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Intellicheck Mobilisa, Inc. v. Honeywell International Inc.

United States District Court, W.D. Washington, Seattle

November 21, 2017





         Before the court is Defendant Honeywell International Inc.'s ("Honeywell") motion to dismiss Plaintiff Intellicheck Mobilisa, Inc.'s ("Intellicheck") second amended complaint. (3d MTD (Dkt. # 82).) The court has considered the motion, the parties' submissions in support of and in opposition to the motion to dismiss, the relevant portions of the record, and the applicable law. Neither party has requested oral argument. Being fully advised, the court DENIES Honeywell's motion to dismiss.


         This case concerns allegations of patent infringement. Intellicheck provides "wireless technology and identity systems for various applications, including patented technology that instantly authenticates government-issued identification documents." (SAC (Dkt. # 74) ¶ 9.) In other words, Intellicheck's patented technology allows customers to determine whether government-issued IDs are authentic. (See id.) Intellicheck protects this patented technology through ownership of five patents: (1) United States Patent No. 7, 478, 067 ("the '067 Patent"); (2) United States Patent No. 5, 864, 623 ("the '623 Patent"); (3) United States Patent No. 6, 463, 416 ("the '416 Patent"); (4) United States Patent No. 6, 920, 437 ("the '437 Patent"); and (5) United States Patent No. 7, 899, 751 ("the '751 Patent") (collectively, "the Patents-in-suit"). (Id. ¶ 11.) Intellicheck claims that it provided information on the patented technology and the Patents-in-suit to several individuals, all of whom subsequently became Honeywell employees. (Id. ¶ 15.) Intellicheck believes that at least some of these individuals worked in the Honeywell division that developed the accused products. (Id.)

         Intellicheck initially brought suit against Honeywell on March 7, 2016, alleging various counts of patent infringement under theories of direct, induced, and contributory infringement. (See generally Compl. (Dkt. # 1).) Honeywell moved to dismiss Intellicheck's induced and contributory infringement claims. (MTD (Dkt. # 25) at 2-3.) Subsequently, Intellicheck amended its complaint (FAC (Dkt. # 30)), which Honeywell again challenged by filing a motion to dismiss; in this second motion to dismiss, Honeywell attacked all asserted claims (2d MTD (Dkt. # 37) at 1-4).

         The parties then filed a stipulated motion to temporarily stay the matter and extend the trial date for six months to explore the possibility of settlement. (Stip. Mot. (Dkt. # 48) at 1-2.) The court declined to stay the case but extended the trial date as requested and denied Honeywell's pending motions as moot without prejudice to renewing those motions at a later date. (10/28/16 Order (Dkt. # 49) at 1-2.) During the ensuing period, the parties engaged in negotiations but ultimately failed to reach a settlement. (Sanks Decl. (Dkt. # 58) ¶ 2.)

         After settlement negotiations broke down, Intellicheck sought leave to file a second amended complaint (MTA (Dkt. # 57)), which the court granted on August 30, 2017 (8/30/17 Order (Dkt. #73)). In the second amended complaint, Intellicheck drops its contributory infringement claims and instead brings ten counts of infringement against Honeywell, alleging that Honeywell's development and sale of various accused products directly and indirectly infringed upon the five Patents-in-suit. (SAC ¶ 13.) Honeywell moves to dismiss all ten counts for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). (See generally 3d MTD.) The court now reviews Intellicheck's allegations of direct and indirect infringement.

         A. Direct Infringement Counts

         1. Count I: Direct Infringement of the '067 Patent

         Intellicheck asserts in Count I that Honeywell directly infringes Claim 2 of the '067 Patent. (SAC ¶¶ 34-46.) Claim 2 is a dependent claim that builds upon Claim 1; together, the two claims protect an apparatus with (1) an "information reader" that reads information from a driver license issued by a certain jurisdiction, with that information having a "predetermined format corresponding to said jurisdiction" (id., Ex. A ('"067 Patent") 14:63-67)[1]; (2) equipment that receives the read information and determines whether that information "comports with said predetermined format" and outputs the information to a remote location through a signal path for further processing ('067 Patent 15:1-7); and (3) said information reader that reads a driver license containing "machine readable information." (id. 15:8-10).

         Intellicheck asserts that Honeywell's scanners that are preinstalled with the Easy DL software "read[] the machine readable information from a driver license via the barcode on the back of the driver license" and then "determine[] whether the information read comports with the predetermined format for that specific jurisdiction (i.e. the State of Washington), " using "the data received from the American Association for Motor Vehicle Administrators (AAMVA)." (E.g., SAC ¶ 39.)[2] The information is then allegedly sent to a "remote location" such as a host computer "via a signal path" for further processing. (See, e.g., id.) Intellicheck emphasizes that Honeywell's scanners can "read the machine readable information ... from the driver license." (See, e.g., id.) Intellicheck seeks to recover damages sustained from these allegedly infringing acts. (Id. ¶¶ 44-46.)

         2. Count III: Direct Infringement of the '623 Patent

         Count III alleges that Honeywell directly infringed Claims 1 and 15 of the '623 Patent. (Id. ¶ 62.) Claim 1 protects an apparatus that authenticates documents and can: (1) read the information on the document; (2) determine whether the document has a format that corresponds to a reference format by comparing the two formats; (3) "pars[e]" the read information into "jurisdictional segments" to then compare against the "predetermined values" of reference jurisdictional segments; (4) compare the read information to determine whether the jurisdictional segments match the predetermined values; and (5) generate a verification signal if there is a match between the two checksums.[3] (Id., Ex. B ("'623 Patent") 15:14-41.) Claim 15 protects the method for authenticating a driver license, comprised of the steps that are listed in Claim 1. (See '623 Patent 16:49-17:7.)

         As to Claim 1, Intellicheck alleges that Honeywell's products read the information on the document and determine "whether the document format corresponds to the format from the issuing jurisdiction." (E.g., SAC ¶ 62.) The scanners purportedly parse the read information to determine whether or not the information matches the predetermined values. (E.g., id.) Additionally, the product "completes a checksum wherein the scanner compares the human recognizable information with the machine coded information" and "generates a signal" if there is a match. (E.g., id.) Moreover, Intellicheck pleads that Honeywell utilizes the method protected by Claim 15 in product testing, where the products are used to read information from a driver's license; determine whether the license format matches the format of a certain jurisdiction; parses the information into jurisdictional segments; and compares the information to ensure a match. (E.g., Id. ¶ 63.) The products are also used to compare two checksums and generate a signal if the information matches. (E.g., id.)

         3. Count V: Direct Infringement of the '416 Patent

         Count V alleges direct infringement of Claim 4 of the '416 Patent. Claim 4 protects a method of authenticating identification documents, wherein (1) "information segments included in said identification document" are extracted; (2) reference data from a storage means is retrieved; (3) the format of the extracted information segments is compared to the format of the retrieved reference data; (4) if the formats match, the information segment is compared to "a predetermined acceptance criteria"; and (5) a signal is provided if the predetermined acceptance criteria is met. (Id., Ex. C ('"416 Patent") 15:58-16:13.)

         Intellicheck asserts that Honeywell infringes Claim 4 in its product testing processes because the products are used to "authenticate a portion of an identification document" by extracting the information to be checked; determining whether the information is in the same format as the reference data; and calculates the necessary information to determine whether the information meets a certain "predetermined acceptance criteria." (SAC ¶ 86.) For example, Intellicheck alleges that Honeywell's product will extract a date of birth from the ID; determine whether format of the date of birth conforms with the known format for the jurisdiction; and then calculate an age and signal whether that information meets the age cutoff. (See id.)

         4. Count VII: Direct Infringement of the '437 Patent

         Count VII alleges that Honeywell directly infringes Claim 14 of the '437 Patent. (Id. ¶¶ 104-15.) Claim 14 protects "[a] method for reading information from a driver license for use in an age-restricted activity." (Id., Ex. D ("'437 Patent") 16:5-6.) The steps consist of: (1) reading "machine readable information" from the license; (2) determining an "identifier" from the information that corresponds to the issuing jurisdiction of the license; (3) extracting the date of birth and expiration date using the identifier; (4) checking either the date of birth or expiration date against a predetermined value for conformance; (5) if the check is successful, calculating the age and displaying that age along with an indication that the license conforms; and (6) if the check is unsuccessful, displaying an indication that the license does not conform. ('437 Patent 16:8-29.)

         Intellicheck alleges that Honeywell uses the accused products in product testing to "read information from a driver's license[] for age-restricted activities." (E.g., SAC ¶ 108.) Intellicheck claims that these products read machine readable information from a driver license and determine whether that information matches the AAMVA; extracts the date of birth and expiration date; verifies whether the date of birth is in the known format and checks for conformance; and calculates the age. (E.g., id.) Then, the products signal "whether the license is valid and whether the person is old enough to purchase alcohol." (E.g., id.)

         5. Count IX: Direct Infringement of the '751 Patent

         Count IX alleges that Honeywell directly infringed Claims 22 and 32 of the '751 Patent. Claim 22 protects "non-transitory computer memories" that are encoded with "an identification data structure and a reference data structure" and used to "determine whether an individual is authorized to perform an activity." (Id., Ex. E ("'751 Patent") 16:42-45.) To make this determination, the identification data structure captures information read from an ID that conforms to "an established format of a jurisdiction" and uses an Issuer Identification Number to determine what jurisdiction issued the Id. ('751 Patent 16:45-52.) The reference data structure contains information on a number of jurisdictional formats; when the established format is one of the jurisdictional formats in the reference data structure, the reference data structure parses and populates the identification data structure with the read identification information. (Id. 16:52-56.)

         Claim 32 protects "a portable device" with (1) a "reader component" that reads portions of machine-readable information from an ID, including the Issuer Identification Number; (2) a "reference component" that specifies the format of the issuing jurisdiction; (3) a "parser component" to parse the read information according to the specific format; (4) a "conformance component" that compares the parsed information to a set value; and (5) an "output component" that shows the result of the comparison. (Id. 17:19-18:3.)

         Intellicheck claims that Honeywell's products infringe Claims 22 and 32. The products are used with a computer and access point to read information from a driver's license and identify the issuer of the license through its Issuer Identification Number. (E.g., SAC ¶ 131.) The products then parse the information from the license into segments to determine whether the person is authorized to perform the transaction. (E.g., id.) The product then will indicate whether or not the person is authorized. (E.g., id.)

         B. Indirect Infringement Counts

         Intellicheck pairs each of the above direct infringement counts with a count of indirect infringement of the respective patent. (See Id. ¶¶ 47-57 (Count II alleging indirect infringement of the '067 Patent).) Each count claiming indirect infringement repeats the same allegations: Intellicheck claims that Honeywell "actively and knowingly" induced others to make, use, or sell the accused products; licensed the products to others and provided instructions that enabled licensees to practice the claimed instructions; and advertised and promoted the accused products in a way that instructed customers to practice the claimed inventions. (E.g., Id. ¶ 50.) For instance, Honeywell literature purportedly instructs users on how to use its products and the accompanying software, and Intellicheck claims that Honeywell customers are "following Honeywell's instructions and using the accused products to authenticate driver's licenses." (E.g., Id. ¶¶ 51-52.) Due to the harm sustained from this indirect infringement, Intellicheck seeks damages, as well as attorney's fees if applicable. (E.g., ¶ 57.)

         Intellicheck asserts that Honeywell had actual notice of the various Patents-in-suits through Honeywell employees who previously worked with Intellicheck. (Id. ¶¶ 15-30.) For instance, Intellicheck alleges that Honeywell had notice of the '623 Patent and the '416 Patent as early as 2007, when Honeywell acquired a company that previously contracted with Intellicheck. (Id. ¶ 16.) Intellicheck claims that it had provided several employees of the acquired company with its patent and patent applications, including both the '623 and '416 Patents. (Id.) Similarly, Intellicheck ...

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