DCT

2:24-cv-00691

Telcom Ventures LLC v. Samsung Electronics Co Ltd

Log In

I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 2:24-cv-00691, E.D. Tex., 08/21/2024
  • Venue Allegations: Plaintiff alleges venue is proper in the Eastern District of Texas because Defendants maintain a regular and established place of business in the district (Plano, TX) and have committed acts of infringement there.
  • Core Dispute: Plaintiff alleges that Defendant’s Samsung Pay and Samsung Wallet services, as implemented on a wide range of Samsung smartphones, infringe eight patents related to enabling mobile device functions based on proximity and physiological data to facilitate financial transactions.
  • Technical Context: The patents address methods for selectively enabling features on a mobile device, such as a payment function, when the device is near a specific location (e.g., a checkout counter) and after sensing a user-specific input (e.g., a fingerprint).
  • Key Procedural History: The asserted patents stem from a single original application filed in 2008. The complaint does not mention any prior litigation or administrative challenges concerning these patents.

Case Timeline

Date Event
2008-11-04 Earliest Patent Priority Date for all Asserted Patents
2015-09-28 Defendant launches "Samsung Pay"
2016-10-04 U.S. Patent No. 9,462,411 ('411 Patent) Issues
2017-11-28 U.S. Patent No. 9,832,708 ('708 Patent) Issues
2019-02-26 U.S. Patent No. 10,219,199 ('199 Patent) Issues
2020-06-02 U.S. Patent No. 10,674,432 ('432 Patent) Issues
2022-06-01 Defendant integrates Samsung Pay into "Samsung Wallet" (approx. date)
2023-09-26 U.S. Patent No. 11,770,756 ('756 Patent) Issues
2024-03-05 U.S. Patent No. 11,924,743 ('743 Patent) Issues
2024-03-19 U.S. Patent No. 11,937,172 ('172 Patent) Issues
2024-07-02 U.S. Patent No. 12,028,793 ('793 Patent) Issues
2024-08-21 Complaint Filed

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

U.S. Patent No. 9,462,411 - "MOBILE DEVICE MODE ENABLEMENT RESPONSIVE TO A PROXIMITY CRITERION"

  • Issued: October 4, 2016.

The Invention Explained

  • Problem Addressed: The patent describes a "rigidity aspect" in mobile devices, where a device is typically configured to perform a set number of functions regardless of its context, such as its location or the time of day (’411 Patent, col. 1:29-37). It proposes that it would be desirable for a mobile device to act as a "wallet" only when it is time to pay for an item, and not at other times when there is no need to do so (’411 Patent, col. 1:37-41).
  • The Patented Solution: The invention provides for systems and methods to adaptively enable modes or functions on a device when a "proximity criterion" is met with respect to an external "entity" (’411 Patent, Abstract; col. 1:42-49). As illustrated in Figure 3, this involves detecting that a first device is near an entity (step 32) and then enabling a mode on the first device (step 34), where the entity is independent of the device's primary communications service provider (’411 Patent, Fig. 3, step 36). For example, a phone's payment function could be enabled only when it is near a point-of-sale terminal.
  • Technical Importance: This approach addresses a need for context-aware functionality in mobile devices, aiming to enhance security and user experience by activating sensitive functions like payments only when situationally appropriate.

Key Claims at a Glance

  • The complaint asserts independent claim 1 (Compl. ¶69).
  • Essential elements of claim 1 include:
    • Sensing, by a smartphone with a sensor, physiological data associated with a living organism.
    • Detecting a proximity criterion is satisfied between the smartphone and an entity.
    • Selectively communicating using a first air interface responsive to both the proximity criterion being satisfied and the physiological data.
    • Refraining from communicating using the first air interface if the physiological data does not satisfy a criterion, even if the proximity criterion is met.
    • Communicating using a second, different air interface for general communications service.
  • The complaint does not explicitly reserve the right to assert dependent claims for this patent.

U.S. Patent No. 10,219,199 - "MOBILE DEVICE MODE ENABLEMENT RESPONSIVE TO A PROXIMITY CRITERION"

  • Issued: February 26, 2019.

The Invention Explained

  • Problem Addressed: This patent, part of the same family as the ’411 Patent, addresses the same problem of situational rigidity in mobile device functions (’199 Patent, col. 1:29-41).
  • The Patented Solution: The ’199 Patent refines the solution by explicitly linking the enablement of a function to both a proximity condition and a "physiological parameter" (’199 Patent, col. 13:31-32). The claims describe a smartphone that, in response to sensing a physiological parameter (e.g., a fingerprint) and detecting proximity to an entity (e.g., a checkout counter), establishes a short-range communication link to conduct a transaction (’199 Patent, col. 13:21-46). This creates a two-factor trigger—location and biometric identity—for enabling the transaction capability.
  • Technical Importance: This patented method provides a specific technical sequence for securely activating a mobile payment function, combining location-based context with biometric user authentication to authorize a communication channel.

Key Claims at a Glance

  • The complaint asserts independent claim 1 (Compl. ¶91).
  • Essential elements of claim 1 include:
    • Detecting that a proximity condition is satisfied between a smartphone and an entity.
    • In response to the proximity condition and a physiological parameter, wirelessly providing information to the entity using a first air interface.
    • This communication uses a short-range link based on unlicensed frequencies (e.g., NFC, Wi-Fi).
    • Separately, receiving a communications service (e.g., cellular) from a wireless network using a second air interface based on licensed frequencies.
    • The first air interface (short-range) is not involved in providing the communications service from the network.
  • The complaint does not explicitly reserve the right to assert dependent claims for this patent.

Multi-Patent Capsule Summaries

  • U.S. Patent No. 9,832,708

    • Patent Identification: U.S. Patent No. 9,832,708, "MOBILE DEVICE MODE ENABLEMENT RESPONSIVE TO A PROXIMITY CRITERION," issued November 28, 2017 (Compl. ¶30).
    • Technology Synopsis: As a continuation of the application leading to the ’411 Patent, this patent concerns the same core technology of enabling mobile device modes based on proximity to an entity. The claims focus on the method of establishing a short-range communication link with the entity concurrently with maintaining a separate cellular communication link.
    • Asserted Claims: At least independent claim 1 (Compl. ¶80).
    • Accused Features: Samsung Pay and Samsung Wallet on accused smartphones (Compl. ¶65, ¶80).

  • U.S. Patent No. 10,674,432

    • Patent Identification: U.S. Patent No. 10,674,432, "MOBILE DEVICE MODE ENABLEMENT RESPONSIVE TO A PROXIMITY CRITERION," issued June 2, 2020 (Compl. ¶38).
    • Technology Synopsis: This continuation patent further refines the concept of context-aware device functions. The claims recite a two-step process involving first enabling a mode to request authorization based on a physiological parameter, and then using that authorization to perform a financial transaction when a proximity condition is met (’432 Patent, col. 13:11-48).
    • Asserted Claims: At least independent claim 1 (Compl. ¶102).
    • Accused Features: Samsung Pay and Samsung Wallet on accused smartphones (Compl. ¶65, ¶102).

  • U.S. Patent No. 11,770,756

    • Patent Identification: U.S. Patent No. 11,770,756, "MOBILE DEVICE MODE ENABLEMENT/DISABLEMENT RESPONSIVE TO SENSING A PHYSIOLOGICAL PARAMETER," issued September 26, 2023 (Compl. ¶42).
    • Technology Synopsis: This patent focuses specifically on the use of a "physiological parameter" to enable a number of device functions while disabling another. The claims describe sensing a parameter, determining if it satisfies a criterion, and then enabling a set of functions (e.g., requesting authorization for payment) while disabling another function (’756 Patent, col. 13:6-17).
    • Asserted Claims: At least independent claim 1 (Compl. ¶113).
    • Accused Features: The use of biometric scanners (e.g., fingerprint) to authenticate and enable Samsung Pay transactions (Compl. ¶61, ¶113).

  • U.S. Patent No. 11,924,743

    • Patent Identification: U.S. Patent No. 11,924,743, "SYSTEMS/METHODS OF ESTABLISHING A CAPABILITY, AND USING THE CAPABILITY, TO EXECUTE FINANCIAL TRANSACTIONS BY A SMARTPHONE," issued March 5, 2024 (Compl. ¶46).
    • Technology Synopsis: This patent claims methods for first establishing a capability to transact, and then using it. The process involves sensing a parameter, establishing a "master-slave relationship" with another device to request authorization, and then using that capability to pay for a product when near an access point (’743 Patent, col. 13:11-67).
    • Asserted Claims: At least independent claim 1 (Compl. ¶124).
    • Accused Features: The process of authenticating with Samsung Pay and then using the authenticated session to make a payment at a terminal (Compl. ¶62, ¶124).

  • U.S. Patent No. 11,937,172

    • Patent Identification: U.S. Patent No. 11,937,172, "SYSTEMS/METHODS OF A TWO-STEP PROCESS IN ESTABLISHING A CAPABILITY, AND USING THE CAPABILITY, TO EXECUTE A FINANCIAL TRANSACTION BY A SMARTPHONE," issued March 19, 2024 (Compl. ¶50).
    • Technology Synopsis: The title suggests this patent is closely related to the ’743 patent, focusing on a two-step process. The first step establishes the capability to transact based on sensing a parameter, and the second step uses that capability to pay for a product upon detecting proximity to a vendor's access point (’172 Patent, Abstract).
    • Asserted Claims: At least independent claim 1 (Compl. ¶135).
    • Accused Features: The two-stage process of user authentication followed by payment transmission in Samsung Pay and Samsung Wallet (Compl. ¶61-62, ¶135).

  • U.S. Patent No. 12,028,793

    • Patent Identification: U.S. Patent No. 12,028,793, "SYSTEMS/METHODS OF ESTABLISHING A CAPABILITY, AND THEN USING THE CAPABILITY, TO PERFORM A FINANCIAL TRANSACTION BY A SMARTPHONE," issued July 2, 2024 (Compl. ¶54).
    • Technology Synopsis: Based on its title and family relationship, this patent also appears to claim a multi-step process for mobile financial transactions. It likely involves establishing an authorized state on the smartphone and then using that state to execute a payment.
    • Asserted Claims: At least independent claim 1 (Compl. ¶146).
    • Accused Features: Samsung Pay and Samsung Wallet on accused smartphones (Compl. ¶65, ¶146).

III. The Accused Instrumentality

Product Identification

The accused instrumentalities are "Samsung Pay" and its successor "Samsung Wallet," as implemented on a broad range of Samsung-branded smartphones, including various models from the Galaxy S, Galaxy Note, Galaxy Z, and Galaxy A series (Compl. ¶58, ¶63, ¶65).

Functionality and Market Context

  • The complaint describes Samsung Pay as a mobile payment service enabling users to make purchases using near-field communication (NFC) or magnetic secure transmission (MST) technologies on equipped smartphones (Compl. ¶59). To conduct a transaction, a user utilizes an integrated "biodata scanner" to sense physiological data, such as a fingerprint, to verify their identity (Compl. ¶61). After verification, the service communicates with a payment terminal via NFC or MST to complete the transaction when the phone is in close proximity to the terminal (Compl. ¶60, ¶62).
  • In June 2022, Samsung reportedly integrated Samsung Pay into Samsung Wallet, which maintained the mobile payment functionality (Compl. ¶63). The complaint alleges these services are either pre-loaded on or made available via over-the-air updates to the listed smartphones (Compl. ¶66).

IV. Analysis of Infringement Allegations

’411 Patent Infringement Allegations

No probative visual evidence provided in complaint. The complaint alleges that Samsung infringes at least claim 1 of the ’411 Patent but references an external Exhibit I that is not provided with the complaint (Compl. ¶69, ¶72). Based on the complaint's narrative, the infringement theory suggests that the accused Samsung smartphones, when using Samsung Pay or Samsung Wallet, perform the claimed method. The smartphone's biodata scanner allegedly performs the step of "sensing...physiological data" (Compl. ¶61). The phone's NFC/MST technology, which requires close proximity to a payment terminal, is alleged to satisfy the "detecting that a proximity criterion is satisfied" element (Compl. ¶60, ¶62). The subsequent NFC/MST transmission to the terminal is alleged to be the "selectively communicating using a first air interface" that is responsive to both proximity and the physiological data, while the device's separate cellular or Wi-Fi connection for general network access constitutes communicating over the "second air interface" (Compl. ¶59, ¶62).

Identified Points of Contention

  • Scope Questions: A central question may be whether the user's action of authenticating with a fingerprint (the "physiological data") and bringing the phone near a terminal constitutes the smartphone itself "detecting" a proximity criterion and "selectively communicating" in response, as the claim requires. The interpretation of whether the claimed sequence of events is met by the standard user workflow for mobile payments will be critical.
  • Technical Questions: The analysis may focus on whether the accused devices "refrain from communicating" on the first air interface (NFC/MST) absent a valid biometric scan, even when the proximity criterion is met. Evidence will be needed to show that mere proximity to a terminal does not trigger a communication attempt without the preceding physiological authentication step, as required by the claim.

’199 Patent Infringement Allegations

The complaint alleges infringement of at least claim 1 of the ’199 Patent, again referencing an external, unprovided exhibit (Exhibit K) (Compl. ¶91, ¶94). The narrative infringement theory for the ’199 Patent is similar to that for the ’411 Patent. The accused smartphones allegedly "detect...that a proximity condition is satisfied" when brought near an NFC/MST payment terminal (the "entity") (Compl. ¶60, ¶62). The user's fingerprint scan is alleged to be the satisfaction of the "physiological parameter" (Compl. ¶61). The subsequent payment data transmission via NFC (an "unlicensed" frequency) is alleged to be the "wirelessly providing...information to the entity using a first air interface" (Compl. ¶59). The smartphone's separate connection to a cellular network for data and voice is alleged to be the "receiving a communications service from a wireless network using a second air interface" on licensed frequencies (Compl. ¶8).

Identified Points of Contention

  • Scope Questions: A key issue may be whether the payment terminal qualifies as an "entity" that is "independent of the communications service provided to the first and second device" as described in the patent specification ('199 Patent, col. 11:36-39). Additionally, claim construction will likely focus on whether the user-initiated process of scanning a fingerprint and tapping to pay aligns with the claim language "in response to at least the proximity condition...and in response to a physiological parameter, wirelessly providing...information."
  • Technical Questions: What evidence does the complaint provide that the accused devices establish the short-range communication link in response to both the proximity and the physiological parameter, as opposed to simply being enabled by the physiological parameter and then activated by proximity? The precise timing and causal relationship between these triggers will be a focal point.

V. Key Claim Terms for Construction

Term from '411 Patent, Claim 1: "physiological data associated with a living organism"

  • Context and Importance: This term is the primary trigger for enabling the secure communication. Its scope will determine what kind of user input qualifies. A narrow construction could limit the claim to specific biometrics, while a broader one might cover other user-initiated actions.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The specification does not define the term, leaving it open to its plain and ordinary meaning. The parent '411 patent mentions "sensing of a signal" generally as a contextual input, suggesting the focus is on a sensed input rather than a specific type of biometric (’411 Patent, col. 1:36-37).
    • Evidence for a Narrower Interpretation: The ’199 patent, a direct continuation, provides examples of a "physiological parameter" including blood pressure, heart rate, and blood content ('199 Patent, col. 8:19-20). While not from the '411 patent itself, this language from a closely related patent could be used to argue for a narrower, more clinical definition that might not include a fingerprint. However, the '756 patent in the same family does refer to a fingerprint as an example, which would support the plaintiff's reading (’756 Patent, col. 2, lines 2-4 of page 2 of the PDF).

Term from '199 Patent, Claim 1: "in response to a physiological parameter, wirelessly providing...information"

  • Context and Importance: This phrase establishes the causal link between the user's biometric authentication and the subsequent data transmission. The dispute will likely center on whether the accused system's operation meets this "in response to" requirement, or if there are intervening steps that break the claimed causal chain. Practitioners may focus on this term because it dictates the required sequence of operations for infringement.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The specification describes a general architecture where functions are enabled based on satisfying a criterion, without mandating a direct, immediate, and automatic software response (’199 Patent, col. 1:42-49). This could support an interpretation where user authentication enables a payment "mode," and a subsequent user action (like tapping) within that mode still qualifies as being "in response to" the initial authentication.
    • Evidence for a Narrower Interpretation: The claim language recites "in response to...wirelessly providing," which could be construed to require an automatic transmission of information immediately following the satisfaction of the physiological parameter condition, without an intervening user step. An argument could be made that if the user must perform another action (e.g., confirming the payment amount, tapping the phone again), the transmission is in response to that final action, not the initial biometric scan.

VI. Other Allegations

  • Indirect Infringement: For each asserted patent, the complaint alleges induced infringement, stating that Samsung disseminates promotional materials, product manuals, and website materials that instruct and encourage users on how to use the accused products in an infringing manner (e.g., Compl. ¶72, ¶76, ¶83). Contributory infringement is also alleged on the basis that Samsung supplies the technology (Samsung Pay/Wallet) that is a material part of the claimed invention and is not a staple article of commerce (e.g., Compl. ¶73, ¶84).
  • Willful Infringement: The complaint alleges that Samsung's infringement has been willful at least as of its knowledge of the patents and receipt of notice that its products infringe (e.g., Compl. ¶77, ¶88). This is based on post-suit knowledge, as the complaint alleges Samsung has "actual notice" of infringement "at least as of the date of the filing of this Complaint" (e.g., Compl. ¶70, ¶81).

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

  • A core issue will be one of causation and sequence: do the accused Samsung Pay and Wallet systems perform the claimed communication steps "in response to" sensing physiological data and detecting proximity, or does the user's workflow introduce intervening steps that break the specific causal chain required by the claims?
  • A second key issue will be one of definitional scope: can the general term "entity" from the patent specification, described as being independent of a communications network, be construed to cover modern point-of-sale payment terminals that are themselves networked devices?
  • A central evidentiary question will be one of technical implementation: what specific software and hardware processes are initiated on the accused smartphones upon a successful fingerprint scan, and how does that internal state change relate to the subsequent activation of the NFC or MST transmitter when the device is brought near a terminal?