IP Law Daily, PATENT—N.D. Cal.: Judgment on pleadings granted in part in mobile payments dispute, (May 18, 2023)

By Kevin M. Finson, J.D.

Patent claims directed at security in NFC transactions were unpatentable as abstract ideas because they merely used generic computer components to carry out a longstanding business practice and lacked an inventive concept.

Samsung had shown that some of the patents asserted against its mobile phone NFC payment systems were unpatentable as abstract ideas, the U.S. District Court in San Jose has held. Patents related to NFC security were dismissed from the case, while patents related to mobile payments remained (Samsung Electronics Co., Ltd. v. Blaze Mobile, Inc., May 16, 2023, Davila, E.).

Blaze Mobile, Inc. and Michelle Fisher (collectively, Blaze) were the owners of a large number of patents which they claimed were infringed by Samsung Electronics Co, Ltd. (Samsung), Samsung Galaxy Store and Samsung Pay products. Samsung filed suit for declaratory judgment of non-infringement and Blaze counterclaimed for infringement. Samsung moved for judgment on the pleadings of unpatentability as to two categories of the asserted patents, U.S. Patents Nos. 9,378,493 (the ’493 patent), 9,652,771 (the ’771 patent), and 10,565,575 (the ’575 patent) (collectively, the NFC Security Patents), and U.S. Patents Nos. 10,699,259 (the ’259 patent) and 10,825,007 (the ’007 patent) (collectively, the Mobile Payment Patents), all based on the argument that the asserted claims were unpatentable as abstract ideas. The court applied the two-step Alice test.

With regard to both sets of patents, Blaze argued that it was premature to consider the Alice test because claim construction was required, and the issues relied on disputed assertions of fact. The court held that Blaze had failed to raise an issue as to claim construction because, while it had identified some terms that it believed needed construction, it had not explained how construction of those terms would alter the application of the Alice test. As to factual disputes, the court noted that allegations must be accepted as true and construed in favor of the non-moving party at the pleadings stage, but this did not prevent consideration of the patentability issue.

NFC security patents. Samsung argued that the NFC security patents were directed to the abstract idea of providing security for transactions on mobile devices. The court reviewed the claims and found that they were broad and non-specific, but merely recited the broad steps for processing payments, describing effects rather than how the tasks would be accomplished. The court held that Blaze had not shown any plausible inventive concept or departure from conventional uses for conventional components, and so granted judgment of unpatentability as to these patents.

Mobile payment patents. The court held that the mobile payment patents were directed to fundamental business practices, much like the NFC security patents. On the issue of inventive concept, however, the court found that Blaze had plausibly alleged an inventive concept by pleading specific technological improvements over the prior art, notably, the ability of the claimed invention to continue functioning even when the mobile device was no longer connected to a network. The court denied judgment on the pleadings as to these patents.

The Case is No. 21-cv-02989-EJD.

Attorneys: Alex Henriques (Kirkland and Ellis LLP) for Samsung Electronics Co., Ltd. Lawrence M. Hadley (Glaser Weil Fink Howard Avchen & Shapiro LLP) for Blaze Mobile, Inc.

Companies: Samsung Electronics Co., Ltd.; Blaze Mobile, Inc.

Cases: Patent CaliforniaNews