Privatetag Innovations LLC v. Samsung Electronics Co Ltd

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: PrivateTag Innovations LLC (Texas)
  • Defendant: Samsung Electronics Co., Ltd. (Republic of Korea) & Samsung Electronics America, Inc. (New York)
  • Plaintiff’s Counsel: KENT & RISLEY LLC
• Case Identification: 2:25-cv-00732, E.D. Tex., 07/21/2025
• Venue Allegations: Venue is alleged to be proper for Samsung Electronics Co., Ltd. as a foreign corporation and for Samsung Electronics America, Inc. because it allegedly maintains a regular and established place of business in the district and has committed acts of infringement there.
• Core Dispute: Plaintiff alleges that Defendant’s Samsung Galaxy smartphones equipped with the Samsung Pay application infringe five patents related to secure RFID and mobile financial transaction technologies.
• Technical Context: The technology concerns systems and methods for securing wireless communications, such as those in mobile payment platforms, by encrypting data between a user's device and a remote server, with a reader acting as a conduit.
• Key Procedural History: The complaint notes that U.S. Patent No. 7,492,258 was granted a patent term adjustment of 358 days, and U.S. Patent No. 7,952,481 was granted a patent term adjustment of 9 days. No other procedural events are mentioned.

Case Timeline

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

U.S. Patent No. 7,492,258 - "Systems and Methods for RFID Security"

• Patent Identification: U.S. Patent No. 7492258, "Systems and Methods for RFID Security," issued February 17, 2009.

The Invention Explained

• Problem Addressed: The patent's background section describes the privacy and security risks associated with Radio Frequency Identification (RFID) tags, which can be surreptitiously read to obtain business intelligence, track individuals, or perform unauthorized financial transactions (’258 Patent, col. 1:39-48). It notes a conflict between the need for robust security and the desire to keep RFID tags low-cost (’258 Patent, col. 1:49-56).
• The Patented Solution: The invention proposes a system where an RFID tag encrypts its identification data before transmission (’258 Patent, Abstract). An RFID reader reads this encrypted data but does not decrypt it; instead, it acts as a simple conduit, forwarding the encrypted data along with separate user-provided authentication data to a secure backend server (’258 Patent, col. 2:1-15). The server, which shares the predetermined encryption scheme, decrypts the tag data and authenticates the reader's transmission, thereby securing the end-to-end transaction (’258 Patent, col. 7:51-67).
• Technical Importance: This architecture enhances security by centralizing decryption and authentication on a trusted server, allowing the tag and reader to remain relatively simple and low-cost while preventing malicious readers from interpreting intercepted tag data (’258 Patent, col. 7:51-56).

Key Claims at a Glance

• The complaint asserts independent claim 11 (Compl. ¶19).
• Claim 11 is a method claim comprising the following essential elements:
  • Encrypting identification data by an RFID tag according to a predetermined scheme.
  • Reading the encrypted data by an RFID reader.
  • Transmitting the encrypted data from the reader to a server.
  • Decrypting the encrypted data by the server according to the same scheme.
  • Performing, by the server, "synchronization contingency processing" when the decryption step results in a failure.
• The complaint does not explicitly reserve the right to assert dependent claims.

U.S. Patent No. 7,952,481 - "Systems and Methods for RFID Security"

• Patent Identification: U.S. Patent No. 7952481, "Systems and Methods for RFID Security," issued May 31, 2011.

The Invention Explained

• Problem Addressed: As a continuation of the '258 Patent, this patent addresses the same technical problem: the need for low-cost security features to prevent the unauthorized reading and use of data from RFID tags, particularly in financial contexts (’481 Patent, col. 1:52-col. 2:1).
• The Patented Solution: The solution is materially identical to that of the '258 Patent, describing a system where an RFID tag and a server communicate via an encrypted channel, using an RFID reader as an untrusted intermediary (’481 Patent, Abstract). The detailed description and figures, such as FIG. 2, illustrate the process of the tag encrypting data, the reader transmitting it, and the server decrypting and authenticating it (’481 Patent, col. 7:42-col. 8:34).
• Technical Importance: The invention provides a method to secure RFID-based systems without requiring expensive, complex hardware in the tags or readers, shifting the security burden to a centralized server (’481 Patent, col. 7:54-59).

Key Claims at a Glance

• The complaint asserts independent claim 1 (Compl. ¶25).
• Claim 1 is a method claim comprising the following essential elements:
  • At the RFID tag, receiving information from an RFID reader that enables encryption of identification data according to a predetermined encryption scheme.
  • At the RFID tag, encrypting the identification data using the received information.
  • At the RFID reader, receiving authentication data.
  • Sending the authentication data from the reader to the server.
  • At the server, performing authentication using the authentication data.
• The complaint does not explicitly reserve the right to assert dependent claims.

U.S. Patent No. 9,628,466 - "Systems and Methods for Performing Secure Financial Transactions"

• Patent Identification: U.S. Patent No. 9628466, "Systems and Methods for Performing Secure Financial Transactions," issued April 18, 2017.

The Invention Explained

• The Patented Solution: The patent, which shares a specification with the '258 and '481 patents, is directed to a system for making a purchase at a point-of-sale (POS) terminal. An electronic device encrypts financial information and sends it to the POS terminal, which acts as a conduit to a server (’466 Patent, col. 2:24-49). The server decrypts the data, identifies the user's bank account (which is not stored on the device itself), and authorizes the transaction (’466 Patent, Claim 1).

Key Claims at a Glance

• The complaint asserts independent claim 15 (Compl. ¶32).
• The accused features are the functionality of Samsung Galaxy smartphones using the Samsung Pay application to conduct financial transactions (Compl. ¶32).

U.S. Patent No. 10,164,959 - "Systems and Methods for Performing Secure Financial Transactions"

• Patent Identification: U.S. Patent No. 10164959, "Systems and Methods for Performing Secure Financial Transactions," issued December 25, 2018.

The Invention Explained

• The Patented Solution: This patent claims an electronic device for making a purchase. The device stores data related to financial information (but not an account number), and a processor is configured to encrypt this data and send it to a POS terminal for communication to a server (’959 Patent, Claim 10). A central feature is the requirement of user verification, such as comparing a received fingerprint with a stored fingerprint, before sending the encrypted data (’959 Patent, col. 15:5-16).

Key Claims at a Glance

• The complaint asserts independent claim 10 (Compl. ¶38).
• The accused features are Samsung Galaxy smartphones with Samsung Pay, specifically their use of biometric authentication (e.g., fingerprint scanning) to authorize a transaction (Compl. ¶38).

U.S. Patent No. 10,623,392 - "Systems and Methods for RFID Security"

• Patent Identification: U.S. Patent No. 10623392, "Systems and Methods for RFID Security," issued April 14, 2020.

The Invention Explained

• The Patented Solution: This patent claims a method where an RFID tag is first activated (e.g., via a switch or password), and only then determines an encryption key based on a communication it receives from a reader (’392 Patent, Claim 1). This two-step process of user-initiated activation followed by key determination is designed to prevent indiscriminate or unauthorized tag reading (’392 Patent, col. 13:58-67).

Key Claims at a Glance

• The complaint asserts independent claim 1 (Compl. ¶43).
• The accused features are the operation of Samsung Pay on Galaxy smartphones, which requires user action to initiate a payment session before any transaction data is transmitted (Compl. ¶43).

III. The Accused Instrumentality

• Product Identification: The accused instrumentalities are "Samsung Galaxy smartphones having the Samsung Pay application" (Compl. ¶19, 25, 32, 38, 43).
• Functionality and Market Context: The complaint alleges that the accused products provide users with the ability to conduct wireless financial transactions by communicating with point-of-sale terminals (Compl. ¶19). This functionality is alleged to embody the patented methods and systems for secure, encrypted data transmission. The complaint alleges that Defendant derives "substantial revenues from infringing acts" within the judicial district but does not provide further details on the products' market position or commercial importance (Compl. ¶6).

No probative visual evidence provided in complaint.

IV. Analysis of Infringement Allegations

The complaint references preliminary claim charts in Exhibits F through J, but these exhibits were not filed with the complaint. The infringement theories are therefore summarized below in prose based on the allegations in the main complaint body.

• ’258 Patent Infringement Allegations: The complaint alleges that the accused Samsung Pay system directly infringes at least claim 11 of the '258 Patent (Compl. ¶19). The narrative suggests that a Samsung phone (the "tag") encrypts payment data, which is read by a POS terminal (the "reader") and transmitted to a backend server for decryption and authorization. However, the complaint provides no specific factual allegations concerning the final limitation of claim 11, which requires the server to perform "synchronization contingency processing" when decryption fails (Compl. ¶19).
• ’481 Patent Infringement Allegations: The complaint alleges that the accused system directly infringes at least claim 1 of the '481 Patent (Compl. ¶25). The infringement theory is that a Samsung phone (the "tag") receives an initiating signal from a POS terminal (the "reader") that "enables encryption." The phone then encrypts data, and the user provides separate authentication (e.g., a fingerprint) that is sent to a server to authorize the transaction (Compl. ¶25). The complaint asserts that Defendant controls the performance of all steps, even those performed by third parties like the user or merchant (Compl. ¶26).
• Identified Points of Contention:
  • Technical Questions: A primary technical question for the '258 Patent will be what evidence exists that Defendant's servers perform the specific "synchronization contingency processing" required by claim 11. For the '481 Patent, a question is whether the initial communication from a POS terminal to a Samsung phone contains "information... that enables encryption," or if it is merely a generic initiation signal that does not contribute to the encryption process itself.
  • Scope Questions: The case may raise questions about whether the components of a modern mobile payment system (smartphone, POS terminal, backend server) map cleanly onto the claimed "RFID tag," "RFID reader," and "server" architecture from patents with a 2006 priority date.

V. Key Claim Terms for Construction

Term from '258 Patent, Claim 11: "synchronization contingency processing"

• Context and Importance: This is the final and most specific functional step of claim 11. Plaintiff's ability to prove infringement will likely depend on showing that Samsung's servers perform this exact type of error handling. Practitioners may focus on this term as it appears to be a significant potential point of non-infringement.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The specification describes this processing as occurring if decryption "fails or otherwise results in meaningless data" (’258 Patent, col. 9:11-13). This could support an argument that any server-side process to handle a decryption failure, such as re-requesting the data, qualifies.
  • Evidence for a Narrower Interpretation: The specification provides a specific example of this process: "the server 106 uses one or more of the previous (or next) pseudorandom numbers to perform the decryption" (’258 Patent, col. 9:22-26). This language suggests the term requires a specific attempt to re-synchronize keys, not just any generic error-handling routine.

Term from '481 Patent, Claim 1: "information from an RFID reader that enables encryption"

• Context and Importance: This limitation defines the initial interaction that triggers the claimed method. The definition is critical to determining whether the first step of the claim is met by the accused system's operation.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: A party could argue that any signal from the reader "enables" encryption because, without that initial communication, the tag would not begin the encryption and transmission process.
  • Evidence for a Narrower Interpretation: The specification describes embodiments where the reader provides specific data used in the encryption process, such as "timing information" or a "pointer" to an encryption key (’481 Patent, col. 10:38-41, col. 11:10-14). This suggests the "information" must be more than a generic "wake-up" call and must be substantively involved in the subsequent encryption step.

VI. Other Allegations

• Indirect Infringement: The complaint alleges induced infringement for the '481 and '959 patents. The allegations state that Defendant encourages infringement by selling the accused smartphones and distributing "product literature or videos inducing end users and others to use the accused instrumentalities" in an infringing manner (Compl. ¶27, ¶39).
• Willful Infringement: The complaint does not contain a specific count for willful infringement or allege pre-suit knowledge. It alleges that Defendant's inducement has been knowing and intentional "at least since receiving notice of its infringement by service of Plaintiff's complaint," which provides a basis for post-suit enhanced damages but not pre-suit willfulness (Compl. ¶27, ¶39).

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

This litigation will likely focus on the following central questions:

1. A core issue will be one of claim construction: Can functionally-oriented terms from the 2006-priority patents, such as "synchronization contingency processing" and "information... that enables encryption," be construed broadly enough to read on the specific software and hardware protocols of the modern Samsung Pay system? The resolution will likely depend on whether the court finds these terms are defined by the specific examples in the specification or are entitled to a wider scope.

2. A key challenge for the Plaintiff will be one of evidentiary proof: As the complaint does not provide the referenced claim charts or deep technical detail, discovery will be critical. The case will turn on whether Plaintiff can produce evidence showing that the internal workings of Samsung's servers and devices—particularly their error-handling routines and communication handshakes—perform the precise functions required by the asserted claims.