Upaid Sys. v. Card Concepts, Inc.

• Decision Date: 22 April 2020
• Docket Number: 17 C 8150
• Parties: UPAID SYSTEMS, LTD., Plaintiff, v. CARD CONCEPTS, INC., Defendant.
• Court: U.S. District Court — Northern District of Illinois

UPAID SYSTEMS, LTD., Plaintiff,
v.
CARD CONCEPTS, INC., Defendant.

17 C 8150

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION

April 22, 2020

Judge Gary Feinerman

MEMORANDUM OPINION AND ORDER

Upaid Systems, Ltd. brought this suit against Card Concepts, Inc. ("CCI"), alleging infringement of U.S. Patent No. 8,976,947 ("'947 Patent"). Doc. 32. Earlier in the litigation, the court denied CCI's Civil Rule 12(c) motion for judgment on the pleadings, which argued that the '947 Patent is invalid under 35 U.S.C. § 101. Docs. 79-80 (reported at 2019 WL 1331832 (N.D. Ill. Mar. 25, 2019)). Consistent with Local Patent Rule 4.1(b), the parties selected ten disputed terms in the patent's claims—designating some as "primary disputed terms" and others as "secondary disputed terms"—and briefed those disputes pursuant to Local Patent Rule 4.2. Docs. 76-78, 83-84, 90-91, 98, 102. The parties then presented legal argument based on their briefs and supporting materials without introducing any testimony. Doc. 107; see N.D. Ill. L.P.R. 4.3. Having considered the parties' submissions, the court construes the primary disputed terms, which CCI identifies—without objection from Upaid—as outcome determinative.

Background

A. The '947 Patent

The '947 Patent, titled "Enhanced Communication Platform and Related Communication Method Using the Platform," describes a system that provides requested communication services

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through an existing network switch even when the switch cannot independently support those services. Doc. 77 at 31. Upaid alleges that CCI's pre-authorized payment systems for laundromat services—LaundryCard, FasCard, and FasCard Mobile App—infringe the '947 Patent. Doc. 32 at ¶¶ 74-109. Upaid asserts ten claims against CCI, five independent (1, 20, 38, 47, and 50) and five dependent (2, 3, 5, 6, 42). Doc. 76 at 9, 24; Doc. 83 at 8; see Alcon Research, Ltd. v. Apotex Inc., 687 F.3d 1362, 1367 (Fed. Cir. 2012) ("It is axiomatic that a dependent claim cannot be broader than the [independent] claim from which it depends.") (citing 35 U.S.C. § 112).

Those claims, with the primary disputed terms in bold and the secondary disputed terms in italics, read as follows:

Table 1. Independent Claims

Claim

Text

1

At least one computer readable medium encoded with processing instructions; performed by at least one computer to perform a method of providing from a platform; pre-authorized communication services and transactions using a plurality of external; networks of different types and which are external to the platform, the method; comprising: accepting and processing a request from a user to provide at least one of a; communication service, a transaction or user account information via one of the plurality; of external networks; verifying that the user is authorized to receive the at least one of the communication; service, the transaction, or the user account information, and that an account associated; with the user has a sufficient amount currently available for payment of the at least one of; the communication service or the transaction; and; charging, in a real-time transaction, an authorized account associated with the user; as the platform controls an element of a corresponding one of the plurality of external; networks to provide at least one of the communication service or the transaction provided; by any one of a plurality of different service and transaction providers.

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20	A method of obtaining pre-authorized communication services and transactions; under control of an enhanced services platform outside of a plurality of external; networks of different types, comprising: sending a request to provide at least one of a communication service, a transaction; or user account information from a user to the enhanced services platform via one of the; external networks for verification that the user is authorized to receive the at least one of; the communication service, the transaction or the user account information, and that an; account associated with the user has a sufficient amount currently available for payment; of the at least one of the communication service or the transaction, if payment is required; and; receiving the at least one of the communication service, the transaction or the; account information by the user one from any one of a plurality of different service and; transaction providers if verification is obtained by the enhanced services platform and; the authorized account associated with the user is charged in real time by an accounting; platform in response to verification of the request.
38	A method of crediting a pre-authorized account of a user, maintained at a platform; connected to a plurality of networks, comprising: sending a notification to the user at a transceiver that the pre-authorized account; needs additional funds; receiving a response message from the user via the transceiver requesting; additional funds be added to the pre-authorized account in accordance with the; notification; authenticating at the platform, using a unique identifier associated with the user,; that the user is associated with the pre-authorized account and another account from which; the additional funds may be drawn; and; after authentication that the user is associated with the pre-authorized account,; crediting the pre-authorized account as a consequence of debiting the other account,; thereby making the additional funds available in the pre-authorized account to pay for at; least one communication service or transaction, provided or consummated, respectively; via at least one of the networks of different types which are connected to the platform.
47	A method of crediting a pre-authorized account of a user, comprising: receiving at a first platform an identification number from a user; authenticating the user at the first platform using the identification number; sending a message to a transceiver of the user indicating that the pre-authorized; account has reached a predetermined limit of remaining funds; and

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adding additional credit to the pre-authorized account, if the user is authenticated; and the user has responded to a message indicating that the pre-authorized account has; reached the predetermined limit of remaining funds and the user has identified another; account on a second platform from which the additional credit is to be obtained for the; pre-authorized account, by debiting the other account and making the additional credit; available in the pre-authorized account to pay for at least one communication service or; transaction, provided or consummated respectively via at least one of a plurality of; networks of different types which are connected to the first platform.

50

A platform outside of external networks of different types and connectable to; a transceiver of a user, a billing platform and another platform, comprising: an interface receiving a request message from a user, via the transceiver disposed; outside of said platform, requesting an increase in an amount in an account associated; with the user and controlled by the billing platform; a verification module authenticating that the user is associated with the account; to permit increase or decrease in the amount in the account; and; a processor, if the user is authenticated as being associated with the account,; determining another account controlled by the other platform and associated with; the user according to the request message,; causing a top up request to be sent outside of said platform via the external; networks of different types to access the other account and obtain an additional amount; to top up the account via a corresponding transaction, and; if the additional amount is received from the other account, causing the account to; be topped up by the additional amount to pay for at least one communication service or; transaction, provided or consummated, respectively via at least one of the external; networks of different types.

Doc. 77 at 81-85.

Table 2. Dependent Claims

Claim	Text
2	The computer readable medium of claim 1, wherein the method further comprises; processing real-time settlement data for the at least one of the communication service or; the commercial transaction.

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3	The computer readable medium of claim 1, wherein the verifying further; comprises authenticating the user using at least one of a security code, a password, user; intervention, a PIN number, automatic call back or interactive voice response.
5	The computer readable medium of claim 1, wherein the charging includes at least; one of decreasing an account balance of a pre-authorized account or increasing a balance; of a charge account.
6	The computer readable medium of claim 1, wherein the method further comprises; recording information about the at least one communication service or the transaction,; including at least one of location of the authorized user, the amount charged, the date, the; time or the type of transaction.
42	The method of claim 38, further comprising establishing an identification of the; user using a password and the number unique to the user.

Id. at 81-82, 84.

The Patent and Trademark Office ("PTO") granted the '947 Patent to its inventors on March 10, 2015, with Upaid as the sole assignee. Id. at 2. The '947 Patent was granted based on Application No. 11/931,883 ("'883 Application"), filed on October 31, 2007. Ibid. The '947 Patent is a continuation of U.S. Patent No. 7,308,087 ("'087 Patent"), issued on December 11, 2007, Doc. 82 at pp. 14, 20-21, ¶¶ 34, 51, as a continuation of U.S. Patent No. 6,714,632 ("'632 Patent"), issued on March 30, 2004, Doc. 32-3 at 2, 317, as a continuation of U.S. Patent No. 6,381,316 ("'316 Patent"), issued on April 30, 2002, Doc. 82 at pp. 14, 17, ¶¶ 34, 40, as a continuation of U.S. Patent No. 6,320,947 ("'947 II Patent"), issued on November 20, 2001, id. at pp. 14-15, ¶¶ 34-35. See Transco Prods. Inc. v. Performance Contracting, Inc., 38 F.3d 551, 555 (Fed. Cir. 1994) ("A 'continuation' application claims...