Paygeo LLC v. Samsung Electronics Co Ltd

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: PayGeo, LLC (Texas)
  • Defendant: Samsung Electronics Co., Ltd. (Republic of Korea) and Samsung Electronics America, Inc. (New York)
  • Plaintiff’s Counsel: Capshaw DeRieux LLP; Kramer Levin Naftalis & Frankel LLP
• Case Identification: 2:25-cv-00334, E.D. Tex., 04/02/2025
• Venue Allegations: Plaintiff alleges venue is proper because Defendant Samsung Electronics America, Inc. maintains a regular and established place of business in Plano, Texas, within the district, and because Defendant Samsung Electronics Co., Ltd. is a foreign corporation subject to suit in any U.S. judicial district.
• Core Dispute: Plaintiff alleges that Defendant’s mobile payment and security platforms, including Samsung Wallet, Samsung Pay, and Samsung Knox, infringe five U.S. patents related to secure mobile financial transactions and authentication.
• Technical Context: The technology at issue involves digital wallets and secure mobile payment systems, a market central to the functionality of modern smartphones and wearable devices.
• Key Procedural History: The complaint notes that Defendants have previously submitted to venue and personal jurisdiction in the Eastern District of Texas in other patent infringement actions. Plaintiff asserts it has not sold products or licensed the Asserted Patents, which may impact the calculation of pre-suit damages.

Case Timeline

Date	Event
2011-07-18	Earliest Priority Date for Asserted Patents (’671, ’296, ’018, ’307, ’347)
2013-09-05	Samsung Knox Launched
2013-10-08	U.S. Patent No. 8,554,671 Issued
2015-09-28	Samsung Pay Launched
2020-10-06	U.S. Patent No. 10,796,296 Issued
2021-03-02	U.S. Patent No. 10,937,018 Issued
2021-08-10	U.S. Patent No. 11,087,307 Issued
2022-06-01	Samsung Wallet Launched (integrating Samsung Pay and Samsung Pass)
2024-06-18	U.S. Patent No. 12,014,347 Issued
2025-04-02	Complaint Filing Date

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

U.S. Patent No. 8,554,671 - System and Associated Method and Service for Providing a Platform that Allows for the Exchange of Cash Between Members in a Mobile Environment

The Invention Explained

• Problem Addressed: The complaint alleges the invention provides a novel platform to facilitate financial transactions between mobile stations securely, addressing the risks of transferring sensitive financial information directly. (Compl. ¶31).
• The Patented Solution: The invention proposes a system where mobile devices do not exchange sensitive financial data directly. Instead, an initiating device generates a unique code, or token, containing the transaction information, which is transferred to a receiving device. (Compl. ¶¶16, 29). This code is also sent to a central "mobile transaction platform" to authenticate and execute the transaction, enhancing security by avoiding the transmission of raw account details. (Compl. ¶¶29, 58).
• Technical Importance: This tokenization-based approach was a foundational improvement for securing peer-to-peer and point-of-sale transactions in the emerging mobile payment environment. (Compl. ¶¶29-30).

Key Claims at a Glance

• The complaint asserts independent claim 24. (Compl. ¶55).
• Claim 24 recites a computer program product for a cashless platform, comprising modules embedded in first and second user mobile stations that perform the steps of:
  • Entering financial information on a first station.
  • Generating a code with that information on the first station.
  • Transferring the code to a second station via a "directional movement" on the first station.
  • Transmitting the code from the first station to a mobile transaction platform for confirmation.
  • Automatically recognizing the code on the second station.
  • Determining whether to accept or decline the transaction on the second station.
  • Executing the transaction by the platform if accepted, or preventing it if declined.
  • Transmitting a "reverse code" from the second station to the first to confirm the outcome. (Compl. ¶58).
• The complaint does not explicitly reserve the right to assert dependent claims for this patent.

U.S. Patent No. 10,796,296 - Kit, System and Associated Method and Service for Providing a Platform to Prevent Fraudulent Financial Transactions

The Invention Explained

• Problem Addressed: The patent's background describes the inconvenience of carrying physical wallets, cash, and credit cards, and aims to provide a secure, consolidated digital alternative. (’296 Patent, col. 3:4-6, 4:48-54).
• The Patented Solution: The invention describes a back-end system that communicates with separate devices associated with a credit card company, a financial institution, and a third-party entity. (’296 Patent, Claim 1). This system provides a mobile application with a login interface where a user can register multiple payment sources, select a specific payment function (e.g., sending money), identify a payee, and execute the transaction in real-time while providing a notification to the recipient. (Compl. ¶84; ’296 Patent, Fig. 4A).
• Technical Importance: The technology provides a unified and secure architecture for a mobile device to act as a central hub for various financial accounts and transaction types, improving both security and user convenience. (Compl. ¶¶33-34).

Key Claims at a Glance

• The complaint asserts independent claim 1. (Compl. ¶81).
• Claim 1 recites a system comprising memory and hardware processors executing program code that includes:
  • A first communication interface for a credit card company device, a second for a financial institution device, and a third for a third-party entity device.
  • A process of: providing a login interface; validating security credentials; presenting interfaces to register a credit card account and a financial account; presenting interfaces to select a "function identifier" (e.g., a payment function); receiving a payee identifier; presenting interfaces to select a payment source from the registered set; receiving the payment amount; selecting the appropriate communication interface based on the payment source; and transmitting a real-time notification to the payee. (Compl. ¶84).
• The complaint does not explicitly reserve the right to assert dependent claims for this patent.

U.S. Patent No. 10,937,018 - Kit, System and Associated Method and Service for Providing a Platform to Prevent Fraudulent Financial Transactions

• Technology Synopsis: The patent discloses a system and method for registering and authenticating different payment methods within a mobile application. It involves storing payment methods, accessing them via security credentials, and communicating with financial entities to execute transactions and provide notifications. (Compl. ¶20). The claimed system architecture is substantially similar to that of the ’296 Patent.
• Asserted Claims: At least Claim 1 (independent). (Compl. ¶108).
• Accused Features: The complaint accuses Samsung’s mobile payment and authentication platform, including Samsung Wallet, Samsung Pay, and associated services. (Compl. ¶49, 112-113).

U.S. Patent No. 11,087,307 - Kit, System and Associated Method and Service for Providing a Platform to Prevent Fraudulent Financial Transactions

• Technology Synopsis: The patent discloses a system and method for registering, storing, and using various payment methods within a mobile application. It describes communicating with financial institutions, initiating transactions via a function identifier, and providing real-time outcome notifications. (Compl. ¶22). The claimed system architecture is substantially similar to that of the ’296 Patent.
• Asserted Claims: At least Claim 1 (independent). (Compl. ¶136).
• Accused Features: The complaint accuses Samsung’s mobile payment and authentication platform, including Samsung Wallet, Samsung Pay, and associated services. (Compl. ¶49, 140-141).

U.S. Patent No. 12,014,347 - Kit, System and Associated Method and Service for Providing a Platform to Prevent Fraudulent Financial Transactions

• Technology Synopsis: This patent discloses a method and system for setting and using various security credentials on a mobile device to control access to a local application and its features. It describes authenticating access using one or more security credentials, such as biometrics. (Compl. ¶24, 42).
• Asserted Claims: At least Claim 6 (independent). (Compl. ¶164).
• Accused Features: The complaint accuses Samsung's platform, including Samsung Wallet, Samsung Pass, and Samsung Knox, of enabling users to set and use security credentials like PINs and fingerprints to access the local application and its services. (Compl. ¶49, 169).

III. The Accused Instrumentality

Product Identification

The "Accused System and Devices" collectively refer to Samsung's mobile payment and authentication platform and the hardware running it. This includes the Samsung Wallet, Samsung Pay, Samsung Pass, and Samsung Knox software and services, as well as Samsung's servers. The accused devices include a wide range of Samsung Galaxy smartphones (A, J, Note, S, XCover, Z, M series) and Galaxy smartwatches. (Compl. ¶49).

Functionality and Market Context

The Accused System provides a comprehensive digital wallet that allows users to store payment cards and other digital content. (Compl. ¶47). It facilitates mobile payments using a "tokenization" approach, where a device-specific token replaces sensitive card information during a transaction. (Compl. ¶61). The system integrates Samsung Pass for biometric authentication (e.g., fingerprint, iris scan) and Samsung Knox, which the complaint describes as an "end-to-end solution that provides security hardening from the hardware through the application layer." (Compl. ¶45). In June 2022, Samsung integrated its Pay and Pass applications into the unified "Samsung Wallet" application. (Compl. ¶48). The complaint presents a screenshot from a Samsung support page illustrating how Samsung Wallet serves as an integrated hub for payments, digital keys, and other assets. (Compl. Ex. 10; Compl. ¶48).

IV. Analysis of Infringement Allegations

’671 Patent Infringement Allegations

Claim Element (from Independent Claim 24)	Alleged Infringing Functionality	Complaint Citation	Patent Citation
a module embedded in a first user mobile station to enter financial information related to the financial transaction	Samsung Wallet allows users to register and store payment methods such as credit or bank card information.	¶60	col. 9:1-5
a module embedded in the first user mobile station to generate a code containing the financial information	When initiating a payment, Samsung Wallet uses tokenization to generate a specific number (a "token") that represents the sensitive financial information. A diagram in the complaint illustrates this token generation process. (Compl. Ex. 13).	¶61	col. 4:66-5:3
a module embedded in the first user mobile station to transfer the generated code to a second user mobile station by means of a directional movement on the first user mobile station...	The system transfers the generated code from an initiating device to a receiving device using "a variety of function calls."	¶62	col. 10:24-34
the first user mobile station further transmitting the generated code to a mobile transaction platform to confirm the executability of the financial transaction	The initiating Samsung device transmits the generated token to the appropriate network via Samsung's servers to authenticate the transaction request. The complaint provides a diagram of this "Network Token Mode." (Compl. Ex. 16).	¶63	col. 9:54-59
a module embedded in the second user mobile station automatically recognizing the transferred code; based on the recognized code, a module...determines whether to accept or decline...	Once authenticated, the receiving device accepts the payment request and executes the transaction, or declines it, which prevents execution.	¶64	col. 10:46-56
a module embedded in the second user mobile station to transmit a reverse code to the first user mobile station, to confirm whether the financial transaction was either accepted or declined	The receiving Samsung device sends a receipt, such as a "push notification with details of your transaction after each purchase," confirming the outcome to the initiating device.	¶65	col. 10:64-11:3

Identified Points of Contention

• Scope Questions: Claim 24 requires transferring a code "by means of a directional movement on the first user mobile station." The complaint alleges this is met by software "function calls" (Compl. ¶62). A potential point of contention is whether this claim language, which suggests a physical user action like a swipe, can be construed to cover purely software-based API calls that occur without a specific directional user input.
• Technical Questions: The claim recites a "reverse code" transmitted from the second station to the first to confirm the transaction's outcome. The complaint alleges this is met by a "push notification" (Compl. ¶65). It raises the question of whether a standard system notification constitutes the specific "reverse code" as contemplated by the patent.

’296 Patent Infringement Allegations

Claim Element (from Independent Claim 1)	Alleged Infringing Functionality	Complaint Citation	Patent Citation
memory storing program code...including a first communication interface configured to communicate with a first device associated with a credit card company...a second communication interface...with a second device associated with a financial institution...a third communication interface...with a third device associated with the third-party entity	Samsung Wallet communicates with credit card companies, financial institutions, and/or third-party entities using Samsung's servers to provide services. The complaint provides a communication flow diagram. (Compl. Ex. 15).	¶86	col. 3:66-4:14
providing a login interface requesting security credentials from a first member...before the first member can access the service	Users access Samsung Wallet and its services by providing security credentials such as a PIN or biometric authentication via Samsung Pass. A screenshot shows the biometric verification screen. (Compl. Ex. 12).	¶87	col. 4:15-19
...presenting one or more interfaces configured to assist the first member to register a set of one or more payment sources...the third-party entity being different than the financial institution and different than the credit card company	Users can register and store various payment methods (credit cards, debit cards, PayPal) and other items (loyalty cards, tickets) in the Samsung Wallet application.	¶88	col. 5:14-20
presenting one or more interfaces configured to enable the first member to select a function identifier...a particular function identifier...configured to navigate to a payment function...to request sending a payment amount to a payee account	A user can initiate a payment by navigating to a payment function within the Samsung Wallet application and entering payment details for a payee.	¶89	col. 5:26-31
selecting the first communication interface...and establishing a communication link...with the first device associated with the credit card company...when the particular payment source is the credit card account	When a credit card is used, Samsung's servers facilitate bilateral communications between the device and the credit card companies to authenticate and execute the payment.	¶90	col. 5:31-33
generating a notification indicating the electronic transfer to the payee account; and transmitting the notification over a communication network to a computing device associated with the second member in real time	Samsung Wallet generates and transmits a real-time notification to the payee, such as a push notification, indicating the completion of the financial transaction.	¶92	col. 6:4-7

Identified Points of Contention

• Scope Questions: Claim 1 recites a system architecture with three distinct communication interfaces connecting to three distinct types of entities: a credit card company, a financial institution, and a third-party entity. A key question for claim construction and infringement will be whether Samsung's integrated platform, which partners with entities that may play multiple roles (e.g., a bank that issues credit cards), can be mapped onto this specific tripartite structure.
• Technical Questions: The claim requires presenting interfaces to register both a credit card account and a separate financial account. The infringement theory will depend on demonstrating that the Accused System provides distinct registration pathways corresponding to these separate claimed entities.

V. Key Claim Terms for Construction

The Term: "directional movement on the first user mobile station" (’671 Patent, Claim 24)

• Context and Importance: This term is central to the infringement allegation for the ’671 patent. The complaint alleges that software "function calls" meet this limitation. The construction of this term—whether it requires a physical user gesture (like a swipe) or can be read more broadly to cover any logical transfer of data initiated from the device—will be critical.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The patent's use of "module...to transfer" could suggest a focus on the act of transferring data from the first station, with "directional movement" being one possible implementation rather than a strict requirement. The specification describes a "Swipay or Swipmail function" which may be used "by simply swiping a finger," suggesting this is an example, not a limitation. (’296 Patent, col. 4:55-58, which shares a specification with the '671 patent).
  • Evidence for a Narrower Interpretation: The plain language suggests a physical action on the device's screen. Embodiments showing a user physically swiping a finger on the screen to initiate a transfer could be argued to limit the scope of the claim to such physical actions.

The Term: "a third-party entity being different than the financial institution and different than the credit card company" (’296 Patent, Claim 1)

• Context and Importance: This phrase defines the specific three-party architecture of the claimed system. Infringement will depend on whether Samsung itself (as the platform provider) qualifies as the "third-party entity," and whether its financial partners can be neatly categorized into the other two distinct roles without overlap. Practitioners may focus on this term because it appears to be a deliberate structural limitation.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The specification may describe the "third-party entity" as the provider of the overall service platform, distinguishing it from the external financial entities that hold the user's funds (banks) or issue credit lines (credit card companies).
  • Evidence for a Narrower Interpretation: The consistent separation of these three entities throughout the claim suggests they must be legally and functionally distinct. If, for example, a single partner bank both issues the credit card and holds the financial account, it could raise the question of whether the three-entity limitation is met.

VI. Other Allegations

Indirect Infringement

The complaint alleges Samsung induces infringement by providing instructional materials, user guides, developer SDKs, and marketing videos that instruct and encourage customers to use the Accused Systems in an infringing manner. (Compl. ¶¶73-75, 100-102). It further alleges contributory infringement on the basis that the Accused Systems are specialized to perform the patented methods, are not staple articles of commerce, and have no substantial non-infringing uses. (Compl. ¶¶76, 103).

Willful Infringement

The complaint alleges that Samsung has had knowledge of its infringement "at the very least...as of the date of the filing of this Complaint." (Compl. ¶53). This allegation supports a claim for post-suit willfulness but does not plead facts establishing pre-suit knowledge.

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

• A core issue will be one of definitional scope: can patent claims rooted in the physical metaphor of a "directional movement" on a device be construed to cover the purely software-based API calls and data transfers that characterize modern mobile payment systems?
• A key evidentiary question will be one of architectural mapping: does Samsung’s integrated digital wallet platform, which partners with a complex ecosystem of financial entities, practice the specific tripartite architecture of a distinct "credit card company," "financial institution," and "third-party entity" as required by several of the asserted patents?
• A central question for the most recent patent will be one of functional specificity: does Samsung's system of providing a user with a choice of security options (e.g., PIN or fingerprint) to access an application meet the specific claim requirement of an authentication process that performs "only a single security level scan" when set to one mode, versus a "plurality of security level scans" when set to another?