DataCloud Technologies v. Walgreens: Voluntary Dismissal With Prejudice After 174 Days
DataCloud Technologies, LLC filed patent infringement claims against Walgreen Co. in the Northern District of Illinois, asserting two patents covering anonymous network communication and data organisation systems. Before Walgreens filed any responsive pleading, DataCloud dismissed all claims with prejudice under Rule 41(a)(1)(A)(i) — permanently forfeiting the right to refile.
Pre-Answer dismissal with prejudice ends DataCloud’s Walgreens patent campaign
DataCloud Technologies, LLC — a non-practising entity holding patents in network communication and data management — filed suit against Walgreen Co. in the Northern District of Illinois on 31 December 2024, asserting US7209959B1 (anonymous network communication via virtual domains) and US6651063B1 (data organisation and management systems). The case was assigned to Judge John F. Kness. Walgreens retained Morgan, Lewis & Bockius LLP to defend, a firm with substantial patent litigation depth, while DataCloud was represented by Rozier Hardt McDonough PLLC.
On 23 June 2025 — 174 days after filing — DataCloud filed a notice of voluntary dismissal with prejudice pursuant to Fed. R. Civ. P. 41(a)(1)(A)(i). The filing explicitly confirmed that Walgreens had neither answered the complaint nor moved for summary judgment, satisfying the procedural precondition for a unilateral plaintiff dismissal at that stage. A dismissal with prejudice is a final adjudication on the merits for res judicata purposes, meaning DataCloud is permanently barred from reasserting these two patents against Walgreens.
The 174-day lifespan and pre-answer posture of the dismissal are commercially significant. The public record does not disclose whether a confidential settlement was reached — a with-prejudice dismissal may accompany a paid settlement or may reflect a unilateral strategic retreat. The absence of any fee motion by Walgreens suggests the resolution, whatever its terms, was not contested. DataCloud’s litigation activity across other defendants, if any, would be relevant context for assessing whether this reflects a broader portfolio wind-down or a defendant-specific resolution.
Filing to Voluntary dismissal in 174 days
174 days — resolved before defendant filed any answer or summary judgment motion
Dismissed with prejudice: what the Rule 41 filing means for both parties
Rule 41(a)(1)(A)(i): plaintiff’s unilateral right to dismiss
Fed. R. Civ. P. 41(a)(1)(A)(i) permits a plaintiff to dismiss without a court order before the defendant serves an answer or a summary judgment motion. DataCloud’s notice confirmed Walgreens had done neither. The plaintiff chose to dismiss with prejudice — a stricter election than the rule requires. A with-prejudice dismissal under Rule 41 is treated as a final judgment on the merits, triggering res judicata and permanently barring refiling of the same claims.
Permanent bar on refilingDataCloud permanently forfeits claims against Walgreens
By electing with-prejudice dismissal, DataCloud has surrendered its right to sue Walgreens again on US7209959B1 and US6651063B1. This is the most restrictive possible self-imposed outcome. Whether this reflects a confidential settlement payment, a commercial licensing resolution, or a unilateral retreat cannot be determined from the public record. The pre-answer timing may signal that DataCloud concluded enforcement against Walgreens was not commercially viable once Walgreens engaged major litigation counsel.
Claims permanently extinguishedWalgreens exits without filing a single responsive pleading
Walgreens achieved dismissal of all patent claims before incurring the cost of an answer, claim construction, or discovery. Morgan, Lewis & Bockius LLP’s engagement likely signalled credible defence posture. Walgreens retains full freedom to operate under the asserted patents going forward, and the with-prejudice nature of the dismissal eliminates residual litigation risk from DataCloud on these specific patents. No attorney fee motion was filed, consistent with either a negotiated resolution or a decision not to seek fees given the case’s early stage.
Full freedom to operate restoredEarly dismissal pattern raises questions about patent enforceability
When a plaintiff holding network-era patents (priority dates in the early 2000s) voluntarily dismisses with prejudice before any responsive pleading, it may signal concerns about claim validity, claim mapping, or the cost-benefit of continued litigation against a well-resourced defendant. Retailers and e-commerce platforms facing similar NPE assertions in network communication and data management should note that early engagement of experienced patent defence counsel consistently correlates with pre-answer resolution outcomes.
NPE enforcement signalFull party and counsel information
| Role | Name | Type | Detail |
|---|---|---|---|
| Plaintiff | DataCloud Technologies, LLC | Company | Non-practising entity — holder of US7209959B1 and US6651063B1 (network and data systems)Search in Eureka ↗ |
| Defendant | Walgreen, Co. | Company | Walgreen Co. — US pharmacy and retail chain; defended by Morgan, Lewis & Bockius LLPSearch in Eureka ↗ |
| Plaintiff counsel | Kenneth Andrew Matuszewski | Attorney | Counsel for DataCloud Technologies, LLCSearch in Eureka ↗ |
| Plaintiff law firm | Rozier Hardt McDonough PLLC | Law Firm | Representing DataCloud Technologies, LLCSearch in Eureka ↗ |
| Defendant counsel | Jason C. White | Attorney | Counsel for Walgreen, Co.Search in Eureka ↗ |
| Defendant counsel | Liya Levin | Attorney | Counsel for Walgreen, Co.Search in Eureka ↗ |
| Defendant counsel | Nicholas A. Restauri | Attorney | Counsel for Walgreen, Co.Search in Eureka ↗ |
| Defendant law firm | Morgan, Lewis & Bockius, LLP | Law Firm | Representing Walgreen, Co.Search in Eureka ↗ |
| Presiding judge | Judge John F. Kness | Judge | Illinois Northern District CourtSearch in Eureka ↗ |
Official order — verbatim text
The dismissal notice is procedurally precise: DataCloud invoked Rule 41(a)(1)(A)(i) and affirmatively elected with-prejudice termination while confirming Walgreens had filed no answer or summary judgment motion. The with-prejudice election transforms what would otherwise be a procedural housekeeping notice into a final merits-equivalent judgment. This phrasing closes off any future enforcement by DataCloud against Walgreens under either asserted patent. The absence of a court order or judicial finding means no claim construction, validity, or infringement ruling was issued — the patent’s enforceability against third parties remains unaffected.
US7209959B1 & US6651063B1 — Network Anonymity and Data Management Systems
US7209959B1 (application no. US09/542858) covers apparatus, systems, and methods for communicating to a network through a virtual domain that provides anonymity to a client — technology consistent with early-2000s privacy and proxy networking architecture. US6651063B1 (application no. US09/493911) covers data organisation and management systems and methods, suggesting structured data storage or retrieval architecture. Both patents originate from application filings in the 2000–2001 window, placing them in an era of broad functional claiming before Alice and modern § 101 jurisprudence tightened eligibility standards.
For retail and e-commerce operators, these patents are strategically relevant because virtual domain anonymisation and data management architectures underpin a wide range of customer-facing digital services — from loyalty platforms and personalisation engines to secure checkout flows. The fact that DataCloud chose Walgreens — a major pharmacy and retail chain with significant digital infrastructure — as a defendant suggests the asserted claims were mapped to commercial web or app-based services. The early dismissal without any claim construction ruling leaves the patents’ scope formally undefined, preserving optionality for DataCloud in future assertions.
Should your team run an FTO against US7209959B1 and US6651063B1?
Any retailer, e-commerce platform, or SaaS provider operating network services that incorporate user anonymisation, virtual domain routing, or structured data management systems should assess exposure to these two DataCloud patents. US7209959B1’s focus on anonymous client communication via virtual domains is broad enough to potentially read on VPN-adjacent features, anonymised session management, or proxy-based data routing in consumer-facing applications. US6651063B1’s data organisation framing may extend to database structuring or content management systems.
PatSnap Eureka’s FTO Search Agent can map the claim scope of US7209959B1 and US6651063B1 against your product architecture, surface relevant prior art that could support an IPR petition, and identify forward citations that reveal how broadly these patents have been interpreted in subsequent prosecution. Given the patents’ early-2000s priority dates and functional claiming style, an Alice § 101 analysis alongside a prior art search is strongly recommended before any licensing negotiation or product launch in the affected technology space.
Run a freedom-to-operate analysis on US7209959B1 to assess your product’s exposure
Run FTO in Eureka →Similar NPE network patent infringement cases in federal district courts
Cases involving NPE assertion of network anonymity and data management patents in the Northern District of Illinois and comparable federal venues.
What this case signals for the NPE patent enforcement landscape
A with-prejudice pre-answer dismissal against a major retailer suggests enforcement calculus shifted sharply once credible defence counsel appeared.
Engaging tier-1 patent defence counsel early can reset litigation economics
Walgreens’ retention of Morgan, Lewis & Bockius LLP — a firm with significant patent litigation capability — likely altered DataCloud’s cost-benefit analysis before any answer was due. Companies facing NPE assertions in network and data management technology should consider that early counsel signalling can itself be a litigation strategy, not merely a defensive necessity.
With-prejudice election is rare without a settlement; monitor for licensing activity
Plaintiffs rarely voluntarily choose with-prejudice over without-prejudice dismissal unless a resolution has been reached or the case is clearly unwinnable. IP teams tracking DataCloud’s US7209959B1 and US6651063B1 portfolio should monitor for licensing announcements or continued assertion against other defendants in the retail and e-commerce sector.
DataCloud v Walgreen — key questions answered
The with-prejudice dismissal under Fed. R. Civ. P. 41(a)(1)(A)(i) means DataCloud permanently forfeited its right to sue Walgreens again on US7209959B1 and US6651063B1. It functions as a final judgment on the merits for res judicata purposes, even though no court adjudicated the patent claims. Walgreens faces no residual litigation risk from DataCloud on these patents.
The public record does not disclose whether a settlement was reached. A with-prejudice voluntary dismissal is consistent with either a confidential paid settlement or a unilateral plaintiff retreat. The absence of any attorney fee motion by Walgreens is consistent with both interpretations. The actual commercial terms, if any, remain undisclosed.
DataCloud asserted US7209959B1, covering apparatus and methods for communicating to a network via a virtual domain providing client anonymity, and US6651063B1, covering a data organisation and management system and method. Both patents originate from application filings in the 2000–2001 period and were assigned to DataCloud Technologies, LLC.
The precise reason is not disclosed in the public record. Possible explanations include a confidential licensing or settlement agreement, a reassessment of claim mapping against Walgreens’ specific products, or a strategic response to the entry of Morgan, Lewis & Bockius LLP as defence counsel. The pre-answer posture — 174 days after filing — suggests the resolution driver emerged relatively early in the litigation lifecycle.
No. A voluntary dismissal with prejudice only binds the parties to that action. No court issued any validity, claim construction, or infringement ruling. US7209959B1 and US6651063B1 remain enforceable against other defendants unless separately challenged through IPR, ex parte reexamination, or district court invalidity proceedings. Third parties facing assertion of these patents cannot rely on the Walgreens dismissal as a validity precedent.
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