IP Law Daily, PATENT—S.D.N.Y.: Licensing entity’s infringement suit against City National Bank dismissed without prejudice, (Jan 16, 2026)

By Saurabh Kashyap, B.A., M.A., LL.B., LL.M.

The patent-holding entity failed to plead specific, nonconclusory facts tying the bank to each step of the claimed authentication method.

The federal district court in Manhattan has granted City National Bank’s motion to dismiss a patent assertion entity’s infringement lawsuit, finding that it failed to plausibly allege direct infringement of its smart card personalization patent under 35 U.S.C. § 271(a). The court ruled that the licensing entity’s reliance on industry-wide personalization standards and generalized, conclusory assertions did not tie CNB’s conduct to each step of the patented method (Auth Token LLC v. City National Bank, No. 25-cv-3870 (S.D.N.Y. Jan. 14, 2026)).

Background. Auth Token LLC is an intellectual property holding company that owns the rights to the asserted patent. City National Bank, an RBC Company, is a commercial banking institution that issues EMV chip-enabled debit cards.

The patent-in-suit, U.S. Patent No. 8,375,212 (the ’212 patent), is titled Method for personalizing an authentication token. The patent discloses a seven-step method for post-manufacture personalization of an authentication token using encrypted communication protocols and cryptographic keys. Key features include establishing an encrypted session between a personalization device and the token using a transport key, transmitting an initial seed value and secret key, and disabling the token from further personalization.

Auth Token alleged that CNB directly infringed Claim 1 of the ’212 Patent by issuing EMV chip-enabled debit cards and personalizing those cards in accordance with the steps described in the patent. It supported this claim with a “claim comparison chart” that mapped the patent’s steps onto the EMV Card Personalization Specification published by EMVCo, a private industry consortium. Auth Token alleged, largely on “information and belief,” that CNB’s debit card practices adhered to the EMV Spec and thus infringed the patent. CNB filed a motion to dismiss under Rule 12(b)(6), arguing that the complaint failed to allege sufficient facts linking its conduct to the patented method. It also challenged the sufficiency of the allegations under the doctrine of equivalents.

Direct infringement. The court held that Auth Token failed to allege that CNB itself performed—or directed the performance of—each step of the patented method, as required under 35 U.S.C. § 271(a) for method claims. Citing Akamai Techs., Inc. v. Limelight Networks, Inc., 797 F.3d 1020, 1022 (Fed. Cir. 2015), the court reiterated that all steps of a method claim must be performed by or attributable to a single entity.

The court found that Auth Token’s reliance on the EMV Spec, a third-party document that does not reference CNB or any specific issuer, was insufficient to state a plausible claim. It noted that EMVCo’s specification is a generalized framework not mandated by regulation, and the complaint did not allege that CNB was required to follow it or, in fact, did so. Relying on Bot M8 LLC v. Sony Corp. of America, 4 F.4th 1342 (Fed. Cir. 2021), the court held that mapping patent claims onto an industry standard does not suffice without factual allegations showing that the defendant adopted and implemented the standard in a manner that performs the claimed method.

“Information and belief” allegations. Further, the court evaluated whether Auth Token’s use of “information and belief” could satisfy Rule 8 pleading standards. Drawing on Arista Records, LLC v. Doe 3, 604 F.3d 110 (2d Cir. 2010), the court distinguished between permissible “belief” allegations anchored in objective facts and speculative assertions lacking such anchors. Because Auth Token provided no CNB-specific facts showing control over card personalization or adherence to the EMV Spec, the court deemed its pleadings to be speculative and deficient.

Internal testing or use. Auth Token also argued that CNB infringed the asserted patent by internally testing or using its EMV chip cards. The court rejected this theory as unsupported by the pleadings. Claim 1 of the ’212 Patent covers a method for personalizing a token, not using or testing one after personalization. Citing Joy Techs., Inc. v. Flakt, Inc., 6 F.3d 770 (Fed. Cir. 1993), the court reiterated that method claims are only infringed when the process is actually performed. It found that Auth Token failed to allege any facts showing that CNB’s internal testing involved performance of the seven-step personalization method.

Doctrine of equivalents. The court found that Auth Token’s doctrine of equivalents argument was inadequately pleaded. Citing Akzo Nobel Coatings, Inc. v. Dow Chem. Co., 811 F.3d 1334 (Fed. Cir. 2016), and nCube Corp. v. SeaChange Int’l, Inc., 436 F.3d 1317 (Fed. Cir. 2006), the court explained that plaintiffs must provide a limitation-by-limitation analysis identifying what the defendant does in place of each claim step and how it is substantially equivalent. The amended complaint offered no such analysis, relying instead on boilerplate assertions.

Conclusion. While granting CNB’s motion to dismiss, the court allowed Auth Token a final opportunity to amend. Judge McMahon stated that any amended complaint must plead nonconclusory, CNB-specific facts plausibly alleging performance or direction of all steps in Claim 1. The court warned that general reliance on industry specifications, assertions on “information and belief,” or vague allegations of testing will not suffice. Any further failure to cure these defects will result in dismissal with prejudice.

The Case is No. 1:25-cv-00178-CFC-SRF.

Judge: Connolly, C.

Attorneys: Grayson P. Sundermeir (Fish & Richardson, PC) for Airbus SAS, Airbus DS Government Solutions, Inc., Airbus Helicopters, Inc., Airbus U.S. Space & Defense, Inc., Airbus Americas, Inc., and Airbus Defence and Space Ltd. Kelly E. Farnan (Richards, Layton & Finger, PA) for Anaconda, Inc.

Companies: Airbus Sas; Airbus DS Government Solutions, Inc.; Airbus Helicopters, Inc.; Airbus U.S. Space & Defense, Inc.; Airbus Americas, Inc.; Airbus Defence and Space Ltd.; Anaconda, Inc.

Cases: Patent TechnologyInternet DelawareNews