Case 1:24-cv-00733-MN Document 22 Filed 10/25/24 Page 1 of 26 PageID #: 1475
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
`
`ALLIANCE LAUNDRY SYSTEMS LLC,
`
`Plaintiff,
`
`v.
`
`PAYRANGE INC.,
`
`Defendant.
`
`)
`)
`)
`)
`)
`)
`)
`)
`)
`
`C. A. No.: 24-733-MN
`
`JURY TRIAL DEMANDED
`
`ALLIANCE LAUNDRY SYSTEMS LLC’S OPENING BRIEF IN SUPPORT OF ITS
`PARTIAL MOTION TO DISMISS PAYRANGE’S AMENDED COUNTERCLAIMS
`
`YOUNG CONAWAY STARGATT & TAYLOR, LLP
`Melanie K. Sharp (No. 2501)
`James L. Higgins (No. 5021)
`Stephanie N. Vangellow (No. 7277)
`1000 North King Street
`Wilmington, DE 19801
`(302) 571-6600
`msharp@ycst.com
`jhiggins@ycst.com
`svangellow@ycst.com
`
`HONIGMAN LLP
`Sarah E. Waidelich
`315 East Eisenhower Parkway, Suite 100
`Ann Arbor, MI 48108
`(734) 418-4200
`
`Scott Barnett
`39400 Woodward Avenue, Suite 101
`Bloomfield Hills, MI 48304
`(248) 566-8496
`
`Jenna E. Saunders
`155 North Wacker Drive, Suite 3100
`Chicago, IL 60606
`(312) 701-9322
`
`Attorneys for Plaintiff Alliance Laundry
`Systems, LLC
`
`Attorneys for Alliance Laundry Systems LLC
`
`Dated: October 25, 2024
`
`

`

`Case 1:24-cv-00733-MN Document 22 Filed 10/25/24 Page 2 of 26 PageID #: 1476
`
`TABLE OF CONTENTS
`
`I.
`
`II.
`
`III.
`
`IV.
`
`V.
`
`NATURE AND STAGE OF THE PROCEEDINGS ......................................................1
`
`SUMMARY OF THE ARGUMENT ...............................................................................2
`
`STATEMENT OF FACTS ................................................................................................3
`
`LEGAL STANDARD: PATENT ELIGIBILITY UNDER 35 U.S.C. § 101 .................5
`
`ARGUMENT ......................................................................................................................6
`
`A.
`
`Claim 11 of the ’772 Patent is Ineligible for Patenting as a Matter of
`Law ..........................................................................................................................6
`
`1.
`
`2.
`
`3.
`
`Step One: Claim 11 of the ’772 Patent is Directed to an
`Abstract Idea ..............................................................................................6
`
`Step Two: Claim 11 of the ’772 Patent Fails to Recite an
`Inventive Concept ....................................................................................10
`
`PayRange Should be Collaterally Estopped from Arguing that
`the Features of the Cancelled ’772 Patent Claims are Inventive .........11
`
`B.
`
`The Asserted Claims of the ’920 and ’423 Patents are Ineligible for
`Patenting as a Matter of Law ..............................................................................13
`
`1.
`
`2.
`
`3.
`
`4.
`
`Claim 1 of the ’423 and ’920 Patents is Representative of the
`Other Asserted Claims ............................................................................13
`
`Claim 1 of the ’423 Patent is Similar to, but Broader Than,
`Claim 1 of the ’772 Patent .......................................................................13
`
`Claim 1 of the ’920 Patent is Similar to, but Broader Than,
`Claim 11 of the ’772 Patent .....................................................................16
`
`Collateral Estoppel Precludes PayRange from Arguing that
`The Asserted Claims of the ’423 and ’920 Patents Recite Patent
`Eligible Subject Matter............................................................................18
`
`VI. CONCLUSION ................................................................................................................20
`
`
`
`
`
`i
`
`

`

`Case 1:24-cv-00733-MN Document 22 Filed 10/25/24 Page 3 of 26 PageID #: 1477
`
`TABLE OF AUTHORITIES
`
`Page(s)
`
`CASES
`
`Alice Corp. Pty. Ltd. v. CLS Bank Intern.,
`573 U.S. 208, 221 (2014) ...........................................................................................5, 6, 10, 15
`
`Am. Axle & Mfg., Inc. v. Neapco Holdings LLC,
`967 F.3d 1285, 1293 (Fed. Cir. 2020), cert. denied, No. 20-891, 142 S. Ct.
`2901 (2022) ..........................................................................................................................9, 10
`
`In re AuthWallet, LLC,
`No. 2022-1842, 2023 WL 3330298 (Fed. Cir. May 10, 2023) ....................................6, 7, 9, 18
`
`Beteiro, LLC v. DraftKings Inc.,
`104 F.4th 1350, 1359 (Fed. Cir. 2024) ....................................................................................15
`
`Brit. Telecomms. PLC v. IAC/InterActiveCorp,
`381 F. Supp. 3d 293, 315-16 (D. Del. 2019), aff’d, 813 F. App’x 584 (Fed.
`Cir. 2020) .......................................................................................................................9, 14, 16
`
`cxLoyalty, Inc. v. Maritz Holdings Inc.,
`986 F.3d 1367, 1376-78 (Fed. Cir. 2021) ......................................................7, 9, 10, 16, 17, 18
`
`Diogenes Ltd. v. DraftKings, Inc.,
`623 F. Supp. 3d 423, 433 (D. Del. 2022) .............................................................................9, 17
`
`FairWarning IP, LLC v. Iatric Sys., Inc.,
`839 F.3d 1089, 1097 (Fed. Cir. 2016)................................................................................15, 17
`
`Ficep Corp. v. Peddinghaus Corp.,
`587 F. Supp. 3d 115, 120-121 (D. Del. Feb. 28, 2022) ...........................................................13
`
`Genetic Techs. Ltd. v. Merial L.L.C.,
`818 F.3d 1369 (Fed. Cir. 2016)..................................................................................................5
`
`Google LLC v. Hammond Dev. Int’l, Inc.,
`54 F.4th 1377, 1381 (Fed. Cir. 2022) ..........................................................................11, 19, 20
`
`GREE, Inc. v. Supercell Oy,
`855 Fed. App’x 740, 742-43 (Fed. Cir. 2021) ...........................................................................8
`
`Innovation Sciences, LLC v. Amazon.com, Inc.,
`778 F. App’x 859, 864 (Fed. Cir. 2019) ..................................................................................10
`
`Int’l Bus. Machs. Corp. v. Zillow Grp., Inc.,
`50 F.4th 1371, 1379-80 (Fed. Cir. 2022) .......................................................................8, 10, 11
`
`ii
`
`

`

`Case 1:24-cv-00733-MN Document 22 Filed 10/25/24 Page 4 of 26 PageID #: 1478
`
`Intellectual Ventures I LLC v. Erie Indemnity Co.,
`850 F.3d 1315, 1325, 1328, 1331 ..............................................................................7, 8, 11, 18
`
`Intellectual Ventures I LLC v. Symantec Corp.,
`838 F.3d 1307, 1315 (Fed. Cir. 2016)......................................................................................15
`
`Internet Patents Corp. v. Active Network, Inc.,
`790 F.3d 1343, 1346 (Fed. Cir. 2015)........................................................................................5
`
`KioSoft Techs, LLC v. PayRange Inc.,
`PTAB-PGR2021-00093 (PTAB, June 10, 2021) ...........................................................2, 12, 19
`
`KioSoft Techs., LLC v. PayRange Inc.,
`PTAB-PGR2023-00042 (PTAB, Jul. 25, 2023) ..................................................................2, 12
`
`Kroy IP Holdings, LLC v. Groupon, Inc.,
`No. 17-1405, 2022 WL 17403538 (D. Del. Dec. 2, 2022) ..........................................11, 19, 20
`
`Mayer v. Belichick,
`605 F.3d 223 (3d Cir. 2010).......................................................................................................5
`
`Mayo Collaborative Servs. v. Prometheus Labs., Inc.,
`566 U.S. 66, 82 (2012) ...............................................................................................................6
`
`Mobile Acuity Ltd. v. Blippar Ltd.,
`110 F.4th 1280, 1294 (Fed. Cir. 2024) ....................................................................................14
`
`PayRange Inc. v. CSC ServiceWorks, Inc.,
`23-cv-278-MN, D.I. 1 ................................................................................................................2
`
`SAP Am., Inc. v. InvestPic, LLC,
`898 F.3d 1161, 1170 (Fed. Cir. 2018)................................................................................15, 17
`
`Smart Sys. Innovations, LLC v. Chicago Transit Auth.,
`873 F.3d 1364, 1371-75 (Fed. Cir. 2017) ..................................................................6, 7, 14, 16
`
`Soverain Software LLC v. Victoria’s Secret Brand Mgmt., LLC,
`778 F.3d 1311, 1319 (Fed. Cir. 2015)......................................................................................11
`
`Synopsys, Inc. v. Mentor Graphics Corp.,
`839 F.3d 1138, 1152 (Fed. Cir. 2016)......................................................................................10
`
`Unbound Partners Ltd. P’ship v. Invoy Holdings Inc.,
`251 A.3d 1016 (Del. Super. Ct. 2021) .......................................................................................1
`
`Universal Secure Registry LLC v. Apple Inc.,
`10 F.4th 1342, 1028 (Fed. Cir. 2021) ........................................................................................7
`
`
`
`iii
`
`

`

`Case 1:24-cv-00733-MN Document 22 Filed 10/25/24 Page 5 of 26 PageID #: 1479
`
`Voter Verified, Inc. v. Election Sys. & Software LLC,
`887 F.3d 1376 (Fed. Cir. 2018)................................................................................................13
`
`Yu v. Apple Inc.,
`1 F.4th 1040 (Fed. Cir. 2021) ....................................................................................................5
`
`STATUTES
`
`35 U.S.C. § 101 ..................................................................................1, 2, 3, 5, 9, 11, 13, 15, 16, 20
`
`OTHER AUTHORITIES
`
`5B Wright and Miller, Fed. Prac. & Proc. Civ. § 1346 (3d ed.) ......................................................1
`
`
`
`iv
`
`

`

`Case 1:24-cv-00733-MN Document 22 Filed 10/25/24 Page 6 of 26 PageID #: 1480
`
`
`
`Plaintiff Alliance Laundry Systems LLC (“Alliance”) respectfully submits
`
`this
`
`memorandum in support of its partial motion to dismiss Defendant PayRange Inc.’s (“PayRange”)
`
`Counterclaims I-III on the bases that: the asserted claims of U.S. Patent Nos. 11,972,423 (“the
`
`’423 Patent”), 11,966,920 (“the ’920 Patent”), and 11,481,772 (“the ’772 Patent”) fail to claim
`
`eligible subject matter pursuant to 35 U.S.C. § 101.1
`
`I.
`
`NATURE AND STAGE OF THE PROCEEDINGS
`
`Alliance filed its Complaint on June 20, 2024, seeking a declaratory judgment that Alliance
`
`does not infringe certain claims of the PayRange patents identified in pre-suit correspondence: the
`
`’423 Patent, the ’920 Patent, and the ’772 Patent (the “DJ Patents”). See D.I. 1. PayRange
`
`subsequently filed its Answer and Counterclaims, asserting infringement of claim 1 of the DJ
`
`Patents and U.S. Patent No. 10,891,608 (“the ’608 Patent”) (collectively, with the DJ patents, the
`
`“Asserted Patents”). See D.I. 11.
`
`Alliance then filed a Motion to Dismiss PayRange’s Counterclaims asserting that the
`
`asserted claims of the DJ Patents are invalid under 35 U.S.C. § 101 and that PayRange had failed
`
`to state a claim for the ’608 Patent. D.I. 14. In lieu of a response to the Motion, PayRange filed an
`
`Amended Answer and Counterclaims, asserting infringement of claims 1, 4, 9, 10, 12-15, 17, and
`
`19-20 of the ’920 patent, claims 1, 3, 4, 6, 8-15, 17, 19, and 20 of the ’423 patent, claim 11 of the
`
`’772 patent, and claims 1, 2, 5, 6-8, 11-13, and 17-19 of the ’608 patent. D.I. 18.
`
`PayRange has twice avoided a ruling on subject matter ineligibility of claim 11 of the ’772
`
`
`1 Due to page constraints, Alliance is not challenging Count IV, PayRange’s claim of infringement
`of the ’608 Patent, at this time, although Alliance maintains that this patent is also invalid. Alliance
`is also not filing an Answer to Count IV because the filing of this Motion tolls the period for
`answering the entirety of the Counterclaims and default would be improper. See, e.g., Unbound
`Partners Ltd. P’ship v. Invoy Holdings Inc., 251 A.3d 1016, 1028 (Del. Super. Ct. 2021); 5B
`Wright and Miller, Fed. Prac. & Proc. Civ. § 1346 (3d ed.).
`
`
`
`1
`
`

`

`Case 1:24-cv-00733-MN Document 22 Filed 10/25/24 Page 7 of 26 PageID #: 1481
`
`Patent by dismissing its suit before an adjudication. First, KioSoft Technologies, LLC (“KioSoft”)
`
`filed a petition for post-grant review challenging all claims of the ’772 patent as ineligible under
`
`35 U.S.C. § 101. KioSoft Techs., LLC v. PayRange Inc., PTAB-PGR2023-00042 (PTAB, Jul. 25,
`
`2023) (“the ’772 PGR”). Before the PTAB could reach an institution decision, PayRange
`
`voluntarily cancelled most of the claims of the ’772 Patent, including claim 1. See D.I. 1, Ex. 5.
`
`Notably, the ’772 PGR was filed shortly after the PTAB issued its final written decision in a PGR
`
`on U.S. Patent No. 10,891,614 (“the ’614 Patent”), a parent patent to the ’772 Patent. In the ’614
`
`Patent PGR, the PTAB found most claims, including claim 1, patent-ineligible. See D.I. 1, Ex. 4,
`
`KioSoft Techs, LLC v. PayRange Inc., PTAB-PGR2021-00093 (PTAB, June 10, 2021) (“the ’614
`
`PGR”). Claim 1 of the ’614 Patent is materially identical to claim 1 of the ’772 Patent. See D.I. 1
`
`at ¶ 27; see also Declaration of Sarah Waidelich (“Decl.”), Ex. C at 4-9.
`
`PayRange and the ’772 Patent family also have history in this Court. While the dispute
`
`with KioSoft was ongoing, PayRange asserted the ’772 Patent against CSC ServiceWorks, Inc.
`
`(“CSC”) in this Court. See PayRange Inc. v. CSC ServiceWorks, Inc., C.A. No. 23-278-MN, D.I.
`
`1. CSC also challenged the ’772 Patent under 35 U.S.C. § 101 by filing motions to dismiss under
`
`Rule 12. See id. at D.I. 8; D.I. 14; D.I. 79. Before this Court ruled, PayRange cancelled most claims
`
`of the ’772 Patent in the PGR. See D.I. 1, Ex. 5. On April 17, 2024, CSC filed its second motion
`
`to dismiss asserting that claim 11 of the ’772 Patent claims patent-ineligible subject matter. See
`
`PayRange, C.A. No. 23-278-MN, D.I. 79. One week after that motion was filed, and before this
`
`Court ruled, PayRange voluntarily dismissed the suit against CSC with prejudice. Id. at D.I. 82.
`
`II.
`
`SUMMARY OF THE ARGUMENT
`
`Alliance moves under Federal Rule of Civil Procedure 12(b)(6) to dismiss PayRange’s
`
`Counterclaims I–III because the asserted claims of the DJ Patents are invalid under 35 U.S.C. §
`
`101. As to Counterclaim III, claim 11 of the ’772 Patent is materially identical to claim 1 of the
`
`
`
`2
`
`

`

`Case 1:24-cv-00733-MN Document 22 Filed 10/25/24 Page 8 of 26 PageID #: 1482
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`’614 Patent, which the PTAB has already found ineligible. Claim 11 also adds nothing material
`
`over claim 1 of the ’772 Patent, which PayRange voluntarily disclaimed prior to the PTAB’s
`
`decision on Section 101. Claim 11 should be finally determined as invalid under Section 101.
`
`As to Counterclaims I and II, the ’920 and ’423 Patents issued in April 2024, and therefore
`
`no party has had an opportunity to challenge them. But claim 1 of the ’920 Patent is materially
`
`identical to claim 11 of the ’772 Patent. See Decl., Ex. A. And claim 1 of the ’423 patent is broader
`
`than claim 1 of the ’772 Patent, which PayRange disclaimed in the face of an eligibility challenge.
`
`See id., Ex. B. The asserted claims of the ’423 and ’920 Patents should also be found ineligible.
`
`III.
`
`STATEMENT OF FACTS
`
`The Asserted Patents share a common specification and claim priority to the same
`
`provisional patent application, filed on December 18, 2013. See D.I. 18, Exs. E, G, H, I. The
`
`common specification explains that vending, or automatic retailing machines “have been around
`
`for thousands of years.” See, e.g., id. at Ex. E, 1:45-46. The common specification further explains
`
`that vending machines are “one type of ‘payment accepting unit,’” which is described as
`
`“equipment that requires payment for the dispensing of products and/or services.” Id. at 1:54-58.
`
`The specification identifies other types of payment accepting units including “parking meters, toll
`
`booths, laundromat washers and dryers, arcade games, kiosks, photo booths, …[and] transit ticket
`
`dispensing machines[.]” Id. at 1:58-65. The specification concedes that “[m]obile payment [the
`
`subject of the asserted claims] is a logical extension” of pre-existing payment accepting units that
`
`required insertion of coins, bills, or cards. Id. at 2:10-12 (emphasis added).
`
`The DJ Patents share a common title: “Method and System for Presenting Representations
`
`of Payment Accepting Unit Events.” The claims of the DJ Patents recite using a mobile device to
`
`select a payment accepting unit and exchange information with the payment accepting unit to
`
`transact payment. Claim 1 of the ’772 Patent, upon which claim 11 depends, recites:
`
`
`
`3
`
`

`

`Case 1:24-cv-00733-MN Document 22 Filed 10/25/24 Page 9 of 26 PageID #: 1483
`Case 1:24-cv-00733-MN Document 22
`Filed 10/25/24
`Page 9 of 26 PagelD #: 1483
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`
`
`Limitation
`
`l.a
`
`1.b
`
`Lc
`
`1.d
`
`Le
`
`1f
`
`1g
`
`
`
`Text of Claim
`
`1. A method of presenting representations of payment accepting unit events,
`comprising:
`at a mobile device with one or more processors, memory, one or more
`output devices including a display, and one or moreradio transceivers:
`identifying one or more paymentaccepting 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/orservices;
`displaying a user interface of the mobile payment application on the
`display of the mobile device, the user interface being configuredto display a visual
`indication of the one or more paymentaccepting units and accept user inputto (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 (11) trigger payment by the
`mobile paymentapplication 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;
`a_ wireless
`establishing via the one or more radio transceivers
`communication path including the mobile device and the available payment
`accepting unit of the one or more payment accepting units;
`after establishing the wireless communication path, enabling user
`interaction with the user interface of the mobile payment application to complete
`the transaction:
`exchanging information with the available payment accepting unit via the
`one or more radio transceivers, in conjunction with the transaction; and
`after exchanging the information, displaying, on the display, an updated
`userinterface of the mobile paymentapplication to the user of the mobile device.
`
`
`
`Claim 11 depends from claim 1 and adds the following limitations:
`
`Limitation
`
`Text of Claim
`The method of claim 1, wherein the user interface of the mobile payment
`application, after establishing the wireless communication path, includes:
`a visual representation of the available payment accepting unit;
`|Ihe|an indication of a prepared balance; and
`an affordance that whenslid, indicates the initiation of the transaction;
`wherein the affordance is slid in responseto receiving a user input of swipe
`
`on the affordance displayed on the display of the mobile device.
`
`The ’423 Patent and the ’920 Patent are continuations of the ’772 Patent. See D.I. 18, Exs.
`
`E, G, H. Theasserted claims of the ’423 Patent are nearly identical to the corresponding, now-
`
`disclaimed claims of the ’772 Patent; in fact, the asserted claims of the ’423 Patent are actually
`
`

`

`Case 1:24-cv-00733-MN Document 22 Filed 10/25/24 Page 10 of 26 PageID #: 1484
`
`broader than the corresponding disclaimed claims of the ’772 Patent. Independent claims 13 and
`
`15 of the ’423 Patent are nearly identical to claim 1 of the ’423 Patent, except claim 13 is applied
`
`to a mobile device and claim 15 is applied to a non-transitory computer readable storage medium.
`
`Claim 1 of the ’920 patent is nearly identical to claim 11 of the ’772 Patent; in fact, claim
`
`1 of the ’920 Patent is broader than claim 11 of the ’772 Patent. Claims 13 and 15 of the ’920
`
`patent are identical to claim 1 of the ’920 patent, except claim 13 is applied to a mobile device and
`
`claim 15 is applied to a non-transitory computer readable storage medium. Differences between
`
`the asserted claims of the ’920 and the ’423 Patent, and the corresponding ’772 Patent claims, are
`
`shown in redline in the attached Exhibits A and B to the Declaration of Sarah Waidelich. See also
`
`D.I. 18, Exs. E, G, H. Differences between claim 1 and claims 13 and 15 of the ’920 Patent and
`
`the ’423 Patent, respectively, are shown in redline in the attached Exhibits D and E.
`
`IV.
`
`LEGAL STANDARD: PATENT ELIGIBILITY UNDER 35 U.S.C. § 101
`
`Patent eligibility under 35 U.S.C. § 101 is a question of law that may be determined on a
`
`Rule 12(b)(6) motion. See, e.g., Genetic Techs. Ltd. v. Merial L.L.C., 818 F.3d 1369, 1373 (Fed.
`
`Cir. 2016). In ruling on a Rule 12(b)(6) motion, the Court must accept all well-pleaded factual
`
`allegations as true. See Mayer v. Belichick, 605 F.3d 223, 229 (3d Cir. 2010). However, a court
`
`need not accept as true allegations that contradict matters subject to judicial notice, “such as the
`
`claims and the patent specification.” Yu v. Apple Inc., 1 F.4th 1040, 1046 (Fed. Cir. 2021).
`
`Courts apply a two-step test for determining whether a patent claims ineligible subject
`
`matter. See Alice Corp. Pty. Ltd. v. CLS Bank Intern., 573 U.S. 208, 217 (2014). At step 1, “the
`
`claims are considered in their 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). Courts look to whether the claims “focus on a specific means or method that
`
`improves the relevant technology or are instead directed to a result or effect that itself is the abstract
`
`
`
`5
`
`

`

`Case 1:24-cv-00733-MN Document 22 Filed 10/25/24 Page 11 of 26 PageID #: 1485
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`idea and merely invoke generic process and machinery.” Smart Sys. Innovations, LLC v. Chicago
`
`Transit Auth., 873 F.3d 1364, 1371 (Fed. Cir. 2017).
`
`If the claims are directed to a patent-ineligible concept, the second step of the test requires
`
`examination of the claim to determine whether it contains an inventive concept “sufficient to
`
`‘transform’ the claimed abstract idea into a patent-eligible application.” Alice, 573 U.S. at 221.
`
`This inventive concept must do more than simply recite “well-understood, routine, conventional
`
`activity[.]” Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 82 (2012).
`
`V.
`
`ARGUMENT
`
`A.
`
`Claim 11 of the ’772 Patent is Ineligible for Patenting as a Matter of Law
`
`PayRange fails to state a claim for relief as to Counterclaim Count III because claim 11
`
`of the ’772 Patent is directed to an abstract idea and lacks an inventive concept.
`
`1.
`
`Step One: Claim 11 of the ’772 Patent is Directed to an Abstract Idea
`
`Claim 11 of the ’772 Patent is directed to the abstract idea of displaying information to
`
`enable a commercial transaction with a merchant. As the ’772 Patent readily acknowledges,
`
`humans have facilitated such transactions “for thousands of years.” See D.I. 18, Ex. E at 1:45-53.
`
`Claim 11 is similar to claim 1 in In re AuthWallet, LLC, No. 2022-1842, 2023 WL 3330298
`
`(Fed. Cir. May 10, 2023), which the Federal Circuit found was directed to an ineligible abstract
`
`idea. Id. at *3 The claim at issue there was directed to a computer-implemented method for making
`
`a purchase in which customers apply “stored value items” (such as coupons) to the purchase. Id.
`
`at *1. The claim comprised the following steps: (1) receive an authorization request from one of a
`
`plurality of possible points of purchase, (2) identify one or more stored items to apply to the
`
`transaction, (3) transmit a transaction indication to the user’s mobile device, where the indication
`
`includes information about the stored item, (4) the user indicates whether the stored value item
`
`should be applied, (5) apply stored value item, and (6) provide updated payment amount to user.
`
`
`
`6
`
`

`

`Case 1:24-cv-00733-MN Document 22 Filed 10/25/24 Page 12 of 26 PageID #: 1486
`
`See id. at *1. AuthWallet argued that the claims were eligible because they provided a security
`
`protocol for authorizing transactions through an intermediary service. See id. The Federal Circuit
`
`rejected this argument and found that the claim was directed to a “longstanding commercial
`
`practice.” Id. at *3. It further held that, even if the claims include this feature, they were directed
`
`to an abstract idea because they recite generic steps and results. Id. at *4.
`
`Claim 11 of the ’772 Patent is similarly directed to the longstanding commercial practice
`
`of displaying information to enable a commercial transaction from a merchant, which the Federal
`
`Circuit has repeatedly found is an abstract idea. See, e.g., cxLoyalty, Inc. v. Maritz Holdings Inc.,
`
`986 F.3d 1367, 1376-77 (Fed. Cir. 2021) (facilitating transaction via user interface); Smart, 873
`
`F.3d at 1371 (method for paying fare with a credit card); Universal Secure Registry LLC v. Apple
`
`Inc., 10 F.4th 1342, 1349 (Fed. Cir. 2021) (enabling transaction using time-varying code).
`
`Further, claim 11 is “not directed to a combined order of specific rules that improve any
`
`technological process[.]” See Smart, 873 F.3d at 1372. Claim 1, from which claim 11 depends,
`
`recites the following results-oriented steps: (1) identify a payment accepting unit (limitation 1.c),
`
`(2) display a user interface that triggers payment in response to user selection (1.d), (3) establish
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`wireless communication between mobile device and payment accepting unit (1.e), (4) transmit
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`information from mobile device to payment accepting unit (1.f), and (5) display an updated user
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`interface on mobile device (1.g). Dependent claim 11 recites the following additional results-
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`oriented steps: (1) the user interface displays a prepared balance (11.c), (2) the user triggers
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`payment by “sliding” an “affordance” (11.d).
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`Claims 1 and 11 do not speak to specific technical problems or solutions to perform these
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`generic steps and results. See, e.g., Smart, 873 F.3d at 1372; Intell. Ventures I LLC v. Erie
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`Indemnity Co., 850 F.3d 1315, 1328 (“The claims are not focused on how usage of XML tags
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`
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`7
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`Case 1:24-cv-00733-MN Document 22 Filed 10/25/24 Page 13 of 26 PageID #: 1487
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`alters the database in a way that leads to an improvement in the technology”) (original emphasis).
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`Rather, the steps are performed using generic, well-known technology. See, e.g., id. The claimed
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`mobile device is defined generically as a “user’s personal mobile device” including “smart phones,
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`tablets or laptop computers…or other technology known or yet to be discovered.” D.I. 18, Ex. E
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`at 8:59-9:26. The accompanying software application “include[s] any software program(s) capable
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`of implementing the features described[.]” See id. The payment accepting unit is “equipment that
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`requires payment for the dispensing of any product and/or service,” including “vending machines,
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`parking meters, toll booths, laundromat washers and dryers…and other known or yet to be
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`discovered payment accepting units.” Id. at 9:27-34. The claimed wireless communication is
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`performed using “any wired or wireless technology that could be used to communicate a small
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`distance” such as “Bluetooth” or “radio frequency identification.” Id. at 9:39-10:16.
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`The user interface is also generically described as a display on a mobile device comprising
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`a touch screen. Id. at 36:12-17. See Int’l Bus. Machs. Corp. v. Zillow Grp., Inc., 50 F.4th 1371,
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`1380 (Fed. Cir. 2022) (displaying information on a “generic display device is abstract absent a
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`‘specific improvement to the way computers [or other technologies] operate.’”). Further, the
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`claimed “slide” or “swipe” function is described as inherent to the user’s mobile device2. See D.I.
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`18, Ex. E at 7:9-14, 36:33-44; see GREE, Inc. v. Supercell Oy, 855 Fed. App’x 740, 742-43 (Fed.
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`Cir. 2021) (user interface not inventive when “described without specificity at a generic level”).
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`In summary, claim 11 recites no more than a generic mobile device and application that
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`transmits, receives, and displays machine and transaction information using known transmission
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`protocols, and thus broadly covers the abstract idea of displaying information to enable a
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`2 PayRange is attempting to read the “slide” feature even more generically by asserting the
`doctrine of equivalents. See D.I. 18, Ex. L at 13 (asserting that a “button performs substantially
`the same function in substantially the same way” as the “slide” limitation).
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`8
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`Case 1:24-cv-00733-MN Document 22 Filed 10/25/24 Page 14 of 26 PageID #: 1488
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`commercial transaction from a merchant. See, e.g., cxLoyalty, 986 F.3d at 1376-77; In re
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`AuthWallet, 2023 WL 3330298, at *3.
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`PayRange alleges that a “significant advantage” of the ’772 Patent is the “the capability to
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`display one or more multiple [sic] payment accepting units…in proximity to a mobile device,”
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`such that a user may “select one of many different machines based on proximity and availability[.]”
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`See D.I. 18, ¶ 59 (emphasis added). But claim 11 does not require the display of multiple payment
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`accepting units. It only requires display of “one or more payment accepting units.” Id. at Ex. E
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`(emphasis added); see also Diogenes Ltd. v. DraftKings, Inc., 623 F. Supp. 3d 423, 433 (D. Del.
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`2022) (“The Court need not…accept as true bald assertions, unsupported conclusions or
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`unwarranted inferences.”). Consequently, PayRange cannot rely on this supposed advantage to
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`demonstrate subject matter eligibility. See Am. Axle & Mfg., Inc. v. Neapco Holdings LLC, 967
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`F.3d 1285, 1293 (Fed. Cir. 2020), cert. denied, No. 20-891, 142 S. Ct. 2901 (2022) (“features that
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`are not claimed are irrelevant”).
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`PayRange also alleges that this purported “solution” is absent from the prior art. D.I. 18 at
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`¶ 59. But “‘novelty’…is of no relevance in determining whether the subject matter of a claim falls
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`within the § 101 categories.” Brit. Telecomms. PLC v. IAC/InterActiveCorp, 381 F. Supp. 3d 293,
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`316 (D. Del. 2019), aff’d, 813 F. App’x 584 (Fed. Cir. 2020). PayRange also alleges, without
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`support, that the information provided in claim 11 was not previously “easily accessible to users.”
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`D.I. 18, ¶ 60; see Diogenes, 623 F. Supp. 3d at 433. But this information (i.e., the available
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`merchant, the customer’s balance, and the transaction) is necessarily exchanged during any
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`commercial transaction. See D.I. 18, ¶ 60; see also cxLoyalty, 986 F.3d at 1377 (“Humans have
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`long intermediated these very transactions by collecting and relaying the very same information.”).
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`Displaying this information on a conventional mobile device does not change the fact that this
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`9
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`Case 1:24-cv-00733-MN Document 22 Filed 10/25/24 Page 15 of 26 PageID #: 1489
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`claim is directed to an abstract idea. See id.
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`2.
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`Step Two: Claim 11 of the ’772 Patent Fails to Recite an Inventive
`Concept
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`Claim 11 fails step 2 because the claim elements, when viewed individually and as an
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`ordered combination, fail to recite “an ‘inventive concept’ sufficient to ‘transform’ the claimed
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`abstract idea into a patent-eligible application.” Alice, 573 U.S. at 221. As discussed above, claim
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`11 recites the use of conventional and generic devices for requesting, transmitting, and displaying
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`information using known, standard technology. See, e.g., cxLoyalty, 986 F.3d at 1377.
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`PayRange alleges that claim 11 is unconventional because it allows a user to use their
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`mobile device to select one of many machines based on proximity and availability. See D.I. 18, ¶
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`59. But, as discussed above, this allegation improperly relies on unclaimed features. See Am. Axle
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`& Mfg., 967 F.3d at 1293. In addition, claim 11 does not describe any improvement to the
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`functionality of the mobile device that “allows” a user to make these selections. See Int’l Bus., 50
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`F.4th at 1379 (“the district court need not accept a patent owner’s conclusory allegations of
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`inventiveness.”). Claim 11 merely describes facilitating a transaction using a generic mobile
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`device and interface. See, e.g., D.I. 18, Ex. E, 8:59-9:26; Innovation Sciences, L