Case 1:24-cv-00733-MN Document 27 Filed 11/25/24 Page 1 of 15 PageID #: 1600
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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
`
`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
`
`ALLIANCE LAUNDRY SYSTEMS, INC.’S REPLY BRIEF IN SUPPORT
`OF ITS PARTIAL MOTION TO DISMISS PAYRANGE’S 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
`
`
`Attorneys for Alliance Laundry Systems LLC
`
`Dated: November 25, 2024
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`ALLIANCE LAUNDRY SYSTEMS LLC,
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`Plaintiff,
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`v.
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`PAYRANGE INC.,
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`Defendant.
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`

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`Case 1:24-cv-00733-MN Document 27 Filed 11/25/24 Page 2 of 15 PageID #: 1601
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` I.
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`TABLE OF CONTENTS
`
`INTRODUCTION ...............................................................................................................1
`
`II.
`
`ARGUMENT .......................................................................................................................1
`
`A.
`
`PayRange Has Not Rebutted Alliance’s Showing of Ineligibility as to
`Claim 11 of the ’772 Patent .....................................................................................1
`
`1.
`
`2.
`
`3.
`
`PayRange Improperly Relies on Unclaimed Limitations ............................1
`
`PayRange Relies on Limitations from Disclaimed Claim 1, Which
`Apply Abstract Ideas Using Generic, Conventional Technology ................3
`
`The Absence of Elements from the Cited Prior Art Does Not
`Render an Idea Non-Abstract or Inventive ..................................................6
`
`B.
`
`C.
`
`D.
`
`The Independent Claims of the ’920 and ’423 Patents are Ineligible ......................7
`
`The Dependent Claims of the ’920 and ’423 Patents are Ineligible ........................8
`
`Collateral Estoppel Applies ...................................................................................10
`
`CONCLUSION ..................................................................................................................10
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`
`
`III.
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`i
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`Case 1:24-cv-00733-MN Document 27 Filed 11/25/24 Page 3 of 15 PageID #: 1602
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`
`
`CASES
`
`TABLE OF AUTHORITIES
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`
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`Page(s)
`
`Aatrix Software, Inc. v. Green Shades Software, Inc.,
`882 F.3d 1121, 1122 (Fed. Cir. 2018)........................................................................................1
`
`Accenture Glob. Servs., GmbH v. Guidewire Software, Inc.,
`728 F.3d 1336, 1345 (Fed. Cir. 2013)........................................................................................4
`
`American Axle & Mfg., Inc. v. Neapco Holdings LLC,
`967 F.3d 1285, 1293 (Fed. Cir. 2020)........................................................................................2
`
`Ancora Techs, Inc. v. HTC Am., Inc.,
`908 F.3d 1343, 1349 (Fed. Cir. 2018)........................................................................................5
`
`In re AuthWallet,
`No. 2022-1842, 2023 WL 3330298 (Fed. Cir. May 10, 2023) ..............................................5, 9
`
`Baggage Airline Guest Services, Inc. v. Roadie, Inc.,
`351 F. Supp. 3d 753, 761-62 (D. Del. 2019) .........................................................................7, 8
`
`Berkheimer v. HP Inc.,
`881 F.3d 1360, 1369 (Fed. Cir. 2018)........................................................................................1
`
`British Telecomm’ns PLC v. IAC/InterActiveCorp,
`381 F. Supp. 3d 293, 322-23 (D. Del. Feb. 4, 2019) .................................................................1
`
`Brumfield, Trustee for Ascent Trust v. IBG LLC,
`97 F.4th 854, 868 (Fed. Cir. 2024) ..................................................................................4, 9, 10
`
`ChargePoint, Inc. v. SemaConnect, Inc.,
`920 F.3d 759, 769 (Fed. Cir. 2019)............................................................................................3
`
`Contour IP Holding LLC v. GoPro, Inc.,
`113 F.4th 1373, 1379-80 (Fed. Cir. 2024) .................................................................................5
`
`CosmoKey Solns GmbH & Co. KG v. Duo Security LLC,
`15 F.4th 1091, 1098-99 (Fed. Cir. 2021) ...................................................................................5
`
`cxLoyalty, Inc. v. Maritz Holdings Inc.,
`986 F.3d 1367, 1377 (Fed. Cir. 2021)....................................................................................3, 9
`
`Dynamic Digit. Depth Rsch. Pty Ltd. v. LG Elecs. Inc.,
`C.A. No. 15-5578-GW, 2016 WL 7444561 (C.D. Cal. June 6, 2016) ......................................7
`
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`ii
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`Case 1:24-cv-00733-MN Document 27 Filed 11/25/24 Page 4 of 15 PageID #: 1603
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`
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`Elec. Power Grp., LLC v. Alstom S.A.,
`830 F.3d 1350, 1355 (Fed. Cir. 2016)......................................................................................10
`
`
`Int’l Business Machs. Corp. v. Zillow Grp, Inc.,
`50 F.4th 1371, 1378-79 (Fed. Cir. 2022) ...........................................................................4, 6, 9
`
`Interval Licensing LLC v. AOL, Inc.,
`896 F.3d 1335, 1347 (Fed. Cir. 2018)........................................................................................6
`
`KioSoft Techs., LLC v. PayRange Inc.,
`PTAB-PGR2021-00093 (PTAB, June 10, 2021) .......................................................................2
`
`ParkerVision, Inc. v. Qualcomm Inc.,
`116 F.4th 1345, 1362 (Sept. 6, 2024) ......................................................................................10
`
`People.ai, Inc. v. Clari Inc.,
`No. 2022-1364, 2023 WL 2820794 (Fed. Cir. 2023) ............................................................4, 5
`
`PersonalWeb Techs. LLC v. Google LLC,
`8 F.4th 1310, 1317, 1319 (Fed. Cir. 2021) ............................................................................5, 6
`
`Staton Techiya, LLC v. Harman Int’l Indus., Inc.,
`C.A. No. 23-801, 2024 WL 2271881 (D. Del. May 20, 2024) ..............................................7, 8
`
`Synopsys, Inc. v. Mentor Graphics Corp.,
`839 F.3d 1138, 1149 (Fed. Cir. 2016)........................................................................................2
`
`Topia Tech., Inc. v. Egnyte, Inc.,
`C.A. No. 21-1821, 2023 WL 2734607 (D. Del. Mar. 31, 2023)............................................8, 9
`
`Uniloc USA, Inc. v. LG Electronics USA, Inc.,
`957 F.3d 1303, 1307-08 (Fed. Cir. 2020) ..................................................................................5
`
`XY, LLC v. Trans Ova Genetics, L.C.,
`890 F.3d 1282, 1294 (Fed. Cir. 2018)......................................................................................10
`
`
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`iii
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`Case 1:24-cv-00733-MN Document 27 Filed 11/25/24 Page 5 of 15 PageID #: 1604
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`
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`I.
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` INTRODUCTION
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`PayRange’s opposition (D.I. 24) attempts to construct a question of fact to avoid a finding
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`of subject-matter ineligibility. Its arguments rest on strained interpretations of the Berkheimer and
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`Aatrix decisions as creating a de facto bar to finding ineligibility at the pleading stage, when in
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`reality these cases stand for the unremarkable proposition that whether a claim is well-understood,
`
`routine, and conventional sometimes raises a fact question. Berkheimer v. HP Inc., 881 F.3d 1360,
`
`1369 (Fed. Cir. 2018); Aatrix Software, Inc. v. Green Shades Software, Inc., 882 F.3d 1121, 1122
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`(Fed. Cir. 2018). These decisions do not hold that a patentee can stave off an invalidity
`
`determination simply by pleading that an invention is novel and nonconventional, as PayRange
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`does here. See, e.g., British Telecomm’ns PLC v. IAC/InterActiveCorp, 381 F. Supp. 3d 293, 322-
`
`23 (D. Del. Feb. 4, 2019). Critically, in advancing its arguments, PayRange leans almost entirely
`
`on unclaimed limitations and a single conclusory statement by a patent examiner that seems to
`
`speak to patent eligibility but is confusingly provided in the context of nonobviousness. Further,
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`many of PayRange’s arguments were already considered and soundly rejected by the PTAB in the
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`Post-Grant Review of U.S. Patent No. 10,891,614 (“the ’614 Patent”), which considered claims
`
`that PayRange admits are materially identical to the claims at issue here. See D.I. 24 at 17. As the
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`PTAB found, and as explained in Alliance’s briefing here, the asserted claims are directed to an
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`abstract idea—implemented using well-understood, routine, and conventional components—and
`
`utterly devoid of any inventive concept. Alliance’s motion to dismiss in part should be granted.
`
`II.
`
`ARGUMENT
`
`A.
`
`PayRange Has Not Rebutted Alliance’s Showing of Ineligibility as to Claim
`11 of the ’772 Patent
`
`1.
`
`PayRange Improperly Relies on Unclaimed Limitations
`
`PayRange argues that the method recited in claim 11 reflects a technical improvement
`
`
`
`1
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`

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`Case 1:24-cv-00733-MN Document 27 Filed 11/25/24 Page 6 of 15 PageID #: 1605
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`sufficient to confer eligibility because it facilitates a commercial transaction with a payment
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`accepting unit that does not have a persistent network connection and avoids communication with
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`a remote server. See D.I. 24 at 2-3, 6-9. But these alleged features are irrelevant to eligibility
`
`because they are not reflected in claim 11. See D.I. 22 at 4; see also D.I. 24 at 2-3, 6-9 (citing to
`
`the specification—not claim 11—as support for the supposed technical improvement). PayRange
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`conceded as much during the ’614 PGR proceeding, which dealt with claims that PayRange
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`acknowledges are materially identical to claim 11 of the ’772. See D.I. 24 at 17; D.I. 1, Ex. 4 at
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`22, KioSoft Techs., LLC v. PayRange Inc., PTAB-PGR2021-00093 (PTAB, June 10, 2021)
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`(PayRange’s Attorney: “I would agree that the claimed invention…does not have a requirement
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`that the vending machine itself lack a persistent network connection.”); id. at 29 (Patent Owner
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`conceded that claim 1 “does not touch on the server”); see also Decl. of S. Waidelich in Support
`
`of Alliance’s Reply (“Decl.”), Ex. J (Transcript) at 40:2-16, 41:2-14, 59:22-61:12.
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`The Federal Circuit has “repeatedly held that features that are not claimed are irrelevant as
`
`to step 1 or step 2 of the Mayo/Alice analysis.” See, e.g., American Axle & Mfg., Inc. v. Neapco
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`Holdings LLC, 967 F.3d 1285, 1293 (Fed. Cir. 2020) (citing cases). Applying this rule, the PTAB
`
`rejected the same arguments in the ’614 PGR that PayRange attempts to advance. See D.I. 1, Ex.
`
`4, at 22. For the reasons espoused by the PTAB in the ’614 PGR, PayRange cannot rely on
`
`unclaimed features of claim 11 to avoid an ineligibility determination. Synopsys, Inc. v. Mentor
`
`Graphics Corp., 839 F.3d 1138, 1149 (Fed. Cir. 2016) (“The § 101 inquiry must focus on the
`
`language of the Asserted Claims”).
`
`Further highlighting the discrepancy between the scope of claim 11 and the features that
`
`PayRange contends constitute the supposed technical improvement, PayRange’s counterclaims
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`and asserted claim charts make no reference to the “non-persistent network connection” or
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`2
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`

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`Case 1:24-cv-00733-MN Document 27 Filed 11/25/24 Page 7 of 15 PageID #: 1606
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`
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`“serverless” features that PayRange now tries to rely on to support eligibility. See, e.g., D.I. 18, ¶¶
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`57-68; id., Ex. L. On the contrary, through its pre-suit correspondence, PayRange pointed to the
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`presence of a server within Alliance’s system as part of the basis for its infringement allegations,
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`contending that the accused instrumentalities establish a communication path “via cloud servers.”
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`Id., Ex. A at 5 (emphasis added). That PayRange must rely on unclaimed features confirms the
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`ineligibility of claim 11. See, e.g., ChargePoint, Inc. v. SemaConnect, Inc., 920 F.3d 759, 769
`
`(Fed. Cir. 2019) (holding claims patent-ineligible where supposed technical improvements were
`
`only discussed in specification and not reflected in the claims themselves).
`
`2.
`
`PayRange Relies on Limitations from Disclaimed Claim 1, Which
`Apply Abstract Ideas Using Generic, Conventional Technology
`
`PayRange disclaimed claim 1 of the ’772 Patent in the face of eligibility challenges before
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`this Court and the PTAB. See D.I. 22 at 2; D.I. 1, Ex. 5. Yet PayRange now relies entirely on
`
`limitations from claim 1 to argue eligibility and to identify a supposed inventive concept.
`
`a.
`
`The relied-upon limitations do not render claim 11 non-
`abstract
`
`PayRange argues that the following limitations render claim 11 patent-eligible:
`
`(1) identifying one or more payment accepting units based on proximity (limitation 1.c); (2)
`
`displaying a user interface that is configured to display one or more payment accepting units and
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`accept user input (1.d); (3) establishing a wireless communication path and thereafter enabling
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`user interaction to complete the transaction (1.e). See D.I. 24 at 6, 8.
`
`PayRange argues that these limitations recite a specific way of using payment accepting
`
`units and mobile devices. See id. But if the recited conventional mobile device and wireless
`
`network are removed, the remaining elements may all be performed by a human. See, e.g.,
`
`cxLoyalty, Inc. v. Maritz Holdings Inc., 986 F.3d 1367, 1377 (Fed. Cir. 2021). For example, these
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`steps are performed when a consumer enters a laundromat, identifies an available washer, and
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`3
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`

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`Case 1:24-cv-00733-MN Document 27 Filed 11/25/24 Page 8 of 15 PageID #: 1607
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`conducts a transaction with that washer. See People.ai, Inc. v. Clari Inc., No. 2022-1364, 2023
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`WL 2820794, at *9 (Fed. Cir. 2023) (“The claims…do not claim a different method than that
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`traditionally used long before…computer technology.”).
`
`PayRange argues that these limitations improve existing technology because the mobile
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`device previously had no “ability (or need) to identify payment accepting units in proximity since
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`the remote server kept track of them.” See D.I. 24 at 6-7. But the claim does not reference absence
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`of a server. See supra § II.A.1; D.I. 24 at 7. In addition, the limitations do not claim how payment
`
`accepting units are identified in a way that improves existing technology. See, e.g., Int’l Business
`
`Machs. Corp. v. Zillow Grp, Inc., 50 F.4th 1371, 1378 (Fed. Cir. 2022). Rather, the specification
`
`discloses that these steps are implemented using a generic mobile phone. See D.I. 22 at 7-8; see
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`also Brumfield, Trustee for Ascent Trust v. IBG LLC, 97 F.4th 854, 868 (Fed. Cir. 2024)
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`(automation of manual processes using generic computers is not a technological improvement).
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`The PTAB also rejected these arguments in the ’614 PGR. See, e.g., D.I. 1, Ex. 4 at 24-26
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`(identifying based on proximity “is not an element in addition to the abstract idea itself”); id. at
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`28-30 (requiring a connection before user input is the “computerized version of the abstract idea
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`of a purchaser initiating a conversation with a merchant in advance of making a purchase”).
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`PayRange further asserts that the “key technical advantage” of claim 11 is the capability to
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`display multiple payment accepting units. D.I. 24 at 10. But that is not required in claim 11, which
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`also encompasses methods that only display one payment accepting unit. See D.I. 18, Ex. E, claim
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`11; Accenture Glob. Servs., GmbH v. Guidewire Software, Inc., 728 F.3d 1336, 1345 (Fed. Cir.
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`2013) (claims abstract where limitations do not meaningfully limit the abstract concept). In any
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`event, the capability to display multiple payment accepting units does not render the concept non-
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`abstract because this is merely the computerized version of a person looking at multiple available
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`4
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`Case 1:24-cv-00733-MN Document 27 Filed 11/25/24 Page 9 of 15 PageID #: 1608
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`vending machines and selecting one of them. See, e.g., People.ai, 2023 WL 2820794, at *11.
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`The cases PayRange cites demonstrate the contrast between claims that capture a
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`technological improvement and the abstract commercial process reflected in claim 11. See D.I. 24
`
`at 8-10. The claims in these cases recite limitations that improve the functionality of the
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`technological environment in which they were deployed—a stark contrast with claim 11 which
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`merely recites generic hardware components and functions described at a high-level of generality.
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`See Uniloc USA, Inc. v. LG Electronics USA, Inc., 957 F.3d 1303, 1307-08 (Fed. Cir. 2020)
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`(reciting software that changes the normal operation of the communication system); Contour IP
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`Holding LLC v. GoPro, Inc., 113 F.4th 1373, 1379-80 (Fed. Cir. 2024) (reciting specific technical
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`improvements that improve the relevant technology); Ancora Techs, Inc. v. HTC Am., Inc., 908
`
`F.3d 1343, 1349 (Fed. Cir. 2018) (reciting “specific and unique characteristics” of the claimed
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`BIOS); CosmoKey Solns GmbH & Co. KG v. Duo Security LLC, 15 F.4th 1091, 1098-99 (Fed.
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`Cir. 2021) (reciting a specific set of ordered steps that provide a specific improvement to the
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`technical field). Claim 11, in contrast, is more akin to the claims in In re AuthWallet because it
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`does not “speak to specific technical problems and solutions but rather recites generic steps and
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`results.” In re AuthWallet, No. 2022-1842, 2023 WL 3330298, at *4 (Fed. Cir. May 10, 2023).
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`b.
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`The limitations PayRange relies on do not provide an inventive
`concept
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`The identifying limitation simply reflects the application of conventional technology to the
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`concept of a consumer looking at available merchants and selecting one to transact business with.
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`See, e.g., PersonalWeb Techs. LLC v. Google LLC, 8 F.4th 1310, 1319 (Fed. Cir. 2021) (“[A]dding
`
`computer functionality…does not confer patent eligibility on an otherwise abstract idea.”). While
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`PayRange asserts that Alliance has identified a new abstract idea here, this is encompassed within
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`the abstract idea of displaying information to enable a commercial transaction. See D.I. 22 at 6-8.
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`5
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`

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`Case 1:24-cv-00733-MN Document 27 Filed 11/25/24 Page 10 of 15 PageID #: 1609
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`Even if this were a separate abstract idea, “‘[a]dding one abstract idea…to another,’…amounts
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`merely to the abstract idea.” See PersonalWeb, 8 F.4th at 1317.
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`PayRange further contends that using a generic mobile phone interface constitutes an
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`inventive concept, but in support offers only the bald assertion that user interfaces were
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`conventionally displayed on the payment accepting units. See D.I. 24 at 11. This bare allegation,
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`“wholly divorced from the claims or the specification,” cannot defeat a motion to dismiss. Int’l
`
`Bus., 50 F.4th at 1379. The claims and specification make clear that the user interface employs
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`well-known and conventional technology. See, e.g., D.I. 22 at 7-8; see also Interval Licensing LLC
`
`v. AOL, Inc., 896 F.3d 1335, 1347 (Fed. Cir. 2018) (selecting information to display “is one of the
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`‘most basic functions of a computer.’”). The PTAB rightly rejected this argument in the ’614 PGR,
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`finding that the claimed user interface was merely “the computerized version of the purchaser
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`seeing and selecting a merchant” and “facilitating a purchaser’s payment[.]” D.I. 1, Ex. 4 at 42.
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`3.
`
`The Absence of Elements from the Cited Prior Art Does Not Render
`an Idea Non-Abstract or Inventive
`
`PayRange also attempts to rely upon the patent examiner’s erroneous findings with respect
`
`to claims 1, 13, and 15 in support of patent-eligibility—claims that were all disclaimed by
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`PayRange in view of prior eligibility challenges. See D.I. 24 at 7; D.I. 22 at 2. The examiner’s
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`findings—and PayRange’s reliance on them—are unfounded.
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`In the notice of allowance for the ’772 Patent, the examiner stated that two prior art
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`references “failed to teach or suggest” identifying a payment accepting unit based on proximity
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`and displaying a user interface that is configured to accept user input1. D.I. 24, Ex. 1 at 2. But the
`
`
`1 PayRange’s assertion that the examiner identified the “closest prior art” is unsupported and
`inaccurate at a minimum because one of the prior art references discloses a method implemented
`at a server—the exact opposite of one of the supposed technological improvements that PayRange
`contends render the claims patent-eligible. See D.I. 24 at 15; id., Ex. 1 at 3; supra § II.A.1.
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`
`
`6
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`

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`presence or absence of these limitations in the prior art does not demonstrate eligibility or
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`inventiveness. See D.I. 22 at 14-17. Further, these limitations merely recite the abstract idea using
`
`conventional technology. See, e.g., supra Section II.A.2. The PTAB rejected similar arguments
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`during the ’614 PGR because “they rest on the alleged novelty of the abstract idea itself, not a
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`specific limitation beyond the judicial exception[.]” D.I. 1, Ex. 4 at 37 (original emphasis).
`
`PayRange endeavors to create a factual dispute from this prosecution history by citing to
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`Dynamic Digit. Depth Rsch. Pty Ltd. v. LG Elecs. Inc., C.A. No. 15-5578-GW, 2016 WL 7444561
`
`(C.D. Cal. June 6, 2016). D.I. 24 at 12. However, in Dynamic Digit., the court found that the
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`asserted claims were not directed to an abstract idea because the claims could not be performed by
`
`a human in the mind and set forth specific steps for performing the claimed method. Id. at *7. This
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`case finds a far closer analogy to Baggage Airline Guest Services, Inc. v. Roadie, Inc., 351 F. Supp.
`
`3d 753, 761 (D. Del. 2019). In Baggage Airline, the patentee argued that there was a factual dispute
`
`as to conventionality because the prosecution history found that the prior art did not “teach or
`
`suggest” a particular claim limitation. Id. But this Court found that no question of fact was raised
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`because the recited limitation was itself abstract and “[a] simple instruction to apply an abstract
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`idea on a computer,’ cannot satisfy the requirement of an ‘inventive concept.’” Id. at 761-62.
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`B.
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`The Independent Claims of the ’920 and ’423 Patents are Ineligible
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`“[C]ourts may treat a claim as representative if the patentee does not present any
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`meaningful argument for the distinctive significance of any claim limitations not found in the
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`representative claim.” Staton Techiya, LLC v. Harman Int’l Indus., Inc., C.A. No. 23-801, 2024
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`WL 2271881, at *7 (D. Del. May 20, 2024). Alliance’s opening brief explained representativeness
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`of the various claims at length. D.I. 22 at 4-5, 13-14, 16. In response, PayRange does not dispute
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`that independent claim 1 of the ’920 and ‘423 Patents are representative of the other independent
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`claims of the respective patents. See D.I. 24 at 12-16. Further, PayRange does not identify a single
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`7
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`Case 1:24-cv-00733-MN Document 27 Filed 11/25/24 Page 12 of 15 PageID #: 1611
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`difference between claim 11 of the ’772 Patent and the claims of the ’423 and ’920 patents that is
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`material to eligibility. See id. PayRange even relies on the same limitations from the ’423 and ’920
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`Patents as those for claim 11 of the ’772 Patent to argue eligibility. See D.I. 24 at 12-15.
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`In addition, during prosecution of the ’423 and ’920 Patents, the examiner issued a double
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`patenting rejection in view of the ’614 and ’772 Patents, stating that the “only difference between
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`the instant application and the [respective] patent is merely a labeling difference.” See Decl., Ex.
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`K at 2-3; Decl., Ex. L at 3-4. Rather than contest this, PayRange filed terminal disclaimers. See
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`Decl., Ex. M at 1; Decl., Ex. N at 1. Neither during prosecution, nor in its response brief, did
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`PayRange identify any material differences between the independent claims of the ’423 Patent,
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`’920 Patent, and claim 11 of the ’772 Patent. Claim 11 of the ’772 Patent is therefore representative
`
`of the challenged independent claims. See, e.g., Topia Tech., Inc. v. Egnyte, Inc., C.A. No. 21-
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`1821, 2023 WL 2734607, at *1 (D. Del. Mar. 31, 2023).
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`PayRange’s citation to the prosecution history for these patents does not alter the Section
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`101 analysis. For both the ’920 and ’423 Patent, PayRange relies on the examiner’s conclusion
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`that certain prior art references “failed to teach or suggest” the same limitations as those identified
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`by the same examiner for the ’772 Patent. D.I. 22, Ex. I at 3-4. As discussed above, these
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`limitations do not raise a question of fact because they do nothing more than apply an abstract idea
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`to a mobile device. See, e.g., Baggage, 351 F. Supp. 3d at 761.
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`
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`PayRange also inserts its own analysis based on the identified prior art references to argue
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`inventiveness of the ’920 and ’423 Patents. See D.I. 24 at 13-15. But these arguments rely on the
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`“identifying one or more payment accepting units in proximity” limitation, which Alliance has
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`demonstrated fails to provide an inventive concept in its opening brief and in Section II.A, supra.
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`C.
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`The Dependent Claims of the ’920 and ’423 Patents are Ineligible
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`Alliance explained in its opening brief that claim 1 of the ’423 and ’920 Patent are
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`Case 1:24-cv-00733-MN Document 27 Filed 11/25/24 Page 13 of 15 PageID #: 1612
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`representative of each dependent claim because the dependent claims merely add generic
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`components and limitations. D.I. 22 at 13. PayRange does not meaningfully challenge this
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`assertion with respect to ’920 Patent dependent claims 10, 12, 14, 19-20 or ’423 Patent dependent
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`claims 3, 6, 8, 10-12, 14 and 19-20. Claim 1 of the ’920 Patent and ’423 Patent are representative
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`of at least these claims. See, e.g., Topia, 2023 WL 2734607, at *1.
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`The only dependent claims PayRange addresses are claims 4, 9, and 17 of the ’920 and
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`’423 Patents. D.I. 24 at 15-16. But these claims add nothing beyond the abstract idea of Claim 1.
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`Claim 4 recites sending the amount of the completed transaction to a server using a long-range
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`transceiver. See D.I. 18, Ex. G; Id., Ex. H. PayRange cites to no support for its assertion that this
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`allows a user to wait until they are in a preferred location before communicating. D.I. 24 at 15; see
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`also Int’l Bus., 50 F.4th at 1379. And the specification confirms conventionality, stating that the
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`long-range transceiver may use any known long-range communication protocol. E.g., D.I. 18, Ex.
`
`H at 39:4-9. Further, sending the amount of the completed transaction is akin to telling a customer
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`how much they spent, which is encompassed in the abstract idea. See Brumfield, 97 F.4th at 868.
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`Claim 9 recites transmitting a coupon, an inherently abstract financial instrument. See D.I.
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`18, Ex. G; id., Ex. H; In re AuthWallet, 2023 WL 3330298, at *3 (claims directed to applying a
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`coupon abstract); cxLoyalty, Inc., 986 F.3d at 1377 (claims directed to applying rewards abstract).
`
`Claim 17 recites that the information exchanged indicates completion of the transaction,
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`including the amount of the transaction, and instructs that the mobile device send the amount of
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`the completed transaction to a server. See D.I. 18, Ex. G; id., Ex. H. This is akin to giving the user
`
`a printed receipt and the user filing the receipt in a folder, which is part of enabling a commercial
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`transaction. See Brumfield, 97 F.4th at 868. The inclusion of a conventional server to perform this
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`step does not render the claims non-abstract. See Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d
`
`9
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`Case 1:24-cv-00733-MN Document 27 Filed 11/25/24 Page 14 of 15 PageID #: 1613
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`
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`1350, 1355 (Fed. Cir. 2016); e.g., D.I. 18, Ex. H at 10:21-54 (describing generic server).
`
`The dependent claims thus do not provide an inventive concept and should be held invalid.
`
`D.
`
`Collateral Estoppel Applies
`
`The Federal Circuit’s holding in ParkerVision, Inc. v. Qualcomm Inc., 116 F.4th 1345
`
`(Sept. 6, 2024) is much narrower than PayRange makes it out to be. In that case, the Court found
`
`that the patentee was not precluded from defending the validity of its method claims, which were
`
`not shown to be unpatentable in the IPR. See id. at 1362. The Court distinguished ParkerVision
`
`from its prior decision in XY, LLC v. Trans Ova Genetics, L.C., 890 F.3d 1282 (Fed. Cir. 2018),
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`where the Federal Circuit found that collateral estoppel applied to arguments over claims that were
`
`found unpatentable by the PTAB. See ParkerVision, 116 F.4th at 1362. Here, the claims of the
`
`’614 Patent were found unpatentable and PayRange did not appeal, rendering the PTAB’s decision
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`final. See XY, 890 F.3d at 1294 (“a defendant should not have to continue defend[ing] a suit for
`
`infringement of [an] adjudged invalid patent.”). XY, not ParkerVision, applies to this case.
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`Furthermore, Alliance is not arguing that collateral estoppel applies to arguments regarding
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`the limitations added by Claim 11 of the ’772 Patent. See D.I. 22 at 11-12. Alliance only argues
`
`that PayRange should be estopped from arguing patent eligibility based on the elements of claim
`
`1 of the ’772 Patent, which are materially identical to the claims found invalid in the ’614 Patent,
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`and for which PayRange identifies no material differences. See D.I. 24 at 16-17. Collateral estoppel
`
`therefore precludes PayRange from arguing that claim 11 of the ’772 Patent is eligible by virtue
`
`of its dependency on disclaimed claim 1.
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`III. CONCLUSION
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`Alliance respectfully requests that the Court grant its motion to dismiss.
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`
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`Case 1:24-cv-00733-MN Document 27 Filed 11/25/24 Page 15 of 15 PageID #: 1614
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`YOUNG CONAWAY STARGATT & TAYLOR, LLP
`
`/s/ Melanie K. Sharp
`____________________________________________
`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
`
`Dated: November 25, 2024
`
`Attorneys for Plaintiff Alliance Laundry Systems, LLC
`
`11
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`