DCT
1:19-cv-01602
Rothschild Digital Confirmation, LLC v Epay Systems, Inc
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: Rothschild Digital Confirmation, LLC (Texas)
- Defendant: Epay Systems, Inc. (Delaware)
- Plaintiff’s Counsel: Stamoulis & Weinblatt, LLP; Chavous Intellectual Property Law LLC
- Case Identification: 1:19-cv-01602, D. Del., 08/28/2019
- Venue Allegations: Plaintiff alleges venue is proper in the District of Delaware because Defendant is incorporated in Delaware, has a place of business in the district, and regularly transacts business there, including offering its products for sale to Delaware customers.
- Core Dispute: Plaintiff alleges that Defendant’s mobile time-tracking software infringes a patent related to a device for verifying a user's activities by capturing a digital image and securely embedding it with user identity, location, and time data.
- Technical Context: The technology addresses the need for securely authenticating and documenting activities in the field, such as employee work, by creating a tamper-resistant record that links a photograph to specific location, time, and user identity metadata.
- Key Procedural History: An Inter Partes Review (IPR) proceeding, IPR2015-00624, was previously filed against the asserted patent. The proceeding resulted in the cancellation of method claims 27, 28, 38, and 39. The currently asserted independent claim 1, a device claim, survived this validity challenge.
Case Timeline
| Date | Event |
|---|---|
| 2004-11-29 | Earliest Priority Date for U.S. Patent No. 7,456,872 |
| 2008-11-25 | Issue Date for U.S. Patent No. 7,456,872 |
| 2015-01-26 | IPR2015-00624 Filed against the '872 Patent |
| 2018-02-08 | IPR Certificate Issued, cancelling claims 27, 28, 38, 39 |
| 2019-08-28 | Complaint Filed |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 7,456,872 - “Device and method for embedding and retrieving information in digital images”
The Invention Explained
- Problem Addressed: The patent describes the difficulty of organizing digital images and associating them with relevant information, noting that conventional digital cameras create files with non-descriptive names ('872 Patent, col. 2:50-54). More critically, it identifies a need for a secure way to verify a user's activities by capturing and authenticating the time, location, and user identity associated with a digital image ('872 Patent, col. 2:59-68).
- The Patented Solution: The patent discloses a "Locational Image Verification Device" (LIVD) designed to solve this problem by integrating multiple functions into a single device ('872 Patent, col. 2:30-33). When a user captures an image to document an "assignment," the device simultaneously captures the user's verified identity, the precise location (e.g., via GPS), and the date/time. This metadata is then associated with the image file and encrypted to create a secure, tamper-resistant record that can be used to authenticate the user's activities ('872 Patent, Abstract; col. 14:46-62).
- Technical Importance: The invention claims to provide a system for creating verifiable, authenticated proof of a user's presence and actions at a specific place and time, a function described as a "critical need" for authenticating data points ('872 Patent, col. 2:65-68).
Key Claims at a Glance
- The complaint focuses its allegations on independent claim 1 ('872 Patent, col. 17:1-12).
- The essential elements of independent claim 1 are:
- A "user verification module" for verifying a user's identity, which enables device operation and provides an assignment to the user.
- A "capture module" for capturing an image and creating a digital image file, where the user's identity is verified at the time of capture.
- A "locational information module" for determining the device's location during image capture.
- A "date and time module" for determining the date and time of image capture.
- A "processing module" for associating the assignment, user identity, location, and time/date with the digital image file.
- An "encryption module" for encrypting the digital image file and its associated information upon image capture.
- The complaint alleges infringement of "at least claim 1," suggesting the right to assert other claims may be reserved (Compl. ¶44).
III. The Accused Instrumentality
Product Identification
- The complaint identifies "Epay's Mobile Punch product" as the Accused Product (Compl. ¶25).
Functionality and Market Context
- The complaint describes the Accused Product as "locational image software" for mobile devices that functions as a mobile time-tracking application (Compl. ¶¶6, 22). It is alleged that when a customer (e.g., an employee) uses the app to "punch" in or out, the software verifies the user's identity via login credentials, uses the device's camera to capture an image, and uses the device's GPS to capture location data (Compl. ¶¶27-29).
- This information—user identity, photo, location, and time—is allegedly associated and stored, creating a record of the employee's work activity for purposes like timekeeping and location verification (Compl. ¶31).
IV. Analysis of Infringement Allegations
No probative visual evidence provided in complaint.
- ’872 Patent Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| a locational image verification device for verifying an assignment of a user comprising: a user verification module for verifying an identity of a user of the device... | The Accused Product on a mobile device is alleged to be a locational image verification device, and its mobile application checks login credentials to verify the user's identity (Compl. ¶¶26-27). | ¶27 | col. 5:26-43 |
| wherein upon verification, the user verification module enables operation of the device and provides an assignment to the user; | Upon successful login, the user can capture an image, which the complaint frames as "verifying an assignment of a user" (Compl. ¶¶26, 28). | ¶28 | col. 13:58-64 |
| a capture module for capturing an image relating to the assignment and creating a digital image file, wherein the user verification module verifies the identity...at a time of the image capture; | The mobile device’s camera is used to capture an image related to the user's task, with identity verified at the time of the capture via the prior login (Compl. ¶28). | ¶28 | col. 4:13-29 |
| a locational information module for determining a location of the device when capturing the image; | The product allegedly uses the mobile device's GPS to capture the real-time location of the device when the image is taken (Compl. ¶29). | ¶29 | col. 5:52-61 |
| a date and time module for determining a date and time of the image capture; | The mobile device, enabled by the Accused Product, determines the date and time of the image capture (Compl. ¶30). | ¶30 | col. 6:4-8 |
| a processing module for associating the assignment, the user identity, location information and the time and date to the digital image file; and | The mobile device's processor is alleged to associate the user identity, location, and time/date information with the captured digital image file (Compl. ¶31). | ¶31 | col. 4:51-54 |
| an encryption module for encrypting the digital image file and associated information upon image capture. | The product allegedly includes an "encryption module for storing and protecting the collected field information data in the database" and performs "data encryption" upon image capture (Compl. ¶32). | ¶32 | col. 6:31-41 |
- Identified Points of Contention:
- Scope Questions: A central question may be whether the act of an employee "punching in" for a time clock, as allegedly facilitated by the Accused Product, qualifies as "verifying an assignment of a user" as recited in the claim. The patent specification provides examples of pre-defined assignments, such as a supervisor providing specific geographic locations for a user to visit ('872 Patent, col. 13:58-64), which raises the question of whether the claim term "assignment" requires a pre-loaded task or can be read more broadly to cover any user-initiated, work-related action.
- Technical Questions: Claim 1 requires an "encryption module" that encrypts "the digital image file and associated information upon image capture." The complaint alleges an "encryption module for storing and protecting the collected field information data in the database" (Compl. ¶32). This raises several technical questions for the court: (1) Does the accused system encrypt the digital image file itself, or only the associated metadata in a database? (2) Does the alleged encryption occur "upon image capture" on the mobile device, as the claim requires, or at a later time, such as when data is received and stored on a server?
V. Key Claim Terms for Construction
The Term: "an assignment of a user"
Context and Importance: This term appears in the preamble and the first element of claim 1. Its construction is critical because it defines the context of the entire claimed invention. The dispute may turn on whether the accused "Mobile Punch" functionality, which verifies an employee's presence at a location, meets this limitation.
Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The claim preamble refers to "verifying an assignment of a user," which could be argued to encompass any task verification. The complaint adopts this phrasing, suggesting the act of clocking in is itself the "assignment" being verified (Compl. ¶¶8, 11, 26).
- Evidence for a Narrower Interpretation: The detailed description repeatedly frames the invention in the context of a user receiving pre-defined tasks from a supervisor. For example, it describes a user receiving "information...as to the specific geographic assignments that the user has been given" and the device displaying "directions to his specific assignments" ('872 Patent, col. 13:58-64, col. 14:15-20). This could support a narrower construction requiring a pre-defined task.
The Term: "encrypting the digital image file and associated information upon image capture"
Context and Importance: This limitation in the final element of claim 1 requires a specific technical action (encryption), a specific target (image file and information), and a specific timing ("upon image capture"). Practitioners may focus on this term because the complaint's allegations describe encryption of "data in the database" (Compl. ¶32), which may not align with the claim's requirements.
Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: A party might argue that "upon image capture" does not mean instantaneously, but rather as part of the overall capture-and-save process. They may also argue that encrypting data destined for a database is functionally equivalent to encrypting "associated information."
- Evidence for a Narrower Interpretation: The patent specification emphasizes the security and immediacy of the process, stating information is "immediately encrypted by the encryption module 140" and that a user "would not have the ability to alter any information" because it is "encrypted immediately upon capture" ('872 Patent, col. 14:50-62). This supports a strict reading where both the image and data are encrypted together on the device at the moment of capture.
VI. Other Allegations
- Indirect Infringement: The complaint alleges that Epay induces infringement by instructing its customers to install and use the Accused Product on their mobile devices in a manner that allegedly infringes the '872 Patent. It further alleges Epay advertises and sells the product with the intent that customers will use it in this way (Compl. ¶¶25, 51).
- Willful Infringement: The complaint alleges that Defendant's infringement will be "knowing and intentional at least upon the service of this Complaint," thereby establishing a basis for post-suit willfulness and enhanced damages (Compl. ¶43; Prayer for Relief ¶6). No facts supporting pre-suit knowledge are alleged.
VII. Analyst’s Conclusion: Key Questions for the Case
This dispute appears to center on the alignment between the specific requirements of the patent's claims and the alleged functionality of a modern mobile time-tracking application. The key questions for the court will likely be:
A core issue will be one of definitional scope: Can the claim term "assignment of a user", which is described in the patent specification in the context of pre-assigned tasks, be construed broadly enough to read on an employee's self-initiated act of "punching in" at a work location?
A key evidentiary question will be one of technical implementation: Does the accused product's alleged function of "storing and protecting...data in the database" meet the specific claim requirement for an "encryption module" that encrypts "the digital image file and associated information upon image capture" on the user's device? The timing, target, and location of the alleged encryption will be determinative.