In three new Western District of Texas complaints, one filed against each of Bank of America (6:21-cv-00463), JPMorgan Chase (6:21-cv-00464), and Wells Fargo (6:21-cv-00465), inventor-controlled Mirror Imaging L.L.C. mounts a long defense against any potential Alice challenges. The four asserted patents, generally related to financial document processing, are targeted at the provision of various financial services and related systems. Mirror Imaging characterizes those patents—the most recent four patents in a family of nine, each of the four having ripened from applications filed after June 2014—as "the post-Alice Mirror Imaging patents".
The patents (9,928,275; 10,013,435; 10,262,009; 10,402,447), all having expired, enjoy grant dates ranging from March 2018 through September 2019 in a family with earliest estimated priority date in April 1999. Mirror Imaging pleads that all four were "correctly allowed by the Patent Examiners over the multitude of eligibility arguments raised by [Fidelity Information Services (FIS)], Jack Henry, Q2 Software, American National Bank of Texas, and Hanmi Bank", with the '009 and '447 patents each alleged to have been "correctly allowed by the Patent Examiners over the multitude of additional eligibility arguments raised by" the same parties.
Those arguments were raised in proceedings before the Patent Trial and Appeal Board (PTAB) that resulted in final written decisions cancelling all of the claims of four earlier Mirror Imaging patents (6,963,866; 7,552,118; 7,836,067; 9,141,612), which the plaintiff refers to as the "non post-Alice Mirror Imaging patents". Handed down in April 2019, those decisions were the first to apply the USPTO's Section 101 guidance in an America Invents Act (AIA) review, holding that the claims of the patents are ineligibly directed to the abstract idea of "organizing, storing, and retrieving financial documents". (CBM2017-00064, CBM2017-00065, CBM2017-00066, CBM2017-00067). However, appeals from those proceedings became bound up with the Arthrex litigation (in which the Federal Circuit held that the appointment of PTAB administrative patent judges by the Secretary of Commerce violated the US Constitution's Appointments Clause), before a settlement ended the matters last summer.
Mirror Imaging has now pressed on, asserting the expired post-Alice Mirror Imaging patents in the new West Texas complaint, seeking past damages for the three banks' alleged infringement of their claims through the provision of various financial services and related systems used for the "preparation, storage, archival, retrieval, and delivery, of periodic (e.g., monthly or annual) account statements of customers" and the "storage, archival, delivery, and retrieval, of check images as drawn on the accounts of customers". The complaints describe named inventors Richard J. Gagnon and Michael D. Schulze as "pioneering inventors" and the patents as "represent[ing] substantial technological advancements in the financial services industry which were unconventional at the time of invention", circa 1999.
Gagnon has been identified as the CEO and, at one point, the president of Mirror Imaging, which was formed in Michigan in March 1997, while Schulze currently holds himself out as the NPE's president. Mirror Imaging pleads that Gagnon is "the former chairman and majority owner of Universal Images, Inc., which from 1989 to 2012 was a computer graphics and digital post-production company operating principally in the television advertising industry", while Schulze is "the former General Lab Manager and Quality Analyst at Great Lakes Technologies, where he designed and managed the Microfilm Processing Laboratory Business Unit consisting of four processing laboratories across three states".
Mirror Imaging began litigating this family of patents in 2002 with a single case asserting the earliest-issuing patent in the relevant family (6,446,072) against Affiliated Computer Services (acquired by Xerox in February 2010) and ACS Image Solutions that ended in 2004. A second, 2008 case targeting seven banks ended in 2010. Mirror Imaging then revived the campaign in 2017, filing more than 25 lawsuits against banks offering online banking systems and asserting the four "non post-Alice Mirror Imaging patents". Among the defendants in that wave of litigation were PlainsCapital and Origin, each sued over their use of online banking systems provided by FIS.
In October 2017, FIS filed its petitions for CBM review against each of those four patents. FIS asserted that the patents were each invalid under Alice, successfully arguing that it had standing because PlainsCapital and Origin are each its customer and privy and because it is obligated to indemnify those defendants. As the PTAB proceedings described above played out, myriad defendant-banks were dismissed with prejudice from the Eastern District of Texas litigation.
In its new complaints, Mirror Imaging pleads that each of the defendants has been "on actual or constructive notice of the Asserted Patents since at least as early as March 27, 2018 (the issue date of the '275 Patent) by virtue of one or more of the following: (i) the notoriety of the Mirror Imaging litigations in the Eastern District of Texas in 2008; (ii) written notice delivered to Defendant from IP Navigation Group in 2012; (iii) the notoriety of the Mirror Imaging litigations in the Eastern District of Texas in 2017; and/or (iv) written notice delivered to Defendant from Mirror Imaging in March 2018 or December 2019 or March 2020".
Mirror Imaging's new lawsuits continue a trend noted in RPX's Q1 in Review: NPE litigation targeting the Financial Services sector jumped by 111% during the first quarter of 2021. The rise comes in the second quarter after the end of the PTAB's covered business method (CBM) review, which FIS and others used to mount a collateral attack on the Mirror Imaging patents. Providing petitioners a wider range of challenges than its inter partes review (IPR) counterpart, including challenges to the eligibility of a patent's subject matter, CBM review became available in September 2012 as a result of the 2011 passage of the America Invents Act, sunsetting this past September after eight years. To have qualified for CBM review, challenged claims must have related to the practice, administration, or management of a financial product or service and must not have recited a "technological invention". For more on the uptick in Financial Services activity, see "NPE Litigation Targeting Financial Services Skyrockets in Q1" (April 2021).
The new suits have been assigned to District Judge Alan D. Albright. 5/4, Western District of Texas.
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