DCT

1:19-cv-03733

SendSig LLC v. Square Inc

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I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 1:19-cv-03733, N.D. Ga., 10/29/2019
  • Venue Allegations: Plaintiff alleges venue is proper because Defendant has a regular and established place of business in the Northern District of Georgia and has committed the alleged acts of infringement in the district.
  • Core Dispute: Plaintiff alleges that Defendant’s point-of-sale (POS) systems, which capture handwritten signatures and send electronic receipts via email, infringe a patent related to creating and sending handwritten or hand-drawn electronic messages.
  • Technical Context: The technology concerns the capture of graphical input, such as a signature on a touchscreen, and its electronic transmission over a network, a now-ubiquitous feature in digital payment and authorization systems.
  • Key Procedural History: The asserted patent is a continuation-in-part of a prior U.S. patent application. The complaint is a First Amended Complaint. No other significant procedural events are mentioned in the complaint.

Case Timeline

Date Event
1999-10-13 '249 Patent Priority Date (Provisional App. 60/159,636)
2000-10-11 '249 Patent Parent Application (09/687,351) Filed
2001-10-15 '249 Patent Application (09/978,472) Filed
2003-05-13 '249 Patent Issued
2019-10-29 First Amended Complaint Filed

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

U.S. Patent No. 6,564,249 - Method and System for Creating and Sending Handwritten or Handdrawn Messages

  • Patent Identification: U.S. Patent No. 6,564,249, Method and System for Creating and Sending Handwritten or Handdrawn Messages, issued May 13, 2003. (Compl. ¶19).

The Invention Explained

  • Problem Addressed: The patent identifies a need for an electronic messaging system that allows for communication via a user's own handwriting or drawing, as opposed to typed text, noting that existing electronic messaging methods did not support this functionality. (Compl. ¶¶25-26; ’249 Patent, col. 2:11-18).
  • The Patented Solution: The invention describes a client-server system to address this problem. A client component on a user's device provides a "graphical data capture area" (e.g., on a screen) to receive handwritten input, captures it as graphical data, and sends it as an electronic message. A server component receives this message and handles its delivery to a recipient, who can then view the handwritten content. (Compl. ¶24; ’249 Patent, Abstract, col. 2:21-38). The patent's Figure 7A, which is reproduced in the complaint, illustrates a user interface for this purpose, showing an "Editor/Viewer" with a "Data Capture Area" for a signature. (Compl. ¶28, p. 12; ’249 Patent, Fig. 7A).
  • Technical Importance: The technology aimed to facilitate more personal and expressive forms of digital communication and to support written languages with complex characters that are difficult to input via a keyboard. (Compl. ¶25; ’249 Patent, col. 1:56-65).

Key Claims at a Glance

  • The complaint asserts direct and induced infringement of "at least claim 1" of the '249 Patent. (Compl. ¶¶75, 85).
  • Independent Claim 1 of the ’249 Patent recites three main components:
    • A server component on a network with a "real-time messaging server" for receiving and sending an electronic message.
    • A "remote client device for the sender" with a client component that sets up a "graphical data capture area," allows a user to enter handwritten input via a "graphical input device," captures the input, and sends it as an electronic message to the server component.
    • "at least another remote client device for the recipient" with a utility for receiving and viewing the message as handwritten content.

III. The Accused Instrumentality

Product Identification

The complaint names the "Square POS system," which includes its software ("Square Point of Sale," "Square Payments," APIs, and SDKs), servers, and hardware (terminals, registers, stands, and card readers) as the "Accused Products." (Compl. ¶¶32-35).

Functionality and Market Context

The Accused Products constitute a point-of-sale system used by merchants to process payments. The functionality relevant to the complaint involves the system's ability to display an interface on a touchscreen, allow a customer to enter a handwritten signature for payment authorization, capture that signature, and send an electronic receipt containing the signature image to the customer's email address. (Compl. ¶¶39, 48, 51-52). The complaint describes the system as "cloud-based," relying on remote "Square servers" for processing and data storage. (Compl. ¶45, p. 22). The complaint includes a screenshot from Square's marketing materials showing a payment screen with a signature capture area. (Compl. ¶31, p. 15).

IV. Analysis of Infringement Allegations

'249 Patent Infringement Allegations

| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality - | Complaint Citation | Patent Citation |
|:----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |:-----------------------|:--------------------|
| (a) a server component operable on a server computer on a network with a real-time messaging server for receiving an electronic message sent from a sender and sending it to a recipient... - | The Square POS system is alleged to be a "real-time electronic messaging system" that uses "Square servers" to receive transaction data (including the signature) and send an electronic receipt to the recipient's email address. - | ¶¶43, 45, 47 | col. 2:21-29 |
| (b) a remote client device for the sender connectable to the server computer through an online data connection... - | The "Square Reader Systems" and "Square Terminals" are identified as the remote client devices, which connect to Square servers via the internet. The "sender" is alleged to be the "Square customer or end-user." - | ¶¶49, 56 | col. 3:41-44 |
| ...and a client component operable on the remote client device for setting up a graphical data capture area in a visual interface... - | The "Square Terminal Software" is alleged to be the client component that sets up the graphical data capture area on the touchscreen interface of the Square device for signature input. - | ¶50 | col. 16:61-64 |
| ...said client component including a graphical input device...operatively coupled to the graphical data capture area for allowing the user to enter handwritten or handdrawn input... - | The touchscreen interface of the Square device is alleged to be the graphical input device, allowing the customer to enter a handwritten signature. - | ¶¶39, 51 | col. 16:64-68 |
| ...and for capturing the handwritten or handdrawn input as graphical data and sending it as an electronic message to the server component...for sending to the recipient addressed... - | The system allegedly captures the signature as graphical data and sends it within an electronic message (the receipt) to the Square server, which then forwards it to the email address provided by the recipient. - | ¶¶52, 53, 55 | col. 17:1-5 |
| (c) at least another remote client device for the recipient connectable to the server computer...having a utility for receiving the electronic message...and viewing it as a handwritten or handdrawn message. | The recipient's personal device (e.g., mobile phone, computer) is alleged to be the recipient client device, which receives the email receipt and allows the user to view the handwritten signature. The complaint provides an image of such a receipt received via email. | ¶¶56-57, p. 29 | col. 17:1-5 |

Identified Points of Contention

  • Scope Questions: A primary question is whether a transactional receipt system like Square's POS constitutes a "real-time electronic messaging system" as that term is used in the patent, which describes its purpose as enabling more "personal or expressive communication." (e.g., ’249 Patent, col. 2:11-14). Another question concerns the identity of the "sender." The complaint identifies the customer as the sender (Compl. ¶49), but the patent appears to contemplate a sender who actively composes and controls the creation of the message, which may not align with a customer providing a signature in a process controlled by a merchant's POS system.
  • Technical Questions: The interpretation of "real-time" will be significant. The patent discloses embodiments ranging from near-instantaneous messaging to systems using standard email protocols. (e.g., ’249 Patent, col. 9:1-3, Fig. 2B). The court will need to determine whether the timing of Square's email receipt delivery falls within the scope of the claimed "real-time" functionality.

V. Key Claim Terms for Construction

"real-time electronic messaging system"

  • Context and Importance: This phrase from the preamble of claim 1 defines the overall character of the claimed invention. Its construction will be critical in determining whether the patent's scope is limited to person-to-person communication systems or if it extends to transactional systems like the accused Square POS.
  • Evidence for a Broader Interpretation: The patent describes embodiments that use standard email protocols like SMTP and IMAP, which are not necessarily instantaneous. ('249 Patent, Fig. 2B, col. 5:5-14). This may support an argument that any system transmitting graphical data via network-based messages, as an alternative to physical mail, could be considered "real-time."
  • Evidence for a Narrower Interpretation: The specification repeatedly frames the invention in the context of personal communication and distinguishes it from other systems by its ability to facilitate "private, one-on-one communications similar to email, except in real time." ('249 Patent, col. 12:4-6). The detailed description of a "Real Time Server Version" with features like polling every five seconds or "always-on" message delivery could support a narrower definition requiring a more immediate, conversational capability. ('249 Patent, col. 9:1-3, col. 11:13-15).

"sender"

  • Context and Importance: The claim requires a "remote client device for the sender" where the message is created. The identity of the sender in the accused system—whether it is the customer who signs or the merchant whose system generates the receipt—is a pivotal issue for mapping the accused system's operation onto the claim elements.
  • Evidence for a Broader Interpretation: The patent states a "sender...uses [the client computer] to compose and send" a message. ('249 Patent, col. 4:65-col. 5:1). A party might argue that the customer, by providing the core graphical content (the signature) and directing its delivery (by providing an email address), functionally acts as the "sender."
  • Evidence for a Narrower Interpretation: The patent's description of a user actively using drawing tools in an "editor/viewer" and issuing a "Send" command suggests a degree of creative control and initiation that may not be present when a customer simply signs for a transaction on a merchant's device. ('249 Patent, col. 6:36-52).

VI. Other Allegations

Indirect Infringement

Count II of the complaint alleges induced infringement. The claim is based on Square having notice of infringement from the date of the complaint's filing and thereafter providing instructions to its customers that allegedly "encourage and direct" infringing operations. (Compl. ¶¶85-86).

Willful Infringement

While the complaint does not use the term "willful," it alleges the knowledge and intent required for post-filing willful infringement by asserting that Square continued its allegedly infringing activities after receiving notice of the patent via the lawsuit. (Compl. ¶85). The prayer for relief also requests that the court find the case "exceptional" and award attorneys' fees, a remedy often associated with findings of willful infringement. (Compl., Prayer for Relief ¶C).

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

  • A core issue will be one of definitional scope: can the term "real-time electronic messaging system," which the patent frames in the context of personal and expressive communication, be construed to cover a modern, commercial point-of-sale system where signature capture is an element of a financial transaction?
  • A second key issue will center on actor identification: does the customer who provides a signature on a Square device meet the claim requirement of a "sender" who composes and sends a message, or is the "sender" the merchant whose system controls the generation and transmission of the electronic receipt?
  • The case will also likely involve a question of temporal scope: does the standard process of generating and delivering an email receipt after a transaction is complete satisfy the patent's "real-time" limitation, or does the specification require a more immediate, conversational form of message exchange?