Bright Capture LLC v. Veryfi Inc

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Bright Capture LLC (Delaware)
  • Defendant: Veryfi, Inc. (Delaware)
  • Plaintiff’s Counsel: Napoli Shkolnik LLC; Kent & Risley LLC
• Case Identification: 1:23-cv-00384, D. Del., 04/05/2023
• 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 receipt scanning and financial data organization products infringe three patents related to automatically scanning, extracting data from, and organizing information from documents that lack a predefined format.
• Technical Context: The technology concerns automated data extraction from unstructured documents, such as financial receipts, to populate expense management software, a process aimed at eliminating tedious manual data entry.
• Key Procedural History: The complaint alleges that Plaintiff provided Defendant with notice of U.S. Patent No. 7,746,510 via a letter and claim chart on May 24, 2022, which may form the basis for the willfulness allegation. The complaint also notes that the '510 patent was allowed after a decision by the Board of Patent Appeals and Interferences and that the '410 patent issued several years after the Supreme Court's decision in Alice, preemptively arguing for the subject matter eligibility of the asserted patent family.

Case Timeline

Date	Event
2001-02-01	Priority Date for '510, '070, and '410 Patents
2010-06-29	U.S. Patent No. 7,746,510 Issued
2014-04-08	U.S. Patent No. 8,693,070 Issued
2018-08-14	U.S. Patent No. 10,049,410 Issued
2022-05-24	Plaintiff allegedly sent notice letter re: '510 Patent
2023-04-05	Complaint Filed

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

U.S. Patent No. 8,693,070 - Receipts scanner and financial organizer

Issued April 8, 2014

The Invention Explained

• Problem Addressed: The patent’s background identifies the process of manually entering financial data from receipts into budgeting or finance software as "very laborious and time consuming," often causing users to abandon the practice ('070 Patent, col. 1:20-26).
• The Patented Solution: The invention proposes a system comprising a scanner and associated software that automates this process. A user feeds receipts into the scanner, and the software automatically captures an image, extracts the relevant numerical information, organizes it, and saves it in a computer file for management and review in various formats, such as reports or charts ('070 Patent, Abstract; col. 2:55-65). A key aspect is the system's ability to handle documents without a predefined structure.
• Technical Importance: The invention aims to solve a practical problem in personal and business finance by automating a tedious data entry task, making expense tracking more efficient and accessible.

Key Claims at a Glance

• The complaint asserts "one or more claims of the ’070 Patent (e.g., claim 1)" (Compl. ¶25).
• Independent Claim 1 recites a method with the following essential elements:
  • In a system with a scanner and a computing device, obtaining an electronic image of a document "having no predefined format and containing numerical information."
  • Automatically capturing the electronic image including the numerical information in the computing device.
  • Organizing the captured numerical information.
  • Enabling editing of the captured numerical information.
  • Enabling viewing of the captured numerical information in a desired format.
  • Combining the captured numerical information with other previously captured numerical information into a report.
• The complaint does not explicitly reserve the right to assert dependent claims for this patent.

U.S. Patent No. 10,049,410 - Receipts scanner and financial organizer

Issued August 14, 2018

The Invention Explained

• Problem Addressed: Similar to its predecessors, the '410 Patent addresses the inefficiency and labor involved when individuals attempt to track expenses by manually entering data from receipts and other financial documents into a computer ('410 Patent, col. 1:18-28).
• The Patented Solution: The invention describes a method for processing a paper expense receipt by receiving its electronic image, using software to "retrieve at least the relevant data from the electronic image," and "parsing the relevant data to obtain the expense data." This extracted data is then used to populate an electronic expense report, with the patent again noting the invention's applicability to receipts having "no predefined format" ('410 Patent, col. 5:4-19).
• Technical Importance: The technology represents a specific method for improving computer and scanning technology by automating the extraction and organization of financial data from unstructured paper sources ('410 Patent, col. 1:7-12).

Key Claims at a Glance

• The complaint asserts "one or more claims of the ’410 Patent (e.g., claim 1)" (Compl. ¶29).
• Independent Claim 1 recites a method with the following essential elements:
  • Receiving at a computer input device a paper expense receipt from an individual.
  • Receiving an electronic image of the receipt on a computer processor.
  • Processing the image to "automatically obtain expense data" by (i) using software to retrieve relevant data and (ii) parsing that data.
  • Populating an electronic expense report with the expense data.
  • Displaying the electronic expense report.
  • The method is specified to operate on an expense receipt that has "no predefined format for the computer system."
• The complaint does not explicitly reserve the right to assert dependent claims for this patent.

U.S. Patent No. 7,746,510 - Receipts scanner and financial organizer

Issued June 29, 2010

• Technology Synopsis: The '510 patent describes an apparatus for scanning various types of receipts of no predefined format, such as grocery or credit card receipts. A computer executes software that receives the scanned information, automatically extracts numerical expense data, and categorizes the information. The system then produces and displays report information and can save the processed data in a format, like Quicken Interchange Format (QIF), for import into other financial management programs ('510 Patent, Abstract; col. 1:12-18).
• Asserted Claims: The complaint asserts "one or more claims of the ’510 Patent" including, for example, independent claims 1 and 11 (Compl. ¶35).
• Accused Features: The complaint alleges that Defendant's products directly infringe by performing the claimed methods of scanning and organizing receipt data. It further alleges Defendant induces infringement by distributing "product literature and website materials" that instruct customers on using the products in an infringing manner (Compl. ¶34-35).

III. The Accused Instrumentality

Product Identification

The complaint refers to the accused instrumentalities as the "Exemplary Defendant Products" (Compl. ¶25, ¶29, ¶34). The specific products are identified in Exhibits 4, 5, and 6, which are referenced as containing claim charts but are not attached to the publicly filed complaint.

Functionality and Market Context

The complaint alleges that the accused products provide for the scanning of documents, such as receipts, and the automatic extraction and organization of financial data from those documents (Compl. ¶25, ¶29, ¶35). The complaint does not provide sufficient detail for analysis of the products' specific commercial importance or market positioning.

IV. Analysis of Infringement Allegations

The complaint references claim-chart exhibits (Exhibits 4, 5, and 6) that were not provided with the filing. The infringement theory is therefore summarized below in prose. No probative visual evidence provided in complaint.

'070 Patent Infringement Allegations

The complaint alleges that the accused products infringe at least claim 1 of the '070 Patent. The narrative theory suggests that Defendant's products constitute a system that performs a method of obtaining an electronic image of a document with no predefined format (like a receipt), automatically captures and organizes the numerical information from that image, and provides functionality for users to view, edit, and combine this information into reports (Compl. ¶25).

'410 Patent Infringement Allegations

The complaint alleges that the accused products infringe at least claim 1 of the '410 Patent. The infringement theory posits that Defendant's system receives electronic images of paper expense receipts that lack a predefined format, processes these images with software to automatically extract and parse expense data, and then populates and displays an electronic expense report based on that data (Compl. ¶29).

Identified Points of Contention

• Scope Questions: A central dispute may arise over the claim term "no predefined format" ('410 Patent, col. 5:18-19). The patentee may argue this covers any document not conforming to a strict template, while the defense could argue that modern OCR systems that are trained on, and optimized for, common receipt layouts are in fact using a form of "predefined format," raising the question of whether the accused system's operation falls within the claim scope.
• Technical Questions: The claims require steps to be performed "automatically" ('410 Patent, col. 5:10). This raises the evidentiary question of how the accused system functions. A key factual dispute may be whether the accused system's data extraction is fully algorithmic or if it relies on a "human-in-the-loop" for verification or correction, which could suggest a mismatch with the claimed level of automation.

V. Key Claim Terms for Construction

The Term: "no predefined format"

(from '410 Patent, claim 1; '070 Patent, claim 1)

• Context and Importance: This term is foundational to the patents' assertion of novelty over prior art, which may have required templates for data extraction. Practitioners may focus on this term because the infringement analysis will depend heavily on whether the accused system, which likely uses sophisticated layout analysis or machine learning models, is considered to be processing documents with "no predefined format."
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The specification suggests the invention is designed to handle a wide variety of documents, including "grocery receipts, various purchase receipts, credit card receipts, bank statements, etc." ('410 Patent, col. 2:50-52), which could support a broad construction covering any document that is not strictly standardized.
  • Evidence for a Narrower Interpretation: The specification describes software that "categorizes each transaction" ('410 Patent, col. 2:54-56). This implies some level of structural understanding of typical receipt layouts (e.g., identifying vendors, dates, and totals). A party could cite this to argue for a narrower meaning that excludes systems operating without any structural assumptions, or conversely, to argue that any system using such structural assumptions is practicing the invention.

The Term: "automatically obtain expense data"

(from '410 Patent, claim 1)

• Context and Importance: This term defines the core automated function of the invention. Its construction will be critical in determining whether the accused system's specific data extraction process meets the claim limitation, particularly concerning the level of automation involved.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The patent background emphasizes speed and convenience, stating that "within seconds after scanning the receipts, the software organizes all the information" ('410 Patent, col. 1:29-31). This may support a construction where "automatically" refers to the user experience of a seamless process, regardless of the underlying technical steps.
  • Evidence for a Narrower Interpretation: The patent describes a subsequent step where a user can "modify or edit each transaction" ('410 Patent, col. 4:29-30). A party might argue that the need for user editing implies the initial "automatic" step is not perfectly accurate and that a system requiring significant human review or intervention does not "automatically obtain" the data in the manner required by the claim.

VI. Other Allegations

Indirect Infringement

The complaint alleges induced infringement of the '510 Patent. The allegation is based on Defendant providing its products to customers and distributing "product literature and website materials" that allegedly instruct users on how to operate the products in an infringing manner (Compl. ¶35).

Willful Infringement

The complaint alleges willful infringement of the '510 Patent based on pre-suit knowledge. It asserts that Plaintiff provided Defendant with "actual knowledge" via a notice letter and accompanying claim chart dated May 24, 2022, and that Defendant continued its allegedly infringing conduct thereafter (Compl. ¶33, ¶37).

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

• A central issue will be one of technical scope and evolution: Can the term "no predefined format," which was a key distinction in earlier eras of OCR technology, be construed to read on modern data extraction systems that use machine learning models trained on vast datasets of common document layouts? This raises the question of whether such training creates an implicit "format" that distinguishes the accused technology from the patented invention.
• A key evidentiary question will be one of functional operation: What evidence will be required to prove that the accused system "automatically" extracts and organizes data as claimed? The case may turn on the degree to which the system relies on algorithmic processing versus templates, heuristics, or human-in-the-loop validation, and whether any such reliance removes it from the scope of the claims.
• For the '510 patent, a critical legal question will be the impact of pre-suit notice: Did the May 2022 letter provide notice sufficiently specific to render Defendant’s subsequent conduct "willful" under the standard set by Halo, and what actions, if any, did Defendant take in response that might negate a finding of willfulness?