Background
In 2023, MCOM IP, LLC sued HSBC Bank USA, N.A. in the Southern District of New York, alleging infringement of claim seventeen of United States Patent Number eight million eight hundred sixty-two thousand five hundred eight. The patent covers a unified electronic banking system. The district court dismissed the complaint with prejudice for failure to state a claim, finding the allegations insufficient to plausibly show infringement. MCOM appealed, challenging both the dismissal and the denial of leave to amend.
The court’s reasoning
The Federal Circuit affirmed the judgment on two independent grounds. First, the court applied issue preclusion based on a companion decision decided the same day, which held that claim seventeen was invalid. This ruling collaterally estopped MCOM from asserting the claim in this appeal. Second, the court independently affirmed the dismissal because MCOM failed to plausibly allege infringement. The complaint did not allege facts showing that HSBC practiced the real-time elements or the common point of control element of the patent. The court noted that the complaint described cookie usage across separate visits rather than within a single active session, and it failed to explain how consistent menus constituted a common point of control. The court also found no abuse of discretion in denying leave to amend, as MCOM had been warned and failed to specify how it would cure the deficiencies.
What it means going forward
The decision reinforces the use of issue preclusion to prevent patentees from relitigating invalidated claims in parallel cases. It also clarifies that generic allegations about banking interfaces are insufficient to plead infringement of complex system claims requiring specific real-time and control elements.
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