DCT
3:24-cv-06185
DH Intl Ltd v. Apple Inc
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: DH International Ltd. (Canada)
- Defendant: Apple Inc. (California)
- Plaintiff’s Counsel: Munck Wilson Mandala, LLP; AddyHart P.C.
- Case Identification: 1:23-cv-01114, W.D. Tex., 09/15/2023
- Venue Allegations: Venue is based on Defendant Apple Inc. having regular and established places of business within the Western District of Texas.
- Core Dispute: Plaintiff alleges that Defendant’s Apple Pay service and the Apple devices that support it infringe two patents related to context-aware mobile payment technology.
- Technical Context: The patents address methods for a portable electronic device to perform different functions—such as an external transaction or an internal information display—based on a single, consistent user action, with the outcome determined by the presence or absence of an external signal.
- Key Procedural History: The complaint alleges that the former owner of the patents-in-suit contacted Apple regarding the patents on July 26, 2017, and received a response, which may be used to support allegations of pre-suit knowledge and willful infringement. The patents were assigned to the current Plaintiff on July 26, 2023.
Case Timeline
| Date | Event |
|---|---|
| 2003-04-14 | Earliest Priority Date for ’333 and ’294 Patents |
| 2009-12-08 | U.S. Patent No. 7,628,333 Issued |
| 2015-05-05 | U.S. Patent No. 9,022,294 Issued |
| 2017-07-26 | Alleged Pre-Suit Notice to Apple by Prior Patent Owner |
| 2023-07-26 | Patents-in-Suit Assigned to Plaintiff DH International |
| 2023-09-15 | Complaint Filed |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 7,628,333 - “Portable Electronic Device Capable of Alternative Data Conveyance Operations Responsive to an Invariable Activation Command”
- Patent Identification: U.S. Patent No. 7,628,333, issued on December 8, 2009.
The Invention Explained
- Problem Addressed: The patent’s background describes conventional smart cards as requiring multiple controls to perform different functions and needing separate interface machines to access or view the information stored on them (ʼ333 Patent, col. 1:15-46).
- The Patented Solution: The invention proposes a portable electronic device that simplifies user interaction by employing a single, "invariable activation command," such as a button press (ʼ333 Patent, col. 7:14-19). The device’s behavior is context-dependent: if it receives an external "activation cue" (e.g., a signal from a point-of-sale terminal), triggering the command initiates a data exchange with the external device. If no cue is received, the same trigger action causes the device to display information on its own screen, guided by a "data conveyance switching element" that directs the data flow based on the cue's presence or absence (ʼ333 Patent, Abstract; col. 6:4-25).
- Technical Importance: This approach unified a single user input to execute distinct, context-appropriate operations (e.g., external transaction vs. internal display), streamlining the user experience for mobile electronic devices.
Key Claims at a Glance
- The complaint asserts independent claim 1 (Compl. ¶33).
- The essential elements of independent claim 1 include:
- A portable electronic device with an electronic circuit.
- A control device that issues an "invariable activation command" when triggered.
- A user interface device.
- A data transceiver for exchanging data with an external device and for receiving an "activation cue" from an external source.
- A "data conveyance switching element" that is in an "activated state" when a cue is received and an "inactive state" when no cue is received.
- Wherein triggering the control device initiates a data exchange with the external device if the switching element is in the activated state, and conveys data to the user interface if the switching element is in the inactive state.
- The complaint also asserts dependent claims 2, 4, 5, 6, 11, and 13 and reserves the right to assert others (Compl. ¶46).
U.S. Patent No. 9,022,294 - “Portable Electronic Device and Method for Alternative Data Conveyance Operations Responsive to an Invariable Activation Command”
- Patent Identification: U.S. Patent No. 9,022,294, issued on May 5, 2015.
The Invention Explained
- Problem Addressed: As a continuation-in-part of the application leading to the ’333 Patent, this patent addresses the same limitations of prior art smart cards requiring complex controls and external readers ('294 Patent, col. 1:21-52).
- The Patented Solution: The invention is specifically directed to a "cellular phone" and refines the core concept by requiring two distinct data transceivers operating over different communication links ('294 Patent, col. 4:8-17). The logic remains centered on an "invariable activation command" and an external "activation cue." When the cue is present (e.g., from a nearby NFC terminal), triggering the command initiates a "first data conveyance operation" using the first transceiver. When the cue is absent, the same trigger initiates a "second data conveyance operation" using the second, distinct transceiver (e.g., a cellular or Wi-Fi radio) to communicate with a different external device, such as a remote server ('294 Patent, col. 4:26-40).
- Technical Importance: This patent adapts the context-aware, single-trigger concept to the hardware architecture of modern smartphones, distinguishing between proximity-based communications (like NFC) and network-based communications (like cellular or Wi-Fi).
Key Claims at a Glance
- The complaint asserts independent claim 1 (Compl. ¶56).
- The essential elements of independent claim 1 include:
- A cellular phone with an electronic circuit.
- A "user-triggered control device" (e.g., button, tactile screen, biometric detector) that issues an "invariable activation command."
- A "first data transceiver" for data exchange with a "first external data exchange device" over a "first communication link."
- A "second data transceiver" for data exchange with a "second external data exchange device" over a "second communication link that is distinct" from the first.
- A "cue receiver" for receiving an "activation cue."
- A "data conveyance switching element" assigned a "first state" when a cue is received and a "second state" when no cue is received.
- Wherein triggering the control device initiates a "first data conveyance operation" via the first transceiver if the element is in the first state, and a "second data conveyance operation" via the second transceiver if in the second state.
- The complaint also asserts dependent claims 2–4, 8–10, 12, and 16–18 and reserves the right to assert others (Compl. ¶70).
III. The Accused Instrumentality
Product Identification
- The accused products are the "Apple Pay" mobile payment and digital wallet service and the Apple devices that support it, including iPhone, Apple Watch, Mac, and iPad models (the "Accused Products" or "Apple mobile devices") (Compl. ¶26, ¶29, ¶30).
Functionality and Market Context
- The complaint describes Apple Pay as a service that replaces physical cards and cash (Compl. ¶27). It alleges two primary modes of operation relevant to the patents. For in-store purchases, a user double-clicks the side button and authenticates via Face ID or passcode, which initiates a transaction when the device is near an NFC-enabled point-of-sale terminal (Compl. ¶38, ¶40). For in-app or online purchases, the user taps an on-screen Apple Pay button to initiate a transaction over a network like Wi-Fi or cellular (Compl. ¶41, ¶69). The complaint alleges Apple Pay is accepted at over 85% of U.S. retailers (Compl. ¶27).
- No probative visual evidence provided in complaint.
IV. Analysis of Infringement Allegations
’333 Patent Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| A portable electronic device, comprising: an electronic circuit... | Apple mobile devices (e.g., iPhone 11, iPhone 13 Pro) contain an electronic circuit with a processor, memory, and I/O ports. | ¶37 | col. 4:24-37 |
| a control device operatively linked to said electronic circuit, with an invariable activation command being issued when said control device is selectively triggered | The combination of double-clicking the side button and biometric/PIN verification, which issues a command to initiate a transaction. | ¶38 | col. 5:6-14 |
| a user interface device operatively linked to said electronic circuit | The Super Retina XDR OLED display on the Apple mobile devices. | ¶39 | col. 4:56-67 |
| a data transceiver... for receiving a selectively emitted activation cue from a source external... | The NFC chip in Apple mobile devices, which receives a signal from an external point-of-sale system's NFC interface. | ¶40 | col. 5:61-64; col. 6:1-3 |
| a data conveyance switching element... being in an activated state upon an activation cue having been received... and being in an inactive state when no activation cue was received... | Apple Pay software, which allegedly enters an "NFC transaction state" (activated) when a user double-clicks the side button and a signal from a POS device is received, and an "in-app or online transaction state" (inactive) if no POS signal is received. | ¶41 | col. 6:4-25 |
| wherein upon said control device being selectively triggered... if said switching element is in said activated state, a data exchange will be initiated...; if said switching element is in said inactive state, data will be conveyed... to said user interface device... | When the device is near a POS terminal (activated state), a double-click initiates an NFC transaction. When not near a POS terminal (inactive state), a double-click opens the Apple Pay application on the display. | ¶44, ¶45 | col. 6:41-58 |
’294 Patent Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| A cellular phone, comprising: an electronic circuit... | Apple mobile devices such as the iPhone 11 Pro Max and iPhone 13 Pro, which are cellular phones containing electronic circuits. | ¶60 | col. 10:41-45 |
| a user-triggered control device... issue an invariable activation command... | The combination of double-clicking the side button and Face ID/passcode, or tapping the Apple Pay button for online/in-app purchases. | ¶61 | col. 10:30-36 |
| a first data transceiver... over a first communication link... | The NFC functionality and NFC chip in Apple mobile devices, used for exchanging transaction information with a point-of-sale system. | ¶62 | col. 8:55-58 |
| a second data transceiver... over a second communication link that is distinct from said first communication link... | The cellular or Wi-Fi functionality in Apple mobile devices, used for exchanging transaction information with a networked transaction server. | ¶63 | col. 8:58-63 |
| a cue receiver... for receiving an activation cue from a source external to said cellular phone... | The NFC functionality, which receives a signal from an external point-of-sale system's NFC interface. | ¶64 | col. 4:18-21 |
| a data conveyance switching element... assigned a first state upon an activation cue having been received... and being assigned a second state when no activation cue was received... | Apple Pay software, which is assigned a "first state (e.g., NFC transaction)" when a signal is received from a POS device, and a "second state (e.g., online or in-app transaction)" when no such signal is received. | ¶65 | col. 4:22-29 |
| wherein upon said control device being selectively triggered... if said switching element is in said first state, a first data conveyance operation will be initiated... if said switching element is in said second state, a second data conveyance operation will be initiated... | When a user double-clicks the side button and an NFC signal is present, an NFC transaction is initiated. If no NFC signal is present, an in-app or online transaction is initiated via cellular or Wi-Fi. | ¶68, ¶69 | col. 4:31-40 |
Identified Points of Contention
- Scope Questions: A central question may be whether the user actions alleged to infringe—double-clicking a physical side button for one transaction type and tapping a virtual on-screen button for another—can both be considered part of a single "invariable activation command" as required by the claims. The defense may argue these are two distinct commands, not one invariable command whose outcome is toggled by an external cue.
- Technical Questions: The infringement theory hinges on whether Apple's software functions as the claimed "data conveyance switching element." A key technical question will be what evidence shows that the software operates as a binary switch based solely on the presence or absence of the "activation cue" (the NFC signal), as opposed to a more complex logic involving other inputs like the active application or user settings.
V. Key Claim Terms for Construction
The Term: "invariable activation command"
- Context and Importance: This term is central to the asserted claims of both patents. The case’s outcome may depend on whether Apple’s user interactions—a physical button double-click for in-store payments and a virtual button tap for online payments—can be construed as a single, "invariable" command.
- Intrinsic Evidence for a Broader Interpretation: The specification suggests the "invariability" lies in the user's action, while the device's internal logic handles the differing outcomes: "the same invariable activation command will thus be issued... and it is the state of switching element... that will be decisive as to the type of data conveyance" (’333 Patent, col. 7:21-28).
- Intrinsic Evidence for a Narrower Interpretation: The patent repeatedly refers to a singular "control device," such as a "single manually activated button" (’333 Patent, col. 5:8-10). This could support an interpretation that requires the physical command to be identical in all contexts, potentially excluding the distinction between a physical button press and a screen tap.
The Term: "data conveyance switching element"
- Context and Importance: This is the technical heart of the claimed invention. Proving infringement requires showing that Apple's software is structurally and functionally equivalent to this element.
- Intrinsic Evidence for a Broader Interpretation: The patent describes this element in flexible terms, including as "a series of instructions programmed onto the microchip" (’333 Patent, col. 6:9-13), which could be read to cover the alleged Apple Pay software.
- Intrinsic Evidence for a Narrower Interpretation: The claims require the element to be in one of two states ("activated" or "inactive") based on whether an activation cue was received (’333 Patent, Claim 1). If the accused Apple Pay software considers factors beyond the mere presence or absence of an NFC signal to determine the data path, it may fall outside a narrow construction of this term.
VI. Other Allegations
- Willful Infringement: The complaint alleges that Apple had pre-suit knowledge of both the ’333 and ’294 patents as of July 26, 2017. This allegation is based on contact from the prior owner of the patents, G. Holdings Inc., and a subsequent response from an Apple representative (Compl. ¶49, ¶73). This asserted pre-suit knowledge forms the basis for the claim of willful infringement.
VII. Analyst’s Conclusion: Key Questions for the Case
- A core issue will be one of definitional scope: can the term "invariable activation command" be construed to cover both the physical double-clicking of a side button for proximity payments and the tapping of a virtual on-screen button for online payments, or are these fundamentally distinct user commands under the patent's language?
- A key evidentiary question will be one of functional mapping: does the accused Apple Pay software operate as the specific "data conveyance switching element" required by the claims—a binary switch toggled only by an external cue—or does its decision-making logic involve additional factors that create a mismatch with the claimed technical operation?
- Finally, a central question for damages will be willfulness: given the specific allegation of pre-suit notice in 2017, the court will likely examine whether Apple’s subsequent conduct constitutes the sort of egregious behavior required to justify enhanced damages, should infringement be found.