DCT
8:25-cv-00660
Pay As You Go LLC v. VeriFone Inc
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: Pay As You Go, LLC (Texas)
- Defendant: VeriFone, Inc. (Delaware)
- Plaintiff’s Counsel: Law Offices of Barbra Stern, PA
- Case Identification: 8:25-cv-00660, M.D. Fla., 03/18/2025
- Venue Allegations: Venue is alleged to be proper based on Defendant’s regular and established place of business within the Middle District of Florida and alleged acts of infringement occurring within the district.
- Core Dispute: Plaintiff alleges that Defendant’s "Pay-per-Usage" billing platform infringes a patent related to methods for processing payments for pay-as-you-go telecommunication services via a third-party point-of-sale.
- Technical Context: The technology at issue concerns payment systems that allow consumers to pay for services like mobile phone usage without requiring a credit card or long-term contract, expanding access for unbanked or privacy-conscious users.
- Key Procedural History: The complaint does not reference prior litigation or administrative proceedings involving the patent-in-suit. It does, however, dedicate significant discussion to distinguishing the patented invention from prior art pre-paid systems, suggesting that issues of novelty and patent eligibility may be points of focus.
Case Timeline
| Date | Event |
|---|---|
| 2003-01-07 | ’127 Patent Priority Date |
| 2006-03-14 | ’127 Patent Issue Date |
| 2025-03-18 | Complaint Filing Date |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 7,013,127 - Systems and Methods for Employing ‘Pay-As-You-Go’ Telecommunication Services, Issued March 14, 2006
The Invention Explained
- Problem Addressed: The patent describes prior art pre-paid telecommunication services as burdensome because they typically required a user to have a credit card to "recharge" an account after the initial value was depleted. This created a barrier for individuals lacking regular income, those with poor credit, or users who wished to preserve their anonymity by avoiding contracts and credit-based transactions (Compl. ¶¶14, 20; ’127 Patent, col. 2:62-67).
- The Patented Solution: The invention proposes a method where a user can make payments, including cash, at a "designated location" or third-party "point-of-sale" (POS), such as a retail merchant site (’127 Patent, col. 4:35-39). This POS location receives the payment along with a user account identifier, communicates the transaction data to the telecommunication services provider, and the provider then credits the user's account. This system decouples the payment act from a direct, credit-based transaction with the service provider (’127 Patent, Abstract; FIG. 2).
- Technical Importance: This approach aimed to broaden the market for telecommunication services by providing a flexible payment mechanism for consumers who were unbanked, underbanked, or preferred not to use credit cards for such services (Compl. ¶¶24-25).
Key Claims at a Glance
- The complaint asserts independent claim 1 (Compl. ¶30).
- The essential elements of Claim 1 are:
- monitoring a user's use of the telecommunication services at regular time intervals;
- communicating results of said monitoring to a telecommunication services provider, wherein said telecommunication services provider processes said results and communicates processed results to said user; and
- receiving a payment from the user, obtained from a payment transaction wherein:
- a payment is received from the user at a point-of-sale together with an account identifier;
- data indicative of the payment transaction is received from the point-of-sale by the telecommunication services provider; and
- an amount of money equal to the amount of payment is received from a point-of-sale proprietor by the telecommunication services provider.
- The complaint does not explicitly reserve the right to assert other claims.
III. The Accused Instrumentality
Product Identification
The accused instrumentality is Defendant's "usage-based pricing (Pay-per-Usage) plan," which is part of its "2Checkout Monetization Platform" (Compl. ¶¶30-31).
Functionality and Market Context
The accused platform enables merchants to bill their end-customers based on consumption of services, such as calls and messages (Compl. ¶31). The system allegedly operates on a monthly billing cycle, calculating charges based on usage during the previous period and presenting a bill to the end-customer via a "2Checkout dashboard" (Compl. ¶¶32-33). The platform is marketed as supporting sales in numerous countries and currencies through various online payment methods, including credit/debit cards, digital wallets, and online banking (Compl. ¶34, p. 17). A screenshot from Defendant's documentation describes how a communications platform could use the system to charge clients a monthly recurring fee plus additional fees based on message and voice call volume (Compl. p. 14).
IV. Analysis of Infringement Allegations
’127 Patent Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| monitoring a user's use of the telecommunication services at regular time intervals; | Defendant’s platform provides for charging customers based on usage within a monthly billing cycle, with fees dependent on the number of messages sent or voice minutes used. | ¶32 | col. 7:1-3 |
| communicating results of said monitoring to a telecommunication services provider, wherein said telecommunication services provider processes said results and communicates processed results to said user; | A monthly bill is generated based on the prior cycle's usage and uploaded to the customer's "2Checkout dashboard," which the complaint alleges constitutes the communication of processed results to the user. | ¶33 | col. 7:4-7 |
| receiving a payment from the user, the payment obtained from a payment transaction wherein: a payment is received from the user at a point-of-sale together with an account identifier, data indicative of the payment transaction is received from the point-of-sale by the telecommunication services provider, and an amount of money equal to the amount of payment is received from a point-of-sale proprietor by the telecommunication services provider. | The customer pays the bill via the "2Checkout dashboard" (alleged "account identifier") using various online payment methods. The complaint alleges this dashboard is the "point-of-sale" and states on "information and belief" that payment is received by the provider from the "point-of-sale proprietor." | ¶34 | col. 7:8-19 |
- Identified Points of Contention:
- Scope Questions: A central dispute may arise over the meaning of "point-of-sale." The complaint alleges that Defendant’s "2Checkout dashboard" is a "point-of-sale" (Compl. ¶34). This raises the question of whether an online payment portal, operated by the service provider's billing agent and facilitating standard electronic payments, falls within the scope of a term the patent appears to have conceived as a third-party location for accepting alternative payments like cash.
- Technical Questions: The infringement theory for the three-part payment transaction sub-clause appears to be based on "information and belief" (Compl. ¶34). This raises an evidentiary question: what proof will be offered that the accused system's architecture distinguishes between a "point-of-sale," a "telecommunication services provider," and a "point-of-sale proprietor" in the specific manner required by the claim? The complaint's own description of the accused system does not facially separate these entities. For example, a screenshot showing available payment methods lists various online and digital wallet options but does not detail the flow of funds from a distinct "proprietor" (Compl. p. 19).
V. Key Claim Terms for Construction
The Term: "point-of-sale"
- Context and Importance: The viability of the infringement claim appears to hinge on construing this term to cover Defendant's online payment platform. Practitioners may focus on this term because the patent's background frames the invention as a solution for users unable to use credit cards directly with a provider, whereas the accused system is primarily a facilitator of such electronic payments.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The complaint notes the patent's disclosure that a "point-of-sale can be a physical location... or a virtual location, such as a website or application" (Compl. ¶15, citing the specification). The specification states the "designated location 12 can be any location that processes a credit card" (’127 Patent, col. 4:35-36).
- Evidence for a Narrower Interpretation: The patent repeatedly frames the problem as avoiding direct credit card payments to the provider and enabling cash payments (’127 Patent, col. 4:20-24). The claim recites a "point-of-sale proprietor" receiving and remitting payment, which may suggest a distinct third-party entity rather than the service provider's own integrated billing platform (’127 Patent, col. 7:17-18).
The Term: "telecommunication services provider"
- Context and Importance: The claim requires this entity to perform and receive certain actions. Defendant's "2Checkout" platform is a service for merchants, who are the ones providing services to the end-user. The identity of the "telecommunication services provider" in the context of the accused system (i.e., whether it is Verifone or Verifone's merchant-customer) will be critical to mapping the claim elements.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The term is not explicitly defined, potentially allowing it to cover an entity like Verifone that provides the essential billing infrastructure for the ultimate service.
- Evidence for a Narrower Interpretation: The patent’s illustrations and description (e.g., FIG. 1) depict a single, integrated provider (18) that manages the user account and the service network. This could support an argument that an intermediary billing platform is not the "provider" as contemplated by the patent.
VI. Other Allegations
- Indirect Infringement: While the prayer for relief seeks judgment for indirect infringement (Compl. Prayer a), the body of the complaint contains no specific factual allegations to support the requisite knowledge or intent for either induced or contributory infringement. The sole count is for "Direct Infringement" (Compl. ¶30).
VII. Analyst’s Conclusion: Key Questions for the Case
- A core issue will be one of definitional scope: can the term "point-of-sale," rooted in the patent’s narrative of providing an alternative to direct electronic payment, be construed to cover the accused "2Checkout" online portal, which primarily exists to facilitate such electronic payments on behalf of a merchant? The analysis will likely depend on the relationship between the "point-of-sale," the "provider," and the "point-of-sale proprietor."
- A key evidentiary question will be one of structural and functional correspondence: can the plaintiff demonstrate that the accused system’s architecture and flow of funds aligns with the specific three-part transaction recited in Claim 1? The complaint's reliance on "information and belief" for this critical limitation suggests that facts supporting this element are not apparent from Defendant's public-facing materials.