Grecia v. True Value Company

Filing 21

ORDER: The Court grants True Value's motion 12 and dismisses Grecia's Complaint without prejudice. It is so ordered. Civil case terminated. Signed by the Honorable Charles P. Kocoras on 8/9/2018. Mailed notice(vcf, )

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
WILLIAM GRECIA,

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Plaintiff,
v.
TRUE VALUE COMPANY,
Defendant.

18 C 1886
Judge Charles P. Kocoras

ORDER
Before the Court is Defendant True Value Company’s (“True Value”) motion
to dismiss Plaintiff William Grecia’s (“Grecia”) Complaint pursuant to Federal Rule
of Civil Procedure 12(b)(6). For the following reasons, the Court grants True Value’s
motion and dismisses Grecia’s Complaint.
STATEMENT
The following facts are taken from Grecia’s Complaint and assumed to be true
for purposes of this motion. Murphy v. Walker, 51 F.3d 714, 717 (7th Cir. 1995). The
Court draws all reasonable inferences in Grecia’s favor. Tamayo v. Blagojevich, 526
F.3d 1074, 1081 (7th Cir. 2008).

Grecia, an individual residing in Pennsylvania, owns United States Patent
8,533,860 (the “‘860 Patent”). He alleges that True Value infringes on Claims 21, 22,
and 241 of the ‘860 Patent.
Claim 21 is to “[a] computer product comprising a memory, a CPU, a
communications console and a non-transitory computer usable medium….the
computer product authorizing access to digital content…the computer product
configured to perform the steps of…” Grecia states that “True Value uses an EMV
Token Point-of-Sale computer product (EMV-PoS)2 that authorizes access to users’
digital financial content to complete purchases using a verification token (e.g., EMV
Device Token) that is used as a substitute to the user’s real card [primary account
number] in EMV-PoS transaction requests.” In simpler terms, this process creates
secure transactions to eliminate the threat of credit card fraud.
The first step in Claim 21 that the computer product is configured to perform is:
receiving the digital content access request from the communications
console, the access request being a read or write request of metadata of
the digital content, the metadata of the digital content being one or more
of a database or storage in connection with the computer product, the
request comprising a verification token corresponding to the digital
content, the verification token is handled by the user as a redeemable
instrument, wherein the verification token comprises at least one of
purchase permission…
Grecia claims: “The True Value EMV-PoS receives an access request to the user’s
digital financial content that is processed as a ‘read’ request of the connected EMV
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Grecia mistakenly identified his Claim 24 allegations as “Claim 23” in his Complaint. He rectified the issue in his
Opposition brief.
2
The True Value EMV-PoS, essentially a credit card reader, is the alleged infringing device. Throughout this
Order, we also refer to this device as the “True Value device” and the “EMV-PoS.”

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card network Token Vault database (metadata) required to determine an access
permission. The verification token (e.g., EMV Token) is handled by the user as a
redeemable instrument (e.g., EMV Tokenized Mobile Device or Chip Card). The
EMV Token (verification token) comprises a ‘purchase permission.’”
The second step in Claim 21 is “authenticating the verification token…”
Grecia alleges that the EMV Token is authenticated using the Luhn Formula for
Computing Modulus 10 Check Digit. The third step in Claim 21 is:
establishing a connection with the communications console, wherein the
communications console is a combination of a graphic user interface
(GUI) and an Applications Programmable Interface (API) wherein the
API is related to a verified web service…
Grecia claims that the True Value EMV-PoS establishes a connection with the EMV
Token Service Provider using an API related to the EMV Token Service Provider.
The fourth and fifth steps in Claim 21 that the computer product is configured
to perform are “requesting the at least one identification reference from the at least
one communications console, wherein the identification reference comprises one or
more of a verified web service account identifier, letter, number, [etc.]” and
“receiving the at least one identification reference from the communications console.”
Grecia alleges that “[t]he True Value EMV-PoS requests and receives an
identification reference from the EMV Token Service comprising letters and numbers
(e.g., Discover exchanges the [primary account number] for its token and sends the

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token and “approved” or “declined” message response with the token back to True
Value).”
The sixth and final step in Claim 21 is “writing at least one of the verification
token or the identification reference into the said metadata.” Grecia states that the
True Value EMV-PoS writes the verification token to its connected storage for receipt
printing and reference for refunds.
Claim 22 states:
The computer product according to Claim 21, wherein the access request
is a request from a first user, the first user is a human user in operation of
the computer product and establishes first access to the digital content;
or wherein the access request is a request from a secondary user, the
secondary user is a human user in operation of the computer product and
establishes secondary access to the same digital content as first
established for access by the first user.
Grecia claims that the True Value EMV-PoS handles the EMV Token request from a
first human user who accesses the digital financial content to complete the transaction.
It also handles an EMV Token request from a second human user who establishes
secondary access to the first user’s digital financial content so the True Value
EMV-PoS can process EMV Token refunds.
Claim 24 provides, “The computer product according to Claim 21, wherein the
customization module customizes a user access panel.” Grecia alleges that the True
Value EMV-PoS customization module customizes the user access panel to include
logos and other information.

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On March 15, 2018, Grecia filed his patent infringement Complaint under the
patent laws of the United States, 35 U.S.C. §§ 101 et seq. He seeks declaratory and
injunctive relief, including a reasonable royalty and pre- and post-judgment interest.
A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) “tests
the sufficiency of the complaint, not the merits of the case.” McReynolds v. Merrill
Lynch & Co., 694 F.3d 873, 878 (7th Cir. 2012). Grecia need not provide detailed
factual allegations, but he must provide enough factual support to raise his right to
relief above a speculative level. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555
(2007). Grecia’s claim must be facially plausible, meaning that the pleadings must
“allow…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). His claim must be
described “in sufficient detail to give the defendant ‘fair notice of what the…claim is
and the grounds upon which it rests.’” E.E.O.C. v. Concentra Health Servs., Inc., 496
F.3d 773, 776 (7th Cir. 2007) (quoting Twombly, 550 U.S. at 555). “Threadbare
recitals of the elements of a cause of action, supported by mere conclusory
statements,” are insufficient to withstand a 12(b)(6) motion to dismiss. Iqbal, 556
U.S. at 678.
True Value argues that Grecia not only failed to sufficiently state his claim, but
effectively pleaded himself out of his claim. Claim 21 requires that the infringing
device is a “computer product” comprised of various components, including a
“communications console.” The “communications console,” referred to several times
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throughout Claim 21, must refer to one particular component or structure. Yet, True
Value argues, Grecia “identifies two entirely different accused structures as the
‘communications console’—both of which are structures outside of the accused
‘computer product.’” More specifically, True Value contends that Grecia identifies
the communications console as both: (1) the customer’s mobile device or chip card;
and (2) the EMV Token Service Provider, i.e., the bank/credit card company.
In his Response, Grecia focuses on True Value’s final point, denying that he
identified the communications console as anything other than a component within the
EMV-PoS device. He contends that, as defined in Claim 21, the communications
console is a “combination of a graphic user interface (GUI) and an Applications
Programmable Interface (API).” Thus, he explains, his Complaint alleges that the
EMV-PoS device has the GUI to receive the customer’s credit card information and
the API to request and receive the token from the Token Service.
Grecia has yet to identify which specific component in the True Value
EMV-PoS is the communications console. Instead, he alleges that the True Value
device itself “performs the functions” of the communications console. This circular
reasoning has not only obfuscated the pleadings and briefing, it has also destroyed his
claim.
In his Opposition brief, Grecia states that the communications console is
responsible for performing the following four functions:

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“receiving a digital content access request from the communications
console…”
“establishing a connection with the communications console…”
“requesting the at least one identification reference from the at least
one communications console…”
“receiving the at least one identification reference from the
communications console…”

As True Value points out, Grecia’s explanation creates a logical paradox, as the
communications console is thus responsible for receiving a request from itself,
establishing a connection with itself, requesting information from itself, and receiving
that requested information from itself. Furthermore, Claim 21 states, and Grecia’s
Complaint alleges, that the computer product—not the communications console—
performs the listed functions. Grecia attempts to reframe his Complaint by claiming
that the True Value device, as the computer product, “performs the functions” of the
communications console, thereby describing the True Value EMV-PoS as both the
computer product and communications console.

His attempt to place the

communications console within the True Value device, however, fails to protect his
claim.
Grecia’s flawed circular reasoning betrays him when he contests True Value’s
argument that he identified the EMV Token Service Provider as the communications
console. Grecia misrepresents the requirements of Claim 21 by stating that the True
Value device “performs the remaining functions of the ‘communications console’ by
establishing a connection with a token service provider.” In reality, Claim 21 states
that the computer product establishes a connection with the communications console.
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In his Opposition brief, Grecia cites directly to the Complaint, which states: “The
True Value EMV-PoS establishes a connection with the EMV Token Service
Provider.” (emphasis added). Grecia’s Complaint unequivocally identifies the EMV
Token Service Provider as the communications console. Grecia does not allege that
the EMV Token Service Provider is located within the True Value device, nor does he
counter True Value’s argument that it is, in fact, located outside the device. This
allegation alone destroys Grecia’s claim.
Grecia also argues that True Value misrepresented his Complaint by claiming
that Grecia identified the customer’s mobile device or chip card as the
communications console. Employing the same reasoning as above, Grecia contends
that the Complaint alleges that the True Value device receives the customer’s credit
card information, “performing the function of the ‘communications console.’” He
adds that the customer’s mobile device or chip card is the “verification token” that is
received. While Grecia clarifies that he did not identify the customer’s cell phone or
chip card as the communications console, he again fails to explicitly state which
component within the True Value device is the communications console. Simply
stating that the EMV-PoS “performs the functions” of the communications console is
insufficient to state his patent infringement claim.
Grecia’s Complaint is confusing at best and pleads Grecia out of his claim at
worst. Grecia likens this case to Disc Disease Solutions, Inc. v. VGH Solutions, Inc.,
where the Federal Circuit reversed the grant of a motion to dismiss because the
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complaint “specifically identified the three accused products…and alleged that the
accused products meet ‘each and every element of at least one claim’ of [the
plaintiff’s patents].” 888 F.3d 1256, 1260 (Fed. Cir. 2018) (“These disclosures and
allegations are enough to provide [the defendant] fair notice of infringement of the
asserted patents.”). Grecia argues that his Complaint identifies “a specific device and
alleges that the accused device contains each of the six functions” in Claim 21 of the
‘860 Patent.
Grecia’s Complaint, however, not only fails to identify any component within
the True Value device as the communications console, but also disproves his
infringement claim by identifying the communications console as something outside
of the True Value device, i.e., the Token Service Provider. Grecia essentially pleaded
himself out of court by “pleading facts that establish an impenetrable defense to [his]
claims.” Tamayo, 526 F.3d at 1086 (“A plaintiff pleads himself out of court when it
would be necessary to contradict the complaint in order to prevail on the merits.”)
(citations omitted). The Court dismisses Grecia’s Complaint for failure to sufficiently
state a claim of patent infringement.3
True Value asks the Court to dismiss Grecia’s Complaint with prejudice, citing
Grecia’s choice to brief the motion to dismiss rather than amend his Complaint and
arguing that re-pleading cannot salvage his infringement claim. While the Court is
3

Claim 21 is the only “independent claim” raised in Grecia’s Complaint. Because Claims 22 and 24 incorporate the
limitations of Claim 21, True Value’s noninfringement arguments regarding Claim 21 necessarily apply to claims 22
and 24. See Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318, 1329 n.5 (Fed. Cir. 2008). Finding that Grecia
failed to state a claim of patent infringement on Claim 21, his Claim 22 and 24 allegations fail, as well.

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skeptical that Grecia can resurrect his patent infringement claim by re-pleading, it
declines to dismiss Grecia’s Complaint with prejudice before he has an opportunity to
amend.
CONCLUSION
For the aforementioned reasons, the Court grants True Value’s motion and
dismisses Grecia’s Complaint without prejudice. It is so ordered.

________________________________
Dated: 8/9/2018

Charles P. Kocoras
United States District Judge

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