Attaching an October 7, 2024 letter signed by Michelle Fisher as the CEO of Blaze Mobile Technologies LLC (BMT), Charles Schwab has asked the Northern District of California for declaratory judgments of noninfringement of three patents held by BMT (3:25-cv-02122). RPX has previously noted (see here and here) the flow of patents on which Fisher is a named inventor from Blaze Mobile, Inc.—a Delaware entity already embroiled in a declaratory judgment action filed against it by Samsung in California—to BMT, formed in Texas. Now, Charles Schwab pleads, on information and belief, that BMT "was formed as a conduit for asserting patent infringement claims in the Eastern District of Texas and in an attempt to avoid litigation" in the Northern District of California.
Charles Schwab seeks declaratory judgments of noninfringement of the three mobile banking patents (10,235,664; 11,783,365; 11,847,649) mentioned in the October 7 letter from BMT. The patents belong to a family of 86 with issue dates ranging from September 2011 through November 2024 and with earliest estimated priority in November 2007. Prosecution of multiple related applications continues before the USPTO. Fisher is the family's sole named inventor. The October 7 letter indicates that BMT has:
. . . reviewed Charles Schwab's mobile banking application and its overall design and implementation appear to leverage Blaze Mobile Technologies' patented technology. Blaze Mobile Technologies' patents are also highly relevant to many app features and functionalities, including check deposit, view account balance, funds transfer, view transaction history, load funds, PIN login, withdraw funds, and bill pay.
Per Schwab, after receiving this letter, counsel that it engaged reached out to Fisher. During a conversation between the two, Fisher suggested that she herself was also represented by counsel. Later, Schwab's lawyer received written consent to communicate directly with Fisher "from Mr. Edward Reilly of Themis Legal Capital". Schwab notes that "Themis Legal Capital's website (themislc.com) states: 'Themis Legal Capital is a Litigation Finance Company that provides capital to corporations and law firms based upon the merits and value of their commercial claims and, in return, receives an interest in the recovery'".
Discussions over a mutual nondisclosure agreement soon included a BMT request to toll any applicable statute of limitations and a litigation standstill, including an agreement not to commence any proceedings before the USPTO, while the parties engaged in talks. Schwab pleads that inclusion of such terms triggered its reasonable apprehension of suit but that it nonetheless continued discussions until February 28, 2025, when it terminated the NDA and later that day filed its DJ complaint.
As noted, Samsung filed its own DJ complaint against Blaze Mobile and Fisher in the Northern District of California, in April 2021. Samsung seeks declaratory judgments of noninfringement for eight Blaze Mobile patents (9,378,493; 9,652,771; 9,996,849; 10,339,556; 10,621,612; 10,699,259; 10,565,575; 10,825,007)—generally related to various aspects of advertisements, near field communications technology, or financial transactions—through its provision of Samsung Pay, Samsung Ads, and Samsung Galaxy Store services, as well as any supported devices.
Attached to the original complaint there is a November 2020 letter sent to Samsung by Synergy IP Corporation, purporting to represent Blaze Mobile "with regard to the negotiation for licensing Blaze's patent rights", identifying by number the eight patents that are the subject of Samsung's complaint, and indicating that Blaze "is strategically drafting its patent claims to cover other Samsung services in the United States". Also attached to Samsung's complaint is a second letter, this one dated in January 2021 and from Fisher, "CEO/Founder Blaze Mobile". It indicates that "Blaze has been negotiating a patent license with Samsung Electronics since 2016, but it has been unproductive".
In October 2023, Blaze Mobile filed a motion to lift a stay that had been imposed in the Samsung DJ action to await the outcome of eight ex parte reexaminations (EPRs), one of each of the patents subject to the complaint. In its supporting papers, Blaze Mobile notes that eight petitions for inter partes review (IPR), one of each of those patents, filed by Samsung in September 2021, failed to lead to the cancellation of any of their claims. Blaze Mobile has pleaded counterclaims of infringement of the same eight patents and argued in its motion that the stay should be lifted to open discovery because no discovery has been allowed in the case to date, while Samsung has been engaged in litigation against Synergy IP and its principals Seungho Ahn, "former Samsung IP Center Head"; and Sungil Cho, "former Samsung in-house IP attorney" in connection with a lawsuit filed by Staton Techiya, LLC in the Eastern District of Texas.
There, this past May, after a bench trial, Chief Judge Rodney Gilstrap ruled that Staton Techiya's affirmative patent claims against Samsung should be dismissed with prejudice because those patents are unenforceable due to unclean hands. Per the court, "The clear and convincing weight of the evidence shows that the patent claims underlying this litigation are infected by the theft of Samsung's sensitive confidential and attorney-client privileged information", a "theft" enabled by the plaintiff's engagement with its "litigation-agent" (and sometime coplaintiff) Synergy IP. Judgment was entered; Samsung filed a motion to set a schedule to consider a request for fees and costs, which Samsung then estimated to be around $26M; Samsung's filed its motion to shift fees, which was fully briefed last fall when the parties noticed a settlement; and the case was then dismissed with prejudice.
Back in the Blaze Mobile case, in September 2023, with the stay in place there, Samsung filed an amended complaint adding trade secret misappropriation and related claims (akin to counterclaims made in the Staton Techiya suit) that, per Blaze Mobile, "accuse Blaze and Fisher of receiving confidential information from Ahn and causing Ahn to breach his ethical obligations to Samsung". In its answer to Samsung's amended complaint, Blaze Mobile pleaded multiple new counterclaims, of fraud, trade secret misappropriation, breach of contract, unjust enrichment, etc. Blaze Mobile provides its "nutshell" view of the situation:
Blaze contends that Samsung, beginning in 2016 and continuing throughout the 5-year period, did not negotiate in good faith and perpetrated a fraud on Blaze by promising to enter into a license agreement, requesting confidential and proprietary information ostensibly for purposes of evaluating whether Samsung would conclude a deal, while fraudulently using the information to improve Samsung technology and develop its litigation plan to invalidate the Blaze patents.
On December 15, 2023, District Judge Edward J. Davila denied the motion to lift the stay, identifying Blaze Mobile's motivation here:
Blaze argues that the addition of these amended claims and the ongoing trial in the Eastern District of Texas warrant lifting the stay because the new claims are unrelated to the patentability of the Patents-in-Suit, and preventing Blaze from conducting discovery on these new claims while Samsung has been free to conduct discovery through the Staton litigation is prejudicial to Blaze. Specifically, Blaze argues that maintaining the stay creates undue prejudice because it "undermines Blaze's ability to access evidence that may be crucial to its counterclaims and defenses," thereby preventing Blaze from "defend[ing] itself against the allegations raised in Samsung's amended complaint." For example, Blaze argues that it may lose key witnesses and evidence from third parties as witnesses involved in the negotiations leave Samsung.
(Citations to the record omitted.) The court, however, found "no urgency or changed circumstances warranting lifting the stay at this time". Early last year, the defendants began noticing the issuance of reexam certificates as those EPRs justifying the current stay begin to wind down—but little else has happened on the docket since.
On social media, Fisher has identified past positions with AT&T (July 1988 through September 1995, then Pacific Bell) and Microsoft (September 1995 through February 2004), having apparently been the founder and CEO of Blaze Mobile since February 2005. She characterizes Blaze Mobile as "a technology company that develops innovative mobile commerce, health care, banking and advertising solutions" and claims to have "invented the NFC [near field communications] mobile payment sticker, which enables any mobile device to be used to make 'contactless' purchases". Delaware records indicate that Blaze Mobile was formed in that state in March 2005.
In the October 7 letter sent to Schwab, Fisher characterizes her background like this:
Before I started Blaze Mobile, I was a Senior Product Manager at Microsoft, where I led the development-from conception to full launch-of over a dozen e-commerce and wireless products. I was also previously the Director of Multimedia & Networks at Pacific Bell (now known as AT&T), where I founded and ran a product development group that launched Media Park, an early Internet service that connected creative professionals in Hollywood, Silicon Valley, and New York to digital content libraries.
Nearly two decades ago, I recognized the opportunities of leveraging mobile phone technologies for financial services. At that time, bank customers were still predominantly going to banks in person or calling customer service numbers, and mobile banking technologies were uncommon and largely limited to sending unsecure text messages with limited utility. I began pioneering techniques for mobile payments and mobile wallets, and after substantial investments into research and development, developed the first ever mobile banking application. I subsequently obtained dozens of patents in the space, including at least 7 patents specifically focused on mobile banking technologies. I also sought to commercialize my innovations through the Blaze Mobile Digital Wallet and partnerships with major financial institutions.
Blaze Mobile does appear to have once offered a product called the Blaze Mobile Wallet, with its website once having advertised its patent portfolio—organized under three categories: "NFC Patents", "Non NFC Mobile Payments", and "Non NFC In Store" patents. It was previously, in 2009, sued over the Blaze Mobile Wallet product by Actus LLC (d/b/a Abridge Technology).
BMT was formed in Texas on January 4, 2024, identifying Blaze Mobile as its managing member. Several Fisher patents were then moved to BMT, prompting the prior RPX coverage. Schwab pleads that the "Eastern District of Texas has been known for decades as being a favorable venue for patent infringement lawsuits, in part because it has "plaintiff-friendly juries". However, per Schwab, "a large majority of the events giving rise to Schwab's claims occurred in this District. It would be inequitable to permit the formation of Blaze Mobile Technologies in 2024 to justify litigating claims related to the Patents-In-Suit in the Eastern District of Texas when almost all the events that give rise to those claims occurred in this District, and Blaze Mobile Inc. and Ms. Fisher are currently litigating patent claims in this District"—in the stayed case filed by Samsung.
Northern District of California Local Rules require parties to certify whether there are any nonparties with a financial interest in the outcome of the litigation. There, Blaze Mobile identified Flash Holdings, LLC as such a nonparty. Flash Holdings is listed in a Northern District of California indictment against Carlos E. Kepke as one of three general partners with Vista Equity Fund II, L.P. (f/k/a Emerging Technologies Investment Fund, L.P.) (VEF II). It is there characterized as a "Nevisian limited liability company" that "had no business purpose other than holding assets for the benefit of [Robert F.] Smith, and its primary initial asset was a 4 percent general partnership interest in VEF II". Smith is the founder, chairman, and CEO of Vista Equity Partners and has been on the board of directors for Blaze Mobile.
The Schwab case names as defendants Blaze Mobile, BMT, and Fisher. It has yet to be assigned to a judge. 2/28, Northern District of California.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
