DCT

2:18-cv-01517

Moviepass Inc v. Sinemia Inc

Log In

I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 2:18-cv-01517, C.D. Cal., 02/23/2018
  • Venue Allegations: Venue is alleged to be proper in the Central District of California because the Defendant resides in the district, maintaining its principal place of business in Los Angeles.
  • Core Dispute: Plaintiff alleges that Defendant’s movie theater subscription service infringes patents related to methods and systems for location-based, just-in-time funding of a payment card for ticket purchases.
  • Technical Context: The technology concerns subscription-based services that use a subscriber's mobile device location to authenticate and authorize the loading of funds onto a physical payment card for real-time, in-person transactions.
  • Key Procedural History: The complaint does not mention any prior litigation, Inter Partes Review (IPR) proceedings, or licensing history related to the patents-in-suit.

Case Timeline

Date Event
2012-05-18 Priority Date for U.S. Patent Nos. 8484133 & 8612325
2013-07-09 U.S. Patent No. 8,484,133 Issued
2013-12-17 U.S. Patent No. 8,612,325 Issued
2018-02-23 Complaint Filed

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

U.S. Patent No. 8,484,133 - "Secure targeted personal buying/selling method and system", Issued July 9, 2013

The Invention Explained

  • Problem Addressed: The patent's background section identifies limitations of existing transaction models. Anonymous pre-paid gift cards prevent sellers from collecting valuable consumer data, while proprietary subscription passes (e.g., a specific cinema chain's pass) limit consumer choice and convenience by being restricted to certain locations (’133 Patent, col. 1:41-61).
  • The Patented Solution: The invention describes a system that links a user’s mobile application to a reloadable debit card. A member uses the app to select a movie, travels to a theater, and performs a location-based "check-in" via the app. This check-in verifies the user is at the correct venue, which triggers the system to instantly load the specific ticket price onto the debit card, enabling the purchase while allowing the service to capture detailed transaction data (’133 Patent, Abstract; col. 3:11-41; FIG. 1).
  • Technical Importance: This method created a framework for a theater-agnostic subscription service, allowing users to frequent any theater while providing the service provider with the data-collection benefits of a closed-loop system (’133 Patent, col. 2:30-41).

Key Claims at a Glance

  • The complaint asserts at least one claim of the ’133 Patent without specifying which claims will be asserted (Compl. ¶27). Independent claims include Claim 1 (a system claim) and Claim 4 (a method claim).
  • The essential elements of independent method Claim 4 include:
    • Storing user data by a service provider system.
    • Presenting a user interface (UI) on a user device.
    • Receiving a request from the user to book a ticket for an event at a specific venue and time.
    • Receiving a notification from the user's mobile device indicating the user is at the venue.
    • In response, detecting via the mobile device whether the user is at the venue.
    • If the user is at the venue, causing a user account to be electronically funded with an amount sufficient to buy the ticket.
    • Notifying the user that funds are available.
  • The complaint reserves the right to assert additional claims, including dependent claims (Compl. ¶27).

U.S. Patent No. 8,612,325 - "Automatic authentication and funding method", Issued December 17, 2013

The Invention Explained

  • Problem Addressed: The patent addresses the general need for a "controller entity" (e.g., an employer, government agency, or parent) to fund specific, permitted purchases for a user, while preventing disallowed purchases and ensuring the identity of the purchaser (’325 Patent, col. 1:31-41).
  • The Patented Solution: The invention discloses a three-party architecture comprising a "controller" who provides funds and rules, an "overseer" who manages the technology platform and enrolls merchants, and a "user" who makes purchases. The user's identity is authenticated by associating them with their mobile device at a specific merchant location. Upon successful authentication, the overseer funds a payment token from the controller's account for the approved transaction (’325 Patent, Abstract; col. 2:1-14).
  • Technical Importance: The patent describes a generalized framework for location-authenticated, controlled spending, applicable to use cases beyond movie tickets, such as corporate expense accounts, government benefit programs like food stamps, or parental allowances (’325 Patent, col. 2:35-40).

Key Claims at a Glance

  • The complaint asserts at least one claim of the ’325 Patent without specifying which claims will be asserted (Compl. ¶31). Independent claims include Claim 1 (a method claim) and Claim 12 (a system claim).
  • The essential elements of independent method Claim 1 include:
    • An overseer processor receiving a request from a controller entity to manage transactions.
    • The overseer generating a payment token for the user on behalf of the controller.
    • The overseer receiving a purchase request from the user.
    • In response, the overseer determining the user's location via their mobile device.
    • Funding the purchase request if the user's location matches an associated merchant location.
  • The complaint reserves the right to assert additional claims, including dependent claims (Compl. ¶31).

III. The Accused Instrumentality

Product Identification

  • The complaint identifies "Sinemia's Premium movie subscription product" as the accused instrumentality (Compl. ¶24).

Functionality and Market Context

  • The complaint alleges the Sinemia service is "remarkably similar" to the MoviePass service (Compl. ¶23). It describes a process where subscribers pay a monthly fee for a set number of movie tickets and are issued a "Sinemia card" that functions like a credit/debit card. To purchase a ticket, the subscriber uses the Sinemia mobile app to select a movie and showtime, travels to the theater, and "checks in" with the app. The service then allegedly verifies the subscriber's phone is within a prescribed distance of the theater, ensures compliance with subscription rules, and loads funds onto the Sinemia card to pay for the ticket (Compl. ¶¶23, 6:1-12). The complaint positions Sinemia as a direct competitor in the movie-subscription marketplace (Compl. ¶25).

IV. Analysis of Infringement Allegations

The complaint references, but does not include, claim chart exhibits detailing its infringement theories (Compl. ¶¶24, 27, 31). The narrative infringement allegations are summarized below.

  • '133 Patent Infringement Allegations: The complaint alleges that Sinemia's service performs a method and provides a system that infringes the ’133 Patent (Compl. ¶27). The narrative theory maps the operation of the Sinemia service to the patented process. The complaint alleges that when a Sinemia subscriber selects a movie in the app, this constitutes receiving a request to book a ticket (Compl. ¶6:1-2). The subsequent requirement for the user to "check in at the theater" using the app, which "verifies that the subscriber's phone is within a prescribed distance of the theater," is alleged to meet the patent's limitations of detecting the user at the venue (Compl. ¶6:2-8). Finally, the complaint alleges that the Sinemia service then "ensures that there is sufficient amount of credit on the subscriber's payment card to pay for the desired movie ticket," which corresponds to the patented step of funding the user's account before purchase (Compl. ¶6:8-12).

  • '325 Patent Infringement Allegations: The complaint asserts that Sinemia's service infringes the ’325 Patent (Compl. ¶31). The infringement theory appears to map Sinemia itself to the "overseer" role defined in the patent. The user (subscriber) appears to be mapped to both the "user" and "controller entity" roles, as the subscriber provides the ultimate source of funds via their subscription payment and also makes the purchase requests. The allegation that the Sinemia service determines a user's location via their mobile device at check-in and subsequently funds a payment device (the Sinemia card) aligns with the core steps of the method claimed in the ’325 Patent (Compl. ¶¶23, 6:1-12).

  • Identified Points of Contention:

    • Scope Questions: A primary question for the ’325 Patent is whether the patent's three-party "controller-overseer-user" architecture can be construed to cover a two-party consumer-vendor relationship where the "user" and "controller" are effectively the same person. For the ’133 Patent, a question may arise as to whether the term "book a ticket", as used in the claims, reads on a process that funds a payment card rather than making an actual seat reservation.
    • Technical Questions: The infringement allegations for both patents depend on a specific sequence of technical events: location verification, rules compliance checks, and just-in-time funding. A key factual question will be what evidence demonstrates that the accused Sinemia system performs these specific functions in the precise manner and sequence required by the asserted claims.

No probative visual evidence provided in complaint.

V. Key Claim Terms for Construction

  • For the ’133 Patent:

    • The Term: "detecting, by the service provider system via the mobile user device, whether the user is at the venue" (from Claim 4)
    • Context and Importance: This term is central to the patent's security model and its "just-in-time" funding mechanism. The definition will determine what type and precision of location verification is required to infringe. Practitioners may focus on this term to dispute whether the accused system's location check meets the standard claimed by the patent.
    • Intrinsic Evidence for Interpretation:
      • Evidence for a Broader Interpretation: The specification describes this step using general language, such as using "the global positioning system (GPS) capabilities of the mobile device" or, alternatively, a "third party location service," which may support a construction covering any form of electronic location verification initiated via the mobile device (’133 Patent, col. 5:30-38).
      • Evidence for a Narrower Interpretation: A specific embodiment in FIG. 4/1 depicts this as a distinct, proximity-gated step where the system checks if the "GPS location [is] within 100 yards from theater," which could support a narrower construction requiring a specific range and methodology (’133 Patent, FIG. 4/1, element 408).

  • For the ’325 Patent:

    • The Term: "controller entity" (from Claim 1)
    • Context and Importance: The "controller entity" is a foundational element of the patent's described architecture, distinct from the "overseer" and the "user." The viability of the infringement case against Sinemia may depend on whether a subscriber who pays for their own service can be defined as a "controller entity."
    • Intrinsic Evidence for Interpretation:
      • Evidence for a Broader Interpretation: The specification defines a controller broadly as "any organization, group of people or individual person wishing to make funds available on a controlled basis to another organization, group of people or individual person," which does not explicitly forbid the funding and receiving persons from being the same individual in a subscription context (’325 Patent, col. 2:30-35).
      • Evidence for a Narrower Interpretation: The patent consistently provides examples where the controller is a distinct third party, such as "a government entity funding a program," "a company funding approved purchases made by employees," or "a parent funding approved purchases made by a child" (’325 Patent, col. 2:35-40). This may support a construction requiring the controller and user to be separate entities.

VI. Other Allegations

  • Indirect Infringement: The complaint alleges that Sinemia contributorily infringes and induces infringement by providing its "Premium movie subscription product" to subscribers and instructing them, via the app and service, on how to use it in an infringing manner (Compl. ¶¶27, 31; Prayer ¶a).
  • Willful Infringement: The complaint alleges that Sinemia's infringement is willful and seeks enhanced damages (Compl., Prayer ¶a). The complaint does not allege any specific facts to support pre-suit knowledge of the patents; the filing of the complaint itself provides notice for any ongoing, post-suit conduct.

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

The resolution of this dispute may turn on the following central questions:

  1. A core issue will be one of architectural scope: Can the ’325 Patent’s three-party “controller-overseer-user” model, which is exemplified by third-party funding scenarios like corporate expense accounts, be construed to cover a two-party subscription service where the consumer is both the source of funds ("controller") and the end-user?

  2. A key evidentiary question will be one of operational proof: What evidence will be presented to demonstrate that the accused Sinemia service performs the specific, multi-step sequence of location verification, rules compliance, and just-in-time card funding in the precise manner required by the asserted claims of the ’133 and ’325 patents?