DCT
2:25-cv-00007
EasyWeb Innovations LLC v. Pocketsmith Ltd
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: Easyweb Innovations LLC (New York)
- Defendant: Pocketsmith Ltd. (New Zealand)
- Plaintiff’s Counsel: Hecht Partners LLP
- Case Identification: 2:25-cv-00007, E.D. Tex., 01/03/2025
- Venue Allegations: Venue is alleged based on Defendant’s marketing, sales, and provision of its services to customers located in the Eastern District of Texas.
- Core Dispute: Plaintiff alleges that Defendant’s online financial management platform infringes a patent related to user-selectable, multi-level security authorization methods.
- Technical Context: The technology at issue involves customizable computer security systems that permit individual users to select their own preferred level of authentication security from a plurality of available options.
- Key Procedural History: The complaint notes that the patent-in-suit overcame a patent eligibility rejection under 35 U.S.C. § 101 during prosecution. The applicant successfully argued that the claims were not directed to an abstract idea but instead provided a concrete, unconventional improvement to computer security by enabling per-user authorization scheme selection, distinguishing the invention from prior art systems that imposed a single, system-wide security method on all users.
Case Timeline
| Date | Event |
|---|---|
| 1999-03-11 | ’905 Patent Priority Date (Provisional Application) |
| 2018-10-30 | ’905 Patent Issued |
| 2019-09-20 | Date of Accused Product documentation captured by Plaintiff |
| 2025-01-03 | Complaint Filed |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 10,114,905 - Individual User Selectable Multi-Level Authorization Method for Accessing a Computer System
The Invention Explained
- Problem Addressed: The patent addresses the rigidity of computer access systems that historically limited all users to a single, system-wide security authorization scheme (Compl. ¶16). This one-size-fits-all approach did not allow individual users to balance their personal preferences for security strength versus convenience (Compl. ¶17).
- The Patented Solution: The invention is a computer-implemented method that provides a plurality of security schemes and allows each user of a system to select a scheme to be associated with their own account, independent of the schemes chosen by other users (’905 Patent, Abstract; col. 45:10-25). For example, one user could opt for a basic security scheme while another could select a more robust scheme requiring additional identification information to gain access, with the system storing and applying these individual preferences for subsequent logins (’905 Patent, col. 46:26-34).
- Technical Importance: The invention is presented as a concrete improvement in computer functionality by moving beyond the conventional, static security models and introducing a dynamic, user-customizable authorization framework (Compl. ¶14, ¶17).
Key Claims at a Glance
- The complaint asserts infringement of claims 1-20, with a narrative focus on independent claims 1 and 9 (Compl. ¶17, ¶36).
- Independent Claim 1 (Method) requires the steps of:
- Prompting a user for a selection of a security scheme from a plurality of schemes.
- Wherein a first scheme requires a specific number of identification information items and a second scheme requires additional identification information beyond the first.
- Storing the user's selection as a preference in the user's storage area.
- Authorizing access to the system when the user satisfies their selected scheme.
- Independent Claim 9 (Method) requires steps for a multi-user system, including:
- Prompting a first user to select a first security scheme.
- Storing the first user's selection in the first user's storage area.
- Prompting a second user to select a second security scheme.
- Storing the second user's selection in the second user's storage area.
- Wherein the first and second security schemes require a different number of identification items to be satisfied.
- The complaint reserves the right to assert dependent claims (Compl. ¶36).
III. The Accused Instrumentality
Product Identification
- The accused products are all versions and variants of the PocketSmith website, a platform for online money management services (Compl. ¶25).
Functionality and Market Context
- The PocketSmith service allows users to secure their accounts via authentication (Compl. ¶24). The complaint alleges that users can select between at least two different security schemes: a standard scheme requiring a username and password, and an optional, more secure "Two-factor authentication (2FA)" scheme (Compl. ¶26). The 2FA scheme requires the user to provide an additional piece of information—a time-limited code from an authenticator app—to log in (Compl. ¶31). The complaint includes a screenshot from PocketSmith's website explaining that 2FA "add[s] an extra level of security" (Compl. p. 10). The user's choice to enable or disable 2FA is stored and applied to their specific account for subsequent access attempts (Compl. ¶29, ¶32).
IV. Analysis of Infringement Allegations
’905 Patent Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| A computer-implemented method for ... providing a plurality of security schemes ... and allowing each particular user to select a security scheme ... | The PocketSmith platform allegedly offers users a choice between a standard login scheme and a two-factor authentication (2FA) scheme, which they can select in the settings menu (Compl. ¶26, ¶28). A screenshot shows the menu for setting up 2FA (Compl. p. 11). | ¶26, ¶28 | col. 45:10-25 |
| wherein a first of the plurality of security schemes requires a specific number of identification information to authorize the particular user, | The first scheme, where 2FA is not enabled, is alleged to require two pieces of identification information: a username and a password (Compl. ¶30). | ¶30 | col. 45:30-34 |
| and a second of the plurality of security schemes requires additional identification information beyond that of the first scheme to authorize the particular user; | The second scheme, with 2FA enabled, allegedly requires the same two pieces (username and password) plus a third piece of identification information: the two-factor authentication code from an authenticator app (Compl. ¶31). A screenshot shows the login screen requesting the 2FA code (Compl. p. 13). | ¶31 | col. 45:35-39 |
| storing the selection as a preference in the particular user's storage area; and | The complaint alleges on information and belief that the user's choice to enable 2FA is stored in the user's storage area, as it is applied to subsequent logins for that specific user (Compl. ¶29, ¶32). | ¶29, ¶32 | col. 45:40-41 |
| thereafter authorizing the particular user to access the computer system when the selected security scheme of the particular user is satisfied. | The system allegedly grants access only after the user provides the credentials required by their selected scheme, either username/password alone or username/password plus the 2FA code (Compl. ¶33). | ¶33 | col. 45:42-45 |
Identified Points of Contention
- Scope Questions: A primary issue may be patent eligibility under 35 U.S.C. § 101. While the complaint argues the claims are a concrete technological improvement, the defense may argue they are directed to the abstract idea of managing access levels. Another question is whether claim terms from a patent with a 1999 priority date, which describes technologies like fax and telephone-based systems, can be construed to read on a modern, web-based two-factor authentication system.
- Technical Questions: A factual question may arise regarding the "storing" limitation. The analysis may focus on what evidence demonstrates that PocketSmith's method of saving a user preference in a modern database architecture corresponds to storing a selection in a "particular user's storage area" as contemplated by the patent.
V. Key Claim Terms for Construction
The Term: "security scheme"
- Context and Importance: This term is foundational to the invention. Its construction will determine whether a modern implementation like time-based one-time password (TOTP) 2FA falls within the scope of a patent with a 1999 priority date. Practitioners may focus on this term because its breadth is central to the infringement analysis.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The claims define schemes functionally by the "number of identification information" required, without limiting the type of information, which may support a broad, technology-agnostic reading (’905 Patent, col. 45:30-39).
- Evidence for a Narrower Interpretation: The specification heavily discusses embodiments related to telephone, fax, and early Internet technologies (’905 Patent, Figs. 4-7, col. 18:22-22:65). This context could be used to argue for a narrower construction limited to the types of authentication contemplated at the time of invention.
The Term: "particular user's storage area"
- Context and Importance: The claims require storing the user's selection in a "particular user's storage area." Whether a record in a shared, modern database constitutes this "area" will be a critical point of construction.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The specification does not appear to explicitly define the term, which may allow it to be read broadly on any form of data storage logically associated with a specific user account (’905 Patent, col. 14:21-22).
- Evidence for a Narrower Interpretation: The patent's diagrams, such as Figure 13, depict a "STORAGE" block (1350) as a discrete component of the system architecture (’905 Patent, Fig. 13). This could support an argument that the term implies a dedicated, partitioned memory space for each user, rather than a mere entry in a communal database.
VI. Other Allegations
Indirect Infringement
- The complaint alleges inducement of infringement, stating that PocketSmith provides instructions, online documentation, and technical support that encourage and guide end-users to enable the allegedly infringing 2FA feature (Compl. ¶40). The complaint also pleads contributory infringement, alleging the accused components are not staple articles of commerce and have no substantial non-infringing uses (Compl. ¶41).
Willful Infringement
- The complaint alleges that PocketSmith acts with knowledge of the ’905 Patent and with intent or willful blindness that its actions cause infringement, which provides a basis for a willfulness claim (Compl. ¶40, ¶41).
VII. Analyst’s Conclusion: Key Questions for the Case
- A core issue will be one of patent eligibility: will the claims be deemed a patent-eligible, concrete technological improvement that is "necessarily rooted in computer technology," as the Plaintiff argues, or will they be found to be directed to the abstract idea of customizing access levels, a likely defense position?
- A second central question will be one of claim construction and scope: can claim terms like "security scheme", conceived in the context of 1999-era technology, be construed broadly enough to encompass modern, web-based two-factor authentication systems, or are they limited by the patent's specification to the technologies disclosed?