SendSig LLC v. Toast Inc

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: SendSig, LLC (Georgia)
  • Defendant: Toast, Inc. (Delaware)
  • Plaintiff’s Counsel: The Saathoff Law Group, PC, LLO; Connor Kudlac Lee PLLC
• Case Identification: 8:18-cv-00405, D. Neb., 08/24/2018
• Venue Allegations: Venue is alleged to be proper based on Defendant having a regular and established place of business in the judicial district, specifically an office in Omaha, Nebraska, and having committed acts of infringement there.
• Core Dispute: Plaintiff alleges that Defendant’s point-of-sale systems, handheld terminals, and associated software infringe two patents related to user interface features for character input and the creation and transmission of handwritten electronic messages.
• Technical Context: The technology concerns user interface design for data entry on electronic devices, specifically methods for improving character selection on screen and for capturing and sending handwritten input like signatures via a network.
• Key Procedural History: The complaint asserts that U.S. Patent No. 6,564,249 is a continuation-in-part of an earlier application. No other significant procedural events such as prior litigation or post-grant proceedings are mentioned.

Case Timeline

Date	Event
1998-11-13	Priority Date for U.S. Patent No. 6,292,164
1999-10-13	Priority Date for U.S. Patent No. 6,564,249
2001-09-18	U.S. Patent No. 6,292,164 Issued
2003-05-13	U.S. Patent No. 6,564,249 Issued
2018-08-24	Complaint Filed

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

U.S. Patent No. 6,292,164, "System and Method for Character Display and Entry in Character Processing System," Issued Sep. 18, 2001

The Invention Explained

• Problem Addressed: The patent's background describes the difficulty for users to distinguish between thousands of characters (e.g., in Asian languages) when displayed in a very small graphical space, such as a 16x16 pixel area on a screen ('164 Patent, col. 1:4-18).
• The Patented Solution: The invention proposes a method to improve usability by displaying a set of characters available for user selection in a size that is "larger than characters already accepted and displayed in the system" ('164 Patent, Abstract). Once a user selects one of the larger, more legible characters, it is then displayed in the normal, smaller size corresponding to the previously entered text ('164 Patent, col. 2:39-44). Figures 6A and 6B illustrate text already accepted (612) and "much larger print characters" (613) displayed for selection ('164 Patent, Fig. 6B; Compl. ¶26).
• Technical Importance: This approach aimed to enhance the speed and accuracy of text entry on devices with limited screen resolution or when dealing with complex character sets, a common challenge in early computing and for internationalization ('164 Patent, col. 1:19-22).

Key Claims at a Glance

• The complaint asserts independent claims 1 and 19 (Compl. ¶92).
• Independent Claim 1 recites a method for accepting user input, comprising the key steps of:
  • receiving a set of user inputs associated with a set of characters;
  • in a size larger than characters already accepted and displayed by the system, displaying characters from the set of characters;
  • receiving a user selection of at least a character from the set of characters; and
  • in response to the user selection, displaying the character in a size generally corresponding to characters already accepted and displayed by the system.
• The complaint does not explicitly reserve the right to assert dependent claims.

U.S. Patent No. 6,564,249, "Method and System for Creating and Sending Handwritten or Handdrawn Messages," Issued May 13, 2003

The Invention Explained

• Problem Addressed: At the time of the invention, the patent asserts there was a "clear need for an electronic messaging system that allows people to communicate with their own handwriting or drawing, as contrasted to typed text," and that existing electronic messaging methods did not allow a user to compose, send, and view such messages ('249 Patent, col. 2:11-18).
• The Patented Solution: The patent describes a system comprising a client and server component. A user on a "remote client device" can use a graphical input device (e.g., a stylus on a touch screen) to enter a handwritten message into a "graphical data capture area" on the screen. This input is captured as graphical data and sent as an electronic message over a network to a server, which then handles delivery to the recipient ('249 Patent, col. 2:21-36, Abstract).
• Technical Importance: The invention provided a framework for integrating natural, free-form graphical input into digital messaging, which was particularly relevant for signatures, diagrams, or personal notes on emerging mobile and pen-based computing devices ('249 Patent, col. 2:4-9).

Key Claims at a Glance

• The complaint asserts independent claim 1 (Compl. ¶103).
• Independent Claim 1 recites a real-time electronic messaging system, comprising the key components of:
  • a server component operable on a server computer on a network with a real-time messaging server;
  • a remote client device for the sender connectable to the server; and
  • a client component on the remote client device that includes a graphical input device operatively coupled to a graphical data capture area, which captures handwritten input and sends it as an electronic message to the server component.
• The complaint does not explicitly reserve the right to assert dependent claims.

III. The Accused Instrumentality

• Product Identification: The "Accused Products" are identified as the Toast POS System, which includes Toast Go handhelds, Toast POS terminals, and associated software, servers, and hardware (Compl. ¶¶ 33, 37).
• Functionality and Market Context: The Toast POS System is a point-of-sale and management system designed for the restaurant industry (Compl. ¶34). The relevant functionality includes allowing customers to use a touchscreen on a Toast Terminal to provide payment information (Compl. ¶42). Specifically, the complaint highlights the system's ability to prompt a user to enter an email address to receive a digital receipt and to capture a handwritten signature on the screen to complete a payment transaction (Compl. ¶¶ 56, 69). The complaint alleges the system is "cloud-based" and provides "real-time messaging capability" (Compl. ¶¶ 65-66). A photograph in the complaint shows a user providing a handwritten signature on a Toast handheld device's screen (Compl. p. 14).

IV. Analysis of Infringement Allegations

’164 Patent Infringement Allegations

Claim Element (from Independent Claim 1)	Alleged Infringing Functionality	Complaint Citation	Patent Citation
receiving a set of user inputs associated with a set of characters	The Toast Terminal Software running on a Toast Terminal receives user inputs, for example when a user inputs an email address.	¶56	col. 10:17-19
in a size larger than characters already accepted and displayed by the system, displaying characters from the set of characters	When a user selects a character on the displayed keypad, the accused software causes the selected character to be displayed in a size larger than the characters already entered in the text field.	¶¶ 59, 61	col. 10:20-23
receiving a user selection of at least a character from the set of characters	A user selects a displayed character from the keypad during normal operation of the Toast Terminal.	¶57	col. 10:24-26
in response to the user selection, displaying the character in a size generally corresponding to characters already accepted and displayed by the system	After a character is selected, it is displayed in the input field in a size that generally corresponds to the previously entered and accepted characters. A photograph shows the letter "a" added to an email address string.	¶¶ 62-63	col. 10:27-30

A photograph provided in the complaint shows the selection of the letter "a" on a virtual keyboard, which appears temporarily magnified in a pop-up bubble, a size larger than the text already entered in the email field (Compl. p. 12).

• Identified Points of Contention:
  • Scope Questions: A central question may be the interpretation of "displaying characters from the set of characters" for selection. The patent specification heavily focuses on selecting from multiple ambiguous character choices (e.g., different kanji for the same phonetic input) ('164 Patent, col. 1:4-14). The court may need to determine if this claim language reads on the accused functionality, which appears to be the temporary magnification of a single, unambiguous character from a QWERTY keyboard as user feedback upon being touched.
  • Technical Questions: What is the primary function of the magnified character shown in the complaint's visual evidence? The infringement theory hinges on this being a display for "selection," while an alternative view may be that it is merely a visual confirmation of a key that has already been pressed, not a pre-selection display of choices.

’249 Patent Infringement Allegations

Claim Element (from Independent Claim 1)	Alleged Infringing Functionality	Complaint Citation	Patent Citation
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 to whom it is addressed	The Toast POS system is cloud-based and includes Toast servers that operate as a "real-time messaging server for receiving an electronic message... and sending it to a recipient."	¶¶ 66-68	col. 16:59-64
a remote client device for the sender connectable to the server computer through an online data connection to the network	The Toast Terminals are identified as remote client devices for the sender (the customer) that are connectable to the Toast servers via the system's cloud-based connectivity.	¶70	col. 16:65-col. 17:2
and a client component operable on the remote client device for setting up a graphical data capture area in a visual interface...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 Toast Terminal Software is a client component that sets up a graphical data capture area (a signature box) on the visual interface of the Toast Terminal. This area is coupled to a graphical input device (the touchscreen) for entering handwritten input. A photograph shows a red outline around the signature capture area on the device screen (Compl. p. 16).	¶¶ 71-72	col. 17:2-10
and for capturing the handwritten or handdrawn input as graphical data and sending it as an electronic message to the server component via the network for sending to the recipient addressed	The software captures the handwritten signature as graphical data and sends it as an electronic message to the Toast server, which then sends it to the recipient's email address. An exhibit shows an emailed receipt containing the captured signature (Compl. p. 17-18).	¶¶ 73-74	col. 17:10-15

• Identified Points of Contention:
  • Scope Questions: The claim requires a "real-time messaging server." The specification describes this in the context of private, back-and-forth communications analogous to instant messaging ('249 Patent, col. 12:1-9). The court may need to decide if this term can be construed to cover Toast's system, which the complaint alleges is used for the asynchronous sending of an email receipt.
  • Legal Questions: The operation of the accused system involves actions by Toast's server, the restaurant's terminal, and the restaurant's customer. This division of actions may raise questions of divided infringement, which could make the associated inducement claims critical to the plaintiff's case.

V. Key Claim Terms for Construction

For the ’164 Patent:

• The Term: "displaying characters from the set of characters"
• Context and Importance: This term is critical because the infringement allegation relies on the temporary magnification of a single selected keyboard character qualifying as this claimed step. Practitioners may focus on this term because its construction will determine whether a common form of touchscreen keyboard feedback falls within the scope of a patent originally aimed at resolving ambiguity in complex character sets.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: Claim 1 itself does not require the display of multiple characters simultaneously, only "characters from the set." The abstract refers generally to "displaying a set of characters in a size larger than characters already accepted." This could arguably cover a serial display of single magnified characters.
  • Evidence for a Narrower Interpretation: The specification's background is exclusively concerned with the problem of selecting from thousands of characters, such as Japanese kanji ('164 Patent, col. 1:4-14). Figures 1B-1D and the associated text describe displaying subsets of multiple characters (e.g., characters 122, 123, and 124) as choices for the user ('164 Patent, col. 4:6-15). This context may support a narrower construction requiring the display of multiple alternative characters for selection.

For the ’249 Patent:

• The Term: "real-time messaging server"
• Context and Importance: The infringement theory applies this term to Toast's cloud-based email receipt system. The definition of "real-time" will be dispositive, as the accused functionality (emailing a receipt) is fundamentally asynchronous, whereas the term often implies synchronous, or near-synchronous, communication.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The claim language itself does not explicitly define "real-time." A party could argue that any system that automatically processes and sends a message without significant manual delay meets a broad definition of the term.
  • Evidence for a Narrower Interpretation: The detailed description contrasts the invention with "chat sessions" and "electronic whiteboards" and describes a system for private, "person-to-person communication" that "can continue back and forth" ('249 Patent, col. 12:1-34). This suggests a system designed for conversational immediacy, potentially supporting a narrower construction that excludes standard asynchronous email.

VI. Other Allegations

• Indirect Infringement: The complaint alleges induced infringement for both patents. The factual basis is that Toast provides instructions, user manuals, and encourages and directs its customers (restaurants) and end-users (restaurant patrons) to use the Accused Products in a manner that allegedly infringes the patents (Compl. ¶¶ 100, 111, 76, 78).
• Willful Infringement: The complaint does not allege pre-suit knowledge of the patents. Instead, it bases its willfulness allegations on Toast's continued alleged infringement "since the filing of this Complaint giving notice" (Compl. ¶¶ 99, 110).

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

This dispute appears to center on whether user interface features common to modern point-of-sale touchscreens fall within the scope of patents directed at solving specific technical problems from an earlier era of computing. The outcome will likely depend on claim construction.

• A core issue will be one of definitional scope: Can the '164 Patent's claim of "displaying characters...for selection," conceived to solve the ambiguity of complex Asian character sets, be construed to cover the temporary pop-up magnification of a single key on a standard QWERTY keyboard, a feature arguably provided for visual feedback rather than for selection among choices?
• A second key issue will be one of functional scope: Does the '249 Patent's claim to a "real-time messaging server," described in the specification in the context of instant, back-and-forth graphical conversations, read on the asynchronous emailing of a receipt containing a customer's signature?
• Finally, a central legal question will be one of infringement liability: Given that the full operation of the accused systems involves actions by Toast's servers, its restaurant clients, and restaurant patrons, the plaintiff's ability to prove that Toast is directly liable as a single actor, or alternatively, that it actively induced the infringing acts of others, will be critical.