DCT
1:18-cv-02972
RFC Capital Holdings Inc v. Gordon & Howard Assoc Inc
Key Events
Complaint
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: RFC Capital Holdings, Inc. (California)
- Defendant: Gordon & Howard Assoc., Inc. (d.b.a. PASSTIME USA) (Colorado)
- Plaintiff’s Counsel: RWBurns & Co., PLLC
- Case Identification: 1:18-cv-02972, D. Colo., 11/19/2018
- Venue Allegations: Venue is alleged to be proper in the District of Colorado because the Defendant's principal place of business is located within the district.
- Core Dispute: Plaintiff alleges that Defendant’s vehicle tracking, payment collection, and telematics systems infringe four U.S. patents related to time-based vehicle disablement, location reporting for asset recovery, and tamper detection.
- Technical Context: The technology at issue involves GPS and cellular-based hardware and software systems used primarily by auto lenders and dealerships to monitor and secure vehicle assets, particularly in the subprime auto loan market.
- Key Procedural History: The complaint does not reference any prior litigation, Inter Partes Review (IPR) proceedings, or licensing history related to the patents-in-suit.
Case Timeline
| Date | Event |
|---|---|
| 1999-08-10 | Earliest Priority Date for ’507 Patent |
| 2000-09-29 | Earliest Priority Date for ’527 and ’465 Patents |
| 2004-04-06 | ’527 Patent Issued |
| 2004-10-25 | Earliest Priority Date for ’471 Patent |
| 2007-09-04 | ’507 Patent Issued |
| 2008-06-17 | ’465 Patent Issued |
| 2008-09-30 | ’471 Patent Issued |
| 2013-07-15 | Defendant Announces "PT SOS" Tamper Detection Feature |
| 2018-11-19 | Complaint Filing Date |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 6,717,527 - "Vehicle Location System" (Issued Apr. 6, 2004)
- The Invention Explained:
- Problem Addressed: The patent’s background section describes the difficulty and expense lenders face in repossessing vehicles after a loan default, noting that while conventional systems can disable a vehicle, they do not help the lender physically locate it for recovery (’527 Patent, col. 2:1-11).
- The Patented Solution: The invention is a system that, upon a triggering event like a missed payment or detected tampering, activates a location system (e.g., GPS) within the vehicle. This system then automatically transmits the vehicle's coordinates to a "service agency," enabling the agency to locate and repossess the asset (’527 Patent, Abstract; col. 2:15-29). The logic flow, which includes determining if a payment was received before activating the location system, is illustrated in the patent’s Figure 3 (’527 Patent, Fig. 3).
- Technical Importance: The technology provided lenders with a more direct and efficient mechanism to recover assets from delinquent borrowers, thereby reducing financial losses associated with loan defaults (’527 Patent, col. 1:26-30, col. 2:42-50).
- Key Claims at a Glance:
- The complaint asserts claims 7, 8, 10, 11, and 13 (Compl. ¶31). Independent claim 7 is a system claim.
- The essential elements of independent claim 7 include:
- A vehicle disablement system that disables the vehicle if a code associated with a payment due date is not entered.
- A location system comprising a location determining device (e.g., GPS) that determines the vehicle's location when the disablement system indicates a payment has been missed.
- A location providing device that receives the location and provides it to a service agency.
U.S. Patent No. 7,388,465 - "Tampering Detector and System Disabler" (Issued Jun. 17, 2008)
- The Invention Explained:
- Problem Addressed: The patent identifies a vulnerability in vehicle disablement systems: a user may attempt to tamper with or remove the primary disablement device to prevent it from functioning, thereby circumventing the payment enforcement mechanism (’465 Patent, col. 2:1-9).
- The Patented Solution: The invention proposes a two-part system. In addition to the primary "vehicle disablement device," there is a separate "tamper disabler." If the primary device detects it is being tampered with, it sends a signal to the tamper disabler, which can then independently disable a critical vehicle system (e.g., ignition), providing a redundant layer of security (’465 Patent, Abstract; col. 2:11-20). The relationship between these components is shown in the patent's figures (’465 Patent, Figs. 1-2).
- Technical Importance: This approach creates a more robust and difficult-to-defeat system for securing assets, as disabling the primary unit is designed to trigger a secondary, potentially hidden, disabling mechanism (’465 Patent, col. 2:18-20).
- Key Claims at a Glance:
- The complaint asserts claims 1, 2, and 3 (Compl. ¶41). Independent claim 1 is a system claim.
- The essential elements of independent claim 1 include:
- An equipment disablement device that disables equipment if a payment is not made by a due date.
- A tamper disabler that receives a signal from the equipment disablement device if it detects tampering.
- The tamper disabler then disables the equipment.
U.S. Patent No. 7,266,507 - "Time-Based Disablement of Equipment" (Issued Sep. 4, 2007)
- Technology Synopsis: This patent details a system where the logic for disabling a vehicle resides within a control module in the vehicle itself. The system computes payment deadlines and requires a user to enter a corresponding code via a user interface (e.g., a keypad) before the deadline passes. Failure to enter the correct code in time results in the control module commanding a disabling module to interrupt a critical vehicle system, such as the ignition (’507 Patent, Abstract; col. 6:5-12).
- Asserted Claims: Claims 12, 25, 27, 29-31, 33, 35, and 37-39 are asserted (Compl. ¶53). Independent claims include system claim 12 and method claim 25.
- Accused Features: The complaint alleges that Defendant’s Elite, SelectGPS, and Encore systems, which utilize a starter relay interrupt, a keypad for code entry, and an internal timer or time stamp feature, infringe the ’507 Patent (Compl. ¶¶44, 46, 48-49).
U.S. Patent No. 7,430,471 - "Method and System for Monitoring a Vehicle" (Issued Sep. 30, 2008)
- Technology Synopsis: This invention describes a method for monitoring a vehicle focused on authorized use. The system detects vehicle movement or activation, transmits a signal to a control center, and determines whether a valid operator identification was received within a specified time interval relative to the movement. If no valid ID is received, an alarm condition can be set, and location information can be transmitted (’471 Patent, Abstract; col. 2:28-46).
- Asserted Claims: Claims 1, 12, 15, and 26 are asserted (Compl. ¶61). Independent claims include method claims 1 and 15.
- Accused Features: The PassTime InTouch system is accused of infringing by monitoring and transmitting signals concerning vehicle movement, location, speed, and position relative to defined boundaries to a user interface (Compl. ¶¶56, 58).
III. The Accused Instrumentality
- Product Identification: The accused instrumentalities are Defendant’s "PassTime Systems," which include the Elite, SelectGPS, InTouch (including InTouch Summit), and Encore product lines (Compl. ¶8). These systems comprise both hardware installed in vehicles and cloud-based software services (Compl. ¶7).
- Functionality and Market Context: The complaint alleges the PassTime Systems provide payment collection and vehicle telematics functions (Compl. ¶7). The hardware includes GPS tracking devices, starter interrupt relays, and keypads for entering payment codes (Compl. ¶¶11, 12, 26). This hardware communicates wirelessly to transmit vehicle location, speed, and other usage data to Defendant’s "PassTime Private Cloud" servers (Compl. ¶¶7, 16-17). This data is then made available to customers (e.g., auto dealers and finance companies) through web-based interfaces and mobile applications (Compl. ¶¶7, 21). A key alleged function is the ability to disable a vehicle's starter if a payment is missed, and to locate the vehicle for repossession (Compl. ¶30). The complaint includes a marketing image describing how "Payment Assurance Devices" work by sending a command to prevent the vehicle from starting if payment is not received on its due date (Compl. ¶27).
IV. Analysis of Infringement Allegations
U.S. Patent No. 6,717,527 Infringement Allegations
| Claim Element (from Independent Claim 7) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| a vehicle disablement system, wherein the vehicle disablement system disables the vehicle if a code associated with a payment due date is not entered prior to the payment due date | The PassTime Systems allegedly include a Starter Interrupt Device (SID) and a keypad. The SID prevents the vehicle from starting if payment is not received, and a user enters a numeric code on the keypad to enable continued operation. | ¶¶26, 28-29 | col. 5:30-48 |
| a location system, the location system comprising a location determining device, wherein the location determining device determines a location of the vehicle when the vehicle disablement system indicates that a payment due date has passed without receiving a code... | The accused systems allegedly include a GPS transceiver that is activated to transmit the vehicle's location coordinates if a user fails to make a timely payment or enter the correct numeric code. | ¶30 | col. 6:11-34 |
| a location providing device, wherein the location providing device receives the location of the vehicle from the location determining device and provides the location of the vehicle to a service agency | The GPS transceiver allegedly transmits location data to the designated entity (e.g., dealer/lender) or its agent via the PassTime Private Cloud for the purpose of repossession. The complaint includes a system diagram showing data transmission from the vehicle to the cloud and then to end users. | ¶¶7, 30 | col. 6:40-50 |
- Identified Points of Contention:
- Technical Question: The complaint alleges the GPS transceiver is "activated" to transmit location data upon payment default (Compl. ¶30). However, other parts of the complaint describe the consumer-facing InTouch system as providing continuous location tracking (Compl. ¶58). A potential issue is whether the accused systems perform the specific "activation upon default" function required by the claim, or if the location reporting is a continuous feature independent of payment status.
- Scope Question: Claim 7 requires providing the location to a "service agency." The complaint alleges the location is provided to the "entity and/or an agent of that entity to repossess the vehicle" (Compl. ¶30). The case may raise the question of whether the lender/dealer itself qualifies as a "service agency" under the patent's definition.
U.S. Patent No. 7,388,465 Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| an equipment disablement device, wherein the equipment disablement device disables the equipment if a payment is not made on the equipment prior to a payment due date | The PassTime Systems are alleged to include a starter interrupt feature that prevents a vehicle from starting if payment is not made on schedule. | ¶¶34, 38 | col. 4:20-35 |
| a tamper disabler which receives a signal from the equipment disablement device if the equipment disablement device detects it is being tampered with and which disables the equipment | The complaint alleges that PassTime systems have "tamper detection" functionality that sends a notification if the device is removed or power is cut. A 2013 press release is cited, announcing a "PT SOS feature" that sends notification and location information if the device is removed from a vehicle. | ¶¶35, 40 | col. 2:11-20 |
- Identified Points of Contention:
- Structural Question: Claim 1 recites an "equipment disablement device" and a "tamper disabler," suggesting two distinct components. The complaint alleges a "tamper detection" feature within the PassTime system (Compl. ¶35). A central dispute may be whether the accused system, which may integrate these functions into a single hardware unit, meets the structural requirements of the claim.
- Functional Question: The claim requires the "tamper disabler" to "disable the equipment." The complaint alleges the tamper feature "sends notification and location information" (Compl. ¶35). A key question for the court will be whether sending a notification to a server for a remote command is equivalent to the claimed "tamper disabler" itself performing the disabling action.
V. Key Claim Terms for Construction
Term: "tamper disabler" (’465 Patent, Claim 1)
- Context and Importance: The construction of this term is critical to the infringement analysis for the ’465 Patent. Practitioners may focus on this term because the dispute will likely concern whether the accused PassTime system's architecture, which integrates multiple functions into a single device, maps onto the patent's arguably two-component "disablement device" and "tamper disabler" structure.
- Intrinsic Evidence for a Broader Interpretation: A party could argue the term is functional, not strictly structural. The patent's summary states the tamper disabler is "able to disable the vehicle in the same manner" as the primary device, focusing on its capability rather than its physical form (’465 Patent, col. 2:17-19). This may support an interpretation where a software module within a single device can serve as the "tamper disabler."
- Intrinsic Evidence for a Narrower Interpretation: A party could argue the claim implies physically separate components. The patent's abstract describes the disabler "receiv[ing] a signal from the equipment disablement device," and Figure 1 depicts the "Vehicle Disablement Device" (120) and "Tamper Disabler" (130) as two distinct boxes, which may support an interpretation requiring separate hardware.
Term: "service agency" (’527 Patent, Claim 7)
- Context and Importance: This term defines the required recipient of the vehicle's location data. Its construction will determine whether providing location information directly to the lender or car dealer, as alleged in the complaint (Compl. ¶30), satisfies the claim limitation.
- Intrinsic Evidence for a Broader Interpretation: The specification suggests a broad scope, stating the service agency "can be a lender or other party having a security interest in the vehicle" or, alternatively, a contracted third party (’527 Patent, col. 2:20-24). This language appears to explicitly include the lender itself within the definition.
- Intrinsic Evidence for a Narrower Interpretation: A party might argue that the consistent use of the distinct term "service agency" throughout the patent, rather than "lender," implies an entity whose primary role is providing the service of repossession, separate from the role of financing. The abstract, for instance, distinguishes between the "service agency" that locates the vehicle and the lender who needs to "recuperate the loss" (’527 Patent, Abstract; col. 2:5-8).
VI. Other Allegations
- Indirect Infringement: While the prayer for relief seeks a judgment for indirect infringement (Compl. p. 13, ¶a), the body of the complaint focuses on allegations of direct infringement by Defendant. The complaint does not plead specific facts to support the elements of induced or contributory infringement, such as alleging that Defendant's user manuals or instructions actively encourage customers to perform infringing acts.
- Willful Infringement: The complaint alleges that all infringing activity from the date of service of the complaint forward is "knowing and willful" (Compl. ¶63). This is an allegation of post-filing willfulness based on the notice provided by the lawsuit itself.
VII. Analyst’s Conclusion: Key Questions for the Case
- Architectural Mapping: A core issue will be whether the integrated architecture of Defendant’s PassTime systems, which combine payment enforcement, location tracking, and tamper detection into single hardware devices, can be mapped onto the arguably separate functional components recited in the patents, particularly the "equipment disablement device" and "tamper disabler" of the ’465 patent.
- Functional Operation vs. Claim Scope: A key evidentiary question will be one of functional equivalence. For the ’527 patent, does the accused system’s location tracking feature, which may be continuously active for consumer use, perform the specific function of being "activated" in response to a payment default as required by Claim 7, or is there a fundamental mismatch in its mode of operation?
- Definitional Scope: The case will likely require construction of key claim terms. For example, can the term "service agency" in the ’527 patent, which is taught as the recipient of location data for repossession, be construed to cover the lender or dealer itself, or does it require a distinct, third-party entity?