United States District Court, N.D. Illinois, Eastern Division.
MEMORANDUM OPINION AND ORDER
JOHNSON COLEMAN United States District Judge.
William Grecia filed a two count complaint against
McDonald’s Corporation, alleging direct infringement of
two patents he owns. McDonald’s moves to dismiss the
complaint in its entirety, arguing Grecia has pleaded himself
out of court because the complaint demonstrates that
McDonald’s actions do not constitute “use”
of the claimed inventions under 35 U.S.C. §271(a). The
Court grants the motion.
alleges that McDonald’s infringes claims 9 and 10 of
U.S. Patent No. 8, 533, 860 (“the ‘860
patent”) and claims 12-14 and 24-26 of U.S. Patent No.
8, 402, 555 (“the ‘555 patent”) through its
use of the “tokenization systems” of several
credit companies. (Dkt. 1 ¶¶ 9, 16.) Claim 10 of
the ‘860 patent and claims 13-14 and 24-26 of the
‘555 patent are dependent on claim 9 of ‘860
patent and claim 12 of the ’555 patent, respectively.
(Dkt. 1-1 at 18, Dkt. 1-2 at 19-20.) Claim 9 is a
“system for authorizing access to digital content using
a worldwide cloud system infrastructure”. (Dkt. 1
¶ 10.) Claim 12 is a “system for monitoring access
to an encrypted digital media”. (Id. ¶
17.) Both of the systems are comprised of a first receipt
module, an authentication module, a connection module, a
request module, a second receipt module, and a branding
module. (Id. ¶¶ 10, 17.) Grecia alleges
McDonald’s uses the claimed systems as follows. When a
McDonald’s customer purchases a McDonald’s food
item with a credit card, the credit card company’s
server acts as a receipt module by receiving the primary
account number (“PAN”) assigned to the credit
card. (Id., subpara. a of ¶¶ 10-13,
17-20.) The credit card company’s authentication module
authenticates the PAN with the issuer of the credit card.
(Id., subpara. b of ¶¶ 10-13, 17-20.) Then
the credit card company’s connection module establishes
a connection between the credit card company’s payment
processor and its token service provider. (Id.,
subpara. c of ¶¶ 10-13, 17-20.) A token is data
that serves as a surrogate for the PAN. (Id.,
subpara. a of ¶¶ 10-13, 17-20.) The payment
processor then acts as a request module and requests from the
token service provider the token associated with the PAN.
(Id., subpara. d of ¶¶ 10-13, 17-20.) The
payment processor then acts as the second receipt module by
receiving the token. (Id., subpara. e of
¶¶ 10-13, 17-20.) The credit card company then
writes the token to the token vault, or branding module, so
that when the same credit card is used for subsequent
McDonald’s purchases, the token associated with the PAN
is available to be cross-referenced. (Id., subpara.
f of ¶¶ 10-13, 17-20.)
complaint will survive a motion to dismiss under Rule
12(b)(6) if its well-pleaded facts when accepted as true and
viewed in the light most favorable to the plaintiff state a
plausible claim for which relief can be granted. Vesely
v. Armslist LLC, 762 F.3d 661, 664 (7th Cir. 2014).
“A claim has facial plausibility when the plaintiff
pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged.” Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009).
infringes a patent if it “makes, uses, offers to sell,
or sells any patented invention” without the authority
to do so. 35 U.S.C. § 271(a).
McDonald’s asserts that the complaint does not
plausibly allege direct infringement through
“use” of the claimed systems because Grecia does
not and cannot allege that McDonald’s controls any of
the systems’ components. Grecia responds that the only
relevant inquiry for purposes of determining
“use” is whether the defendant has put a system
as a whole into service for its own benefit, which the
complaint alleges McDonald’s has done. Both parties
believe that Centillion Data Sys., LLC v. Qwest
Commc'ns Int'l, Inc., 631 F.3d 1279 (Fed. Cir.
2011) supports their respective positions and compels a
ruling in their favor.
Centillion, the Federal Circuit addressed for the
first time “the issue of infringement for
‘use’ of a system claim that includes elements in
the possession of more than one actor.” 631 F.3d at
1283. The court in Centillion held that a party need
not exercise “physical or direct control over each
individual element of the system” in order to
“use” it for the purposes of Section 271(a), but
“a party must put the invention into service,
i.e., control the system as a whole and obtain
benefit from it.” Id. at 1284.
argues that the definition of “use” applied by
the court in Centillion is only applicable to a
“divided system” where two different entities
operate different components of the system. According to
McDonald’s the claimed systems here are not divided
because the credit card companies control all of the
systems’ components. Where the entire system is
controlled by one entity, McDonald’s argues, a
different entity cannot be deemed the infringing user of the
USA, Inc. v. Microsoft Corp., 632 F.3d 1292 (Fed. Cir.
2011) supports McDonald’s argument that the test for
“use” is different for divided systems than for
inventions controlled by a single party. In Uniloc,
the plaintiff contended that Microsoft’s
product-activation feature infringed its patent through use
of software algorithms to remotely verify that software being
installed by a computer user had not been pirated. 632 F.3d
at 1296-98. Microsoft argued that it did not
“use” the system because it had no control over
the computers of its customers who, when seeking to install
Microsoft software, began the product activation process.
Id. at 1301, 1308. The Federal Circuit rejected the
argument because it found that no part of the
customers’ computers was a component of the claimed
invention. Id. at 1309. Rather the customers’
computers were merely a necessary part of the environment in
which the claimed invention functioned. Id. The
court noted that a patent can be infringed by a single party
using a claimed invention even if two parties are required
for the invention to function. Id.
argues that McDonald’s directly controls at least one
component of the claimed systems because it controls the data
processing device that sends the PAN to the first receipt
module. This argument fails because data processing devices
are not a component of the claimed systems. Contrary to
Grecia’s assertions, the court need not engage in
premature claim construction to arrive at that conclusion.
Rather the court can rely on Grecia’s own description
of the claimed inventions in the complaint, which pleads that
the system is comprised of a first receipt module, an
authentication module, a connection module, a request module,
a second receipt module, and a branding module. The complaint
does not plausibly allege that data processing devices are a
component of the claimed systems. The devices controlled by
McDonald’s that send the PAN to the first receipt
module are, like the Microsoft customers’ computers in
Uniloc, merely part of the environment in which the
claimed inventions function. The users of the claimed
inventions are the credit companies themselves, not
the complaint does not plausibly allege that McDonald’s
uses the claimed inventions, ...