Allsafe Tech Inc v. Leighton Tech LLC

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Allsafe Technologies, Inc. (New York)
  • Defendant: Leighton Technologies, LLC (New York)
  • Plaintiff’s Counsel: Kloss, Stenger & Lotempio; Sheridan Ross P.C.
• Case Identification: 1:10-cv-00077, W.D.N.Y., 01/29/2010
• Venue Allegations: Venue is asserted on the basis that the defendant, Leighton Technologies, LLC, resides in the State of New York.
• Core Dispute: Plaintiff seeks a declaratory judgment that its radio-frequency identification (RFID) card products do not infringe Defendant’s patents, and that those patents are invalid and unenforceable.
• Technical Context: The patents-in-suit relate to hot lamination processes for manufacturing RFID and dual-function (contact/contactless) smart cards, a foundational technology for modern secure identification, access control, and payment systems.
• Key Procedural History: This declaratory judgment action was filed by Allsafe following licensing demands from Leighton Technologies (LT) in July 2003 and again in November 2009. The complaint asserts that these demands, particularly the 2009 letter alluding to impending litigation, created an actual controversy. Allsafe raises significant challenges to the patents' enforceability, alleging inequitable conduct during prosecution for failure to disclose material prior art and co-pending applications, as well as asserting invalidity based on improper inventorship.

Case Timeline

Date	Event
1995-10-17	Priority Date for '207, '099, '155, and '367 Patents
1998-10-06	U.S. Patent No. 5,817,207 Issued
2000-03-14	U.S. Patent No. 6,036,099 Issued
2001-04-10	U.S. Patent No. 6,214,155 Issued
2003-02-04	U.S. Patent No. 6,514,367 Issued
2003-07-XX	LT's agent sends first licensing demand letter to Allsafe
2009-11-09	LT's counsel sends second licensing demand letter
2010-01-29	Complaint Filing Date

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

No probative visual evidence provided in complaint.

U.S. Patent No. 5,817,207 - Radio Frequency Identification Card and Hot Lamination Process for the Manufacture of Radio Frequency Identification Cards

• Patent Identification: U.S. Patent No. 5,817,207, "Radio Frequency Identification Card and Hot Lamination Process for the Manufacture of Radio Frequency Identification Cards," issued October 6, 1998.

The Invention Explained

• Problem Addressed: The patent describes that prior to the invention, manufacturing RFID cards that met industry standards was difficult. Existing cards were often too thick for standard card readers, had irregular surfaces unsuitable for high-quality dye sublimation printing, and had poor aesthetic qualities, such as the embedded electronics being visible through the plastic ('207 Patent, col. 2:4-13).
• The Patented Solution: The patent discloses a multi-step hot lamination process to create a thin, smooth, and aesthetically pleasing RFID card. The process involves positioning an electronic element directly between two plastic core sheets, then using a specific heat and pressure cycle in a laminator to encapsulate the element and form a unified core ('207 Patent, col. 2:30-40). Subsequently, a layer of ink is printed on the core to cosmetically hide the internal components, and a final clear overlaminate film is applied to protect the surface and provide a high-quality finish ('207 Patent, col. 5:5-30).
• Technical Importance: This manufacturing method enabled the production of RFID cards that could comply with ISO/ANSI standards for thickness and durability while also providing a superior surface finish suitable for widespread dye sublimation printing technology ('207 Patent, col. 2:50-61).

Key Claims at a Glance

• The complaint does not specify asserted claims, which is typical for a declaratory judgment action. The primary independent process claims are Claims 1 and 16.
• The essential elements of independent Claim 1 include:
  • Providing first and second plastic core sheets.
  • Positioning at least one electronic element "in the absence of a non-electronic carrier directly between" the core sheets.
  • Positioning the core in a laminator and subjecting it to a heat and pressure cycle comprising specific heating, pressing, and cooling steps.
  • Coating an outer surface of the core with a layer of ink.
  • Applying a layer of overlaminate film to an outer surface of the core.

U.S. Patent No. 6,036,099 - Hot Lamination Process for the Manufacture of a Combination Contact/Contactless Smart Card and Product Resulting Therefrom

• Patent Identification: U.S. Patent No. 6,036,099, "Hot Lamination Process for the Manufacture of a Combination Contact/Contactless Smart Card and Product Resulting Therefrom," issued March 14, 2000.

The Invention Explained

• Problem Addressed: The patent addresses the unique manufacturing challenges of creating a "dual function" smart card—one that incorporates both contactless (RFID) and physical contact interfaces ('099 Patent, col. 2:5-9). The presence of both embedded internal electronics and exposed surface contacts created obstacles for traditional card manufacturing processes ('099 Patent, col. 2:36-41).
• The Patented Solution: The invention builds on the hot lamination process by adding a critical step: after laminating the core with the embedded electronics, a "controlled depth milling operation" is performed to create a cavity in the card's surface ('099 Patent, col. 3:6-9). This milling exposes contact pads of the internal electronic element, allowing for the subsequent installation of a physical contact chip, thus enabling dual-functionality in a single, standard-thickness card ('099 Patent, col. 9:2-6).
• Technical Importance: This process allowed for the production of a single, integrated smart card compatible with both legacy physical-contact readers and modern contactless readers, facilitating a transition between technology standards ('099 Patent, col. 2:5-9).

Key Claims at a Glance

• The complaint does not specify asserted claims. The primary independent process claims are Claims 1 and 17.
• The essential elements of independent Claim 1 include:
  • Providing and positioning plastic core sheets with an electronic element between them.
  • Subjecting the core to a heat and pressure lamination cycle.
  • Coating the core with a layer of ink.
  • "milling a region of said core to a controlled depth so as to form a cavity which exposes at least one contact pad of said electronic element."

U.S. Patent No. 6,214,155 - Radio Frequency Identification Card and Hot Lamination Process for the Manufacture of Radio Frequency Identification Cards

• Patent Identification: U.S. Patent No. 6,214,155, "Radio Frequency Identification Card and Hot Lamination Process for the Manufacture of Radio Frequency Identification Cards," issued April 10, 2001.
• Technology Synopsis: As a continuation of the application that led to the ’207 Patent, this patent similarly discloses a hot lamination process for manufacturing RFID cards. The claimed process focuses on encapsulating an electronic element between plastic layers using controlled heat and pressure, followed by coating and laminating steps to produce a card meeting industry standards for thickness and surface quality.
• Asserted Claims: Not specified in the complaint; independent claims include 1 and 15.
• Accused Features: The complaint makes a general allegation that LT has asserted that Allsafe’s RFID card manufacturing processes infringe the Leighton Patents (Compl. ¶31).

U.S. Patent No. 6,514,367 - Hot Lamination Process for the Manufacture of a Combination Contact/Contactless Smart Card

• Patent Identification: U.S. Patent No. 6,514,367, "Hot Lamination Process for the Manufacture of a Combination Contact/Contactless Smart Card," issued February 4, 2003.
• Technology Synopsis: As a continuation of the application that led to the ’099 Patent, this patent similarly discloses a manufacturing process for dual-function smart cards. The process involves laminating a core with an embedded electronic element and then performing a milling operation to create a cavity, thereby exposing contact pads for a physical interface while maintaining the card's contactless capabilities.
• Asserted Claims: Not specified in the complaint; independent claims include 1 and 20.
• Accused Features: The complaint makes a general allegation that LT has asserted that Allsafe’s RFID card manufacturing processes infringe the Leighton Patents (Compl. ¶31).

III. The Accused Instrumentality

Product Identification

The accused instrumentalities are Plaintiff Allsafe's processes for manufacturing its plastic card products, which include "13.56 MHz contactless cards, 125 KHz proximity cards and Mifare cards," collectively referred to as "RFID cards" (Compl. ¶6).

Functionality and Market Context

These RFID cards are used in a variety of applications, including security access control, network log-on security, transportation, and cashless vending (Compl. ¶6). The complaint identifies Allsafe as a "premier plastic card manufacturer in the United States" (Compl. ¶6). The complaint does not provide specific details about Allsafe’s manufacturing process itself, focusing instead on allegations of patent invalidity and unenforceability.

IV. Analysis of Infringement Allegations

As this is a declaratory judgment action, the complaint alleges that the patentee (Defendant) has asserted infringement, but does not provide a detailed infringement theory or claim chart. The analysis below outlines the elements of a representative independent claim for each lead patent and cites the complaint's general allegation.

'207 Patent Infringement Allegations

Claim Element (from Independent Claim 1)	Alleged Infringing Functionality	Complaint Citation	Patent Citation
(b) positioning said at least one electronic element in the absence of a non-electronic carrier directly between said first and second plastic core sheets to form a core...	Allsafe's manufacturing process for its RFID cards allegedly includes this step, as asserted by LT.	¶31	col. 6:22-26
(c) subjecting said core to a heat and pressure cycle... comprising the steps of: (i) heating... (ii) applying a first pressure... (iii) cooling... while applying a second pressure...	Allsafe's manufacturing process for its RFID cards allegedly includes this lamination cycle, as asserted by LT.	¶31	col. 6:27-38
(d) coating at least one of said outer surfaces of said core with a layer of ink;	Allsafe's manufacturing process for its RFID cards allegedly includes this coating step, as asserted by LT.	¶31	col. 6:39-41
(e) applying a layer of overlaminate film to at least one of said outer surfaces of said core.	Allsafe's manufacturing process for its RFID cards allegedly includes this overlaminate step, as asserted by LT.	¶31	col. 6:42-44

'099 Patent Infringement Allegations

Claim Element (from Independent Claim 1)	Alleged Infringing Functionality	Complaint Citation	Patent Citation
(c) positioning said core in a laminator apparatus, and subjecting said core to a heat and pressure cycle...	Allsafe's manufacturing process for its RFID cards allegedly includes a lamination cycle, as asserted by LT.	¶31	col. 9:16-19
(d) coating at least one of said outer surfaces of said core with a layer of ink;	Allsafe's manufacturing process for its RFID cards allegedly includes a coating step, as asserted by LT.	¶31	col. 9:20-21
(e) milling a region of said core to a controlled depth so as to form a cavity which exposes at least one contact pad of said electronic element.	Allsafe's manufacturing process for its RFID cards allegedly includes this milling step, as asserted by LT.	¶31	col. 9:22-25

• Identified Points of Contention:
  • Evidentiary Questions: The complaint does not describe Allsafe’s actual manufacturing process. A central point of contention will be whether discovery reveals that Allsafe’s process performs each and every step recited in the asserted claims. For example, does Allsafe’s process use a heat/pressure/cooling cycle that matches the specifics of claim 1 of the ’207 Patent?
  • Technical Questions: For the ’099 Patent, a key question is whether Allsafe's process involves a "milling" step to create a cavity for a contact chip. If Allsafe only produces contactless cards, it may not perform this step, which could support its non-infringement position for the '099 and '367 patents.

V. Key Claim Terms for Construction

The Term: "in the absence of a non-electronic carrier" (’207 Patent, Claim 1)

• Context and Importance: This negative limitation is critical to defining the scope of the claimed process. Practitioners may focus on this term because its interpretation determines whether processes using any form of intermediate holder or substrate for the electronic element fall outside the claim. The dispute would center on what constitutes a "carrier."
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The term itself is not explicitly defined, which might support an argument that it should be interpreted broadly to exclude only substantial, separate carrier structures known in the prior art.
  • Evidence for a Narrower Interpretation: The claim language specifies positioning the element "directly between" the core sheets ('207 Patent, col. 6:23-24). This suggests a narrow interpretation where the presence of any intervening material, even a thin film or adhesive layer not part of the core sheets themselves, could be considered a "carrier," thus avoiding infringement.

The Term: "milling a region of said core" (’099 Patent, Claim 1)

• Context and Importance: This term defines the step that creates the dual-function capability of the card. Its construction is central to infringement of the ’099 and ’367 patents. The key question is what type of material-removal process qualifies as "milling."
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The specification refers to a "controlled depth milling operation" but does not limit it to a specific tool or method ('099 Patent, col. 3:6-7). This could support a construction that encompasses any process that controllably removes material to form a cavity, such as laser ablation or chemical etching.
  • Evidence for a Narrower Interpretation: A party could argue that in the context of machining, "milling" has a more specific technical meaning involving a rotary cutter. The patent does not provide an explicit definition deviating from this, which may support a narrower construction that excludes other forms of material removal.

VI. Other Allegations

• Inequitable Conduct: The complaint contains detailed allegations of inequitable conduct. Allsafe alleges that during the prosecution of the '155 Patent, the inventor and his attorneys intentionally withheld from the USPTO the existence of co-pending applications for the '367 Patent and another patent, as well as material prior art (the "Jarvis Patent") that was cited in the '367 application (Compl. ¶¶ 19-20). Similar allegations are made regarding the prosecution of the '367 Patent, for failure to disclose the co-pending '155 application (Compl. ¶24). Allsafe further alleges a general failure to disclose the correct inventorship for all the Leighton Patents with an intent to deceive the USPTO (Compl. ¶¶ 27-28).
• Patent Misuse: The complaint alleges that LT has misused the Leighton Patents by "attempting to obtain licenses therefor, knowing that the Leighton Patents are invalid and/or were procured by inequitable conduct" (Compl. ¶41).

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

1. Enforceability and Validity: A primary focus of the case will be Allsafe's allegations of inequitable conduct. The key question for the court will be whether the non-disclosed co-pending applications and prior art were material to patentability and whether they were withheld with deceptive intent. A finding of inequitable conduct could render one or more of the patents unenforceable, potentially resolving the case regardless of the infringement analysis.
2. Evidentiary Proof of Infringement: As Allsafe's manufacturing process is not detailed in the complaint, a central issue will be one of evidence. The case will turn on whether LT can demonstrate that Allsafe's actual, proprietary manufacturing process performs every step of the asserted claims, including potentially dispositive steps like "milling" a cavity ('099 Patent) or placing an electronic element "in the absence of a non-electronic carrier" ('207 Patent).
3. Inventorship: The case raises a fundamental question of validity based on proper inventorship. The court will need to consider evidence regarding who actually conceived of the claimed inventions. A finding that the named inventor, Keith Leighton, is not the true and sole inventor, as alleged by Allsafe (Compl. ¶11, ¶27), could invalidate the patents under 35 U.S.C. §§ 101 and 102(f).