Two legal points of view underscore ATM patent uncertainty

June 17, 2016 | by Suzanne Cluckey

It was baseball legend Babe Ruth — Sultan of Swat and sometime philosopher — who correctly pointed out, "It ain't over 'til it's over."

Take the case of Global Cash Access Inc. v. NRT Technology Corp., and NRT Technologies Inc.

Last Friday, ATM Marketplace ran a commentary by Ralph Jocke, an attorney whose particular line expertise lies in ATM patent issues. Jocke recapped a recent court decision in a patent dispute between Global Cash Access (which now goes by the name Evri Holdings) and NRT Technology Corp., both ATM providers to the casino industry.

The patent in question — U.S. Patent No. 6,081,792 — is essentially a process for getting around daily cash withdrawal limits on ATM cash transactions. To ensure that their patrons are able to maximize their gambling enjoyment (though "losses" might be a better term) the patented process turns an ATM cash transaction into a POS debit transaction, which is not subject to ATM withdrawal limits. The ATM dispenses a debit receipt that the user takes to a casino teller to exchange for cash or some other item of value such as chips. 

In May 2015 Global Cash brought a two-part case against its competitor, NRT Technologies. The suit alleged that: 1) NRT had infringed the patent for its process; and 2) NRT had engaged in the deceptive practice of telling prospective customers that: a) the patent was invalid; and b) even if it were valid, their process didn't infringe on it.
 
NRT subsequently filed a motion with the U.S. District court in Nevada, where Global Cash had filed the patent infringement suit, seeking to have the patent declared invalid. In its decision, the court ultimately agreed that the process was, in fact, unpatentable: 

 

The ʼ792 Patent itself indicates that this process is abstract, suggesting that ways around a bank’s ATM withdrawal limit — by, for example, obtaining cash in person from a bank or using existing POS technology — are well known. In describing these methods of obtaining cash, the ʼ792 Patent effectively confirms that using an alternative transaction to obtain cash is a longstanding economic practice that aligns with similar commercial practices deemed abstract by the Supreme Court.

Case closed, right?

Not exactly. There remains the allegation by GCA that: 

...  since November 2014, Defendants have engaged in unfair and deceptive trade practices by misleading consumers about the ʼ792 Patent’s validity, expiration date, and continued applicability in light of evolving technologies. Defendants also allegedly made misleading statements in denying that Defendants’ products infringed the ʼ792 Patent. Plaintiff claims that Defendants made such misleading statements to persuade consumers to purchase Defendants’ competing products. 

So — did NRT have the right to sell its products on its own say-so that the patent wasn't valid or applicable? And was GCA's business unfairly damaged by NRT's acts?

On Monday, ATM Marketplace received an email from James Leahy, an attorney representing Everi Holdings (aka Global Cash Access), who took issue with any inference by Jocke that the GCA patent was invalid:

The article in question states that the District Court in Nevada found the disputed patent invalid, a statement that was [implied] by NRT in their press releases dated March 30 and May 16. In fact, the Court only dismissed the patent infringement claim and allowed the unfair business practices claim to move forward, issuing no final judgment on the validity of the patent. Accordingly, the patent remains valid until such time as a final judgment finding the patent invalid, if any, is entered by the court. In the event that a final judgment of invalidity is entered, Everi intends to appeal that ruling. Because this dismissal of only the patent infringement claim is not a final judgment, it is not ripe for appeal at this time. However, we will consider an appeal to the Federal Circuit at the appropriate time.

In fact, the district court in Nevada did find the patent invalid, as Jocke said. The court determined that:

Because the claims of the ʼ792 Patent are directed to the abstract idea ... and because the claims lack an inventive concept, the Court finds that the ʼ792 Patent is patent-ineligible ...

However, as Leahy pointed out, this is not necessarily the end of the matter.

And as Jocke explained in an email sent Monday afternoon to ATM Marketplace:

What [James Leahy] is trying to say is that the Global Cash patent is not legally dead until all appeals are exhausted.  Global Cash intends to appeal, and is hoping that the law will change and somehow the District Court decision holding the patent invalid might be reversed by the appeals court.

It is similar to the situation when a person that is charged with a crime.  Often the jury in the trial court finds them guilty of the crime, but they do not have to go to jail until they have exhausted all of their appeals. Only after they have exhausted all appeals is the guilty determination final and binding.

Jocke also pointed out in last Friday's commentary that "other patent owners who have appealed court holdings invalidating patents based on the patent covering "abstract ideas" have met with little success."

And, he wrote:

It would not surprise me if Global Cash is trying settle.  They might even be able to settle in a way that would withdraw the Court's decision that the patent is invalid.  However, even if they can settle in a way that withdraws the Court ruling that the patent is invalid, the patent is now "damaged goods" and I suspect that Global Cash would not be anxious to sue anyone else over it.

The fact of the matter is that until it's all said and done — the unfair competition claims of GCA decided, a settlement agreed to (or not), and the appeals process exhausted — the patent remains valid in the eyes of the law, even if it looks as good as dead to the layman.

And as The Babe observed, "You just can't beat the person who never gives up." 

The case is Global Cash Access Inc. v. NRT Technology Corp., and NRT Technologies Inc., case No. 2:15-cv-00822-MMD-GWF
(Defs.’ Motion to Dismiss – dkt. no. 25; Pl.’s Motion for Leave to File Sur-Reply – dkt. no. 34.)

photo istock


Topics: Regulatory Issues, Transaction Processing



Suzanne Cluckey
Suzanne’s editorial career has spanned three decades and encompassed all B2B and B2C communications formats. Her award-winning work has appeared in trade and consumer media in the United States and internationally. She is now the editor of ATMmarketplace.com and BlockChainTechNews.com wwwView Suzanne Cluckey's profile on LinkedIn

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