Monticello Enterprises LLC v. Petco Health & Wellness Company Inc. et al.

Monticello Enterprises LLC, identified as a patent assertion entity (PAE), initiated this patent infringement lawsuit against Petco Health & Wellness Company Inc. and Petco Animal Supply Stores Inc., a prominent retailer of pet supplies and services. The litigation alleged that Petco's digital payment infrastructure infringed Monticello's intellectual property. Specifically, the accused products and services included Petco's browser payment request API integrations, in-app payment systems, and point-of-sale checkout interfaces, particularly those utilizing third-party payment systems like Apple Pay, Google Pay, and/or Samsung Pay. The primary patent at issue, U.S. Patent 11,004,139, along with several other related patents (U.S. Patents 9,824,408, 10,121,186, 10,643,266, 11,461,828, and 11,468,497), broadly cover online, wireless, and in-app payment systems and browser payment interfaces.

This case, originally filed in the Western District of Texas, Waco Division, was administratively closed on April 19, 2024, and consolidated into a lead case, 6:23-cv-753-XR, which also involved similar patent infringement claims against other retailers like Macy's and Starbucks. The Western District of Texas gained prominence as a patent litigation venue due to its historically fast-paced dockets; however, judge assignments in the Waco Division are now randomized. The consolidated cases ultimately concluded with a significant victory for the defendants. On March 18, 2026, the District Court, adopting a Report and Recommendation from Magistrate Judge Derek T. Gilliland, granted summary judgment in favor of the defendants and dismissed the consolidated cases. The court found that Monticello had licensed its patents to Allied Security Trust I, which in turn sublicensed them to entities like Apple, Google, and Samsung. Petco, by using these payment systems, was deemed an "Authorized Third Party" under these sublicense agreements, thus precluding Monticello's infringement claims.

The case is notable for highlighting common strategies employed by patent assertion entities, such as Monticello, including the simultaneous filing of complaints against multiple defendants asserting the same patent portfolio, often leading to consolidation to streamline litigation efforts. Furthermore, the validity of Monticello's patents has faced external challenges; for instance, Unified Patents filed an ex parte reexamination against U.S. Patent 11,468,497, leading to a final rejection of its challenged claims on November 7, 2024, indicating potential vulnerabilities in Monticello's broader patent portfolio. The dismissal based on existing sublicense agreements provides a crucial precedent for retailers utilizing popular third-party payment systems.

This case, Monticello Enterprises LLC v. Petco Health & Wellness Company Inc. et al. (6:23-cv-00761), was initiated in the Western District of Texas on November 9, 2023. It involves allegations of patent infringement related to browser payment interfaces and in-store/in-app purchase APIs. The primary patent at issue in this specific case, as initially identified, is US Patent 11,004,139. However, the broader campaign by Monticello Enterprises LLC involves six U.S. patents, including 11,468,497, 11,461,828, 11,004,139, and 10,121,186, all covering similar payment technologies.

Here's a chronological breakdown of the key legal developments and outcome:

• Filing & Initial Pleadings (Complaint): Monticello Enterprises LLC filed its complaint against Petco Health & Wellness Company Inc. and Petco Animal Supply Stores Inc. on November 9, 2023. This was part of a larger strategy by Monticello, which filed near-simultaneous complaints against multiple defendants, including Macy's and Starbucks, asserting the same patent portfolio. The complaints alleged infringement related to Petco's browser payment request API integrations, in-app payment systems, and point-of-sale checkout interfaces.

• Pre-trial Motions of Substance (Motions to Dismiss): Petco, along with co-defendants Macy's and Starbucks in the related cases, filed motions to dismiss the complaints 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. The motions were subsequently denied without prejudice by the District Court on January 21, 2025, allowing the issue to be raised again at the summary judgment stage.

• Consolidation: The case was administratively closed on April 19, 2024, and consolidated into lead case 6:23-cv-753-XR, which involves Monticello Enterprises LLC v. Macy's, Inc. et al.. This consolidation, enacted under Federal Rule of Civil Procedure 42(a), was aimed at eliminating duplicative Markman hearings, claim construction disputes, and scheduling conflicts, a common practice in multi-defendant patent assertion campaigns.

• Summary Judgment: In the consolidated lead case (6:23-cv-753-XR), defendants (including Petco) filed a Motion for Summary Judgment, arguing that Monticello's claims were precluded by sublicenses authorized and/or granted by Apple, Google, and Samsung (Initial Sublicensees of the patents in question). On February 27, 2026, Magistrate Judge Gilliland issued a Report and Recommendation, recommending that the Motion for Summary Judgment be granted. However, on March 18, 2026, the Court disagreed with Monticello's argument regarding the sublicenses and held that a sublicense is automatically granted when certain conditions are met, suggesting the litigation in the lead case may be concluding on grounds related to licensing.

• Parallel PTAB IPR/PGR Proceedings: Unified Patents filed an ex parte reexamination proceeding against U.S. Patent 11,468,497, one of the patents asserted by Monticello in its campaign, on April 26, 2024. This patent had been asserted against Starbucks, Petco, and Macy's. On November 7, 2024, the Central Reexamination Unit (CRU) issued a final rejection of all challenged claims of US Patent 11,468,497, finding them invalid. This outcome for one of the asserted patents could have implications for the ongoing consolidated district court litigation.

• Appeals: As of April 2026, Monticello Enterprises LLC has appealed several related cases to the Court of Appeals for the Federal Circuit, including cases against Petco, Starbucks, and Macy's. These appeals, filed around April 20-23, 2026, are currently open. It is highly probable that these appeals are related to the summary judgment ruling in the lead case 6:23-cv-753-XR.

In summary, this specific case (6:23-cv-00761) was administratively closed and consolidated into a lead case. While no merits determination was made in this individual case, the underlying patent infringement claims against Petco continue within the consolidated litigation. Significant developments in the lead case include the denial of motions to dismiss based on patent eligibility and a pending or recent summary judgment ruling concerning sublicensing. Additionally, one of the key patents asserted by Monticello in its broader campaign has been found invalid in a parallel ex parte reexamination proceeding, and Monticello has initiated appeals at the Federal Circuit related to the consolidated cases.

Monticello Enterprises LLC is represented by the following counsel:

Amar L. Thakur

• Role: Lead Counsel (Partner)
• Firm: Manatt, Phelps & Phillips, LLP, San Diego, California
• Note: Mr. Thakur leads Manatt's technology and IP litigation practice and is an experienced lead trial lawyer. He is currently representing Monticello Enterprises in a complex 6-patent lawsuit related to digital payment methods, which includes this case. He has successfully represented clients in high-stakes patent and commercial disputes before federal courts in multiple states, including Texas, and before the International Trade Commission. He is registered to practice before the U.S. Patent and Trademark Office.

Bruce R. Zisser

• Role: Counsel (Partner)
• Firm: Manatt, Phelps & Phillips, LLP, Los Angeles, California
• Note: Mr. Zisser has over two decades of experience litigating patent disputes for multinational corporations and emerging companies. He focuses on patent litigation in federal courts throughout California, Texas, and Delaware, as well as before the International Trade Commission. He is registered to practice before the U.S. Patent and Trademark Office and has experience in mobile technology, electronic health records, and smart battery management technology patent cases.

B. Russell Horton

• Role: Local Counsel (Partner)
• Firm: George, Brothers, Kincaid & Horton, L.L.P., Austin, Texas
• Note: Mr. Horton has extensive experience in litigation, including complex patent, trade secret, antitrust, and commercial disputes, representing both plaintiffs and defendants in state and federal courts throughout Texas. He is board-certified in Civil Trial Law and Personal Injury Trial Law by the Texas Board of Legal Specialization.

The following counsel of record represented the defendant(s) in Monticello Enterprises LLC v. Petco Health & Wellness Company Inc. et al.:

BakerHostetler

• Kevin W. Kirsch
  • Role: Lead Counsel (Columbus Intellectual Property Leader)
  • Firm & Office: BakerHostetler, Columbus, OH
  • Experience Note: Kirsch is a highly experienced patent litigator, having represented companies in over 200 patent litigation matters across various states. He is a former co-leader of BakerHostetler's Patent Litigation team and the current Columbus Intellectual Property Leader.
• Andrew E. Samuels
  • Role: Counsel
  • Firm & Office: BakerHostetler, Columbus, OH / Austin, TX
  • Experience Note: Samuels is an intellectual property litigator with experience spanning patent, trade secret, trademark, and copyright litigation at both trial and appellate levels. He was recognized by Managing IP as a "Rising Star" and by The Best Lawyers in America® as "One to Watch" in 2025.
• Kevin P. Flynn
  • Role: Counsel
  • Firm & Office: BakerHostetler, Cincinnati, OH
  • Experience Note: Flynn is a registered patent attorney who counsels inventors and brand owners on intellectual property matters. He has represented clients in courts across the country and in administrative forums such as the International Trade Commission and the Patent Trial and Appeal Board, across a wide range of technologies.
• Derek M. Freitas
  • Role: Counsel
  • Firm & Office: BakerHostetler, Cincinnati, OH (at the time of appearance in this case)
  • Experience Note: Freitas focuses his practice on Intellectual Property Litigation, handling IP and commercial disputes involving complex technology. He uses his background in computer science and software to translate complex technical concepts for judges and juries. He previously worked as a Judicial Extern for a U.S. District Court Judge. While listed with BakerHostetler in this case's PacerMonitor entry, his professional profile indicates he is currently a Senior Associate at FBT Gibbons.

Manatt, Phelps & Phillips, LLP

• Bruce R. Zisser
  • Role: Counsel
  • Firm & Office: Manatt, Phelps & Phillips, LLP, Los Angeles, CA
  • Experience Note: Zisser possesses over two decades of experience litigating patent disputes for multinational corporations and emerging companies. His practice includes federal court litigation in California, Texas, and Delaware, as well as before the International Trade Commission.
• Amar L. Thakur
  • Role: Counsel (Leader of Technology and IP Litigation Practice)
  • Firm & Office: Manatt, Phelps & Phillips, LLP, San Diego, CA
  • Experience Note: Thakur is an experienced lead trial lawyer who guides technology IP owners in acquiring, building, monetizing, and protecting their assets. He has successfully represented clients in high-stakes patent and commercial disputes before federal courts in multiple states, including Texas, and before the International Trade Commission.

The Dacus Firm, P.C.

• Deron R. Dacus
  • Role: Local Counsel
  • Firm & Office: The Dacus Firm, P.C., Tyler, TX
  • Experience Note: Dacus is a board-certified civil trial lawyer with extensive experience in patent, business, and commercial litigation, particularly in the Eastern District of Texas. He has represented clients in well over 1,000 patent cases in the region and has successfully tried dozens of patent cases to verdict.