DCT

4:25-cv-00913

Near Field Electronics LLC v. Spencer Gifts LLC

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I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 4:25-cv-00913, E.D. Tex., 08/20/2025
  • Venue Allegations: Plaintiff alleges venue is proper because Defendant maintains a regular and established place of business within the Eastern District of Texas and sells or offers to sell the accused products in the district.
  • Core Dispute: Plaintiff alleges that Defendant’s Near Field Communication (NFC)-capable credit card readers infringe five patents related to integrated circuit architecture, multi-protocol communication, interface configuration, and power management.
  • Technical Context: The patents-in-suit generally relate to technologies developed to make integrated circuits for computer peripherals more flexible, cost-effective, and power-efficient, particularly in an era of evolving communication standards.
  • Key Procedural History: The complaint notes that four of the five asserted patents have expired. For these patents, Plaintiff asserts liability only for a past damages period, beginning August 20, 2019, and ending on each patent’s respective expiration date. No other significant procedural events are mentioned.

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 Issued
2004-05-25 U.S. Patent No. 6,742,071 Issued
2005-01-11 U.S. Patent No. 7,373,531 Priority Date
2005-10-25 U.S. Patent No. 6,959,350 Issued
2006-02-07 U.S. Patent No. 6,996,727 Issued
2008-05-13 U.S. Patent No. 7,373,531 Issued
2019-08-20 Alleged Infringement Period Begins for all Patents
2021-11-21 U.S. Patent No. 6,742,071 Expired
2022-01-31 U.S. Patent No. 6,691,201 Expired
2022-04-14 U.S. Patent No. 6,996,727 Expired
2023-08-12 U.S. Patent No. 6,959,350 Expired
2025-08-20 Complaint Filed

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

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

The Invention Explained

  • Problem Addressed: The patent’s background describes that peripheral devices supporting multiple signaling protocols, such as both Universal Serial Bus (USB) and PS/2, conventionally required separate sets of external components, dedicated I/O pins on the micro-controller, and complex firmware to manage the different protocols, leading to higher costs, larger circuit board sizes, and compromised performance (Compl. ¶11; ’201 Patent, col. 1:29-50).
  • The Patented Solution: The invention is a single integrated circuit that automatically detects the signaling protocol of a connected bus (e.g., USB or PS/2) and configures itself to operate using that protocol through a single, shared set of I/O pins, thereby eliminating the need for redundant external components and simplifying the device design (’201 Patent, Abstract; col. 2:51-62).
  • Technical Importance: This "single chip solution" aimed to reduce the cost, complexity, and physical footprint of computer peripherals designed to be compatible with both legacy and modern connection standards (Compl. ¶12).

Key Claims at a Glance

  • The complaint asserts independent method claim 14 (’201 Patent, col. 6:64-7:10; Compl. ¶31).
  • Claim 14 requires the essential steps of:
    • Detecting a signaling protocol of a bus connected to an integrated circuit.
    • Configuring the integrated circuit to communicate in the detected protocol.
    • Operating over the connected bus through a single set of pins for each of the selected protocols.
  • The complaint generally reserves the right to amend its infringement contentions, which may include the assertion of additional claims (Compl. ¶32).

U.S. Patent No. 6,742,071 - "Real-time I/O Processor Used to Implement Bus Interface Protocols"

The Invention Explained

  • Problem Addressed: The patent’s background explains that conventional methods for implementing bus interfaces were either protocol-specific, which limited flexibility and market relevance, or user-programmable with fixed wait-states, which could not implement complex signaling required by evolving standards (’071 Patent, col. 1:12-48).
  • The Patented Solution: The patent describes a real-time I/O processor, referred to as a programmable general-purpose interface (GPIF), that uses a limited instruction set to generate interface-specific waveforms and respond to external events. This allows the processor's control outputs and data path decisions to be changed on every clock cycle, replacing rigid, protocol-specific hardware with a flexible, programmable architecture (Compl. ¶15-16; ’071 Patent, Abstract; col. 4:46-55).
  • Technical Importance: This solution enabled higher-speed operation and allowed a single chip architecture to be adapted to multiple and evolving bus protocols, reducing redesign costs and time-to-market (Compl. ¶16).

Key Claims at a Glance

  • The complaint asserts independent method claim 15 (’071 Patent, col. 12:64-13:14; Compl. ¶36).
  • Claim 15 requires the essential steps of:
    • Generating control signals in response to a processor's current state.
    • Progressing to a next state based on the current state, an internal control signal, and an external input signal.
    • Driving an output control signal onto the external bus.
    • Updating the current state to the next state.
  • The complaint generally reserves the right to amend its infringement contentions (Compl. ¶37).

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

  • Technology Synopsis: The patent addresses the inefficiency of using hard-coded endpoint configurations in USB interface controllers, which required creating and maintaining different Hardware Description Language (HDL) code for each version of the controller (Compl. ¶20). The invention provides a configurable bus interface controller that uses a single HDL-based configuration package to generate the necessary configuration circuitry, allowing the controller to be flexibly configured for different endpoints without requiring separate HDL code for each one (Compl. ¶19, ¶21).
  • Asserted Claims: Independent method claim 10 is asserted (Compl. ¶41).
  • Accused Features: The complaint accuses credit card readers equipped with the NXP PN512 NFC Front-End or similar components of infringement (Compl. ¶41).

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

  • Technology Synopsis: The patent addresses the lack of a low-power mode in conventional USB interface power supplies, which provided only a constant voltage (Compl. ¶25). The invention discloses a power supply architecture with a standard operating mode and a power-down standby mode that significantly reduces current consumption by using a low-power programmable resistor to maintain the required bus pullup function during idle states (Compl. ¶24).
  • Asserted Claims: Independent method claim 18 is asserted (Compl. ¶46).
  • Accused Features: The complaint accuses credit card readers equipped with the NXP PN512 NFC Front-End or similar components of infringement (Compl. ¶46).

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

  • Technology Synopsis: The patent describes a method for detecting the operational state of a circuit component by monitoring the "through current" flowing in a circuit (Compl. ¶28). By applying a signal to transistor gates, the device detects the presence, absence, or state of the signal based on whether current flows, enabling it to reduce power consumption by stopping or reducing the power supply when the monitored component is not operating (Compl. ¶28-29).
  • Asserted Claims: Independent claim 2 is asserted (Compl. ¶51).
  • Accused Features: The complaint accuses credit card readers equipped with the NXP PN512 NFC Front-End or similar components of infringement (Compl. ¶51).

III. The Accused Instrumentality

Product Identification

The complaint identifies the "Accused Instrumentalities" as NFC-capable credit card reader devices equipped with an NXP PN512 NFC Front-End, or other NFC front-end components with similar functionality (Compl. ¶31).

Functionality and Market Context

The complaint alleges that Defendant uses these devices in the regular course of its business operations for processing NFC payment transactions (Compl. ¶33). The core functionality is enabling contactless payments. Defendant is alleged to sell, offer for sale, and/or use these products and services throughout the United States, including within the Eastern District of Texas (Compl. ¶3, ¶7). No probative visual evidence provided in complaint.

IV. Analysis of Infringement Allegations

The complaint references claim chart exhibits (Exhibits A-1, B-1, C-1, D-1) that are not attached to the filed document (Compl. ¶32, ¶37, ¶42, ¶47, ¶52). The following summarizes the narrative infringement theory provided in the complaint.

  • ’201 Patent Infringement Allegations
    • The complaint alleges that when Defendant's credit card readers are used for their intended purpose of processing NFC payments, they necessarily perform each step of the method claimed in claim 14 (Compl. ¶33). The narrative suggests the device detects an NFC protocol and configures its internal circuitry to communicate via that protocol using a shared set of hardware pins.
  • ’071 Patent Infringement Allegations
    • The complaint alleges that the use of the Accused Instrumentalities for processing NFC payments causes them to perform the method steps of claim 15 (Compl. ¶38). This theory implies that the device’s I/O processor generates control signals, transitions between internal states based on external signals from an NFC card or device, drives signals onto the communication bus, and updates its state as required by the claim.
  • Identified Points of Contention:
    • Scope Questions: A primary question may be whether the term "signaling protocol" in the ’201 Patent, which is described in the context of wired USB and PS/2 standards, can be construed to read on the detection and operation of a wireless NFC protocol. Similarly, it raises the question of whether the "real-time I/O processor" of the ’071 Patent reads on the architecture of the accused NFC front-end components.
    • Technical Questions: For the ’201 Patent, a question is what evidence shows that the accused NXP PN512 is capable of operating in a "plurality of signaling protocols" and "automatically selects" one, as opposed to being a dedicated, single-protocol device. For the ’071 Patent, the analysis may focus on whether the internal state machine of the accused component executes the specific sequence of generating signals, progressing state based on external input, and updating state as recited in claim 15.

V. Key Claim Terms for Construction

U.S. Patent No. 6,691,201 – Claim 14

  • The Term: "detecting a signaling protocol"
  • Context and Importance: The interpretation of this term is central to whether the patent's scope extends beyond the disclosed USB/PS/2 context to cover the accused NFC technology. Practitioners may focus on this term because the Defendant will likely argue for a narrow construction limited to the patent's specific embodiments, while the Plaintiff will advocate for a broader meaning covering any form of protocol detection.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The claim itself uses the general phrase "a plurality of signaling protocols" without express limitation to any specific standards (’201 Patent, col. 6:13-14).
    • Evidence for a Narrower Interpretation: The patent's title, abstract, and detailed description exclusively discuss the USB and PS/2 protocols, which may be used to argue that the invention is confined to that specific technological problem (’201 Patent, Title; Abstract; col. 1:21-28).

U.S. Patent No. 6,742,071 – Claim 15

  • The Term: "progressing to a next state based on...an input signal received from said external bus"
  • Context and Importance: This term defines a specific logical condition for the processor's operation. Infringement will depend on whether the accused NXP PN512's state machine transitions are directly and causally linked to external bus signals in the manner required by the claim.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The specification describes the invention as a "generic interface" capable of implementing "multiple industry-standard protocols," suggesting the claimed process is not limited to a single context (’071 Patent, col. 2:39-40, col. 2:57).
    • Evidence for a Narrower Interpretation: The specification provides detailed diagrams of specific logic and state machine implementations (e.g., ’071 Patent, Fig. 6). A defendant may argue that the claim term should be construed in light of these specific disclosed structures and their operational logic.

VI. Other Allegations

  • Indirect Infringement: The complaint alleges induced infringement under 35 U.S.C. § 271(b) for the ’531 patent only. The allegations are based on Defendant advertising and distributing the accused products and providing "instruction materials, training, and services" that allegedly encourage infringement by partners, customers, and end users (Compl. ¶55-56). Knowledge is alleged as of the date of notice of the complaint (Compl. ¶56).
  • Willful Infringement: Willfulness is alleged for the ’531 patent only. The allegation is based on alleged knowledge of the patent and infringement "since the filing of this Complaint," indicating a theory of post-suit willfulness (Compl. ¶57).

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

  • A core issue will be one of definitional scope: can claims drafted in the context of wired computer peripheral interfaces (e.g., USB, PS/2, EIDE) be construed to cover the distinct technology of wireless, contactless NFC payment systems, or has the technology evolved beyond the patents' teachings?
  • A key evidentiary question will be one of operational correspondence: does the accused NXP PN512 front-end component, in its actual operation during an NFC transaction, perform the specific, ordered steps of the asserted method claims, or is there a fundamental mismatch in the technical process?
  • With four of the five patents-in-suit having expired, a central focus for those patents will be on quantifying historical damages. The dispute will likely involve detailed economic analysis to determine a reasonable royalty for a limited, past period of alleged infringement on technologies that are now in the public domain.