Brett Trout
In a high-stakes patent litigation case, Alpha Modus Corp. has filed a lawsuit against Walgreens Co. in the U.S. District Court for the Eastern District of Texas, alleging infringement of three patents related to real-time retail technology. Alpha Modus CEO William Alessi has estimated damages in this case to be $500 million, or possibly even billions of dollars over the life of the patents. Investors and speculators doubled the price of Alpha Modus stock last week, likely in anticipation of this lawsuit, before the price dropped back down this week to about a sixty percent overall increase. This case underscores the importance of protecting intellectual property and of conducting intellectual property due diligence before launching new technology.

The Case at a Glance
Alpha Modus, a technology company specializing in retail analytics and consumer engagement, patented technology relating to the capture of customer data relating to age, gender, body movement, eye movement, behavior, etc. and the use of the data to facilitate sales through a smart digital display. In its lawsuit, Alpha Modus accuses Walgreens of infringing the following patents:
- U.S. Patent No. 10,360,571 – Covers real-time consumer behavior tracking and targeted marketing in retail environments.
- U.S. Patent No. 10,977,672 – Relates to inventory management and dynamic advertising based on real-time customer interactions.
- U.S. Patent No. 11,042,890 – Focuses on customer assistance using smart digital displays to enhance in-store shopping experiences?.
The lawsuit claims that Walgreens installed digital smart screens developed by Cooler Screens, a company with whom Alpha Modus had previously discussed a licensing deal but never reached an agreement. Despite being made aware of Alpha Modus’s patents, Walgreens allegedly proceeded with the use of these technologies without obtaining a license?.
The Role of Cooler Screens in the Dispute
Cooler Screens, a company co-founded by former Walgreens CEO Greg Wasson, provides digital smart displays that track consumer behavior and deliver targeted advertisements in real-time. These displays are installed in retail stores to enhance customer engagement and drive sales.
According to the lawsuit:
- Alpha Modus approached Cooler Screens in January 2020 about licensing its patents.
- Cooler Screens declined before selling its own digital smart screens.
- Walgreens partnered with Cooler Screens and deployed the accused digital smart screens across its retail locations.
- Cooler Screens sued Walgreens for $200M for breach of contract relating to the use of the smart screens in Walgreens stores.
- Alpha Modus wrote to Walgreens in February of 2020 informing Walgreens of Alpha Modus’ patents, then wrote two more letters. Walgreens ignored all three letters.
Key Legal Claims
Alpha Modus asserts that Walgreens has engaged in:
- Direct Patent Infringement – By using digital smart screens in its stores that allegedly embody Alpha Modus’s patented technology.
- Induced Infringement – By encouraging and enabling employees and customers to use the allegedly infringing technologies.
- Willful Infringement – By deploying the digital smart screen systems despite knowing about, or being willfully blind to Alpha Modus’ patents. Alpha Modus claims this entitles it to enhanced damages under 35 U.S.C. §284.
The financial damages sought by Alpha Modus could be hundreds of millions of dollars, including:
- Lost licensing revenue
- Royalties on Walgreens’ sales
- Treble damages (triple the amount)
- Attorney’s Fees
- Costs
Alpha Modus has also requested an injunction, permanently enjoining Walgreens from further use of the accused digital smart screen systems.
Implications for Retail Tech and Patent Holders
This case highlights the growing importance of patents in customer engagement. As technology-driven shopping experiences become the norm, disputes over artificial intelligence-powered purchasing analytics, dynamic advertising, and smart displays are likely to increase.
What This Means for Businesses:
- Conduct thorough patent due diligence before deploying new technologies.
- Demand intellectual property indemnification clauses in agreements relating to technology launched by third-parties.
- Take all cease-and-desist letters and other allegations of patent infringement seriously, immediately contacting patent counsel to determine if infringement has occurred.
- Prepare to fight. If you decide to fight the allegations of infringement prepare for federal litigation that my take several years and several million dollars to resolve, even if you are ultimately successful.
What This Means for Patent Owners:
- Protect new technology with nondisclosure agreements before you launch.
- Patent all technology that gives you a competitive advantage, whether through licensing or direct use.
- Document all licensing discussions and communications.
- Act quickly and decisively when infringement is detected.
- Make infringers aware, in writing, of exactly which of their products are infringing which of your patents.
- Consider a contingent fee attorney arrangement when dealing with infringers having deep pockets.
Final Thoughts
This case serves as a cautionary tale for companies leveraging patented technologies. Breaching a licensing agreement or infringing a patent often results in, at best, a lengthy and expensive trial and, at worst, injunctions, triple damages, attorney’s fees, and irreparable reputational damage.
Trials like this attract attention from investors, competitors, legal experts, and lawmakers. Depending on how this case resolves, the retail industry may see stricter compliance measures and heightened awareness around patent enforcement moving forward.
? Key Takeaway: Patent owners must vigilantly protect and enforce their intellectual property, while companies implementing new technologies should conduct due diligence to avoid patent infringement lawsuits before they start.
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