DCT
1:18-cv-02788
UPaid Systems Ltd v. Speed Queen Laundry LLC
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: Upaid Systems, Ltd. (British Virgin Islands)
- Defendant: Speed Queen Laundry LLC (Delaware)
- Plaintiff’s Counsel: Polsinelli PC
- Case Identification: 1:18-cv-02788, N.D. Ga., 06/06/2018
- Venue Allegations: Plaintiff alleges venue is proper because Defendant is subject to personal jurisdiction in the district and has committed, and continues to commit, acts of patent infringement there.
- Core Dispute: Plaintiff alleges that Defendant’s use of cashless payment systems in its laundromats infringes a patent related to an enhanced platform for providing pre-authorized transactions over different types of networks.
- Technical Context: The technology relates to centralized platforms that enable advanced communication and transaction services to be provided over existing, and often incompatible or legacy, network infrastructures.
- Key Procedural History: The complaint details a lengthy prosecution history for the asserted patent and its family, noting that the patent is a continuation of several earlier patents. Plaintiff highlights that the patent application was examined and allowed by the USPTO after the Supreme Court’s decision in Alice Corp. v. CLS Bank, and after the USPTO issued related guidance, without receiving a subject matter eligibility rejection. The complaint also notes that other defendants sued on the same patent have previously taken licenses.
Case Timeline
| Date | Event |
|---|---|
| 1998-09-15 | Priority Date for Asserted Patent Family (Provisional Applications) |
| 1999-09-14 | Filing Date for U.S. Patent No. 6,320,947 |
| 2001-05-09 | Filing Date for U.S. Patent No. 6,381,316 |
| 2001-11-20 | Issue Date for U.S. Patent No. 6,320,947 |
| 2002-04-03 | Filing Date for U.S. Patent No. 6,714,632 |
| 2002-04-30 | Issue Date for U.S. Patent No. 6,381,316 |
| 2003-10-15 | Filing Date for U.S. Patent No. 7,308,087 |
| 2004-03-30 | Issue Date for U.S. Patent No. 6,714,632 |
| 2007-10-31 | Filing Date for U.S. Patent No. 8,976,947 (Asserted Patent) |
| 2007-12-11 | Issue Date for U.S. Patent No. 7,308,087 |
| 2014-06-09 | U.S. Supreme Court issues Alice Corp. decision |
| 2014-12-23 | Filing Date for U.S. Patent No. 9,431,377 |
| 2015-03-10 | Issue Date for U.S. Patent No. 8,976,947 (Asserted Patent) |
| 2016-08-30 | Issue Date for U.S. Patent No. 9,431,377 |
| 2018-06-06 | Complaint Filing Date |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 8,976,947 - "Enhanced Communication Platform and Related Communication Method Using the Platform"
- Patent Identification: U.S. Patent No. 8,976,947, "Enhanced Communication Platform and Related Communication Method Using the Platform," issued March 10, 2015.
The Invention Explained
- Problem Addressed: In the late 1990s, communication networks were often fragmented and operated as "walled gardens," preventing interoperability (Compl. ¶14). Providing advanced services like voice mail or integrated transaction processing often required costly upgrades to legacy hardware and software, and such services were typically unavailable across different network types or from different devices ('947 Patent, col. 1:20-2:14; Compl. ¶14-15).
- The Patented Solution: The invention describes a centralized "enhanced platform" that is external to existing communication networks (Compl. ¶15). This platform interfaces with legacy switches and disparate networks to provide advanced, pre-authorized communication and financial transaction services without requiring significant infrastructure upgrades ('947 Patent, Abstract; Compl. ¶72-73). The complaint presents Figure 1, a software architecture diagram, to illustrate how a central platform (NetManager) could be architected to manage services across different systems like a Subscriber Handling System and a Call Handling System (Compl. ¶22).
- Technical Importance: This approach purported to enable the rollout of advanced, value-added services over existing infrastructure, thereby saving the time, effort, and expense associated with replacing or upgrading legacy switches and software (Compl. ¶72).
Key Claims at a Glance
- The complaint asserts infringement of numerous claims, including independent method claims 1, 11, 19, 38, 44, and 47, and independent apparatus/system/platform claims 25, 31, 48, 50, and 52 (Compl. ¶85, 90, 95).
- Independent Claim 1, a representative method claim, recites the key elements of a method encoded on a computer readable medium for providing pre-authorized services, including:
- Accepting and processing a request from a user for a service, transaction, or account information via one of a plurality of external networks.
- Verifying the user is authorized and has a sufficient account balance.
- Charging, in a real-time transaction, an authorized account.
- The charging occurs as the platform controls an element of a corresponding external network to provide the service or transaction.
- The complaint reserves the right to assert numerous dependent claims (Compl. ¶85, 90, 95).
III. The Accused Instrumentality
Product Identification
- The accused instrumentalities are the "Accused Systems," which collectively refer to Card Concepts Inc's LaundryCard, FasCard, and FasCard Mobile App systems used in Defendant's laundromats (Compl. ¶81).
Functionality and Market Context
- The Accused Systems are cashless and card-based payment systems designed to automate laundromats (Compl. ¶82). The FasCard system accepts payment via coins, credit/debit cards, and loyalty cards to operate laundry machines (Compl. ¶83).
- The FasCard Mobile App allows a user to connect to the system via a smartphone to view machine availability, remotely start machines, and add monetary value to their accounts (Compl. ¶84).
- The complaint alleges these systems provide Defendant with enhanced profits through the sale of cashless cards, collection of unused residual value, and reduced operational costs (Compl. ¶100).
IV. Analysis of Infringement Allegations
The complaint references claim chart exhibits (Exhibits N, O, and P) that were not included with the filed complaint. The following chart summarizes the infringement allegations for a representative claim based on the narrative in the complaint.
U.S. Patent No. 8,976,947 Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| a method of providing from a platform pre-authorized communication services and transactions using a plurality of external networks of different types and which are external to the platform | Defendant uses the Accused Systems (the "platform") to allow customers to pay for laundry services (the "transaction") using various payment methods that rely on external networks, such as credit card processing networks and the internet. | ¶81, ¶83, ¶84 | col. 21:36-44 |
| accepting and processing a request from a user to provide at least one of a communication service, a transaction or user account information via one of the plurality of external networks | A customer initiates a transaction by using a credit card, loyalty card, or the mobile app to start a laundry machine. The request is processed via the appropriate network (e.g., credit card network, internet). | ¶83, ¶84 | col. 21:45-49 |
| verifying that the user is authorized...and that an account associated with the user has a sufficient amount currently available for payment | The Accused Systems verify that the customer's credit card, debit card, or loyalty card account has sufficient funds to pay for the requested laundry cycle before starting the machine. | ¶83, ¶84 | col. 21:50-57 |
| charging, in a real-time transaction, an authorized account associated with the user as the platform controls an element of a corresponding one of the plurality of external networks to provide...the transaction | The Accused Systems charge the customer's account in real time and, in response, send a signal to the selected laundry machine to begin operation. | ¶83, ¶84 | col. 21:58-65 |
- Identified Points of Contention:
- Scope Questions: The infringement case may turn on whether claim terms developed in the context of 1990s-era telecommunications can be construed to read on a modern, localized payment system. A central question for the court will be whether a laundromat's payment terminal, its local network, and its connection to a credit card processing network and the internet constitute a "platform" connected to a "plurality of external networks of different types" as described in the patent.
- Technical Questions: A potential point of dispute is whether the accused system "controls an element of a corresponding one of the plurality of external networks." The complaint alleges the system controls the laundry machine, but it raises the question of whether the laundry machine itself is an "element" of an "external network" in the manner contemplated by the patent specification.
V. Key Claim Terms for Construction
The Term: "platform"
Context and Importance: The entire infringement theory depends on the accused laundromat payment system constituting the claimed "platform." The construction of this term will determine whether the patent's scope is broad enough to cover technology outside the telecommunications context in which it was originally described.
Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The claims use the general term "platform" without express limitation to telecommunications. The complaint highlights the technology's use for "pre-authorized... financial" transactions and "e-commerce" (Compl. ¶17), which could support a broad application.
- Evidence for a Narrower Interpretation: The patent specification, including the Background and Detailed Description, consistently describes the platform as an "advanced intelligent communication system" designed to interface with "legacy switches" in a "public switched telephone network (PSTN)" ('947 Patent, col. 1:24-28, col. 2:1-14). The complaint itself introduces the invention as a solution created to overcome the "fragmentation of networks between the carriers" (Compl. ¶14).
The Term: "plurality of external networks of different types"
Context and Importance: Plaintiff's theory requires that the various communication links of the accused laundromat system (e.g., local connections, internet, credit card networks) meet this limitation. This term's construction is critical to mapping the accused product onto the claims.
Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: Plaintiff may argue that a credit card network and the internet are, facially, networks of "different types" and are "external" to the central laundromat server, thus satisfying the plain language of the claim.
- Evidence for a Narrower Interpretation: The patent specification provides specific examples of such networks, including "a landline communication network, a wireless communication network, a wide area network, a global computer network, a cable network, and a satellite network" ('947 Patent, col. 4:5-9). A party could argue the term should be limited to the types of large-scale, public-facing carrier networks described.
VI. Other Allegations
- Indirect Infringement: The complaint alleges inducement by asserting that Defendant provides its customers with the hardware, software, and mobile application, thereby ensuring the systems are used in an infringing manner (Compl. ¶87, ¶92, ¶97). Contributory infringement is alleged on the grounds that the Accused Systems have no substantial non-infringing use (Compl. ¶88, ¶93, ¶98).
- Willful Infringement: Willfulness is alleged based on Defendant's knowledge of the patent "at least [from] the filing of this Complaint" and its continued use of the accused systems thereafter (Compl. ¶87, ¶89, ¶94).
VII. Analyst’s Conclusion: Key Questions for the Case
- A core issue will be one of definitional scope and context: Can claim terms like "platform" and "plurality of external networks," which are rooted in the specification's context of overcoming the fragmentation of 1990s-era national telecommunication carrier networks, be construed to cover a modern, physically localized, IoT-style payment system for operating washing machines?
- A second central question will address patent eligibility under 35 U.S.C. § 101: Is the patent directed to the abstract idea of managing pre-authorized transactions, and if so, does the claimed "enhanced platform" represent a specific, unconventional technological solution to a technical problem (interfacing with incompatible legacy networks), or is it merely a generic computer implementation of a fundamental business practice? The patent's post-Alice issuance without a § 101 rejection, as emphasized by the Plaintiff, will be a significant factor in this analysis.