By Jay Landers 

In the ongoing patent infringement lawsuit regarding automated parking lot monitoring and enforcement systems, the latest filing in the case seeks to add Premium Parking Service LLC. Defendant Parking Revenue Recovery Services Inc. (PRRS) is alleging that the parking operator conspired with the plaintiff Municipal Parking Services Inc. (MPS) to harm PRSS’s business.

The charge follows previous allegations by the parking compliance company PRRS and its fellow defendant, the parking operator LAZ Parking, that MPS deliberately withheld pertinent material from the U.S. Patent and Trademark Office (USPTO) when securing the patents at the heart of the lawsuit, a claim that MPS has denied. 

Financial ties alleged 

On April 8, PRRS and LAZ filed their second amended counterclaims in the case, which began last June when MPS filed suit against the two companies in the U.S. District Court for the Western District of Texas, Austin Division. MPS, the maker of the SafetyStick and other automated parking detection and violation enforcement equipment, alleges that PRRS and its customer LAZ are infringing five MPS patents pertaining to automated parking lot monitoring and management systems. 

The recent counterclaims assert the existence of financial ties between Premium Parking and MPS. Premium Parking “is a major investor in MPS, if not the majority owner of MPS, and is MPS’s largest customer,” according to the April 8 filing. “Upon further information and belief, one or more of the Asserted Patents are security for monies, financing and/or loans that [Premium Parking] has provided to MPS.” 

These allegations were denied by Joe Caldwell, the CEO of MPS. “Premium Parking is not a shareholder in MPS or its patents,” Caldwell said. He declined to comment on other aspects of the ongoing litigation. 

Premium Parking likewise issued a denial. “Allegations in court documents are not findings of fact, and Premium Parking firmly disputes any suggestion of conspiracy,” said Ben Montgomery, the company’s president. “Premium Parking uses Municipal Parking Services technology and services at a number of its facilities,” Montgomery said. “The nature of that relationship does not support the conspiracy allegations in the counterclaims, and the suggestion that it does is without merit. We intend to defend these allegations and trust the legal process to reflect reality.” 

PRRS and LAZ both declined to comment for this story. 

‘False and misleading’ statements 

PRRS alleges that Premium Parking joined MPS in a “campaign” of “intentional and unlawful conduct” in which they “coordinated their efforts to inflate the nature of their patents [and] their ability to put competitors out of business,” according to the April 8 filing.  

As stated in the April 8 filing, beginning at the annual conference of the International Parking and Mobility Institute (IPMI) held last June in Louisville, Kentucky, MPS representatives made “false and misleading” statements to the effect that “anyone working with PRRS would be forced to stop, and that if they continued to do business with PRRS they would be sued too.”  

Following the IPMI show, MPS and Premium Parking continued to make similar threats and ultimatums, according to the latest filing. PRRS alleges these actions “have materially damaged the value of PRRS’ service offering, and have caused significant damage to PRRS and its business relationships,” according to the second amended counterclaims. 

As part of three separate counts, PRRS is asking the court to formally declare that MPS and Premium Parking willfully violated the Lanham Act, a federal law that includes provisions prohibiting false or misleading statements in commerce that damage another business. PRRS separately alleges that MPS and Premium Parking engaged in a civil conspiracy under Texas common law.  

PRRS also is asking the court to issue injunctions barring MPS and Premium Parking and anyone acting with them from making statements, to customers or anyone else, suggesting that PRRS is legally prohibited from doing business, and to award PRRS actual damages for the lost business, goodwill, and profits it claims to have suffered as a result of those false statements. 

‘Inequitable conduct’ 

PRRS and LAZ also allege that Thomas Hudson, the lead inventor on all five of the MPS patents involved in the case and the company’s former chairman and CEO, deliberately withheld material prior art from the USPTO during patent prosecution with the specific intent to deceive. Prior art refers to the existence of publicly available information regarding a similar invention that was available before the filing date of a subsequent patent.   

The core of the allegation is that, in April 2013, Hudson was appointed to the board of directors of Image Sensing Systems Inc. (ISS), a company that was providing automated license plate recognition (ALPR) technology to parking operators, including as part of a project for the Regional Transportation District (RTD), the public transportation provider for the greater metropolitan area of Denver. PRRS and LAZ contend that through his board role and regular contact with ISS officers and employees, Hudson became aware of the RTD project and its functioning ALPR-based parking monitoring system. This system, they argue, embodied key elements of the claims in the patents MPS subsequently obtained. 

PRRS and LAZ contend that, despite this alleged knowledge, Hudson, MPS, and their patent prosecution counsel, Skaar Ulbrich Macari P.A., intentionally failed to disclose the RTD project to the USPTO in the prosecution of any of the five asserted patents. They argue the withheld information was “but-for material,” meaning the patents would not have been issued had the examiner known of it. What is more, PRRS and LAZ allege that Hudson’s omission “was not the result of oversight or negligence, but was undertaken with the specific intent to mislead and deceive the USPTO into issuing patents that would otherwise have been rejected,” according to the April 8 filing. 

For these reasons, PRRS and LAZ ask the court to issue a declaratory judgment of unenforceability for all five of the MPS patents due to “inequitable conduct.” 

MPS has sought to have the inequitable conduct claims dismissed, arguing in court filings in January and March that the allegations were too vague to meet the required legal standard and that Hudson had already filed his own relevant patent application before joining the ISS board. PRRS and LAZ disputed both points in their April 8 filing. On April 10, Judge Alan D. Albright denied MPS’s dismissal motion as moot in light of the defendants’ filing of their second amended counterclaims. MPS has the option to file a new motion to dismiss the amended claims, respond to them, and/or make new claims. 

Allegations of invalidity  

PRRS and LAZ continue to ask the court to formally declare that their products and services, including PRRS’s Automated Recognition and Compliance (ARC) system used at LAZ parking facilities, do not infringe any valid or enforceable claim of the following five MPS patents: 

• U.S. Patent No. 10,121,172, “Parking Lot Monitoring System” (November 6, 2018)   

• U.S. Patent No. 11,257,302, “Parking Meter System” (February 22, 2022)   

• U.S. Patent No. 11,688,205, “Parking Meter System” (June 27, 2023)   

• U.S. Patent No. 12,142,085, “Parking Meter System” (November 12, 2024)   

• U.S. Patent No. 12,249,187, “Parking Meter System” (March 11, 2025)   

As first detailed in their December 24, 2025, answer to MPS’s amended complaint, PRRS and LAZ maintain that their products and services do not perform all the steps required by the claimed methods, particularly steps related to determining vehicle identification, performing license plate recognition, and determining parking violations in the manner the patents describe.  

The defendants also continue to ask the court to declare the five MPS patents invalid for various reasons, including the existence of prior art. In addition to the RTD project noted above, PRRS and LAZ also point to the following examples: 

• European Patent Specification 1 331 620 B1, “Automated car-park management system,” Extel S.r.l., (April 13, 2005)  

• U.K. Patent Application GB 2 441 383 A, “Automated car park system,” Ranger Services Limited, (March 5, 2008)  

• U.S. Patent Publication Number 2010/0030628, “Monitoring Vehicle Use,” Renshaw-Smith et al., (February 4, 2010)  

• U.S. Patent Publication Number 2014/0036077, “Method for Controlling Vehicle Use of Parking Spaces by Use of Cameras,” Nerayoff et al., (February 6, 2014)  

All four references describe automated, camera-based systems that monitor vehicle use of parking facilities by capturing license plate or registration data and recording timing information. 

Notably, the four examples were cited by the automated parking enforcement technology and services provider Clancy Systems, Inc., when it asked the USPTO last September to rule on the validity of the five MPS patents in a process known as ex parte reexamination. To date, the USPTO has rejected certain claims of the ‘085 and ‘187 patents and has yet to rule on the remaining three patents, said Liz Wolfson, the secretary treasurer of Clancy. However, the USPTO’s decisions are a first step in the reexamination process, as MPS may appeal, and the USPTO can reverse course. In fact, last year, MPS successfully appealed the patent office’s initial rejections of three of the patents, after Clancy first asked it in 2024 to review them. 

PRRS and LAZ also contend that MPS’s patents should never have been granted in the first place because they violate sections 101, 102, 103, and 112 of Title 35 of the United States Code (35 U.S.C.), the federal statute governing patent law in the United States. Those sections establish, respectively, that patents may only be granted for genuine inventions rather than abstract ideas, that a claimed invention must be truly novel and not already known in the prior art, that it must not be obvious to a skilled practitioner in the relevant field, and that it must be described with sufficient clarity and precision to inform others of its scope. 

MPS has denied both the noninfringement and invalidity claims in previous court filings. For example, in a brief filed on December 22, MPS characterized its patents as covering genuinely “novel methods and systems” for automated parking monitoring and enforcement, and argued that the prior art references cited by PRRS and LAZ, including Renshaw, Ranger, and Nerayoff, describe only background technology that does not anticipate or render obvious MPS’s specific claimed methods. MPS also has highlighted the USPTO’s 2025 decision upholding its three patents that Clancy had originally asked to be reexamined. 

Markman hearing 

On February 24, Judge Albright held what is known as a Markman hearing in the case. Named after a landmark 1996 Supreme Court decision, a Markman hearing is a pretrial proceeding unique to patent litigation in which the judge, rather than the jury, formally interprets the meaning of disputed words and phrases in the patent claims at issue.  

The parties disputed eight specific claim terms appearing across the five asserted patents, including phrases such as “recording a time,” “capturing image data of the vehicle,” “transmitting the image data,” “determining an identification of the vehicle,” “license plate recognition,” and “determining automatically.”  

Judge Albright issued his claim construction order two days after the hearing. For eight of the nine disputed term groupings, he determined that the terms should be given their plain and ordinary meaning. For the remaining term, “sensing a vehicle entering / sensing the vehicle exiting the parking lot,” the court adopted MPS’s alternative proposed construction: “automatically detecting the presence of a vehicle at the entrance/exit of the parking lot.” In each instance, the constructions proposed by PRRS and LAZ were not adopted. 

Because the meaning of key terms governs how infringement and validity are assessed at trial, the Markman hearing is a critical milestone, said Paul R. Gugliuzza, the Thomas W. Gregory Professor of Law at the University of Texas at Austin School of Law, and an expert in patent litigation. “It’s typically the most important pre-trial decision in any patent case,” Gugliuzza said. “The meaning that the judge gives to claim terms will often determine whether the patent claim is valid, infringed, or both. But, if the judge simply adopts ‘plain and ordinary meaning,’ as Judge Albright did here, it essentially falls to the fact-finder (usually a jury) to decide what that meaning is and how it impacts validity and infringement.”   

The case now moves toward two spring deadlines that will lock in the parties’ core technical positions: Final Infringement and Invalidity Contentions due May 22, 2026, after which neither side can freely change its patent arguments, and a May 27 deadline for MPS to re-plead willful infringement, a more serious allegation that the defendants have denied. Fact discovery closes August 19, 2026, followed by expert reports through the fall. The October 28, 2026, dispositive motion deadline will be the last opportunity for either side to seek a court ruling ending the case before it reaches a jury, with trial currently scheduled to begin January 20, 2027. 

Correction: A previous version of this article incorrectly attributed all counterclaims and counts against Premium Parking to both Parking Revenue Recovery Services Inc. (PRRS) and LAZ Parking. The counts against Premium Parking were made by PRRS only. The article headline and text have been revised to reflect this fact. 

JAY LANDERS is the editor-in-chief of Parking Today. He can be reached at [email protected].