DCT
1:18-cv-00834
Bytemark Inc v. Token Transit Inc
Key Events
Complaint
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: Bytemark, Inc. (Delaware)
- Defendant: Token Transit, Inc. (Delaware)
- Plaintiff’s Counsel: Richards, Layton & Finger, P.A.
- Case Identification: 1:18-cv-00834, D. Del., 06/01/2018
- Venue Allegations: Venue is alleged to be proper in the District of Delaware because Defendant is a Delaware corporation and conducts business in the district, including by offering its accused application and system to customers such as the Delaware Transit Corporation (DART First State).
- Core Dispute: Plaintiff alleges that Defendant’s mobile transit ticketing application and its underlying system infringe patents related to the use of dynamic, human-perceptible visual displays for validating electronic tickets.
- Technical Context: The technology addresses perceived shortcomings of barcode-based mobile tickets by replacing them with visually distinct, animated, or changing displays on a smartphone screen, allowing for faster and more reliable verification by human ticket takers.
- Key Procedural History: The complaint notes that the Patents-in-Suit have been previously asserted in litigation against several of Defendant's competitors. Significantly, after this complaint was filed, an Inter Partes Review (IPR) proceeding concluded for the '967 Patent (IPR2017-01449), resulting in the cancellation of several claims, including independent claim 1, which is the sole claim of the '967 patent asserted in this action.
Case Timeline
| Date | Event |
|---|---|
| 2011-03-11 | Earliest Priority Date for '967 and '993 Patents |
| 2013-07-23 | '967 Patent Issued |
| 2016-01-19 | '993 Patent Issued |
| 2017-05-18 | Inter Partes Review (IPR) Filed for '967 Patent |
| 2018-06-01 | Complaint Filed |
| 2020-09-23 | IPR Certificate Issued Cancelling Claim 1 of '967 Patent |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 8,494,967 - Method and System for Distributing Electronic Tickets with Visual Display, issued July 23, 2013
The Invention Explained
- Problem Addressed: The patent's background describes conventional electronic ticketing systems that display a barcode on a phone screen as being "fraught with error" ('967 Patent, col. 1:32-33). It notes that barcode scanners are not designed to read lit LCD screens and that the screen's "reflectivity can defeat the scanning process" ('967 Patent, col. 1:36-37; Compl. ¶18).
- The Patented Solution: The invention replaces machine-readable codes with a "human perceptible verifying visual object," such as an animation or a changing color pattern, displayed on the user's device ('967 Patent, Abstract). A central server validates a "token" from the user's device and, in response, transmits a data file or command that causes the visual object to be displayed, allowing a ticket taker to perform verification without a scanner ('967 Patent, col. 2:50-65).
- Technical Importance: The described solution sought to improve the speed and reliability of ticket verification at venues by replacing a machine-dependent process (scanning) with a human-centric one (visual inspection of a dynamic display) (Compl. ¶17).
Key Claims at a Glance
- The complaint asserts independent claim 1 (Compl. ¶29). However, the Inter Partes Review Certificate for the '967 Patent indicates that claim 1 was cancelled.
- The essential elements of the asserted (now cancelled) claim 1 include:
- Receiving a request from a user's device to verify a purchased electronic ticket.
- Receiving a token from the user's device associated with the request.
- Determining if the token is stored in a data record and is valid.
- If the token is valid, causing an activation by transmitting a data file to the user's device, which comprises a "visual validation display object" for recognition by a ticket taker.
U.S. Patent No. 9,239,993 - Method and System for Distributing Electronic Tickets with Visual Display, issued January 19, 2016
The Invention Explained
- Problem Addressed: The '993 Patent addresses the same fundamental problem as its parent '967 Patent: the inefficiency and error-prone nature of verifying electronic tickets by scanning barcodes on mobile device screens ('993 Patent, col. 1:20-25).
- The Patented Solution: This patent elaborates on the security architecture. The system transmits a "unique alphanumeric string" as a token to a user's device, with a copy stored on a central server ('993 Patent, Claim 1). The system validates the token by matching the device's token with the server's copy. Upon successful validation, it transmits a "secured validation display object" to the device, thereby preventing display if the token is not validated ('993 Patent, col. 14:10-33). The specification describes various methods for "securing" the object, such as encryption or tying the display to a unique device identifier like an IMEI number ('993 Patent, col. 5:15-60).
- Technical Importance: This approach introduces an explicit security and authentication layer to the visual validation process, aiming to prevent ticket fraud by ensuring the visual display is only generated after a unique token is verified by a central authority (Compl. ¶19).
Key Claims at a Glance
- The complaint asserts independent claim 1 (Compl. ¶47).
- The essential elements of asserted independent claim 1 include:
- Transmitting a token that is a unique alphanumeric string to a remote display device.
- Storing a copy of the unique alphanumeric string on a central computer system.
- Validating the token by matching the transmitted token to the stored copy to provide a ticket payload.
- Securing a validation display object prior to transmission.
- Transmitting the secured validation display object.
- Enabling the remote device to display the object upon validation, or preventing display if not validated.
III. The Accused Instrumentality
Product Identification
- The accused instrumentalities are the "Token Transit app" and the associated back-end system (Compl. ¶¶12, 22).
Functionality and Market Context
- The Token Transit app allows users to purchase and store transit passes on their smartphones (Compl. ¶23). To use a pass, the user taps to "activate" it, which prompts the device to display a dynamic visual object for a bus driver or ticket taker (Compl. ¶24). The complaint alleges this visual display incorporates security features like motion ("words moving back and forth"), a color of the day, a unique local picture, and a display of the current time "down to the second," which are intended to distinguish valid tickets from fraudulent ones (Compl. ¶¶25, 34). The system is alleged to be a direct competitor to Plaintiff's and is used by transit agencies across the country (Compl. ¶¶11-12). No probative visual evidence provided in complaint.
IV. Analysis of Infringement Allegations
'967 Patent Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| receiving from the user's computer device a request to verify purchase of a previously purchased electronic ticket... | A transit user taps to use a stored pass in the "Pass Wallet," which sends a request from the smartphone to verify the purchase. | ¶33 | col. 14:6-14 |
| receiving from the user's computer device a token associated with the received request; | The activation of a ticket is an online transaction involving a token that links the request from the smartphone to a particular user ticket on the server. | ¶35 | col. 14:15-17 |
| determining whether a token associated with the purchased electronic ticket has been stored in a data record... and if it has, whether the received token is valid; | The Token Transit server system determines if a token associated with the user's purchased ticket has been stored and if the received token is valid. | ¶36 | col.14:18-22 |
| in dependence on the determination that the received token is valid, causing an activation... by transmitting to the user's computer device a data file comprising the visual validation display object... | Upon determining the token is valid, the server transmits a data file to the smartphone, causing the display of the visual object with motion, color, and current time. | ¶37 | col. 14:23-31 |
- Identified Points of Contention:
- Claim Validity: The primary issue is that asserted claim 1 of the '967 Patent was cancelled in an IPR proceeding that concluded after the complaint was filed ('967 Patent, IPR Certificate). This suggests the infringement allegations for this patent are no longer viable.
- Technical Questions: Assuming the claim were valid, a key question would be evidentiary: what proof, beyond "information and belief," shows that the accused system uses a "token" and performs the server-side "determining" step in the specific manner required by the claim?
'993 Patent Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| transmitting a token associated with a previously purchased electronic ticket to a remote display device, wherein the token is a unique alphanumeric string... | A unique alphanumeric string associated with the ticket number is transmitted to the user's smartphone to link the ticket to the device. | ¶51 | col. 14:10-14 |
| wherein a copy of the unique alphanumeric string is stored on a central computer system; | A copy of the token is stored on Defendant's central computer system, which allows a user to recover a lost ticket. | ¶52 | col. 14:15-17 |
| validating the token by matching the token transmitted to the remote display device to the copy of the unique alphanumeric string stored on the central computing system... | The token is validated by matching the one on the smartphone to the copy on the central system to provide a "ticket payload." | ¶53 | col. 14:18-22 |
| securing a validation display object prior to transmission to provide a secured validation display object; | On information and belief, a validation display object is secured within the Token Transit system before it is transmitted to the user's device. | ¶54 | col. 14:23-25 |
| transmitting to the remote display device a secured validation display object associated; with the ticket payload. | The Token Transit system transmits a secured validation display object to the smartphone. | ¶55 | col. 14:26-28 |
| enabling the remote display device to display the secured validation display object... or preventing the remote display device from displaying the secured validation display object in the event that the token is not validated. | The system enables the smartphone to display the object upon successful validation and prevents its display if the token is not validated. | ¶¶56, 57 | col. 14:29-33 |
- Identified Points of Contention:
- Scope Questions: What precise technical standard must be met to satisfy the term "securing a validation display object"? The breadth of this term will be a central issue for claim construction.
- Technical Questions: The complaint's allegations regarding the "unique alphanumeric string" and the "securing" step are made on "information and belief." A key question is what evidence exists that the accused system actually performs these specific functions, as opposed to using other types of identifiers or generic transport-layer security.
V. Key Claim Terms for Construction
Term from the '993 Patent: "securing a validation display object"
- The Term: "securing a validation display object"
- Context and Importance: This term is critical because it defines the inventive security feature that distinguishes the claimed method. The outcome of the infringement analysis may depend on whether the accused system's security protocols meet the bar set by this limitation. Practitioners may focus on this term because its construction will determine whether standard security practices (like SSL/TLS) are sufficient to infringe, or if a more specialized, application-level security measure is required.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The specification discusses using an "Authkey" or a "key-pair in an assymetric encryption system" to encrypt the visual object ('993 Patent, col. 5:15-28, col. 6:1-8). This language could support a construction that encompasses any form of encryption applied to the object before transmission.
- Evidence for a Narrower Interpretation: The specification also describes highly specific security methods, such as customizing animation code for a device's unique IMEI number or fetching a "dynamic script" with instructions arranged in a different order for different devices ('993 Patent, col. 5:46-60, col. 6:28-39). This could support a narrower construction requiring a specific, device-aware, or anti-tampering security mechanism beyond generic data encryption.
VI. Other Allegations
- Indirect Infringement: The complaint alleges that Defendant induces infringement by "encouraging customers and others to purchase and use the infringing system" (Compl. ¶¶39, 59). It also alleges contributory infringement, stating that Defendant knew its application and system were infringing and are "not suitable for substantial non-infringing use" (Compl. ¶¶42, 62).
- Willful Infringement: Willfulness is alleged for both patents based on Defendant’s "full knowledge, or willful blindness to knowledge" of the patents (Compl. ¶¶44, 64). The complaint alleges this knowledge arises from Defendant being a competitor in the same market and from Plaintiff's prior, "nationally publici[zed]" lawsuits asserting these same patents against Defendant's competitors (Compl. ¶¶14-15).
VII. Analyst’s Conclusion: Key Questions for the Case
- A dispositive threshold question is the impact of claim cancellation: Given that the sole asserted claim of the '967 Patent was cancelled by the U.S. Patent and Trademark Office after the suit was filed, the court will first need to address the viability of that portion of the lawsuit.
- For the remaining '993 Patent, a core issue will be one of definitional scope: Can the term "securing a validation display object" be construed to cover the security measures employed by the Token Transit system? The case may turn on whether the patent requires a specific, application-level security measure or if standard data transmission security is sufficient to meet this limitation.
- A key evidentiary question will be one of technical proof: Can Plaintiff produce evidence beyond its "information and belief" pleadings to demonstrate that the accused Token Transit system uses a "unique alphanumeric string" as a token and validates it against a central server copy in the specific manner required by the claims of the '993 Patent?