United States District Court, D. Rhode Island
SCVNGR, INC. d/b/a LEVELUP Plaintiff,
DAILYGOBBLE, INC. d/b/a RELEVANT, Defendant.
J. McConnell, Jr. United States District Judge
the Court is a Motion for Sanctions and for Expanded
Preliminary Injunction (ECF No. 46) by SCVNGR, Inc. d/b/a
LevelUp ("LevelUp") against DailyGobble, Inc. d/b/a
Relevant ("Relevant") for contempt of this
Court's Preliminary Injunction (ECF No. 29). The
Court's Preliminary Injunction, effective July 15, 2016,
enjoined Relevant from "offering to sell, selling,
advertising, developing applications for, or entering into
any agreement or contract to provide" any mobile payment
application that utilizes "the sentinel method described
in U.S. Patent No. 8, 924, 260." Id. at 1(a).
In addition, the Court carved out a narrow exception,
allowing Relevant to continue to service clients who entered
into agreements with Relevant prior to the Preliminary
Injunction. Id. at l(b). This exception required
Relevant to-if it sought to invoke the
exception-"disclose a list of those current customers or
customers under contract." Id. at l(c).
20, 2016, five days after this Court's Preliminary
Injunction, Relevant entered into an agreement for mobile
payment with Pei Wei. ECF No. 48-2. LevelUp asserts that the
Pei Wei agreement violates this Court's Order because
Relevant executed the agreement after the Court's
Preliminary Injunction. ECF No. 46-1 at 3-4; ECF No. 50-2 at
1-4. Additionally, on March 13, 2017, almost eight months
after this Court's Preliminary Injunction, Relevant
submitted a list to the Court identifying seven clients under
contract prior to the Preliminary Injunction. ECF No. 43.
LevelUp contends that Relevant's mobile payment
applications for four clients-Wicked Greenz, along with Boss
Coffee, Starbird, and Polio Campero-violate this Court's
Order because Relevant waited eight months to identify these
clients and has failed to produce agreements. ECF No. 46-1 at
5; ECF No. 50-2 at 4-6.
Court begins with the Pei Wei agreement. This agreement
provides for mobile payment services through use of the
"Relevant Application." ECF No. 48-2 at 17.
Customers "displayQ a unique code from the Relevant
Application to the cashier who will scan the code at the
register." Id. The mobile payment provision
also notes that mobile payment "is made possible with
the use of Third Party Providers NCR and Payeezy."
Id. This language, while not describing the sentinel
method, is very similar to Relevant's agreements that do
utilize the sentinel method. See ECF No. 50-2 at 2.
Relevant's CEO, Dazhi Chen, however, declared that
Relevant has begun designing a non-infringing mobile payment
system and never agreed to implement the infringing sentinel
system for Pei Wei. ECF No. 48- 1 at ¶¶ 3, 7. As
conceded in LevelUp's briefing, Relevant has not yet
implemented a mobile payment application for Pei Wei. ECF No.
50-2 at 4. Because there is no evidence that the agreement
with Pei Wei is for the infringing system, and because
Relevant has not even implemented a mobile payment
application yet, the Court does not, with regard to Pei Wei,
find Relevant in violation of the Court's Preliminary
Court now turns its attention to the four additional clients
identified in Relevant's March 13th Notice. The first
issue is the almost eight-month delay in identifying the
above clients. The Court's Preliminary Injunction carved
out an exception for clients with existing agreements, but it
required Relevant to disclose a list of exempted clients if
it sought to avail itself of this carve out. ECF No. 29 at
1(c). The Court's Preliminary Injunction did not specify
a date or say if Relevant was required to cease infringing
operations prior to submitting the list with the Court. In
light of the fact that the document agreements were
previously produced to LevelUp, and in light of the ambiguity
in the Court's Order, the Court does not impose sanctions
for this conduct.
the Court considers the agreements produced for these four
additional clients identified in the March 13th Notice.
Relevant entered into an agreement with Wicked Greenz-signed
by Wicked Greenz on March 28, 2016, but not signed by
Relevant-to provide a mobile payment application. ECF No.
48-4. Like the agreement with Wicked Greenz, the agreement
produced for Starbird contained a provision for a mobile
payment application and, unlike the agreement with Wicked
Greenz, both parties signed. ECF No. 48-7. Even though the
Wicked Greenz agreement is not an executed agreement, the
Court finds that, because this agreement is signed by the
client, Relevant has sufficiently demonstrated that it had a
legally enforceable agreement with Wicked Greenz prior to the
Preliminary Injunction. Accordingly, Relevant properly
identified Wicked Greenz and Starbird.
also produced two agreements without any contractual
provisions concerning mobile payment applications: an
agreement with Polio Campero, ECF No. 48-5, and an agreement
with Boss Coffee, ECF No. 48-6. The Court's Order exempts
only those agreements in which the parties contracted for the
infringing mobile payment application. ECF No. 29 at ¶
1(c). As neither of these agreements contain such a
provision, the Court finds that Relevant improperly
identified these clients in its March 13th Notice. Despite
the March 13th Notice, Relevant now states that it does not
provide mobile payment services for Polio Campero. ECF No. 48
at 5. As for Boss Coffee, Relevant maintains that it
"agreed to provide mobile payment functionality"
"by at least December 9, 2015." Id. at 5,
* see also ECF No. 48-1 at ¶ 14. Aside from the
affidavit of Mr. Chen, Relevant also references ECF No. 48-8,
which, as of now, is mostly a series of completely blank
pages. Thus far, Relevant has failed to establish the
existence of a legally enforceable agreement for a mobile
payment application with Boss Coffee.
Court orders Relevant to file with this Court, within
fourteen days of this Order, evidence of a legally
enforceable mobile payment agreement between Relevant and
Boss Coffee. Otherwise, the Court will consider sanctions.
conclusion, the Court DENIES LevelUp's Motion for
Sanctions and for Expanded Preliminary Injunction (ECF No.
46) for: (1) Relevant entering into the mobile payment
agreement with Pei Wei, (2) Relevant not disclosing its list
of mobile payment clients until March 13, 2017, and (3)
Relevant providing mobile payment services for Wicked Greenz,
Polio Campero, and Starbird. The Court reserves ruling on the