DCT
6:24-cv-00339
PayRange Inc v. Card Concepts Inc
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: PayRange Inc. (Tennessee / ppb Oregon)
- Defendant: Card Concepts Inc. (Illinois)
- Plaintiff’s Counsel: Wilson Sonsini Goodrich & Rosati
- Case Identification: 6:24-cv-00339, W.D. Tex., 06/24/2024
- Venue Allegations: Plaintiff alleges venue is proper because Defendant maintains a regular and established place of business in the district through a remote employee who resides and works there, and because Defendant was previously registered to do business in Texas using that employee's residence as its registered office address.
- Core Dispute: Plaintiff alleges that Defendant’s FasCard mobile payment systems for unattended retail machines infringe four patents related to retrofitting coin-operated machines for cashless payments and methods for presenting transaction information on a mobile device.
- Technical Context: The technology enables legacy, offline machines such as laundry and vending machines to accept modern, mobile-based cashless payments via a hardware adapter and a corresponding mobile application.
- Key Procedural History: The complaint notes that Plaintiff has previously litigated its patent portfolio against a competitor, KioSoft, and that its patents survived validity challenges at the Patent Trial and Appeal Board (PTAB). Plaintiff also cites subsequent licensing agreements with KioSoft and other major industry players, WASH and CSC. The complaint alleges that Defendant was provided with notice of infringement, including detailed claim charts, on March 21, 2024, prior to the filing of the lawsuit. A statutory disclaimer was filed for certain claims of U.S. Patent No. 11,481,772.
Case Timeline
| Date | Event |
|---|---|
| 2013-12-18 | Priority Date for all Patents-in-Suit (’608, ’772, ’920, ’423) |
| 2021-01-12 | U.S. Patent No. 10,891,608 Issues |
| 2022-10-25 | U.S. Patent No. 11,481,772 Issues |
| 2023-11-22 | Disclaimer filed for U.S. Patent No. 11,481,772 |
| 2024-03-21 | Plaintiff sends notice letter with claim charts to Defendant |
| 2024-04-23 | U.S. Patent No. 11,966,920 Issues |
| 2024-04-30 | U.S. Patent No. 11,972,423 Issues |
| 2024-06-24 | Complaint Filed |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 10,891,608 - “METHOD AND SYSTEM FOR AN OFFLINE-PAYMENT OPERATED MACHINE TO ACCEPT ELECTRONIC PAYMENTS,” Issued January 12, 2021
The Invention Explained
- Problem Addressed: The patent's background describes the challenge of enabling modern electronic payments on the vast installed base of legacy "offline-payment operated machines" (e.g., coin-operated washers, dryers, and vending machines) that are not connected to a network and are designed to accept only physical currency (Compl. ¶ 29; ’608 Patent, col. 1:34-58).
- The Patented Solution: The invention is a retrofittable "payment module" that installs into the existing machine. This module receives a wireless payment request from a user's mobile device and, in response, generates a sequence of electrical pulses that "emulate" the signal a traditional coin mechanism would produce. This allows the module to trigger the machine's operation without requiring physical coins or a modification of the machine's core control unit (’608 Patent, Abstract; col. 6:25-29). Figure 28A illustrates the payment module (1520) intercepting signals between the machine's control unit (1506) and its power supply to initiate an operation (’608 Patent, Fig. 28A).
- Technical Importance: This approach provided a method to quickly and inexpensively upgrade millions of offline, coin-operated machines to accept cashless mobile payments without replacing the entire machine or its internal electronics (Compl. ¶ 5).
Key Claims at a Glance
- The complaint asserts at least independent claim 1 (Compl. ¶ 30).
- The essential elements of Claim 1 include:
- A payment module for an offline payment-operated machine with a coin receiving switch.
- The module comprises a short-range wireless transceiver, one or more processors, a first interface module, and memory.
- The first interface module is configured to output electrical pulses emulating an analog signal from the coin receiving switch.
- The memory includes instructions for storing a required number of electrical pulses, receiving a wireless request from a mobile device, and, in response, determining a number of pulses to output, causing the machine to operate by issuing those pulses, and sending operation information back to the mobile device.
- The complaint does not explicitly reserve the right to assert dependent claims.
U.S. Patent No. 11,966,920 - “METHOD AND SYSTEM FOR PRESENTING REPRESENTATIONS OF PAYMENT ACCEPTING UNIT EVENTS,” Issued April 23, 2024
The Invention Explained
- Problem Addressed: In environments with multiple payment-accepting machines, such as a laundromat, a mobile application needs to provide a clear and intuitive user interface. Users need to easily identify the correct machine, initiate payment, and receive confirmation of the transaction's status, which is difficult when relying on the limited displays of the machines themselves (’772 Patent, col. 14:1-20).
- The Patented Solution: The patent describes a method performed on a mobile device for presenting payment events. The solution involves the mobile application identifying nearby available machines, displaying a visual representation of them, accepting user input to select a specific machine and trigger payment, establishing a wireless communication path, and then displaying an updated user interface—such as a "Transaction Complete" or "Transaction Aborted" message—to inform the user of the outcome (’772 Patent, Abstract; Fig. 26A-26D).
- Technical Importance: This technology centralizes the user experience on the more capable screen of a mobile device, providing clarity and convenience that enhances the reliability and usability of mobile payments for unattended machines (Compl. ¶ 40).
Key Claims at a Glance
- The complaint asserts at least independent claim 1 (Compl. ¶ 41).
- The essential elements of Claim 1 of the parent '772 patent (which is likely similar) include:
- At a mobile device, identifying one or more available payment accepting units in proximity.
- Displaying a user interface with a visual indication of the units and accepting user input to select a unit and trigger payment.
- Establishing a wireless communication path with the selected unit.
- Enabling user interaction to complete the transaction.
- Exchanging information with the unit.
- Displaying an updated user interface reflecting the transaction's outcome.
- The complaint does not explicitly reserve the right to assert dependent claims.
U.S. Patent No. 11,972,423 - “METHOD AND SYSTEM FOR PRESENTING REPRESENTATIONS OF PAYMENT ACCEPTING UNIT EVENTS,” Issued April 30, 2024
Technology Synopsis
This patent, similar in subject matter to the ’920 patent, describes methods for a mobile device to present payment-related events to a user. The alleged advantages include identifying payment units based on an identifier, displaying a visual indication of the units, and completing a transaction after establishing wireless communication (Compl. ¶ 51).
Asserted Claims
At least Claim 1 (Compl. ¶ 52).
Accused Features
The complaint accuses the FasCard app of infringing by providing functionality for identifying machines and completing mobile payment transactions (Compl. ¶ 52).
U.S. Patent No. 11,481,772 - “METHOD AND SYSTEM FOR PRESENTING REPRESENTATIONS OF PAYMENT ACCEPTING UNIT EVENTS,” Issued October 25, 2022
Technology Synopsis
This patent also relates to the user interface on a mobile device. It claims as unconventional the capability to display multiple available payment units and a user's balance before a service is requested, and to show an indication of the transaction's initiation after the request, contrasting this with conventional systems where such information was less accessible (Compl. ¶¶ 62-63).
Asserted Claims
Claim 11. The complaint notes that claims 1-6, 8-10, and 12-20 have been disclaimed (Compl. ¶¶ 24, 64).
Accused Features
The complaint accuses CCI's products with mobile payment functionality of infringing this patent (Compl. ¶ 64).
III. The Accused Instrumentality
Product Identification
The accused instrumentalities are Defendant's "FasCard" payment module and the associated "FasCard app" (Compl. ¶¶ 30, 41).
Functionality and Market Context
The complaint alleges that the FasCard module is placed into an offline payment-operated machine, such as a laundry machine, to enable cashless payments (Compl. ¶ 31). It allegedly includes a short-range wireless transceiver (e.g., NFC) to communicate with a user's mobile device (Compl. ¶ 31). The FasCard app on the mobile device is allegedly used to initiate a cashless operation (Compl. ¶ 31). The complaint further alleges the module is configured to output electrical pulses to the machine's control unit to start its operation (Compl. ¶ 31). The complaint positions the accused products as those of a competitor that copied Plaintiff's technology after its success in the laundry and vending industries (Compl. ¶ 7). No probative visual evidence provided in complaint.
IV. Analysis of Infringement Allegations
U.S. Patent No. 10,891,608 Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| a payment module for an offline payment-operated machine...the payment module comprising: a short-range wireless transceiver configured to communicate with one or more mobile devices; one or more processors; | The accused FasCard product is a payment module for offline machines (e.g., laundry machines) that includes a short-range wireless transceiver (e.g., NFC) and one or more processors. | ¶31 | col. 47:1-9 |
| a first interface module configured to output...one or more electrical pulses, each of the one or more electrical pulses emulating an analog signal generated by the coin receiving switch of the offline payment-operated machine... | The FasCard module includes a first interface module that outputs one or more electrical pulses to the control unit of the offline machine, with each pulse emulating the signal from the machine's coin receiving switch. | ¶31 | col. 47:10-18 |
| and memory with one or more programs...including instructions for: storing...a number of the electrical pulses that must be received by the control unit to initiate an operation...; | The FasCard module's memory allegedly stores programs with instructions for storing the number of electrical pulses required to initiate the machine's operation. | ¶31 | col. 47:19-27 |
| receiving a wireless request via the short-range wireless transceiver from a respective mobile device...to initiate a cashless operation...; | The FasCard module's memory allegedly stores programs with instructions for receiving a wireless request from a mobile device via its transceiver to begin a cashless operation. | ¶31 | col. 47:28-33 |
| and in response to the wireless request: determining a first number of electrical pulses to output...; causing the offline payment-operated machine to initiate the requested cashless operation by issuing the first number of electrical pulses...; and sending operation information...to the respective mobile device... | In response to the wireless request, the FasCard module's programs allegedly determine the number of pulses to output, cause the machine to operate by issuing those pulses, and send information about the operation back to the mobile device. | ¶31 | col. 47:34-48 |
- Identified Points of Contention:
- Scope Questions: A central question will be the scope of the term "emulating an analog signal." The analysis may turn on whether the electrical pulses generated by the accused FasCard module must replicate specific properties (e.g., shape, amplitude, interval) of the signal from a physical coin switch, or if simply causing the machine to operate is sufficient to meet this limitation.
- Technical Questions: What evidence demonstrates that the FasCard module performs the specific sequence of software steps recited in the claim? The infringement allegation will require proof that the module stores a pulse value, receives a request, then determines and issues the pulses, and finally sends operation information back to the mobile device, all in the claimed sequence.
U.S. Patent No. 11,966,920 Infringement Allegations
The complaint states that an exhibit, not attached to the public filing, contains a claim chart for Claim 1 of the ’920 patent (Compl. ¶ 42). The complaint's narrative alleges that CCI's products, including the FasCard app, infringe by identifying payment units by location or identifier, displaying them visually to the user, and completing a transaction after establishing a wireless link (Compl. ¶¶ 40-41).
- Identified Points of Contention:
- Scope Questions: The interpretation of "identifying" payment accepting units will be a likely point of dispute. Questions may arise as to whether this requires an active, real-time discovery process (e.g., scanning for Bluetooth signals and using signal strength) as described in the patent family's specification, or if displaying a pre-populated list of machines at a known location can satisfy this element.
- Evidentiary Questions: The complaint's allegations regarding the user interface patents are general. A key question for the court will be what specific evidence demonstrates that the FasCard app's workflow and displayed information match the step-by-step process required by the asserted claims.
V. Key Claim Terms for Construction
For the ’608 Patent
- The Term: "emulating an analog signal generated by the coin receiving switch"
- Context and Importance: This term is the technological core of the invention, defining how the retrofitted module "tricks" the legacy machine. The case may hinge on whether the accused FasCard module's electrical output falls within the scope of this term. Practitioners may focus on this term because the dispute will likely involve expert testimony comparing the specific electrical characteristics of the accused signal to those produced by a mechanical coin switch.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The specification states that "In essence the adapter module 100 simulates establishing payment on payment accepting unit 120 in much the same manner as other alternative forms of payment (e.g., cash)" (’608 Patent, col. 6:25-29). This language may support a construction focused on the functional result (crediting the machine) rather than a specific electrical waveform.
- Evidence for a Narrower Interpretation: The detailed description teaches a "training mode" where the module detects a "preset sequence of payment acceptance signals," including identifying the "count," "amplitude," "shape," and "interval between pulses" to create a "predefined signal sequence to emulate" it (’608 Patent, col. 41:50-60). This could support a narrower construction requiring the replication of these specific signal characteristics.
For the ’920 Patent
- The Term: "identifying...one or more payment accepting units in proximity"
- Context and Importance: This term defines the initial step of the user experience on the mobile app. Its construction will determine whether the accused app's method for presenting machines to the user is infringing. Practitioners may focus on this term because it could distinguish between a dynamic, location-aware system and a more static, list-based system.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The patent family describes a user approaching a machine and the application "automatically connect[ing]" (’608 Patent, col. 7:3-6). This may suggest that merely presenting the proximate machine for selection, regardless of the underlying method, constitutes "identifying."
- Evidence for a Narrower Interpretation: The specification discloses using "Received Signal Strength Indicator (RSSI)" and "In-Range Heuristics" which involve a "mathematical computation" to "determine when a user is in the authorization zone 104 and/or the payment zone 102" (’608 Patent, col. 10:46-67). This may support a narrower construction that requires an active, proximity-sensing process rather than simply displaying a map or list of machines at a given address.
VI. Other Allegations
- Indirect Infringement: The complaint alleges both induced and contributory infringement for all four patents-in-suit. The inducement allegations are based on claims that CCI "actively encourages" its customers and partners to use the accused FasCard system in an infringing manner with specific intent (Compl. ¶¶ 32, 43, 54, 66). The contributory infringement allegations state that the accused products are a material part of the invention and are known to be especially made for infringing use (Compl. ¶¶ 33, 44, 55).
- Willful Infringement: While the word "willful" is not used, the complaint asserts that each count presents an "exceptional" case and requests enhanced damages under 35 U.S.C. § 284 (Compl. ¶¶ 37, 47, 58, 69). The basis for this allegation is pre-suit knowledge stemming from a detailed notice letter, including claim charts, sent to CCI on March 21, 2024 (Compl. ¶ 13). For the ’920 and ’423 patents, which issued after the notice letter, the complaint alleges CCI was notified of the infringement even prior to their issuance (Compl. ¶¶ 47, 58).
VII. Analyst’s Conclusion: Key Questions for the Case
- A core issue will be one of technical equivalence: does the accused FasCard module's electrical signaling method constitute "emulating an analog signal generated by the coin receiving switch" as defined by the '608 patent, or is there a fundamental mismatch in electrical properties or operational logic that places it outside the claim's scope?
- A key dispute will be one of definitional scope for the user interface patents: can the term "identifying," which the patent specification links to proximity-based heuristics like RSSI analysis, be construed broadly enough to cover the method by which the accused FasCard app presents a list of available machines to the user?
- Given the plaintiff’s detailed allegations of prior enforcement, PTAB victories, and a pre-suit notice letter with claim charts, a central question for damages will be the nature and timing of the defendant's knowledge. The court will likely examine what CCI knew about the patents-in-suit and when, which will be critical to determining whether the case is "exceptional" and warrants enhanced damages.