v. Pay As You Go, LLC

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Pay As You Go, LLC (Wyoming)
  • Defendant: Cloudera, Inc. (Delaware)
  • Plaintiff’s Counsel: Garteiser Honea, PLLC
• Case Identification: 1:24-cv-00463, W.D. Tex., 04/29/2024
• Venue Allegations: Plaintiff alleges venue is proper in the Western District of Texas because Defendant has committed acts of infringement in the district and maintains a regular and established place of business there.
• Core Dispute: Plaintiff alleges that Defendant’s Cloudera Data Platform infringes a patent related to systems and methods for implementing pay-as-you-go payment services via a third-party point-of-sale.
• Technical Context: The technology addresses methods for users, particularly those without access to traditional banking or credit, to make payments for services like telecommunications on an as-needed basis.
• Key Procedural History: The complaint does not mention any prior litigation, Inter Partes Review (IPR) proceedings, or specific licensing history concerning the patent-in-suit. The complaint does note that Plaintiff is the assignee of the patent.

Case Timeline

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

• Patent Identification: U.S. Patent No. 7,013,127, “SYSTEMS AND METHODS FOR EMPLOYING ‘PAY-AS-YOU-GO’ TELECOMMUNICATION SERVICES,” issued March 14, 2006.

The Invention Explained

• Problem Addressed: The patent describes prior art pre-paid telecommunication systems (e.g., calling cards) as burdensome for both users and providers. These systems generally required a credit card to "recharge" an account, which created a significant barrier for users lacking regular income, credit history, or who wished to maintain privacy through cash transactions (Compl. ¶17; ’127 Patent, col. 2:63-66).
• The Patented Solution: The invention discloses a method where a user's service usage is monitored, and the user can make payments at a third-party "point-of-sale" (POS), such as a retail store. The user provides an account identifier at the POS, makes a payment (e.g., with cash), and data from this transaction is relayed to the telecommunication service provider, which then credits the user's account ('127 Patent, Abstract; col. 4:18-39; FIG. 2). This system separates the payment act from a direct transaction with the service provider.
• Technical Importance: This approach aimed to broaden access to telecommunication services for unbanked or underbanked populations and increase payment flexibility (Compl. ¶¶ 20, 29).

Key Claims at a Glance

• The complaint’s infringement theory is exemplified by independent Claim 1 (Compl. ¶30).
• The essential elements of Claim 1 are:
  • monitoring a user's use of the telecommunication services at regular time intervals;
  • communicating results of said monitoring to a telecommunication services provider, wherein said telecommunication services provider processes said results and communicates processed results to said user; and
  • receiving a payment from the user, the payment obtained from a payment transaction wherein:
    • a payment is received from the user at a point-of-sale together with an account identifier,
    • data indicative of the payment transaction is received from the point-of-sale by the telecommunication services provider, and
    • an amount of money equal to the amount of payment is received from a point-of-sale proprietor by the telecommunication services provider.
• The complaint does not explicitly reserve the right to assert dependent claims but alleges infringement of "one or more claims" (Compl. ¶51).

III. The Accused Instrumentality

Product Identification

• The accused instrumentality is the Cloudera Data Platform (CDP), described as a "cloud-native service" (Compl. ¶37).

Functionality and Market Context

• The complaint alleges that the CDP allows users to pay for services they use in a particular period, characterizing this as a form of "pay-as-you-go telecommunication services" (Compl. ¶¶ 37, 51).
• The alleged functionality involves users purchasing "blocks of data that can be used in a single month" and choosing to "pay for additional blocks of data using a third-party payment service" (Compl. ¶¶ 41, 44). The complaint includes a screenshot from Defendant's website describing "Cloudera Data Platform pricing" for "Cloud-native services to secure and manage the data lifecycle in any cloud or data center" (Compl. p. 10, Figure 1). The complaint does not provide specific details on the technical operation of the third-party payment integration.

IV. Analysis of Infringement Allegations

’127 Patent Infringement Allegations

Identified Points of Contention

• Scope Questions: A central issue may be whether the term "telecommunication services," as used in a patent focused on telephone calls and messaging, can be construed to encompass the "cloud-native" data management and analytics services offered by the accused CDP (Compl. ¶37; ’127 Patent, col. 2:13-16). The complaint makes this connection conclusorily.
• Technical Questions: The complaint alleges payment occurs via a "third-party payment service" (Compl. ¶44). A key question for the court will be whether this service functions as the claimed "point-of-sale," which the patent describes primarily as a physical retail location with a terminal ('127 Patent, col. 4:29-39, Claim 7). The complaint asserts a POS can be a "virtual location, such as a website or app like PayPal® or Venmo®," a scope that may be disputed (Compl. ¶23).

V. Key Claim Terms for Construction

The Term: "telecommunication services"

• Context and Importance: The viability of the infringement case hinges on this term’s scope. The patent provides examples like "telephone calls, data calls, audio transfers, video transfers, e-mail sessions," and other services over wireless and wire line networks (’127 Patent, col. 2:13-18). The accused product provides "cloud-native services that allow users to pay for the services... that are used by the users" (Compl. ¶37). Practitioners may focus on whether the accused data platform services fall within the patent's definition.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The claim language is not explicitly limited to voice calls. The specification includes "data calls," "web sessions," and "other services provided over a telecommunication network," which could be argued to cover modern data services (’127 Patent, col. 2:13-18).
  • Evidence for a Narrower Interpretation: The patent’s background and embodiments are heavily grounded in the context of early 2000s consumer mobile phone and calling card services, a context far removed from enterprise cloud data platforms (’127 Patent, col. 1:24-41). Dependent claim 2 further specifies services like "telephone calls, data calls, audio transfers, video transfers," which may be argued to narrow the scope of the independent claim (’127 Patent, col. 7:54-59).

The Term: "point-of-sale"

• Context and Importance: The infringement theory relies on a third-party online payment system qualifying as a "point-of-sale." The construction of this term is critical to mapping the accused system onto the claim.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The complaint argues the term encompasses "virtual location[s], such as a website or app" (Compl. ¶23). The patent's objective is to provide convenient payment options, and one could argue that online payment services are a modern-day equivalent of that convenience.
  • Evidence for a Narrower Interpretation: The specification explicitly describes the POS as a physical place, such as "retail stores such as the dry cleaners, the drug store, the supermarket, etc." where a card can be "swiped" at a "POS terminal" (’127 Patent, col. 4:29-39). Dependent claim 7 narrows "point-of-sale" to "a retail merchant site; a vending machine; and an automated teller machine (ATM)," providing strong evidence for a more limited, physical interpretation (’127 Patent, col. 8:1-4).

VI. Other Allegations

• Indirect Infringement: The complaint alleges that Defendant "directs or controls its customer-users' use of its telecommunications service and means for affecting payment thereof," which may form the basis for a claim of induced infringement (Compl. ¶47).
• Willful Infringement: The complaint does not explicitly allege willful infringement.

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

The resolution of this case appears to depend on several key questions of claim scope and technical interpretation, stemming from the application of a 2003-vintage patent to modern cloud computing technology.

• A core issue will be one of definitional scope: can the term "telecommunication services", which is rooted in the patent's context of consumer phone service, be construed to cover the enterprise-level cloud data management and analytics services offered by the accused platform?
• Another central question will be one of technological equivalence: does a modern online "third-party payment service" function as the claimed "point-of-sale", which the patent’s text and dependent claims describe as a physical location like a retail store or ATM?
• Finally, an evidentiary question will be whether discovery reveals that the accused Cloudera Data Platform actually operates in the manner alleged, specifically regarding the monitoring of usage and the integration with third-party payment providers to facilitate pay-as-you-go transactions as claimed.