InfoBytes Blog

Debit card patent suit revived by Federal Circuit

Recently, the U.S. Court of Appeals for the Federal Circuit affirmed in part, vacated in part and remanded a district court’s dismissal of a patent suit against a healthcare company. The plaintiff alleged that the healthcare company marketed name-brand payment products that infringed on the plaintiff’s patent, a multifunction card system, which allows for specialized card functions through an existing banking network. The U.S. District Court for the District of Connecticut dismissed the complaint, holding that the plaintiff failed to state plausible claims of patent infringement.

On appeal, the Federal Circuit found that the district court erred in its review of a license agreement and failed to take all of the complaint’s “well-pled factual allegations” as true. The appellate court noted that the district court incorrectly concluded that the defendant’s products were licensed and could not infringe on the patent. The Federal Circuit affirmed in part, vacated in part, and remanded portions of the district court’s dismissal, emphasizing that the scope of the license was “narrower” than the district court ruled.

Additionally, the Federal Circuit found that the district court erred in dismissing the plaintiff’s claims of direct and indirect infringement related to the defendant’s payment products. The appellate court concluded that the complaint sufficiently alleged that the defendant itself “makes” and “uses” the infringing system. The court also determined that the plaintiff adequately pled induced and contributory infringement.

Courts Debit Cards Patent Litigation