DCT

4:25-cv-00674

Near Field Electronics LLC v. Racetrac Inc

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I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 4:25-cv-00674, E.D. Tex., 06/26/2025
  • Venue Allegations: Plaintiff alleges venue is proper in the Eastern District of Texas because Defendant maintains a regular and established place of business in Frisco, Texas.
  • Core Dispute: Plaintiff alleges that Defendant’s credit card readers equipped with Near Field Communication (NFC) capabilities infringe five patents related to bus interface protocols, configurable circuit architecture, power management, and signal detection.
  • Technical Context: The patents concern foundational technologies for managing communication and power within integrated circuits, which are critical for modern point-of-sale terminals that must handle multiple communication standards efficiently.
  • Key Procedural History: The complaint notes that four of the five patents-in-suit have expired. Plaintiff explicitly limits its request for damages to a period beginning six years prior to the complaint's filing and ending on the respective expiration dates for these patents, precluding claims for ongoing royalties on the expired patents.

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 Issue Date
2004-05-25 U.S. Patent No. 6,742,071 Issue Date
2005-01-11 U.S. Patent No. 7,373,531 Priority Date
2005-10-25 U.S. Patent No. 6,959,350 Issue Date
2006-02-07 U.S. Patent No. 6,996,727 Issue Date
2008-05-13 U.S. Patent No. 7,373,531 Issue Date
2019-06-26 Alleged Damages Period Begins
2021-11-21 U.S. Patent No. 6,742,071 Expiration
2022-01-31 U.S. Patent No. 6,691,201 Expiration
2022-04-14 U.S. Patent No. 6,996,727 Expiration
2023-08-12 U.S. Patent No. 6,959,350 Expiration
2025-06-26 Complaint Filing Date

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

U.S. Patent No. 6,691,201 - "Dual Mode USB-PS/2 Device," issued February 10, 2004

The Invention Explained

  • Problem Addressed: The patent describes that, at the time of the invention, peripheral devices supporting multiple communication protocols (such as USB and PS/2) required separate sets of external components, which increased cost, consumed circuit board space, and complicated firmware design (Compl. ¶11; ’201 Patent, col. 1:40-50).
  • The Patented Solution: The invention is a "single chip solution" embodied in an integrated circuit that can automatically detect the signaling protocol of a connected bus and configure itself to operate in the correct mode (e.g., USB or PS/2) using a single, shared set of input/output pins. This eliminates the need for redundant external hardware and simplifies the device's overall design (’201 Patent, Abstract; col. 1:55-67).
  • Technical Importance: This technology was significant during the market transition from legacy (PS/2) to modern (USB) peripheral connections, as it allowed manufacturers to produce a single, cost-effective device that could interface with both standards (’201 Patent, col. 1:25-28).

Key Claims at a Glance

  • The complaint asserts independent method claim 14 (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 the detected protocol, where communication for each protocol occurs over the connected bus through a single set of pins.
  • The complaint reserves the right to amend its infringement contentions to include other 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 notes that conventional methods for implementing bus interfaces were either rigid and protocol-specific, which limited product marketability, or were user-programmable with fixed wait-states, which lacked the flexibility to handle complex, high-speed, or evolving communication protocols (’071 Patent, col. 1:16-32, 1:39-48).
  • The Patented Solution: The invention provides a flexible, real-time input/output (I/O) processor, described as a general-purpose interface (GPIF), that executes a small instruction set to generate custom communication waveforms and respond to external events. This architecture allows control outputs and data path decisions to be changed on every clock cycle, enabling implementation of varied and complex protocols without hardware redesign (’071 Patent, Abstract; col. 2:52-66; col. 4:41-47).
  • Technical Importance: This processor-based approach provided a reusable and adaptable hardware solution for creating interfaces to multiple industry-standard and customer-specific protocols, reducing design risk and time-to-market for complex electronic devices (’071 Patent, col. 2:52-59).

Key Claims at a Glance

  • The complaint asserts independent method claim 15 (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 an output control signal onto the external bus; and
    • (D) updating the current state to the next state.
  • The complaint reserves the right to assert its right to amend its analysis (Compl. ¶37).

U.S. Patent No. 6,959,350 - "Configurable USB Interface With Virtual Register Architecture," issued October 25, 2005

Technology Synopsis

This patent addresses the inflexibility of conventional USB interface controllers where endpoint configurations were hard-coded, requiring new and difficult-to-maintain HDL code for each design variant (Compl. ¶20; ’350 Patent, col. 1:19-28). The invention discloses a configurable bus interface controller that uses a high-level configuration package at compile time to automatically generate the necessary hardware circuitry (either configuration registers or hardcoded logic) to support different endpoint parameters like type, direction, and packet size (Compl. ¶19; ’350 Patent, Abstract).

Asserted Claims

The complaint asserts at least claim 10 (Compl. ¶41).

Accused Features

The functionality of the accused NFC readers to be configured for various communication endpoints is alleged to infringe this patent (Compl. ¶41, 43).

U.S. Patent No. 6,996,727 - "Power Supply for Universal Serial Bus Interface with Programmable Bus Pullup Resistor," issued February 7, 2006

Technology Synopsis

The patent addresses the problem of power consumption in USB devices that lacked a low-power standby mode (Compl. ¶25; ’727 Patent, col. 1:16-20). The invention provides a power supply architecture for a bus interface that operates in two modes: a standard mode with a regulated voltage, and a power-down standby mode where the main supply is off but a programmable, low-power pullup resistor remains active to maintain required signaling, thus significantly reducing current consumption during idle states (Compl. ¶24; ’727 Patent, col. 2:28-40).

Asserted Claims

The complaint asserts at least claim 18 (Compl. ¶46).

Accused Features

The power-saving and standby-mode functionalities of the accused NFC readers are alleged to infringe this patent (Compl. ¶46, 48).

U.S. Patent No. 7,373,531 - "Signal Detection Method...and Electronic Apparatus," issued May 13, 2008

Technology Synopsis

The patent is directed to detecting the operational state of an electronic component to enable power savings (Compl. ¶29; ’531 Patent, Abstract). The invention describes a method where an input signal is applied to the gates of series-connected transistors; a "through current" flows only when the input signal is actively transitioning (e.g., switching between high and low). The presence or absence of this through current is monitored to detect if the component is active or idle, which in turn can trigger a power reduction process (Compl. ¶28; ’531 Patent, col. 2:47-65).

Asserted Claims

The complaint asserts at least claim 2 (Compl. ¶51).

Accused Features

The signal detection and power consumption control mechanisms within the accused NFC readers are alleged to infringe this patent (Compl. ¶51, 58).

III. The Accused Instrumentality

Product Identification

The accused instrumentalities are identified as "credit card reader device[s] equipped with an NXP PN512 NFC Front-End" and any other of Defendant's NFC-capable credit card readers with similar functionality (Compl. ¶31, 36, 41, 46, 51).

Functionality and Market Context

The complaint alleges that Defendant RaceTrac uses these devices in the "regular course of its business operations for processing NFC payment transactions" (Compl. ¶33). The core accused component is the NXP PN512, an "NFC Front-End" chip, which suggests it is an integrated circuit that manages the physical layer communication for various NFC protocols used in contactless payments (Compl. ¶31). The allegations situate these devices as part of the point-of-sale infrastructure at Defendant's retail locations.
No probative visual evidence provided in complaint.

IV. Analysis of Infringement Allegations

The complaint references preliminary infringement analysis in Exhibits A-1 and B-1 for the ’201 and ’071 patents, respectively; however, these exhibits were not filed with the complaint (Compl. ¶32, 37). The narrative infringement theories are summarized below.

’201 Patent Infringement Allegations

The complaint alleges that when Defendant's accused NFC readers are used, they necessarily perform the method of claim 14 (Compl. ¶33). The theory appears to be that the NXP PN512 chip, in establishing a connection with an NFC-enabled card or mobile device, inherently "detect[s] a signaling protocol" from a plurality of possible NFC standards or modes and "configur[es]" its internal circuitry to communicate using that protocol over a "single set of pins" (i.e., the antenna connection) ('201 Patent, cl. 14).

’071 Patent Infringement Allegations

The complaint alleges that the accused devices perform the method of claim 15 during NFC payment transactions (Compl. ¶38). The infringement theory suggests that the accused NXP PN512 chip functions as a real-time I/O "processor" as contemplated by the patent. This implies the chip executes a programmed sequence of steps to manage the complex, timing-sensitive waveforms of NFC communication by generating control signals, "progressing to a next state" based on inputs from the external NFC device, driving outputs, and updating its internal state to maintain the protocol ('071 Patent, cl. 15).

Identified Points of Contention

  • Scope Questions: A central question for the ’201 Patent may be whether the negotiation of communication parameters within the family of NFC standards constitutes "automatically select[ing] one of said plurality of signaling protocols" in the manner contemplated by the patent, which is described in the context of distinct wired interfaces like USB and PS/2 ('201 Patent, cl. 1). For the ’071 Patent, a dispute may arise over whether the accused NFC chip operates as a programmable "processor" executing a "method" composed of discrete "states," or if it is a more hard-wired transceiver whose operation does not map onto the specific steps of claim 15.
  • Technical Questions: The complaint's allegations are made "upon information and belief" and identify the NXP PN512 component without providing public-facing technical evidence of its internal architecture (Compl. ¶31, 36). A key evidentiary question will be whether discovery reveals that the chip's actual operation performs the specific functions recited in the asserted claims.

V. Key Claim Terms for Construction

U.S. Patent No. 6,691,201 (Claim 14)

The Term

"detecting a signaling protocol of a bus"

Context and Importance

The plaintiff's infringement theory appears to equate the process of an NFC reader establishing a link with a target (e.g., a credit card) with "detecting a signaling protocol." The construction of this term will be critical to determining if the technology of the accused devices falls within the claim's scope.

Intrinsic Evidence for Interpretation

  • Evidence for a Broader Interpretation: The claims use the general phrase "plurality of signaling protocols" without being explicitly limited to USB and PS/2 ('201 Patent, col. 6:12-13). This could support a reading that covers detecting one of several modes or standards within the broader NFC ecosystem.
  • Evidence for a Narrower Interpretation: The patent’s background, summary, and detailed description are heavily focused on the specific problem of creating a dual-mode device for the distinct USB and PS/2 standards ('201 Patent, col. 1:11-28). A party could argue the term requires distinguishing between fundamentally different bus architectures, not merely negotiating parameters within a single communication family.

U.S. Patent No. 6,742,071 (Claim 15)

The Term

"progressing to a next state based on said current state ... and an input signal received from said external bus"

Context and Importance

This limitation defines the dynamic, responsive nature of the claimed method. Practitioners may focus on this term because infringement hinges on whether the accused device's operation can be characterized as a "processor" moving through a series of "states" in response to external signals, as opposed to a less flexible, hard-coded logic circuit.

Intrinsic Evidence for Interpretation

  • Evidence for a Broader Interpretation: The specification describes the invention as a "generic interface" for implementing "multiple industry-standard protocols" and even "customer-specific interfaces," suggesting the concept of a "state" should be interpreted flexibly to cover a wide range of programmed behaviors ('071 Patent, col. 2:55-58; col. 12:4-6).
  • Evidence for a Narrower Interpretation: The patent discloses specific embodiments using a "finite state machine," a "lookup table," and a "writable control store" with explicit instructions, such as "branch on signal" ('071 Patent, Fig. 6-7, col. 8:19-22). This could support a narrower construction requiring a programmable, instruction-driven architecture rather than any reactive hardware.

VI. Other Allegations

Indirect Infringement

Indirect infringement is alleged only for the ’531 Patent. The complaint alleges inducement under 35 U.S.C. § 271(b) based on Defendant providing the accused devices to its "partners, clients, customers, and end users" and providing "instruction materials, training, and services" that allegedly encourage infringing use (Compl. ¶55-56). Knowledge is alleged to exist from "at least the date Defendant received notice" via the complaint (Compl. ¶56).

Willful Infringement

Willfulness is alleged only for the ’531 Patent. The allegation is based on Defendant's continued infringement after having been put on notice of the patent by the filing of the complaint (Compl. ¶57).

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

  1. A central issue will be one of technological mapping: can the methods claimed in patents from the early 2000s, which were created to solve problems in the context of wired computer peripherals (e.g., USB, PS/2, parallel ports), be read to cover the operation of a modern NFC front-end integrated circuit designed for contactless, radio-frequency communication?

  2. A key evidentiary question will be whether the internal architecture and runtime operation of the accused NXP PN512 component, once revealed through discovery, in fact practice the specific steps of the asserted method claims. The complaint’s infringement theories are pleaded "on information and belief," placing a significant burden on discovery to substantiate them with technical proof.

  3. With four of the five asserted patents now expired, a primary focus of the case will be on the quantification of past damages. The dispute will be confined to the specific, limited infringement period alleged by the Plaintiff (from June 2019 to each patent's respective expiration date), which may intensify the focus on historical sales and usage data for the accused point-of-sale systems.