Monticello Enterprises LLC v. Bluemercury Inc. et al.

This patent infringement litigation, Monticello Enterprises LLC v. Bluemercury Inc. et al., case number 6:23-cv-00753, was filed in the Western District of Texas. The plaintiff, Monticello Enterprises LLC, is identified as a patent assertion entity (PAE) that actively asserts intellectual property rights in browser-based and mobile payment technologies. The defendants include Bluemercury Inc., Macy's Retail Holdings Inc., Macys.com Inc., and Macys Inc., all prominent retail companies that operate extensive e-commerce and in-store payment systems.

The core of the dispute revolved around the defendants' alleged infringement through their use of modern "Pay Systems," such as Apple Pay, Google Pay, and/or Samsung Pay, which facilitate electronic transactions. These technologies are considered foundational to contemporary e-commerce checkout experiences. While the prompt specifically identifies U.S. Patent 11,004,139 as a patent at issue, court documents indicate that Monticello Enterprises LLC asserted a portfolio of six patents generally related to the processing of electronic payments within this consolidated litigation. A specific one-line technical sketch for Patent 11,004,139 was not readily available in the search results, but it is understood to be part of Monticello's patents concerning browser-based and mobile payment technologies.

The case was heard in the Waco Division of the Western District of Texas, a venue widely recognized for its high volume of patent litigation and its relatively swift path to trial. The case was notably terminated on March 18, 2026, when District Judge Xavier Rodriguez adopted a Report and Recommendation from Magistrate Judge Derek T. Gilliland, granting the defendants' motion for summary judgment. The defendants successfully argued they possessed an automatic sublicense through Patent Sublicense Agreements (PSAs) held by initial sublicensees like Apple, Google, and Samsung, which covered their use of the "Pay Systems." This outcome, based on a sublicense defense, is particularly notable as it resolved claims concerning all six asserted patents in the consolidated cases, highlighting the critical role of licensing structures in complex technology ecosystems like mobile payments. While this case concluded on sublicense grounds, Monticello's other payment-related patents have faced challenges from entities like Unified Patents through reexamination proceedings.

Monticello Enterprises LLC v. Bluemercury Inc. et al.: Key Litigation Developments and Outcome

Case Caption: Monticello Enterprises LLC v. Bluemercury Inc. et al.
Case Number: 6:23-cv-00753
Court: Texas Western District Court
Filed: 2023-11-07
Terminated: 2026-03-18
Status: Dismissed
Plaintiff(s): Monticello Enterprises LLC
Defendant(s): Bluemercury Inc.; Macy's Retail Holdings Inc.; Macys.com Inc.; Macys Inc.
Patents at issue: 11004139 (and five other unspecified patents related to electronic payments)

This patent infringement lawsuit, filed by Monticello Enterprises LLC, concluded with a summary judgment dismissal in favor of the defendants based on an automatic sublicense. The case was consolidated with other related actions filed by Monticello Enterprises against different defendants.

Key Legal Developments:

• Filing & Initial Pleadings:

  • Monticello Enterprises LLC filed the lead complaint against Bluemercury Inc., Macy's Retail Holdings Inc., Macys.com Inc., and Macys Inc. on November 7, 2023. This case, 6:23-cv-00753, became the lead case for consolidated litigation, including Monticello Enterprises LLC v. Petco Health & Wellness Company, Inc., et al. (6:23-cv-00761) and Monticello Enterprises LLC v. Starbucks Corporation (6:23-cv-00763). Specific dates for the defendants' answers and any counterclaims were not immediately available in the search results.

• Pre-trial Motions of Substance:

  • Motions to Dismiss (Rule 12(b)(6)): Defendants (including Petco, Macy's, and Starbucks in the consolidated cases) filed motions to dismiss under Rule 12(b)(6), arguing that all six asserted patents claimed ineligible subject matter under 35 U.S.C. § 101.
  • On December 4, 2024, Magistrate Judge Derek T. Gilliland issued a report and recommendation concerning these motions.
  • On January 21, 2025, the District Court adopted the Magistrate Judge's report and recommendation, denying the defendants' motions to dismiss without prejudice to raising the patent eligibility issue at the summary judgment stage.
  • Joint Motion for Summary Judgment: Defendants later filed a Joint Motion for Summary Judgment, arguing that the plaintiff's claims were precluded by sublicenses. This motion was referred to Magistrate Judge Gilliland.
  • On February 27, 2026, Magistrate Judge Gilliland issued a Report and Recommendation (ECF No. 78), recommending that the defendants' Joint Motion for Summary Judgment be granted.
  • Plaintiff filed objections to the Magistrate Judge's recommendation (ECF No. 80).

• Claim Construction (Markman):

  • The search results did not explicitly mention a Markman hearing or order in the lead case. However, given the consolidation of cases with multiple patents, the potential for consolidated Markman proceedings was noted as significant for claim construction implications.

• Discovery Milestones:

  • Specific strategic discovery milestones were not detailed in the available search results.

• Trial Events, Verdict, and Post-trial Motions:

  • The case did not proceed to trial.

• Final Disposition:

  • On March 18, 2026, the District Court considered the Magistrate Judge's Report and Recommendation regarding the Joint Motion for Summary Judgment and the plaintiff's objections. The Court adopted the recommendation in part, granted the Motion for Summary Judgment, and dismissed all consolidated cases.
  • The basis for dismissal was the finding that the defendants had an automatic sublicense. Plaintiff Monticello Enterprises LLC had licensed the relevant patents (which concern electronic payment processing) to Allied Security Trust I (AST). AST, in turn, could sublicense the patents to its members via Patent Sublicense Agreements (PSAs). The defendants, who are merchants using payment systems like Apple Pay, Google Pay, and/or Samsung Pay, were found to be covered by these PSAs as "Authorized Third Parties," "users," or "customers" of the Initial Sublicensees (Apple, Google, Samsung). The Court concluded that Section 2.3 of the PSAs provided an automatic sublicense to the defendants, thus shielding them from liability and requiring dismissal of the case.

• Parallel PTAB IPR/PGR Proceedings:

  • On April 26, 2024, Unified Patents filed an ex parte reexamination proceeding against U.S. Patent 11,468,497. This patent is owned and asserted by Monticello Enterprises LLC and relates to transmitting user payment data. It was asserted against Starbucks, Petco, and Macy's, defendants in the consolidated district court cases. While this reexamination is relevant to Monticello Enterprises' patent portfolio and some of the defendants, the specific patent 11004139 and the other five asserted patents in the 6:23-cv-00753 case were not directly identified as subjects of IPR or PGR proceedings in the available search results. The reexamination of 11,468,497 did not directly cause the dismissal of 6:23-cv-00753, as that dismissal was based on the sublicense argument.

Here is the identified counsel of record representing Monticello Enterprises LLC in Monticello Enterprises LLC v. Bluemercury Inc. et al. (6:23-cv-00753):

• Bruce R. Zisser

  • Role: Counsel
  • Firm: Manatt, Phelps & Phillips, LLP
  • Office Location: Los Angeles, CA
  • Experience Note: Mr. Zisser has over two decades of experience litigating patent disputes for multinational corporations and emerging companies, particularly in high-tech telecommunications systems. He has successfully represented clients in federal courts in California, Texas, and Delaware, and before the International Trade Commission.

• Andrew Hensley

  • Role: Associate Counsel
  • Firm: Ballard Spahr LLP
  • Office Location: Phoenix, AZ
  • Experience Note: Mr. Hensley is a distinguished associate in Ballard Spahr's Intellectual Property Department, focusing on high-stakes patent litigation and brand management. He has been a key member of patent litigation teams that invalidated patents and achieved favorable outcomes at the Federal Circuit Court of Appeals.

No other attorneys were identified as representing the plaintiff, Monticello Enterprises LLC, in this specific case based on the available search results. Richard W. Miller, while associated with Ballard Spahr LLP and mentioned in connection with this case number, was identified as representing a "Challenger" (defendant) in the referenced litigation platform entry, not the plaintiff.

While direct docket access for Monticello Enterprises LLC v. Bluemercury Inc. et al. (6:23-cv-00753) is not available through general web search, information regarding Macy's Inc.'s frequent patent litigation defense counsel and general litigation counsel can be used to infer potential representation.

Based on past patent litigation involving Macy's Inc. and similar retail entities, it is highly probable that the defendants were represented by firms with significant experience in intellectual property and complex commercial litigation.

One firm that has represented defendants in patent infringement actions brought by Monticello Enterprises LLC in the Western District of Texas is BakerHostetler. They successfully secured summary judgment for Petco in a similar case. While not definitively confirmed for this specific case, BakerHostetler's strong patent litigation practice and prior success against Monticello make them a likely candidate for representing the defendants.

Additionally, Alston & Bird LLP is another large firm with a robust intellectual property practice, including patent litigation, and has represented major corporations in various legal matters. They have offices across the United States, including Dallas, Texas, which could provide local counsel capabilities in the Western District of Texas. Alston & Bird has achieved total defense wins for clients in patent fights, demonstrating their capability in this area.

Macy's also has in-house legal counsel. Tracy Preston was named Chief Legal Officer and Corporate Secretary of Macy's, Inc., effective January 8, 2024. Her role involves overseeing a broad range of legal affairs, including litigation and compliance. While she would not typically act as direct trial counsel, she would lead and oversee the in-house legal team managing the defense.

Given the information, here are the likely representatives for the defendants:

• BakerHostetler

  • Role: Lead Counsel (highly probable, based on similar successful defense against Monticello)
  • Firm: BakerHostetler (multiple offices, strong litigation practice)
  • Relevant Experience: Known for significant experience in patent litigation defense and success in securing summary judgments for defendants. They have previously represented Petco against Monticello Enterprises LLC in the Western District of Texas, winning summary judgment.

• Alston & Bird LLP

  • Role: Lead Counsel or "Of Counsel" (possible, given their extensive IP litigation experience)
  • Firm: Alston & Bird LLP (offices in Atlanta, Dallas, New York, etc.)
  • Relevant Experience: A multinational law firm with a strong intellectual property practice, including patent litigation. They have achieved complete defense victories for clients in complex federal patent infringement trials.

• Tracy Preston

  • Role: Chief Legal Officer and Corporate Secretary (in-house counsel for Macy's, Inc.)
  • Firm: Macy's, Inc. (in-house)
  • Relevant Experience: Responsible for a broad range of legal affairs, litigation, and compliance for Macy's, Inc.

Without direct access to the court's docket for case 6:23-cv-00753, the specific attorneys of record and their precise roles (lead, local, or of counsel) cannot be definitively stated. However, based on the general practices of Macy's in patent litigation and the success of certain firms against this plaintiff, the above represent the most probable counsel.