DCT
1:19-cv-01226
Anuwave LLC v. Coinbase Inc
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: Anuwave LLC (Texas)
- Defendant: Coinbase, Inc. (Delaware)
- Plaintiff’s Counsel: Stamoulis & Weinblatt LLC; Ferraiuoli LLC
- Case Identification: 1:19-cv-01226, D. Del., 06/27/2019
- Venue Allegations: Venue is alleged to be proper in the District of Delaware because the Defendant is a Delaware corporation and therefore resides in the district.
- Core Dispute: Plaintiff alleges that Defendant’s “Coinbase Text Notification” service, which allows users to manage cryptocurrency accounts via SMS, infringes a patent related to methods for enabling application-like communication over an SMS channel.
- Technical Context: The technology concerns using a software application on a mobile device to create a richer, menu-driven user experience for services that operate over the basic Short Message Service (SMS) protocol.
- Key Procedural History: The complaint does not mention any prior litigation, Inter Partes Review (IPR) proceedings, or specific licensing history concerning the asserted patent.
Case Timeline
| Date | Event |
|---|---|
| 2006-08-03 | ’862 Patent Priority Date |
| 2012-10-23 | ’862 Patent Issue Date |
| 2019-06-25 | Date Plaintiff last visited website cited in the complaint |
| 2019-06-27 | Complaint Filing Date |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 8,295,862, “Method and system to enable communication through SMS communication channel,” issued October 23, 2012
The Invention Explained
- Problem Addressed: The patent identifies that using SMS for commercial services is cumbersome because users must remember and type specific text commands on mobile keypads. While more advanced applications exist, they often require IP-based connections (like WAP or GPRS) that may be costly or unavailable, limiting access for many users (’862 Patent, col. 1:25-50).
- The Patented Solution: The invention describes a "network aware application" (NWA) on a user's mobile device that works with "middleware" to intercept SMS messages. Instead of a user typing raw commands, the NWA presents a structured interface with menus and options. The user's selections are converted into the necessary SMS command, sent to a service gateway, and the gateway's SMS response is then intercepted and rendered back into a user-friendly format by the NWA. This system creates an application-like experience using the ubiquitous SMS channel as the data transport layer (’862 Patent, col. 2:4-27, Fig. 1).
- Technical Importance: The described method allows for the creation of interactive, user-friendly mobile services over the standard SMS network, bypassing the need for a more capable and potentially more expensive mobile data connection (’862 Patent, col. 1:52-57).
Key Claims at a Glance
- The complaint’s infringement allegations focus on independent claim 7 (Compl. ¶14).
- The essential elements of independent claim 7 are:
- Listing all services at a terminal station that are available with an SMS gateway according to meta information available at the terminal station;
- Upon selecting a service, a network aware application configured to allow a user to type in a desired parameter;
- Upon user entering the desired parameter, submitting a request to the SMS gateway;
- The SMS gateway responding back with a response;
- Wherein the desired parameter is not listed at the terminal station.
- The complaint does not explicitly reserve the right to assert other claims but states infringement of "at least one claim" (Compl. ¶10).
III. The Accused Instrumentality
Product Identification
The accused instrumentality is the “Coinbase Text Notification” solution (Compl. ¶14).
Functionality and Market Context
The complaint alleges the accused solution enables users to interact with their Coinbase accounts using an SMS-enabled mobile device. A user can send a command such as "Hi" to receive a list of available services (e.g., check balance, view transactions). The user then sends another text command (e.g., "SEND/REQ/BAL") followed by specific parameters (e.g., an amount or a recipient's nickname) to execute a transaction or query (Compl. ¶14-17). The complaint cites a Coinbase website describing how users can perform "all basic actions" via SMS messages (Compl. ¶14, n.1).
IV. Analysis of Infringement Allegations
No probative visual evidence provided in complaint.
’862 Patent Infringement Allegations
| Claim Element (from Independent Claim 7) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| listing all services at a terminal station that are available with an SMS gateway according to meta information available at the terminal station; | The system shows available SMS services (e.g., bal, qr, txns) when a user sends "Hi." This list is allegedly based on "meta information" consisting of user preferences linked to the device during registration. | ¶15 | col. 2:46-51 |
| upon selecting a service, a network aware application configured to allow a user to type in a desired parameter; | Upon selecting a service by entering a command (e.g., "SEND/REQ/BAL"), a mobile device's SMS client is allegedly implemented as a "network aware application" that allows the user to type a desired parameter, such as an "account amount/nickname." | ¶16 | col. 6:4-8 |
| upon user entering the desired parameter, submitting a request to the SMS gateway; | After the user enters the desired parameter (e.g., the amount/nickname), the system submits a request to the Coinbase SMS server/gateway. | ¶17 | col. 6:8-9 |
| the SMS gateway responding back with a response, | Upon receiving the user's request, the Coinbase SMS gateway/server responds to the user with the requested information, which is displayed on the mobile device. | ¶18 | col. 6:9-10 |
| wherein the desired parameter is not listed at the terminal station. | The parameter entered by the user, such as the "amount/nickname," is not a pre-listed option at the terminal station (the mobile device). | ¶19 | col. 8:1-2 |
- Identified Points of Contention:
- Scope Questions: A central question may be whether a standard mobile SMS client, as allegedly used by Coinbase's service, constitutes the "network aware application" described in the patent. The patent specification appears to describe the NWA as a distinct software component with its own middleware, separate from the standard SMS module ('862 Patent, Fig. 1, 102).
- Technical Questions: The complaint alleges infringement of the requirement for "meta information available at the terminal station." However, its own description states that the list of services is based on "user's preferences which are linked to their mobile device when they register for Coinbase text notification service" (Compl. ¶15). This raises the question of whether the meta information resides on the user's device ("terminal station") as the claim requires, or if it is generated and sent from Coinbase's server, which would suggest a potential mismatch with the claim language.
V. Key Claim Terms for Construction
The Term: "network aware application"
- Context and Importance: The definition of this term is critical because it determines whether a standard, pre-installed SMS client on a smartphone can meet the limitation, or if a specialized, custom-built application is required. The complaint equates it with "a mobile device's SMS client" (Compl. ¶16).
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The patent does not explicitly limit the term to a specific programming language or platform, and its function is to present an interface and handle user input, which a modern SMS client does.
- Evidence for a Narrower Interpretation: The specification repeatedly describes the NWA as being managed by "middleware" that intercepts messages before they are processed by the "standard SMS module" (’862 Patent, col. 2:7-12). Figure 1 shows a decision block (102) where a message is specifically routed to the NWA, suggesting it is a distinct entity from the default SMS handler.
The Term: "meta information available at the terminal station"
- Context and Importance: This term dictates the location of the data that defines the available services. Infringement depends on whether this information is stored locally on the user's device or is retrieved from a remote server. Practitioners may focus on this term as it defines a core architectural element of the claimed method.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The phrase "available at" could be argued to mean accessible from the terminal station, even if stored remotely.
- Evidence for a Narrower Interpretation: The specification states that the "network application application is bundled with a meta information of available SMS based services" (’862 Patent, col. 2:46-49). This language suggests the meta information is part of the application package installed and residing on the terminal station itself.
VI. Other Allegations
- Indirect Infringement: The complaint does not contain explicit allegations of induced or contributory infringement. The sole count is for direct infringement (Compl. ¶¶21-22).
- Willful Infringement: The complaint alleges Defendant had knowledge of the ’862 patent "at least as of the service of the present complaint" (Compl. ¶23). This allegation, if proven, would only support a claim for post-suit willfulness, as no facts supporting pre-suit knowledge are alleged.
VII. Analyst’s Conclusion: Key Questions for the Case
- A central issue will be one of architectural location: Does the accused Coinbase system rely on "meta information available at the terminal station" to list services, as required by claim 7, or does it generate that list on its own servers and send it to the user upon request? The complaint's own factual allegations may provide grounds for the defense to argue the latter.
- The case may also turn on a question of definitional scope: Does a standard smartphone SMS client qualify as the specialized "network aware application" that the patent describes as being managed by middleware and operating distinctly from a device's standard SMS module?
- Finally, an evidentiary question will be what proof Plaintiff can offer that Coinbase's internal systems perform the steps of the claimed method, particularly regarding the generation and use of "meta information" and the specific software architecture that constitutes the "network aware application."