DCT

4:25-cv-00716

Near Field Electronics LLC v. Urban Outfitters Inc

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Key Events
Complaint

I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 4:25-cv-00716, E.D. Tex., 07/03/2025
  • Venue Allegations: Venue is based on Defendant maintaining regular and established places of business for its retail brands within the Eastern District of Texas.
  • Core Dispute: Plaintiff alleges that Defendant’s in-store credit card readers, which utilize Near-Field Communication (NFC) technology, infringe five patents related to integrated circuit design for bus interface protocols, power management, and signal detection.
  • Technical Context: The patents address foundational technologies for enabling integrated circuits to flexibly interface with multiple communication standards and manage power consumption, technologies which are fundamental to modern System-on-Chip (SoC) designs.
  • Key Procedural History: Four of the five asserted patents have expired. For these patents ('201', '071', '350', '727'), Plaintiff seeks damages only for a specific period of past infringement, beginning July 3, 2019, and ending on each patent’s respective expiration date. The complaint alleges willful infringement and inducement only for the single unexpired patent ('531'), with knowledge predicated on the filing of the complaint itself.

Case Timeline

Date Event
2000-06-21 '201 Patent Priority Date
2000-07-25 '071 Patent Priority Date
2000-08-28 '727 Patent Priority Date
2002-06-28 '350 Patent Priority Date
2004-02-10 '201 Patent Issued
2004-05-25 '071 Patent Issued
2005-01-11 '531 Patent Priority Date
2005-10-25 '350 Patent Issued
2006-02-07 '727 Patent Issued
2008-05-13 '531 Patent Issued
2019-07-03 Alleged Infringement Period Begins
2021-11-21 '071 Patent Expires
2022-01-31 '201 Patent Expires
2022-04-14 '727 Patent Expires
2023-08-12 '350 Patent Expires
2025-07-03 Complaint Filed

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 invention, supporting multiple communication protocols (like USB and PS/2) on a peripheral device required costly external components, complex firmware, and dedicated I/O pins on the micro-controller, which increased board space and could compromise performance (Compl. ¶11; ’201 Patent, col. 1:28-49).
  • The Patented Solution: The invention provides a single integrated circuit that can automatically detect the signaling protocol of a connected bus (e.g., USB or PS/2) and configure itself to communicate using that protocol, all through a single shared set of I/O pins ('201 Patent, Abstract; col. 2:51-65). This integration eliminates the need for many external components and simplifies the required firmware (Compl. ¶12; ’201 Patent, col. 1:50-2:8).
  • Technical Importance: This approach reduced the cost, size, and complexity of peripheral devices like computer mice that needed to support multiple interface standards to maximize connectivity (Compl. ¶12; ’201 Patent, col. 5:57-6:4).

Key Claims at a Glance

  • The complaint asserts independent claim 14 (Compl. ¶31).
  • Claim 14 is a method for automatically selecting a signaling protocol for communication, comprising the steps of:
    • (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 said detected signaling protocol, where each protocol operates over the bus through a single set of pins.
  • The complaint reserves the right to assert 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 protocol-specific, limiting marketability, or user-programmable in a way that was inflexible and difficult for implementing complex signaling ('071 Patent, col. 1:13-48). Traditional microprocessor-based I/O systems were often too slow, requiring many clock cycles to make decisions and change outputs (Compl. ¶16).
  • The Patented Solution: The invention describes a specialized, real-time input/output (I/O) processor, referred to as a general-purpose interface (GPIF), that acts as a master device to control an external bus ('071 Patent, col. 4:1-16; Compl. ¶15). This processor uses a limited instruction set to generate complex, interface-specific waveforms and can make data path decisions and change control outputs on every clock cycle, enabling higher-speed operation than conventional systems ('071 Patent, col. 6:4-9; Compl. ¶16).
  • Technical Importance: The technology provided a flexible and high-performance "master logic" system that could be programmed to interface with numerous and evolving industry-standard protocols without requiring new hardware designs for each one (Compl. ¶16; '071 Patent, col. 1:53-67).

Key Claims at a Glance

  • The complaint asserts independent claim 15 (Compl. ¶36).
  • Claim 15 is a method for providing an interface to an external bus, comprising the steps of:
    • (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 the external bus;
    • (C) driving at least one output control signal onto the external bus; and
    • (D) updating the current state to the next state.
  • The complaint reserves the right to assert other claims (Compl. ¶37).

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

  • Technology Synopsis: The patent addresses the problem of hard-coded USB endpoint configurations, which required writing and maintaining separate, error-prone hardware description language (HDL) code for each version of an interface controller (Compl. ¶20; ’350 Patent, col. 1:19-33). The invention provides a configurable bus interface controller that uses an HDL-based configuration package to flexibly generate circuitry for different USB endpoint configurations without requiring new HDL code for each endpoint (Compl. ¶¶19, 21).
  • Asserted Claims: Independent claim 10 (Compl. ¶41).
  • Accused Features: The complaint alleges that credit card readers equipped with the NXP PN512 NFC Front-End directly infringe by performing the patented method (Compl. ¶41).

Multi-Patent Capsule: 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 need for power savings in USB devices. Conventional devices at the time provided a constant voltage supply with no low-power mode (Compl. ¶25; ’727 Patent, col. 1:16-20). The invention describes a power supply architecture with two modes: a standard mode and a power-down (standby) mode that reduces power consumption while using a low-power programmable resistor to maintain the necessary pull-up function for signaling (Compl. ¶¶24-25; ’727 Patent, col. 2:30-41).
  • Asserted Claims: Independent claim 18 (Compl. ¶46).
  • Accused Features: The complaint alleges that credit card readers equipped with the NXP PN512 NFC Front-End directly infringe by performing the patented method (Compl. ¶46).

Multi-Patent Capsule: U.S. Patent No. 7,373,531 - "Signal Detection Method, Frequency Detection Method, Power Consumption Control Method...", issued May 13, 2008

  • Technology Synopsis: The patent is directed to methods and devices for detecting the state of an electrical signal (e.g., presence, absence, frequency) by monitoring the "through current" that flows in a circuit when a signal is applied to the gates of connected transistors (Compl. ¶28; ’531 Patent, col. 2:47-3:41). This detection can then be used to trigger a power reduction process, thereby reducing the overall power consumption of an electronic apparatus (Compl. ¶29).
  • Asserted Claims: Independent claim 2 (Compl. ¶51).
  • Accused Features: The complaint alleges that credit card readers equipped with the NXP PN512 NFC Front-End directly infringe, and that Defendant induces infringement and willfully infringes (Compl. ¶¶51, 55, 57).

III. The Accused Instrumentality

Product Identification

  • The accused instrumentalities are credit card reader devices used in Defendant's retail stores, which are equipped with an "NXP PN512 NFC Front-End" or other front-end components with similar NFC functionality (Compl. ¶31).

Functionality and Market Context

  • The relevant functionality of the accused products is their ability to process NFC payment transactions at the point of sale (Compl. ¶33). The complaint identifies a specific third-party component, the NXP PN512, as the core infringing technology within these devices. The complaint alleges these devices are used in the regular course of Defendant's business operations across its Urban Outfitters, Anthropologie, and Free People retail stores (Compl. ¶¶3, 33). No probative visual evidence provided in complaint.

IV. Analysis of Infringement Allegations

The complaint references preliminary infringement analysis in Exhibits A-1 through E-1, but these exhibits were not filed with the court. The narrative infringement theory is summarized below.

  • ’201 Patent Infringement Allegations: The complaint alleges that when Defendant's credit card readers are used to process NFC payments, they perform the method of claim 14 (Compl. ¶33). The core allegation is that the NXP PN512 chip within the readers practices the claimed method of automatically detecting and selecting a communication protocol ('201 Patent, Claim 14). The complaint does not specify which protocols are being selected between or how the detection occurs.
  • ’071 Patent Infringement Allegations: The complaint alleges that the accused credit card readers, when used for NFC transactions, perform the method of claim 15 (Compl. ¶38). This implies that the NXP PN512 chip within the readers acts as a master I/O processor, generating control signals and progressing through states on a clock-cycle basis to manage communication with an external device (i.e., the NFC-enabled card or phone) ('071 Patent, Claim 15).
  • Identified Points of Contention:
    • Scope Questions: A central question will be whether the scope of patent claims, drafted in the context of wired protocols like USB and PS/2, can be construed to cover the distinct technology of wireless NFC communication. For the '201 patent, this raises the question of whether the term "signaling protocol of a connected bus" fairly reads on the protocols involved in an NFC transaction. For the '071 patent, it raises the question of whether the radio-frequency field generation and modulation in NFC constitutes "driving at least one output control signal... onto said external bus."
    • Technical Questions: The complaint's theory rests on the functionality of the NXP PN512 chip. A key technical question will be whether Plaintiff can produce evidence that the actual operation of this specific chip performs every step of the asserted method claims. For example, for claim 14 of the '201 patent, what evidence demonstrates that the chip "detect[s] a signaling protocol" and then "configur[es]" itself, as opposed to being permanently configured for NFC operation?

V. Key Claim Terms for Construction

  • Term from '201 Patent, Claim 14: "a plurality of signaling protocols"

    • Context and Importance: The infringement allegation requires this term to be broad enough to encompass NFC technology. Practitioners may focus on this term because its construction could be dispositive; if limited to the protocols disclosed in the patent, the infringement case may fail.
    • Intrinsic Evidence for Interpretation:
      • Evidence for a Broader Interpretation: The claim uses the general term "signaling protocols" without explicit limitation. Plaintiff may argue this generic language was intended to cover any set of two or more protocols.
      • Evidence for a Narrower Interpretation: The specification's background, summary, and detailed description repeatedly and exclusively use USB and PS/2 as the exemplary protocols ('201 Patent, col. 1:18-25, col. 2:27-28, col. 3:7-9). Defendant may argue the invention is limited to solving the specific problem of integrating those two particular legacy standards.

  • Term from '071 Patent, Claim 15: "external bus"

    • Context and Importance: This term's construction is critical because the accused interaction is a wireless NFC transaction, not a physical, wired bus connection as typically understood. The viability of the infringement theory depends on whether the wireless communication link can be considered an "external bus."
    • Intrinsic Evidence for Interpretation:
      • Evidence for a Broader Interpretation: The patent does not explicitly define "bus" or limit it to a physical set of wires. Plaintiff may argue that any channel for data transfer between two devices, including a wireless one, meets the functional meaning of a bus.
      • Evidence for a Narrower Interpretation: The specification consistently discusses interfaces in the context of physical connections, such as the "P1284 printer parallel bus, EPP interface, ATAPI interface, ISA interface" ('071 Patent, col. 1:19-21) and generating signals on pins ('071 Patent, col. 2:42-45). Defendant may argue this context limits the term "bus" to a tangible, wired medium.

VI. Other Allegations

  • Indirect Infringement: The complaint alleges induced infringement under 35 U.S.C. § 271(b) only for the '531 patent (Compl. ¶55). The alleged acts of inducement include advertising, distributing, and providing instruction materials and training for the accused credit card readers (Compl. ¶56). The complaint alleges the requisite intent exists because Defendant gained knowledge of the '531 patent as of the filing of the lawsuit (Compl. ¶56).
  • Willful Infringement: Willfulness is alleged only for infringement of the '531 patent (Compl. ¶57). The basis for this allegation is Defendant's continuation of the accused activities after receiving notice of infringement via the filing and service of the complaint (Compl. ¶57).

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

  1. A core issue will be one of definitional scope: Can terms like "signaling protocol" and "external bus," which are rooted in the early 2000s technological context of wired interfaces like USB and PS/2, be construed broadly enough to encompass the fundamentally different technology of wireless Near-Field Communication (NFC)? The outcome of claim construction on these terms may be determinative.
  2. A key evidentiary question will be one of technical proof: The complaint's infringement theory relies entirely on the functionality of a single, off-the-shelf third-party component (the NXP PN512 chip). This places a significant burden on the Plaintiff to prove, through discovery, that the specific, detailed operations of this chip inside Defendant's products meet each and every limitation of the asserted method claims from five different patents.
  3. A critical legal question for the '531 patent will be the adequacy of willfulness and inducement allegations: Can Plaintiff sustain claims for willful and induced infringement where the sole basis for Defendant's alleged knowledge and intent is the filing of the complaint itself? Courts are often skeptical of such post-suit allegations, which will require Plaintiff to show Defendant acted with specific intent or willful blindness after becoming aware of the patent.