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Federal Courts Throw Out Smart Communications’ Mail-Scanning Patent

by K. Robert Schaeffer

On October 7, 2022, the U.S. District Court for the Middle District of Tennessee granted judgment on the pleadings to Rutherford County and VendEngine, Inc., the contractor that digitizes prisoner mail in its jail, in a suit filed by Smart Communications that alleged infringement of its patented rival digitization service, MailGuard. In its decision, the Court found the MailGuard patent “invalid because it is not directed to patent-eligible subject matter.” See: HLFIP Holding, Inc. v. Rutherford Cty., 2022 U.S. Dist. LEXIS 184056 (M.D. Tenn.).

The decision mirrors an earlier ruling by the federal court for the Middle District of Pennsylvania, which also decided that MailGuard was “patent ineligible” on April 22, 2022. In that case, Smart Communications sued the York County Prison for engaging rival mail-scanning service TextBehind, claiming its service infringed on the MailGuard patent.

Smart Communications, founded and run by CEO Jon Logan, emerged on the prison industrial landscape in 2009 primarily as a provider of electronic messaging to county jails. Since then it has expanded its communications service offerings to include phone calls, virtual visits, tablets, kiosks, digital media – and scanning incoming mail, ostensibly to prevent the introduction of contraband.

The company gained prominence in 2018 when it signed an emergency, no-bid, $13.536 million three-year contract to scan prisoner mail for the Pennsylvania Department of Corrections (DOC), after fewer than 60 prison staffers throughout the state claimed they were sickened by exposure to synthetic cannabinoids over a five-month period. [See: PLN, Sep. 2019, p.60.]

Despite reporting that debunked the risk from incidental exposure to these drugs, along with DOC’s failure to provide any evidence they ever originated from incoming mail, Smart Communications was tapped as a solution to this manufactured emergency, promising that MailGuard would cut off “the last conduits of drugs and undocumented inmate communications with the
outside world.”

Though repeated assurances of “turnkey” service were made in marketing materials, the transition was a widely-publicized mess, resulting in low-grade and incomplete scans, weeks-long delays, and mail that was often returned to sender, misdelivered, or lost completely.

Smart Communications first filed a patent application for its MailGuard system in May 2016. The “correctional postal mail contraband elimination system” routes all incoming prisoner mail through a centralized processing facility in Tampa, where it is scanned into an electronic file that is returned to the prison. At that point, it is printed for the prisoner or made available electronically via tablets and kiosks. All original mail is destroyed.

The U.S. Patent and Trademark Office approved the application in May 2019. But numerous competitors appeared in what the company dubbed the “corrections mail elimination marketplace.” One of these, TextBehind, secured state-level mail-scanning contracts with prison systems in North Carolina and Wisconsin in late 2021. When it was then hired by York County Prison, Smart Communications filed a patent infringement suit against the lockup.

On August 25, 2020, as settlement negotiations began, Smart Communications became aware that the prison’s telephone service contract with industry giant Global Tel*Link (GTL) was due to expire at year end. The very next day, Logan forwarded prison Warden Clair Doll marketing materials describing his company’s communication services. The day after that, the two had a conference call, and Doll invited Logan to meet and discuss a resolution to the patent suit, as well as to hear a formal pitch for Smart Communications’ services.

Over the next several months, while the patent infringement litigation was stayed amid settlement talks, the parties engaged in “extensive contract negotiations.” When GTL got wind, it offered to indemnify and assist the prison in its patent litigation with Smart Communications. The ploy worked; the prison renewed its contract with GTL, and by January 2021, GTL attorneys had been added to the patent litigation.

On October 6, 2021, Smart Communications filed a complaint against GTL and York County Prison, calling GTL’s meddling in the patent suit a violation of the Sherman anti-trust act. But the federal court for the Middle District of Pennsylvania decided that Smart Communications’ blatant opportunism in using its patent litigation as a pretense for soliciting business away from GTL had “baited” the company into forming an interest in the case.

Meanwhile, the same court scrutinized the MailGuard system under Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S. 208 (2014). The prison and GTL argued that the patent was invalid because MailGuard comprises “an ineligible method of organizing human activity,” namely “receiving, sorting, reviewing, logging, screening and distributing inmate postal mail using generic computer components like scanners, terminals, servers and kiosks and generic computer processes like generating text-searchable documents and tagging electronic files.”

Historically, systems that merely “automate manual processes” have been classified as abstract ideas that are ineligible for patent. As the prison and GTL argued, “the purported invention” of MailGuard “is simply to computerize a process that … correctional facilities have carried out manually for years.” The court agreed, finding nothing in the MailGuard system that “does anything more than perform this task [of screening incoming mail for contraband] faster and more accurately than humans have been doing for years.” Without the inventive application necessary for a valid patent, MailGuard was patent ineligible, the court said. See: HLFIP Holding, Inc. v. York Cty., 600 F. Supp. 3d 526 (M.D. Pa. 2022).

According to a recent report by Prison Policy Initiative, at least 23 other state-level DOCs, as well as many individual federal facilities, are now scanning incoming prisoner mail. With its MailGuard patent quashed, Smart Communications has no choice but to appeal these two decisions to protect its small slice of this pie. But if the decisions stand, expect more firms to pop up and stake a claim in one of the last aspects of prison life not yet fully monetized: letters from home, holiday cards, photos of family gatherings and loved ones, and finger-paintings by children.

Additional sources: New York Times, Philadelphia Inquirer, Slate