DCT
5:25-cv-02122
Charles Schwab & Co Inc v. Blaze Mobile Inc
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: Charles Schwab & Co., Inc. (California); Charles Schwab Bank, SSB (Texas); and The Charles Schwab Corporation (Delaware)
- Defendant: Blaze Mobile, Inc. (Delaware); Blaze Mobile Technologies, LLC (Texas); and Michelle Fisher
- Plaintiff’s Counsel: Greenberg Traurig, LLP
- Case Identification: 3:25-cv-02122, N.D. Cal., 02/28/2025
- Venue Allegations: Plaintiff asserts that venue is proper in the Northern District of California because Defendant Michelle Fisher resides in the district, Defendant Blaze Mobile Inc. has its principal place of business in the district, and Defendant Blaze Mobile Technologies, LLC is a subsidiary controlled and operated from the district. The complaint further alleges that a majority of the events giving rise to the dispute occurred in the district and that Defendants have previously litigated patents in this venue.
- Core Dispute: Plaintiff seeks a declaratory judgment that its mobile banking application does not infringe three patents owned by Defendants related to processing mobile banking transactions and customizing mobile applications.
- Technical Context: The technology at issue involves methods for securing financial transactions conducted via non-browser-based mobile applications and for dynamically customizing the application's user interface based on a user's affiliation with a particular group.
- Key Procedural History: The complaint alleges that this action follows a period of communication initiated by a letter from Defendants on October 7, 2024, which accused Plaintiff's mobile banking application of using Defendants' patented technology. The complaint notes that in prior litigation involving a different party, a court in this district found three other patents naming Ms. Fisher as the inventor to be unpatentable under 35 U.S.C. § 101. Plaintiff alleges that shortly after that ruling, Defendants formed a new Texas-based entity and assigned the patents-in-suit to it in an effort to secure a more favorable litigation venue.
Case Timeline
| Date | Event |
|---|---|
| 2005-01-01 | Blaze Mobile Inc. first incorporated (approximate date) |
| 2007-11-14 | Earliest priority date for ’649 Patent |
| 2007-11-30 | Earliest priority date for ’664 Patent |
| 2007-12-13 | Earliest priority date for ’365 Patent |
| 2014-03-19 | ’664 Patent application filed |
| 2015-04-20 | ’649 Patent application filed |
| 2019-03-19 | ’664 Patent issued |
| 2023-05-16 | Order in Samsung case invalidating other Fisher-invented patents |
| 2023-06-02 | ’365 Patent application filed |
| 2023-10-10 | ’365 Patent issued |
| 2023-12-19 | ’649 Patent issued |
| 2024-01-04 | Blaze Mobile Technologies, LLC formed |
| 2024-03-02 | Patents-in-Suit assigned to Blaze Mobile Technologies, LLC |
| 2024-10-07 | Defendants send letter to Plaintiff alleging infringement |
| 2025-02-28 | Complaint for Declaratory Judgment filed |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 10,235,664 - "Mobile Banking Transactions at a Server with Authentication," issued March 19, 2019
The Invention Explained
- Problem Addressed: The patent describes a system for conducting payment transactions using mobile devices but notes the security risks involved. The detailed description suggests a problem with potential identity theft and fraudulent purchases when transaction authorizations are not handled securely (’664 Patent, col. 3:1-5).
- The Patented Solution: The invention proposes a method where a non-browser-based application on a mobile device communicates with a remote management server to process transactions. A user initiates a transaction and provides an identification code and PIN through the app; the server authenticates the user, processes the payment, and then sends a "digital artifact" (e.g., a receipt, coupon, or other content) back to the app for display on a specific application screen (’664 Patent, Abstract; col. 8:1-24). This architecture centralizes authentication and transaction processing on the server, separating it from the point-of-sale environment.
- Technical Importance: This approach sought to improve mobile commerce security by using a dedicated application and a trusted remote server to handle authentication, thereby avoiding the direct exposure of user credentials at a merchant's physical or online point of sale (’664 Patent, col. 3:1-5).
Key Claims at a Glance
- The complaint seeks a declaratory judgment of non-infringement of independent claims 1 (a method), 2 (a system), and 3 (a remote server) (Compl. ¶71).
- The core elements of independent claim 1 include:
- Maintaining a payment method at a remote management server.
- Receiving an identification code and PIN from a non-browser based application at the server.
- Authenticating the user at the server.
- Receiving a request from the user's application to initiate a mobile banking transaction.
- Processing the transaction at the server.
- Sending a "digital artifact" from the server to the application for display "within a non-browser based application generated screen."
U.S. Patent No. 11,783,365 - "Blaze Mobile Banking Using a Non-Browser Based Application," issued October 10, 2023
The Invention Explained
- Problem Addressed: The patent's background section identifies the cost and device memory constraints associated with delivering separate, customized mobile applications for different brands or institutions (’365 Patent, col. 1:63-col. 2:5). The technical challenge is to provide a unique, branded user experience without requiring users to download a distinct application for each affiliation.
- The Patented Solution: The patent describes a single mobile application built on a "generic platform" that can be dynamically customized based on a user's affiliation with a "special interest group" (SIG), such as a university, corporation, or bank. A remote server identifies the user's SIG and delivers specific content—such as logos, advertisements, or maps—to customize the application's interface. (’365 Patent, Abstract; col. 4:13-35).
- Technical Importance: This technology allows a single application to provide multiple, distinct, co-branded user experiences, which addresses the market challenge of "app fatigue" and provides a scalable platform for affiliate marketing and user engagement (’365 Patent, col. 2:6-18).
Key Claims at a Glance
- The complaint seeks a declaratory judgment of non-infringement of independent claims 1 (a method) and 16 (a mobile device) (Compl. ¶72).
- The core elements of independent claim 1 include:
- Receiving userID and password information at a non-browser based application.
- Transmitting that information to a remote server for authentication.
- Receiving a user request for a mobile banking transaction within the application.
- Transmitting the transaction request to the server.
- Receiving a "digital artifact" from the server at the application after the transaction is processed.
- Displaying the digital artifact within the application.
Multi-Patent Capsule: U.S. Patent No. 11,847,649
- Patent Identification: U.S. Patent No. 11,847,649, "Method and System for Mobile Banking Using a Server," issued December 19, 2023 (Compl. ¶23).
- Technology Synopsis: This patent describes a system for securing mobile banking by centralizing control on a remote server. The technology addresses the problem of protecting sensitive financial data from fraudulent use resulting from the loss or theft of a mobile device (’649 Patent, col. 1:35-42). The solution involves a hosted mobile application where a remote server manages authentication, monitors data transmission, and can remotely disable application use, thereby minimizing the security risk associated with data stored on the device itself (’649 Patent, Abstract; col. 3:15-24).
- Asserted Claims: The complaint asserts non-infringement of independent claims 1, 12, and 23 (Compl. ¶73).
- Accused Features: Plaintiff's core non-infringement argument is that its systems do not "send a digital artifact to the non-browser based application" as required by the patent's claims (Compl. ¶73).
III. The Accused Instrumentality
Product Identification
- The "Charles Schwab's mobile banking application" (Compl. ¶57).
Functionality and Market Context
- The complaint describes the accused product as a "mobile banking application" but provides minimal detail regarding its specific technical operation (Compl. ¶57). The infringement analysis in the complaint is based on a denial of specific functionality—namely, that Plaintiff's servers and application do not send or receive a "digital artifact" for display after a transaction is processed (Compl. ¶71-73). The complaint does reference Defendants' allegation that the application provides Schwab with "cost savings... in excess of $100M per year," which speaks to its alleged commercial significance (Compl. ¶58). The complaint provides a screenshot of the "Blaze Mobile" logo, alleging it has been used by the defendant entities in the Northern District of California since 2013 (Compl. ¶45).
IV. Analysis of Infringement Allegations
As this is a complaint for declaratory judgment, the allegations are framed as denials of infringement. The analysis focuses on the specific claim elements Plaintiff identifies as not being met by its application.
’664 Patent Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Non-Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| after the mobile banking transaction has been processed, sending, from the remote management server, a digital artifact to the non-browser based application for display within a non-browser based application generated screen | Plaintiff alleges its systems do not send a "digital artifact" to its mobile application for display after a transaction has been processed. | ¶71 | col. 8:16-24 |
’365 Patent Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Non-Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| receiving a digital artifact from the remote management server at the non-browser based application | Plaintiff alleges that its mobile application does not receive a "digital artifact" from a remote management server. | ¶72 | col. 10:35-38 |
- Identified Points of Contention:
- Scope Questions: The dispute raises a central question about the scope of the term "digital artifact." Does this term, as used across the patents-in-suit, require a specific type of content object (such as a coupon or advertisement, as exemplified in the specification), or could it be interpreted more broadly to encompass any data sent from the server for display after a transaction, such as a confirmation message or an updated account balance?
- Technical Questions: A key factual question will be what data, if any, is transmitted from Plaintiff's servers to its mobile application following a transaction and how that data is displayed. The litigation will need to establish whether any post-transaction screen update or notification in the Schwab app functions as the "sending" and "display" of a "digital artifact" as claimed.
V. Key Claim Terms for Construction
The Term: "digital artifact"
Context and Importance: This term is present in the final, dispositive step of the asserted independent claims of all three patents. Plaintiff's stated non-infringement theory is premised entirely on its systems not sending or receiving such an "artifact." The construction of this term is therefore critical to the entire dispute.
Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The specification of the ’664 Patent states that artifacts can include "advertisements, receipts, tickets, coupons, media, content, and so on" (’664 Patent, col. 3:30-32). The use of "and so on" may support an interpretation that the list is merely exemplary and not exhaustive, potentially covering any data object sent for display.
- Evidence for a Narrower Interpretation: The examples provided in the specification (coupons, tickets, media) consistently point to discrete content objects that are distinct from a simple transaction status update. Language in dependent claims also enumerates specific types of artifacts like receipts or coupons (’664 Patent, claims 9-10). A party could argue that the term requires a specific content object with independent value, not just a confirmation of the underlying transaction.
The Term: "non-browser based application"
Context and Importance: This term defines the environment of the invention and distinguishes it from conventional web-based commerce. The interpretation will determine what types of mobile software are covered by the claims. Practitioners may focus on this term to determine if Plaintiff's application, depending on its underlying technology (e.g., native, hybrid, or web-wrapped), falls within the scope of the claims.
Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: On its face, the term is broad and could encompass any software on a mobile device that is not a general-purpose web browser like Chrome or Safari.
- Evidence for a Narrower Interpretation: The ’664 Patent specification defines the application as a "mobile operating system platform based application with a graphical user interface that is downloaded and installed on the mobile device" (’664 Patent, col. 7:54-58). This language could be used to argue that the invention is specific to traditionally compiled, native applications and may not cover certain modern hybrid or containerized application architectures.
VI. Other Allegations
- Indirect Infringement: Plaintiff explicitly denies both induced and contributory infringement for all patents-in-suit, stating that it does not cause or contribute to any third-party infringement (Compl. ¶71-73).
- Willful Infringement: As a declaratory judgment plaintiff, Schwab does not face a willfulness allegation in its own complaint. However, the complaint establishes Plaintiff's pre-suit knowledge of the patents via the October 7, 2024 letter from Defendants (Compl. ¶55). This fact would become central should Defendants counterclaim and allege willful infringement.
VII. Analyst’s Conclusion: Key Questions for the Case
- A core issue will be one of definitional scope: can the term "digital artifact," which the patents exemplify with content like coupons and tickets, be construed to cover a routine transaction confirmation message or an updated account balance displayed within a mobile banking app?
- A key evidentiary question will be one of technical operation: what data is actually transmitted between Schwab's servers and its mobile application following a financial transaction, and does the nature and presentation of that data meet the construed requirements of the claims?
- A significant threshold question will concern venue: will the court prioritize Defendants' historical and operational presence in the Northern District of California, as Plaintiff argues, or will it find that the recent assignment of the patents to a Texas-based entity is sufficient to warrant a transfer of the case?