First Class Monitoring LLC v. M&T Bank Corp

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: First-Class Monitoring, LLC (Texas)
  • Defendant: M&T Bank Corporation (New York)
  • Plaintiff’s Counsel: Stamoulis & Weinblatt LLC
• Case Identification: 1:17-cv-01578, D. Del., 11/03/2017
• Venue Allegations: Venue is alleged to be proper in the District of Delaware based on Defendant maintaining a "regular and established place of business" in the district, from which it markets and supports the accused services.
• Core Dispute: Plaintiff alleges that Defendant’s mobile text banking services infringe a patent related to methods for transmitting data using the Short Message Service (SMS) portion of a wireless network's control channel.
• Technical Context: The technology concerns using cellular network control channels for low-bandwidth data communications, a method for machine-to-machine (M2M) communication that is a conceptual antecedent to modern Internet of Things (IoT) applications.
• Key Procedural History: An Inter Partes Review (IPR) proceeding (IPR2017-01932) was initiated against the patent-in-suit before this complaint was filed. Subsequent to the filing of this lawsuit, the U.S. Patent and Trademark Office issued a certificate cancelling both claims asserted in this case, claims 1 and 7. This development raises a significant question regarding the viability of the infringement action.

Case Timeline

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

U.S. Patent No. 6,014,089 - "Method for Transmitting Data Using a Digital Control Channel of a Wireless Network," issued January 11, 2000

The Invention Explained

• Problem Addressed: The patent's background describes the inefficiency and labor-intensive nature of manually reading utility meters and notes the limitations of early automated systems that required dedicated telephone lines or intermediate radio storage stations (’089 Patent, col. 1:23-54).
• The Patented Solution: The invention proposes a method to use the existing, and often underutilized, control channel of digital wireless networks (e.g., GSM, TDMA) to transmit data. Specifically, it leverages the Short Message Service (SMS) protocol to send a request for data from a remote device to a "data collection unit" (e.g., a device attached to a utility meter), which then compiles and returns the requested data via another SMS message (’089 Patent, Abstract; col. 3:10-28). The system architecture is depicted in figures such as Figure 8, which shows a remote computer communicating with a data collection device over a wireless network.
• Technical Importance: This approach provided a way to achieve remote data monitoring without building new physical infrastructure, instead repurposing a portion of the burgeoning digital cellular networks for low-bandwidth, machine-to-machine communications (’089 Patent, col. 6:53-60).

Key Claims at a Glance

• The complaint asserts infringement of at least independent claims 1 and 7 (’089 Patent, col. 14:12; col. 15:7), and the general allegation suggests the right to assert dependent claims is reserved (Compl. ¶14).
• Independent Claim 1 recites a two-way communication method comprising the steps of:
  • Composing and transmitting a data request in an SMS packet from an "access point" to a "data collection unit" via a wireless control channel.
  • Receiving and interpreting the request at the data collection unit.
  • Compiling the requested data at the unit.
  • Composing and transmitting the compiled data in an SMS packet from the unit back to the access point.
• Independent Claim 7 recites a one-way communication method comprising the steps of:
  • Automatically collecting data at a data collection unit.
  • Composing the data into an SMS packet.
  • Inserting the packet into a wireless control channel for transmission to an access point.

III. The Accused Instrumentality

• Product Identification: The accused instrumentality is Defendant's "M&T Mobile Text Banking" service (Compl. ¶15).
• Functionality and Market Context: The service enables M&T Bank customers to send text message commands, such as "BAL" for an account balance, to a designated short code (62638) and receive their financial information in a return text message (Compl. ¶15). The complaint alleges this system involves a central server, which functions as a "data collection unit," that receives SMS requests, collects the corresponding account data, formats it into an SMS reply, and transmits it back to the customer over a cellular network (Compl. ¶15). To support its allegations, the complaint references a screenshot of what appears to be the M&T mobile banking application on an Apple iPhone (Compl. ¶15).

IV. Analysis of Infringement Allegations

• ’089 Patent Infringement Allegations (Claim 1)

• ’089 Patent Infringement Allegations (Claim 7)

• Identified Points of Contention:
  • Scope Questions: A central question is whether the patent's claim terms, originating in the context of remote utility metering, can be construed to cover the accused financial services system. Specifically, whether a bank's central server (Compl. ¶15) constitutes a "data collection unit" and a customer's mobile phone constitutes an "access point" as those terms are used in the patent (’089 Patent, col. 12:53-62).
  • Technical Questions: The complaint's factual allegations describe a request-response system where a customer initiates a query and receives a reply (Compl. ¶15), which appears to map more directly to Claim 1. It raises the question of what evidence supports infringement of Claim 7, which requires "automatically collecting data" and transmitting it, a process that suggests a data push without a preceding user request.

V. Key Claim Terms for Construction

• The Term: "data collection unit"

  • Context and Importance: This term is critical because the patent's primary embodiments describe this unit as a device co-located with a utility meter or other remote sensor (’089 Patent, Fig. 1; col. 2:25-34). The complaint alleges that M&T's centralized bank server is the "data collection unit" (Compl. ¶15). The case may turn on whether the term is limited to a remote, unattended device or if it can broadly cover any network-connected server that gathers data.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The specification suggests applications beyond utility meters, such as home security and health monitoring, which could imply the "unit" is any device that collects data for transmission (’089 Patent, col. 8:29-47). The term "unit" itself is general.
    • Evidence for a Narrower Interpretation: The patent’s background and dominant embodiments consistently frame the invention as a solution for monitoring remote, physically dispersed assets like utility meters (’089 Patent, col. 1:23-54). An argument could be made that the inventive concept is tied to this remote monitoring context, limiting the scope of "data collection unit" to devices in the field.

• The Term: "access point"

  • Context and Importance: Practitioners may focus on this term because its role appears inverted in the accused system compared to the patent's description. The patent describes the "access point" as the entity initiating the request, such as a utility company's computer (’089 Patent, col. 12:1-12, Fig. 8 element 54). The complaint’s theory requires the customer's mobile phone to be the "access point" (Compl. ¶15).
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The term is not explicitly defined, leaving open the possibility that it refers to any endpoint in the communication exchange, whether initiating or receiving. Claim 1 uses the term for both the sender of the request and the receiver of the compiled data.
    • Evidence for a Narrower Interpretation: The specification, particularly in the discussion related to Figure 8, describes the "remote device 54" (e.g., a computer connected to the telephone network) as the entity making the request, which could be interpreted as the intended meaning of "access point" (’089 Patent, col. 12:1-12). This could suggest the term refers to a centralized, fixed entity rather than a mobile end-user device.

VI. Other Allegations

• Indirect Infringement: The complaint does not allege indirect infringement (inducement or contributory infringement). The sole count is for direct infringement under 35 U.S.C. § 271(a) (Compl. ¶14).
• Willful Infringement: The complaint does not include an explicit allegation of willful infringement. It does, however, request a declaration that the case is "exceptional" under 35 U.S.C. § 285, which is the basis for seeking an award of attorneys' fees (Compl., Prayer for Relief ¶C).

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

• Procedural Viability: The most immediate and likely dispositive issue is the legal consequence of the post-filing cancellation of the only two asserted claims (Claims 1 and 7) by the USPTO. A primary question for the court will be whether the complaint can proceed when its statutory basis for infringement has been invalidated.
• Definitional Scope: Should the case proceed, a core issue will be one of definitional scope: can claim terms such as "data collection unit", which are rooted in the patent's disclosure of remote utility meter monitoring, be construed broadly enough to read on the components of a centralized, server-based financial service like the accused text banking system?
• Factual Basis for Infringement: A key evidentiary question, particularly for Claim 7, will be whether the accused service performs the specific functions required by the claim. The court may need to determine if M&T's system performs any "automatic" data transmission as required by Claim 7, or if it functions exclusively as a user-initiated, request-response system more closely aligned with the now-cancelled Claim 1.