DCT

6:22-cv-01270

OHVA Inc v. Shopify Inc

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Key Events
Complaint

I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 6:22-cv-01270, W.D. Tex., 12/08/2022
  • Venue Allegations: Venue is alleged to be proper because the defendant is a foreign corporation that has committed acts of patent infringement and caused harm within the district.
  • Core Dispute: Plaintiff alleges that Defendant’s unspecified products and services for e-commerce infringe a patent related to methods and apparatus for conducting secure network-based transactions using an analog audio signal.
  • Technical Context: The technology concerns using a physical device, such as a smart card or key fob, to transmit secure transaction data as an analog audio signal through a computer's or smartphone's microphone port, bypassing the need for a dedicated digital card reader.
  • Key Procedural History: An Inter Partes Review (IPR) was instituted against the asserted patent after the filing of this complaint. The IPR proceeding, IPR2023-00921, concluded with the issuance of a certificate on May 27, 2025, confirming that all claims of the patent-in-suit (Claims 1-4) have been cancelled. The cancellation of all asserted claims raises a threshold question about the viability of the ongoing litigation.

Case Timeline

Date Event
2005-09-20 ’286 Patent Priority Date
2017-06-13 ’286 Patent Issue Date
2022-12-08 Complaint Filing Date
2023-05-18 IPR Proceeding (IPR2023-00921) Filed Against ’286 Patent
2025-05-27 IPR Certificate Issued Cancelling All Claims of ’286 Patent

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

U.S. Patent No. 9,679,286 - “Methods and Apparatus for Enabling Secure Network-Based Transactions”

  • Issued: June 13, 2017

The Invention Explained

  • Problem Addressed: The patent’s background section identifies the high cost and complexity of dedicated smart card readers as a primary barrier to their widespread adoption for secure online commerce, despite their superior security features compared to traditional payment methods. (’286 Patent, col. 1:26-32).
  • The Patented Solution: The invention proposes using a simple, low-cost device (a "card reader") that plugs directly into the microphone port of a "computerized appliance" like a PC or smartphone. This device converts digital transaction data from a transaction card into a modulated analog audio signal. This audio signal is then transmitted through the microphone port to the appliance, which uses software to demodulate the signal back into digital data for use in a secure online transaction. (’286 Patent, Abstract; col. 2:1-7). This architecture, depicted in embodiments like Figure 6, leverages ubiquitous audio hardware to avoid the need for specialized digital readers.
  • Technical Importance: This approach sought to democratize strong, hardware-based authentication for online transactions by utilizing the standard audio input jack found on nearly all consumer electronic devices. (’286 Patent, col. 1:33-38).

Key Claims at a Glance

  • The complaint does not specify claims but refers to "Exemplary '286 Patent Claims" in a missing exhibit (Compl. ¶11). The patent contains two independent claims, Claim 1 (apparatus) and Claim 3 (method).
  • Independent Claim 1 (Apparatus) includes:
    • A card reader with an output pin configured to directly connect to a microphone port of a smart telephone.
    • The card reader provides transaction data as an "analog variable voltage audio signal."
    • Coded instructions on a server, when executed on the smart telephone, convert the analog signal to digital data and facilitate a transaction with a second server.
  • Independent Claim 3 (Method) includes:
    • Accepting transaction data at a card reader connected to a smart telephone’s microphone port.
    • Receiving the data in the smart telephone as an "analog variable voltage audio signal."
    • Converting the analog signal to digital data.
    • Establishing data exchange with a server to facilitate a transaction.
  • The complaint appears to reserve the right to assert additional claims, including dependent claims. (Compl. ¶11).

III. The Accused Instrumentality

Product Identification

The complaint does not identify any specific accused products or services by name. It refers to "Exemplary Defendant Products" that are purportedly identified in charts within Exhibit 2, an attachment that was not included with the publicly filed complaint. (Compl. ¶11, ¶16).

Functionality and Market Context

The complaint provides no specific details about the functionality or operation of the accused products. It makes only the conclusory allegation that the "Exemplary Defendant Products practice the technology claimed by the '286 Patent." (Compl. ¶16).

IV. Analysis of Infringement Allegations

The complaint references claim charts in an exhibit that is not provided, and therefore a detailed tabular analysis is not possible. (Compl. ¶16, ¶17). The infringement theory is presented only in general terms, alleging that Defendant's unspecified products "satisfy all elements of the Exemplary '286 Patent Claims." (Compl. ¶16).

No probative visual evidence provided in complaint.

Identified Points of Contention

  • Hardware Mismatch Question: A primary point of contention would be whether Shopify, a company known for its e-commerce software platform, makes, uses, or sells the physical "card reader" with an "output pin" that connects to a "microphone port" as required by apparatus claim 1 of the '286 Patent. The complaint provides no facts to suggest Shopify is involved with such hardware.
  • Technical Question: The infringement case appears to depend on whether the accused Shopify system performs the step of "receiving the transaction data... as an analog variable voltage audio signal from the microphone port," as required by method claim 3. A key question for the court will be what evidence, if any, supports this allegation, as compared to more conventional data input methods like NFC, Bluetooth, or USB-based readers.

V. Key Claim Terms for Construction

"card reader"

  • Context and Importance: The construction of this term is critical. The infringement allegation against a software and services company like Shopify may depend on whether this term is limited to the physical hardware device described in the patent or can be construed more broadly.
  • Intrinsic Evidence for a Broader Interpretation: The patent does not provide an explicit definition for the term, which a party might argue supports applying its plain and ordinary meaning, potentially covering any component that "reads" card data.
  • Intrinsic Evidence for a Narrower Interpretation: The specification consistently frames the "card reader" as a distinct physical apparatus. It is described as being "plugged into the microphone input of the PC sound card" (’286 Patent, col. 1:36-38) and having an "output pin from the card reader adapted to engage in a microphone port" (’286 Patent, col. 2:4-5). Figures like 4, 5, and 6 all depict tangible hardware devices, suggesting the term is tied to a physical object with an audio jack interface.

"analog variable voltage audio signal"

  • Context and Importance: This term specifies the physical nature of the data transmission from the "card reader" to the "smart telephone." The infringement analysis will turn on whether the accused Shopify system processes data in this specific analog format.
  • Intrinsic Evidence for a Broader Interpretation: A party could argue the term is not limited to a specific modulation technique and covers any signal that can be represented as an audio waveform.
  • Intrinsic Evidence for a Narrower Interpretation: The detailed description explains that the signal is generated using "frequency-shift keying (FSK) modulation" to create an "audible sound compatible with PC sound card capabilities." (’286 Patent, col. 5:18-27). This may support a narrower construction limited to modulated, audible, analog signals, as distinguished from purely digital data streams generated by modern card readers.

VI. Other Allegations

Indirect Infringement

The complaint alleges induced infringement, stating that Defendant distributes "product literature and website materials inducing end users... to use its products in the customary and intended manner that infringes." (Compl. ¶14). The complaint references the missing Exhibit 2 as containing evidence of these materials. (Compl. ¶14).

Willful Infringement

Willfulness allegations are based on Defendant's alleged knowledge of infringement obtained from the service of the complaint itself. (Compl. ¶13, ¶15).

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

  • A dispositive threshold issue will be the legal impact of claim cancellation: given that an IPR certificate has cancelled all claims of the ’286 patent, the central question is whether the plaintiff retains any viable cause of action for infringement.
  • A core factual issue will be one of technical mismatch: does Shopify's accused e-commerce platform involve a physical "card reader" that transmits data as an "analog variable voltage audio signal" via a device's microphone port, or is there a fundamental mismatch between the patent’s specific hardware-and-audio-jack solution and the accused system's actual mode of operation?
  • A key legal issue will be one of definitional scope: can the term "card reader", as described in a patent focused on physical hardware connecting to an audio jack, be construed to cover a software-based payment processing system that does not appear to use the specific physical interface taught by the invention?