United States: International Patent Row Over Prepaid Payment Systems Lands In US Laundromats

Last Updated: June 13 2018
Article by RPX Corporation

Upaid Systems, Ltd. (f/k/a InTouch Technologies, Ltd.) has continued to pursue a revived US leg of its international litigation campaign, suing more laundromats across a variety of states for the use of the payment system facilitated by Card Concept's LaundryCard and FasCard "cashless cards". Facing new complaints so far in June are Lancer Laundry Wilmington (1:18-cv-00837) in Delaware; Midtown Wash (1:18-cv-02787), Speed Queen Laundry (1:18-cv-02788), and Blue Water Express Laundry (1:18-cv-02786) in Georgia; Azizi Enterprises (d/b/a Duds 'n' Suds) (2:18-cv-02291) and Rosedale Ultra Wash (2:18-cv-02292) in Kansas; and Washateria (4:18-cv-00834) in Missouri. The complaints assert a single patent already at issue in a Northern District of Illinois case brought last November directly against Card Concepts, which has challenged the patent under Alice. This spate of new litigation follows past disputes between Upaid and other companies in Australia, Britain, and Japan, as well as here in the US.

Card Concepts describes the US patent-in-suit (8,976,947) as ineligibly drawn to the abstract idea of "using conventional computers and networks to perform the generalized steps of pre-authorizing and charging for a service or transaction". The '947 patent issued in March 2015 as part of a family of eight US patents, with issue dates across the family ranging from November 2001 to August 2016, with an earliest estimated priority date in September 1998. Prosecution of multiple related applications, one filed in July 2016, continues before the USPTO.

Upaid's boilerplate customer complaints all recount the prosecution history of the asserted '947 patent, citing 9,431,377, a light-emitting device patent apparently belonging to Seoul Semiconductor, rather than 9,432,377, the asserted patent's family member.

The patents in this family name a long list of inventors, including Simon Joyce, the founder, chairman, and CEO of Upaid Systems (formed in the British Virgin Islands in 1997), together with multiple individuals who purportedly contributed to the development effort through an Indian company, Satyam Computer Services, engaged to provide software development services related to Upaid's "platform for the delivery of enhanced communication services to customers". During the course of litigation brought in the Eastern District of Texas against Cellco Partnership (d/b/a Verizon Wireless) and Qualcomm over two earlier family members (6,320,947; 6,714,632), asserted against prepaid telecom services, two of the Indian inventors contacted by the defendants declared that they did not sign over their rights to the inventions and that earlier declarations and assignments submitted to the USPTO on their behalf contained forged signatures. Verizon Wireless notified Upaid that it had obtained a "full license" from one of those individuals, Ramkumar Mambakkam. Upaid sought to have its case voluntarily dismissed without prejudice, presumably to sort out the inventorship issues, explaining to the court that Upaid had relied upon Satyam to collect and return the required signatures, which Upaid argued that it had no reason to question. Roughly one month later, in April 2007, the parties submitted a joint motion to dismiss the case, but with prejudice.

Satyam became a large minority shareholder in Upaid after a debt-to-equity conversion, but reported arguments over work quality, board representation, and IP rights led to UK litigation that ended in a settlement between the parties. After Upaid's unsuccessful attempt to sue Qualcomm and Verizon Wireless, Upaid sued Satyam (alleging fraud) in Texas and Satyam counter-sued in Britain (attempting to stop the Texas litigation under the prior settlement agreement). By the end of 2009, the parties settled their growing international disputes, with Satyam paying Upaid $70M and Upaid granting to Satyam a worldwide license of its portfolio.

In November 2017, Upaid resuscitated US enforcement efforts with the case against Card Concepts, which it has followed up by filing myriad customer lawsuits. In the intervening years, Upaid had reportedly sought to enforce its portfolio through litigation between Upaid and large telecom carriers outside the US: Telstra in Australia and NTT Docomo in Japan. For more details, see RPX Insight.

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