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eCharge Licensing v. Square

eCharge Licensing v. Square

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Published by PatentBlast
eCharge Licensing v. Square
eCharge Licensing v. Square

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Published by: PatentBlast on Sep 11, 2013
Copyright:Attribution Non-commercial

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09/11/2013

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IN THE UNITED STATES DISTRICT COURTFOR THE NORTHERN DISTRICT OF ILLINOISEASTERN DIVISION
ECHARGE LICENSING LLCPlaintiff,vs.SQUARE, INC.Defendant.)))))))))Civil Action No. _____________ 
JURY TRIAL DEMANDED
 
COMPLAINT FOR PATENT INFRINGMENT
Plaintiff eCharge Licensing LLC (“eCharge”) complains of defendant Square,Inc. (“Square”) as follows:
THE PARTIES
1. Plaintiff eCharge is an Illinois limited liability company having a place of  business at 500 Skokie Boulevard, Suite 250, Northbrook, Illinois. eCharge is theexclusive licensee and holder of all substantial rights to U.S. Patent Numbers 6,764,005,7,828,207 and 8,490,875, referred to below collectively as the “eCharge Patents,” as wellas all substantial rights under the published application relating to the ’875 patent (U.S.Pub. No. 2011/0028184). eCharge has standing to sue for infringement of the eChargePatents, and for equitable remuneration for the use of rights claimed in the ’184Publication. The inventor of the eCharge Patents is a principal of the company thatgranted eCharge its exclusive license. The inventor benefits financially from successfullicensing of the eCharge Patents.2. Defendant Square is a Delaware corporation having a principal place of  business in San Francisco, California. Square provides its customers the Square Wallet
Case: 1:13-cv-06445 Document #: 1 Filed: 09/09/13 Page 1 of 9 PageID #:1
 
2application, aspects of which eCharge contends infringe the eCharge Patents and the ’184Publication claims as alleged below. The Square Wallet application runs on consumers’smart phones and like devices (such as the Apple iPhone and Android-equipped phones).
JURISDICTION AND VENUE
3. This action arises under the patent laws of the United States, e.g., 35U.S.C. §§ 271, 281, 283-285. Subject matter jurisdiction exists under 28 U.S.C. §§ 1331and 1338(a).4. Square has regularly engaged in business in the State of Illinois and purposely availed itself of the privilege of conducting business in the State of Illinois andthis judicial district, for example, by providing its customers in this judicial district withthe Square Wallet application. Square also facilitates the use of Square Wallet throughregistration of Illinois merchants to accept payment through the use of Square Wallet, andthrough delivery of mobile credit card reading devices to Illinois Square-registeredmerchants. As part of its business, Square also provides its customers moneytransmission services within the State of Illinois, such that it requires a license as amoney transmitter from the Illinois Department of Financial and Professional Regulation,Division of Financial Institutions. Square has not obtained such license, and as such,does business in violation of Illinois law. Square is currently subject to, and operating inIllinois in violation of, a Cease and Desist Order issued by the Illinois Division of Financial Institutions under its statutory authority in January 2013. The Cease and DesistOrder names the Illinois statutes that Square has been found to violate, which includes205 ILCS 657/§90(h) (a Class 3 felony). Accordingly, this Court has personal
Case: 1:13-cv-06445 Document #: 1 Filed: 09/09/13 Page 2 of 9 PageID #:2
 
3 jurisdiction over Square, and venue is proper in this Court under 28 U.S.C. § 1391(c)and/or 1400(b).
FACTUAL BACKGROUND
5. Square has been aware of the eCharge Patents since at least approximatelyAugust 20, 2012, the date of a Notice of Infringement sent to Square on behalf of theeCharge. The Notice of Infringement included infringement claim charts for at least the’005 and ’207 patents. The Notice of Infringement further included reference to the published application corresponding to the ’875 patent (the ’184 Publication). At leastclaims 13 and 14 of the ’875 patent are identical to claims 13 and 14 in the ’184 published application. The ’875 patent eventually issued on July 23, 2013.6. Over a period of nearly one year, Square refrained from explaining toeCharge any substantive reason why it might not be subject to infringement liability. Inthis way, Square resisted eCharge’s efforts to ascertain what possible rationale Squaremight have for resisting reasonable license offers. For example, despite repeatedrequests, Square never supplied alleged-invalidity claim charts when it raised the issue of hypothetical invalidity. Square finally did purport to deny infringement (for the firsttime) in a letter dated August 8, 2013, but it did so by relying on claim limitations that donot, in fact, exist. In particular, Square stated:“Square Wallet provides its users with an extremely high level of protection byallowing users to pay merchants
without any communication of the user’s credit card information
from the user’s mobile device. Moreover, Square’s servers do
Case: 1:13-cv-06445 Document #: 1 Filed: 09/09/13 Page 3 of 9 PageID #:3

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