DCT

4:26-cv-01310

Gadmi Security LLC v. Microsoft Corp

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I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 4:26-cv-01310, E.D. Tex., 09/18/2026
  • Venue Allegations: Plaintiff alleges venue is proper in the Eastern District of Texas because Microsoft has committed acts of infringement and maintains a regular and established place of business in the district, specifically a "POP location" in Plano, Texas, since at least August 2023.
  • Core Dispute: Plaintiff alleges that Defendant’s Microsoft Teams and Azure products infringe five patents related to methods for establishing and managing secure, encrypted communications.
  • Technical Context: The patents address foundational problems in modern cryptography, focusing on on improving the security, efficiency, and ease of use of encrypted group messaging and authentication information exchange.
  • Key Procedural History: The complaint alleges the technology was developed by Cyph, Inc., and that Microsoft learned of it at cybersecurity conferences (Black Hat USA 2016 and DEF CON 24) before launching the accused products. The complaint notes that the patents were examined by the USPTO post-Alice and, in some cases, an examiner made explicit determinations that the claims were not directed to an abstract idea, a point Plaintiff may use to preemptively counter potential patent eligibility challenges.

Case Timeline

Date Event
2015-01-07 Earliest Priority Date for all Asserted Patents
2015-08-31 Filing date for application leading to '’465 Patent
2016-07-30 Black Hat USA 2016 conference begins
2016-08-04 DEF CON 24 conference begins
2017-03-01 Microsoft Teams launched (approximate date)
2017-10-17 U.S. Patent No. 9,794,070 Issued
2018-04-17 U.S. Patent No. 9,948,625 Issued
2018-06-19 U.S. Patent No. 10,003,465 Issued
2020-06-30 U.S. Patent No. 10,701,047 Issued
2021-12-01 End-to-end encryption added to Microsoft Teams (approximate date)
2022-09-06 U.S. Patent No. 11,438,319 Issued
2023-08-01 Microsoft allegedly maintained a physical POP location in Plano, TX (approximate date)
2026-09-18 Complaint Filed

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

U.S. Patent No. 9,948,625 - "Encrypted Group Communication Method"

  • Patent Identification: U.S. Patent No. 9,948,625, "Encrypted Group Communication Method", issued April 17, 2018.

The Invention Explained

  • Problem Addressed: The patent's background describes the challenges of conventional encryption systems, which are often difficult to use, inefficient (asymmetric encryption), or vulnerable to compromise if a single secret is exposed (symmetric encryption), particularly in group settings (Compl. ¶31; ’047 Patent, col. 2:8-29). This creates a large "attack surface" for hackers Compl. ¶31
  • The Patented Solution: The invention proposes a method to improve encrypted group communications by having a first user generate a single shared symmetric key to initiate a session. This key is then distributed to all users in the group, who use it to encrypt and decrypt messages. The method specifically includes a step for adding new users to an existing session by distributing the same shared key to them, simplifying group management Compl. ¶32 ’047 Patent, col. 3:5-14
  • Technical Importance: This approach aims to provide a more computationally and bandwidth-efficient method for secure group communications compared to systems that rely on complex asymmetric key exchanges for every message or participant Compl. ¶34

Key Claims at a Glance

  • The complaint asserts at least independent Claim 1 Compl. ¶32 Compl. ¶87
  • Claim 1 Elements:
    • A method, comprising:
    • generating a shared symmetric key to begin a communication session among a group of users by a first user;
    • distributing, by the first user, the generated shared symmetric key to each user in the group of users;
    • communicating within the communication session among a group of users, wherein each user encrypts and decrypts messages using the generated shared symmetric key;
    • wherein additional users are added to the existing communication session when the first user distributes to the additional users the generated shared symmetric key.
  • The complaint does not explicitly reserve the right to assert dependent claims for this patent.

U.S. Patent No. 10,701,047 - "Encrypted Group Communication Method"

  • Patent Identification: U.S. Patent No. 10,701,047, "Encrypted Group Communication Method", issued June 30, 2020.

The Invention Explained

  • Problem Addressed: As a continuation of the '’625 Patent, the '047 Patent addresses the same fundamental problems of inefficiency and vulnerability in conventional group encryption systems Compl. ¶39 ’047 Patent, col. 2:8-29
  • The Patented Solution: The invention refines the group communication method by introducing a two-tiered session structure. It claims a method where a first user initiates a "long-lived session" for the overall group communication, but each individual encrypted communication within that group comprises a "short-lived secure communication session" Compl. ¶40 ’047 Patent, col. 3:38-40 This distinction provides a specific technical framework for managing group interactions.
  • Technical Importance: This layered session model is presented as a technical improvement that is more secure, efficient, and convenient than prior systems Compl. ¶42

Key Claims at a Glance

  • The complaint asserts at least independent Claim 1 Compl. ¶40 Compl. ¶112
  • Claim 1 Elements:
    • A method, comprising:
    • generating a shared symmetric key to begin a communication session among a group of users by a first user, wherein the communication session is a long-lived session;
    • distributing, by the first user, the generated shared symmetric key to each user in the group of users;
    • communicating within the communication session, wherein users encrypt and decrypt messages using the shared symmetric key;
    • wherein each encrypted group communication comprises a short-lived secure communication session.
  • The complaint does not explicitly reserve the right to assert dependent claims for this patent.

U.S. Patent No. 11,438,319 - "Encrypted Group Communication Method"

  • Patent Identification: U.S. Patent No. 11,438,319, "Encrypted Group Communication Method", issued September 6, 2022 Compl. ¶43
  • Technology Synopsis: As a continuation of the '047 patent, this patent addresses the same problems of secure and efficient group communication Compl. ¶¶46-47 The asserted claim is a computer-implemented method that, like the '047 patent, involves generating a shared symmetric key for a "long-lived session" where individual communications are "short-lived secure communication sessions" Compl. ¶48
  • Asserted Claims: At least independent Claim 1 Compl. ¶48 Compl. ¶137
  • Accused Features: The complaint alleges that Microsoft Teams' group communication functionalities infringe this patent Compl. ¶137

U.S. Patent No. 9,794,070 - "Method of Ephemeral Encrypted Communications"

  • Patent Identification: U.S. Patent No. 9,794,070, "Method of Ephemeral Encrypted Communications", issued October 17, 2017 Compl. ¶51
  • Technology Synopsis: This patent aims to reduce the "attack surface" by enabling ephemeral (i.e., non-permanent) communications Compl. ¶56 The claimed method involves a first user requesting a server to open an ephemeral session, the server generating a unique session identifier, and the first user transmitting that identifier to a second user "using a second communication channel" (e.g., SMS, email) to establish the connection Compl. ¶57
  • Asserted Claims: At least independent Claim 1 Compl. ¶57 Compl. ¶162
  • Accused Features: The complaint alleges that the Accused Products (Teams and Azure) infringe this patent Compl. ¶162

U.S. Patent No. 10,003,465 - "System and Method of Encrypting Authentication Information"

  • Patent Identification: U.S. Patent No. 10,003,465, "System and Method of Encrypting Authentication Information", issued June 19, 2018 Compl. ¶60
  • Technology Synopsis: This patent addresses the problem of verifying that authentication information (like public keys) has not been tampered with during an exchange, a vulnerability that enables man-in-the-middle attacks Compl. ¶¶65-67 The solution involves using a pre-coordinated, "out-of-band" shared symmetric key to encrypt and decrypt the authentication information itself, thereby verifying its authenticity Compl. ¶68 Compl. ¶69 The claim specifies the key is generated using an "integrated circuit chip" Compl. ¶69
  • Asserted Claims: At least independent Claim 1 Compl. ¶69 Compl. ¶187
  • Accused Features: The complaint alleges that Microsoft Teams infringes this patent Compl. ¶187

III. The Accused Instrumentality

  • Product Identification: The complaint identifies Defendant's "Teams and Azure products" as the Accused Products Compl. ¶2
  • Functionality and Market Context:
    • Microsoft Teams is identified as a collaboration application launched in March 2017 that is part of the Office 365 suite Compl. ¶72 The complaint alleges it provides features for encrypted group communication and that end-to-end encryption ("E2EE") was added in December 2021 Compl. ¶72 Plaintiff alleges Teams has over 320 million active users and generates over $11 billion in annual revenue, with an additional premium for E2EE features Compl. ¶¶74-76
    • Microsoft Azure is identified as a cloud platform launched in February 2010 that offers a wide range of services, including computing, storage, and networking Compl. ¶77 The complaint states that Azure uses security-related features, including encryption at rest and in transit, and that its revenue surpassed $100 billion in fiscal year 2026 (Compl. ¶¶77, 80).
    • No probative visual evidence provided in complaint.

IV. Analysis of Infringement Allegations

The complaint references claim chart exhibits that were not provided. The following tables are constructed based on the complaint's narrative allegations and an analysis of the patent specifications.

  • '9,948,625 Patent Infringement Allegations
Claim Element (from Independent Claim 1) Alleged Infringing Functionality Complaint Citation Patent Citation
A method, comprising: generating a shared symmetric key to begin a communication session among a group of users by a first user; A Microsoft Teams user initiates a group chat, which the complaint alleges involves generating a shared symmetric key for the session. ¶87; ¶88 col. 3:5-9
distributing, by the first user, the generated shared symmetric key to each user in the group of users; The Teams platform, allegedly at the direction of the first user, distributes the session key to other members invited to the group chat. ¶88; ¶103 col. 3:9-14
communicating within the communication session among a group of users, wherein each user encrypts a message... and each user decrypts a message... using the generated shared symmetric key; Members of a Teams group chat send and receive messages that are encrypted and decrypted using the session's shared key. ¶72; ¶87 col. 3:15-24
wherein additional users are added to the existing communication session when the first user distributes to the additional users the generated shared symmetric key. A Teams user adds a new member to an existing group chat, which allegedly involves distributing the existing shared symmetric key to the new member. ¶87; ¶103 col. 3:25-28
  • '10,701,047 Patent Infringement Allegations
Claim Element (from Independent Claim 1) Alleged Infringing Functionality Complaint Citation Patent Citation
A method, comprising: generating a shared symmetric key to begin a communication session among a group of users by a first user, wherein... the communication session is a long-lived session; A Microsoft Teams group chat is alleged to be a persistent, "long-lived session" for which a shared key is generated. ¶112; ¶113 col. 3:38-40
distributing, by the first user, the generated shared symmetric key to each user in the group of users; The Teams platform, allegedly at the direction of the initiating user, distributes the key for the long-lived session to all group members. ¶113; ¶128 col. 3:9-14
communicating within the communication session among a group of users... Members of a Teams group chat send and receive encrypted messages within the persistent chat environment. ¶72; ¶112 col. 3:15-24
wherein each encrypted group communication comprises a short-lived secure communication session. The complaint does not provide sufficient detail for analysis of how individual communications in Teams constitute "short-lived" sessions distinct from the "long-lived" session. ¶40; ¶112 col. 3:38-40
  • Identified Points of Contention:
    • Scope Questions: The infringement theories for the '625 and '047 patents raise the question of whether the claimed step of "distributing, by the first user," can be met when a centralized server (Microsoft Teams) performs the distribution, allegedly at the user's direction. This implicates the legal doctrine of divided infringement.
    • Technical Questions: For the '047 patent, a central dispute may be whether the architecture of Microsoft Teams actually employs a "long-lived session" that contains distinct "short-lived secure communication sessions," as required by the claim, or if this is a mischaracterization of how Teams' cryptographic protocol operates.

V. Key Claim Terms for Construction

  • The Term: "distributing, by the first user" (from '625 Patent, Claim 1)

  • Context and Importance: This term is critical for determining direct infringement. The claim recites an action performed "by the first user." Microsoft may argue that its servers, not the user, perform the key distribution, thereby avoiding infringement of this step. The case may turn on whether the user's act of initiating a chat and adding members constitutes "distributing" under the law of divided infringement.

  • Intrinsic Evidence for Interpretation:

    • Evidence for a Broader Interpretation: The specification describes the benefits of the invention in a general sense, such as being "simple, and more convenient, to implement" '047 Patent, col. 3:45-47 Plaintiff may argue this supports an interpretation that covers common, convenient, server-mediated architectures.
    • Evidence for a Narrower Interpretation: The plain language "by the first user" may suggest that the user's own device must perform the distribution step directly, without a server intermediary. The patent's flow chart shows the "first user" performing the distribution action directly '9,948,625 Patent, FIG. 1, step 10

  • The Term: "long-lived session" / "short-lived secure communication session" (from '047 Patent, Claim 1)

  • Context and Importance: The distinction between these two types of sessions is a core element of Claim 1 of the '047 and '’319 patents. The infringement case depends on mapping these specific claim terms to the actual operation of Microsoft Teams. Practitioners may focus on this term because the patentability of the claim may hinge on this specific, structured arrangement being a technical improvement over the prior art.

  • Intrinsic Evidence for Interpretation:

    • Evidence for a Broader Interpretation: The specification does not appear to provide an explicit, narrow definition with specific technical parameters. Plaintiff may argue the terms should be given their plain and ordinary meaning, where a "long-lived session" is any persistent group chat and a "short-lived session" is any individual message exchange within it.
    • Evidence for a Narrower Interpretation: Defendant may argue the terms must be read in light of the patent's stated goal of improving efficiency '047 Patent, col. 3:41-42 This could require a specific technical implementation (e.g., related to key management or session teardown) that is more than just a label for a chat room and a message. The specification contrasts "N short-lived secure communication sessions and 1 long-lived session" as the invention's improvement, suggesting a concrete technical structure '047 Patent, col. 3:38-40

VI. Other Allegations

  • Indirect Infringement: The complaint alleges induced infringement for all asserted patents, stating that Microsoft "specifically instructs users how to perform the operations that constitute direct infringement" through its product documentation and user interfaces Compl. ¶103 Compl. ¶128 Compl. ¶153 Compl. ¶178 Compl. ¶203 This is alleged to satisfy the requirement of taking active steps to encourage infringement.
  • Willful Infringement: Willfulness is alleged for all asserted patents. The claims are primarily based on alleged pre-suit knowledge of Cyph's technology and patents. The complaint alleges Microsoft had knowledge from its employees' attendance at Black Hat 2016 and DEF CON 24, where Cyph's technology was presented Compl. ¶89, as well as from competitive activities and monitoring of the patent landscape Compl. ¶89 The complaint itself is also cited as providing knowledge for any ongoing post-filing infringement Compl. ¶90

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

  1. A central issue will be one of divided infringement and control: can Plaintiff prove that a Microsoft Teams user, by clicking to create a group chat, "directs or controls" Microsoft's servers to perform the claimed step of "distributing" a symmetric key in a manner that satisfies the legal standard for direct infringement liability?

  2. A second core question is one of technical and definitional scope: does the architecture of Microsoft Teams actually implement the specific two-tiered structure of a "long-lived session" containing multiple "short-lived secure communication sessions" as claimed in the '047 and '319 patents, or will discovery reveal a fundamental mismatch in technical operation?

  3. A key evidentiary battle will focus on pre-suit knowledge and willfulness: can Plaintiff produce sufficient evidence to move beyond "information and belief" and demonstrate that specific Microsoft employees not only attended the 2016 conferences but also learned of the patented technology and used that knowledge to develop the accused features in Teams and Azure?