Authen Tec, Inc. v. Atrua Technologies, Inc.

MOTION for Leave to File NOTICE OF UNOPPOSED MOTION AND MEMORANDUM IN SUPPORT OF UNOPPOSED MOTION FOR LEAVE TO FILE SECOND AMENDED COMPLAINT

N.D. Cal.July 30, 2008

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. C 08-1423 PJH AUTHENTEC’S NOTICE OF UNOPPOSED MTN & UNOPPOSED MTN FOR LEAVE TO FILE SECOND AMENDED COMPLAINT DM_US:21372470_2 HOWREY LLP Henry C. Bunsow (SBN 60707) bunsowh@howrey.com Denise M. De Mory (SBN 168076) demoryd@howrey.com Brian A.E. Smith (SBN 188147) smithbrian@howrey.com HOWREY LLP 525 Market Street, Suite 3600 San Francisco, California 94105 Telephone: (415) 848-4900 Facsimile: (415) 848-4999 Elizabeth Hoult Fontaine (SBN 207557) fontainee@howrey.com HOWREY LLP 4 Park Plaza, Suite 1700 Irvine, California 92614 Telephone: (949) 721-6900 Facsimile: (949) 721-6910 Attorneys for Plaintiff AUTHENTEC, INC. UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION AuthenTec, Inc., a Delaware corporation, Plaintiff, vs. Atrua Technologies, Inc., a California corporation, Defendant. Case No. C 08-1423 PJH NOTICE OF UNOPPOSED MOTION AND MEMORANDUM IN SUPPORT OF UNOPPOSED MOTION FOR LEAVE TO FILE SECOND AMENDED COMPLAINT Judge: Hon. Phyllis J. Hamilton Date: September 3, 2008 Time: 9:00 a.m. Place: Courtroom 3, 17th Floor Case 3:08-cv-01423-PJH Document 35 Filed 07/30/2008 Page 1 of 6 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. C 08-1423 PJH AUTHENTEC’S NOTICE OF UNOPPOSED MTN & UNOPPOSED MTN FOR LEAVE TO FILE SECOND AMENDED COMPLAINT DM_US:21372470_2 HOWREY LLP NOTICE OF UNOPPOSED MOTION AND UNOPPOSED MOTION FOR LEAVE TO FILE SECOND AMENDED COMPLAINT TO ALL PARTIES AND TO THEIR COUNSEL OF RECORD: PLEASE TAKE NOTICE that on September 3, 2008 at 9:00 a.m., or as soon thereafter as counsel may be heard before the Honorable Phyllis J. Hamilton in Courtroom 3, 17th Floor, of the United States District Court, located at 450 Golden Gate Avenue, San Francisco, California, Plaintiff AuthenTec, Inc., (“AuthenTec”) will move for an unopposed motion for leave to file a second amended complaint (“Unopposed Motion”). This Unopposed Motion is based upon the Memorandum in Support of the Unopposed Motion for Leave to File Second Amended Complaint, the Declaration of Elizabeth Fontaine, concurrently filed herewith, and such other papers which the Court may deem appropriate. Case 3:08-cv-01423-PJH Document 35 Filed 07/30/2008 Page 2 of 6 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. C 08-1423 PJH AUTHENTEC’S NOTICE OF UNOPPOSED MTN & UNOPPOSED MTN FOR LEAVE TO FILE SECOND AMENDED COMPLAINT DM_US:21372470_2 HOWREY LLP I. INTRODUCTION By this unopposed motion AuthenTec seeks to file a second amended complaint adding tort claims, including unfair competition, false advertising, intentional interference with prospective economic advantage and trade libel. On July 29, 2008, Atrua’s counsel, Mr. Li, informed AuthenTec in writing that Atrua does not oppose AuthenTec’s filing of its second amended complaint.1 (Exh. A to Fontaine Declaration filed with this motion.) Under Rule 15(a) a party may amend its pleading with the opposing party’s written consent. Because Atrua consents to AuthenTec’s second amended complaint and because all factors weigh in favor of granting the leave, AuthenTec respectfully requests that the Court grant this Motion. II. FACTUAL BACKGROUND On March 12, 2008, AuthenTec filed its original complaint against Atrua alleging infringement of three AuthenTec patents. On April 25, 2008, AuthenTec filed its First Amended Complaint asserting two additional patents. The five AuthenTec patents asserted in this action are U.S. Patent Nos. 5,862,248; 6,667,439; 5,940,526; 5,963,679 ; and 6,259,804 (collectively, “AuthenTec’s patents- in-suit”). The patents-in-suit relate generally to fingerprint sensor devices and related methods and integrated circuit packages. On May 14, 2008, Atrua filed its answer to AuthenTec’s First Amended Complaint and asserted unfair competition claims and a claim that AuthenTec infringes one Atrua patent. On June 25, 2008, the parties met and conferred as required by Rule 26(f). AuthenTec informed Atrua of its intent to seek leave to amend during this call, and circulated a draft Second Amended Complaint to Atrua shortly thereafter. This Court conducted the Initial Case Management Conference on July 10, 2008 and issued the Case Management Order on July 11, 2008. Discovery has just begun. Both parties have served first sets of written discovery requests, however, no responses have been served yet. 1 Although Atrua consented in writing to the filing of AuthenTec’s Second Amended Complaint, Atrua insisted that AuthenTec file this unopposed motion rather than a stipulation. Case 3:08-cv-01423-PJH Document 35 Filed 07/30/2008 Page 3 of 6 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. C 08-1423 PJH AUTHENTEC’S NOTICE OF UNOPPOSED MTN & UNOPPOSED MTN FOR LEAVE TO FILE SECOND AMENDED COMPLAINT -2- DM_US:21372470_2 HOWREY LLP III. ARGUMENT Rule 15(a)(2) states that “a party may amend its pleading only with the opposing party’s written consent or the court’s leave.” Fed. R. Civ. Pro. 15(a)(2). Here, Atrua consents to AuthenTec’s second amended complaint. Thus, the Court should grant the instant Motion on this basis alone. Id. In addition, all applicable Rule 15(a) factors favor granting leave to amend in this case. See Foman v. Davis, 371 U.S. 178, 182 (1962) (holding that amendments are liberally allowed because, as the Supreme Court found many years ago, “[i]f the underlying facts or circumstances relied upon by a plaintiff may be a proper subject of relief, he ought to be afforded an opportunity to test his claim on the merits.”) Because of the strong policy in favor of permitting amendment, only limited circumstances justify the denial of leave to amend. Eminence Capital, L.L.C. v. Aspeon, Inc., 316 F.3d 1048, 1051 (9th Cir. 2003) (citation omitted). Such circumstances include undue delay, bad faith, prejudice to the opposing party, and futility of the amendment. See Leadsinger, Inc. v. BMG Music Publ’g., 512 F.3d 522, 532 (9th Cir. 2008) (quoting Foman v. Davis, 371 U.S. 178, 182 (1962)). Without prejudice or a “strong showing” from one of the other factors, “there exists a presumption under Rule 15(a) in favor of granting leave to amend” that “should not be lightly cast aside.” Eminence Capital, LLC, 316 F.3d at 1052; McMullen v. Fluor Corp., 81 Fed. Appx. 197, 201 (9th Cir. 2003). Indeed, “where there is a lack of prejudice to the opposing party and the amended complaint is obviously not frivolous, or made as a dilatory maneuver in bad faith, it is an abuse of discretion” to deny leave to amend. U.S. v. Peno Oreille Public Utility Dist. No. 1, 926 F.2d 1502, 151-12 (9th Cir. 1991) (citations omitted). In this case, none of the circumstances for denying leave to amend applies. First, there has been no undue delay. AuthenTec’s original Complaint was filed just over four months ago, and discovery has just begun. During the parties’ Rule 26(f) meet and confer on June, 25, 2008, AuthenTec notified Atrua of its intention to file a Second Amended Complaint adding unfair competition claims. On July 1, 2008, AuthenTec sent Atrua its initial proposed Second Amended Complaint. On July 23, 2008, AuthenTec sent Atrua a revised proposed Second Amended Complaint in response to Atrua’s request that AuthenTec provide additional factual allegations for its new tort Case 3:08-cv-01423-PJH Document 35 Filed 07/30/2008 Page 4 of 6 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. C 08-1423 PJH AUTHENTEC’S NOTICE OF UNOPPOSED MTN & UNOPPOSED MTN FOR LEAVE TO FILE SECOND AMENDED COMPLAINT -3- DM_US:21372470_2 HOWREY LLP causes of action. On July 29, 2008, Atrua consented to the filing of the Second Amended Complaint. Thus, there has been no undue delay. See Bowles v. Reade, 198 F.3d 752, 757 (9th Cir. 1999). Second, AuthenTec has not acted in bad faith because its unfair competition claims are not brought to create delay or for any other improper purpose. See Santana Row Hotel Partners, LP v. Zurich America Insurance Company, et al., 2006 U.S. Dist. LEXIS 67509 (N.D. Cal. June 20, 2006). Instead, AuthenTec seeks to add new causes of action based on tort claims against Atrua. See Union Pacific R. Co. v. Nevada Power Co., 950 F.2d 1429, 1432 (9th Cir. 1991) (holding that amendments seeking to add claims are to be granted more freely than amendments adding parties). Third, Atrua will not be prejudiced by the amendment. Of the grounds for denying leave to amend, “prejudice to the opposing party is the most important factor.” Jackson v. Bank of Hawaii, 902 F.2d 1385, 1387 (9th Cir. 1990). The party opposing leave to amend bears the burden of showing prejudice. DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 187 (9th Cir. 1987). Here, Atrua has consented to the amendment and thus, there is and can be no allegation of prejudice.2 Finally, AuthenTec’s tort claims are not futile. An amendment may be futile where a plaintiff can prove no set of facts that would constitute a valid claim. See Miller v. Rykoff-Sexton, Inc., 845 F.2d 209, 214 (9th Cir. 1988). Here, AuthenTec’s tort claims are not futile. Atrua has made statements on its website and in its marketing materials about Atrua’s products, AuthenTec, and AuthenTec’s products that falsely and misleadingly describe or represent Atrua’s products, AuthenTec, and AuthenTec’s products. AuthenTec asserts that such statements were made with the intent to deceive and mislead customers or potential customers of AuthenTec’s products and have damaged AuthenTec’s business. 2 In this case, discovery has just begun; the parties have served first sets of written discovery requests, but the responses are not due yet. Thus, Atrua is free to seek discovery on these claims in parallel with the other claims in the case. Further, the mere fact that Atrua will have to defend against additional causes of action is not a sufficient basis to argue that it will be prejudiced by the amendment. See Genentech, Inc. v. Abbott Labs., 127 F.R.D. 529, 531 (N.D. Cal. 1989) (holding that additional work does not constitute grounds for denying leave to amend). Case 3:08-cv-01423-PJH Document 35 Filed 07/30/2008 Page 5 of 6 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. C 08-1423 PJH AUTHENTEC’S NOTICE OF UNOPPOSED MTN & UNOPPOSED MTN FOR LEAVE TO FILE SECOND AMENDED COMPLAINT -4- DM_US:21372470_2 HOWREY LLP IV. CONCLUSION For the foregoing reasons, AuthenTec respectfully requests that the Court enter its Second Amended Complaint because Atrua consents to the amendment, and it is not untimely, is not brought in bad faith, will not prejudice Atrua and is not futile. Dated: July 30, 2008 HOWREY LLP By: /s/ Denise M. De Mory Denise M. De Mory Attorneys for Plaintiff AUTHENTEC, INC. Case 3:08-cv-01423-PJH Document 35 Filed 07/30/2008 Page 6 of 6 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. C08-01423 PJH SECOND AMENDED COMPLAINT & DEMAND FOR JURY TRIAL DM_US:21358855_1 HOWREY LLP Henry C. Bunsow (SBN 60707) bunsowh@howrey.com Denise M. De Mory (SBN 168076) demoryd@howrey.com HOWREY LLP 525 Market Street, Suite 3600 San Francisco, California 94105 Telephone: (415) 848-4900 Facsimile: (415) 848-4999 Elizabeth Hoult Fontaine (SBN 207557) fontainee@howrey.com HOWREY LLP 4 Park Plaza, Suite 1700 Irvine, California 92614 Telephone: (949) 721-6900 Facsimile: (949) 721-6910 Attorneys for Plaintiff AuthenTec, Inc. UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION AuthenTec, Inc., a Delaware corporation, Plaintiff, vs. Atrua Technologies, Inc., a California corporation, Defendant. Case No. C08-01423 PJH SECOND AMENDED COMPLAINT FOR PATENT INFRINGEMENT, UNFAIR COMPETITION, FALSE ADVERTISING, INTERFERENCE WITH PROSPECTIVE ECONOMIC ADVANTAGE, AND TRADE LIBEL DEMAND FOR JURY TRIAL Plaintiff AuthenTec, Inc. (“AuthenTec”) alleges the following in support of its Second Amended Complaint for Patent Infringement and Demand for Jury Trial (“Second Amended Complaint”) against Defendant Atrua Technologies, Inc. (“Atrua”): PARTIES 1. AuthenTec is a Delaware corporation having a principal place of business at 709 South Harbor City Boulevard, Melbourne, Florida 32901. Case 3:08-cv-01423-PJH Document 35-2 Filed 07/30/2008 Page 1 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. C08-01423 PJH SECOND AMENDED COMPLAINT & DEMAND FOR JURY TRIAL -2- DM_US:21358855_1 HOWREY LLP 2. On information and belief, Atrua is a California corporation having a principal place of business at 1696 Dell Avenue, Campbell, California 95008. JURISDICTION 3. This action arises under violations of federal patent law, the Lanham Act (15 U.S.C. §§ 1051-1127 et seq.), California statutory unfair competition law (Cal. Bus. & Prof. Code §§ 17200 and 17500), and the California common law doctrines of unfair competition, intentional interference with prospective economic advantage, and trade libel. Accordingly, this Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331, 1338, and 1367. This Court has subject matter jurisdiction over the patent claims in this action pursuant to 28 U.S.C. §§ 1331, 1338(a) because this action arises under the patent laws of the United States, including 35 U.S.C. §§ 101, et seq. and 271, et seq. This Court has subject matter jurisdiction over AuthenTec’s declaratory judgment claim under the Federal Declaratory Judgment Act, 28 U.S.C. § 2201, et seq., and 28 U.S.C. § 1338(a). This Court has subject matter jurisdiction over the Lanham Act claims pursuant to 28 U.S.C. § 1331. This Court has jurisdiction over the California state law claims pursuant to 28 U.S.C. §§ 1338 and 1367. 4. This Court has personal jurisdiction over Atrua because AuthenTec is informed and believes that Atrua is incorporated in California and maintains its corporate headquarters in Campbell, California, which is located in this District. As such, Atrua has transacted business in this District, contracted to supply goods or services in this District, and purposefully availed itself of the privileges and benefits of the laws of the State of California. This Court also has jurisdiction over Atrua because it has committed violations of federal patent law, the Lanham Act, and California law during the course of its business in this District. VENUE 5. Venue is proper in this judicial District under 28 U.S.C. §§ 1391(b) and 1400(b) because AuthenTec is informed and believes that a substantial part of the events giving rise to this claim occurred in this District, and Atrua has a regular and established place of business in this District. Case 3:08-cv-01423-PJH Document 35-2 Filed 07/30/2008 Page 2 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. C08-01423 PJH SECOND AMENDED COMPLAINT & DEMAND FOR JURY TRIAL -3- DM_US:21358855_1 HOWREY LLP INTRADISTRICT ASSIGNMENT 6. This action is an Intellectual Property Action that arises in Santa Clara County. Pursuant to Civil L.R. 3-2(c) and (e), this action should be assigned to the San Jose Division. COUNT 1 (Infringement of U.S. Patent No. 5,862,248) 7. Paragraphs 1 through 6 of the Second Amended Complaint set forth above are incorporated herein by reference. 8. On January 19, 1999, United States Patent No. 5,862,248 (“the ‘248 Patent”) entitled “Integrated Circuit Device Having an Opening Exposing the Integrated Circuit Die and Related Methods” was duly and legally issued to Matthew M. Salatino, S. James Studebaker, and Nicolaas W. VanVonno. AuthenTec is the owner of all rights and interest in and to the ‘248 Patent by assignment. A true and correct copy of the ‘248 Patent is attached hereto as Exhibit A. 9. Upon information and belief, Atrua has infringed and continues to infringe under 35 U.S.C. § 271 the ‘248 Patent. The infringing acts include, but are not limited to, importing, selling, and offering for sale in the United States biometric products, systems, and devices, including fingerprint sensors, that are covered by one or more claims of the ‘248 Patent, and inducing and contributing to the infringement of such claims. Atrua has been offering and continues to offer for sale such products, systems, and devices without the authorization of AuthenTec. 10. Atrua’s acts of infringement have caused damage to AuthenTec in an amount subject to proof at trial. Under 35 U.S.C. § 284, AuthenTec is entitled to recover from Atrua the damages sustained by AuthenTec as a result of Atrua’s infringement of the ‘248 Patent. Atrua’s infringement of AuthenTec’s exclusive rights under the ‘248 Patent will continue to damage AuthenTec’s business, causing it irreparable harm, for which there is no adequate remedy at law, unless enjoined by this Court under 35 U.S.C. § 283. 11. Upon information and belief, Atrua’s infringement of the ‘248 Patent has been willful and deliberate, and entitles AuthenTec to increased damages under 35 U.S.C. § 284 and attorneys’ fees and costs under 35 U.S.C. § 285. Case 3:08-cv-01423-PJH Document 35-2 Filed 07/30/2008 Page 3 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. C08-01423 PJH SECOND AMENDED COMPLAINT & DEMAND FOR JURY TRIAL -4- DM_US:21358855_1 HOWREY LLP COUNT 2 (Infringement of U.S. Patent No. 6,667,439) 12. Paragraphs 1 through 11 of the Second Amended Complaint set forth above are incorporated herein by reference. 13. On December 23, 2003, United States Patent No. 6,667,439 (“the ‘439 Patent”) entitled “Integrated Circuit Package Including Opening Exposing Portion of an IC” was duly and legally issued to Matthew M. Salatino and Patrick O. Weber. AuthenTec and Hestia Technologies, Inc. are the owners of all rights and interest in and to the ‘439 Patent by assignment. A true and correct copy of the ‘439 Patent is attached hereto as Exhibit B. 14. Upon information and belief, Atrua has infringed and continues to infringe under 35 U.S.C. § 271 the ‘439 Patent. The infringing acts include, but are not limited to, importing, selling, and offering for sale in the United States biometric products, systems, and devices, including fingerprint sensors, that are covered by one or more claims of the ‘439 Patent, and inducing and contributing to the infringement of such claims. Atrua has been offering and continues to offer for sale such products, systems, and devices without the authorization of AuthenTec. 15. Atrua’s acts of infringement have caused damage to AuthenTec in an amount subject to proof at trial. Under 35 U.S.C. § 284, AuthenTec is entitled to recover from Atrua the damages sustained by AuthenTec as a result of Atrua’s infringement of the ‘439 Patent. Atrua’s infringement of AuthenTec’s exclusive rights under the ‘439 Patent will continue to damage AuthenTec’s business, causing it irreparable harm, for which there is no adequate remedy at law, unless enjoined by this Court under 35 U.S.C. § 283. 16. Upon information and belief, Atrua’s infringement of the ‘439 Patent has been willful and deliberate, and entitles AuthenTec to increased damages under 35 U.S.C. § 284 and attorneys’ fees and costs under 35 U.S.C. § 285. Case 3:08-cv-01423-PJH Document 35-2 Filed 07/30/2008 Page 4 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. C08-01423 PJH SECOND AMENDED COMPLAINT & DEMAND FOR JURY TRIAL -5- DM_US:21358855_1 HOWREY LLP COUNT 3 (Infringement of U.S. Patent No. 5,940,526) 17. Paragraphs 1 through 16 of the Second Amended Complaint set forth above are incorporated herein by reference. 18. On August 17, 1999, United States Patent No. 5,940,526 (“the ‘526 Patent”) entitled “Electric Field Fingerprint Sensor Having Enhanced Features and Related Methods” was duly and legally issued to Dale R. Setlak, Nicolaas W. VanVonno, Rex Lowther, and Dave Gebauer. AuthenTec is the owner of all rights and interest in and to the ‘526 Patent by assignment. A true and correct copy of the ‘526 Patent is attached hereto as Exhibit C 19. Upon information and belief, Atrua has infringed and continues to infringe under 35 U.S.C. § 271 the ‘526 Patent. The infringing acts include, but are not limited to, importing, selling, and offering for sale in the United States biometric products, systems, and devices, including fingerprint sensors, that are covered by one or more claims of the ‘526 Patent, and inducing and contributing to the infringement of such claims. Atrua has been offering and continues to offer for sale such products, systems, devices, processes, and methods without the authorization of AuthenTec. 20. Atrua’s acts of infringement have caused damage to AuthenTec in an amount subject to proof at trial. Under 35 U.S.C. § 284, AuthenTec is entitled to recover from Atrua the damages sustained by AuthenTec as a result of Atrua’s infringement of the ‘526 Patent. Atrua’s infringement of AuthenTec’s exclusive rights under the ‘526 Patent will continue to damage AuthenTec’s business, causing it irreparable harm, for which there is no adequate remedy at law, unless enjoined by this Court under 35 U.S.C. § 283. 21. Upon information and belief, Atrua’s infringement of the ‘526 Patent has been willful and deliberate, and entitles AuthenTec to increased damages under 35 U.S.C. § 284 and attorneys’ fees and costs under 35 U.S.C. § 285. Case 3:08-cv-01423-PJH Document 35-2 Filed 07/30/2008 Page 5 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. C08-01423 PJH SECOND AMENDED COMPLAINT & DEMAND FOR JURY TRIAL -6- DM_US:21358855_1 HOWREY LLP COUNT 4 (Infringement of U.S. Patent No. 5,963,679) 22. Paragraphs 1 through 21 of the Second Amended Complaint set forth above are incorporated herein by reference. 23. On October 5, 1999, United States Patent No. 5,963,679 (“the ‘679 Patent”) entitled “Electric Field Fingerprint Sensor Apparatus and Related Methods” was duly and legally issued to Dale R. Setlak. AuthenTec is the owner of all rights and interest in and to the ‘679 Patent by assignment. A true and correct copy of the ‘679 Patent is attached hereto as Exhibit D. 24. Upon information and belief, Atrua has infringed and continues to infringe under 35 U.S.C. § 271 the ‘679 Patent. The infringing acts include, but are not limited to, importing, selling, and offering for sale in the United States biometric products, systems, and devices, including fingerprint sensors, that are covered by one or more claims of the ‘679 Patent, and inducing and contributing to the infringement of such claims. Atrua has been offering and continues to offer for sale such products, systems, and devices without the authorization of AuthenTec. 25. Atrua’s acts of infringement have caused damage to AuthenTec in an amount subject to proof at trial. Under 35 U.S.C. § 284, AuthenTec is entitled to recover from Atrua the damages sustained by AuthenTec as a result of Atrua’s infringement of the ‘679 Patent. Atrua’s infringement of AuthenTec’s exclusive rights under the ‘679 Patent will continue to damage AuthenTec’s business, causing it irreparable harm, for which there is no adequate remedy at law, unless enjoined by this Court under 35 U.S.C. § 283. 26. Upon information and belief, Atrua’s infringement of the ‘679 Patent has been willful and deliberate, and entitles AuthenTec to increased damages under 35 U.S.C. § 284 and attorneys’ fees and costs under 35 U.S.C. § 285. COUNT 5 (Infringement of U.S. Patent No. 6,259,804) 27. Paragraphs 1 through 26 of the Second Amended Complaint set forth above are incorporated herein by reference. Case 3:08-cv-01423-PJH Document 35-2 Filed 07/30/2008 Page 6 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. C08-01423 PJH SECOND AMENDED COMPLAINT & DEMAND FOR JURY TRIAL -7- DM_US:21358855_1 HOWREY LLP 28. On July 10, 2001, United States Patent No. 6,259,804 (“the ‘804 Patent”) entitled “Fingerprint Sensor with Gain Control Features and Associated Methods” was duly and legally issued to Dale R. Setlak, John Cornett, Brian Kilgore, Daryl Williams, and Dave Gebauer. AuthenTec is the owner of all rights and interest in the ‘804 Patent by assignment. A true and correct copy of the ‘804 Patent is attached hereto as Exhibit E. 29. Upon information and belief, Atrua has infringed and continues to infringe under 35 U.S.C. § 271 the ‘804 Patent. The infringing acts include, but are not limited to, importing, selling, and offering for sale in the United States biometric products, systems, and devices, including fingerprint sensors, that are covered by one or more claims of the ‘804 Patent, and inducing and contributing to the infringement of such claims. Atrua has been offering and continues to offer for sale such products, systems, and devices without the authorization of AuthenTec. 30. Atrua’s acts of infringement have caused damage to AuthenTec in an amount subject to proof at trial. Under 35 U.S.C. § 284, AuthenTec is entitled to recover from Atrua the damages sustained by AuthenTec as a result of Atrua’s infringement of the ‘804 Patent. Atrua’s infringement of AuthenTec’s exclusive rights under the ‘804 Patent will continue to damage AuthenTec’s business, causing it irreparable harm, for which there is no adequate remedy at law, unless enjoined by this Court under 35 U.S.C. § 283. 31. Upon information and belief, Atrua’s infringement of the ‘804 Patent has been willful and deliberate, and entitles AuthenTec to increased damages under 35 U.S.C. § 284 and attorneys’ fees and costs under 35 U.S.C. § 285. COUNT 6 (Federal Unfair Competition – Lanham Act § 43(a); 15 U.S.C. § 1125(a)) 32. Paragraphs 1 through 31 of the Second Amended Complaint set forth above are incorporated herein by reference. 33. Atrua’s statements about Atrua’s products, AuthenTec, and AuthenTec’s products, made in connection with Atrua’s goods or services, falsely and misleadingly describes or represents Atrua’s products, AuthenTec, and AuthenTec’s products. These statements include, but are not limited Case 3:08-cv-01423-PJH Document 35-2 Filed 07/30/2008 Page 7 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. C08-01423 PJH SECOND AMENDED COMPLAINT & DEMAND FOR JURY TRIAL -8- DM_US:21358855_1 HOWREY LLP to, that Atrua advertises on its website that its Wings™ Fingerprint sensor products are “Compliant with key relevant industry standards.” The biometrics industry generally relies on National Institute of Standards and Technology (NIST) and American National Standards Institute (ANSI) standards. On information and belief, Atrua’s Wings™ Fingerprint sensor products are not compliant with NIST and ANSI standards. Thus, Atrua’s claims that its slide or swipe sensors comply with relevant industry standards are misleading and likely to deceive members of the consuming public and AuthenTec’s customers or potential customers. 34. Atrua’s false and misleading statements also include, but are not limited to, that Atrua advertises in its “Made-for-Mobile Fingerprint Solutions” materials that its “[p]roven minutia matching method does not degrade or age like pattern matching.” This false and misleading statement implies that AuthenTec’s sensors are less reliable. This is false. In the same “Made-for-Mobile Fingerprint Solutions” materials, Atrua advertises that it is “[t]he leading fingerprint solution for mobile phones.” This statement is false and misleading. Thus, Atrua’s claims that the matching method used by its sensors perform better and that it is the industry leader for fingerprint sensors in mobile phones are false and misleading and likely to deceive members of the consuming public and AuthenTec’s customers or potential customers. 35. Atrua’s false and misleading statements further include, but are not limited to, that Atrua advertises in its “ATW300 Fingerprint Touch Sensor Family Overview” materials that “Authentec Requires $2.56 in Additional BOM Components.” The Bill of Materials identified here for AuthenTec, however, relate to the personal computer platform rather than the mobile device platform. Accordingly, this comparison is false and misleading. Thus, Atrua’s claims that its sensors are less expensive are false and misleading and likely to deceive members of the consuming public and AuthenTec’s customers or potential customers. 36. Atrua’s false and misleading statements about Atrua’s products, AuthenTec, and AuthenTec’s products, made in the course of commercial advertising or promotion, misrepresents the nature, characteristics, and qualities of Atrua’s products and AuthenTec’s products. Case 3:08-cv-01423-PJH Document 35-2 Filed 07/30/2008 Page 8 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. C08-01423 PJH SECOND AMENDED COMPLAINT & DEMAND FOR JURY TRIAL -9- DM_US:21358855_1 HOWREY LLP 37. Atrua makes such false and misleading statements with the specific intent to deceive and mislead customers and potential customers of AuthenTec’s products. 38. On information and belief, Atrua’s false and misleading statements have been placed in interstate commerce, have actually deceived customers, create a likelihood that a substantial segment of customers will be deceived, have substantially damaged AuthenTec, and violate 15 U.S.C. § 1125(a). 39. Atrua’s acts have substantially damaged AuthenTec’s business in an amount to be determined at trial. 40. AuthenTec has been, is now, and will be irreparably injured by Atrua’s acts, and unless enjoined by this Court, AuthenTec will suffer further harm to its name, reputation, and goodwill. This harm constitutes an injury for which AuthenTec has no adequate remedy at law. COUNT 7 (State Unfair Competition – California Business & Professions Code § 17200) 41. Paragraphs 1 through 40 of the Second Amended Complaint set forth above are incorporated herein by reference. 42. Atrua’s unlawful, unfair, and/or fraudulent business acts and practices constitute unfair competition in violation of Section 17200 et seq. of the California Business & Professions Code. 43. Atrua’s statements about Atrua’s products, AuthenTec, and AuthenTec’s products, made in connection with Atrua’s goods or services, falsely and misleadingly describes or represents Atrua’s products, AuthenTec, and AuthenTec’s products. These statements include, but are not limited to, that Atrua advertises on its website that its Wings™ Fingerprint sensor products are “Compliant with key relevant industry standards.” The biometrics industry generally relies on National Institute of Standards and Technology (NIST) and American National Standards Institute (ANSI) standards. On information and belief, Atrua’s Wings™ Fingerprint sensor products are not compliant with NIST and ANSI standards. Thus, Atrua’s claims that its slide or swipe sensors comply with relevant industry standards are misleading and likely to deceive members of the consuming public and AuthenTec’s customers or potential customers. Case 3:08-cv-01423-PJH Document 35-2 Filed 07/30/2008 Page 9 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. C08-01423 PJH SECOND AMENDED COMPLAINT & DEMAND FOR JURY TRIAL -10- DM_US:21358855_1 HOWREY LLP 44. Atrua’s false and misleading statements also include, but are not limited to, that Atrua advertises in its “Made-for-Mobile Fingerprint Solutions” materials that its “[p]roven minutia matching method does not degrade or age like pattern matching.” This false and misleading statement implies that AuthenTec’s sensors are less reliable. This is false. In the same “Made-for-Mobile Fingerprint Solutions” materials, Atrua advertises that it is “[t]he leading fingerprint solution for mobile phones.” This statement is false and misleading. Thus, Atrua’s claims that the matching method used by its sensors perform better and that it is the industry leader for fingerprint sensors in mobile phones are false and misleading and likely to deceive members of the consuming public and AuthenTec’s customers or potential customers. 45. Atrua’s false and misleading statements further include, but are not limited to, that Atrua advertises in its “ATW300 Fingerprint Touch Sensor Family Overview” materials that “Authentec Requires $2.56 in Additional BOM Components.” The Bill of Materials identified here for AuthenTec, however, relate to the personal computer platform rather than the mobile device platform. Accordingly, this comparison is false and misleading. Thus, Atrua’s claims that its sensors are less expensive are false and misleading and likely to deceive members of the consuming public and AuthenTec’s customers or potential customers. 46. On information and belief, as a result of Atrua’s unlawful, unfair, and/or fraudulent business acts and practices, AuthenTec has lost money or property and suffered injury in fact. 47. AuthenTec is entitled to a judgment enjoining and restraining Atrua from engaging in further unfair competition and is further entitled to an award of restitution for Atrua’s unjust enrichment. 48. Atrua’s acts of unfair competition have caused and will continue to cause AuthenTec irreparable harm. The irreparable harm caused by Atrua to AuthenTec cannot be fully remedied by restitution alone. Atrua’s unlawful, unfair, and/or fraudulent business acts and practices will continue unless enjoined by the Court. Case 3:08-cv-01423-PJH Document 35-2 Filed 07/30/2008 Page 10 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. C08-01423 PJH SECOND AMENDED COMPLAINT & DEMAND FOR JURY TRIAL -11- DM_US:21358855_1 HOWREY LLP COUNT 8 (Common Law Unfair Competition) 49. Paragraphs 1 through 48 of the Second Amended Complaint set forth above are incorporated herein by reference. 50. AuthenTec designs, manufactures, and sells fingerprint sensors used in electronic devices such as personal computers and mobile devices. 51. On information and belief, Atrua also designs and makes fingerprint sensors used in electronic devices such as mobile telephones. 52. Atrua’s acts and practices, including making false statements about Atrua’s products, AuthenTec, and AuthenTec’s products, made in connection with Atrua’s goods or services, violate the common law of California. 53. Atrua’s statements about Atrua’s products, AuthenTec, and AuthenTec’s products, made in connection with Atrua’s goods or services, falsely and misleadingly describes or represents Atrua’s products, AuthenTec, and AuthenTec’s products. These statements include, but are not limited to, that Atrua advertises on its website that its Wings™ Fingerprint sensor products are “Compliant with key relevant industry standards.” The biometrics industry generally relies on National Institute of Standards and Technology (NIST) and American National Standards Institute (ANSI) standards. On information and belief, Atrua’s Wings™ Fingerprint sensor products are not compliant with NIST and ANSI standards. Thus, Atrua’s claims that its slide or swipe sensors comply with relevant industry standards are misleading and likely to deceive members of the consuming public and AuthenTec’s customers or potential customers. 54. Atrua’s false and misleading statements also include, but are not limited to, that Atrua advertises in its “Made-for-Mobile Fingerprint Solutions” materials that its “[p]roven minutia matching method does not degrade or age like pattern matching.” This false and misleading statement implies that AuthenTec’s sensors are less reliable. This is false. In the same “Made-for-Mobile Fingerprint Solutions” materials, Atrua advertises that it is “[t]he leading fingerprint solution for mobile phones.” This statement is false and misleading. Thus, Atrua’s claims that the matching Case 3:08-cv-01423-PJH Document 35-2 Filed 07/30/2008 Page 11 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. C08-01423 PJH SECOND AMENDED COMPLAINT & DEMAND FOR JURY TRIAL -12- DM_US:21358855_1 HOWREY LLP method used by its sensors perform better and that it is the industry leader for fingerprint sensors in mobile phones are false and misleading and likely to deceive members of the consuming public and AuthenTec’s customers or potential customers. 55. Atrua’s false and misleading statements further include, but are not limited to, that Atrua advertises in its “ATW300 Fingerprint Touch Sensor Family Overview” materials that “Authentec Requires $2.56 in Additional BOM Components.” The Bill of Materials identified here for AuthenTec, however, relate to the personal computer platform rather than the mobile device platform. Accordingly, this comparison is false and misleading. Thus, Atrua’s claims that its sensors are less expensive are false and misleading and likely to deceive members of the consuming public and AuthenTec’s customers or potential customers. 56. Atrua’s wrongful acts have substantially damaged AuthenTec’s business in an amount to be determined at trial. 57. AuthenTec has been, is now, and will be irreparably injured by Atrua’s acts, and unless enjoined by this Court, AuthenTec will suffer further harm to its name, reputation, and goodwill. This harm constitutes an injury for which AuthenTec has no adequate remedy at law. COUNT 9 (Federal False Advertising – Lanham Act § 43(a); 15 U.S.C. § 1125(a)) 58. Paragraphs 1 through 57 of the Second Amended Complaint set forth above are incorporated herein by reference. 59. Atrua’s statements about Atrua’s products, AuthenTec, and AuthenTec’s products, made in connection with Atrua’s goods or services, falsely and misleadingly describes or represents Atrua’s products, AuthenTec, and AuthenTec’s products. These statements include, but are not limited to, that Atrua advertises on its website that its Wings™ Fingerprint sensor products are “Compliant with key relevant industry standards.” The biometrics industry generally relies on National Institute of Standards and Technology (NIST) and American National Standards Institute (ANSI) standards. On information and belief, Atrua’s Wings™ Fingerprint sensor products are not compliant with NIST and ANSI standards. Thus, Atrua’s claims that its slide or swipe sensors comply with relevant industry Case 3:08-cv-01423-PJH Document 35-2 Filed 07/30/2008 Page 12 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. C08-01423 PJH SECOND AMENDED COMPLAINT & DEMAND FOR JURY TRIAL -13- DM_US:21358855_1 HOWREY LLP standards are misleading and likely to deceive members of the consuming public and AuthenTec’s customers or potential customers. 60. Atrua’s false and misleading statements also include, but are not limited to, that Atrua advertises in its “Made-for-Mobile Fingerprint Solutions” materials that its “[p]roven minutia matching method does not degrade or age like pattern matching.” This false and misleading statement implies that AuthenTec’s sensors are less reliable. This is false. In the same “Made-for-Mobile Fingerprint Solutions” materials, Atrua advertises that it is “[t]he leading fingerprint solution for mobile phones.” This statement is false and misleading. Thus, Atrua’s claims that the matching method used by its sensors perform better and that it is the industry leader for fingerprint sensors in mobile phones are false and misleading and likely to deceive members of the consuming public and AuthenTec’s customers or potential customers. 61. Atrua’s false and misleading statements further include, but are not limited to, that Atrua advertises in its “ATW300 Fingerprint Touch Sensor Family Overview” materials that “Authentec Requires $2.56 in Additional BOM Components.” The Bill of Materials identified here for AuthenTec, however, relate to the personal computer platform rather than the mobile device platform. Accordingly, this comparison is false and misleading. Thus, Atrua’s claims that its sensors are less expensive are false and misleading and likely to deceive members of the consuming public and AuthenTec’s customers or potential customers. 62. Atrua’s false and misleading statements about Atrua’s products, AuthenTec, and AuthenTec’s products, made in the course of commercial advertising or promotion, misrepresents the nature, characteristics, and qualities of Atrua’s products and AuthenTec’s products. 63. Atrua makes such false and misleading statements with the specific intent to deceive and mislead customers and potential customers of AuthenTec’s products. 64. On information and belief, Atrua’s false and misleading statements have been placed in interstate commerce, have actually deceived customers, create a likelihood that a substantial segment of customers will be deceived, have substantially damaged AuthenTec, and violate 15 U.S.C. § 1125(a). Case 3:08-cv-01423-PJH Document 35-2 Filed 07/30/2008 Page 13 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. C08-01423 PJH SECOND AMENDED COMPLAINT & DEMAND FOR JURY TRIAL -14- DM_US:21358855_1 HOWREY LLP 65. Atrua’s acts have substantially damaged AuthenTec’s business in an amount to be determined at trial. 66. AuthenTec has been, is now, and will be irreparably injured by Atrua’s acts, and unless enjoined by this Court, AuthenTec will suffer further harm to its name, reputation, and goodwill. This harm constitutes an injury for which AuthenTec has no adequate remedy at law. COUNT 10 (State False Advertising – California Business & Professions Code § 17500) 67. Paragraphs 1 through 66 of the Complaint set forth above are incorporated herein by reference. 68. Atrua purposefully and intentionally made or disseminated or caused to be made or disseminated to the public unfair, deceptive, untrue, and/or misleading statements and/or advertising about Atrua’s products, AuthenTec, and AuthenTec’s products in violation of Section 17500 et seq. of the California Business & Professions code. 69. Atrua’s statements about Atrua’s products, AuthenTec, and AuthenTec’s products, made in connection with Atrua’s goods or services, falsely and misleadingly describes or represents Atrua’s products, AuthenTec, and AuthenTec’s products. These statements include, but are not limited to, that Atrua advertises on its website that its Wings™ Fingerprint sensor products are “Compliant with key relevant industry standards.” The biometrics industry generally relies on National Institute of Standards and Technology (NIST) and American National Standards Institute (ANSI) standards. On information and belief, Atrua’s Wings™ Fingerprint sensor products are not compliant with NIST and ANSI standards. Thus, Atrua’s claims that its slide or swipe sensors comply with relevant industry standards are misleading and likely to deceive members of the consuming public and AuthenTec’s customers or potential customers. 70. Atrua’s false and misleading statements also include, but are not limited to, that Atrua advertises in its “Made-for-Mobile Fingerprint Solutions” materials that its “[p]roven minutia matching method does not degrade or age like pattern matching.” This false and misleading statement implies that AuthenTec’s sensors are less reliable. This is false. In the same “Made-for-Mobile Case 3:08-cv-01423-PJH Document 35-2 Filed 07/30/2008 Page 14 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. C08-01423 PJH SECOND AMENDED COMPLAINT & DEMAND FOR JURY TRIAL -15- DM_US:21358855_1 HOWREY LLP Fingerprint Solutions” materials, Atrua advertises that it is “[t]he leading fingerprint solution for mobile phones.” This statement is false and misleading. Thus, Atrua’s claims that the matching method used by its sensors perform better and that it is the industry leader for fingerprint sensors in mobile phones are false and misleading and likely to deceive members of the consuming public and AuthenTec’s customers or potential customers. 71. Atrua’s false and misleading statements further include, but are not limited to, that Atrua advertises in its “ATW300 Fingerprint Touch Sensor Family Overview” materials that “Authentec Requires $2.56 in Additional BOM Components.” The Bill of Materials identified here for AuthenTec, however, relate to the personal computer platform rather than the mobile device platform. Accordingly, this comparison is false and misleading. Thus, Atrua’s claims that its sensors are less expensive are false and misleading and likely to deceive members of the consuming public and AuthenTec’s customers or potential customers. 72. In making and disseminating the statements and/or advertisements, Atrua knew or should have known that the statements and/or advertisements were untrue or misleading and were in violation of California Business & Professions code § 17500 et seq. 73. On information and belief, Atrua’s acts have substantially damaged AuthenTec’s business, substantially damaged consumers’ interests, and unjustly enriched Atrua, and will continue to do so unless enjoined by the Court. 74. Atrua’s acts have caused and will continue to cause AuthenTec irreparable harm. AuthenTec has no adequate remedy at law for Atrua’s wrongful conduct. 75. AuthenTec is entitled to a judgment enjoining and restraining Atrua from engaging in further wrongful conduct and is further entitled to an award of restitution for Atrua’s unjust enrichment. COUNT 11 (Intentional Interference with Prospective Economic Advantage) 76. Paragraphs 1 through 75 of the Second Amended Complaint set forth above are incorporated herein by reference. Case 3:08-cv-01423-PJH Document 35-2 Filed 07/30/2008 Page 15 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. C08-01423 PJH SECOND AMENDED COMPLAINT & DEMAND FOR JURY TRIAL -16- DM_US:21358855_1 HOWREY LLP 77. AuthenTec had economic relationships with potential customers that contained the probability of future economic benefit or advantage to AuthenTec. 78. Atrua knew of the existence of these relationships. 79. Atrua made and/or disseminated wrongful, unfair, unlawful, and fraudulent statements about Atrua’s products, AuthenTec, and AuthenTec’s products, designed to interfere with or disrupt these relationships. 80. Atrua intended to interfere with and disrupt these relationships through its wrongful, unfair, unlawful, and fraudulent statements, or had knowledge that its interference or disruption was certain or substantially certain to occur as a result of its actions. 81. On information and belief, Atrua’s actions interfered with or disrupted AuthenTec’s prospective customer relationships and other prospective economic advantages. 82. Atrua’s statements about Atrua’s products, AuthenTec, and AuthenTec’s products, made in connection with Atrua’s goods or services, falsely and misleadingly describes or represents Atrua’s products, AuthenTec, and AuthenTec’s products. These statements include, but are not limited to, that Atrua advertises on its website that its Wings™ Fingerprint sensor products are “Compliant with key relevant industry standards.” The biometrics industry generally relies on National Institute of Standards and Technology (NIST) and American National Standards Institute (ANSI) standards. On information and belief, Atrua’s Wings™ Fingerprint sensor products are not compliant with NIST and ANSI standards. Thus, Atrua’s claims that its slide or swipe sensors comply with relevant industry standards are misleading and likely to deceive members of the consuming public and AuthenTec’s customers or potential customers. 83. Atrua’s false and misleading statements also include, but are not limited to, that Atrua advertises in its “Made-for-Mobile Fingerprint Solutions” materials that its “[p]roven minutia matching method does not degrade or age like pattern matching.” This false and misleading statement implies that AuthenTec’s sensors are less reliable. This is false. In the same “Made-for-Mobile Fingerprint Solutions” materials, Atrua advertises that it is “[t]he leading fingerprint solution for mobile phones.” This statement is false and misleading. Thus, Atrua’s claims that the matching Case 3:08-cv-01423-PJH Document 35-2 Filed 07/30/2008 Page 16 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. C08-01423 PJH SECOND AMENDED COMPLAINT & DEMAND FOR JURY TRIAL -17- DM_US:21358855_1 HOWREY LLP method used by its sensors perform better and that it is the industry leader for fingerprint sensors in mobile phones are false and misleading and likely to deceive members of the consuming public and AuthenTec’s customers or potential customers. 84. Atrua’s false and misleading statements further include, but are not limited to, that Atrua advertises in its “ATW300 Fingerprint Touch Sensor Family Overview” materials that “Authentec Requires $2.56 in Additional BOM Components.” The Bill of Materials identified here for AuthenTec, however, relate to the personal computer platform rather than the mobile device platform. Accordingly, this comparison is false and misleading. Thus, Atrua’s claims that its sensors are less expensive are false and misleading and likely to deceive members of the consuming public and AuthenTec’s customers or potential customers. 85. Atrua’s wrongful actions, designed to interfere with or disrupt AuthenTec’s economic relationships, have substantially damaged AuthenTec’s business in an amount to be determined at trial. 86. Atrua’s interference was and is oppressive, fraudulent, and malicious, and was and is intended to obtain an unfair and improper competitive advantage, warranting an award of punitive damages to AuthenTec. COUNT 12 (Trade Libel and Defamation) 87. Paragraphs 1 through 86 of the Second Amended Complaint set forth above are incorporated herein by reference. 88. AuthenTec designs, manufactures, and sells fingerprint sensors used in electronic devices such as personal computers and mobile devices. 89. On information and belief, Atrua also designs and makes fingerprint sensors used in electronic devices such as mobile telephones. 90. Atrua published, made, and/or disseminated wrongful, unfair, unlawful, and fraudulent statements about Atrua’s products, AuthenTec, and AuthenTec’s products to AuthenTec’s customers, potential customers, and/or potential business partners. Atrua’s statements disparaged and misrepresented the quality and characteristics of AuthenTec’s products. Case 3:08-cv-01423-PJH Document 35-2 Filed 07/30/2008 Page 17 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. C08-01423 PJH SECOND AMENDED COMPLAINT & DEMAND FOR JURY TRIAL -18- DM_US:21358855_1 HOWREY LLP 91. Atrua’s statements about Atrua’s products, AuthenTec, and AuthenTec’s products were false. Atrua intentionally made such statements with the knowledge that they were false or with reckless disregard for their truth or falsity. 92. On information and belief, Atrua’s actions interfered with or disrupted AuthenTec’s relationships with customers, potential customers, and/or potential business partners. 93. Atrua’s false and misleading statements include, but are not limited to, that Atrua advertises in its “Made-for-Mobile Fingerprint Solutions” materials that its “[p]roven minutia matching method does not degrade or age like pattern matching.” This false and misleading statement implies that AuthenTec’s sensors are less reliable. This is false. In the same “Made-for-Mobile Fingerprint Solutions” materials, Atrua advertises that it is “[t]he leading fingerprint solution for mobile phones.” This statement is false and misleading. Thus, Atrua’s claims that the matching method used by its sensors perform better and that it is the industry leader for fingerprint sensors in mobile phones are false and misleading and likely to deceive members of the consuming public and AuthenTec’s customers or potential customers. 94. Atrua’s false and misleading statements further include, but are not limited to, that Atrua advertises in its “ATW300 Fingerprint Touch Sensor Family Overview” materials that “Authentec Requires $2.56 in Additional BOM Components.” The Bill of Materials identified here for AuthenTec, however, relate to the personal computer platform rather than the mobile device platform. Accordingly, this comparison is false and misleading. Thus, Atrua’s claims that its sensors are less expensive are false and misleading and likely to deceive members of the consuming public and AuthenTec’s customers or potential customers. 95. Atrua’s wrongful actions, designed to interfere with or disrupt AuthenTec’s business relationships, have substantially damaged AuthenTec’s business in an amount to be determined at trial. 96. Atrua’s interference was and is oppressive, fraudulent, and malicious, and was and is intended to obtain an unfair and improper competitive advantage, warranting an award of punitive damages to AuthenTec. Case 3:08-cv-01423-PJH Document 35-2 Filed 07/30/2008 Page 18 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. C08-01423 PJH SECOND AMENDED COMPLAINT & DEMAND FOR JURY TRIAL -19- DM_US:21358855_1 HOWREY LLP COUNT 13 (Declaration of Non-Infringement of U.S. Patent No. 7,197,168) 97. Paragraphs 1 through 96 of the Second Amended Complaint set forth above are incorporated herein by reference. 98. Based upon Atrua’s filing of its counterclaims and AuthenTec’s affirmative defenses, an actual controversy has arisen and now exists between the parties as to whether any of AuthenTec’s products infringe any valid and enforceable claim of U.S. Patent No. 7,197,168 (“the ’168 patent”). 99. AuthenTec’s products do not infringe and have never infringed any valid and enforceable claim of the ’168 patent, either literally or under the doctrine of equivalents, nor is AuthenTec actively inducing or contributing to the infringement of the ’168 patent. Therefore, AuthenTec is not liable for any damage purportedly arising from Atrua’s accusation of infringement. 100. AuthenTec desires and requests judicial determination and declaration of the respective rights and duties of the parties based on the disputes recited above. Such a determination and resulting declaration are necessary and appropriate at this time so that the parties may ascertain their respective rights and duties regarding the noninfringement of the ’168 patent. 101. Under the Federal Declaratory Judgment Act, 28 U.S.C. § 2201 et seq., AuthenTec accordingly requests a declaration from the Court that AuthenTec does not infringe any claim of the ’168 patent in any way. COUNT 14 (Declaration of Invalidity of the ’168 patent) 102. Paragraphs 1 through 101 of the Second Amended Complaint set forth above are incorporated herein by reference. 103. The ’168 patent, and each claim thereof, is invalid for failure to comply with the conditions and requirements of patentability set forth in Title 35 of the United States Code, particularly 35 U.S.C. § 101, et seq. 104. The ’168 patent, and each claim thereof, is invalid for failure to comply with the provisions of 35 U.S.C. § 102. Case 3:08-cv-01423-PJH Document 35-2 Filed 07/30/2008 Page 19 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. C08-01423 PJH SECOND AMENDED COMPLAINT & DEMAND FOR JURY TRIAL -20- DM_US:21358855_1 HOWREY LLP 105. The ’168 patent, and each claim thereof, is invalid for failure to comply with the provisions of 35 U.S.C. § 103. 106. The ’168 patent, and each claim thereof, is invalid for failure to comply with the provisions of 35 U.S.C. § 112. 107. AuthenTec desires and requests judicial determination and declaration of the respective rights and duties of the parties based on the disputes recited above. Such a determination and resulting declaration are necessary and appropriate at this time so that the parties may ascertain their respective rights and duties regarding the invalidity of the ’168 patent. 108. Under the Federal Declaratory Judgment Act, 28 U.S.C. § 2201 et seq., AuthenTec accordingly requests a declaration from the Court that the ’168 patent is invalid and unenforceable. PRAYER FOR RELIEF WHEREFORE, AuthenTec respectfully requests that this Court enter judgment against Atrua as follows: a) For judgment that Atrua has infringed and continues to infringe the ‘248 Patent, the ‘439 Patent, ‘526 Patent, the ‘679 Patent, and the ‘804 Patent; b) For preliminary and permanent injunctions under 35 U.S.C. § 283 against Atrua and its directors, officers, employees, agents, servants, subsidiaries, parents, successors, assigns, attorneys, and all persons acting in concert, on behalf of, in joint venture with, or in partnership with Atrua from further infringing acts; c) For damages to be paid by Atrua adequate to compensate AuthenTec for Atrua’s infringement, including interests, costs, and disbursements as the Court may deem appropriate under 35 U.S.C. § 284; d) For judgment finding that Atrua’s infringement was willful and deliberate, entitling AuthenTec to increased damages under 35 U.S.C. § 284; e) For judgment finding this to be an exceptional case, and awarding AuthenTec attorneys’ fees and costs under 35 U.S.C. § 285; Case 3:08-cv-01423-PJH Document 35-2 Filed 07/30/2008 Page 20 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. C08-01423 PJH SECOND AMENDED COMPLAINT & DEMAND FOR JURY TRIAL -21- DM_US:21358855_1 HOWREY LLP f) For judgment requiring that Atrua and its officers, agents, servants, employees, owners, and representatives, and all other persons, firms, or corporations in active concert or participation with it, be enjoined and restrained from making false, misleading, unlawful, unfair, and fraudulent statements about Atrua’s products, AuthenTec, and AuthenTec’s products to AuthenTec’s customers, potential customers, and/or potential business partners; g) For judgment requiring that Atrua and its officers, agents, servants, employees, owners, and representatives, and all other persons, firms, or corporations in active concert or participation with it, be enjoined and restrained from further acts of unfair competition, false advertising, trade libel, and interference with prospective economic advantage; h) For judgment declaring that AuthenTec does not infringe any valid and enforceable claim of the ’168 patent in any way; i) For judgment declaring that each claim of the ’168 patent is invalid; j) For judgment that Atrua is not entitled to any injunctive relief; k) For damages to be paid by Atrua adequate to compensate AuthenTec for Atrua’s unfair competition, trade libel, interference with prospective economic advantage, and Lanham Act violations; l) For restitution and recovery of Atrua’s unjust enrichment; m) For prejudgment interest; n) For exemplary damages as appropriate and permitted by law; o) For reasonable attorneys’ fees and costs as appropriate and permitted by law; and p) For such other and further relief at law and in equity as the Court may deem just and proper. Dated: July 30, 2008 Respectfully submitted, HOWREY LLP By: /s/ Denise M. De Mory Denise M. De Mory Attorneys for Plaintiff AuthenTec, Inc. Case 3:08-cv-01423-PJH Document 35-2 Filed 07/30/2008 Page 21 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. C08 01423 (HRL) SECOND AMENDED COMPLAINT & DEMAND FOR JURY TRIAL -22- DM_US:21358855_1 HOWREY LLP DEMAND FOR JURY TRIAL AuthenTec hereby demands a trial by jury on all issues set forth in its Complaint for Patent Infringement, Unfair Competition, False Advertising, Interference with Prospective Economic Advantage, and Trade Libel pursuant to Fed. R. Civ. P. 38 and Civ. L.R. 3-6. Dated: July 30, 2008 Respectfully submitted, HOWREY LLP By: /s/ Denise M. De Mory Denise M. De Mory Attorneys for Plaintiff Case 3:08-cv-01423-PJH Document 35-2 Filed 07/30/2008 Page 22 of 22 EXHIBIT A Case 3:08-cv-01423-PJH Document 35-3 Filed 07/30/2008 Page 1 of 17 Case 3:08-cv-01423-PJH Document 35-3 Filed 07/30/2008 Page 2 of 17 Case 3:08-cv-01423-PJH Document 35-3 Filed 07/30/2008 Page 3 of 17 Case 3:08-cv-01423-PJH Document 35-3 Filed 07/30/2008 Page 4 of 17 Case 3:08-cv-01423-PJH Document 35-3 Filed 07/30/2008 Page 5 of 17 Case 3:08-cv-01423-PJH Document 35-3 Filed 07/30/2008 Page 6 of 17 Case 3:08-cv-01423-PJH Document 35-3 Filed 07/30/2008 Page 7 of 17 Case 3:08-cv-01423-PJH Document 35-3 Filed 07/30/2008 Page 8 of 17 Case 3:08-cv-01423-PJH Document 35-3 Filed 07/30/2008 Page 9 of 17 Case 3:08-cv-01423-PJH Document 35-3 Filed 07/30/2008 Page 10 of 17 Case 3:08-cv-01423-PJH Document 35-3 Filed 07/30/2008 Page 11 of 17 Case 3:08-cv-01423-PJH Document 35-3 Filed 07/30/2008 Page 12 of 17 Case 3:08-cv-01423-PJH Document 35-3 Filed 07/30/2008 Page 13 of 17 Case 3:08-cv-01423-PJH Document 35-3 Filed 07/30/2008 Page 14 of 17 Case 3:08-cv-01423-PJH Document 35-3 Filed 07/30/2008 Page 15 of 17 Case 3:08-cv-01423-PJH Document 35-3 Filed 07/30/2008 Page 16 of 17 Case 3:08-cv-01423-PJH Document 35-3 Filed 07/30/2008 Page 17 of 17 EXHIBIT B Case 3:08-cv-01423-PJH Document 35-4 Filed 07/30/2008 Page 1 of 14 Case 3:08-cv-01423-PJH Document 35-4 Filed 07/30/2008 Page 2 of 14 Case 3:08-cv-01423-PJH Document 35-4 Filed 07/30/2008 Page 3 of 14 Case 3:08-cv-01423-PJH Document 35-4 Filed 07/30/2008 Page 4 of 14 Case 3:08-cv-01423-PJH Document 35-4 Filed 07/30/2008 Page 5 of 14 Case 3:08-cv-01423-PJH Document 35-4 Filed 07/30/2008 Page 6 of 14 Case 3:08-cv-01423-PJH Document 35-4 Filed 07/30/2008 Page 7 of 14 Case 3:08-cv-01423-PJH Document 35-4 Filed 07/30/2008 Page 8 of 14 Case 3:08-cv-01423-PJH Document 35-4 Filed 07/30/2008 Page 9 of 14 Case 3:08-cv-01423-PJH Document 35-4 Filed 07/30/2008 Page 10 of 14 Case 3:08-cv-01423-PJH Document 35-4 Filed 07/30/2008 Page 11 of 14 Case 3:08-cv-01423-PJH Document 35-4 Filed 07/30/2008 Page 12 of 14 Case 3:08-cv-01423-PJH Document 35-4 Filed 07/30/2008 Page 13 of 14 Case 3:08-cv-01423-PJH Document 35-4 Filed 07/30/2008 Page 14 of 14 EXHIBIT C Case 3:08-cv-01423-PJH Document 35-5 Filed 07/30/2008 Page 1 of 16 Case 3:08-cv-01423-PJH Document 35-5 Filed 07/30/2008 Page 2 of 16 Case 3:08-cv-01423-PJH Document 35-5 Filed 07/30/2008 Page 3 of 16 Case 3:08-cv-01423-PJH Document 35-5 Filed 07/30/2008 Page 4 of 16 Case 3:08-cv-01423-PJH Document 35-5 Filed 07/30/2008 Page 5 of 16 Case 3:08-cv-01423-PJH Document 35-5 Filed 07/30/2008 Page 6 of 16 Case 3:08-cv-01423-PJH Document 35-5 Filed 07/30/2008 Page 7 of 16 Case 3:08-cv-01423-PJH Document 35-5 Filed 07/30/2008 Page 8 of 16 Case 3:08-cv-01423-PJH Document 35-5 Filed 07/30/2008 Page 9 of 16 Case 3:08-cv-01423-PJH Document 35-5 Filed 07/30/2008 Page 10 of 16 Case 3:08-cv-01423-PJH Document 35-5 Filed 07/30/2008 Page 11 of 16 Case 3:08-cv-01423-PJH Document 35-5 Filed 07/30/2008 Page 12 of 16 Case 3:08-cv-01423-PJH Document 35-5 Filed 07/30/2008 Page 13 of 16 Case 3:08-cv-01423-PJH Document 35-5 Filed 07/30/2008 Page 14 of 16 Case 3:08-cv-01423-PJH Document 35-5 Filed 07/30/2008 Page 15 of 16 Case 3:08-cv-01423-PJH Document 35-5 Filed 07/30/2008 Page 16 of 16 EXHIBIT D Case 3:08-cv-01423-PJH Document 35-6 Filed 07/30/2008 Page 1 of 23 Case 3:08-cv-01423-PJH Document 35-6 Filed 07/30/2008 Page 2 of 23 Case 3:08-cv-01423-PJH Document 35-6 Filed 07/30/2008 Page 3 of 23 Case 3:08-cv-01423-PJH Document 35-6 Filed 07/30/2008 Page 4 of 23 Case 3:08-cv-01423-PJH Document 35-6 Filed 07/30/2008 Page 5 of 23 Case 3:08-cv-01423-PJH Document 35-6 Filed 07/30/2008 Page 6 of 23 Case 3:08-cv-01423-PJH Document 35-6 Filed 07/30/2008 Page 7 of 23 Case 3:08-cv-01423-PJH Document 35-6 Filed 07/30/2008 Page 8 of 23 Case 3:08-cv-01423-PJH Document 35-6 Filed 07/30/2008 Page 9 of 23 Case 3:08-cv-01423-PJH Document 35-6 Filed 07/30/2008 Page 10 of 23 Case 3:08-cv-01423-PJH Document 35-6 Filed 07/30/2008 Page 11 of 23 Case 3:08-cv-01423-PJH Document 35-6 Filed 07/30/2008 Page 12 of 23 Case 3:08-cv-01423-PJH Document 35-6 Filed 07/30/2008 Page 13 of 23 Case 3:08-cv-01423-PJH Document 35-6 Filed 07/30/2008 Page 14 of 23 Case 3:08-cv-01423-PJH Document 35-6 Filed 07/30/2008 Page 15 of 23 Case 3:08-cv-01423-PJH Document 35-6 Filed 07/30/2008 Page 16 of 23 Case 3:08-cv-01423-PJH Document 35-6 Filed 07/30/2008 Page 17 of 23 Case 3:08-cv-01423-PJH Document 35-6 Filed 07/30/2008 Page 18 of 23 Case 3:08-cv-01423-PJH Document 35-6 Filed 07/30/2008 Page 19 of 23 Case 3:08-cv-01423-PJH Document 35-6 Filed 07/30/2008 Page 20 of 23 Case 3:08-cv-01423-PJH Document 35-6 Filed 07/30/2008 Page 21 of 23 Case 3:08-cv-01423-PJH Document 35-6 Filed 07/30/2008 Page 22 of 23 Case 3:08-cv-01423-PJH Document 35-6 Filed 07/30/2008 Page 23 of 23 EXHIBIT E Case 3:08-cv-01423-PJH Document 35-7 Filed 07/30/2008 Page 1 of 16 Case 3:08-cv-01423-PJH Document 35-7 Filed 07/30/2008 Page 2 of 16 Case 3:08-cv-01423-PJH Document 35-7 Filed 07/30/2008 Page 3 of 16 Case 3:08-cv-01423-PJH Document 35-7 Filed 07/30/2008 Page 4 of 16 Case 3:08-cv-01423-PJH Document 35-7 Filed 07/30/2008 Page 5 of 16 Case 3:08-cv-01423-PJH Document 35-7 Filed 07/30/2008 Page 6 of 16 Case 3:08-cv-01423-PJH Document 35-7 Filed 07/30/2008 Page 7 of 16 Case 3:08-cv-01423-PJH Document 35-7 Filed 07/30/2008 Page 8 of 16 Case 3:08-cv-01423-PJH Document 35-7 Filed 07/30/2008 Page 9 of 16 Case 3:08-cv-01423-PJH Document 35-7 Filed 07/30/2008 Page 10 of 16 Case 3:08-cv-01423-PJH Document 35-7 Filed 07/30/2008 Page 11 of 16 Case 3:08-cv-01423-PJH Document 35-7 Filed 07/30/2008 Page 12 of 16 Case 3:08-cv-01423-PJH Document 35-7 Filed 07/30/2008 Page 13 of 16 Case 3:08-cv-01423-PJH Document 35-7 Filed 07/30/2008 Page 14 of 16 Case 3:08-cv-01423-PJH Document 35-7 Filed 07/30/2008 Page 15 of 16 Case 3:08-cv-01423-PJH Document 35-7 Filed 07/30/2008 Page 16 of 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. C 08-1423 PJH [PROPOSED] ORDER GRANTING LEAVE TO FILE 2ND AMENDED COMPLAINT DM_US:21373041_1 HOWREY LLP Henry C. Bunsow (SBN 60707) bunsowh@howrey.com Denise M. De Mory (SBN 168076) demoryd@howrey.com HOWREY LLP 525 Market Street, Suite 3600 San Francisco, California 94105 Telephone: (415) 848-4900 Facsimile: (415) 848-4999 Elizabeth Hoult Fontaine (SBN 207557) fontainee@howrey.com HOWREY LLP 4 Park Plaza, Suite 1700 Irvine, California 92614 Telephone: (949) 721-6900 Facsimile: (949) 721-6910 Attorneys for Plaintiff AUTHENTEC, INC. UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION AuthenTec, Inc., a Delaware corporation, Plaintiff, vs. Atrua Technologies, Inc., a California corporation, Defendant. Case No. C 08-1423-PJH [PROPOSED] ORDER GRANTING AUTHENTEC’S UNOPPOSED MOTION FOR LEAVE TO FILE SECOND AMENDED COMPLAINT Judge: Hon. Phyllis J. Hamilton Date: September 3, 2008 Time: 9:00 a.m. Ctrm: Courtroom 3, 17th Floor AND RELATED COUNTERCLAIMS This matter comes before the Court on AuthenTec, Inc.’s Unopposed Motion for Leave to File Second Amended Complaint. The Court, having reviewed and considered the parties’ respective briefing and arguments in this matter and all relevant factual statements therein, hereby GRANTS AuthenTec, Inc. leave to file its Second Amended Complaint (attached as Exhibit 1 to AuthenTec’s Motion for Leave to File Second Amended Complaint). / / / / / / / / / / / / Case 3:08-cv-01423-PJH Document 35-8 Filed 07/30/2008 Page 1 of 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case No. C 08-1423 PJH [PROPOSED] ORDER GRANTING LEAVE TO FILE 2ND AMENDED COMPLAINT -2- DM_US:21373041_1 HOWREY LLP IT IS SO ORDERED. DATED:____________________________ HON. PHYLLIS J. HAMILTON UNITED STATE DISTRICT COURT JUDGE Case 3:08-cv-01423-PJH Document 35-8 Filed 07/30/2008 Page 2 of 2