Bright Capture LLC v. Shoeboxed Inc

I. Executive Summary and Procedural Information

• Parties & Counsel:
  • Plaintiff: Bright Capture LLC (Delaware)
  • Defendant: Shoeboxed, Inc. (Delaware)
  • Plaintiff’s Counsel: Kent & Risley LLC
• Case Identification: 6:22-cv-01311, W.D. Tex., 12/28/2022
• Venue Allegations: Venue is alleged to be proper in the Western District of Texas because Defendant maintains a regular and established place of business in the district and has allegedly committed acts of patent infringement there.
• Core Dispute: Plaintiff alleges that Defendant’s financial organization products and services infringe three patents related to scanning documents that lack a predefined format, automatically extracting numerical data, and organizing that data into financial reports.
• Technical Context: The technology concerns automated expense tracking, which seeks to replace the laborious manual entry of financial data from physical receipts with a streamlined, scanner-based system for data capture and organization.
• Key Procedural History: Plaintiff notes that one of the patents-in-suit was issued after the Supreme Court's Alice decision on patent eligibility. The complaint also highlights that an earlier patent in the family was allowed by the Board of Patent Appeals and Interferences based on the finding that prior art did not disclose processing receipts with "no predefined format." Plaintiff also alleges it provided Defendant with actual notice of one of the patents-in-suit via a letter one day prior to filing the complaint.

Case Timeline

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

U.S. Patent No. 8,693,070 - "Receipts scanner and financial organizer," issued April 8, 2014

The Invention Explained

• Problem Addressed: The patent addresses the problem that individuals often do not know how they are spending their money, and that manually tracking expenses by saving receipts and entering them into financial software is "laborious and time consuming" (’070 Patent, col. 1:18-25).
• The Patented Solution: The invention proposes a system with a scanner and associated software that automates this process. A user feeds receipts into the scanner, and the system automatically captures an image, extracts the relevant financial data, and organizes it into a database that can be viewed in various formats like tables or pie charts for budgeting and analysis (’070 Patent, Abstract; col. 2:55-68). A key aspect is the ability to process documents, like receipts, that have "no predefined format" (’070 Patent, col. 5:40-41).
• Technical Importance: The technology aims to provide a significant convenience and efficiency improvement over manual data entry for personal and small business finance management by automating the data extraction step from unstructured physical documents. (’070 Patent, col. 1:26-34).

Key Claims at a Glance

• The complaint asserts at least independent claim 1 (Compl. ¶25).
• Independent Claim 1 of the ’070 Patent recites a method with the essential steps of:
  • Obtaining, via a scanner, an electronic image of a document having "no predefined format" and containing numerical information.
  • Automatically capturing the electronic image including the numerical information in a computing device.
  • Organizing the captured numerical information.
  • Enabling editing and viewing of the captured information.
  • Combining the captured information with previously captured information into a report.
• The complaint does not explicitly reserve the right to assert dependent claims.

U.S. Patent No. 10,049,410 - "Receipts scanner and financial organizer," issued August 14, 2018

The Invention Explained

• Problem Addressed: Similar to the ’070 Patent, the ’410 Patent identifies the tedium and inefficiency of manually entering receipt data into budgeting or finance programs as the central problem to be solved (’410 Patent, col. 1:18-28).
• The Patented Solution: The invention describes a method for processing a paper expense receipt by receiving the receipt from an individual, creating an electronic image, and then using software to "automatically obtain expense data" by retrieving and "parsing the relevant data" from the image (’410 Patent, col. 5:11-16). The method specifically populates an electronic expense report and works on receipts that have "no predefined format for the computer system" (’410 Patent, col. 5:17-21). This patent emphasizes the specific steps of retrieving and parsing data to populate a report.
• Technical Importance: By automating the parsing of unstructured receipts, the invention sought to provide a more effective and user-friendly computer-based tool for financial management than was previously available. (’410 Patent, col. 1:29-33).

Key Claims at a Glance

• The complaint asserts at least independent claim 1 (Compl. ¶29).
• Independent Claim 1 of the ’410 Patent recites a method with the essential steps of:
  • Receiving a paper expense receipt from an individual.
  • Receiving an electronic image of that receipt.
  • Processing the image to automatically obtain expense data, which includes the sub-steps of using software to retrieve relevant data and parsing that data.
  • Populating an electronic expense report with the data.
  • Displaying the report to the individual.
  • The method is specified to work where the receipt has "no predefined format."
• The complaint does not explicitly reserve the right to assert dependent claims.

U.S. Patent No. 7,746,510 - "Receipts scanner and financial organizer," issued June 29, 2010

Technology Synopsis

The ’510 Patent, the earliest issued patent in the family, addresses the challenge of automated expense tracking from physical documents. The invention describes an apparatus comprising a scanner and a computer with software configured to scan various types of receipts of "no predefined format," automatically process the scanned image to extract numerical expense data, and categorize the information for display and reporting. (’510 Patent, Abstract). The complaint notes this patent was allowed by the BPAI over prior art because of its claimed ability to process receipts lacking a predefined format (Compl. ¶21).

Asserted Claims

The complaint asserts at least claim 11 (Compl. ¶35). Independent claims 1 and 11 are directed to an apparatus for managing expense information.

Accused Features

The complaint alleges that Defendant’s products infringe the ’510 Patent, with specific allegations of induced infringement based on Defendant's "product literature and website materials" that allegedly instruct users on how to use the products in an infringing manner (Compl. ¶¶34-35).

III. The Accused Instrumentality

Product Identification

The complaint identifies the accused instrumentalities as "Exemplary Defendant Products" offered by Shoeboxed, Inc. (Compl. ¶¶25, 29, 34). Specific product or service names are not provided.

Functionality and Market Context

Based on the allegations, the accused instrumentalities are products and services that allow users to submit receipts for digital processing. The core accused functionality is the automated extraction of financial data from these receipts and the organization of that data for expense tracking and reporting (Compl. ¶¶25, 29, 35). Plaintiff alleges Defendant provides these products for sale and use within the United States (Compl. ¶¶25, 29).

IV. Analysis of Infringement Allegations

The complaint alleges direct infringement of the ’070 and ’410 patents and induced infringement of the ’510 patent (Compl. ¶¶25, 29, 35). For each patent, the complaint incorporates by reference an external claim chart exhibit (Exhibits 4, 5, and 6) that was not included with the complaint filing (Compl. ¶¶26, 30, 36). As such, a detailed, element-by-element analysis based on the provided documents is not possible.

In general, the complaint's narrative theory is that Defendant's receipt-processing services practice the patented methods. This includes allegations that Defendant's system receives receipt images from users, "automatically" processes those images to extract expense data without relying on a predefined format, and organizes that data into reports for the user, thereby mapping to the core steps of the asserted claims (Compl. ¶¶25, 29). No probative visual evidence provided in complaint.

• Identified Points of Contention:
  • Scope Questions: A primary point of dispute may be the meaning of the phrase "no predefined format," which appears in the claims of all three patents-in-suit. The case may turn on whether the accused Shoeboxed system truly operates without any predefined format, or if it relies on a set of underlying templates, common keywords (e.g., "Total," "Tax"), or structural heuristics that might be argued to constitute a de facto "format," potentially placing it outside the claim scope.
  • Technical Questions: A key factual question will concern the specific technical operations of the accused system. The claims require that data be obtained or organized "automatically." Discovery will likely focus on what level of automation is actually employed by the Shoeboxed service and whether human-in-the-loop review or other non-automated processes are used in a way that would negate a finding of infringement for this claim element.

V. Key Claim Terms for Construction

• The Term: "no predefined format"
• Context and Importance: This term is recited in the independent claims of all three patents-in-suit (e.g., ’410 Patent, col. 5:20-21) and appears to be the central feature distinguishing the invention from the prior art, as Plaintiff alleges this was a basis for allowance of the ’510 Patent (Compl. ¶21). The outcome of the infringement analysis will likely depend heavily on how this term is construed. Practitioners may focus on this term because its scope will determine whether the accused system, which processes a variety of but not necessarily infinite receipt layouts, falls within the claims.
• Intrinsic Evidence for Interpretation:
  • Evidence for a Broader Interpretation: The specification suggests the invention is capable of handling a wide variety of document types, listing "grocery receipts, various purchase receipts, credit card receipts, bank statements, etc." as examples (’410 Patent, col. 2:50-52). This could support a broad construction that covers any document not conforming to a single, rigid template.
  • Evidence for a Narrower Interpretation: A party could argue that while the format is not "predefined," the invention is limited by the context of "expense receipt" or documents containing "numerical information" as recited in the claims (e.g., ’410 Patent, col. 5:4, 49). This might be used to argue that the claims require a document with certain inherent, albeit unstandardized, characteristics of a financial transaction record, and do not cover truly arbitrary documents.

VI. Other Allegations

• Indirect Infringement: The complaint alleges induced infringement of the ’510 Patent. It asserts that Defendant had knowledge of the patent and intentionally encouraged infringement by "distribut[ing] product literature and website materials inducing end users... to use its products in the customary and intended manner that infringes" (’510 Patent, Compl. ¶¶34-35).
• Willful Infringement: The complaint alleges that Plaintiff provided Defendant with "actual knowledge" of the ’510 Patent via a notice letter and claim chart dated December 27, 2022, prior to the filing of the suit (Compl. ¶33). It further alleges that "despite such actual knowledge," Defendant continued its allegedly infringing activities (Compl. ¶34). While not using the term "willful," these allegations provide a factual basis for such a claim, and the prayer for relief requests enhanced damages under 35 U.S.C. § 284 and a finding of an exceptional case (Compl. ¶¶D, E(i)).

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

This dispute appears to center on the automated interpretation of unstructured documents. The key questions for the court will likely be:

• A core issue will be one of definitional scope: What is the proper construction of the term "no predefined format"? Does it mean the complete absence of any expected structure, or does it mean tolerance for variations among documents that still share the common conventions of a financial receipt? The answer will likely dictate the outcome of the infringement analysis.
• A second issue will be a question of fact and technology: How does the accused Shoeboxed system actually work? Does the system's reliance on OCR, potential pattern matching, or any human-in-the-loop review fall within the scope of the claims' requirement for "automatically" capturing and organizing information?
• Finally, regarding the ’510 Patent, the case may turn on proof of intent: Can Plaintiff show that Defendant's instructional materials and product functions, particularly after receiving pre-suit notice, demonstrate a specific intent to encourage customers to perform the patented method, as required to prove induced infringement?