DCT
1:23-cv-01114
DH Intl Ltd v. Apple Inc
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: DH International Ltd. (Canada)
- Defendant: Apple Inc. (California)
- Plaintiff’s Counsel: Munck Wilson Mandala, LLP; AddyHart P.C.
- Case Identification: 1:23-cv-01114, W.D. Tex., 09/15/2023
- Venue Allegations: Venue is alleged to be proper in the Western District of Texas because Defendant Apple Inc. maintains multiple "regular and established places of business" in Austin, Texas.
- Core Dispute: Plaintiff alleges that Defendant’s Apple Pay service, as implemented on its mobile devices, infringes two patents related to a system where a single, "invariable" user action triggers one of two different data operations, with the specific operation determined by the device's proximity to an external signal source.
- Technical Context: The technology addresses user interface simplification for mobile payments, allowing a device to automatically select a transaction type (e.g., in-person NFC payment vs. an online or in-app payment) based on its operational context.
- Key Procedural History: The complaint alleges that Defendant had pre-suit knowledge of the patents-in-suit as of July 26, 2017, based on communications between a representative for the patents' former owner and a representative for Apple. This allegation may form the basis for a claim of willful infringement.
Case Timeline
| Date | Event |
|---|---|
| 2003-04-14 | Earliest Priority Date ('333 & '294 Patents) |
| 2009-12-08 | U.S. Patent No. 7,628,333 Issues |
| 2015-05-05 | U.S. Patent No. 9,022,294 Issues |
| 2017-07-26 | Alleged Pre-Suit Notice to Apple Regarding Patents |
| 2023-09-15 | Complaint Filed |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 7,628,333 - "Portable Electronic Device Capable of Alternative Data Conveyance Operations Responsive to an Invariable Activation Command," Issued Dec. 8, 2009
The Invention Explained:
- Problem Addressed: The patent describes conventional portable electronic devices, such as smart cards, as often requiring multiple controls to perform different functions, which can complicate the user experience ('333 Patent, col. 1:43-46).
- The Patented Solution: The invention proposes a device where a single, "invariable activation command" (e.g., a button press) can trigger two different outcomes. The outcome is determined by a "switching element" that changes state based on whether the device has received an external "activation cue" (e.g., a signal from a point-of-sale terminal). If the cue is present, the command initiates a data exchange with the external device; if the cue is absent, the command initiates an internal function, such as displaying information on the device's screen ('333 Patent, Abstract; col. 2:5-14).
- Technical Importance: This approach aims to simplify the user interaction model by making a single physical action (the command) context-aware, thereby reducing the need for the user to manually select an operating mode ('333 Patent, col. 7:13-19).
Key Claims at a Glance:
- The complaint asserts independent claim 1 and dependent claims 2, 4, 5, 6, 11, and 13 (Compl. ¶46).
- Independent Claim 1 recites a portable electronic device with the following essential elements:
- An electronic circuit.
- A control device that issues an "invariable activation command" when triggered.
- A user interface device.
- A data transceiver for exchanging data with an external device and for receiving an "activation cue" from an external source.
- A "data conveyance switching element" that is in an "activated state" when a cue is received and an "inactive state" when no cue is received.
- Wherein triggering the control device causes (a) a data exchange with the external device if the switch is in the activated state, or (b) data to be conveyed to the user interface device if the switch is in the inactive state.
U.S. Patent No. 9,022,294 - "Portable Electronic Device and Method for Alternative Data Conveyance Operations Responsive to an Invariable Activation Command," Issued May 5, 2015
The Invention Explained:
- Problem Addressed: Similar to its parent, the '294 Patent addresses the need for a simplified, universal, and secure way to make mobile payments without requiring complex user inputs ('294 Patent, col. 1:15-20, 48-52).
- The Patented Solution: This patent refines the concept for a "cellular phone" specifically. It requires two distinct data transceivers: a first for one communication link (e.g., short-range NFC) and a second for another (e.g., cellular or Wi-Fi). The "invariable activation command" causes the device's switching element to initiate a data conveyance operation over the first transceiver if an external cue is detected, and over the second transceiver if no cue is detected ('294 Patent, col. 4:3-40).
- Technical Importance: The invention provides a framework for a mobile phone to automatically switch between different communication networks (e.g., a proximity-based network for in-store payments and a wide-area network for online payments) using the same simple user trigger ('294 Patent, col. 15:1-24).
Key Claims at a Glance:
- The complaint asserts independent claim 1 and dependent claims 2–4, 8–10, 12, and 16–18 (Compl. ¶70).
- Independent Claim 1 recites a cellular phone with the following essential elements:
- An electronic circuit.
- A user-triggered control device that issues an "invariable activation command."
- A "first data transceiver" for a first communication link.
- A "second data transceiver" for a second, distinct communication link.
- A "cue receiver" for receiving an external "activation cue."
- A "data conveyance switching element" assigned a "first state" when a cue is received and a "second state" when no cue is received.
- Wherein triggering the control device initiates (a) a "first data conveyance operation" via the first transceiver if the switch is in the first state, or (b) a "second data conveyance operation" via the second transceiver if the switch is in the second state.
III. The Accused Instrumentality
- Product Identification: The accused products are Apple's "Apple Pay" software and services, and the "Apple mobile devices" on which they operate, including various models of the iPhone, Apple Watch, Mac, and iPad (Compl. ¶¶29, 30).
- Functionality and Market Context:
- The complaint describes Apple Pay as a digital wallet service that allows users to make payments in stores, in apps, and online (Compl. ¶27).
- The core accused functionality involves a user double-clicking the side button on an Apple device. The complaint alleges this action constitutes the "invariable activation command" (Compl. ¶38, ¶61).
- The system's behavior allegedly changes based on an "activation cue": if an NFC-enabled point-of-sale (POS) terminal is nearby, its signal acts as the cue. In this "activated state," the double-click initiates an NFC transaction (Compl. ¶¶41, 44). If no NFC signal is detected (the "inactive state"), the same double-click allegedly initiates an "in-app or online transaction" or opens the Apple Pay application on the screen (Compl. ¶¶41, 45, 65).
- The complaint alleges Apple Pay is a significant service, "accepted at over 85 percent of retailers in the U.S." (Compl. ¶27).
IV. Analysis of Infringement Allegations
No probative visual evidence provided in complaint.
'333 Patent Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| a control device operatively linked to said electronic circuit, with an invariable activation command being issued when said control device is selectively triggered | Apple mobile devices include a control device, such as a side button, which, in combination with biometric verification, issues a command to initiate a transaction when triggered by a user double-click. | ¶38 | col. 6:5-13 |
| a data transceiver ... for receiving a selectively emitted activation cue from a source external to said portable electronic device | Apple mobile devices include an NFC chip (data transceiver) that receives a signal (activation cue) from an external POS system's NFC interface. | ¶40 | col. 6:63-66 |
| a data conveyance switching element ... being in an activated state upon an activation cue having been received ... and being in an inactive state when no activation cue was received | Apple Pay software acts as the switching element. It enters an "activated state (e.g., NFC transaction)" upon receiving a signal from a POS device, and is otherwise in an "inactive state (e.g., idle state)." | ¶41 | col. 6:4-18 |
| if said switching element is in said activated state, a data exchange will be initiated through the instrumentality of said data transceiver | When the device is in the NFC transaction state, the user's double-click initiates an NFC data exchange with the POS system. | ¶44 | col. 8:3-9 |
| if said switching element is in said inactive state, data will be conveyed from said electronic circuit to said user interface device for communicating information | When the device is in an idle state (no NFC cue), the user's double-click results in "opening the Apple Pay application" on the device's display to communicate information to the holder. | ¶45 | col. 8:10-14 |
- Identified Points of Contention:
- Scope Question: A key dispute may center on the "inactive state" limitation. The patent describes this state as resulting in "communicating information to the portable electronic device holder" (e.g., displaying a balance) ('333 Patent, col. 8:28-30). The complaint alleges this is met by "opening the Apple Pay application" (Compl. ¶45). The court may need to determine if launching an interactive application constitutes "conveying data...for communicating information" in the manner required by the claim.
- Technical Question: The complaint alleges the "invariable activation command" is a "combination of double-clicking the side button and face ID/passcode" (Compl. ¶38). A question arises as to whether this multi-step, conditional authentication process is "invariable" in the sense contemplated by the patent, which emphasizes a single, simple trigger that is the "same...notwithstanding" the context ('333 Patent, col. 7:36-41).
'294 Patent Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| a user-triggered control device ... issue an invariable activation command | Apple mobile devices' side button, when double-clicked by a user (in combination with biometric verification), issues a command to initiate a transaction. | ¶61 | col. 8:12-20 |
| a first data transceiver ... over a first communication link | Apple devices include NFC functionality for exchanging transaction data with a POS system interface over an NFC link. | ¶62 | col. 8:8-11 |
| a second data transceiver ... over a second communication link that is distinct from said first | Apple devices include cellular or Wi-Fi functionality for exchanging transaction data with a networked transaction server, a link distinct from NFC. | ¶63 | col. 8:12-17 |
| a data conveyance switching element ... assigned a first state upon an activation cue having been received... and being assigned a second state when no activation cue was received | Apple Pay software is the switching element. It is assigned a "first state (e.g., NFC transaction)" upon receiving an NFC signal and a "second state (e.g., online or in-app transaction)" when no such signal is received. | ¶65 | col. 8:21-29 |
| if said switching element is in said first state, a first data conveyance operation will be initiated through ... said first data transceiver | If in the NFC transaction state, the user's trigger initiates an NFC transaction. | ¶68 | col. 8:30-35 |
| if said switching element is in said second state, a second data conveyance operation will be initiated through ... said second data transceiver | If in the online/in-app state, the user's trigger initiates a transaction using cellular or Wi-Fi functionality. | ¶69 | col. 8:36-40 |
- Identified Points of Contention:
- Scope Question: Does the accused "second state" functionality—an "in-app or online transaction"—constitute a "data conveyance operation" initiated by the same invariable command as the first? A defense could argue that the double-click merely brings up the Wallet interface, and a separate user action (e.g., an on-screen tap) is required to initiate the online/in-app payment, breaking the causal link required by the claim.
- Technical Question: The complaint alleges the switching element is "Apple Pay software" (Compl. ¶65). The court will need to assess what evidence shows this software performs the specific function of being "assigned" one of two distinct states based solely on the presence or absence of the NFC "cue," and in turn triggering one of two different data conveyance operations via different transceivers from a single user command.
V. Key Claim Terms for Construction
The Term: "invariable activation command"
- Context and Importance: This term is the technological lynchpin of both patents. Its construction is critical because the infringement case depends on mapping Apple's user authentication sequence (e.g., double-click plus Face ID) to this limitation. Practitioners may focus on this term because its interpretation will define whether a multi-step or conditional user input can satisfy the "invariable" requirement.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The specification states that the command is invariable because "the portable electronic device holder will not be able to select to issue different activation commands," and the "same invariable activation command will thus be issued" regardless of the context ('333 Patent, col. 7:15-24). This may support an interpretation focused on the user's consistent initial physical action.
- Evidence for a Narrower Interpretation: The patent also states the command is issued when the control device is "triggered" and gives examples like a single button press ('333 Patent, col. 6:25-27). A defendant could argue this implies a single, discrete event, not a multi-part sequence like double-click followed by a separate biometric verification step.
The Term: "data conveyance switching element"
- Context and Importance: This term defines the core logic that enables the invention's context-aware functionality. Whether Apple's software architecture contains a component that meets this definition will be a central point of dispute.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The specification provides a flexible definition, stating the element "can be a physical structure, a virtual program, or both" and can be "a series of instructions programmed onto the microchip" ('333 Patent, col. 6:10-18). This supports the plaintiff's allegation that "Apple Pay software" can embody the element (Compl. ¶41).
- Evidence for a Narrower Interpretation: The patent figures depict the switching element as a discrete functional block within the I/O controller that "directs the data flow" ('333 Patent, Fig. 2, 44b; col. 4:28-30). This could support a narrower construction requiring a specific, identifiable software module whose primary function is to route data to one of two distinct paths based on a binary state.
VI. Other Allegations
- Indirect Infringement: The complaint does not provide sufficient detail for analysis of indirect infringement.
- Willful Infringement: The complaint alleges willful infringement based on both pre-suit and post-suit knowledge. Pre-suit knowledge is predicated on alleged communications on July 26, 2017, between Apple and the patents' prior owner, G. Holdings Inc. (Compl. ¶¶49, 73). Post-suit knowledge is based on the filing and service of the complaint itself (Compl. ¶¶48, 72).
VII. Analyst’s Conclusion: Key Questions for the Case
- A core issue will be one of definitional scope: can the term "invariable activation command," described in the patent as a single, consistent trigger, be construed to read on Apple's multi-step authentication process that combines a physical action (double-click) with a subsequent, conditional biometric verification?
- A second key issue will be one of functional mapping: does the accused system's logic, where an action without an external cue may simply launch an application for potential further user input, satisfy the claim requirement for initiating a distinct, second "data conveyance operation"? Specifically for the '333 patent, does "opening the Apple Pay application" meet the limitation of "conveying data...for communicating information"?
- An evidentiary question will be one of architectural equivalence: what evidence will the plaintiff present to demonstrate that Apple's software architecture contains a discrete "data conveyance switching element" that operates in the binary, cue-driven manner claimed by the patents, as opposed to a more generalized, multi-factor contextual awareness integrated into the operating system?