Bright Capture LLC v. Emburse LLC

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Bright Capture LLC (Delaware)
  • Defendant: Emburse, LLC (Delaware)
  • Plaintiff’s Counsel: Kent & Risley LLC
• Case Identification: 1:22-cv-04264, S.D.N.Y., 05/24/2022
• Venue Allegations: Plaintiff alleges venue is proper because Defendant maintains a regular and established place of business in the Southern District of New York and has committed the alleged acts of patent infringement in the district.
• Core Dispute: Plaintiff alleges that Defendant’s products infringe three patents related to systems for scanning documents, such as receipts, and automatically extracting and organizing the financial data contained within them.
• Technical Context: The technology at issue automates the historically manual process of expense tracking by digitizing unstructured paper documents and converting them into organized, searchable financial data.
• Key Procedural History: The patents-in-suit belong to a long-prosecuted family originating from a 2001 provisional application. The '410 Patent is subject to a terminal disclaimer, which may indicate a potential double-patenting issue was addressed during prosecution. The complaint alleges Plaintiff provided Defendant with pre-suit notice of infringement for the '510 patent, including claim charts, four days before filing the lawsuit.

Case Timeline

Date	Event
2001-02-01	Priority Date for '410, '510, and '070 Patents
2010-06-29	U.S. Patent No. 7,746,510 Issued
2014-04-08	U.S. Patent No. 8,693,070 Issued
2018-08-14	U.S. Patent No. 10,049,410 Issued
2022-05-20	Plaintiff allegedly provided pre-suit notice for '510 Patent to Defendant
2022-05-24	Complaint Filed

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

U.S. Patent No. 10,049,410 - Receipts scanner and financial organizer, Issued Aug. 14, 2018

The Invention Explained

• Problem Addressed: The patent’s background section identifies the process of manually entering financial data from receipts and bills into budgeting software as "laborious and time consuming," often causing users to abandon their financial tracking efforts (’410 Patent, col. 1:19-25).
• The Patented Solution: The invention proposes an apparatus and software to automate this process. A user feeds receipts into a scanner connected to a computer, and the system automatically extracts, processes, and organizes the financial information into a database, which can then be viewed in various formats like tables or charts (’410 Patent, col. 2:41-51, Figs. 4A-4B). A key aspect is the system’s ability to process documents, like receipts, that have "no predefined format" (’410 Patent, Abstract).
• Technical Importance: The technology aimed to significantly reduce the friction and manual effort required for personal and business expense management by automating data capture from physical documents (’410 Patent, col. 1:26-33).

Key Claims at a Glance

• The complaint asserts independent claim 1 (Compl. ¶13).
• The essential elements of Claim 1 include:
  • A method of receiving a paper expense receipt at a computer input device from an individual.
  • Receiving an electronic image of the receipt on a computer processor.
  • Processing the image to "automatically obtain expense data" by using software to retrieve and parse relevant data from the image.
  • Populating and displaying an electronic expense report with the obtained data.
  • A condition that the expense receipt has "no predefined format for the computer system."
• The complaint notes that Plaintiff may assert other claims, including dependent claims (Compl. ¶13).

U.S. Patent No. 7,746,510 - Receipts scanner and financial organizer, Issued Jun. 29, 2010

The Invention Explained

• Problem Addressed: Similar to its family members, the patent addresses the difficulty and tedium of manually tracking expenses by saving and entering data from receipts, bills, and other financial documents (’510 Patent, col. 1:20-30).
• The Patented Solution: The invention describes an apparatus comprising a scanner and a computer with software to scan various types of receipts of "no predefined format." The system automatically processes the scanned information, collects the expense data, categorizes it into predetermined categories, and displays the organized information in reports. (’510 Patent, col. 5:1-26). The specification also notes the ability to save the data in a format like Quicken Interchange Format (QIF) for use in other financial programs (’510 Patent, Abstract).
• Technical Importance: This system provided a method to bridge the gap between unstructured physical receipts and structured digital financial management tools, automating a key bottleneck in personal and small business accounting (’510 Patent, col. 1:31-39).

Key Claims at a Glance

• The complaint asserts independent claim 11 (Compl. ¶19).
• The essential elements of Claim 11 include:
  • An apparatus comprising a scanner, a computer, and a display device.
  • The scanner is for scanning receipts of "no predefined format" containing printed expense information.
  • The computer receives and processes the scan by "collecting the expense information."
  • The computer organizes the collected information by "categorizing the expense information into one or more predetermined expense categories to obtain report information."
  • The report information for at least one category is displayed on the display device.
• The complaint reserves the right to assert other claims (Compl. ¶19).

U.S. Patent No. 8,693,070 - Receipts scanner and financial organizer, Issued Apr. 8, 2014

• Patent Identification: U.S. Patent No. 8,693,070, Receipts scanner and financial organizer, Issued Apr. 8, 2014.
• Technology Synopsis: This patent claims a system and method where a scanner obtains an electronic image of a document having "no predefined format" and containing numerical data. A computing device then automatically captures the numerical information from the image, organizes it, and combines it with information from other documents to create a report that a user can view, edit, and search. ('070 Patent, Claim 1).
• Asserted Claims: The complaint asserts independent claim 1 (Compl. ¶23).
• Accused Features: The complaint alleges that the "Exemplary Defendant Products" directly infringe the patent, but the specific features are detailed in an unprovided claim chart exhibit (Exhibit 6) (Compl. ¶¶ 23-24).

III. The Accused Instrumentality

Product Identification

The complaint does not identify any specific accused products by name in the body of the text. It refers to them generally as the "Exemplary Defendant Products" and states that they are identified in claim chart exhibits attached to the complaint (Exhibits 4, 5, and 6), which were not available for this analysis (Compl. ¶¶ 13, 19, 23).

Functionality and Market Context

The complaint does not provide sufficient detail for analysis of the accused products' specific functionality, operation, or market position. The allegations of their function are made by incorporating by reference the unprovided claim chart exhibits (Compl. ¶¶ 14, 20, 24).

IV. Analysis of Infringement Allegations

The complaint references claim chart exhibits that were not provided with the publicly filed document. The infringement allegations are summarized below in prose based on the narrative infringement theories in the complaint. No probative visual evidence provided in complaint.

'410 Patent Infringement Allegations

The complaint alleges that Defendant’s products directly infringe at least claim 1 of the '410 Patent by performing a method of processing paper expense receipts (Compl. ¶13). The infringement theory appears to be that the accused products provide a system that receives an electronic image of an expense receipt having no predefined format, automatically processes the image to extract expense data, and uses that data to populate and display an electronic expense report for the user (Compl. ¶13; ’410 Patent, col. 5:2-20). The specific mapping of product features to these claim elements is allegedly contained in the unprovided Exhibit 4 (Compl. ¶14).

'510 Patent Infringement Allegations

The complaint alleges that Defendant induces its end users to infringe at least claim 11 of the '510 Patent (Compl. ¶19). The theory of infringement is that Defendant provides its products along with "product literature and website materials" that instruct users to operate them in a manner that meets all limitations of the claim (Compl. ¶¶ 18-19). This infringing use would involve an apparatus where a user scans a receipt of no predefined format, and a connected computer automatically collects the expense information, categorizes it, and displays it in a report, thereby directly infringing the claim (Compl. ¶19; ’510 Patent, col. 6:19-38). The specific allegations of inducement are allegedly detailed in the unprovided Exhibit 5 (Compl. ¶20).

Identified Points of Contention

• Evidentiary Questions: As the complaint’s technical infringement details are contained entirely within unprovided exhibits, a central question will be what evidence Plaintiff will present to show that the accused products perform the specific functions of automatically extracting, parsing, and categorizing data as required by the claims.
• Scope Questions: The infringement analysis may focus on the scope of the phrase "no predefined format." A question for the court could be whether this term, as used in the patents, reads on a system that is trained to recognize a large but finite set of common receipt layouts, or if it requires the ability to process truly arbitrary and unknown document structures.
• Technical Questions: A key technical question may be what level of user interaction is permissible for a system to be considered to "automatically obtain expense data" ('410 Patent) or "automatically... collect[] the expense information" ('510 Patent). The degree to which the accused products require user correction or manual categorization could become a central point of dispute.

V. Key Claim Terms for Construction

Key Term: "no predefined format"

(present in asserted independent claims of both the '410 and '510 patents)

• Context and Importance: This term is fundamental to the scope of the invention, as it distinguishes the claimed technology from template-based data entry systems. Practitioners may focus on this term because its construction will determine whether the patents cover modern OCR systems that are pre-trained on vast libraries of document layouts, which a defendant might argue constitutes a form of "predefined format."
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The specification lists a diverse set of documents the system can process, including "grocery receipts, various purchase receipts, credit card receipts, bank statements, etc.," suggesting an intent to cover a wide variety of unstructured documents (’410 Patent, col. 2:50-52).
  • Evidence for a Narrower Interpretation: The patents do not provide an explicit definition for the term. A defendant may argue that the term implies a complete lack of any a priori structural information about the document, a standard that sophisticated, trained OCR systems might not meet.

Key Term: "automatically obtain expense data"

('410 Patent, Claim 1)

• Context and Importance: The degree of automation is a core element of the claimed invention, intended to solve the problem of "laborious" manual entry. The viability of the infringement claim will depend on whether the accused product's operation, including any required user input, falls within the scope of "automatically."
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The patent’s stated purpose is to eliminate the tedious manual work of typing in receipt data, suggesting "automatically" should be construed to mean the core data extraction is performed by the system without the user having to type the values (’410 Patent, col. 1:21-25).
  • Evidence for a Narrower Interpretation: The specification discloses that a user can "modify or edit each transaction" after processing, which could suggest that the "automatic" step is only a preliminary one and that the term does not preclude the need for significant user correction to achieve a final, accurate result (’410 Patent, col. 4:29-30).

VI. Other Allegations

Indirect Infringement

The complaint alleges induced infringement of the '510 Patent. The factual basis for this claim is the allegation that Defendant provides "product literature and website materials" that instruct and encourage its customers to use the accused products in an infringing manner (Compl. ¶¶ 18-19).

Willful Infringement

While not pleaded as a separate count, the complaint alleges facts that may support a claim for willful infringement. Specifically for the '510 Patent, Plaintiff alleges it provided Defendant with actual notice of infringement via a letter with claim charts on May 20, 2022, and that Defendant continued its allegedly infringing conduct despite this knowledge (Compl. ¶¶ 17-18). The prayer for relief seeks a finding that the case is "exceptional" under 35 U.S.C. § 285, which is often associated with findings of willful infringement or other litigation misconduct (Compl. ¶ I.i).

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

• A primary issue will be one of evidentiary sufficiency: Given the complaint's skeletal nature and reliance on unprovided exhibits, what specific evidence will Plaintiff be able to adduce in discovery to prove that the accused products practice each element of the asserted claims, particularly the automatic processing and organization steps?
• The case will likely involve a core question of claim scope: Can the term "no predefined format," which originates in the context of early 2000s scanner technology, be construed to cover modern, AI-driven OCR systems that are pre-trained on immense datasets of document layouts, or does such training itself constitute a "predefined format" outside the patent's scope?
• A key technical dispute may center on the degree of automation: Does the accused system "automatically" extract and categorize financial data as required by the claims, or does it demand a level of user correction and intervention so significant that it fails to meet this critical limitation?