DCT
2:20-cv-07872
NantWorks LLC v. Bank Of America Corp
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: NantWorks, LLC (Delaware) and Nant Holdings IP, LLC (Delaware)
- Defendant: Bank of America Corp (Delaware) and Bank of America, NA. (national banking association)
- Plaintiff’s Counsel: Quinn Emanuel Urquhart & Sullivan, LLP
- Case Identification: 2:20-cv-07872, C.D. Cal., 11/11/2020
- Venue Allegations: Plaintiff alleges venue is proper in the Central District of California because a substantial part of the events giving rise to the claims occurred in the district and Defendant has a regular and established place of business there.
- Core Dispute: Plaintiff alleges that Defendant’s mobile check deposit feature infringes nine patents related to mobile image recognition technology, which Plaintiff claims was misappropriated following a prior business collaboration.
- Technical Context: The technology at issue involves using a mobile device's camera to capture and process images of objects, such as financial checks, to extract information and initiate transactions.
- Key Procedural History: The complaint alleges a prior business relationship (2011-2013) where Plaintiff developed and provided Defendant with a mobile check deposit software solution for evaluation. Plaintiff alleges that after communications ceased, Defendant improperly used this software and its underlying technology to develop and improve its own mobile banking application. The complaint also alleges that Defendant had pre-suit knowledge of the patents-in-suit, beginning with a notification regarding the ’529 and ’252 patents in November 2011, and that Defendant subsequently cited these patents in its own patent prosecution.
Case Timeline
| Date | Event |
|---|---|
| 2000-11-06 | Earliest Priority Date for all Asserted Patents |
| 2010-04-01 | NantWorks demonstrates image recognition technology to BoA executive |
| 2011-02-01 | U.S. Patent No. 7,881,529 Issues |
| 2011-03-01 | U.S. Patent No. 7,899,252 Issues |
| 2011-10-31 | NantWorks and BoA enter into a collaboration agreement |
| 2011-11-02 | NantWorks allegedly notifies BoA of the ’529 and ’252 patents |
| 2012-01-01 | BoA allegedly cites NantWorks patents in an Information Disclosure Statement |
| 2012-07-01 | BoA allegedly releases first commercial version of its Mobile Banking app |
| 2012-12-04 | U.S. Patent No. 8,326,038 Issues |
| 2013-06-11 | U.S. Patent No. 8,463,030 Issues |
| 2013-07-02 | U.S. Patent No. 8,478,036 Issues |
| 2013-08-27 | U.S. Patent No. 8,520,897 Issues |
| 2015-05-12 | U.S. Patent No. 9,031,278 Issues |
| 2016-04-26 | U.S. Patent No. 9,324,004 Issues |
| 2016-10-01 | NantWorks allegedly informs BoA of all asserted patents |
| 2018-07-23 | Representatives for NantWorks and BoA meet to discuss alleged misappropriation |
| 2020-11-11 | Complaint Filed |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 7,881,529 - "Data capture and identification system and process," Issued February 1, 2011 (’529 Patent)
The Invention Explained
- Problem Addressed: The patent describes a need to identify a physical object from a digital image and link it to information without requiring the object to be physically modified with a barcode, tag, or other embedded identifier (Compl. ¶50; ’529 Patent, col. 2:27-34). Traditional methods that require such modification can be time-consuming or disfigure the object's appearance (’529 Patent, col. 2:13-22).
- The Patented Solution: The invention proposes a system where a camera-equipped, network-enabled device captures an image of an object. Data from that image is sent to a remote service that identifies the object based solely on its visual characteristics by comparing it to a database. The service then associates the identified object with related information (e.g., a URL) and returns it to the user's device (’529 Patent, Abstract; col. 3:56-64).
- Technical Importance: The technology provides a method for linking the physical world to online digital content using the increasingly common camera-equipped mobile phone, without needing specialized tags on objects (Compl. ¶50).
Key Claims at a Glance
- The complaint asserts at least independent claim 1 (Compl. ¶62).
- Essential elements of Claim 1 include:
- A camera that captures an image.
- A network-enabled device that processes the image to produce data and sends the data to a service.
- A service programmed to receive the data, identify an object within the image, distinguish the object from others using a database of target object characteristics, associate the object with information, and return the information.
- The network-enabled device is further programmed to present the returned information to a user.
U.S. Patent No. 7,899,252 - "Object information derived from object images," Issued March 1, 2011 (’252 Patent)
The Invention Explained
- Problem Addressed: The patent addresses the challenge of automatically extracting information from images containing recognizable symbols, such as text or barcodes, which previously required manual entry or specialized scanners ('252 Patent, col. 1:40-46).
- The Patented Solution: The invention describes a method where a mobile device captures an image and transmits data to an image processing platform. This platform determines if the image contains recognizable symbols, decodes them to extract information (e.g., text from a MICR line), and uses that information to query a database on a distal server for pertinent associated data, which is then returned to the mobile device ('252 Patent, Abstract; col. 2:10-22).
- Technical Importance: This system enables mobile devices to act as intelligent scanners, capable of reading and interpreting symbolic information from the physical world to trigger digital actions or retrieve relevant data (Compl. ¶50-51).
Key Claims at a Glance
- The complaint asserts at least independent claim 18 (Compl. ¶77).
- Essential elements of Claim 18 include:
- Providing a mobile device with a camera configured to capture an image and transmit data to an image processing platform.
- Configuring the platform to receive and process the data, which includes operating on the data to determine if the image contains recognizable symbols and decoding those symbols to extract symbol information.
- Providing access to a distal server that uses a database to identify pertinent information associated with the symbols.
- Allowing the mobile device to receive the pertinent information over a network.
Multi-Patent Capsule: U.S. Patent No. 8,326,038 (’038 Patent) - "Object information derived from object images," Issued December 4, 2012
- Technology Synopsis: This patent describes an interactive system where an optical sensor captures image information from a displayed image on a portable device's screen. An image processing platform then identifies features, recognizes a target, and enables a transaction with an account based on the target information.
- Asserted Claims: At least independent claim 1 (Compl. ¶93).
- Accused Features: The Bank of America mobile check deposit feature, where the user's mobile device camera (optical sensor) captures an image of a check (target) to enable a deposit (transaction) into a user's account (Compl. ¶95-98).
Multi-Patent Capsule: U.S. Patent No. 8,463,030 (’030 Patent) - "Image capture and identification system and process," Issued June 11, 2013
- Technology Synopsis: This patent relates to a transaction system where a mobile device acquires data related to an object. An object identification platform recognizes the object and determines associated information, which a content platform then uses to initiate a transaction with a selected account.
- Asserted Claims: At least independent claim 1 (Compl. ¶108).
- Accused Features: The accused mobile check deposit system, which uses a mobile device to acquire check data, an identification platform (BoA servers) to recognize the check and its details, and a content platform to initiate the deposit transaction to the user's account (Compl. ¶110-113).
Multi-Patent Capsule: U.S. Patent No. 8,478,036 (’036 Patent) - "Image capture and identification system and process," Issued July 2, 2013
- Technology Synopsis: This patent describes a content provisioning system with a target database. An identification platform communicates with a mobile device, receives a digital representation of a scene, and recognizes a target by comparing derived parameters to recognition parameters in the database. A content service then obtains and sends content information related to the target.
- Asserted Claims: At least independent claim 1 (Compl. ¶123).
- Accused Features: The accused system, where BoA's identification platform and target database receive check image data, recognize the check as a known target, and a content service obtains and sends deposit information to the mobile device and identification platform (Compl. ¶125-128).
Multi-Patent Capsule: U.S. Patent No. 8,520,897 (’897 Patent) - "Object information derived from object images," Issued August 27, 2013
- Technology Synopsis: This patent discloses a method of conducting a transaction with an interactive system by displaying an image on a device, presenting it to an optical sensor, and enabling feature identification, target recognition, and performance of a transaction based on the target information.
- Asserted Claims: At least independent claim 25 (Compl. ¶138).
- Accused Features: The Bank of America mobile check deposit process, which involves presenting a check (target) to the mobile device's camera (optical sensor) to enable a deposit transaction (Compl. ¶140-144).
Multi-Patent Capsule: U.S. Patent No. 9,031,278 (’278 Patent) - "Image capture and identification system and process," Issued May 12, 2015
- Technology Synopsis: This patent outlines a computer-assisted method for receiving an image of a document via a mobile device, determining symbolic content, extracting symbol information, determining the document's validity based on the image and symbol information, and recognizing the document as a target object by querying a database.
- Asserted Claims: At least independent claim 1 (Compl. ¶154).
- Accused Features: The accused mobile check deposit method, which receives a check image, extracts symbolic content (MICR line), determines the check's validity, and recognizes it as a target object to process the deposit (Compl. ¶156-160).
Multi-Patent Capsule: U.S. Patent No. 9,324,004 (’004 Patent) - "Image capture and identification system and process," Issued April 26, 2016
- Technology Synopsis: This patent describes a method for processing a video stream by analyzing a scene via a mobile device for an object, deriving a characteristic of the video stream, and recognizing the object as a target based at least in part on that characteristic. An indication is provided upon recognition, and content information is presented to the user.
- Asserted Claims: At least independent claim 1 (Compl. ¶170).
- Accused Features: The accused mobile check deposit feature, which uses a video stream from the mobile device camera to find and analyze a check (object), recognize it as a target, provide an indication of capture, and present deposit information (Compl. ¶172-177).
III. The Accused Instrumentality
Product Identification
- The accused products are the Bank of America Mobile Banking application, its mobile check deposit feature, and the associated computers, servers, software, and other infrastructure operated by Bank of America ("BoA Accused Products") (Compl. ¶54).
Functionality and Market Context
- The mobile check deposit feature allows Bank of America customers to deposit checks remotely using a camera-equipped mobile device (Compl. ¶64). The user captures an image of the front and back of a check, and the application processes the image to extract data, verify the check's legitimacy, and credit the user's account (Compl. ¶65-67). The complaint alleges this feature is a "critical aspect of BoA's business," citing press releases that state customers deposit hundreds of thousands of checks daily via mobile devices (Compl. ¶39). The complaint includes a screenshot of the check capture interface within the Bank of America app, showing a viewfinder overlaying a check image (Compl. p. 19).
IV. Analysis of Infringement Allegations
’529 Patent Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| a camera that captures an image | The camera on a customer's mobile phone or tablet is used to capture an image of a check for deposit. | ¶64 | col. 3:31-33 |
| a network-enabled device that conducts a data processing operation on at least a portion of the image to produce data, and sends the data to a service | A customer's mobile device running the BoA app processes the captured check image and transmits the resulting image data to BoA's servers. | ¶54, ¶64 | col. 3:51-54 |
| the service programmed to receive the data; identify an object within the image; distinguish an object present in the image from others using a database that stores data characteristics of target objects; associate the object with information; and return the information to the network-enabled device | BoA's servers receive the check image data, identify the object as a U.S. check, distinguish its features (e.g., alphanumeric characters, signatures) from other objects, associate it with deposit transaction information (e.g., amount, validity), and return deposit status to the user's device. | ¶65-¶67 | col. 4:26-38 |
| the network-enabled device further programmed to present the information related to the object to a user | The mobile device displays a deposit receipt with a confirmation number and transaction status to the user. A screenshot of this "Deposit Receipt" screen is provided in the complaint. | ¶67; p. 21 | col. 12:1-3 |
’252 Patent Infringement Allegations
| Claim Element (from Independent Claim 18) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| providing a mobile device having a camera the mobile device configured to capture an image and configured to transmit data relating to the image an image processing platform | A customer's mobile phone or tablet with a camera captures a check image and transmits data to BoA's systems for processing. | ¶79 | col. 2:10-13 |
| configuring the image processing platform to receive the data relating to the image and to conduct image processing... | BoA's servers and/or the mobile application itself are configured to receive the check image data and perform processing. | ¶81 | col. 2:13-16 |
| ...operating on the data relating to the image to determine if the image contains one or more recognizable symbols; and decoding the recognizable symbols to extract symbol information by analyzing the recognizable symbols according to type | The system analyzes the check image to identify and decode symbols such as the alphanumeric characters of the MICR line and the written monetary amount. | ¶81, ¶83 | col. 2:36-40 |
| providing access to a distal server configured to use a database to identify pertinent information associated with the recognizable symbols based on the symbol information | BoA's distal servers access databases to use the extracted MICR data (account and routing numbers) to identify and validate pertinent account information for the transaction. | ¶82 | col. 2:16-20 |
| allowing the mobile device to receive the pertinent information over a network | The mobile device receives deposit status and confirmation details from BoA's servers over the network. A screenshot of an online transaction history showing a deposited check image is provided. | ¶83; p. 29 | col. 2:20-22 |
Identified Points of Contention
- Scope Questions: A primary question may be whether the patents, which describe general systems for object and symbol recognition, can be validly construed to cover the specific and highly regulated application of mobile check deposit. Defendant may argue that remote deposit capture involves conventional and well-understood technologies (e.g., OCR on a MICR line) that are distinct from the inventive concepts disclosed in the patents, which often describe identifying unstructured objects in a general environment.
- Technical Questions: For the ’529 Patent, a key technical question will be what "data characteristics of target objects" are stored in the alleged "database" and whether BoA's system "distinguishes" a check from "others" in the manner claimed. For the ’252 Patent, the dispute may focus on whether processing a standardized MICR line constitutes "decoding... recognizable symbols according to type" or is merely standard optical character recognition.
V. Key Claim Terms for Construction
Term: "distinguish an object present in the image from others using a database that stores data characteristics of target objects" (’529 Patent, Claim 1)
- Context and Importance: This limitation defines the core identification function of the claimed service. Its construction will be critical to determining whether BoA's process of validating a check (e.g., ensuring it is a U.S. check, has a valid format, contains a signature) infringes. Practitioners may focus on whether this requires a general visual search against a database of many different types of objects, or if it can read on a verification process for a single, pre-defined object type like a check.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The specification states the invention can identify an object "solely by its visual appearance" and refers to decomposing data into "unique characteristics" ('529 Patent, col. 2:19-20, col. 2:5-7). This could support an argument that any process using visual features (like the layout of a check) to confirm an object's identity against stored criteria meets the limitation.
- Evidence for a Narrower Interpretation: The background and detailed description frequently provide examples of identifying one object from a varied environment, such as "pictures or other art in a large museum" or linking to a "vending machine" ('529 Patent, col. 2:32-33, col. 2:23-24). This context could support a narrower construction requiring the system to differentiate between multiple, distinct categories of potential objects, not just validate a single, expected object type.
Term: "recognizable symbols" (’252 Patent, Claim 18)
- Context and Importance: The definition of this term is central to whether processing a check infringes. The dispute will likely turn on whether the numeric and character fields on a standard check, such as the MICR line and the courtesy amount box, qualify as "recognizable symbols" under the patent's definition.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The specification explicitly states that the invention "can detect, decode, and identify images and objects based on traditional symbols which may appear on the object, such as alphanumeric characters, barcodes, or 2-dimensional matrix codes" (’252 Patent, col. 2:36-40). This language provides direct support for construing the term to include the text and numbers on a check.
- Evidence for a Narrower Interpretation: An argument for a narrower scope could focus on the context of "decoding" the symbol. A defendant might argue that the term implies a self-contained, encoded data unit (like a QR code or a product barcode) that is "decoded" to reveal information, as opposed to simply performing OCR on standard text characters that are already human-readable.
VI. Other Allegations
Indirect Infringement
- The complaint alleges that Defendant induces infringement by encouraging and instructing its customers on how to use the mobile check deposit feature through promotional materials, user guides, and the application's user interface (Compl. ¶70, ¶86).
Willful Infringement
- The complaint alleges willful infringement based on Defendant's alleged pre-suit knowledge of the patents. Specific allegations include a direct notification from Plaintiff to Defendant identifying the ’529 and ’252 patents on November 2, 2011; Defendant’s subsequent citation of these same patents in an Information Disclosure Statement for its own patent application on January 1, 2012; and another notification of all asserted patents in October 2016 (Compl. ¶56-57). The overarching allegations of trade secret misappropriation from the prior business relationship are also presented to support egregious misconduct (Compl. ¶69, ¶85).
VII. Analyst’s Conclusion: Key Questions for the Case
- A core issue will be one of definitional scope: can the broadly claimed concepts of "object identification" and "symbol recognition," which are described in the patents in the context of general visual search, be construed to cover the specific, standardized, and arguably conventional technology of mobile remote deposit capture for financial checks? The outcome may depend on whether the court views the accused functionality as an application of the patented inventive concept or as an independent, well-established field of technology.
- A second central question will be one of evidentiary proof related to the parties' history: how will the extensive allegations of a prior business relationship, the sharing of proprietary software, and alleged misappropriation influence the proceedings? While distinct from the patent infringement analysis itself, these facts raise a key question for the fact-finder regarding Defendant's intent and knowledge, which could significantly impact potential findings of willfulness and the calculation of damages.
- A key technical question will be one of functional operation: does the accused system's method of validating a check by analyzing its features (e.g., MICR line, layout, signature line) perform the function of "distinguish[ing] an object... from others using a database that stores data characteristics of target objects" as required by the '529 Patent, or is there a fundamental mismatch in the claimed identification process versus the accused verification process?