DCT
6:23-cv-00267
Sales Transaction Systems LLC v. JPMorgan Chase Bank NA
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: Sales Transaction Systems LLC (California)
- Defendant: JPMorgan Chase Bank, N.A. (Delaware)
- Plaintiff’s Counsel: Connor Lee & Shumaker PLLC
- Case Identification: 6:23-cv-00267, W.D. Tex., 04/11/2023
- Venue Allegations: Plaintiff alleges venue is proper in the Western District of Texas because Defendant operates banks and ATMs in the district, which constitute regular and established places of business where alleged infringement occurs.
- Core Dispute: Plaintiff alleges that Defendant’s cardless ATM access system infringes a patent related to using a mobile wireless device for financial transactions at an ATM in place of a physical card.
- Technical Context: The technology concerns secure, cardless financial transactions at Automated Teller Machines (ATMs), a feature increasingly offered by financial institutions to enhance customer convenience and security.
- Key Procedural History: The complaint alleges that Defendant has been aware of the patent-in-suit since at least December 29, 2022, following receipt of a notice of infringement letter from the Plaintiff. The patent-in-suit is a continuation of an application filed in 2010, which itself is a divisional of an application filed in 2002, indicating a long prosecution history.
Case Timeline
| Date | Event |
|---|---|
| 2002-01-15 | Earliest Priority Date ('933 Patent) |
| 2021-04-27 | U.S. Patent No. 10,990,933 Issues |
| 2022-12-29 | Alleged Date of Notice of Infringement Letter |
| 2023-04-11 | Complaint Filed |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 10,990,933 - "System and Method for a Private and Secure Financial Transaction System Using an ATM," issued April 27, 2021
The Invention Explained
- Problem Addressed: The patent's background describes privacy and security risks inherent in traditional bankcard transactions. These include merchants and banks retaining sensitive customer and purchasing data, creating risks of data theft and misuse, as well as the risk of physical card theft or loss (U.S. Patent No. 10,990,933, col. 1:42-65).
- The Patented Solution: The invention proposes a system where a customer can use a "portable wireless device" (such as a cell phone or PDA) to conduct transactions at an ATM, including cash withdrawals, "in lieu of an ATM card" ('933 Patent, Abstract; col. 2:30-37). The system architecture involves the customer's wireless device, the ATM, and a "central system" communicating over a network to authorize the transaction without sharing the customer's identity or sensitive data with the financial institution's local systems, thereby enhancing privacy ('933 Patent, col. 2:37-46).
- Technical Importance: The described technology sought to leverage the increasing prevalence of mobile devices to reduce reliance on physical payment cards, thereby mitigating the data security and physical theft risks associated with them ('933 Patent, col. 2:11-14, 2:37-46).
Key Claims at a Glance
- The complaint asserts independent claims 1 and 5 (Compl. ¶29).
- Essential elements of independent claim 5 include:
- A central system for managing ATMs that pre-stores customer electronic addresses.
- An ATM with a printing mechanism and logic to control it.
- The ATM interfacing with a customer's "mobile wireless device" to identify the customer "in lieu of the ATM receiving customer identifying data from an ATM card."
- The ATM logic "suppresses printing" of the transaction receipt.
- The central system logic electronically sends the receipt to the pre-stored customer electronic address.
- The complaint does not explicitly reserve the right to assert dependent claims.
III. The Accused Instrumentality
Product Identification
- The accused instrumentality is JPMorgan Chase Bank's "ATM banking ecosystem," which includes its "Cardless ATM Access" system and associated software (Compl. ¶12).
Functionality and Market Context
- The accused system allows Chase customers to access ATMs without a physical debit card by using a mobile phone's wallet application containing a virtual Chase debit card (Compl. ¶3). The user taps their phone on an NFC symbol on the ATM to initiate the transaction (Compl. ¶19). The complaint provides a screenshot from the Chase website illustrating this three-step process: accessing the mobile wallet, tapping the phone on the ATM, and entering a PIN (Compl. p. 2). The complaint alleges this is a widely advertised feature available across Chase's network of over 16,000 ATMs (Compl. ¶15).
IV. Analysis of Infringement Allegations
'933 Patent Infringement Allegations
| Claim Element (from Independent Claim 5) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| A system for interfacing by an ATM with a customer for a financial transaction, comprising: a central system for managing operations of ATMs ... wherein the central system database server pre-storing customer electronic addresses of select customers; | Chase is alleged to operate a central system with a CPU, memory, and logic for managing its ATMs, which includes a central database server that pre-stores customer electronic addresses, such as email addresses. | ¶15-16 | col. 13:21-29 |
| an ATM, wherein the ATM has a printing mechanism and an ATM logic, wherein the ATM logic controls the printing mechanism for printing an ATM transaction receipt... | Chase ATMs are alleged to be fully functioning automated teller machines that include a standard printing mechanism and logic to control the printing of transaction receipts. A provided diagram illustrates the "Receipt slot" as a standard component of cash machines (Compl. p. 6). | ¶17-18 | col. 13:30-34 |
| the ATM interfaces with the customer, using a mobile wireless device of the customer to identify the customer being in proximity to the ATM for the ATM transaction in lieu of the ATM receiving customer identifying data from an ATM card; | Chase ATMs allegedly interface with a customer's mobile phone via NFC to initiate a transaction. This is presented as being "in lieu of" using a physical card. A marketing image shows a user tapping a smartphone against an ATM's NFC reader (Compl. p. 5). | ¶19 | col. 16:3-9 |
| the ATM logic suppresses printing of the ATM transaction receipt; and | The system allegedly allows the user to choose not to receive a physical receipt. The complaint alleges that if an electronic option is chosen, the printing is suppressed. A screenshot shows ATM screen options for "Email," "Text message," "No receipt," and "Print" (Compl. p. 7). | ¶20 | col. 16:9-10 |
| the central system logic sending electronically the ATM transaction receipt to the one of select customers via the pre-stored customer electronic addresses of select customers in the central system database server. | The Chase central system is alleged to send transaction receipts to customers' pre-stored email addresses. A screenshot from a marketing video shows a message stating, "Take your card and your receipt is in your email!" (Compl. p. 8). | ¶21-22 | col. 16:11-15 |
- Identified Points of Contention:
- Scope Questions: A central dispute may arise over the meaning of conducting a transaction "in lieu of the ATM receiving customer identifying data from an ATM card." Defendant may argue that its system still uses "customer identifying data from an ATM card" because a virtual debit card is stored in the mobile wallet and its data is transmitted to the ATM. Plaintiff may counter that the claim is directed at replacing the physical card as the data-delivery object, which the accused system does.
- Technical Questions: The complaint alleges distinct "ATM logic" and "central system logic" perform the "suppressing" and "sending" steps, respectively. A factual question will be whether Chase's system architecture maps onto this claimed separation of functions or if, for example, a single system component or the ATM itself manages both receipt suppression and electronic delivery, potentially challenging the literal claim structure.
V. Key Claim Terms for Construction
The Term: "mobile wireless device"
- Context and Importance: The scope of this term is fundamental, as the technology at issue (modern smartphones with NFC) did not exist in the same form when the patent's earliest priority application was filed in 2002. The patent's definition will determine if it reads on the accused devices.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The term is used generally throughout the claims and specification. The detailed description notes it "may be a cellular telephone... Alternatively, it may be PDA with a wireless modem" ('933 Patent, col. 4:31-33), suggesting these are examples, not an exhaustive list.
- Evidence for a Narrower Interpretation: A defendant could argue that the specific examples provided ground the term in the technological context of the early 2000s, potentially limiting its scope to devices with similar capabilities and communication methods, as opposed to modern smartphones with integrated, secure hardware elements for payment.
The Term: "suppresses printing of the ATM transaction receipt"
- Context and Importance: This term is critical for infringement because the accused system gives the user an option to not print. Practitioners may focus on this term because its construction will determine whether providing a "no print" option meets the "suppresses printing" limitation, or if the claim requires a more automatic or default suppression.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The patent states the ATM "suppresses printing of a paper record for the ATM customer, because an e-mail notification 325 is sent" ('933 Patent, col. 10:28-31). This could support an interpretation where the act of sending an electronic receipt is the trigger for suppression, which aligns with the user-selectable options in the accused system.
- Evidence for a Narrower Interpretation: The claim language is active ("the ATM logic suppresses printing"). A defendant might argue this requires an affirmative, system-initiated action rather than merely responding to a user's selection from a menu of options that includes printing.
VI. Other Allegations
- Indirect Infringement: While not pleaded as a separate count, the complaint alleges Defendant "aids and abets" normal use (Compl. ¶29). The factual basis for inducement is alleged through Defendant's advertising and instructions to customers on how to use the cardless ATM feature, supported by screenshots of Chase's website (Compl. ¶¶3, 19).
- Willful Infringement: Willfulness is alleged based on Defendant’s purported knowledge of the '933 Patent since at least December 29, 2022, from a notice letter sent by Plaintiff (Compl. ¶31). Plaintiff also seeks a declaration that the case is "exceptional" under 35 U.S.C. § 285 (Compl. p. 11, ¶ iii).
VII. Analyst’s Conclusion: Key Questions for the Case
- A core issue will be one of definitional scope: can the phrase "in lieu of... receiving customer identifying data from an ATM card," written in the context of replacing physical plastic cards, be construed to read on a system that transmits data from a virtual card stored within a "mobile wireless device"?
- A second key question will be one of claim construction and factual proof: does providing a user with the option to select a "No receipt" or "Email" receipt on an ATM screen satisfy the affirmative limitation that "the ATM logic suppresses printing," or does the claim require a more automatic suppression triggered by the use of the wireless device itself?
- A final evidentiary question will relate to system architecture: can Plaintiff prove that the accused Chase system employs a distinct "ATM logic" and "central system logic" that perform the separate functions of suppressing printing and sending electronic receipts, respectively, as structurally required by the language of claim 5?