DCT

6:21-cv-00955

Aire Technology Ltd v. Samsung Electronics America Inc

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I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 6:21-cv-00955, W.D. Tex., 09/15/2021
  • Venue Allegations: Venue is alleged based on Defendant Samsung Electronics America, Inc. being registered to do business in Texas and both Defendants having regular and established places of business within the Western District of Texas.
  • Core Dispute: Plaintiff alleges that Defendants’ mobile devices and smartwatches equipped with Near Field Communication (NFC) and mobile payment applications infringe four patents related to managing multi-application contactless communications and secure transactions.
  • Technical Context: The technology concerns methods for a single device, like a smartphone, to manage and present multiple distinct applications (e.g., different credit cards, transit passes) to a contactless reader as if they were separate physical cards, and to enhance the security of such transactions.
  • Key Procedural History: The complaint was filed on September 15, 2021. Subsequent to the filing, three of the four asserted patents were subject to Inter Partes Review (IPR) proceedings initiated in 2022. The asserted claims of the ’706 and ’249 patents were cancelled. The asserted claim of the ’360 patent was found patentable. The provided documents do not indicate an IPR was filed against the ’827 patent. These post-filing developments may significantly impact the viability of the infringement counts for the '706 and '249 patents.

Case Timeline

Date Event
2002-10-24 Earliest Priority Date for ’249 Patent
2003-07-30 Earliest Priority Date for ’360 Patent
2006-06-12 Earliest Priority Date for ’706 Patent and ’827 Patent
2012-05-08 U.S. Patent No. 8,174,360 Issues
2012-06-19 U.S. Patent No. 8,205,249 Issues
2013-11-12 U.S. Patent No. 8,581,706 Issues
2014-08-26 U.S. Patent No. 8,816,827 Issues
2015-04-10 Approximate launch of first accused product (Galaxy S6)
2021-09-15 Complaint Filed

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

U.S. Patent No. 8,581,706 - “Data storage medium and method for contactless communication between the data storage medium and a reader,” issued November 12, 2013

  • The Invention Explained:
    • Problem Addressed: When multiple contactless data carriers (like chip cards) are in a reader's field simultaneously, or when one carrier hosts multiple applications, the reader struggles to select and communicate with a single, specific application due to signal collisions and ambiguity ('706 Patent, col. 1:44-51).
    • The Patented Solution: The invention proposes a communication device on a single data carrier that manages its multiple applications. It generates distinct "communication-readiness" signals for each application, each with a unique identifier, making the single carrier appear to the reader as a collection of separate, individual data carriers ('706 Patent, col. 3:5-20). This allows a standard reader to select a specific application without confusion, simplifying the interaction ('706 Patent, col. 3:5-15).
    • Technical Importance: This approach allows for the consolidation of numerous functions (payment, access, transit) onto a single device like a smartphone while maintaining compatibility with existing reader infrastructures designed to handle one card at a time ('706 Patent, col. 6:46-51).
  • Key Claims at a Glance:
    • Independent claim 11 is asserted (Compl. ¶16).
    • Claim 11 requires a contactlessly communicating portable data carrier comprising:
      • at least two applications stored thereon;
      • a communication device configured to control communication between a reading device and the applications;
      • the communication device is set up to generate communication-readiness signals for the applications, each signal comprising an identification number; and
      • the communication device is set up to store information in a nonvolatile memory about which of the applications last communicated with a reading device.
    • The complaint reserves the right to assert other claims (Compl. ¶16).

U.S. Patent No. 8,816,827 - “Data storage medium and method for contactless communication between the data storage medium and a reader,” issued August 26, 2014

  • The Invention Explained:
    • Problem Addressed: As a continuation of the '706 patent, the '827 patent addresses the same problem of managing multiple contactless applications on a single device to avoid conflicts and simplify selection by a reader ('827 Patent, col. 1:44-51).
    • The Patented Solution: The '827 patent describes a similar solution but focuses on grouping applications. It generates communication-readiness signals for a "first group" and a "second group" of applications, allowing a reader to interact with applications on a group basis ('827 Patent, col. 11:7-24). This hierarchical arrangement provides a structured way to manage and present a large number of applications from a single data carrier ('827 Patent, Fig. 4).
    • Technical Importance: This grouping mechanism offers a more scalable way to manage diverse applications (e.g., separating payment cards from loyalty cards) on one device, enhancing organizational efficiency for both the device and the reading system ('827 Patent, col. 10:1-17).
  • Key Claims at a Glance:
    • Independent claim 22 is asserted (Compl. ¶27).
    • Claim 22 requires a contactlessly communicating portable data carrier comprising:
      • at least a first and second application stored thereon;
      • a communication device for controlling communication between a reading device and the applications;
      • the communication device is configured to generate a first communication-readiness signal for the first application and a second communication-readiness signal for the second application, each with an identification number;
      • the first signal is generated for a "first group of applications" and the second signal is for a "second group of applications"; and
      • the signals indicate the communication readiness of "every application" of their respective groups.
    • The complaint reserves the right to assert other claims (Compl. ¶26).

U.S. Patent No. 8,205,249 - “Method for carrying out a secure electronic transaction using a portable data support,” issued June 19, 2012

  • Technology Synopsis: The patent addresses the problem that electronic transactions do not reflect the relative security of the user authentication method employed (e.g., a simple PIN versus a more secure biometric scan) ('249 Patent, col. 1:33-40). The invention solves this by having the portable data carrier create "quality information" that describes the authentication method used and attaching this information to the transaction data, allowing a recipient to gauge the transaction's reliability ('249 Patent, Abstract).
  • Asserted Claims: Independent claim 10 (Compl. ¶38).
  • Accused Features: The complaint alleges that Samsung Pay's use of different authentication methods (e.g., PIN, fingerprint, iris scan, or bypassing authentication for some programs) infringes the '249 Patent (Compl. ¶¶ 39-40, 43).

U.S. Patent No. 8,174,360 - “Communication apparatus for setting up a data connection between intelligent devices,” issued May 8, 2012

  • Technology Synopsis: The patent addresses the high power consumption of contactless devices that constantly emit search signals ('360 Patent, col. 1:31-36). The solution is a power-saving apparatus that uses a low-power "measuring device" to monitor a property (e.g., resonance) of its transmission oscillator. Only when it detects a change indicating a nearby device does it use a "switching apparatus" to activate the full-power communication element ('360 Patent, Abstract).
  • Asserted Claims: Independent claim 1 (Compl. ¶49).
  • Accused Features: The complaint alleges that the Accused Products' NFC hardware (antenna, chip) and associated low-power modes for detecting nearby readers infringe the '360 Patent (Compl. ¶¶ 51-54).

III. The Accused Instrumentality

  • Product Identification: The complaint names a wide range of Samsung smartphones and smartwatches, including Galaxy S, Note, Fold, and Watch series devices, that support NFC and mobile payment applications like Samsung Pay and Google Pay (the "Accused Products") (Compl. ¶13).
  • Functionality and Market Context: The accused functionality centers on the products' use of NFC technology to perform contactless communications (Compl. ¶16). Specifically, the complaint focuses on Host Card Emulation (HCE) as implemented in Android, which allows a device to emulate multiple smart cards. This enables applications like Samsung Pay to store and use digital versions of credit cards, debit cards, and transit passes (Compl. ¶¶ 17, 38). The complaint alleges the Accused Products contain NFC hardware, including an antenna and an NFC chip, to control communication with readers. A teardown photograph of a Samsung S21 is provided to show the physical NFC antenna (Compl. ¶18, p. 8). The complaint also points to the products' ability to handle multiple Application IDs (AIDs) for different services and to resolve conflicts when multiple applications could respond to a reader's query (Compl. ¶¶ 17, 19).

IV. Analysis of Infringement Allegations

U.S. Patent No. 8,581,706 Infringement Allegations

Claim Element (from Independent Claim 11) Alleged Infringing Functionality Complaint Citation Patent Citation
A contactlessly communicating portable data carrier... The Accused Products are portable devices (phones, watches) that support contactless NFC technology. A screenshot of Samsung's product specifications lists "NFC" under connectivity. ¶16 col. 11:14-15
comprising at least two applications stored thereon The Android operating system on the Accused Products allows multiple "HostApduService" components to be installed, enabling different applications (e.g., Visa, MasterCard) to use NFC. ¶17 col. 11:16-17
a communication device configured to control communication between a reading device and the at least two applications The Accused Products contain an NFC antenna, an NFC chip, and related software that together control communication between a reader and the device's applications. A teardown photograph shows the NFC chip on the mainboard. ¶18 col. 11:18-20
wherein the communication device is set up to generate communication-readiness signals to the reading device which in each case indicate to the reading device a communication readiness for one of the applications and comprise an identification number... The communication device generates signals containing an Application ID (AID), which serves as the claimed identification number to indicate to an NFC reader which service is ready to communicate. ¶19 col. 11:21-26
wherein the communication device is set up to store information in a nonvolatile memory of the data carrier about which of the at least two applications last communicated with a reading device. The Samsung Pay application provides a "View Recent Transactions" feature, which allegedly provides information about the last application that communicated with a reading device. A screenshot shows a transaction list. ¶20 col. 11:27-31
  • Identified Points of Contention:
    • Scope Questions: Does the term "communication-readiness signals" read on the standard application selection protocol involving AIDs as defined by ISO/IEC 7816-4 and used in Android? The patent does not explicitly mention AIDs.
    • Technical Questions: Does the "View Recent Transactions" feature (Compl. p. 13) actually "store information...about which...application last communicated," as required by the claim, or does it merely store a list of transactions associated with a single payment application? The evidence provided shows a transaction history, which may not be the same as tracking communications across different applications (e.g., a payment app vs. a transit app).

U.S. Patent No. 8,816,827 Infringement Allegations

Claim Element (from Independent Claim 22) Alleged Infringing Functionality Complaint Citation Patent Citation
A contactlessly communicating portable data carrier comprising at least a first and second application stored thereon... The Accused Products run Android, which allows for the installation of multiple applications that utilize NFC, such as different payment network apps. ¶28 col. 13:22-24
a communication device for controlling communication between a reading device and the at least first and second applications The Accused Products use an NFC antenna, NFC chip, and related hardware/software to manage communications between a reader and the on-device applications. A system diagram shows the NFC Controller interacting with the Host CPU and Secure Element. ¶29 col. 13:25-28
wherein the communication device is configured to generate a first communication-readiness signal...and a second communication-readiness signal...and comprise an identification number... The communication device generates signals containing Application IDs (AIDs) for different NFC applications or services, with each AID serving as an identification number. ¶30 col. 13:29-37
wherein the first communication-readiness signal is generated for a first group of applications...and the second communication-readiness signal is generated for a second group of applications... The Android HCE system allows applications to be associated with "AID groups" which can be further associated with categories (e.g., "CATEGORY_PAYMENT"). The complaint alleges these correspond to the claimed "first group" and "second group." ¶31 col. 13:38-44
the first communication-readiness signal indicating to the reading device the communication readiness of every application of the first group... The complaint cites Android developer documentation stating that for an AID group, either "All AIDs in the group are routed to this HCE service" or "No AIDs in the group are routed," which is alleged to meet the requirement of indicating readiness for every application in the group. ¶31 col. 13:45-51
  • Identified Points of Contention:
    • Scope Questions: Does Android's concept of an "AID group," which ensures that a set of AIDs are routed together to a single service, meet the claim limitation of a "group of applications"? The court may need to determine if a group of identifiers (AIDs) is equivalent to a group of the applications themselves.
    • Technical Questions: What evidence demonstrates that the Accused Products generate distinct signals for a "first group" and a "second group" simultaneously or in the manner claimed, versus simply responding to a reader's queries for specific AIDs that happen to be categorized by the OS?

V. Key Claim Terms for Construction

For U.S. Patent No. 8,581,706

  • The Term: "store information...about which of the at least two applications last communicated with a reading device" (Claim 11)
  • Context and Importance: This limitation is central to distinguishing the '706 patent from systems that simply manage multiple applications. The infringement allegation relies entirely on Samsung Pay's "View Recent Transactions" feature. The definition of what information must be stored, and whether it must relate to distinct applications versus mere transactions, will likely be a dispositive issue for this claim.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The specification discusses the method making it "possible to ascertain...which application last communicated with the reading device" upon reactivation of the data carrier ('706 Patent, col. 5:35-41). This could be argued to support any form of storage that allows this determination, even if indirect.
    • Evidence for a Narrower Interpretation: The purpose described is to "prevent the same application from always being served first" ('706 Patent, col. 5:41-45). This suggests the stored information must be functional and used to alter the communication priority of different applications, a function not obviously performed by a simple user-facing transaction log.

For U.S. Patent No. 8,816,827

  • The Term: "a first group of applications" / "a second group of applications" (Claim 22)
  • Context and Importance: The complaint maps this term to the "AID groups" and "categories" within the Android HCE architecture. Practitioners may focus on this term because the case depends on whether a software construct for routing identifiers (AIDs) in an operating system constitutes the claimed "group of applications" that generates a collective readiness signal.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The specification states that applications "can be arranged in a hierarchical manner" and that signals can be generated for "groups of applications" ('827 Patent, col. 3:39-44). This general language may support construing any logical grouping, like Android's, as falling within the claim.
    • Evidence for a Narrower Interpretation: Figure 4 of the patent shows a specific embodiment where applications are explicitly organized into groups (G1, G2, G3) that are then assigned a group-level identifier (UID1, UID2, UID3). A defendant may argue this structure implies a more tightly integrated grouping defined within the data carrier's communication device itself, rather than a higher-level OS categorization.

VI. Other Allegations

  • Indirect Infringement: The complaint alleges induced infringement for all four patents. The basis is that Samsung provides the Accused Products and "actively encourage[s] and instruct[s] its customers and end users (for example, through user manuals and online instruction materials...)" to use the NFC and mobile payment features in an infringing manner (Compl. ¶¶ 21, 32, 44, 55).
  • Willful Infringement: Willfulness is alleged based on Samsung's purported knowledge of the patents "as of at least the filing and service of this complaint" (Compl. ¶¶ 21, 32, 44, 55). The complaint alleges that despite this knowledge, Samsung continues to infringe, suggesting post-suit willfulness.

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

  • Procedural Viability: A threshold issue for the court will be the impact of the post-filing IPR proceedings. With the asserted claims of the '706 and '249 patents having been cancelled, a key question is whether the infringement counts based on those patents can proceed or are now moot.
  • Claim Scope vs. Industry Standards: For the surviving claims of the '827 and '360 patents, a central theme will be one of definitional scope: can claim terms drafted before the widespread adoption of modern smartphone OS features be construed to read on those features? Specifically, does the '827 patent's "group of applications" map to Android's "AID groups," and does the '360 patent's power-saving "measuring device" map to the low-power modes of modern NFC chipsets?
  • Evidentiary Sufficiency: A key evidentiary question will be one of functional operation: does the accused functionality, as it actually operates, meet the specific requirements of the claims? For example, for the '706 patent, does a "Recent Transactions" log perform the claimed function of storing information about the last application to communicate for the purpose of altering communication priority, or is there a fundamental mismatch between the claim's purpose and the feature's operation?