Case 1:24-cv-00733-MN Document 24 Filed 11/15/24 Page 1 of 23 PageID #: 1564
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`PLAINTIFF PAYRANGE INC.’S OPPOSITION TO DEFENDANT
`ALLIANCE LAUNDRY SYSTEMS LLC’S OPENING BRIEF IN SUPPORT OF ITS
`PARTIAL MOTION TO DISMISS PAYRANGE’S AMENDED COUNTERCLAIMS
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`
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`OF COUNSEL:
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`James C. Yoon
`Ryan R. Smith
`WILSON SONSINI GOODRICH & ROSATI
`Professional Corporation
`650 Page Mill Road
`Palo Alto, CA 94304
`Tel: (650) 493-9300
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`Jamie Y. Otto
`WILSON SONSINI GOODRICH & ROSATI
`Professional Corporation
`953 East Third Street, Suite 100
`Los Angeles, CA 90013
`Tel: (323) 210-2900
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`Dated: November 15, 2024
`11884103 / 23372.00002
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`
`David E. Moore (#3983)
`Bindu A. Palapura (#5370)
`Andrew M. Moshos (#6685)
`POTTER ANDERSON & CORROON LLP
`Hercules Plaza, 6th Floor
`1313 N. Market Street
`Wilmington, DE 19801
`Tel: (302) 984-6000
`dmoore@potteranderson.com
`bpalapura@potteranderson.com
`amoshos@potteranderson.com
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`
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`Attorneys for Defendant PayRange Inc.
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
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`C.A. No. 24-733-MN
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`JURY TRIAL DEMANDED
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`)))))))))
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`ALLIANCE LAUNDRY SYSTEMS LLC,
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`PAYRANGE INC.,
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`Plaintiff/Counterdefendant,
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`v.
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`Defendant/Counterclaimant
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`

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`Case 1:24-cv-00733-MN Document 24 Filed 11/15/24 Page 2 of 23 PageID #: 1565
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`I.
`II.
`III.
`IV.
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`V.
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`TABLE OF CONTENTS
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`Page
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`The ’772 Patent Has Inventive Concepts That Improve Mobile
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`Alliance Fails to Establish that the ’920 and ’423 Patents are
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`INTRODUCTION AND RESPONSE TO STATEMENT OF ISSUES .............................1
`FACTUAL BACKGROUND ..............................................................................................2
`LEGAL STANDARD ..........................................................................................................5
`ARGUMENT .......................................................................................................................6
`A.
`The ’772 Is Directed to Patent-Eligible Subject Matter...........................................6
`1.
`The ’772 Patent Is Not Directed to An Abstract Idea ................................. 6
`2.
`Transactions .............................................................................................. 11
`B.
`Representative of Claim 11 of the ’772 Patent ......................................................12
`1.
`Claim 1 of the ’423 Patent Provides Additional Inventive Concepts ....... 12
`Claim 1 of the ’920 Patent Provide Additional Inventive Concepts ......... 14
`2.
`3.
`and ’423 Patents ........................................................................................ 15
`C.
`Collateral Estoppel is Inapplicable ........................................................................16
`CONCLUSION ..................................................................................................................17
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`Alliance Ignores the Asserted Dependent claims of the ’920
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`i
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`Case 1:24-cv-00733-MN Document 24 Filed 11/15/24 Page 3 of 23 PageID #: 1566
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`
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`TABLE OF AUTHORITIES
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`CASES
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`Page(s)
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`Aatrix Software, Inc. v. Green Shades Software, Inc.,
`882 F.3d 1121 (Fed. Cir. 2018)........................................................................................5, 6
`
`Alice Corp. Pty. Ltd. v. CLS Bank Int’l,
`573 U.S. 208 (2014) .........................................................................................................1, 5
`
`Ancora Technologies, Inc. v. HTC America, Inc.,
`908 F.3d 1343 (Fed. Cir. 2018)............................................................................................9
`
`Automated Tracking Sols., LLC, v. Coca-Cola Co.,
`723 F. App’x (Fed. Cir. 2018) .............................................................................................5
`
`BASCOM Glob. Internet Servs. v. AT&T Mobility LLC,
`827 F.3d 1341 (Fed. Cir. 2016)..........................................................................................13
`
`Berkheimer v. HP Inc.,
`881 F.3d 1360 (Fed. Cir. 2018)......................................................................................5, 11
`
`Cellspin Soft, Inc. v. Fitbit, Inc.,
`927 F.3d 1306 (Fed. Cir. 2019)..........................................................................................15
`
`Contour IP Holding LLC v. GoPro, Inc.,
`113 F.4th 1373 (Fed. Cir. 2024) ..........................................................................................9
`
`CosmoKey Solutions GmbH & Co. Kg v. Duo Security LLC,
`15 F.4th 1091 (Fed. Cir. 2021) ......................................................................................9, 10
`
`Dynamic Digit. Depth Rsch. Pty Ltd. v. LG Elecs. Inc.
`
`C.A. No. 15-5578, 2016 WL 7444561 (C.D. Cal. June 6, 2016) ......................................12
`
`Finjan, Inc. v. Blue Coat Sys., Inc.,
`879 F.3d 1299 (Fed. Cir. 2018)............................................................................................6
`
`In re AuthWallet, LLC,
`No. 2022-1842, 2023 WL 3330298 (Fed. Cir. May 10, 2023) ............................................8
`
`Mayo Collaborative Servs. v. Prometheus Labs., Inc.,
`566 U.S. 66 (2012) ...............................................................................................................5
`
`Parkervision, Inc. v. Qualcomm Inc.,
`116 F.4th 1345 (Fed. Cir. 2024) ..................................................................................16, 17
`
`Uniloc USA, Inc. v. LG Electronics USA, Inc.,
`957 F.3d 1303 (Fed. Cir. 2020)........................................................................................8, 9
`
`ii
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`

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`Case 1:24-cv-00733-MN Document 24 Filed 11/15/24 Page 4 of 23 PageID #: 1567
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`Visual Memory LLC v. NVIDIA Corp.,
`867 F.3d 1253 (Fed. Cir. 2017)............................................................................................5
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`RULES
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`Fed. R. Civ. P. 12(b)(6)....................................................................................................................5
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`
`iii
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`Case 1:24-cv-00733-MN Document 24 Filed 11/15/24 Page 5 of 23 PageID #: 1568
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`I.
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`INTRODUCTION AND RESPONSE TO STATEMENT OF ISSUES
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`Plaintiff PayRange, Inc. (“PayRange”) is the leading innovator in mobile payments for
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`unattended retail, including laundry and vending. Customers have embraced PayRange’s
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`technology, and several competitors have licensed PayRange’s patent portfolio. Despite
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`infringing, Alliance refused to take a license, opting instead for this declaratory judgment action.
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`Alliance now seeks to dismiss PayRange’s counterclaims for infringement of U.S. Patent Nos.
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`11,481,772 (the “’772 Patent”), 11,966,920 (the “’920 Patent”), and 11,972,423 (the “’423
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`Patent”) based on alleged patent ineligibility. See generally D.I. 22 (“Br.”).
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`Alliance’s motion falls short of proving that the ’772, ’920 and ’423 patents claim an
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`abstract idea under Alice1 Step One. According to Alliance, the patents are directed to
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`“displaying information to enable a commercial transaction with a merchant.” Br. at 7.
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`Alliance’s characterization all but eviscerates the clear and specific technological enhancements
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`provided by the claimed inventions and is so broad that it applies equally to prior art references,
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`which the patent examiner found PayRange’s patents to be patentably distinct over.
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`Regarding Alice Step Two, PayRange’s First Amended Counterclaims (“FAC” (D.I. 18))
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`contains detailed factual allegations explaining that several claim elements were not well-
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`understood, routine, or conventional. Alliance cannot disregard these allegations at the pleadings
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`stage. At a minimum, there are factual disputes as to whether the claims encompass inventive
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`concepts, which precludes dismissal at the pleadings stage.
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`Alliance asserts that claim 11 of the ’772 Patent is representative of the ’920 and ’423
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`Patents. Br. at 5. Not so. Alliance oversimplifies the ’920 and ’423 Patent, ignoring numerous
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`meaningful claim limitations. Even if the Court independently considers the patent eligibility of
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`1 Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S. 208 (2014).
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`

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`Case 1:24-cv-00733-MN Document 24 Filed 11/15/24 Page 6 of 23 PageID #: 1569
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`each asserted claim of the ’920 and ’423 Patents, they do not claim an abstract idea, and
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`PayRange has made well-pleaded allegations regarding inventive concepts.
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`Alliance also asserts collateral estoppel based on a related PayRange patent for which
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`certain claims were held patent ineligible in a Post Grant Review (“PGR”) proceeding before the
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`USPTO. Contrary to Alliance’s argument, the Federal Circuit has never held that collateral
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`estoppel applied in district court based on a USPTO proceeding. In fact, the Federal Circuit
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`recently held just the opposite. For these reasons, as explained below, Alliance’s motion should
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`be denied in full.
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`II.
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`FACTUAL BACKGROUND
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`The ’772, ’920 and ’423 patents stem from a common provisional application filed
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`December 18, 2013. The patents include nearly identical written descriptions and figures. While
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`this section focuses on the background of the ’772 Patent, the discussion is equally applicable to
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`the ’920 and ’423 Patents.
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`The specification of the ’772 Patent repeatedly identifies the invention as being directed
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`to an improvement to a computer network system platform, specifically a “mobile-device-to-
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`machine payment processing system” focused on the unattended retail space (e.g., laundromats)
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`subject to a non-persistent network connection. ’772 Patent at 5:62-6:6; see also id. at 2:19-23
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`(machine-to-machine payment systems), 6:42-7:8 (describing non-persistent network
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`connections). The ’772 Patent addresses technological problems that arises when a user attempts
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`to use a mobile device to engage in a transaction with an unattended automated machine (e.g., a
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`laundry machine).
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`This is very different from a traditional point-of-sale transaction in which a user offers a
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`payment instrument such as a credit card to a store clerk. It is instead an interaction that occurs
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`electronically between two machines. Traditionally, a laundry transaction is initiated by the user
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`2
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`Case 1:24-cv-00733-MN Document 24 Filed 11/15/24 Page 7 of 23 PageID #: 1570
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`at the laundry machine and the authorization is obtained by the merchant’s machine (e.g., a
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`point-of-sale device), not by the purchaser. In other words, the user interacts with a single
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`device from start to finish.
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`In contrast, with the ’772 Patent, the user possesses a wireless device, such as a
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`smartphone. Unlike traditional online purchases, the user does not initially select any goods or
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`services using the device. Instead, when the device comes within proximity to one or more
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`machines, a dialog takes place to identify the machines in proximity to the mobile device that are
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`available to accept payment from a mobile payment application executing on the mobile device.
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`The device displays a user interface of the mobile payment application, the interface specifically
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`being configured to display a visual indication of the machines and to accept user input to select
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`a particular machine and trigger payment to the machine for a transaction initiated by the user.
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`The mobile device thereby dynamically creates, based on proximity, a network connection with a
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`specific machine that is available to accept payment from the mobile payment application
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`operating on the mobile device.
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`As mentioned above, it is possible that the device may detect more than one payment
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`accepting unit, for example, the user of the device might approach a bank of machines. The user
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`is thus afforded the opportunity to select a machine of their choosing. The user can then use the
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`mobile device to convey a wireless authorization to the selected machine. In other words, the
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`mobile device enables user interaction with the user interface of the mobile payment application
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`to complete the transaction between the user and the machine at the appropriate time and for a
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`selected machine.
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`The ’772 Patent further explains that, when more than one machine is close to the user,
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`each user “receives authorization grants for specific payment accepting units” but that the mobile
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`3
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`Case 1:24-cv-00733-MN Document 24 Filed 11/15/24 Page 8 of 23 PageID #: 1571
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`device must not send the authorization grants to all nearby machines. ’772 Patent at 24:17-57.
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`In particular, the mobile device can display on its touch screen (as shown in Figs. 10A-10D) “a
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`visual indication of the payment accepting unit 120 (e.g., a picture and/or payment accepting unit
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`ID of the payment accepting unit 120) for visual confirmation.” Id. at 24:51-56. The user “can
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`manually change the payment accepting unit 120.” Id. at 24:46-47. As depicted in Figs. 10A-
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`10D (Fig. 10C is reproduced below), the user selects the desired payment accepting unit by
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`scrolling to the right or to the left and then swiping the dollar bill to the desired machine.
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`However, the transaction disclosed in the ’772 Patent requires the user to select the
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`products or services directly associated with the unattended automated machine. See e.g., ’772
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`Patent at 7:23-27 (“the user inputting his selection on the payment accepting unit 120 and the
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`payment accepting unit 120 dispensing the product or service”), see also id. at 33:40-44 (“the
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`user of the mobile device 150 selects a product to purchase from the machine 120 by interacting
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`with one or more input mechanisms of the machine 120 (e.g., buttons 126 or a touch screen
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`4
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`Case 1:24-cv-00733-MN Document 24 Filed 11/15/24 Page 9 of 23 PageID #: 1572
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`display 124 in FIG. 19.”). The mobile device display is then updated based on events that
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`occurred at the payment accepting unit. Id. at 7:18-24, 7:46-50.
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`III. LEGAL STANDARD
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`The Supreme Court recognizes “abstract ideas” as an exception to Section 101’s broad
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`patentability principles. To identify which claims are and are not abstract ideas, the Supreme
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`Court has articulated a two-part test:
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`First, we determine whether the claims at issue are directed to one of those patent-
`ineligible concepts. If so, we then ask, “[w]hat else is there in the claims before us?”
`To answer that question, we consider the elements of each claim both individually
`and “as an ordered combination” to determine whether the additional elements
`“transform the nature of the claim” into a patent-eligible application. We have
`described step two of this analysis as a search for an “‘inventive concept’”—i.e.,
`an element or combination of elements that is “sufficient to ensure that the patent
`in practice amounts to significantly more than a patent upon the [ineligible concept]
`itself.”
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`Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S. 208, 217-18 (2014) (internal citations omitted).
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`The Supreme Court has cautioned that “we tread carefully in construing this exclusionary
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`principle lest it swallow all of patent law” because “[a]t some level, ‘all inventions . . . embody,
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`use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas.’” Id. at 217
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`(citing Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 71 (2012)).
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`Pertinent to this motion to dismiss, “whether a claim element or combination of elements
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`is well-understood, routine, and conventional to a skilled artisan in the relevant field is a question
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`of fact. Any fact … that is pertinent to the invalidity conclusion must be proven by clear and
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`convincing evidence.” Berkheimer v. HP Inc., 881 F.3d 1360, 1368 (Fed. Cir. 2018); see also
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`Automated Tracking Sols., LLC, v. Coca-Cola Co., 723 F. App’x, at 992 (Fed. Cir. 2018).
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`When reviewing a motion to dismiss under Rule 12(b)(6), all factual inferences must be
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`drawn in favor of the non-moving party. Visual Memory LLC v. NVIDIA Corp., 867 F.3d 1253,
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`1261 (Fed. Cir. 2017). For example, in Aatrix Software, Inc. v. Green Shades Software, Inc., the
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`5
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`Federal Circuit found error where a district court “denied leave to amend without claim
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`construction and in the face of factual allegations, spelled out in the proposed second amended
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`complaint, that, if accepted as true, establish that the claimed combination contains inventive
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`components. . . .” 882 F.3d 1121, 1125 (Fed. Cir. 2018).
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`IV. ARGUMENT
`A.
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`The ’772 Is Directed to Patent-Eligible Subject Matter
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`Alliance argues that claim 11 of the ’772 Patent is directed to an abstract idea and does
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`not recite any inventive concepts. Br. at 6-11. Each argument is rebutted, in turn, below.
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`1.
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`The ’772 Patent Is Not Directed to An Abstract Idea
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`Alliance contends that claim 11 of the ’772 Patent “is directed to the abstract idea of
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`displaying information to enable a commercial transaction with a merchant.” Br. at 6.
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`Alliance’s contention mischaracterizes claim 11 and wholly disregards its improvements over the
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`prior art. “In cases involving software innovations, [the Step One] inquiry often turns on
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`whether the claims focus on ‘the specific asserted improvement in computer capabilities.’” See
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`Finjan, Inc. v. Blue Coat Sys., Inc., 879 F.3d 1299, 1303 (Fed. Cir. 2018) (citation omitted).
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`Claim 11 of the ’772 Patent is directed to the specific technological improvements of identifying
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`payment units in proximity to the mobile device, receiving user selection of an available
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`payment accepting unit, and triggering payment by the mobile payment application prior to
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`establishing a wireless communication path with the selected payment accepting unit. Only after
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`triggering payment and establishing the wireless connection is user input accepted to complete
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`the transaction. This represented a specific way of using payment accepting units and mobile
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`devices to make payments, not abstract ideas. FAC, ¶¶ 59-60; ’772 Patent at 7:33-40, 33:38-48.
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`The ’772 Patent stands in sharp contrast to conventional approaches where the payment
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`accepting device required a persistent connection to a remote server to communicate with a
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`6
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`Case 1:24-cv-00733-MN Document 24 Filed 11/15/24 Page 11 of 23 PageID #: 1574
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`mobile device. ’772 Patent at 6:42-60. The mobile device had no ability (or need) to identify
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`payment accepting units in proximity since the remote server kept track of them. In effect, the
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`payment was triggered from the server, with the mobile device doing little more than relaying
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`user input. The server, in turn, communicated with a single payment accepting device to
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`disburse a requested good or service. Conventional approaches, therefore, required each
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`payment accepting device to have a persistent network connection, thereby increasing costs
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`associated with the installation and operation of payment accepting devices, such as laundry
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`machines.
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`The prosecution history of the ’772 Patent confirms that claim 11 pertains to a specific
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`technological improvement. In allowing claims of the ’772 Patent, the examiner identified
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`U.S. 2019/0236586 A1 (“Mei”) and US 2016/0132870 A1 (“Xu”) as the closest prior art to
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`the ’772 Patent. Ex. 1 at 3. In general, Mei taught a payment processing method of a vending
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`machine receiving transaction information from a payment card application on a mobile device.
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`Id. Xu generally taught a method for facilitating secure transactions on a mobile device when
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`long-range network connections are unavailable. Id. The patent examiner determined that
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`neither Mei nor Xu taught or suggested the recited limitation of claim 1 (upon which claim 11
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`depends), which begins with “identifying one or more payment accepting units in proximity to
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`the mobile device that are available to accept payment from a mobile payment application
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`executing on the mobile device, the identifying based at least in part on an identifier …” Id. at 2.
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`Alliance’s articulation of the alleged abstract ideas is so broad that it would apply with equal
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`force to Mei and Xu. Alliance is wrong because the ’772 Patent—as acknowledged by the patent
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`examiner—represents an improvement over these prior art references.
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`7
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`Case 1:24-cv-00733-MN Document 24 Filed 11/15/24 Page 12 of 23 PageID #: 1575
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`Alliance’s reliance on the nonprecedential In re AuthWallet, LLC opinion is misplaced.
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`Br. at 6 (citing In re AuthWallet, LLC, No. 2022-1842, 2023 WL 3330298 (Fed. Cir. May 10,
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`2023)). In finding the patent-in-suit ineligible, the Federal Circuit quoted, and agreed with, the
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`district court’s finding that “[f]or years, retailers have provided coupons and other financial
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`incentives to customers during purchase” and “[t]he ’852 Patent simply describes that that
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`conventional business practice may be effected by technology rather than by hand.” In re
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`AuthWallet, 2023 WL 3330298 at *2 (citations omitted). Further, the Federal Circuit found that
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`the patent was directed to a longstanding commercial practice. Id. at *3.
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`Alliance argues that claim 11 of the ’772 Patent is similarly focused on a longstanding
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`commercial practice, especially “displaying information to enable a commercial transaction from
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`a merchant…” Br. at 7. As explained above, Alliance misinterprets the claims. The ’772 Patent
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`provided a specific technological solution, including displaying multiple payment accepting
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`units, in proximity to a mobile device, on the mobile device (’772 Patent at claim 1), triggering
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`payment by the mobile payment application before any connection to the payment accepting unit
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`is established (id.), and the use of wireless communication technology as a way to facilitate a
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`transaction without connection to a remote server (id.). These specific improvements to
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`transacting between a mobile device and a payment accepting machine overcame critical
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`shortcomings in the prior art, including transforming the role of the remote server and mobile
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`device. Contrary to Alliance’s assertions, these are not merely “generic steps and results.” Br. at
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`7.
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`The Federal Circuit has upheld the patentability of similar patents. In Uniloc USA, Inc. v.
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`LG Electronics USA, Inc., the court found that a patent that reduced latency in network
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`communications was directed to a patent-eligible improvement. 957 F.3d 1303 (Fed. Cir. 2020).
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`8
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`The court also found that “[t]he claimed invention’s compatibility with conventional
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`communication systems does not render it abstract.” Id. at 1309.
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`The ’772 Patent also bears resemblance to the patent in Contour IP Holding LLC v.
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`GoPro, Inc., 113 F.4th 1373 (Fed. Cir. 2024). The patented invention in that case involved “an
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`improved POV camera through its combination of claim limitations and requirement that the
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`claimed POV camera processor be configured to record low-and high-quality data streams in
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`parallel.” Id. at 1379. This was not an abstract idea because the invention allowed the “claimed
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`POV camera to ‘operate differently than it otherwise could.’” Id. at 1380 (citation omitted).
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`Similarly, before the ’772 Patent, the prior art focused on performing transactions at the
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`unattended retail machine itself and could not, for instance, identify payment units in proximity
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`to the mobile device. The ’772 Patent represented a substantial improvement as it allowed
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`unattended retail machines to operate differently than they otherwise could.
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`Also instructive is Ancora Technologies, Inc. v. HTC America, Inc., where the Federal
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`Circuit addressed a patent involving methods of limiting use of unauthorized software. 908 F.3d
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`1343, 1344 (Fed. Cir. 2018) . The Court found that the patent was not directed to an abstract idea
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`because the claimed method “specifically identifies how that functionality improvement is
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`effectuated in an assertedly unexpected way: a structure containing a license record is stored in a
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`particular, modifiable, non-volatile portion of the computer’s BIOS, and the structure in that
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`memory location is used for verification by interacting with the distinct computer memory that
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`contains the program to be verified.” Id. at 1348-49.
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`Finally, in CosmoKey Solutions GmbH & Co. Kg v. Duo Security LLC, the Federal
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`Circuit determined that the patent-in-suit was directed to “activation of the authentication
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`function, communication of the activation within a predetermined time, and automatic
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`9
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`deactivation of the authentication function, such that the invention provides enhanced security
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`and low complexity with minimal user input.” 15 F.4th 1091, 1097 (Fed. Cir. 2021). Although
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`disagreeing with the district court’s overly broad characterization of the patent-in-suit, the
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`Federal Circuit ultimately concluded that the patent was eligible under Step Two. Id. at 1098-99.
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`Alliance attempts to discount the key technical advantage of displaying one or more
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`payment accepting units because “claim 11 does not require the display of multiple payment
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`accepting units.” Br. at 9 (emphasis in original). PayRange does not make this assertion. Claim
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`1 of the ’772 Patent recites “identifying one or more payment accepting units in proximity to the
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`mobile device … Claim 1 of the ’772 Patent claims recites “identifying one or more payment
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`accepting units in proximity to the mobile device … the user interface being configured to
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`display a visual indication of the one or more payment accepting units and accept user input to
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`(i) receive selection … of the one or more payment accepting units.” The Amended Answer
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`states that “this limitation allows a user to select one of many different machines based on
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`proximity and availability of the machines.” D.I. 18, ¶ 59. The claim clearly covers
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`implementations with multiple payment accepting units. Alliance cannot disregard this aspect of
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`the invention.
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`Alliance attempts to brush past PayRange’s factual allegations regarding patent eligibility
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`because, according to Alliance, “this information (i.e., the available merchant, the customer’s
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`balance, and the transaction) is necessarily exchanged during any commercial transaction.” Br.
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`at 9. But Alliance overlooks that prior art systems would display transaction related information
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`on the payment accepting units themselves and that displaying that same information on the
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`mobile device was unconventional, requiring resolution of several technical problems. D.I. 18,
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`¶¶ 46, 59.
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`10
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`Case 1:24-cv-00733-MN Document 24 Filed 11/15/24 Page 15 of 23 PageID #: 1578
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`In sum, claim 11 of the ’772 Patent is not directed to an abstract idea and the motion to
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`dismiss on § 101 grounds should be denied.
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`2.
`
`The ’772 Patent Has Inventive Concepts That Improve Mobile
`Transactions
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`Even if the Court were to reach Step Two of the Alice framework, the ’772 Patent adds
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`ample inventive concepts as they “involve more than performance of ‘well-understood, routine,
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`[and] conventional activities previously known to the industry.’” Berkheimer, 881 F.3d at 1367
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`(citation omitted). PayRange alleges, and as explained above, claim 11 of the ’772 Patent
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`“allows a user to select one of many different machines based on proximity and availability of
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`the machines and initiate payment to the selected machine using a mobile device.” D.I. 18, ¶ 59.
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`PayRange alleges that this feature was unconventional based, at least, on the feature being absent
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`from the Mei and Xu prior art, which the patent examiner found to be the closest prior art
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`references. Id. Contrary to Alliance’s assertion, claim 1 (upon which claim 11 depends)
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`expressly allows for the user to use the mobile device to select a mobile payment accepting unit
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`from among one or more such units. ’772 Patent at 47:20-24. Alliance argues that this
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`unconventional aspect amounts to nothing more than the abstract idea itself. Br. at 10. Alliance
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`cannot have it both ways. Alliance’s articulation of the abstract idea says nothing about selecting
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`one or more payment accepting units on a mobile device. Alliance cannot articulate a broad
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`abstract idea for Step One and then narrow its abstract idea for Step Two to encompass inventive
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`concepts.
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`Alliance also attempts to discount PayRange’s factual allegations that “[c]onventionally,
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`the user interface was displayed on the payment accepting units themselves. Using the mobile
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`phone as the user interface was unconventional.” D.I. 18, ¶ 60. As claim 11 makes clear,
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`identifying the correct payment accepting unit to display was a significant technical hurdle.
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`11
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`

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`Case 1:24-cv-00733-MN Document 24 Filed 11/15/24 Page 16 of 23 PageID #: 1579
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`
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`Claim 1, which claim 11 depends upon, provides a technical solution by “identifying one more
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`payment accepting units in proximity to the mobile device” (’772 Patent at Claim 1), thereby
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`excluding a potentially vast number of payment accepting units, each of which could potentially
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`be displayed. D.I. 18, ¶ 60. Relying on proximity to narrow the selection process was
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`unconventional. Alliance again ignores the claim language and PayRange’s factual allegations.
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`Alliance also argues that the novelty over prior art is irrelevant in assessing an inventive
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`concept. Br. at 10. PayRange is not arguing for patent eligibility based on novelty. PayRange is
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`simply pointing-out that the absence of a claim element from the prior art may establish (at least
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`at the pleading stage) unconventionality for that element. See Dynamic Digit. Depth Rsch. Pty
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`Ltd. v. LG Elecs. Inc., C.A. No. 15-5578-GW(Ex), 2016 WL 7444561, at *7-8 (C.D. Cal. June 6,
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`2016) (claims added inventive concept where specification described a particular claim
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`limitation as a specific “advancement over prior art depth-mapping techniques” and another
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`claim limitation, “classifier,” as “specifically limited” to particular relationships and “ha[ving]
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`no meaning absent these relationships”).
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`B.
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`Alliance Fails to Establish that the ’920 and ’423 Patents are Representative
`of Claim 11 of the ’772 Patent
`1.
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`Claim 1 of the ’423 Patent Provides Additional Inventive Concepts
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`PayRange disputes that claim 11 of ’772 Patent is representative of claim 1 of the ’423
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`Patent. While PayRange’s arguments above regarding abstract idea and inventive concept of
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`the ’772 Patent apply with equal force to claim 1 of the ’423 Patent, the prosecution history
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`further supports PayRange’s factual allegations that claim 1 of the ’423 Patent is not routine,
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`well-understood, or conventional.
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`First, the ’423 Patent requires a mobile device that “identif[ies] one or more payment
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`accepting units in proximity to the mobile device that are available to accept payment from a
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`12
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`

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`Case 1:24-cv-00733-MN Document 24 Filed 11/15/24 Page 17 of 23 PageID #: 1580
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`
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`mobile payment application executing on the mobile device[.]” ’423 Patent at Claim. 1;
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`FAC, ¶ 46. The patent examiner identified U.S. Publication No. 2002015123 A1 by Giordano
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`(“Giordano”) as the most analogous prior art. FAC, ¶ 44.
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`With Giordano, the user interface was part of the payment accepting unit itself and
`there was no need to identify a particular payment accepting machine. In contrast,
`the ’423 Patent relies on the end-user’s mobile phone as the user interface. However,
`determining which payment accepting unit to interact with creates a significant
`technological challenge. The ’423 Patent addresses this problem by identifying the
`payment accepting units in proximity to the mobile device which eliminates the
`vast number of potential payment accepting units. This was an unconventional
`solution absent from the prior art.
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`Id., ¶ 46. Alliance improperly disregards this well-pleaded factual allegation. Alliance’s only
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`argument is “novelty” “is not the test for patent eligibility.” Br. at 15. PayRange’s allegations
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`do not rest of the fact that the patent examiner found claim 1 of the ’423 Patent novel. Rather,
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`PayRange’s allegations show that the closest prior art lacked a key claim limitation (namely,
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`“identif[ies] one or more payment accepting units