DCT

1:25-cv-00323

Near Field Electronics LLC v. CVS Pharmacy Inc

Log In

I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 1:25-cv-00323, E.D. Tex., 06/18/2025
  • Venue Allegations: Plaintiff alleges venue is proper in the Eastern District of Texas because Defendant CVS maintains a regular and established place of business in the district.
  • Core Dispute: Plaintiff alleges that Defendant’s Near Field Communication (NFC)-capable credit card readers infringe five U.S. patents related to semiconductor technologies for interface protocol management, power consumption control, and flexible hardware configuration.
  • Technical Context: The patents address foundational integrated circuit design challenges, such as enabling a single chip to handle multiple communication standards, implementing flexible I/O processors, and managing power in peripheral devices.
  • Key Procedural History: The complaint notes that four of the five patents-in-suit have expired. For these patents, Plaintiff expressly limits its claim for damages to a period beginning June 18, 2019 (six years prior to the complaint filing) and ending on the respective patent expiration dates, focusing the dispute for those patents entirely on past damages.

Case Timeline

Date Event
2000-06-21 U.S. Patent No. 6,691,201 Priority Date
2000-07-25 U.S. Patent No. 6,742,071 Priority Date
2000-08-28 U.S. Patent No. 6,996,727 Priority Date
2002-06-28 U.S. Patent No. 6,959,350 Priority Date
2004-02-10 U.S. Patent No. 6,691,201 Issued
2004-05-25 U.S. Patent No. 6,742,071 Issued
2005-01-11 U.S. Patent No. 7,373,531 Priority Date
2005-10-25 U.S. Patent No. 6,959,350 Issued
2006-02-07 U.S. Patent No. 6,996,727 Issued
2008-05-13 U.S. Patent No. 7,373,531 Issued
2019-06-18 Alleged Infringement Start Date for Damages Calculation
2021-11-21 U.S. Patent No. 6,742,071 Expired
2022-01-31 U.S. Patent No. 6,691,201 Expired
2022-04-14 U.S. Patent No. 6,996,727 Expired
2023-08-12 U.S. Patent No. 6,959,350 Expired
2025-06-18 Complaint Filed

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

U.S. Patent No. 6,691,201 - "Dual Mode USB-PS/2 Device" (Issued Feb. 10, 2004)

The Invention Explained

  • Problem Addressed: The patent describes that supporting multiple signaling protocols, such as USB and PS/2, conventionally required costly external components, dedicated I/O pins on a micro-controller, and complex firmware to manage the different modes (’201 Patent, col. 1:28-49; Compl. ¶11).
  • The Patented Solution: The invention is a single integrated circuit that can automatically select and operate in either USB or PS/2 mode through a single set of shared I/O pins. The circuit detects the protocol of the connected bus and configures itself accordingly, eliminating the need for extra components and simplifying the device design ('201 Patent, Abstract; col. 2:51-62).
  • Technical Importance: This "single chip solution" offered a more integrated and cost-effective method for peripheral device manufacturers to ensure compatibility with both legacy (PS/2) and then-emerging (USB) standards ('201 Patent, col. 2:3-10; Compl. ¶12).

Key Claims at a Glance

  • The complaint asserts independent method claim 14 ('201 Patent, col. 6:65-7:10; Compl. ¶31).
  • Essential elements of claim 14 include:
    • (A) detecting a signaling protocol of a bus connected to an integrated circuit that operates in a plurality of signaling protocols; and
    • (B) configuring said integrated circuit to communicate in one of said plurality of signaling protocols in response to said detected signaling protocol, wherein each selected protocol operates over the connected bus through a single set of pins.
  • The complaint reserves the right to assert additional claims (Compl. ¶32).

U.S. Patent No. 6,742,071 - "Real-time I/O Processor Used to Implement Bus Interface Protocols" (Issued May 25, 2004)

The Invention Explained

  • Problem Addressed: The patent explains that conventional methods for implementing bus interfaces were either protocol-specific and inflexible, or were user-programmable interfaces that were difficult to program and lacked the sophistication to handle complex signaling (’071 Patent, col. 1:16-48).
  • The Patented Solution: The invention discloses a programmable general-purpose interface (GPIF) that functions as a specialized, real-time I/O processor. This processor uses a limited instruction set to generate interface-specific waveforms and respond to external events, allowing its control outputs and data path decisions to be changed on every clock cycle, thereby replacing rigid, protocol-specific hardware designs ('071 Patent, Abstract; col. 4:66-5:11; Compl. ¶15-16).
  • Technical Importance: This architecture provided a more flexible and higher-speed solution for interfacing with multiple or evolving bus protocols compared to traditional microprocessor-based I/O systems ('071 Patent, col. 2:53-65; Compl. ¶16).

Key Claims at a Glance

  • The complaint asserts independent method claim 15 ('071 Patent, col. 12:65-14:6; Compl. ¶36).
  • Essential elements of claim 15 include:
    • (A) generating a plurality of first control signals in response to a current state of a processor;
    • (B) progressing to a next state based on the current state, an internal control signal, and an input signal from an external bus;
    • (C) driving at least one output control signal onto the external bus; and
    • (D) updating the current state to the next state.
  • The complaint reserves the right to assert additional claims (Compl. ¶37).

Multi-Patent Capsules

  • U.S. Patent No. 6,959,350, "Configurable USB Interface With Virtual Register Architecture" (Issued Oct. 25, 2005)

    • Technology Synopsis: The patent addresses the problem of hard-coded USB endpoint configurations in interface controllers, which required writing new hardware description language (HDL) for different versions (Compl. ¶20). The invention provides a configurable bus interface controller that uses an HDL-based configuration package to flexibly generate configuration circuitry for various USB endpoint configurations without requiring new HDL code for each one (Compl. ¶19, 21).
    • Asserted Claims: The complaint asserts at least claim 10 (Compl. ¶41).
    • Accused Features: The NXP PN512 NFC Front-End and similar components within CVS's credit card readers are accused of infringement (Compl. ¶41).

  • U.S. Patent No. 6,996,727, "Power Supply for Universal Serial Bus Interface with Programmable Bus Pullup Resistor" (Issued Feb. 7, 2006)

    • Technology Synopsis: The patent addresses the lack of a low-power mode in conventional 3.3V power supplies for USB interfaces (Compl. ¶25). The invention discloses a dual-mode power supply architecture featuring a standard operating mode and a power-down standby mode. In standby, the main supply is turned off, and a low-power, programmable resistor maintains the necessary pullup function to significantly reduce current consumption during idle states (Compl. ¶24).
    • Asserted Claims: The complaint asserts at least claim 18 (Compl. ¶46).
    • Accused Features: The NXP PN512 NFC Front-End and similar components within CVS's credit card readers are accused of infringement (Compl. ¶46).

  • U.S. Patent No. 7,373,531, "Signal Detection Method...and Electronic Apparatus" (Issued May 13, 2008)

    • Technology Synopsis: The patent is directed to methods and devices for detecting the operational state of a monitoring target to enable power savings (Compl. ¶28-29). The solution involves applying a signal to the gates of connected transistors and detecting the signal's presence, absence, or frequency by monitoring whether a "through current" flows in the circuit. This detection can then trigger a power supply reduction process (Compl. ¶28).
    • Asserted Claims: The complaint asserts at least claim 2 (Compl. ¶51).
    • Accused Features: The NXP PN512 NFC Front-End and similar components within CVS's credit card readers are accused of infringement (Compl. ¶51).

III. The Accused Instrumentality

Product Identification

  • The complaint identifies the "Accused Instrumentalities" as "credit card reader device[s] equipped with an NXP PN512 NFC Front-End," including any other NFC-capable readers with similar components (Compl. ¶31, 36, 41, 46, 51).

Functionality and Market Context

  • The complaint alleges that CVS uses these devices in the regular course of its business operations for processing NFC payment transactions (Compl. ¶33, 38). The core of the infringement allegations centers on the technical functionality of the NXP PN512 integrated circuit (or similar front-end components) contained within the payment terminals used in CVS stores (Compl. ¶31).

No probative visual evidence provided in complaint.

IV. Analysis of Infringement Allegations

The complaint references, but does not include, claim chart exhibits (Exhibits A-1, B-1, etc.) that would detail its infringement theories (Compl. ¶32, 37, 42, 47, 52). The analysis below summarizes the narrative infringement theory for each lead patent based on the text of the complaint.

  • ’201 Patent Infringement Allegations
    The complaint alleges that when CVS uses the Accused Instrumentalities, the devices perform the method of claim 14 (Compl. ¶33). The narrative theory suggests that the NXP PN512 chip is an integrated circuit capable of operating with multiple signaling protocols (e.g., NFC, and potentially others). When a payment is made, the device allegedly detects the relevant payment protocol from the bus (e.g., a tapped credit card or phone) and configures itself to communicate using that protocol via a single set of pins, thus performing the claimed method steps (Compl. ¶31, 33).

  • Identified Points of Contention:

    • Scope Questions: A central question will be whether the patent's teachings, which are explicitly grounded in the context of dual-mode USB and PS/2 peripherals, can be read to cover the operation of a modern NFC front-end controller. The court may need to determine if "plurality of signaling protocols" as used in the patent encompasses the communication standards managed by the accused NXP PN512 chip.
    • Technical Questions: What evidence does the complaint provide that the accused device "automatically selects" a protocol "in response to a signaling protocol of a connected bus" in the manner claimed? The mechanism for protocol handling in an NFC reader may differ fundamentally from the specific USB/PS/2 detection method described in the patent's specification.

  • ’071 Patent Infringement Allegations
    The complaint alleges that the Accused Instrumentalities, when used for processing NFC payments, perform the method steps of claim 15 (Compl. ¶38). The theory posits that the NXP PN512 chip functions as the claimed "real-time I/O processor." During a transaction, it allegedly generates control signals, progresses through different operational states based on inputs from the external bus (the NFC communication field), drives output signals, and updates its internal state, thereby mapping to the claimed state-machine-like process (Compl. ¶36, 38).

  • Identified Points of Contention:

    • Scope Questions: Does the NXP PN512 chip operate as the claimed "processor" that executes a program by "progressing to a next state based on said current state"? The defense may argue that the accused chip's architecture does not match the specific state-based, instruction-driven processor described in the patent's detailed description ('071 Patent, Fig. 6; col. 6:3-9).
    • Technical Questions: A key evidentiary question will be whether the normal operation of the NXP PN512 chip can be mapped to the distinct steps of generating control signals, progressing states, driving outputs, and updating states as recited in claim 15. The plaintiff will need to show that the accused device performs these specific, discrete functions rather than operating on a different computational principle.

V. Key Claim Terms for Construction

  • Term from '201 Patent, Claim 14: "a single set of pins"

    • Context and Importance: This term is foundational to the patent's claimed benefit of a "single chip solution" that reduces component count. The infringement case depends on showing that the accused NFC chip uses a shared "single set of pins" for its "plurality of signaling protocols." Practitioners may focus on this term because its scope will determine whether the claim is limited to the specific USB/PS/2 context or can apply more broadly to modern multifunction chips.
    • Intrinsic Evidence for a Broader Interpretation: The claim language itself is general and not explicitly limited to any specific protocols or pin types. The summary of the invention also describes the concept broadly as sharing "integrated circuit pins for both protocols" ('201 Patent, col. 2:61).
    • Evidence for a Narrower Interpretation: The detailed description and figures exclusively discuss the sharing of pins for USB (DP/DM signals) and PS/2 (SCLK/SDATA signals) protocols ('201 Patent, Fig. 1; col. 2:36-44). An argument could be made that the term's meaning is defined and limited by these specific embodiments.

  • Term from '071 Patent, Claim 15: "processor"

    • Context and Importance: The infringement allegation hinges on the accused NXP PN512 chip being a "processor" that performs the specific state-based method of claim 15. The construction of this term will be critical in determining whether the accused chip’s architecture falls within the claim scope.
    • Intrinsic Evidence for a Broader Interpretation: The patent states that the invention provides a "processor-based solution" for implementing changing interface standards, suggesting a general functional definition ('071 Patent, col. 2:58-60).
    • Evidence for a Narrower Interpretation: The specification describes the "processor" in detail as a specialized "general purpose interface (GPIF)" with a specific two-instruction set ("branch on signal" and "wait N clocks") and an architecture based on a finite state machine and a lookup table ('071 Patent, col. 5:4-6; col. 7:14-23). A defendant may argue that "processor" should be construed to require these specific, disclosed structural and functional limitations.

VI. Other Allegations

  • Indirect Infringement: The complaint alleges induced infringement of the ’531 patent under 35 U.S.C. § 271(b). The alleged acts of inducement include CVS "advertising and distributing the Accused Instrumentalities and providing instruction materials, training, and services" to its partners, customers, and end users (Compl. ¶56). Plaintiff alleges that CVS possesses the requisite specific intent or willful blindness because it has knowledge of the patent and the alleged infringement from at least the filing date of the complaint (Compl. ¶56).
  • Willful Infringement: Willfulness is alleged for infringement of the '531 patent. The allegation is based entirely on post-suit knowledge: "Since the filing of this Complaint, Defendant's infringement has been willful" (Compl. ¶57).

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

  1. A core issue will be one of technological scope: Can the claims of patents from the early 2000s, which address problems like USB/PS/2 duality and early programmable I/O, be construed to read on the functionality of a modern, specialized NXP PN512 NFC front-end controller? The dispute will likely center on whether the claimed inventions are broad enough to cover subsequent, more complex technologies or are limited to the specific technical contexts disclosed in the specifications.
  2. A key challenge for the plaintiff will be one of evidentiary proof: The complaint makes broad allegations against devices containing a specific chip. The case will likely turn on whether discovery yields technical evidence sufficient to demonstrate that the accused NXP PN512 chip, as operated by CVS in its payment terminals, actually performs the specific, multi-step methods recited in the asserted claims of each patent.
  3. The case presents a question of remedy and valuation: With four of the five asserted patents having already expired, the dispute is largely retrospective. This focuses the litigation on calculating a reasonable royalty for a finite period of past infringement, rather than the forward-looking value of an injunction, which may significantly influence the strategic and financial calculus for both parties.