Cloud of Change v. Lightspeed & Clover: Federal Circuit Affirms POS Patent Unpatentable
Cloud of Change, LLC asserted US9400640B2 — covering a web-based point-of-sale builder — against Lightspeed Commerce and Clover Network. The Federal Circuit affirmed the patent unpatentable in a Rule 36 judgment, ending the dispute 643 days after the appeal was filed.
Federal Circuit seals fate of Cloud of Change’s web-based POS patent
Cloud of Change, LLC appealed to the United States Court of Appeals for the Federal Circuit (Case No. 24-1446) seeking to overturn a finding that US9400640B2 — a patent covering a web-based point-of-sale builder — was unpatentable. The defendants, Lightspeed Commerce, Inc. and Clover Network, LLC, are both prominent players in the point-of-sale software and payments space, making the patent’s scope commercially significant for the broader POS technology sector.
The Federal Circuit issued a Rule 36 summary affirmance on 12 November 2025, confirming the unpatentability determination without issuing a written opinion. Rule 36 affirmances signal that the appellate panel found no reversible error warranting further elaboration — the invalidity finding below therefore stands in full, and the asserted claims of US9400640B2 remain cancelled. Cloud of Change obtains no patent rights against either defendant.
The 643-day duration from filing to judgment is consistent with typical Federal Circuit appeal timelines, and the Rule 36 disposition suggests the panel viewed the lower court’s reasoning as legally sound on its face. Because no written opinion was issued, the precise claim construction, prior art relied upon, and the legal basis for unpatentability are not publicly elaborated at the appellate level — practitioners must look to the underlying proceedings for that analysis.
Filing to Unpatentable in 643 days
643 days from appeal filing to Federal Circuit judgment — consistent with typical Rule 36 summary affirmance timelines
Federal Circuit affirms: what the Rule 36 ruling means for both parties
Rule 36 affirmance: no reversible error found
A Federal Circuit Rule 36 judgment means the court affirmed the decision below without issuing a written opinion, having determined there is no reversible error in the result. It is not a merits-silent outcome — it is a considered appellate determination that the lower tribunal’s conclusion was correct. The unpatentability finding is now binding and cannot be challenged further at this appellate level.
Affirmed without written opinionUS9400640B2 cancelled — enforcement path closed
For Cloud of Change, the affirmance extinguishes the commercial value of US9400640B2 as an enforcement asset. The patent claims are unpatentable, meaning Cloud of Change cannot assert this patent against Lightspeed, Clover, or any other party. Further challenge at this level is foreclosed; the only theoretical remaining avenue would be a petition for certiorari to the Supreme Court, which is rarely granted in patent validity disputes.
Patent rights extinguishedLightspeed and Clover secure freedom from this patent
Both Lightspeed Commerce and Clover Network emerge with confirmed freedom to operate with respect to US9400640B2. The affirmance at the Federal Circuit level — the highest specialist patent court — provides strong protection against any re-assertion of these specific claims. The unpatentability basis of termination suggests the claims were found invalid, not merely unenforceable, which typically signals prior art or eligibility grounds were dispositive.
FTO confirmed for both defendantsPOS technology sector: patent enforcement risk reduced
The cancellation of a web-based POS builder patent at the Federal Circuit level reduces one assertion risk for POS software and payments platforms. However, the absence of a written opinion limits precedential guidance for the sector — competitors cannot rely on the ruling’s reasoning to assess their own exposure. Firms operating in POS, mPOS, or browser-based commerce infrastructure should monitor whether Cloud of Change holds related continuation patents in the same family.
Sector: POS software & paymentsFull party and counsel information
| Role | Name | Type | Detail |
|---|---|---|---|
| Plaintiff | Cloud of Change, LLC | Company | Patent assertion entity — holder of US9400640B2 covering web-based point-of-sale builder technologySearch in Eureka ↗ |
| Defendant | Lightspeed Commerce, Inc. | Company | Lightspeed Commerce, Inc. (POS software) and Clover Network, LLC (payments/POS platforms)Search in Eureka ↗ |
| Co-Defendant | Clover Network, LLC | Company | Search in Eureka ↗ |
| Plaintiff counsel | Barden Todd Patterson | Attorney | Counsel for Cloud of Change, LLCSearch in Eureka ↗ |
| Plaintiff counsel | Jerry Robin Selinger | Attorney | Counsel for Cloud of Change, LLCSearch in Eureka ↗ |
| Plaintiff counsel | John Allen Yates | Attorney | Counsel for Cloud of Change, LLCSearch in Eureka ↗ |
| Plaintiff counsel | Kyrie Cameron | Attorney | Counsel for Cloud of Change, LLCSearch in Eureka ↗ |
| Plaintiff law firm | Patterson & Sheridan LLP | Law Firm | Representing Cloud of Change, LLCSearch in Eureka ↗ |
| Defendant counsel | Joseph Daniel Gray | Attorney | Counsel for Lightspeed Commerce, Inc.Search in Eureka ↗ |
| Defendant counsel | Valerie Barker | Attorney | Counsel for Lightspeed Commerce, Inc.Search in Eureka ↗ |
| Defendant law firm | Slayden Grubert Beard PLLC | Law Firm | Representing Lightspeed Commerce, Inc.Search in Eureka ↗ |
| Presiding judge | Judge N/A | Judge | Court of Appeals for the Federal CircuitSearch in Eureka ↗ |
Official order — verbatim text
The Federal Circuit’s order — ‘AFFIRMED. See Fed. Cir. R. 36’ — is a summary affirmance issued without a written opinion. Under Rule 36, this disposition confirms the panel found no reversible error in the lower tribunal’s unpatentability determination. The standard of review applied to factual findings of unpatentability is ‘substantial evidence’; legal conclusions such as patent eligibility are reviewed de novo. The terse order provides no insight into which ground the lower decision rested on, but its affirmance carries full precedential weight as to the parties and this patent.
US9400640B2 — Web-Based Point-of-Sale Builder System
US9400640B2 (application number US12/012666) covers a web-based point-of-sale builder — a system enabling merchants to construct, configure, and deploy POS transaction interfaces via a browser-based platform. The patent was asserted by Cloud of Change against two leading POS and payments infrastructure companies. The ‘B2’ designation indicates a granted utility patent that has undergone at least one post-grant correction or reexamination. The application’s filing context places it in the early era of cloud-based commerce tooling, when browser-delivered POS systems were emerging as a disruptive alternative to legacy installed software.
Web-based POS technology sits at the intersection of SaaS commerce platforms, payments infrastructure, and retail technology — a sector with significant ongoing investment and active patent prosecution. Cloud of Change’s decision to assert this patent against both Lightspeed Commerce and Clover Network (a Fiserv subsidiary) suggests the claims were drafted broadly enough to read on mainstream POS platform architectures. The Federal Circuit’s affirmance of unpatentability removes this specific asset from the enforcement landscape, but the broader sector remains patent-dense with active assertion activity from both operating companies and NPEs.
Should you run an FTO analysis against US9400640B2 and its patent family?
Any company developing, licensing, or deploying web-based point-of-sale builder tools — including mPOS platforms, browser-based checkout configurators, or cloud POS infrastructure — should assess exposure to the US9400640B2 patent family. Although the asserted patent has been found unpatentable, related continuations or divisional applications sharing the same priority chain may carry surviving claims. The commercial value of POS platforms makes this family worth monitoring even post-cancellation.
PatSnap Eureka’s FTO Search Agent allows R&D and product teams to map the full patent family around US9400640B2, identify any live continuation or divisional applications, and benchmark claim scope against your product architecture. Eureka’s claim analysis tools surface relevant prior art, flag prosecution history estoppel, and generate a structured FTO risk summary — enabling faster, more defensible clearance decisions for POS technology teams.
Run a freedom-to-operate analysis on US9400640B2 to assess your product’s exposure
Run FTO in Eureka →Similar Federal Circuit appeals involving POS and commerce software patents
Browse Federal Circuit appeals with comparable unpatentability affirmances in web-based POS, mPOS, and cloud commerce software technology — analysed and indexed by PatSnap.
What this case signals for the POS software IP landscape
A Rule 36 affirmance of unpatentability at the Federal Circuit carries significant weight for anyone operating in the web-based point-of-sale technology space.
Rule 36 affirmances carry real weight — do not dismiss them as procedural
Rule 36 judgments are often misread as non-events. In practice, they confirm the Federal Circuit found the lower decision legally correct on all raised grounds. For POS technology firms, this affirmance signals that the claims of US9400640B2 were substantively deficient — whether on prior art or eligibility grounds — and that the appellate court saw no close question requiring elaboration.
No written opinion limits precedential reach but not practical impact
The absence of a written Federal Circuit opinion means no published claim construction or prior art analysis emerges from this appeal. For in-house IP teams, this creates an information gap: the specific invalidity rationale must be sourced from the underlying tribunal record. Teams assessing related POS patents should obtain the lower-level proceedings to understand which prior art or § 101 arguments succeeded.
Cloud v Lightspeed — key questions answered
A Rule 36 affirmance means the Federal Circuit confirmed the lower tribunal’s unpatentability finding without issuing a written opinion. The court found no reversible error. US9400640B2 remains unpatentable and Cloud of Change cannot assert it against Lightspeed, Clover, or any other party.
The patent at issue was US9400640B2, covering a web-based point-of-sale builder system. The application number is US12/012666. The patent was asserted by Cloud of Change, LLC against both Lightspeed Commerce, Inc. and Clover Network, LLC in connection with their POS software and payments platforms.
An ‘unpatentable’ basis of termination typically indicates the patent claims were cancelled following an invalidity determination — most commonly arising from a successful inter partes review (IPR) or covered business method (CBM) proceeding at the PTAB, or a district court invalidity ruling. It means the claims failed to satisfy patentability requirements, such as novelty, obviousness, or patent eligibility.
No. With the Federal Circuit affirming unpatentability, US9400640B2’s claims are cancelled and cannot be re-asserted. Cloud of Change’s only theoretical further avenue is a petition for certiorari to the Supreme Court, which is rarely granted in patent validity matters. However, any related continuation or divisional patents in the same family would not be affected by this ruling.
The appeal (Case No. 24-1446) was filed on 8 February 2024 and closed on 12 November 2025 — a duration of 643 days. This timeline is broadly consistent with Federal Circuit appeals that resolve via Rule 36 summary affirmance, which tend to move faster than cases requiring full merits briefing and oral argument resulting in a written opinion.
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