DCT

2:15-cv-08301

First Data Corp v. Inselberg

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I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 2:15-cv-08301, D.N.J., 12/26/2015
  • Venue Allegations: Venue is alleged to be proper as all defendants reside or are located in the District of New Jersey, where a substantial part of the events giving rise to the claims occurred.
  • Core Dispute: Plaintiffs seek a declaratory judgment that they do not infringe a portfolio of patents owned or claimed by Defendants, and that an assignment of those patents to Plaintiff Bisignano and a subsequent license to Plaintiff First Data are valid.
  • Technical Context: The patents relate to methods and systems for enabling interactive audience participation at live spectator events, a technology aimed at enhancing fan engagement in large venues.
  • Key Procedural History: The dispute arises from a 2010 loan from Plaintiff Bisignano to Defendant Interactive, which was secured by the patents-in-suit. Following an alleged default, the patents were assigned to Bisignano in 2012. Defendants now contest the validity of that assignment and have threatened First Data, a licensee of Bisignano, with patent infringement litigation, including sending a claim chart for U.S. Patent No. 8,213,975.

Case Timeline

Date Event
2000-09-06 Priority Date for the Inselberg Patents
2002-08-13 U.S. Patent No. 6,434,398 Issues
2003-11-18 U.S. Patent No. 6,650,903 Issues
2004-07-06 U.S. Patent No. 6,760,595 Issues
2005-12-13 U.S. Patent No. 6,975,878 Issues
2006-02-07 U.S. Patent No. 6,996,413 Issues
2006-10-17 U.S. Patent No. 7,123,930 Issues
2007-07-24 U.S. Patent No. 7,248,888 Issues
2007-08-28 U.S. Patent No. 7,263,378 Issues
2008-09-09 U.S. Patent No. 7,424,304 Issues
2009-04-21 U.S. Patent No. 7,522,930 Issues
2009-09-08 U.S. Patent No. 7,587,214 Issues
2010-04-06 U.S. Patent No. 7,693,532 Issues
2010-08-17 Bisignano loans $500,000 to Interactive, secured by the patents
2010-09-07 U.S. Patent No. 7,792,539 Issues
2010-09-14 U.S. Patent No. 7,797,005 Issues
2010-12-21 U.S. Patent No. 7,856,242 Issues
2010-12-28 U.S. Patent No. 7,860,523 Issues
2011-09-20 U.S. Patent No. 8,023,977 Issues
2012-03-06 U.S. Patent No. 8,131,279 Issues
2012-04-02 Effective date of patent assignment from Interactive to Bisignano
2012-07-03 U.S. Patent No. 8,213,975 Issues
2013-04-02 U.S. Patent No. 8,412,172 Issues
2013-04-16 U.S. Patent No. 8,423,005 Issues
2014-10-31 Inselberg alleges First Data practices the patents
2014-11-18 Inselberg sends First Data a claim chart for the '975 patent
2015-09-18 Defendants' counsel threatens lawsuit against Plaintiffs
2015-10-09 Defendants' counsel sends draft complaint to Plaintiffs
2015-11-19 Defendants' counsel sends second draft complaint to Plaintiffs
2015-12-02 Defendants file complaint in New Jersey Superior Court
2015-09-22 U.S. Patent No. 9,143,828 Issues
2015-12-26 Plaintiffs file this Declaratory Judgment Complaint

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

U.S. Patent No. 6,434,398 - "Method and apparatus for interactive audience participation at a live spectator event," Issued August 13, 2002

The Invention Explained

  • Problem Addressed: The patent background describes a lack of meaningful audience participation and useful feedback at live spectator events, noting that fans desire more interactivity beyond informal cheering and expect the detailed analysis available from televised broadcasts (’398 Patent, col. 1:11-40).
  • The Patented Solution: The invention provides a method where spectators use a handheld interactive device to receive audio programming (like play-by-play commentary) and respond to queries presented during the event. These responses are transmitted to a central processor, aggregated into results, and then broadcast back to the audience, for example on a large screen display (’398 Patent, col. 3:28-51, Abstract).
  • Technical Importance: This approach sought to merge the live event atmosphere with the data-rich, interactive experience of at-home viewing and computer games, providing a new channel for fan engagement and data collection for sponsors and teams (’398 Patent, col. 2:57-68).

Key Claims at a Glance

  • The complaint seeks a declaratory judgment of non-infringement of any claim of the patent (Compl. ¶87). Claim 1 is the sole independent method claim. Claim 8 is the sole independent apparatus claim.
  • Independent Claim 1 (Method):
    • providing each spectator with an interactive device that presents a promotional message and includes a user interface;
    • broadcasting audio programming to the spectator through the device;
    • querying the spectators, with answers entered via the user interface;
    • transmitting the answers to a central processor;
    • storing the answers as spectator data;
    • processing the spectator data into results;
    • storing the results; and
    • broadcasting the results of the processing.
  • The complaint does not specify assertion of dependent claims but seeks a declaration of non-infringement on the entire patent.

U.S. Patent No. 6,650,903 - "Method and apparatus for interactive audience participation at a live spectator event," Issued November 18, 2003

The Invention Explained

  • Problem Addressed: This patent, a continuation of the '398 patent, addresses the same problem of limited interactivity at live events and the desire of fans to share opinions and receive real-time analysis (’903 Patent, col. 1:21-44).
  • The Patented Solution: The patent claims a method for interactive participation that adds the element of underwriting the cost of the user interface device with a promotional message from a sponsor or advertiser. The core technical steps of providing devices, querying, transmitting answers, processing, and broadcasting results remain central to the solution (’903 Patent, col. 6:1-21, Abstract).
  • Technical Importance: This invention explicitly links the interactive fan experience to a business model, suggesting a way to subsidize the deployment of the necessary hardware through advertising revenue (’903 Patent, col. 4:1-4).

Key Claims at a Glance

  • The complaint seeks a declaratory judgment of non-infringement of any claim of the patent (Compl. ¶87). Claim 1 is an independent method claim. Claim 3 is an independent apparatus claim.
  • Independent Claim 1 (Method):
    • providing spectators with an interactive device presenting a promotional message and having a user interface;
    • querying spectators via the user interface;
    • transmitting answers to a central processor and processing them into results;
    • storing and broadcasting the results; and
    • wherein the promotional message is from a sponsor/advertiser, and the method includes underwriting the cost of the device with the message.
  • The complaint does not specify assertion of dependent claims but seeks a declaration of non-infringement on the entire patent.

Multi-Patent Capsule: Additional Patents

  • The complaint seeks a declaratory judgment of non-infringement for 20 other patents in the same family (Compl. ¶¶15, 87). These patents generally claim variations and improvements on the core system of using wireless handheld devices for audience interaction at live events. This includes U.S. Patent Nos. 6,760,595; 6,975,878; 6,996,413; 7,123,930; 7,248,888; 7,263,378; 7,424,304; 7,522,930; 7,587,214; 7,693,532; 7,792,539; 7,797,005; 7,856,242; 7,860,523; 8,023,977; 8,131,279; 8,213,975; 8,412,172; 8,423,005; and 9,143,828. Defendants' pre-suit infringement allegations specifically targeted U.S. Patent No. 8,213,975 via a claim chart (Compl. ¶¶30, 40).

III. The Accused Instrumentality

Product Identification

The complaint alleges that Defendants have accused Plaintiff First Data Corporation and its subsidiary, Perka, Inc., of practicing the Inselberg Patents (Compl. ¶28).

Functionality and Market Context

The complaint does not provide sufficient detail for analysis of the functionality of any First Data or Perka, Inc. product or service. It states that "First Data does not and has never practiced or infringed any of the Inselberg Patents" (Compl. ¶31). No probative visual evidence provided in complaint.

IV. Analysis of Infringement Allegations

The complaint does not contain a claim chart or a narrative technical theory of infringement. It alleges that on November 18, 2014, Defendant Inselberg sent First Data a "claim chart" purporting to show infringement of the ’975 patent (Compl. ¶30). This referenced claim chart was not attached as an exhibit or otherwise detailed in the complaint. The complaint provides no further technical basis for the infringement allegations it seeks to have declared invalid.

V. Key Claim Terms for Construction

The complaint does not provide a basis for claim construction analysis, as it presents no specific technical arguments regarding infringement that would highlight disputes over the meaning of particular claim terms.

VI. Other Allegations

  • Indirect Infringement: The prayer for relief seeks a declaration that First Data has not "contributed to the infringement of, or induced others to infringe, either directly or indirectly, any claim" of the specified patents (Compl., Prayer for Relief ¶4). However, the complaint's factual allegations do not describe any specific conduct by First Data that would form the basis for a claim of indirect infringement, nor do they detail any such allegations made by Defendants.

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

This declaratory judgment action appears to center on foundational legal and contractual issues rather than a detailed technical dispute at this stage. The key questions for the court will likely be:

  • A primary issue will be one of contractual validity: Is the 2012 Assignment Agreement, which transferred the patents from Defendants to Plaintiff Bisignano following a loan default, valid and enforceable under New Jersey law? The answer to this question may determine ownership of the patents-in-suit.
  • A secondary issue will be the validity of the license: Assuming the assignment to Bisignano is valid, is the subsequent royalty-free license granted by Bisignano to First Data also valid and sufficient to shield First Data from Defendants' infringement claims?
  • A final question will be one of technical infringement: Should the ownership and license issues be resolved in Defendants' favor, the case would then turn to the evidentiary question of whether any product or service offered by First Data or its subsidiaries practices the limitations of any valid claim of the Inselberg patents.