DCT
6:22-cv-00294
Caselas LLC v. Comerica
Key Events
Amended Complaint
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: Caselas, LLC (Florida)
- Defendant: Comerica Bank (Texas)
- Plaintiff’s Counsel: Garteiser Honea, PLLC
- Case Identification: 6:22-cv-00294, W.D. Tex., 04/27/2022
- Venue Allegations: Plaintiff alleges venue is proper in the Western District of Texas because Defendant maintains regular and established places of business, including physical bank branches, in Austin and San Antonio.
- Core Dispute: Plaintiff alleges that Defendant’s payment card authorization systems infringe five patents related to using historical chargeback and account data to assess risk in real-time before a transaction is completed.
- Technical Context: The patents address financial technology for real-time fraud and risk assessment in electronic payment transactions, a field focused on reducing financial losses for merchants and issuing banks from fraudulent activities like "cyber-shoplifting" and improper chargebacks.
- Key Procedural History: During prosecution of U.S. Patent Nos. 9,117,206, 9,117,230, and 9,715,691, the complaint notes that the patent examiner considered the Supreme Court's decision in Alice Corp. v. CLS Bank Int'l and found the claims patent-eligible. Subsequent to the filing of this complaint, all claims of U.S. Patent No. 9,715,691 were canceled in an inter partes review proceeding (IPR2021-00799), with the certificate of cancellation issued on April 4, 2024.
Case Timeline
| Date | Event |
|---|---|
| 2001-01-16 | Earliest Priority Date for all Asserted Patents |
| 2009-05-05 | U.S. Patent No. 7,529,698 Issues |
| 2010-02-16 | U.S. Patent No. 7,661,585 Issues |
| 2015-07-09 | Corrected Notice of Allowability for ’206 and ’230 Patents |
| 2015-08-25 | U.S. Patent No. 9,117,206 Issues |
| 2015-08-25 | U.S. Patent No. 9,117,230 Issues |
| 2017-04-10 | Notice of Allowability for ’691 Patent |
| 2017-07-25 | U.S. Patent No. 9,715,691 Issues |
| 2022-04-27 | Second Amended Complaint Filed |
| 2024-04-04 | Certificate of Cancellation Issued for all claims of ’691 Patent |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 7,529,698 - “Apparatus And Method For Providing Transaction History Information, Account History Information, And/Or Charge-Back Information”
The Invention Explained
- Problem Addressed: The patent’s background section describes the financial losses merchants incur from non-payment of receivables due to credit card fraud, "cyber-shoplifting," and chargebacks, particularly in non-face-to-face transactions where verifying a customer's identity is difficult (’698 Patent, col. 1:33-61).
- The Patented Solution: The invention proposes a computer-implemented method to combat this problem by providing merchants with risk-related information before a transaction is finalized. The system receives transaction and account information, processes it against a database containing historical data (including prior chargebacks), generates a report based on this analysis, and transmits it to the merchant, who can then decide whether to proceed with the transaction (’698 Patent, Abstract; col. 2:35-48). The system architecture is depicted in Figure 1, showing a central processing computer mediating between a merchant computer and an information provider (’698 Patent, Fig. 1).
- Technical Importance: The complaint alleges that at the time of the invention, the use of chargeback data as a real-time data point in payment processing was not a conventional practice, stating that major card networks like Visa and MasterCard did not implement such functionality until many years later (Compl. ¶28).
Key Claims at a Glance
- The complaint asserts independent claim 20 (Compl. ¶72).
- The essential elements of claim 20 include:
- Receiving information regarding a transaction involving an account, where the information is received by a receiver prior to the completion of the transaction.
- Processing the transaction information with a processing device using information regarding the account.
- Generating a report or message in response, wherein the report contains information regarding a chargeback from a previous transaction involving the account.
- Transmitting the report or message to a communication device associated with the merchant.
- The complaint does not explicitly reserve the right to assert dependent claims for this patent.
U.S. Patent No. 7,661,585 - “Apparatus And Method For Providing Transaction History Information, Account History Information, And/Or Charge-Back Information”
The Invention Explained
- Problem Addressed: The ’585 Patent addresses the same technical problem as the ’698 Patent: merchant losses from fraudulent transactions and chargebacks in an environment where customer verification is challenging (’585 Patent, col. 1:43-65).
- The Patented Solution: The patented solution is an apparatus, rather than a method, for providing risk assessment. It comprises a receiver, a processing device, and a transmitter. The system is designed to receive information about a transaction involving both an individual and an account, process that information, generate a report containing historical chargeback data related to the individual or account, and transmit that report to the merchant before the transaction is finalized (’585 Patent, Abstract; col. 2:45-58).
- Technical Importance: As with the ’698 Patent, the complaint frames this technology as a non-conventional solution to the problem of transaction fraud at the time of the invention (Compl. ¶28, ¶29).
Key Claims at a Glance
- The complaint asserts independent claim 21 (Compl. ¶83).
- The essential elements of claim 21 describe an apparatus comprising:
- A receiver for receiving information regarding a transaction involving an account, prior to the transaction's completion.
- A processing device for processing the information using account data, and generating a report or message that contains information regarding a previous chargeback involving the account.
- A transmitter for transmitting the report or message to a merchant's communication device.
- The complaint does not explicitly reserve the right to assert dependent claims for this patent.
U.S. Patent No. 9,117,206 - “Apparatus And Method For Providing Transaction History Information, Account History Information, And/Or Charge-Back Information”
- Technology Synopsis: This patent, a continuation-in-part of the '585 Patent, describes an apparatus and method for receiving information about an individual and an account involved in a transaction, processing that information, generating a report that includes historical chargeback data, and transmitting it to a merchant (Compl. ¶25).
- Asserted Claims: The complaint asserts at least Claim 13 (Compl. ¶93).
- Accused Features: The accused features are Defendant’s payment card services that allegedly process information regarding an individual and their transaction history, including chargeback data, to generate and transmit an authorization message (Compl. ¶94-95).
U.S. Patent No. 9,117,230 - “Apparatus And Method For Providing Transaction History Information, Account History Information, And/Or Charge-Back Information”
- Technology Synopsis: This patent, also related to the family, describes apparatuses and methods for receiving and processing transaction information involving an individual and an account. The system generates and transmits a report to a merchant containing information about prior chargebacks associated with the individual (Compl. ¶26).
- Asserted Claims: The complaint asserts at least Claim 31 (Compl. ¶102).
- Accused Features: The infringement allegations target Defendant’s payment authorization systems that allegedly use historical account and chargeback data to determine whether to authorize a transaction and transmit that decision to a merchant (Compl. ¶103-104).
U.S. Patent No. 9,715,691 - “Apparatus And Method For Providing Transaction History Information, Account History Information, And/Or Charge-Back Information”
- Technology Synopsis: This patent describes apparatuses and methods that process information regarding an account involved in a transaction with an individual prior to the transaction's completion. The system generates a report containing prior chargeback data and transmits it to a merchant (Compl. ¶27). All claims of this patent were subsequently canceled in IPR2021-00799.
- Asserted Claims: The complaint asserts at least Claim 1 (Compl. ¶111).
- Accused Features: The allegations are directed at Defendant’s payment card systems that receive and process transaction information using historical account data, including chargebacks, to generate and transmit an authorization message (Compl. ¶112-114).
III. The Accused Instrumentality
Product Identification
- The "Accused Instrumentalities" are Defendant Comerica’s payment card services, marketed as Comerica Debit MasterCard, Comerica ATM Card, and Comerica Business Debit Card, as well as other payment card services where Comerica acts as the Issuing Bank or Card Issuer (Compl. ¶63). The complaint presents a screenshot of Comerica's website identifying its credit card products (Compl. p. 25).
Functionality and Market Context
- The complaint alleges that the Accused Instrumentalities comprise a nationwide network of servers, hardware, and software that function to authorize or decline electronic payment transactions (Compl. ¶63). The system allegedly generates, maintains, and utilizes "Account Profile Data," which includes data related to "historical chargeback events and/or historical transactions associated with either the individual account holder and/or the account" (Compl. ¶68). This data is allegedly used to develop "Risk Indicators" that inform the transaction authorization process (Compl. ¶68). The complaint further alleges that Comerica utilizes services such as Ethoca Alerts and/or Verifi Alerts, which are industry tools for sharing chargeback and fraud data between issuers and merchants (Compl. ¶67).
IV. Analysis of Infringement Allegations
’698 Patent Infringement Allegations
| Claim Element (from Independent Claim 20) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| a computer-implemented method, comprising: receiving information regarding a transaction involving an account, wherein the information... is received by a receiver prior to a processing, a completion, a consummation, or a cancellation, of the transaction; | The Accused Instrumentalities comprise a receiver that receives transaction details (e.g., amount, account number) from merchants or payment gateways before the transaction is authorized or settled. | ¶73 | col. 29:35-43 |
| processing the information regarding the transaction with a processing device using information regarding the account; | The system’s processing device processes the received transaction details using associated account information, which allegedly includes historical account details and chargeback data. | ¶74 | col. 29:44-47 |
| generating a report or a message in response to the processing... wherein the report or the message contains information regarding a charge-back regarding a previous transaction involving the account; | The system generates an authorization or decline message that is allegedly "at least partially dependent upon the satisfaction or non-satisfaction of prior chargeback event thresholds, and therefore embodies and contains such information." | ¶75 | col. 29:48-53 |
| and transmitting the report or the message to a communication device associated with a merchant, vendor, or provider, of a good, product, or service. | The system transmits the authorization or decline message to the merchant via a payment gateway or payment processor. A screenshot shows Comerica's physical locations in Austin, supporting the allegation of a business presence where such services are offered (Compl. p. 3). | ¶75 | col. 29:54-58 |
’585 Patent Infringement Allegations
| Claim Element (from Independent Claim 21) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| An apparatus, comprising: a receiver for receiving information regarding a transaction involving an account... prior to a processing, a completion, a consummation, or a cancellation, of the transaction; | The Accused Instrumentalities comprise a receiver for obtaining transaction details (amount, account number, etc.) from merchants via payment gateways before the transaction is completed. | ¶84 | col. 31:27-35 |
| a processing device for processing the information regarding the transaction using information regarding the account, wherein the processing device generates a report or a message... containing information regarding a charge-back regarding a previous transaction...; | The system’s hardware and software act as a processing device that uses historical account and chargeback data to generate an authorization message, which is allegedly dependent on chargeback thresholds and thus contains chargeback information. | ¶85, ¶86 | col. 31:36-44 |
| and a transmitter, wherein the transmitter transmits the report or the message to a communication device associated with a merchant... | The apparatus includes a transmitter to send the resulting authorization or decline message back to the merchant via the payment gateway or processor. | ¶86 | col. 31:45-51 |
Identified Points of Contention
- Scope Questions: A central dispute may arise over the claim term "report or a message... contain[ing] information regarding a charge-back." The complaint alleges that a binary approve/decline message "embodies and contains" this information because its generation is dependent on chargeback data (Compl. ¶75, ¶86). A potential defense argument is that such a message does not explicitly "contain" the underlying chargeback information as required by a plain reading of the claim language.
- Technical Questions: The complaint alleges on "information and belief" that Comerica's systems perform the claimed processing using historical chargeback data (Compl. ¶68, ¶74). A key factual question will be the specific technical architecture of the accused systems. Discovery may focus on whether Comerica's system itself performs the claimed "processing" and "generating" steps, or if it primarily relies on risk scores or alerts generated and provided by third-party services like Ethoca or Visa (Compl. ¶67), which could raise questions of divided infringement.
V. Key Claim Terms for Construction
- The Term: "report or a message... contain[ing] information regarding a charge-back" (from ’698 claim 20; ’585 claim 21).
- Context and Importance: The viability of the infringement case may depend heavily on the construction of this term. Plaintiff's theory requires a broad interpretation where a message whose logic is based on chargeback history is deemed to "contain" that information. A narrow construction requiring the explicit presence of historical chargeback data within the transmitted message itself could present a significant challenge to the infringement allegations.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The patent's stated purpose is to allow a merchant to assess risk and protect against losses from chargebacks (’698 Patent, col. 2:26-34). An interpretation where a decline message—the ultimate expression of unacceptable risk—"contains" the underlying risk information could be argued as consistent with this purpose.
- Evidence for a Narrower Interpretation: The specification repeatedly refers to providing "transaction history information, account history information, and/or charge-back information" to a merchant, and flowcharts depict a distinct step of "PROCESS INFORMATION/GENERATE ACCOUNT INFORMATION REPORT" (’698 Patent, Fig. 3, step 304). This may suggest the "report" is a substantive data object containing specific details, not merely a binary outcome derived from those details. The specification also notes the report can contain "the number and frequency of charge-backs," "reasons for the charge-back action," and "allegations made by the account holder" (’698 Patent, col. 19:17-25), suggesting a more detailed output than a simple authorization message.
VI. Other Allegations
Willful Infringement
- The complaint alleges that Defendant’s infringement became willful after it received notice of the asserted patents via the original complaint in this litigation (Compl. ¶77, ¶116-117). It further supports this allegation by claiming, on information and belief, that Defendant has a "policy or practice of not reviewing the patents of others" and instructs its employees not to do so, constituting willful blindness (Compl. ¶78, ¶88).
VII. Analyst’s Conclusion: Key Questions for the Case
- A core issue will be one of definitional scope: Can a binary approve/decline message, which does not explicitly state any historical data, be construed to be a "report or a message contain[ing] information regarding a charge-back" simply because its underlying generation logic considered such data?
- A key evidentiary question will be one of technical attribution: What evidence will demonstrate that Defendant's accused systems perform the claimed steps of "processing" historical data and "generating" a report, versus merely receiving and acting upon risk assessments or alerts provided by third-party payment networks and fraud-prevention services?
- A key question of patent viability will be the vulnerability of the asserted patents to invalidity challenges. Given that all claims of the related ’691 patent were canceled in an inter partes review, the court will likely face arguments that the remaining asserted patents, which share a common specification and priority date, are invalid for similar reasons.