Case 1:23-cv-00278-MN Document 15 Filed 06/02/23 Page 1 of 26 PageID #: 701
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
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`PAYRANGE INC.,
`
`Plaintiff,
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`v.
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`CSC SERVICEWORKS, INC.,
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`Defendant.
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`Civil Action No. 1:23-cv-00278-MN
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`JURY TRIAL DEMANDED
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`CSC SERVICEWORKS, INC.’S OPENING BRIEF IN SUPPORT OF ITS PARTIAL
`MOTION TO DISMISS PAYRANGE’S AMENDED COMPLAINT
`
`
`Date: June 2, 2023
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`John C. Phillips, Jr. (# 110)
`Megan C. Haney (#5016)
`PHILLIPS, MCLAUGHLIN & HALL, P.A.
`1200 North Broom Street
`Wilmington, DE 19806
`(302) 655-4200
`jcp@pmhdelaw.com
`mch@pmhdelaw.com
`
`Attorneys for Defendant
`CSC ServiceWorks, Inc.
`
`

`

`Case 1:23-cv-00278-MN Document 15 Filed 06/02/23 Page 2 of 26 PageID #: 702
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`
`
`TABLE OF CONTENTS
`
`I. NATURE AND STAGE OF THE PROCEEDINGS ................................................................... 1
`II. SUMMARY OF THE ARGUMENT ........................................................................................... 1
`III. STATEMENT OF FACTS ........................................................................................................... 2
`IV. LEGAL STANDARDS ................................................................................................................ 4
`A.
`Patent Eligible Subject Matter .............................................................................................. 4
`B.
`Stating A Claim For Willfulness or Indirect Infringement ................................................... 5
`1. Willfulness ............................................................................................................................ 6
`2.
`Indirect Infringement............................................................................................................. 6
`V. ARGUMENT ............................................................................................................................... 7
`A.
`The ‘772 Patent is invalid for failing to claim patentable subject matter. ............................ 7
`1. The claims of the ‘772 Patent are directed to an abstract idea. ............................................. 7
`2. The ‘772 Patent fails to recite an inventive concept. .......................................................... 13
`B.
`PayRange fails to state a claim for willfulness and indirect infringement. ......................... 16
`VI. CONCLUSION .......................................................................................................................... 20
`
`
`
`i
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`

`

`Case 1:23-cv-00278-MN Document 15 Filed 06/02/23 Page 3 of 26 PageID #: 703
`
`TABLE OF AUTHORITIES
`
`Cases
`
`Page(s)
`
`Affinity Labs of Texas, LLC v. Amazon.com Inc.,
`838 F.3d 1266 (Fed. Cir. 2016).................................................................................................... 10
`
`Alice Corp. Pty v. CLS Bank Int’l,
`573 U.S. 208 (2014) .............................................................................................................. passim
`
`Am. Axle & Mfg., Inc. v. Neapco Holdings LLC,
`939 F.3d 1355 (Fed Cir. 2019)....................................................................................................... 9
`
`Am. Axle & Mfg., Inc. v. Neapco Holdings LLC,
`967 F.3d 1285 (Fed. Cir. 2020).................................................................................................... 13
`
`Ariosa Diagnostics, Inc. v. Sequenom, Inc,
`788 F.3d 1371 (Fed. Cir. 2015).................................................................................................... 14
`
`Ashcroft v. Iqbal,
`556 U.S. 662 (2009) ....................................................................................................................... 5
`
`Atlas Glob. Techs., LLC v. Sercomm Corp.,
`6:21-CV-00818-ADA, 2022 WL 16557650 (W.D. Tex. Oct. 31, 2022) ..................................... 18
`
`Bayer Healthcare LLC v. Baxalta Inc.,
`989 F.3d 964 (Fed. Cir. 2021)............................................................................................ 6, 16, 18
`
`Bell Atlantic v. Twombly,
`550 U.S. 433 (2007) ............................................................................................................. 5, 6, 17
`
`Bilski v. Kappos,
`561 U.S. 593 (2010) ....................................................................................................................... 4
`
`BoardActive Corp. v. Foursquare Labs, Inc.,
`No. 1:22-CV-00597-JDW, 2023 WL 2587688 (D. Del. Mar. 21, 2023)..................................... 15
`
`Bridge & Post, Inc. v. Verizon Commc'ns, Inc.,
`778 F. App’x 882 (Fed. Cir. 2019) .............................................................................................. 15
`
`buySAFE, Inc. v. Google, Inc.,
`765 F.3d 1350 (Fed. Cir. 2014).................................................................................................... 12
`
`ChargePoint, Inc. v. SemaConnect, Inc.,
`920 F.3d 759 (Fed. Cir. 2019).................................................................................................. 9, 12
`
`Cirba Inc. v. VMware, Inc.,
`No. CV 19-742-GBW, 2023 WL 3151852 (D. Del. Apr. 18, 2023) ........................................... 17
`
`
`
`ii
`
`

`

`Case 1:23-cv-00278-MN Document 15 Filed 06/02/23 Page 4 of 26 PageID #: 704
`
`Commil USA, LLC v. Cisco Sys., Inc.,
`135 S. Ct. 1920 (2015) ................................................................................................................. 16
`
`DSU Med. Corp. v. JMS Co., Ltd.,
`471 F.3d 1293 (Fed. Cir. 2006)...................................................................................................... 6
`
`Dynamic Data Techs., LLC v. Amlogic Holdings Ltd,
`2020 WL 4365809 (D. Del. July 30, 2020) ................................................................................... 6
`
`Dynamic Data Techs., LLC v. Brightcove Inc.,
`2020 WL 4192613 (D. Del. July 21, 2020) ................................................................................. 19
`
`Elec. Power Grp., LLC v. Alstom S.A.,
`830 F.3d 1350 (Fed. Cir. 2016)...................................................................................................... 5
`
`Enfish, LLC v. Microsoft Corp.,
`
`822 F.3d 132 (Fed. Cir. 2016)...................................................................................................... 12
`
`Epic IP LLC v. Backblaze, Inc.,
`351 F. Supp. 3d 733 (D. Del. 2018) (Bryson, J.) ........................................................................... 9
`
`Finjan, Inc. v. Cisco Systems, Inc.,
`2017 WL 2462423 (N.D. Cal. June 7, 2017) ............................................................................... 18
`
`Fujitsu Ltd. v. Netgear Inc.,
`620 F.3d 1321 (Fed. Cir. 2010)...................................................................................................... 6
`
`GeoComply Sols. Inc. v. Xpoint Servs. LLC,
`No. CV 22-1273-WCB, 2023 WL 1927393 (D. Del. Feb. 10, 2023) .......................................... 15
`
`Global-Tech Appliances, Inc. v. SEB S.A.,
`563 U.S. 754 (2011) ..................................................................................................................... 19
`
`Helios Streaming, LLC v. Vudu, Inc.,
`2020 WL 2332045 (D. Del. 2020) ......................................................................................... 18, 19
`
`In re AuthWallet, LLC,
` No. 2022-1842, 2023 WL 3330298 (Fed. Cir. May 10, 2023) ...................................................... 8
`
`In re Bill of Lading Transmission & Processing Sys. Pat. Litig.,
`681 F.3d 1323 (Fed. Cir. 2012)...................................................................................................... 6
`
`In re TLI Commc'ns LLC Patent Litig.,
`823 F.3d 607 (Fed. Cir. 2016)...................................................................................................... 14
`
`Innovation Scis., LLC v. Amazon.com, Inc.,
`778 F. App’x 859 (Fed. Cir. 2019) ................................................................................................ 8
`
`
`
`iii
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`

`

`Case 1:23-cv-00278-MN Document 15 Filed 06/02/23 Page 5 of 26 PageID #: 705
`
`Intellectual Ventures I LLC v. Erie Indem. Co.,
`850 F.3d 1315 (Fed. Cir. 2017)...................................................................................................... 9
`
`Internet Patents Corp. v. Active Network, Inc.,
`790 F.3d 1343 (Fed. Cir. 2015)...................................................................................................... 7
`
`Interval Licensing LLC v. AOL, Inc.,
`896 F.3d 1335 (Fed. Cir. 2018)...................................................................................................... 9
`
`Jackson v. Seaspine Holdings Corp.,
`CV 20-1784-RGA, 2022 WL 610703 (D. Del. Feb. 14, 2022) ................................................... 17
`
`Mayo Collaborative Servs. v. Prometheus Labs., Inc.,
`566 U.S. 66 (2012) ......................................................................................................................... 4
`
`MONEC Holding AG v. Motorola Mobility, Inc.,
`897 F. Supp. 2d 225 (D. Del. 2012) ............................................................................................. 17
`
`PPG Industries Ohio, Inc. v. Axalta Coating Sys., LLC,
`CV 21-346-LPS-SRF, 2022 WL 610740 (D. Del. Jan. 26, 2022) ............................................... 20
`
`Robocast, Inc. v. YouTube, LLC,
`CV 22-304-RGA, 2022 WL 16922035 (D. Del. Nov. 14, 2022) ................................................ 17
`
`Sandbox Software, LLC v. 18Birdies, LLC,
`No. CV 18-1649-MN, 2019 WL 2524780 (D. Del. June 19, 2019) ............................................ 16
`
`SAP Am., Inc. v. InvestPic, LLC,
`898 F.3d 1161 (Fed. Cir. 2018)...................................................................................................... 5
`
`Simio LLC v. FlexSim Software Prods., Inc.,
`983 F.3d 1353 (Fed. Cir. 2020).................................................................................................... 15
`
`Smart Sys. Innovations, LLC v. Chicago Transit Auth.,
`873 F.3d 1364 (Fed. Cir. 2017)...................................................................................................... 8
`
`Sonos, Inc. v. Google LLC,
`591 F. Supp. 3d 638 (N.D. Cal. 2022) ......................................................................................... 18
`
`T-Jat Sys. 2006, Ltd. v. Expedia, Inc. (DE),
`No. 16-581, 2018 WL 1525496 (D. Del. Mar. 28, 2018) ............................................................ 16
`
`Thunder Power New Energy Vehicle Dev. Co. Ltd. v. Byton N. Am. Corp.,
`340 F. Supp. 3d 922, 929 (N.D. Cal. 2018) ................................................................................... 9
`
`TrackTime, LLC v. Amazon.com, Inc.,
`No. CV 18-1518-MN, 2019 WL 2524779 (D. Del. June 19, 2019) ............................................ 14
`
`
`
`iv
`
`

`

`Case 1:23-cv-00278-MN Document 15 Filed 06/02/23 Page 6 of 26 PageID #: 706
`
`Two-Way Media Ltd. v. Comcast Cable Commc’ns,
`LLC, 874 F.3d 1329 (Fed. Cir. 2017) .......................................................................................... 16
`
`Universal Secure Registry LLC v. Apple Inc.,
`10 F.4th 1342 (Fed. Cir. 2021) ...................................................................................................... 8
`
`VLSI Tech. LLC v. Intel Corp.,
`2019 WL 1349468 (D. Del. Mar. 26, 2019) ................................................................................ 19
`
`W. View Research, LLC v. Audi AG,
`685 F. App’x 923 (Fed. Cir. 2017) .................................................................................................... 14
`
`Yu v. Apple Inc.,
`1 F.4th 1040 (Fed. Cir. 2021) ...................................................................................................... 14
`
`ZapFraud, Inc. v. Barracuda Networks, Inc.,
`528 F. Supp. 3d 247 (D. Del. 2021) ............................................................................................. 19
`
`
`
`v
`
`

`

`Case 1:23-cv-00278-MN Document 15 Filed 06/02/23 Page 7 of 26 PageID #: 707
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`I. NATURE AND STAGE OF THE PROCEEDINGS
`
`PayRange Inc. (“PayRange”) filed its Original Complaint on March 15, 2023, alleging that
`
`CSC ServiceWorks, Inc. (“CSC”) infringes U.S. Patent Nos. 8,856,045 (“the ‘045 Patent”),
`
`10,438,208 (“the ‘208 Patent”), 10,891,608 (“the ‘608 Patent”), and 11,481,772 (“the ‘772 Patent)
`
`(collectively, “the Asserted Patents”). D.I. 1. On May 5, 2023, CSC filed Partial Motion to Dismiss
`
`PayRange’s Original Complaint under Federal Rule of Civil Procedure 12(b)(6). D.I. 8. Rather than
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`responding to CSC’s Motion, PayRange filed an Amended Complaint against CSC on May 19, 2023,
`
`alleging infringement of at least claims 1-4 and 10-12 of the ‘045 Patent, claim 1 of the ‘208 Patent,
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`claim 1 of the ‘608 Patent, and claims 1 and 4 of the ‘772 Patent. D.I. 12 at ¶¶ 47, 62, 73, 87. In light
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`of PayRange’s Amended Complaint, the Court denied as moot CSC’s Partial Motion to Dismiss. D.I.
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`13.
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`CSC moves under Federal Rule of Civil Procedure 12(b)(6) to: (1) dismiss Count IV of
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`PayRange’s Amended Complaint because the ‘772 Patent is invalid under 35 U.S.C. § 101 for
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`claiming ineligible subject matter; and (2) dismiss PayRange’s claims of willful and indirect
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`infringement as to the ‘208, ‘608, and ‘772 Patents in Counts II, III, and IV because PayRange has
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`failed to allege facts supporting CSC’s knowledge of those patents.
`
`II.
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`SUMMARY OF THE ARGUMENT
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`PayRange alleges that CSC infringes four patents related to mobile payments. The claims of
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`at least one of those patents—the ‘772 Patent—are textbook patent-ineligible. They recite purely
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`functional, results-oriented steps for using a mobile device to make payments on a machine. The
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`claims are devoid of specific instructions or algorithms for accomplishing this abstract idea, reciting
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`only generic “mobile devices,” servers, and goal-oriented messages. Furthermore, using a mobile
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`device to make payments on a machine—as the claims recite—is merely a computer-implemented
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`
`
`1
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`

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`Case 1:23-cv-00278-MN Document 15 Filed 06/02/23 Page 8 of 26 PageID #: 708
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`method of a longstanding economic practice. Because the claims recite the abstract idea of using
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`mobile devices for payments on machines, they fail the patent eligibility requirements of 35 U.S.C. §
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`101.
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`The Federal Circuit has consistently held that requesting, transmitting, and displaying
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`information—including in the context of mobile payments, as in the claims at-issue—are abstract
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`ideas. Reciting those abstract ideas using well-known, conventional, off-the-shelf devices and
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`wireless technologies does not transform the abstract idea into patent-eligible subject matter.
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`Because the claims of the ‘772 Patent are drawn to the abstract idea of using a mobile device
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`to make payments on machines with conventional devices and technologies, PayRange has failed to
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`state a claim upon which relief can be granted. The Court should dismiss Count IV for asserting
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`claims that fail the eligibility requirements of 35 U.S.C. § 101.
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`PayRange’s Amended Complaint also fails to state claims for indirect and willful
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`infringement of the ‘772, ‘208, and ‘608 Patents. Both of those claims require actual knowledge of
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`the specific patents allegedly infringed. But PayRange’s Complaint lacks factual allegations plausibly
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`supporting that CSC had specific knowledge of these patents before PayRange filed this lawsuit.
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`Because specific knowledge of each asserted patent is a requirement for both willful infringement
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`and indirect infringement of those patents, CSC requests that the Court dismiss the willfulness and
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`indirect infringement allegations of Counts II, III, and IV.
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`III.
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`STATEMENT OF FACTS
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`PayRange filed an Amended Complaint against CSC on May 19, 2023, alleging infringement
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`of at least claims 1-4 and 10-12 of the ‘045 Patent, claim 1 of the ‘208 Patent, claim 1 of the ‘608
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`Patent, and claims 1 and 4 of the ‘772 Patent. D.I. 12 at ¶¶ 47, 62, 73, 87. The Asserted Patents issued
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`on the following dates:
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`
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`2
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`

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`Case 1:23-cv-00278-MN Document 15 Filed 06/02/23 Page 9 of 26 PageID #: 709
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`•
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`•
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`•
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`•
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`‘045 Patent: October 7, 2014 (see D.I. 12-1 at Ex. 1);
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`‘208 Patent: October 8, 2019 (see D.I. 12-1 at Ex. 2);
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`‘608 Patent: January 12, 2021 (see D.I. 12-1 at Ex. 3);
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`‘772 Patent: October 25, 2022 (see D.I. 12-1 at Ex. 4).
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`The ‘772 Patent specification explains that “vending machines” have “been around for
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`thousands of years,” with “coin operated vending machines . . . introduced in the 1880’s.” See ‘772
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`Patent at 1:45-53. It further explains that vending machines are one type of “payment accepting unit,”
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`which the specification describes as “equipment that requires payment for the dispensing of products
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`and/or services.” Id. at 1:54-65. While prior payment accepting units required insertion of cash or
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`coins and physical user input with the machine (id. at 2:2-3), based on the proliferation of mobile
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`devices, “[m]obile payment is a logical extension.” Id. at 2:10-12.
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`The ‘772 Patent is entitled “Method and System for Presenting Representations of Payment
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`Accepting Unit Events.” Its claims recite using a mobile device to present “selection and transaction
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`information” to a “payment accepting unit.” Method claim 1 is exemplary:
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`1. A method of presenting representations of payment accepting unit events, comprising:
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`at a mobile device with one or more processors, memory, one or more output devices
`including a display, and one or more radio transceivers:
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`identifying one or more payment accepting units in proximity to the mobile device that are
`available to accept payment from a mobile payment application executing on the mobile device, the
`identifying based at least in part on an identifier corresponding to the one or more payment accepting
`units, wherein the one or more payment accepting units are payment operated machines that accept
`payment for dispensing of products and/or services;
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`displaying a user interface of the mobile payment application on the display of the mobile
`device, the user interface being configured to display a visual indication of the one or more payment
`accepting units and accept user input to (i) receive selection by a user of the mobile device of an
`available payment accepting unit of the one or more payment accepting units and (ii) trigger payment
`by the mobile payment application for a transaction initiated by the user of the mobile device with
`the available payment accepting unit of the one or more payment accepting units;
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`3
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`Case 1:23-cv-00278-MN Document 15 Filed 06/02/23 Page 10 of 26 PageID #: 710
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`establishing via the one or more radio transceivers a wireless communication path including
`the mobile device and the available payment accepting unit of the one or more payment accepting
`units;
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`after establishing the wireless communication path, enabling user interaction with the user
`interface of the mobile payment application to complete the transaction;
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`exchanging information with the available payment accepting unit via the one or more radio
`transceivers, in conjunction with the transaction; and
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`after exchanging the information, displaying, on the display, an updated user interface of the
`mobile payment application to the user of the mobile device.
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`In addition to direct infringement, PayRange alleges that CSC infringes indirectly (knowingly
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`inducing others to infringe a patent) and willfully (knowingly infringing a patent). PayRange’s
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`allegations supporting specific knowledge of the Asserted Patents include that: (1) PayRange made a
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`presentation to CSC in early 2017 stating that it had “patented technology” (D.I. 12 at ¶¶ 7-8); (2)
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`PayRange soon thereafter sent CSC products for testing that identified the ‘045 Patent and stated that
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`PayRange had other “patents pending” (id. at ¶¶ 9-14); (3) PayRange met with CSC in June of 2017
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`to deliver a technical presentation which identified the ‘045 patent and family members of the ‘608,
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`‘208, and ‘772 Patents (id. at ¶¶ 15-18); (4) PayRange deposed CSC in connection with “another
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`patent lawsuit” which, “on information and belief,” led CSC to investigate PayRange’s patent
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`portfolio (id. at ¶ 21); and (5) twelve days prior to filing this lawsuit, PayRange sent CSC’s outside
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`counsel a “presentation discussing its intellectual property” and a draft complaint (id. at ¶ 22).
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`IV. LEGAL STANDARDS
`
`A. Patent Eligible Subject Matter
`
`Whether patent claims are drawn to patent-eligible subject matter under 35 U.S.C. § 101 is an
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`issue of law for the court to decide. See Bilski v. Kappos, 561 U.S. 593, 621 (2010). “Laws of nature,
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`natural phenomena, and abstract ideas are not patentable.” Alice Corp. Pty v. CLS Bank Int’l, 573
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`U.S. 208, 216 (2014). These exceptions are “reserved exclusively to none.” Mayo Collaborative
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`
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`4
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`

`

`Case 1:23-cv-00278-MN Document 15 Filed 06/02/23 Page 11 of 26 PageID #: 711
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`Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 71 (2012) (internal citations omitted).
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`The Supreme Court has established a two-step analytical framework for “distinguishing
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`patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-
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`eligible applications of those concepts.” Alice, 573 U.S. at 217. First, the court must determine
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`“whether the claims at issue are directed to one of those patent-ineligible concepts,” such as an
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`abstract idea. Id. at 217. Second, if the claims are directed to an abstract idea, the court must “examine
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`the elements of the claim to determine whether it contains an ‘inventive concept’ sufficient to
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`‘transform’ the claimed abstract idea into a patent-eligible application.” Id. at 221. An “inventive
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`concept” includes an element or combination of elements that “is sufficient to ensure that the patent
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`in practice amounts to significantly more than a patent upon the [ineligible concept] itself.” Id. at 217
`
`(citation omitted).
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`The first step of the Alice inquiry examines “the focus of the claims, their character as a
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`whole.” SAP Am., Inc. v. InvestPic, LLC, 898 F.3d 1161, 1167 (Fed. Cir. 2018). The second step
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`requires the court to “look[] more precisely at what the claim elements add—specifically, whether,
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`in the Supreme Court’s terms, they identify an ‘inventive concept’ in the application of the ineligible
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`matter to which (by assumption at step two) the claim is directed.” Elec. Power Grp., LLC v. Alstom
`
`S.A., 830 F.3d 1350, 1353 (Fed. Cir. 2016) (citations omitted).
`
`B. Stating A Claim For Willfulness or Indirect Infringement
`
`Stating a claim for relief “requires more than labels and conclusions, and a formulaic recitation
`
`of the elements of a cause of action will not do.” Bell Atlantic v. Twombly, 550 U.S. 433, 444 (2007).
`
`Rather, a pleading must allege “enough facts to state a claim to relief that is plausible on its face.” Id.
`
`at 570. “While legal conclusions can provide the framework of a complaint, they must be supported
`
`by factual allegations.” Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). “Factual allegations must be
`
`
`
`5
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`

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`Case 1:23-cv-00278-MN Document 15 Filed 06/02/23 Page 12 of 26 PageID #: 712
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`enough to raise a right to relief above the speculative level on the assumption that all of the
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`complaint’s allegations are true.” Twombly, 550 U.S. at 545.
`
`1. Willfulness
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`A determination of willfulness requires both knowledge of the asserted patent and deliberate
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`or intentional infringement. See Bayer Healthcare LLC v. Baxalta Inc., 989 F.3d 964, 988 (Fed. Cir.
`
`2021) (citing Eko Brands, LLC v. Adrian Rivera Maynez Enters., Inc., 946 F.3d 1367, 1378 (Fed. Cir.
`
`2020)). To state a claim for willful infringement, a pleading must allege, at a minimum: “facts from
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`which it can be plausibly inferred that the party accused of infringement (1) had knowledge of or was
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`willfully blind to the existence of the asserted patent and (2) had knowledge of or was willfully blind
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`to the fact that the party's alleged conduct constituted, induced, or contributed to infringement of the
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`asserted patent.” Dynamic Data Techs., LLC v. Amlogic Holdings Ltd, 2020 WL 4365809, at *5 (D.
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`Del. July 30, 2020) (emphasis added).
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`2. Indirect Infringement
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`Indirect infringement can take the form of either inducement or contributory infringement. An
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`induced infringement claim under 35 U.S.C. § 271(b) requires that: (1) a third party directly infringed,
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`(2) the alleged inducer knew of the patent and, nevertheless, (3) knowingly induced the infringing
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`acts with a specific intent to encourage infringement by the third party. See In re Bill of Lading
`
`Transmission & Processing Sys. Pat. Litig., 681 F.3d 1323, 1339 (Fed. Cir. 2012); DSU Med. Corp.
`
`v. JMS Co., Ltd., 471 F.3d 1293, 1304–06 (Fed. Cir. 2006). A contributory infringement claim under
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`35 U.S.C. § 271(c) requires that: (1) there is direct infringement involving the sale, offer for sale, or
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`importation of a component of a patented apparatus, system, or method, (2) the accused infringer had
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`knowledge of the patent, (3) the component has no substantial noninfringing uses, and (4) that the
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`component is a material part of the invention. See Fujitsu Ltd. v. Netgear Inc., 620 F.3d 1321, 1326
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`
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`6
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`

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`Case 1:23-cv-00278-MN Document 15 Filed 06/02/23 Page 13 of 26 PageID #: 713
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`(Fed. Cir. 2010).
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`V. ARGUMENT
`
`A. The ‘772 Patent is invalid for failing to claim patentable subject matter.
`
`PayRange’s Complaint fails to state a claim for relief as to Count IV because the ‘772 Patent
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`claims only the unpatentable abstract idea of using a mobile device for payment on a machine. The
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`‘772 Patent claims further fail step two of the Alice test because they implement this abstract idea
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`using well-known, generic components, and thus lack an inventive concept that transforms the
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`abstract idea into patent-eligible subject matter.
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`1. The claims of the ‘772 Patent are directed to an abstract idea.
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`At Alice step 1, the court must “first determine whether the claims at issue are directed to a
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`patent-ineligible concept.” Alice, 573 U.S. at 217. In this step, “the claims are considered in their
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`entirety to ascertain whether their character as a whole is directed to excluded subject matter.” Internet
`
`Patents Corp. v. Active Network, Inc., 790 F.3d 1343, 1346 (Fed. Cir. 2015). The Federal Circuit has
`
`consistently held that claims directed to the requesting, transmitting, and displaying of information—
`
`including information related to mobile payments— are unpatentable abstract ideas.
`
`The ‘772 Patent is directed to the abstract idea of using a mobile device for making payments
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`on a machine, including by requesting, transmitting, and displaying information to complete a mobile
`
`payment. Making payments on a machine is a longstanding economic practice, which the ‘772 Patent
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`specification admits “has been around for thousands of years.” ‘772 Patent at 1:45-46. The claims
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`recite generic, results-oriented steps to implement this practice, including “identifying” payment
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`accepting units, “displaying” selection and payment information on a user interface, “receiving” a
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`selection, “trigger[ing] payment” by an application, “establishing” a wireless communication path,
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`and “exchanging information” with payment accepting units. The Federal Circuit has repeatedly
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`Case 1:23-cv-00278-MN Document 15 Filed 06/02/23 Page 14 of 26 PageID #: 714
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`found abstract similar claims directed to transmitting, receiving, and displaying information in a
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`generic, results-oriented manner like the claims at issue here.
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`The Federal Circuit routinely finds similar claims abstract—including claims directed to
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`completing mobile payments. The Federal Circuit’s recent decision in In re AuthWallet, LLC is
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`instructive. No. 2022-1842, 2023 WL 3330298 (Fed. Cir. May 10, 2023). The patent in that case was
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`directed to “a method for processing financial transaction data that implements authorization requests
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`and confers discounts and benefits upon the consumer.” Id. at *1-3. The specific steps in the mobile
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`payment process at issue included: (1) receiving an authorization request from a purchaser that
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`includes an identifier and transaction information, (2) determining one or more stored value items to
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`apply to the transaction based on the authorization request, (3) transmitting a transaction indication
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`message to a mobile device, (4) accepting input from a user of the mobile device, (5) applying the
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`stored value items, and (6) initiating payment. Id. at *1-3. In finding the claims abstract, the Federal
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`Circuit reasoned they are directed to a longstanding economic practice that is performed ordinarily in
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`the stream of commerce. Id. at 3. In implementing that economic practice, the claims “recite[d]
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`generic steps and results.” Id. at *4 (internal citations omitted).
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`In re AuthWallet was not an outlier—the Federal Circuit has found other similar claims to be
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`abstract. See Smart Sys. Innovations, LLC v. Chicago Transit Auth., 873 F.3d 1364, 1371 (Fed. Cir.
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`2017) (finding claims directed to mobile payment of transit fares over a network to be abstract because
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`“when reduced to their core, claims directed to the performance of certain financial transactions—
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`and paying a fare is a financial transaction—must be categorized as involving abstract ideas”);
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`Universal Secure Registry LLC v. Apple Inc., 10 F.4th 1342, 1349 (Fed. Cir. 2021) (finding abstract
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`claims directed to securing electronic payment transactions because they “simply recite conventional
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`actions in a generic way” and “do not purport to improve any underlying technology”); Innovation
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`Case 1:23-cv-00278-MN Document 15 Filed 06/02/23 Page 15 of 26 PageID #: 715
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`Scis., LLC v. Amazon.com, Inc., 778 F. App’x 859, 863 (Fed. Cir. 2019) (finding invalid claims
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`directed to securely processing a credit card transaction with a payment server as directed to an
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`abstract idea); Intellectual Ventures I LLC v. Erie Indem. Co., 850 F.3d 1315, 1329 (Fed. Cir. 2017)
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`(“receiving a request for information” is “no more than the performance of well-understood, routine,
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`and conventional activit[y] previously known to the industry”); ChargePoint, Inc. v. SemaConnect,
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`Inc., 920 F.3d 759, 767 (Fed. Cir. 2019) (finding abstract claims directed to “communication over a
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`network to interact with a device connected to the network”).
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`Like the claims in those cases, the well-known concepts in the ‘772 Patent are abstract
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`“because they consist of generic and conventional . . . acquisition and organization steps that are
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`connected to, but do not convert, the abstract idea” of using a mobile device for making payments on
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`a machine “into a particular conception of how to carry out that concept.” Interval Licensing LLC v.
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`AOL, Inc., 896 F.3d 1335, 1346 (Fed. Cir. 2018); see also Am. Axle & Mfg., Inc. v. Neapco Holdings
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`LLC, 939 F.3d 1355, 1365 (Fed Cir. 2019) (“[A] claim to a[n abstract idea] without specifying the
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`means of how to implement the concept is ineligible under Section 101.”); Thunder Power New
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`Energy Vehicle Dev. Co. Ltd. v. Byton N. Am. Corp., 340 F. Supp. 3d 922, 929 (N.D. Cal. 2018),
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`aff'd, 777 F. App’x 517 (Fed. Cir. 2019) (“Any explanation of how these various devices will
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`accomplish these steps, at a technical level, is absent.”); Epic IP LLC v. Backblaze, Inc., 351 F. Supp.
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`3d 733 at 738 (D. Del. 2018) (Bryson, J.) (holding claims abstract because they “recite [a] concept,
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`but not the way to implement it.”).
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`The claims of the ‘772 Patent do not provide rules or algorithms for performing the generic,
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`claimed steps. For instance, they recite such steps as “identifying one or more payment accepting
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`units in proximity to the mobile device that are available to accept payment from a mobile payment
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`application executing on the mobile device” and “establishing via the one or more radio transceivers
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`a wireless communication path including the mobile device and the available payment accepting
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`unit.” But the claims do notrecite How the mobil