district court litigation was too short-lived for such a challenge to be filed by the defendant in response to the suit.

Counsel for Plaintiff Disintermediation Services, Inc.

Based on a review of the court filings in the Eastern District of Texas, the plaintiff, Disintermediation Services, Inc., was represented by attorneys from Garon IP, LLC, and the well-known Texas-based patent litigation firm Ward, Smith & Hill, PLLC.

• Justin Kurtis Garon

  • Role: Lead Counsel
  • Firm: Garon IP, LLC (New Orleans, LA)
  • Note: Justin "Bobby" Garon appears to be the principal of Garon IP. Public records indicate a lawyer with the same name retired from a partnership at Silbert, Pitre & Friedman at the end of 2018 to become the Executive Director of the Jewish Endowment Foundation of Louisiana, though he may have continued some legal work "of counsel." The relationship between these roles is not entirely clear from available information.

• Wesley Hill

  • Role: Local Counsel
  • Firm: Ward, Smith & Hill, PLLC (Longview, TX)
  • Note: Wesley Hill is a seasoned and highly regarded patent trial lawyer in the Eastern District of Texas. He has been involved in over 1100 cases, tried more than 30 to verdict, and frequently represents clients in high-stakes intellectual property disputes. His firm is described as "a force to be reckoned with in the Eastern District of Texas."

• T. John Ward

  • Role: Of Counsel
  • Firm: Ward, Smith & Hill, PLLC (Longview, TX)
  • Note: Judge T. John Ward is a former U.S. District Judge for the Eastern District of Texas (1999-2011) who presided over one of the heaviest patent dockets in the country. Now of counsel at the firm bearing his son's name, he focuses on patent and complex commercial litigation, bringing immense experience from his time on the bench.

No Counsel of Record for Defendant Kroger

A review of the court docket for Disintermediation Services, Inc. v. The Kroger Co. et al., Case No. 2:24-cv-00525, in the U.S. District Court for the Eastern District of Texas, reveals that no attorney ever filed a notice of appearance on behalf of the defendants, The Kroger Co. and Kroger Texas LP.

The case was terminated just 34 days after the complaint was filed. The plaintiff, Disintermediation Services, Inc., filed a Notice of Voluntary Dismissal with Prejudice on August 14, 2024, before Kroger was required to file an answer or any other responsive pleading with the court.

This rapid dismissal strongly suggests the parties reached an out-of-court settlement very early in the proceedings, obviating the need for Kroger's legal counsel to formally appear on the record. Consequently, no defense attorneys are listed in the case filings.