DCT

1:26-cv-00767

Rady v. De Beers PLC

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I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 1:26-cv-00767, D. Del., 07/14/2026
  • Venue Allegations: Venue is based on several defendants being incorporated in Delaware, and other defendants allegedly engaging in regular business activities and committing acts of infringement within the district, including selling products and promoting the accused platforms to U.S. participants. For foreign-entity defendants, venue is alleged to be proper in any judicial district.
  • Core Dispute: Plaintiff alleges that Defendants' diamond and asset traceability platforms (Tracr, Valutrax, Origyn) and associated scanning machines infringe four patents related to technology for creating unique digital fingerprints of physical objects based on their intrinsic properties.
  • Technical Context: The technology addresses the long-standing challenge of reliably tracking high-value goods like diamonds, which can be physically altered during their lifecycle (e.g., cutting and polishing), rendering traditional tracking methods like serial numbers insufficient.
  • Key Procedural History: The complaint alleges a complex history wherein Plaintiff Dr. Rady disclosed his invention to Defendant De Beers' consultant, Boston Consulting Group (BCG), under a promise of confidentiality. Plaintiff alleges BCG and De Beers then misappropriated the invention to develop the accused Tracr platform. A prior lawsuit on a related "grandfather patent" resulted in a court finding its claims patent-ineligible under 35 U.S.C. § 101. The patents-in-suit are continuations of that original application, allegedly amended to overcome the eligibility issues. The complaint also includes counts for correction of inventorship on two U.S. patents granted to De Beers UK Limited, alleging Dr. Rady is the true inventor.

Case Timeline

Date Event
2017-03-XX Plaintiff allegedly discloses invention concept to his supervisor at BCG Compl. ¶46
2017-12-22 Earliest Priority Date for all four patents-in-suit (filing of Provisional Application No. 62/609,783) Compl. ¶53 '261 Patent, p. 2
2018-01-09 Plaintiff allegedly discloses invention in detail to head of BCG's Gamma unit Compl. ¶56
2018-01-18 Plaintiff allegedly provides a copy of his unpublished patent application to a BCG partner Compl. ¶61
2018-05-10 De Beers announces the launch of the Tracr platform Compl. ¶66
2020-03-13 Plaintiff files first patent infringement lawsuit against De Beers and BCG in S.D.N.Y. Compl. ¶88
2024-03-27 Federal Circuit affirms district court decision finding claims of a related patent ineligible Compl. ¶89
2025-07-29 U.S. Patent No. 12,375,261 issues Compl. ¶110
2025-08-26 U.S. Patent No. 12,401,496 issues Compl. ¶116
2026-03-17 U.S. Patent No. 12,580,734 issues Compl. ¶122
2026-07-14 U.S. Patent No. 12,683,762 issues Compl. ¶129
2026-07-14 Complaint Filed Compl. p. 1

II. Technology and Patent(s)-in-Suit Analysis

U.S. Patent No. 12,375,261 - "Physical Item Mapping to Blockchain Framework"

The Invention Explained

  • Problem Addressed: The patent's background describes the unreliability of traditional methods for tracing physical items, such as those that rely on third-party trust or external markers, which are vulnerable to fraud and fail when an item is physically modified (e.g., a diamond is cut) '261 Patent, col. 1:11-18 Compl. ¶38 This makes it difficult to verify an item's provenance or link a finished product to its raw material source '261 Patent, col. 3:56-4:2
  • The Patented Solution: The invention is a hardware apparatus that uses spectral imaging and a 3D scanner to analyze an object's intrinsic, unique physical properties, including subsurface irregularities '261 Patent, col. 2:54-65 This data is processed to create a robust and unique "digital signature" for the object. This signature can then be recorded, for example on a blockchain, to create a verifiable and tamper-proof record of the item's identity and history, which persists even after physical modification '261 Patent, abstract '261 Patent, col. 5:1-12
  • Technical Importance: This approach created a "tag-less" identification architecture that turns an object's own unique physical structure into its identifier, solving a critical vulnerability in supply chain security for high-value goods Compl. ¶¶29-31

Key Claims at a Glance

  • The complaint asserts at least independent claim 1 Compl. ¶181
  • The essential elements of independent claim 1 include:
    • An apparatus comprising: a housing, a spectral imaging camera, a light source, a laser range scanner, a power source, and a processor.
    • A non-transient computer-readable memory in communication with the processor.
    • The memory contains a plurality of unique digital signatures for pre-recorded physical items.
    • Each signature comprises a digital combination of spectral data and 3D scan data, identifying and mapping physical features (anomalies, defects, flaws, etc.) in 3D coordinate space Compl. ¶114
  • The complaint does not explicitly reserve the right to assert dependent claims for this patent, but states it is not limiting the claims that will be asserted Compl. ¶181

U.S. Patent No. 12,401,496 - "Physical Item Mapping to Blockchain Framework"

The Invention Explained

  • Problem Addressed: The patent addresses the same problem as the '261 Patent: the lack of a robust, end-to-end framework for asset provenance that can withstand physical modification of the asset and does not rely on fallible external markers or trusted third parties '496 Patent, col. 3:35-51
  • The Patented Solution: The invention is a networked system that uses a combination of spectral and 3D scan data to generate a unique signature for a physical item. This signature is based on the relative distances between the item's intrinsic physical features. The system is designed to record this signature, connecting the physical item to a digital record, potentially on a blockchain, to enable tracking and authentication '496 Patent, abstract '496 Patent, col. 4:1-9
  • Technical Importance: The invention provides a systemic solution for transparent asset and supply chain management that does not rely on outside trust, offering complete tracking of an asset even after it has been physically altered Compl. ¶39 '496 Patent, col. 3:48-51

Key Claims at a Glance

  • The complaint asserts at least independent claim 1 Compl. ¶199
  • The essential elements of independent claim 1 include:
    • A system comprising: one or more processors, a spectral imaging camera, a laser range scanner, a light source, a non-transient computer-readable memory, and a connection to a computer network.
    • The memory contains instructions that cause the processor(s) to:
    • Use spectral data and 3D scan data to identify and map physical features of an item in 3D coordinate space.
    • Generate a unique signature for the item by reflecting relative distances between said physical features.
    • Record the unique signature Compl. ¶120
  • The complaint does not explicitly reserve the right to assert dependent claims for this patent but states it is not limiting the claims that will be asserted Compl. ¶199

U.S. Patent No. 12,580,734 - "Method for Irrefutably Identifying Physical Items"

Technology Synopsis

This patent claims a method for generating a unique digital signature for an item. The method involves imaging the item to get 3D spatial and spectral data, using this data to create a digital 3D map of the item's physical features, generating a unique signature from that map, and comparing it to previously recorded signatures. A key part of the comparison step involves "rotating in virtual space" the item's features to identify a match, which addresses the challenge of identifying an object regardless of its orientation during a scan Compl. ¶126

Asserted Claims

Claims 1 and 21 are asserted Compl. ¶217

Accused Features

The complaint alleges that Defendants' processes for operating the Tracr, Valutrax, and Origyn platforms, which involve scanning items and comparing their digital fingerprints, practice the claimed method Compl. ¶¶218-223

U.S. Patent No. 12,683,762

Technology Synopsis

This patent claims an apparatus that includes a housing with a spectral imaging camera, a light source, and a 3D scanner. The apparatus also includes a communication system for a peer-to-peer network and a processor. The system's memory is pre-loaded with a plurality of unique digital signatures, with each signature comprising a plurality of points mapping the physical features of an item in 3D coordinate space Compl. ¶133 The claim appears to focus on the combination of the scanning hardware with a networked communication system and a pre-existing database of signatures.

Asserted Claims

Claim 7 is asserted Compl. ¶235

Accused Features

The complaint alleges that the scanning machines used within the Tracr, Valutrax, and Origyn ecosystems constitute the claimed apparatus, as they allegedly contain the required hardware, connect to a network, and access a database of diamond fingerprints Compl. ¶¶236-241

III. The Accused Instrumentality

Product Identification

The accused instrumentalities are primarily the "Tracr" and "Valutrax" platforms, the "Origyn Minting Box," and the associated physical "diamond scanning machines" (also referred to as sight boxes, robots, and modified RhoVol machines) used to implement these platforms (Compl. ¶¶11; Compl. ¶152; Compl. ¶172; Compl. ¶176).

Functionality and Market Context

  • The complaint alleges these platforms are used to establish a diamond's provenance and track it from "mine to finger" Compl. ¶153 The scanning machines allegedly "map millions of points to form a complete 3D silhouette, or virtual replica, of the physical stone" Compl. ¶153 This process generates a unique "fingerprint" or "digital twin" based on the stone's inherent physical characteristics, including internal inclusions and occlusions Compl. ¶¶153-155
  • This digital fingerprint is then allegedly logged on a system, which the complaint claims allows for matching "children stones to the parent stone" after a rough diamond is cut and polished Compl. ¶153 The complaint alleges that the Origyn Minting Box is a modified version of the diamond scanning machines, adapted for authenticating second-hand luxury goods Compl. ¶172 De Beers has allegedly promoted Tracr as an "industry-leading platform" and stated that by 2030, the majority of its annual production by value will be recorded on Tracr Compl. ¶162

IV. Analysis of Infringement Allegations

The complaint references, but does not include, claim chart exhibits Compl. ¶¶182-186 Compl. ¶¶200-204 The infringement theory is therefore summarized in prose based on the narrative allegations.

'261 Patent Infringement Allegations

The complaint alleges that the accused scanning machines (including the Origyn Minting Box and machines used for Tracr and Valutrax) directly infringe claim 1 of the '261 Patent Compl. ¶¶182-186 The infringement theory asserts that these devices are physical apparatuses that contain all the claimed hardware elements: a housing, a spectral imaging camera, a laser range scanner (or 3D scanner), a light source, a power source, a processor, and computer-readable memory (Compl. ¶114; Compl. ¶¶158, 172-176). The complaint further alleges that the memory of these systems contains, or is used in connection with, a database of "unique digital signatures" (e.g., the Tracr database of diamond fingerprints) and that the processor executes software to create new signatures by combining spectral and 3D scan data, thereby mapping the unique physical features of each scanned item (Compl. ¶152; Compl. ¶153; Compl. ¶154; Compl. ¶155).

'496 Patent Infringement Allegations

The complaint alleges that the accused systems directly infringe claim 1 of the '496 Patent Compl. ¶¶200-204 The theory posits that the combination of scanning machines, processors, and network connections used in the Tracr, Valutrax, and Origyn platforms constitute the claimed "system" Compl. ¶120 It is alleged that these systems use their processors to execute instructions stored in memory to perform the claimed steps: using spectral and 3D scan data to map an item's physical features in 3D space, generating a unique signature based on the "relative distances" between those features, and recording that signature to a database via the network connection Compl. ¶¶153-155

Identified Points of Contention

  • Scope Questions: A central dispute may concern the patent eligibility of the claims under 35 U.S.C. § 101, especially given the prior litigation history involving the parent '250 patent Compl. ¶150-151 The analysis will question whether reciting a physical "apparatus" or "system" with specific hardware components is sufficient to render the claims a patent-eligible practical application, or whether they remain directed to the abstract idea of generating and comparing data.
  • Technical Questions: A key factual question will be whether the accused scanning machines actually contain and use both a "spectral imaging camera" and a "laser range scanner" (or 3D scanner) in the manner claimed. Discovery will be needed to establish the precise hardware configuration and operational logic of the Tracr, Valutrax, and Origyn systems. It also raises the question of what evidence the complaint provides that the accused systems generate a signature based on "relative distances between said physical features" as required by claim 1 of the '496 Patent.

V. Key Claim Terms for Construction

The Term: "unique digital signature"

(asserted in claims of the '261, '496, and '734 patents)

  • Context and Importance: This term defines the core output of the claimed invention. Its construction will be critical to determining infringement, as the accused "digital twin" or "fingerprint" generated by the Tracr platform must fall within its scope. Practitioners may focus on this term to argue for a scope that either includes or excludes the specific data format used by Defendants.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: Claim 1 of the '261 Patent defines the signature broadly as "a digital combination of spectral data and 3D scan data... identifying and mapping in 3D coordinate space physical features" '261 Patent, claim 1 This language could support an interpretation covering any digital file that merges these two data types to represent an object's features.
    • Evidence for a Narrower Interpretation: Dependent claims and the specification provide more specific structures, such as "a plurality of points (x, y, z)" and "a plurality of triplets" of those points '261 Patent, claims 15-18 '734 Patent, claim 21 Defendants may argue that these specific embodiments limit the term's scope, especially since the complaint alleges Plaintiff disclosed the concept of using "triplets" to BCG Compl. ¶57

The Term: "apparatus comprising: a housing, a spectral imaging camera mounted in or on said housing, a light source mounted in or on said housing, a laser range scanner mounted in or on said housing..."

'261 Patent, claim 1

  • Context and Importance: This preamble is central to the patent eligibility dispute. Plaintiff has structured the claim as a tangible machine, likely to distinguish it from the claims of the parent patent that were found abstract Compl. ¶150-151 The construction will determine whether the claim is viewed as a concrete invention or an abstract idea with conventional hardware tacked on.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation (supporting patentability): The specification describes a physical "box/device" and a "cabinet" that houses the item analysis components, suggesting a concrete, integrated machine '261 Patent, col. 4:5-6 '261 Patent, col. 2:1-2 The detailed listing of interconnected physical components (scanner, imager, light source, etc.) may support the argument that it is a specific, practical application.
    • Evidence for a Narrower Interpretation (challenging patentability): The specification also describes the components in general terms (e.g., "a spectral imager," "a laser range scanner") without specifying unconventional arrangements '261 Patent, col. 8:27-42 A court could be asked to decide whether these are merely generic components performing their conventional functions to generate data for an abstract analytical process.

VI. Other Allegations

Indirect Infringement

The complaint pleads inducement to infringe, alleging Defendants actively encourage their partners and customers (such as Signet Jewelers and other Tracr participants) to use the infringing scanning machines and platforms (Compl. ¶¶193; Compl. ¶195; Compl. ¶197). This encouragement is allegedly done through promotion of the platforms and providing user documentation that directs the use of approved scanning machines Compl. ¶166, fn. 45 Knowledge is alleged to stem from Plaintiff's extensive pre-suit disclosures to BCG and De Beers Compl. ¶¶56-61

Willful Infringement

Willfulness is alleged based on both pre- and post-suit conduct Compl. ¶189 The complaint asserts Defendants had pre-suit knowledge of the invention due to Plaintiff's confidential disclosures to BCG executives while he was an employee, including providing a copy of his unpublished patent application Compl. ¶¶56-61 The complaint further alleges that an anonymous member of the Tracr development team confirmed the misappropriation via a "speak-up hotline" Compl. ¶86 The complaint includes a screenshot of the submission confirmation for this report, which allegedly detailed the "nicked" patent Compl. ¶87 This screenshot shows a confirmation from the "Submit-A-Report-Success" page for the Anglo American hotline with a reference number Compl. ¶87

VII. Analyst's Conclusion: Key Questions for the Case

  • A central question will be one of patent eligibility: Given that claims from a parent patent were invalidated under § 101, are the asserted claims-which now explicitly recite a physical "apparatus" and "system"-a patent-eligible practical application of the technology, or do they remain directed to the abstract idea of creating and comparing data identifiers for physical objects?
  • A core issue will be one of misappropriation and proof of infringement: Does the evidentiary record support the complaint's detailed narrative that Defendants' Tracr platform was derived directly from Dr. Rady's confidential disclosures, and can Plaintiff demonstrate that the accused systems technically operate in the specific manner required by the claims, particularly regarding the combination of spectral and 3D data to generate a unique signature?
  • A key legal and factual question will be one of definitional scope: How will the term "unique digital signature" be construed by the court? The case may turn on whether this term is limited to the specific "triplet" data structure detailed in the specification and allegedly disclosed to Defendants, or if it can be read more broadly to encompass the "digital twin" technology allegedly used in the accused Tracr platform.
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