Sipco, Llc et al v. Streetline, Inc. et al

REPLY BRIEF re MOTION to Dismiss / Defendants' Reply Brief in Support of Their Motion to Dismiss the First Amended Complaint

D. Del.March 21, 2017

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE SIPCO, LLC and IP CO., LLC d/b/a INTUS IQ, Plaintiffs, v. STREETLINE, INC., KAPSCH TRAFFICCOM HOLDING CORP., and KAPSCH TRAFFICCOM U.S. CORP. Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) ) C.A. No. 16-830-RGA DEFENDANTS’ REPLY BRIEF IN SUPPORT OF THEIR MOTION TO DISMISS THE FIRST AMENDED COMPLAINT Of Counsel: Pierre R. Yanney Stephen E. Underwood STROOCK & STROOCK & LAVAN LLP 180 Maiden Lane New York, NY 10038 (212) 806-5400 pyanney@stroock.com sunderwood@stroock.com ROSS ARONSTAM & MORITZ LLP Benjamin J. Schladweiler (#4601) 100 S. West Street, Suite 400 Wilmington, DE 19801 (302) 576-1600 bschladweiler@ramllp.com Counsel for Defendants Streetline, Inc. and Kapsch TrafficCom Holding Corp. Dated: March 21, 2017 Case 1:16-cv-00830-RGA Document 23 Filed 03/21/17 Page 1 of 16 PageID #: 1225 -i- TABLE OF CONTENTS I. INTRODUCTION .................................................................................................................. 1 II. ARGUMENT.......................................................................................................................... 2 The FAC Fails to State a Claim for Direct Infringement Against Any Defendant............. 2A. 1. ‘692 Patent - Claim 1 ..................................................................................................... 2 2. The Other Nine Patents-in-Suit....................................................................................... 4 3. SIPCO Fails to Distinguish the Cases Cited by Defendants........................................... 5 4. SIPCO’s Remaining Direct Infringement Arguments Lack Merit ................................. 7 The FAC Fails to State a Claim Against the Kapsch Defendants....................................... 8B. The FAC Fails to State a Claim for Induced Infringement Against Any Defendant.......... 9C. The FAC Fails to State a Claim for Induced Infringement Against Kapsch .................... 10D. Dismissal With Prejudice Is Proper .................................................................................. 10E. Case 1:16-cv-00830-RGA Document 23 Filed 03/21/17 Page 2 of 16 PageID #: 1226 -ii- TABLE OF AUTHORITIES Page(s) Cases Ashcroft v. Iqbal, 556 U.S. 662 (2009)...................................................................................................................1 Atlas IP, LLC v. Exelon Corp., 189 F. Supp. 3d 768 (N.D. Ill. 2016) .....................................................................................1, 5 CG Tech. Dev., LLC v. FanDuel, Inc., No. 2:16-CV-00801-RCJ-VCF, 2017 WL 58572 (D. Nev. Jan. 4, 2017) .................................7 Chester Residents Concerned For Quality Living v. Seif, 944 F. Supp. 413 (E.D. Pa. 1996) ..............................................................................................3 Collabo Innovations, Inc. v. Omnivision Techs., Inc., No. CV 16-197-SLR-SRF, 2017 WL 374484 (D. Del. Jan. 25, 2017)......................................9 e.Digital Corp. v. iBaby Labs, Inc., No. 15-cv-05790-JST, 2016 WL 4427209 (N.D. Cal. Aug. 22, 2016).................................. 6-7 Gen. Elec. Co. v. Sonosite, Inc., 568 F. Supp. 2d 983 (W.D. Wis. 2008) ...................................................................................10 Global- Tech Appliances, Inc. v. SEB SA., 131 S.Ct. 2060 (2011)................................................................................................................9 Global-Tech LED, LLC v. Every Watt Matters, LLC, No. 15-CV-61933, 2016 WL 6682015 ......................................................................................3 Kearns v. Gen. Motors Corp., 94 F.3d 1553 (Fed. Cir. 1996)....................................................................................................5 Philips v. ASUSTeK Computer Inc., No. 15-1125-GMS, 2016 WL 6246763 (D. Del. Oct. 25, 2016) ...............................................8 Power Integrations, Inc. v. Fairchild Semiconductor Int'l, Inc., 843 F.3d 1315 (Fed. Cir. 2016)................................................................................................10 Raindance Techs., Inc. v. 10X Genomics, Inc., No. 15-152-RGA, 2016 WL 927143 (D. Del. Mar. 4, 2016) ................................................1, 7 Robern, Inc. v. Glasscrafters, Inc., No. CV 16-1815, 2016 WL 3951726 (D.N.J. July 22, 2016)....................................................7 Case 1:16-cv-00830-RGA Document 23 Filed 03/21/17 Page 3 of 16 PageID #: 1227 -iii- Scripps Research Inst. v. Illumina, Inc., No. 16-cv-661 JLS (BGS), 2016 WL 6834024 (S.D. Cal. Nov. 21, 2016) ...........................5, 6 TeleSign Corp. v. Twilio, Inc., No. 16-2106, 2016 WL 4703873 (C.D. Cal. Aug. 3, 2016) ..................................................1, 6 Wright's Well Control Servs., LLC v. Oceaneering Int'l, Inc., No. CV 15-1720, 2017 WL 568781 (E.D. La. Feb. 13, 2017) ..............................................3, 6 Young v. U.S. Bank Nat. Ass'n, No. 3:14CV161-NBB-SAA, 2015 WL 1242046 (N.D. Miss. Mar. 18, 2015) ..........................2 Commonwealth of Pa. ex rel. Zimmerman v. PepsiCo, Inc., 836 F.2d 173 (3d. Cir. 1988)..................................................................................................2, 3 Other Authorities Fed. R. Civ. P. 8(a) ......................................................................................................................7, 8 Case 1:16-cv-00830-RGA Document 23 Filed 03/21/17 Page 4 of 16 PageID #: 1228 -1- I. INTRODUCTION When it comes to the pleading requirements for patent infringement, SIPCO is living in the past. SIPCO repeatedly argues that its complaint only needs to provide “notice” of “what the case is about.” D.I. 20 at 7, 14. That is no longer true. Rather, now that Twombly and Iqbal apply to direct patent infringement, the complaint must “plead[] factual content that allows the court to draw the reasonable inference that the defendant is liable.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (emphases added). As shown in Defendants’ briefs, SIPCO has utterly failed to meet this burden. SIPCO counters that it must have met its burden, because (according to SIPCO) there is “no [case] where a complaint having the type of detailed allegations as in the [FAC] was held insufficient” under Twombly/Iqbal. D.I. 20 at 1. That is not true. In many of the cases cited in Defendants’ Opening Brief, the complaint contained at least as much - and often far more - detail as there is in SIPCO’s FAC. See Exh. A1 at 6-9 (claim chart matching features of accused product to claim elements); Exh. B2 at ¶¶ 63-95 (detailed allegations comparing accused products to claim elements); Exh. C3 at ¶¶ 15-22 (detailed summary of accused product). Yet, in each of these cases, the court found that the complaint did not satisfy Twombly/Iqbal. Thus, it would not be “unprecedented” for a complaint “as detailed” as the FAC to be dismissed. To the contrary, dismissal of the FAC would be entirely in line with what courts around the nation (including this Court) have been doing with patent complaints, post-Form 18. 1 Exhibit A is the Second Amended Complaint in Atlas IP, LLC v. Exelon Corp., 189 F. Supp. 3d 768, 775 (N.D. Ill. 2016), which the court found did not satisfy Twombly/Iqbal. 2 Exhibit B is the complaint in TeleSign Corp. v. Twilio, Inc., No. 16-2106, 2016 WL 4703873, at *4 (C.D. Cal. Aug. 3, 2016), which the court found did not satisfy Twombly/Iqbal. 3 Exhibit C is the First Amended Complaint in Raindance Techs., Inc. v. 10X Genomics, Inc., No. 15-152-RGA, 2016 WL 927143 (D. Del. Mar. 4, 2016), which this Court found did not satisfy Twombly/Iqbal. Case 1:16-cv-00830-RGA Document 23 Filed 03/21/17 Page 5 of 16 PageID #: 1229 -2- II. ARGUMENT The FAC Fails to State a Claim for Direct Infringement Against Any DefendantA. SIPCO argues that Defendants’ motion should be denied, because Defendants have not “identif[ied] any [specific] claimed element that cannot be found within . . . the Amended Complaint.” D.I. 20 at 2. This turns the Twombly/Iqbal framework on its head. Under Twombly/Iqbal, the burden is on the plaintiff to allege sufficient facts to state a plausible claim for relief. See Young v. U.S. Bank Nat. Ass'n, No. 3:14CV161-NBB-SAA, 2015 WL 1242046, at *1 (N.D. Miss. Mar. 18, 2015) (under Twombly/Iqbal, on a properly-filed “motion to dismiss for failure to state a claim . . . the burden rests on the plaintiff to prove her claim should go forward.”) The burden is not on the defendant to try to anticipate, and then negate, any possible set of facts that the plaintiff might conjure to try to save its complaint. Here, Defendants argued (in their Opening Brief) that the FAC fails to state a claim, because it does not show how any of the features of the accused products satisfy any of the claim elements. Once that argument was made, the onus was on SIPCO to identify allegations in the FAC that showed how the elements of at least one claim of each patent are met by the features of the accused products. SIPCO has failed to do so. Thus, the FAC must be dismissed. 1. ‘692 Patent - Claim 1 For nine of the ten patents-in-suit, SIPCO does not even attempt to show how the components of the accused products correspond to the elements of the claims. Rather, SIPCO only attempts to make such a showing for one claim of one patent - claim 1 of the ‘692 Patent. See D.I. 20 at 4-6. Even that attempt fails, for several reasons. First, “it is axiomatic that the complaint may not be amended by the briefs in opposition to a motion to dismiss.” Commonwealth of Pa. ex rel. Zimmerman v. PepsiCo, Inc., 836 F.2d 173, 181 (3d. Cir. 1988). Thus, on a motion to dismiss, courts in this Circuit will “examine the Case 1:16-cv-00830-RGA Document 23 Filed 03/21/17 Page 6 of 16 PageID #: 1230 -3- sufficiency of the plaintiffs' pleadings under their original allegations . . . rather than allowing informal amendment through their response brief.” Chester Residents Concerned For Quality Living v. Seif, 944 F. Supp. 413, 416 (E.D. Pa. 1996) (emphasis added). SIPCO’s brief (at pp. 4-6) is a clear attempt to make such “informal amendments.” Nothing in the FAC made any attempt to tie the accused products to the elements of the claims. SIPCO now attempts to perform this “tying” in its opposition brief. However, “the legal theories set forth in [SIPCO’s] brief are helpful only to the extent that they find support in the allegations set forth in the complaint.” Zimmerman, 836 F.2d at 181. Here, there is no support in the FAC for any comparison between the claim elements and the accused products. Thus, the “legal theories set forth in [SIPCO’s] brief” simply cannot cure the deficiencies in the FAC. SIPCO counters that, allegedly, there is no requirement that the complaint itself include a comparison between the accused product and the claim elements. See D.I. 20 at 13. Rather, SIPCO contends, the complaint only needs to allege the technical details of the accused product, and any “tying” of those details to the claim elements may be done in a brief. Id. That is incorrect. To Defendants’ knowledge, courts that have addressed this issue (post- Form 18) have uniformly held that the complaint itself must plausibly tie the accused product’s features to all the elements of at least one patent claim. See, e.g., Global-Tech LED, LLC v. Every Watt Matters, LLC, No. 15-CV-61933, 2016 WL 6682015, at *3 (complaint itself must “sufficiently tie any specific operation [of the accused device] to a patent claim,” because “Plaintiff may not amend [the] complaint through new allegations raised [in a brief]"); Wright's Well Control Servs., LLC v. Oceaneering Int'l, Inc., No. CV 15-1720, 2017 WL 568781, at *4 (E.D. La. Feb. 13, 2017) (dismissing complaint because it “makes no attempt to relate the factual allegations in its complaint to the specific claims contained in its patents”) (emphases added). Case 1:16-cv-00830-RGA Document 23 Filed 03/21/17 Page 7 of 16 PageID #: 1231 -4- Thus, the portion of SIPCO’s brief that compares claim 1 of the ‘692 patent with the features of the accused products cannot, as a matter of law, cure the deficiencies in its complaint. Even if allegations in a brief could (as a procedural matter) cure deficiencies in a complaint, SIPCO’s allegations would still fail on the merits. At best, SIPCO’s brief identifies certain physical components of Streetline’s product (e.g., “LTC5800 mote” and “LTP5903 manager”) which allegedly correspond to certain physical components (“wireless transmitter,” “gateway”) of the claims. See D.I. 20 at 4-6. However, claim 1 of the ‘692 patent does not simply recite physical components sitting in the ether; rather, it recites components connected together in a certain way, and transmitting/receiving certain information. SIPCO’s brief does not identify anything in the accused products that transmits or receives the required information, and does not cite anything which shows that the components are connected together in the claimed way. Specifically, SIPCO’s brief fails to show anything in the accused products that corresponds to, at least, the highlighted elements of ‘692, claim 1 shown at pp. 1-2 of Exhibit D to this brief.4 As shown in Exhibit D, SIPCO has not identified what, if anything, corresponds to the “select information,” “transmitter identification information,” and “transceiver identification information” in the accused products; has not identified what, if anything “translates the select information,” or what that “translated” information represents; and has not identified which components allegedly transmit and receive these various types of information (as claimed). Thus, even on the merits, SIPCO’s brief fails to cure the deficiencies in the FAC. 2. The Other Nine Patents-in-Suit For the remaining nine patents-in-suit, SIPCO’s brief does not even attempt to tie the elements of any claim to the accused products. Since each patent gives rise to a separate and 4 Exhibit D lists the text of the asserted claims, with bold-type highlighting showing claim elements for which there is no support in the FAC’s description of the accused products. Case 1:16-cv-00830-RGA Document 23 Filed 03/21/17 Page 8 of 16 PageID #: 1232 -5- independent cause of action (see Kearns v. Gen. Motors Corp., 94 F.3d 1553, 1555 (Fed. Cir. 1996)), any showing of infringement as to the ‘692 Patent cannot, as a matter of law, automatically establish infringement of the other patents. Thus, even if SIPCO’s brief had established that the FAC states a claim as to ‘692 claim 1 (which it does not), that would not establish that it states a claim as to the other nine patents. Since SIPCO has made no attempt (in the FAC or its brief) to show that any claim of these nine patents is plausibly infringed, SIPCO has not met its burden under Twombly/Iqbal, and the FAC must be dismissed as to those patents. Moreover, on the merits, the asserted claims of these nine patents contain numerous elements which have no corresponding feature in the accused products (as summarized in the FAC). These include, without limitation, the elements outlined in bold in Exhibit D to this brief. Thus, even on the merits, SIPCO’s FAC clearly fails to state a claim as to these nine patents. 3. SIPCO Fails to Distinguish the Cases Cited by Defendants SIPCO tries to distinguish the cases cited by Defendants, but its efforts miss the mark. First, SIPCO argues that Atlas is inapposite because it involved a “sui generis” situation in which plaintiff’s infringement arguments were internally inconsistent. See D.I. 20 at 11. Even if that is true, the Atlas court still held the plaintiff to the burden of showing, in the complaint, that all elements of an asserted claim were present in the accused product. Indeed, in Atlas, the plaintiff even provided a claim chart, comparing the claim language to the accused product’s features. See Exh. A at 6-9. Yet, the court still found that the complaint did not state a claim, because of the internal inconsistency in plaintiff’s positions. See Atlas, 189 F. Supp. 3d. at 774- 776. Thus, Atlas does not help SIPCO. To the contrary - it demonstrates just how woefully inadequate SIPCO’s FAC is, compared to the (still-inadequate) complaint in Atlas. Second, SIPCO notes that the court in Scripps Research Inst. v. Illumina, Inc., No. 16- cv-661 JLS (BGS), 2016 WL 6834024 (S.D. Cal. Nov. 21, 2016) stated, in dicta, that Twombly Case 1:16-cv-00830-RGA Document 23 Filed 03/21/17 Page 9 of 16 PageID #: 1233 -6- “does not require a patentee to plead with the specificity required in its infringement contentions.” Id. at * 6. Despite that statement, however, the Scripps court still held the plaintiff to the burden of plausibly showing that all elements of a claim were met. Indeed, the Scripps court dismissed the complaint because “Plaintiff does not explain how [the complaint’s] description of Defendant's BeadChip product-particularly the general overview of the bifunctional molecules contained therein-plausibly meets the limitations of . . . Plaintiff's asserted claims.” Id. (emphasis added). Similarly, here, the “general overview” of Streetline’s products set forth in Paragraphs 18-21 of the FAC “does not explain how [Streetline’s product] plausibly meets the limitations” of the claims. Id. Thus, Scripps suggests that SIPCO’s FAC is inadequate, not that it is adequate (as SIPCO asserts). Third, SIPCO asserts that Wright’s Well is inapposite because, in that case, “claimed elements could not be identified in anything pled in the complaint.” D.I. 20 at 12. That does not help SIPCO, however, because SIPCO’s FAC suffers from the exact same deficiency. Fourth, SIPCO asserts that Telesign is inapposite because, in that case, the complaint did not “describ[e] any facts that relate the product to any claim element.” D.I. 20 at 12. Even if that were true, it would not help SIPCO, because SIPCO’s FAC suffers from the exact same deficiency. However, SIPCO’s assertion is not true. The complaint in Telesign did attempt to show, on an element-by-element basis, how each claim element was met in the accused device. See Exh. B at ¶¶ 63-95. Yet, the court still dismissed the complaint under Twombly/Iqbal, because it failed to identify exactly which elements were present in each of the accused products. See Telesign, 2016 WL 4703873 at * 3. Since the Telesign complaint was inadequate, SIPCO’s FAC (which comes nowhere near the same level of detail) is clearly inadequate as well. Fifth, SIPCO asserts that e.Digital Corp. v. iBaby Labs, Inc., No. 15-cv-05790-JST, 2016 Case 1:16-cv-00830-RGA Document 23 Filed 03/21/17 Page 10 of 16 PageID #: 1234 -7- WL 4427209 (N.D. Cal. Aug. 22, 2016) is inapposite because, there, “nothing in the complaint could plausibly correspond to a particular claim limitation.” D.I. 20 at 12. That does not help SIPCO, however, because SIPCO’s FAC suffers from the exact same deficiency (as shown in Exhibit D). Finally, SIPCO points out that this Court rejected the complaint in Raindance because, there, “‘nothing in the complaint could correspond to a [particular] claimed element’ . . . an ‘autocatalytic reaction.’” D.I. 20 at 12-13. However, that does not help SIPCO because, as shown in Exhibit D, SIPCO’s FAC also fails to support many elements of the asserted claims. Indeed, Raindance is instructive because the complaint in that case, like SIPCO’s FAC here, merely provided a general overview of the features of the accused products, without ever comparing those features to the claim elements. See Exh. C at ¶¶ 15-22. Since the Raindance complaint was inadequate, the similarly-structured (and similarly-detailed) SIPCO FAC is also inadequate. Thus, the cited cases support Defendants’ position that the FAC should be dismissed. 4. SIPCO’s Remaining Direct Infringement Arguments Lack Merit SIPCO argues that it is inappropriate to demand a claim element-by-element analysis in the complaint, because that level of detail is for “infringement [contention] claim charts, not the pleadings.” D.I. 20 at 13. Several courts have considered this argument, but rejected it. For instance, in Robern, Inc. v. Glasscrafters, Inc., No. CV 16-1815, 2016 WL 3951726, at *5 (D.N.J. July 22, 2016), the patentee argued that an element-by-element analysis was not needed at the pleading stage, because “the New Jersey Local Patent Rules require more detailed disclosures” in the post-pleading stage. The court rejected that argument5, finding that “New 5 The court reached the same result in CG Tech. Dev., LLC v. FanDuel, Inc., No. 2:16-CV- 00801-RCJ-VCF, 2017 WL 58572, at *3 (D. Nev. Jan. 4, 2017), finding that “[t]he requirement of providing infringement contentions element-by-element under the Local Rules does not permit a more flexible application of Civil Rule 8(a) at the dismissal stage” (emphasis added). Case 1:16-cv-00830-RGA Document 23 Filed 03/21/17 Page 11 of 16 PageID #: 1235 -8- Jersey Local Civil Rules merely supplement, and cannot be inconsistent with, the Federal Rules.” Id. Thus, the court found, the Local Rules “do[] not remove Plaintiff's responsibility to comply in the first instance with the pleading requirements of Rule 8(a),” as set forth in Twombly. Id. Accordingly, the fact that Delaware has enacted a “default standard,” which provides for the exchange of infringement contentions after the close of pleadings, does not change the fact that SIPCO must still satisfy Twombly/Iqbal in its complaint. Finally, SIPCO complains that nothing “short of claim charts could possibly satisfy [the] pleading standard” outlined by Defendants. D.I. 20 at 14. That is not true. For instance, in Philips v. ASUSTeK Computer Inc., No. 15-1125-GMS, 2016 WL 6246763 (D. Del. Oct. 25, 2016), this Court found that a complaint satisfied Twombly/Iqbal, even though it did not include “claim charts.” Rather, the complaint (Exhibit E hereto) gave a detailed narrative, in numbered paragraphs, explaining where each element was met in the accused products. See Exh. E at ¶¶ 39-45. SIPCO could have met its Twombly/Iqbal burden by providing such a narrative. It did not. The FAC Fails to State a Claim Against the Kapsch DefendantsB. SIPCO concedes that the so-called “advertisements” for Streetline on Kapsch’s6 website do not, by themselves, constitute sales, or offers for sale, of the Streetline system. See D.I. 20 at 15. Instead, SIPCO argues that the presence of these “advertisements” on Kapsch’s website is “circumstantial evidence, and raises a reasonable inference” that Kapsch itself is actually selling, or offering to sell, the accused products. Id. This makes no sense. SIPCO cites no authority for this proposition, because there is none. Simply put, the FAC does not allege any facts to support a reasonable inference that Kapsch itself (as distinct from Streetline) is selling, or offering for sale, the accused products. Thus, for this additional reason, 6 SIPCO has not contested the fact, as set forth in footnote 1 of Defendants’ Opening Brief, that Kapsch U.S. no longer exists, having been merged into Kapsch Holding. Thus, the complaint should be dismissed with prejudice as to the Kapsch U.S. entity. Case 1:16-cv-00830-RGA Document 23 Filed 03/21/17 Page 12 of 16 PageID #: 1236 -9- the FAC against the Kapsch Defendants should be dismissed. The FAC Fails to State a Claim for Induced Infringement Against Any DefendantC. The FAC fails to state a claim for induced infringement because, inter alia, it fails to identify the alleged direct infringers. SIPCO argues that the FAC does identify the direct infringers - namely, “governmental entities.” D.I. 20 at 16. That is incorrect. The FAC only refers to “governmental entities” in the preamble of the complaint. When it comes to the actual counts, the FAC does not allege that “governmental entities” have committed direct infringement. Rather, it alleges that unnamed “persons” have done so. D.I. 16, ¶ 26. Since the counts of the complaint specifically use the broader term “persons,” rather than the narrower term “governmental entities,” it is clear that the counts were intended to have the broader meaning. And, as set forth in Kapsch’s opening brief (D.I. 19 at 14-15), merely identifying “persons” is insufficient to state a claim. Thus, the FAC fails to state a claim. SIPCO also argues that it has adequately pled the required mental state, because the complaint itself gave Defendants notice of the Patents-in-Suit. D.I. 20 at 17-18. A complaint may provide notice of the Patents-in-Suit, but only for post-filing infringement.7 Thus, by relying on the complaint to provide notice, SIPCO is limiting its claim to post-filing inducement. Moreover, induced infringement requires both knowledge of the patents, and knowledge (or willful blindness) that the induced acts constitute infringement. See Global- Tech Appliances, Inc. v. SEB SA., 131 S.Ct. 2060, 2068-72 (2011). SIPCO’s FAC does not allege any facts to show that, at any time, Defendants had actual knowledge (or willful blindness) that the induced acts constitute infringement. Thus, even after limiting its claim to post-filing conduct, SIPCO has 7 Collabo Innovations, Inc. v. Omnivision Techs., Inc., No. CV 16-197-SLR-SRF, 2017 WL 374484, at *9 (D. Del. Jan. 25, 2017) (“a plaintiff may plead actual knowledge of the patents-in- suit as of the filing of the initial complaint to state a cause of action limited to the defendant's post-litigation conduct . . . pre-suit knowledge of the patent must be alleged unless the plaintiff limits its cause of action for indirect infringement to post-litigation conduct”) (emphasis added). Case 1:16-cv-00830-RGA Document 23 Filed 03/21/17 Page 13 of 16 PageID #: 1237 -10- still failed to state a claim for induced infringement against any Defendant. The FAC Fails to State a Claim for Induced Infringement Against KapschD. The only alleged “inducing act” which Kapsch has committed, according to the FAC, is providing “advertisements” for Streetline on Kapsch’s website. SIPCO asserts that this is enough to state a claim for inducement, because (allegedly) “[a]ny advertisement of an accused product or method may be sufficient to support an induced infringement pleading.” D.I. 20 at 19. SIPCO distorts the case law. An “advertisement” can only support an induced infringement claim if it “instruct[s] how to use [the] product in [an] infringing manner.” Power Integrations, Inc. v. Fairchild Semiconductor Int'l, Inc., 843 F.3d 1315, 1335 (Fed. Cir. 2016) (emphasis added). If the “advertisement” merely provides a “listing of the [accused product’s] features . . . [which] do not instruct the customer to perform a particular [infringing] method or explain how to do anything,” then the advertisement is not a legally-cognizable “inducing act.” Gen. Elec. Co. v. Sonosite, Inc., 568 F. Supp. 2d 983, 1009 (W.D. Wis. 2008) (emphasis added). Here, the excerpt from Kapsch’s website quoted in the FAC (D.I. 16, ¶¶ 23-24) is simply a “listing of the [Streetline Products’] features,” which “do not instruct the customer to perform a particular [infringing] method or explain how to do anything.” Id. Thus, this website excerpt is not a legally-cognizable inducing act, and SIPCO has failed to state a claim against Kapsch. Dismissal With Prejudice Is ProperE. SIPCO’s only argument against dismissal with prejudice is that, allegedly, it has cured the deficiencies in its original complaint. See D.I. 20 at 20. As shown above, and in Defendants’ opening brief, that is simply not true. Thus, for the same reasons set forth in Defendant’s Opening Brief (D.I. 19 at 3-4, 18-19), the FAC should be dismissed with prejudice. Case 1:16-cv-00830-RGA Document 23 Filed 03/21/17 Page 14 of 16 PageID #: 1238 -11- Respectfully submitted, Of Counsel: Pierre R. Yanney Stephen E. Underwood STROOCK & STROOCK & LAVAN LLP 180 Maiden Lane New York, NY 10038 (212) 806-5400 pyanney@stroock.com sunderwood@stroock.com ROSS ARONSTAM & MORITZ LLP /s/ Benjamin J. Schladweiler Benjamin J. Schladweiler (#4601) 100 S. West Street, Suite 400 Wilmington, DE 19801 (302) 576-1600 bschladweiler@ramllp.com Counsel for Defendants Streetline, Inc. and Kapsch TrafficCom Holding Corp. Dated: March 21, 2017 Case 1:16-cv-00830-RGA Document 23 Filed 03/21/17 Page 15 of 16 PageID #: 1239 CERTIFICATE OF SERVICE I, Benjamin J. Schladweiler, hereby certify that on March 21, 2017, I caused the foregoing Defendants' Reply Brief in Support of Their Motion to Dismiss the First Amended Complaint to be served via electronic mail upon the following counsel of record: George Pazuniak Sean T. O'Kelly Daniel Patrick Murray 901 N. Market Street, Suite 1000 Wilmington, DE 19801 gp@del-iplaw.com sokelly@oeblegal.com dmurray@oeblegal.com Counsel for Plaintiff SIPCO, LLC and IP CO., LLC d/b/a INTUS IQ /s/ Benjamin J. Schladweiler Benjamin J. Schladweiler (#4601) Case 1:16-cv-00830-RGA Document 23 Filed 03/21/17 Page 16 of 16 PageID #: 1240 EXHIBIT A Case 1:16-cv-00830-RGA Document 23-1 Filed 03/21/17 Page 1 of 163 PageID #: 1241 UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS ATLAS IP, LLC ) A Florida Corporation, ) ) Plaintiff, ) ) v. ) No. 1:15-cv-10746 ) Hon. Milton I. Shadur COMMONWEALTH EDISON CO., ) An Illinois Corporation, ) JURY DEMANDED ) Defendants. ) SECOND AMENDED COMPLAINT Plaintiff, Atlas IP, LLC (“Atlas”) hereby alleges by way of complaint against defendant, Commonwealth Edison Company (“ComEd”) as follows: THE PLAINTIFF AND THE PATENTS IN SUIT 1. Atlas is a Florida LLC with a principal place of business at One SE Third Avenue, Suite 1200, Miami, Florida 33131. 2. Atlas is the owner by assignment of U.S. Patent Nos. 5,371,734 (“the ‘734 patent”), entitled Medium access control protocol for wireless network (Exhibit A). 3. The invention of the ‘734 patent, the application for which was filed in January 1993, is directed to “a reliable medium access control (MAC) protocol for wireless, preferably radio frequency (RF), LAN-type network communications among a plurality of resources, such a[s] a battery powered portable computers.” ‘734 Patent, col. 5, lines 10-14. 4. Representative claim 1 of the ‘734 patent reads: A communicator for wirelessly transmitting frames to and receiving frames from a least one additional communicator in accordance with a predetermined medium access control protocol, the communicators which transmit and receive the frames constituting a Group, each communicator including a transmitter and a receiver for transmitting and receiving the frames respectively, the medium access control protocol controlling each 1 Case 1:16-cv-00830-RGA Document 23-1 Filed 03/21/17 Page 2 of 163 PageID #: 1242 2 communicator of the Group to effect predetermined functions comprising: designating one of the communicators of the Group as a hub and the remaining the communicators of the Group as remotes; the hub establishing repeating communication cycles, each communication cycle having intervals during which the hub and the remotes transmit and receive frames; the hub transmitting cycle establishing information to the remotes to establish the communication cycle and a plurality of predeterminable intervals during each communication cycle, the intervals being ones when the hub is allowed to transmit frames to the remotes, when the remotes are allowed to transmit frames to the hub, and when each remote is expected to receive a frame from the hub; the hub transmitting a frame containing the cycle establishing information which establishes both an outbound portion of the communication cycle when the hub transmits frames to the remotes and an inbound portion of the communication cycle when the remotes transmit frames to the hub, the frame containing the cycle establishing information also establishing the predetermined intervals during the outbound and inbound portions of the communication cycle when each remote is allowed to transmit and receive; the remotes powering off their transmitters during times other than those intervals when the remote is allowed to transmit frames to the hub, by using the cycle establishing information transmitted from the hub; and the remotes powering off their receivers during times other than those intervals when the remote is expected to receive a frame from the hub, by using the cycle establishing information transmitted from the hub. THE DEFENDANT AND THE ACCUSED PRODUCTS 5. ComEd is an Illinois Corporation with a principal place of business at 10 South Dearborn Street, Chicago, Illinois 60680-5398. 6. ComEd had, before January 2013, installed among its customer base a network of smart meters supplied by General Electric. Such smart meters communicate to an access point over a neighborhood area network (“NAN”) using a communication module supplied by Silver Spring Networks, Inc. (“Silver Spring”). 2 Case 1:16-cv-00830-RGA Document 23-1 Filed 03/21/17 Page 3 of 163 PageID #: 1243 3 7. The communication between the smart meters and access points over the NAN utilize licensed 902-928 MHz band. 8. The smart meters and access points communicating over the NAN (“Accused Products”) and are designed to form a communication group. 9. The Accused Products each include a transceiver consisting of a transmitter and receiver that transmits and receives packets of data. 10. The Accused Products operate to transmit and receive information about customer natural gas and electric usage. 11. The Accused Products form a group of at least one device operating in remote mode (smart meter), and one device operating in base mode (access point). 12. The access point transmits at least one frame of data to a smart meter that initiates a communication session, and which allows the smart meter to calculate the duration of the communication session and its constituent intervals before the smart meter transmits to the access point during the communication session. 13. During the communication session, the access point and smart meter will transmit and receive packets of data to and from one another consisting of an interrogation message from the access point to the smart meter, and utility usage and machine state data from the smart meter to the access point. 14. During the transmission period, the smart meter expects to receive a packet of data in the form of, inter alia, an acknowledgement. 15. During the reception period, the smart meter sends packets of data to the access point including utility usage and machine state data. 3 Case 1:16-cv-00830-RGA Document 23-1 Filed 03/21/17 Page 4 of 163 PageID #: 1244 4 16. The access point establishes communication cycles with the smart meter that repeats. During each such communication cycle, there are intervals during which the access point and the smart meter transmit and receive frames. 17. A smart meter has the ability to power off its transmitter during times other than those when it is transmitting data. 18. A smart meter has the ability to power off its receiver during times other than those when it is receiving data. 19. Once a smart meter has transmitted data packets to the access point, if its receiver has been powered down, it activates its receiver to await the reception of data from the base. JURISDICTION AND VENUE 20. This Court has subject matter jurisdiction in this matter pursuant to 28 U.S.C. § 1338(a). 21. Venue is proper in this Judicial District pursuant to 28 U.S.C. § 1400(b). 22. This Court has personal jurisdiction over the defendants by virtue of their continuing business operations in this Judicial District. Count I - Infringement of the ‘734 Patent 23. Atlas hereby incorporates by reference paragraphs 1-22. 24. The accused smart meters and access points described herein infringed the claims of the ‘734 patent before the expiration thereof, as shown in the chart attached as Exhibit B. 25. Atlas was injured by the defendants’ infringement of the ‘734 patent. 26. Atlas has not made or sold, or had made or sold for it, any product covered by the claims of the ‘734. Of Atlas’s predecessors in interest in the ownership of the ‘734 patent, only Digital Ocean Inc. made or sold, or had made or sold, products covered by the claims of the ‘734 4 Case 1:16-cv-00830-RGA Document 23-1 Filed 03/21/17 Page 5 of 163 PageID #: 1245 5 patent. Digital Ocean marked all such products with the ‘734 patent number. WHEREFORE, Atlas respectfully requests that this Court award it damages adequate to compensate it for the defendants’ infringement of the patents in suit, and such further relief as the Court deems appropriate. Respectfully submitted, /s/ George C. Summerfield George C. Summerfield STADHEIM & GREAR 400 North Michigan Avenue Suite 2200 Chicago, Illinois 60611 (312) 755-4400 summerfield@stadheimgrear.com COUNSEL FOR PLAINTIFF ATLAS IP, LLC Date: March 24, 2016 5 Case 1:16-cv-00830-RGA Document 23-1 Filed 03/21/17 Page 6 of 163 PageID #: 1246 E xh ib it B At la s I P, L LC v . C om m on we al th E di so n Co ., N o. 1 :1 5- cv -1 07 46 C la im 1 C on st ru ct io n C om E d Sy st em A c om m un ic at or fo r w ire le ss ly tr an sm itt in g fr am es to a nd re ce iv in g fr am es fr om a le as t on e ad di tio na l c om m un ic at or in a cc or da nc e w ith a p re de te rm in ed m ed iu m a cc es s c on tro l pr ot oc ol , t he c om m un ic at or s w hi ch tr an sm it an d re ce iv e th e fr am es c on st itu tin g a G ro up , ea ch c om m un ic at or in cl ud in g a tra ns m itt er an d a re ce iv er fo r t ra ns m itt in g an d re ce iv in g th e fr am es re sp ec tiv el y, th e m ed iu m a cc es s co nt ro l p ro to co l c on tro lli ng e ac h co m m un ic at or o f t he G ro up to e ff ec t pr ed et er m in ed fu nc tio ns c om pr is in g: A “ co m m un ic at or ” is “ a de vi ce c ap ab le of c om m un ic at io n. ” A tla s I P, L LC v . S t. Ju de M ed ., In c. , 2 01 4 U .S . D is t. LE X IS 10 41 09 a t * 16 (S .D . F la . J ul y 30 , 2 01 4) . A “ m ed iu m a cc es s p ro to co l” is a “p ro to co l f or se le ct iv el y ac tiv at in g an d de ac tiv at in g th e tra ns m itt er s a nd re ce iv er s o f t he m ea ns fo r c om m un ic at in g be tw ee n th e re so ur ce s t o sa ve e le ct ric al po w er c on su m ed w hi le st ill p er m itt in g LA N -li ke fu nc tio na lit y. ” A “ fr am e” is “ an o rd er ed g ro up o f b its .” ‘7 34 P at en t a t 1 :4 1- 43 . C om Ed h as e st ab lis he d ne ig hb or ho od a re a ne tw or ks (“ N A N s” ) c om pr is in g an a cc es s po in t [ hu b] a nd G en er al E le ct ric sm ar t m et er s e qu ip pe d w ith a S ilv er S pr in g co m m un ic at io n m od ul e [r em ot es ] t ha t co m m un ic at e w ith o ne a no th er . Th e ac ce ss p oi nt a nd th e sm ar t m et er s co m m un ic at e vi a a w ire le ss p ro to co lo ve r th e 90 2- 92 8 M H z fr eq ue nc y ba nd . Th e w ire le ss p ro to co l s pe ci fie s t he fu nc tio ns o f th e ac ce ss p oi nt a nd th e sm ar t m et er s de sc rib ed b el ow . Th e ac ce ss p oi nt a nd sm ar t m et er s co m m un ic at e us in g, in te r a lia , s ch ed ul ed m es sa ge s [ fr am es ]. de si gn at in g on e of th e co m m un ic at or s o f t he G ro up a s a h ub a nd th e re m ai ni ng th e co m m un ic at or s o f t he G ro up a s r em ot es A “ hu b” is a “ co m m un ic at or th at h as be en d es ig na te d by th e m ed iu m a cc es s co nt ro l p ro to co l t o co nt ro l co m m un ic at io ns to a nd fr om th e re m ot es .” ‘ 73 4 Pa te nt a t 5 :4 2- 66 , 1 0: 33 - 49 , 1 1: 28 -3 0, 1 3: 67 -1 4: 14 , 4 3: 3- 17 , F ig s. 1- 3 , 1 1, 1 8. Th e w ire le ss p ro to co l d es ig na te s t he ac ce ss p oi nt to p er fo rm th e fu nc tio ns o f t he hu b, an d th e sm ar t m et er s t o pe rf or m th e fu nc tio ns o f r em ot es . th e hu b es ta bl is hi ng re pe at in g co m m un ic at io n cy cl es , e ac h co m m un ic at io n A “ co m m un ic at io n cy cl e” is “ a se rie s o f in te rv al s f or o ut bo un d an d in bo un d Th e ac ce ss p oi nt [h ub ]e sta bl ish es a co m m un ic at io n cy cl e by tr an sm itt in g a C as e: 1 :1 5- cv -1 07 46 D oc um en t # : 2 5- 2 F ile d: 0 3/ 24 /1 6 P ag e 1 of 4 P ag eI D # :3 77 6 Case 1:16-cv-00830-RGA Document 23-1 Filed 03/21/17 Page 7 of 163 PageID #: 1247 cy cl e ha vi ng in te rv al s d ur in g w hi ch th e hu b an d th e re m ot es tr an sm it an d re ce iv e fr am es ; co m m un ic at io ns .” ‘ 73 4 Pa te nt a t 5 :4 4- 58 , 7 :1 2- 18 , 1 1: 38 -5 5, 1 3: 12 -3 6, 2 7: 54 - 28 :6 4, 3 2: 19 - 2 2, 3 3: 8- 27 , 3 7: 32 -3 8: 33 , Fi gs . 3 , 1 0- 11 , 1 8- 19 . A n “i nt er va l” o cc ur s w ith in a co m m un ic at io n cy cl e. A tla s I P, L LC v . M ed tro ni c, In c. , 2 01 4 U .S . D is t. LE X IS 14 3 at * 42 (S .D . F la . O ct . 8 , 2 01 4) . re ad re qu es t m es sa ge o r a p ow er st at us ch ec k m es sa ge to a sm ar t m et er [r em ot e] . Th e re ad re qu es t m es sa ge is se nt d ur in g on e in te rv al in th e co m m un ic at io n cy cl e, an d th e sm ar t m et er se nd s a re ad m es sa ge or a p ow er st at us m es sa ge to th e sm ar t m et er in a su bs eq ue nt in te rv al w ith in th e co m m un ic at io n cy cl e. th e hu b tra ns m itt in g cy cl e es ta bl is hi ng in fo rm at io n to th e re m ot es to e st ab lis h th e co m m un ic at io n cy cl e an d a pl ur al ity o f pr ed et er m in ab le in te rv al s d ur in g ea ch co m m un ic at io n cy cl e, th e in te rv al s b ei ng on es w he n th e hu b is a llo w ed to tr an sm it fr am es to th e re m ot es , w he n th e re m ot es a re al lo w ed to tr an sm it fr am es to th e hu b, a nd w he n ea ch re m ot e is e xp ec te d to re ce iv e a fr am e fr om th e hu b; “[ W ]e to da y ho ld th at th e st ar tin g tim e an d du ra tio n of th e cy cl e an d of re m ot e- tra ns m is si on in te rv al s w ith in e ac h cy cl e m us t b e co m m un ic at ed b y th e hu b to th e re m ot es b ef or e th e tim e at w hi ch re m ot es m ay b eg in tr an sm itt in g. ” At la s I P, L LC v . St . J ud e M ed ., In c. , 8 04 F .3 d 11 85 , 1 18 8 (F ed . C ir. 2 01 5) . Th e ac ce ss p oi nt [h ub ]c om m un ic at es th e sta rti ng ti m e an d du ra tio n of th e cy cl e an d co ns tit ue nt in te rv al s t o th e sm ar t m et er [r em ot e] . T he st ar tin g tim e is co m m un ic at ed to th e sm ar t m et er w he n th e ac ce ss p oi nt tr an sm its th e re ad re qu es t m es sa ge o r t he p ow er st at us c he ck m es sa ge to th e sm ar t m et er , i .e ., th e tra ns m is si on is th e sta rti ng ti m e. Th e re ad re qu es t ( a re qu es t f or u til ity us ag e) a nd p ow er st at us c he ck re qu es t m es sa ge s, an d th e re sp on se s t he re to , a re o f fix ed le ng th o r d ur at io n. T he ty pe o f re qu es t m es sa ge tr an sm itt ed b y th e ac ce ss po in t i nf or m s t he sm ar t m et er o f t he du ra tio n of e ac h in te rv al o f t he co m m un ic at io n cy cl e, e. g. , a n in te rv al le ng th su ff ic ie nt to tr an sm it a fix ed le ng th re ad re qu es t f ro m th e ac ce ss p oi nt to th e sm ar t m et er [t he in te rv al w he n th e hu b is al lo we d to tr an sm it fr am es to th e re m ot e C as e: 1 :1 5- cv -1 07 46 D oc um en t # : 2 5- 2 F ile d: 0 3/ 24 /1 6 P ag e 2 of 4 P ag eI D # :3 78 7 Case 1:16-cv-00830-RGA Document 23-1 Filed 03/21/17 Page 8 of 163 PageID #: 1248 an d wh en th e re m ot e is ex pe ct ed to re ce iv e fr am es fr om th e hu b] , a nd a n in te rv al le ng th su ff ic ie nt to tr an sm it a re ad re sp on se fr om th e sm ar t m et er to th e ac ce ss p oi nt [t he in te rv al w he n th e re m ot e is al lo we d to tr an sm it fr am es to th e hu b] . th e hu b tra ns m itt in g a fr am e co nt ai ni ng th e cy cl e es ta bl is hi ng in fo rm at io n w hi ch es ta bl is he s b ot h an o ut bo un d po rti on o f t he co m m un ic at io n cy cl e w he n th e hu b tra ns m its fr am es to th e re m ot es a nd a n in bo un d po rti on o f t he c om m un ic at io n cy cl e w he n th e re m ot es tr an sm it fr am es to th e hu b, th e fr am e co nt ai ni ng th e cy cl e es ta bl is hi ng in fo rm at io n al so e st ab lis hi ng th e pr ed et er m in ed in te rv al s d ur in g th e ou tb ou nd a nd in bo un d po rti on s o f t he co m m un ic at io n cy cl e w he n ea ch re m ot e is al lo w ed to tr an sm it an d re ce iv e; A “ fr am e” is “ an o rd er ed g ro up o f b its .” ‘7 34 P at en t a t 1 :4 1- 43 . A “ co m m un ic at io n cy cl e” is “ a se rie s o f in te rv al s f or o ut bo un d an d in bo un d co m m un ic at io ns .” ‘ 73 4 Pa te nt a t 5 :4 4- 58 , 7 :1 2- 18 , 1 1: 38 -5 5, 1 3: 12 -3 6, 2 7: 54 - 28 :6 4, 3 2: 19 - 2 2, 3 3: 8- 27 , 3 7: 32 -3 8: 33 , Fi gs . 3 , 1 0- 11 , 1 8- 19 . Th e re ad re qu es t a nd p ow er st at us c he ck re qu es t m es sa ge s a re “ an o rd er ed g ro up o f bi ts ,” i.e ., th ey a re fr am es . A s e xp la in ed ab ov e, th es e m es sa ge [f ra m es ] c on ta in in fo rm at io n es ta bl is hi ng th e co m m un ic at io n cy cl e, in cl ud in g th e in te rv al in w hi ch a re ad re qu es t o r p ow er st at us c he ck re qu es t m es sa ge s i s s en t f ro m th e ac ce ss p oi nt [h ub ] t o th e sm ar t m et er [r em ot e] [th e ou tb ou nd p or tio n of th e co m m un ic at io n cy cl e] , a nd th e in te rv al in w hi ch a re ad m es sa ge o r p ow er st at us m es sa ge is se nt fr om th e sm ar t m et er [r em ot e] to th e ac ce ss p oi nt [h ub ] [ th e in bo un d po rti on o f t he c om m un ic at io n cy cl e] th e re m ot es p ow er in g of f t he ir tra ns m itt er s du rin g tim es o th er th an th os e in te rv al s w he n th e re m ot e is a llo w ed to tr an sm it fr am es to th e hu b, b y us in g th e cy cl e es ta bl is hi ng in fo rm at io n tra ns m itt ed fr om th e hu b; a nd “P ow er in g of f” m ea ns “ to d is ab le o r po w er d ow n ci rc ui try .” ‘ 73 4 Pa te nt a t 28 :3 8- 44 . A n “i nt er va l” o cc ur s w ith in a co m m un ic at io n cy cl e. A tla s I P, L LC v . M ed tro ni c, In c. , 2 01 4 U .S . D is t. LE X IS 14 3 at * 42 (S .D . F la . O ct . 8 , 2 01 4) . A sm ar t m et er [r em ot e] h as a ra di o tra ns ce iv er th at u til iz es th e lic en se d 90 2- 92 8 M H z ba nd . Th e sm ar t m et er [r em ot e] c om m un ic at es w ith th e ac ce ss p oi nt [h ub ] u si ng h al f- du pl ex ra di o fr eq ue nc y co m m un ic at io ns . In h al f- du pl ex c om m un ic at io ns , a sm ar t m et er [r em ot e] p ow er s d ow n th e C as e: 1 :1 5- cv -1 07 46 D oc um en t # : 2 5- 2 F ile d: 0 3/ 24 /1 6 P ag e 3 of 4 P ag eI D # :3 79 8 Case 1:16-cv-00830-RGA Document 23-1 Filed 03/21/17 Page 9 of 163 PageID #: 1249 tra ns m itt er c irc ui try o f t he ra di o tra ns ce iv er d ur in g th e in te rv al o f t he co m m un ic at io n cy cl e in w hi ch it is re ce iv in g th e re ad re qu es t a nd p ow er st at us ch ec k re qu es t m es sa ge s [ fr am es ]. In fo rm at io n ab ou t s uc h in te rv al is tra ns m itt ed fr om th e hu b, a s e xp la in ed ab ov e. th e re m ot es p ow er in g of f t he ir re ce iv er s du rin g tim es o th er th an th os e in te rv al s w he n th e re m ot e is e xp ec te d to re ce iv e a fr am e fr om th e hu b, b y us in g th e cy cl e es ta bl is hi ng in fo rm at io n tra ns m itt ed fr om th e hu b. “P ow er in g of f” m ea ns “ to d is ab le o r po w er d ow n ci rc ui try .” ‘ 73 4 Pa te nt a t 28 :3 8- 44 . A n “i nt er va l” o cc ur s w ith in a co m m un ic at io n cy cl e. A tla s I P, L LC v . M ed tro ni c, In c. , 2 01 4 U .S . D is t. LE X IS 14 3 at * 42 (S .D . F la . O ct . 8 , 2 01 4) . Th e sm ar t m et er [r em ot e] c om m un ic at es w ith th e ac ce ss p oi nt [h ub ] u si ng h al f- du pl ex ra di o fr eq ue nc y co m m un ic at io ns . In h al f- du pl ex c om m un ic at io ns , a sm ar t m et er [r em ot e] p ow er s d ow n th e re ce iv er ci rc ui try o f t he ra di o tra ns ce iv er d ur in g th e in te rv al o f t he c om m un ic at io n cy cl e in w hi ch it is tr an sm itt in g th e re ad a nd p ow er st at us c he ck re qu es t m es sa ge s [ fr am es ]. In fo rm at io n ab ou t s uc h in te rv al is tra ns m itt ed fr om th e hu b, a s e xp la in ed ab ov e. C as e: 1 :1 5- cv -1 07 46 D oc um en t # : 2 5- 2 F ile d: 0 3/ 24 /1 6 P ag e 4 of 4 P ag eI D # :3 80 9 Case 1:16-cv-00830-RGA Document 23-1 Filed 03/21/17 Page 10 of 163 PageID #: 1250 EXHIBIT B Case 1:16-cv-00830-RGA Document 23-1 Filed 03/21/17 Page 11 of 163 PageID #: 1251 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 1 COMPLAINT FOR PATENT INFRINGEMENT UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA TELESIGN CORPORATION, PLAINTIFF, v. TWILIO, INC., DEFENDANT. ) ) ) ) ) ) ) ) ) Case No. _____________ COMPLAINT FOR PATENT INFRINGEMENT JURY TRIAL DEMANDED ) Plaintiff TeleSign Corporation brings this Complaint for patent infringement against Defendant Twilio, Inc. as follows:1 1 Citations to Exhibits that refer to URLs are to true and accurate copies of those URLs as of the date visited. Headings are included for readability; the allegations under any given heading are not intended to relate solely to that heading and vice versa. All allegations may be applicable to any Section, Count, or request. Tony M. Diab (SBN 277343) (tdiab@shb.com) SHOOK, HARDY & BACON L.L.P. Jamboree Center 5 Park Plaza, Suite 1600 Irvine, California 92614 Telephone: 949.475.1500 Facsimile: 949.475.0016 Attorneys for Plaintiff TELESIGN CORPORATION Case 2:16-cv-02106-PSG-SS Document 1 Filed 03/28/16 Page 1 of 43 Page ID #:1Case 1:16-cv-00830-RGA Document 23-1 Filed 03/21/17 Page 12 of 16 PageID #: 1252 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 2 COMPLAINT FOR PATENT INFRINGEMENT I. Introduction and Parties 1. Plaintiff TeleSign is a California corporation, duly authorized to do business in the State of California, with its principal place of business in Marina Del Rey, California. 2. TeleSign is an industry leader in Internet security and user authentication. TeleSign is one of the fastest-growing technology companies in North America, sells to some of the top websites in the world, and is a market leader in two-step- verification technology. 3. TeleSign helps its customers secure billions of end-user accounts worldwide and prevent registration fraud. 4. The technology offered by TeleSign gives businesses the ability to connect a unique identity with every account to verify new registrations and authenticate users. TeleSign helps businesses detect suspicious users and better protect their existing user base from account compromise. TeleSign is trusted by some of the world’s largest companies to help prevent fraudulent accounts and stop account takeovers. 5. As explained herein, Twilio has harmed TeleSign while benefiting from making, selling, offering to sell, and/or using TeleSign’s patented technologies, and inducing others to infringe TeleSign’s patent rights without TeleSign’s permission. 6. On information and belief, Defendant Twilio is a Delaware corporation with its principal place of business in San Francisco, California. Twilio maintains its principal place of business at 645 Harrison Street, San Francisco, California 94107 and can be served at 548 Market Street #14510, San Francisco, California 94104. 7. Twilio is reportedly part of the so-called “unicorn club” of companies that are valued at over $1 billion. See Exhibit 1.2 2 http://www.forbes.com/sites/alexkonrad/2015/05/04/twilio-joins-unicorn-ranks/#205dd3907bf1 (last accessed March 26, 2016). Case 2:16-cv-02106-PSG-SS Document 1 Filed 03/28/16 Page 2 of 43 Page ID #:2Case 1:16-cv-00830-RGA Document 23-1 Filed 03/21/17 Page 13 of 16 PageID #: 1 53 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 3 COMPLAINT FOR PATENT INFRINGEMENT II. TeleSign I 8. TeleSign has asserted three patents against Twilio (Patent Nos. 7,945,034; 8,462,920 and 8,687,038), in Case No. 2:15-cv-03240-PSG-SS (“TeleSign I”), which was filed in this Court on April 30, 2015 and assigned to the Honorable Phillip Gutierrez. III. Jurisdiction and Venue 9. This is an action for patent infringement arising under the patent laws of the United States, 35 U.S.C. § 1 et seq., including §§ 271 and 281. Thus, this Court has original jurisdiction under 28 U.S.C. § 1338(a). 10. Further, because the United States Patent No. 9,300,792 issued just after 12:00 AM ET on March 29, 2016, this Court has subject-matter jurisdiction.3 11. Twilio is subject to personal jurisdiction in this district. On information and belief, Twilio is responsible for acts of infringement occurring in the Central District of California (as, for example) alleged in this Complaint, has delivered or caused to be delivered infringing products or services in the Central District of California, has induced persons in this district to infringe TeleSign’s patents, is doing business in this district, recruits personnel from this district, employs employees from this district, seeks to employ persons from this district, advertises and markets its products and services in this district, seeks to sell its products and services to residents of this district (including via its website at www.twilio.com), hosts seminars or shows in this district, and did not contest personal jurisdiction in TeleSign I. 12. Venue is proper in this Court under 28 U.S.C. §§ 1400(b), 1391(b) and 1391(c). 3 See, e.g., Cerro Wire Inc. v. Southwire Co., 777 F. Supp. 2d 1334, 1337 (N.D. Ga. 2011) (“Considering the arguments presented by both parties, the Court is persuaded that Cerro's approach [applying “absolute time”] is correct and holds that the ’024 Patent was issued just after 12:00 a.m. EDT on July 6, 2010, and thus Cerro’s Complaint was filed after the Patent issued. Therefore, the Court has subject matter jurisdiction over this declaratory judgment action. Further, the Court finds that this action is the first-filed case regarding the parties’ dispute over the ’024 Patent.”). Case 2:16-cv-02106-PSG-SS Document 1 Filed 03/28/16 Page 3 of 43 Page ID #:3Case 1:16-cv-00830-RGA Document 23-1 Filed 03/21/17 Page 14 of 16 PageID #: 1254 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 4 COMPLAINT FOR PATENT INFRINGEMENT 13. At least because Twilio is subject to personal jurisdiction in this district, it is deemed to be a resident of this district; thus, venue is proper in this Court under 28 U.S.C. §§ 1400(b), 1391(b) and 1391(c). 14. Moreover, TeleSign is headquartered in the Central District of California, where the harm from Twilio’s infringement has been and is being felt. 15. In TeleSign I, Twilio moved to transfer the case, but this Court found that venue was proper. See TeleSign I, ECF No. 75, pp. 4-7 (Order Denying Defendant’s Motions to Dismiss). IV. U.S. Patent No. 9,300,792 16. United States Patent No. 9,300,792 (the “’792 Patent,” “Asserted Patent”) is entitled “Registration, Verification and Notification System.” 17. Just after 12:00 AM ET on March 29, 2016, the ’792 Patent issued from U.S. Patent Application Serial No. 14/678,815 (the ’815 Application), which had published as United States Publ. No. 2015/0215889 (the ’889 Publication) on July 30, 2015. 18. A copy of the Issue Notification for the ’792 Patent is attached as Exhibit 2. 19. A copy of United States Publ. No. 2015/0215889 is attached as Exhibit 3. 20. TeleSign owns the right, title, and interest in the ’815 Application, the ’889 Publication, and the ’792 Patent. 21. Each claim of the ’792 Patent is presumed valid and enforceable. 22. Each claim of the ’792 Patent is valid and enforceable. 23. U.S. Patent Nos. 8,462,920 and 8,687,038 (asserted in TeleSign I) are referred to herein as “Parent Patents” to the ’792 Patent. 24. In TeleSign 1, Twilio moved on the pleadings to find the Parent Patents invalid under 35 U.S.C. § 101 as purportedly directed to patent-ineligible subject matter. This Court denied that motion, finding that at least claim-construction was necessary. TeleSign I, ECF No. 123. TeleSign disclosed a copy of Twilio’s Section 101 motion to the Patent Office before it granted that ’792 Patent. The Patent Office considered Case 2:16-cv-02106-PSG-SS Document 1 Filed 03/28/16 Page 4 of 43 Page ID #:4Case 1:16-cv-00830-RGA Document 23-1 Filed 03/21/17 Page 15 of 16 PageID #: 1255 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 5 COMPLAINT FOR PATENT INFRINGEMENT Twilio’s Section 101 motion (Exhibit 4), but still allowed the Application (Exhibit 5) and granted the ’792 Patent. 25. The Patent Office granted the ’792 Patent well after the Supreme Court decided Alice on June 19, 2014. Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014). 26. The claims of the ’792 Patent do not recite a mathematical algorithm. 27. The claims of the ’792 Patent do not recite a fundamental economic or longstanding commercial practice. 28. In the 2005 or 2006 timeframe, the state of the art was such that performing the steps recited in the claims of the ’792 Patent was not conventional or routine. For example, it was not routine to receive a user’s telephone number via a computing interface, send a verification code via SMS (short message service) to the user, receive a submitted verification via the computing interface, verify the telephone if the submitted verification code was the same as the communicated verification code, complete a registration based on the received information and the verified telephone number, maintain a record of notification events associated with actions that require acknowledgement by a user, transmit a message to the telephone number upon receiving an indication of an occurrence of an established notification event, and receiving from the user an acknowledgement of an action associated with the established notification event. 29. In the 2005 or 2006 timeframe, one of ordinary skill in the art would not have known to receive a user’s telephone number via a computing interface, send a verification code via SMS (short message service) to the user, receive a submitted verification via the computing interface, verify the telephone if the submitted verification code was the same as the communicated verification code, complete a registration based on the received information and the verified telephone number, maintain a record of notification events associated with actions that require Case 2:16-cv-02106-PSG-SS Document 1 Filed 03/28/16 Page 5 of 43 Page ID #:5Case 1:16-cv-00830-RGA Document 23-1 Filed 03/21/17 Page 16 of 16 PageID #: 1256 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 6 COMPLAINT FOR PATENT INFRINGEMENT acknowledgement by a user, transmit a message to the telephone number upon receiving an indication of an occurrence of an established notification event, and receiving from the user an acknowledgment of an action associated with the established notification event. 30. The recited implementation by a computing system is integral to the claimed invention. 31. The claimed solution in the ’792 Patent is necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer networks. 32. Adhering to the routine, conventional functioning of the prior art would foster problems that the ’792 Patent prevents. 33. The ’792 Patent does not broadly and generically claim ‘use of the Internet’ to perform an abstract business practice. V. TeleSign and Twilio are Competitors. 34. Twilio offers technology that is similar to TeleSign’s technology. 35. For example, TeleSign offers two-factor authentication technology (see Exhibit 6) as so too does Twilio (see Exhibit 74). TeleSign offers technology to prevent fraudulent website registrations (see Exhibit 85) as does Twilio (see Exhibit 96). 36. Twilio and TeleSign directly compete for customers and potential customers. For example, in 2015, Twilio began increasing publicity of its phone verification services in direct competition with TeleSign. See TeleSign I, ECF No. 24-12, ¶ 28. 37. TeleSign and Twilio market their products using the same channels. Id., ¶ 29. 38. TeleSign and Twilio regularly meet or interact with the same customers and potential customers on sales calls and during in-person meetings. Id. 4 https://www.twilio.com/authy (last accessed March 16, 2016). 5 https://www.telesign.com/products/phone-id/ (last accessed March 24, 2016). 6 https://www.twilio.com/docs/tutorials/walkthrough/account-verification/ruby/rails (last accessed March 27, 2016). Case 2:16-cv-02106-PSG-SS Document 1 Filed 03/28/16 Page 6 of 43 Page ID #:6Case 1:16-cv-00830-RGA Document 23-1 Filed 03/21/17 Page 17 of 16 PageID #: 1257 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 7 COMPLAINT FOR PATENT INFRINGEMENT 39. Actual or potential customer(s) have considered and/or are considering using TeleSign or Twilio to provide multiple solutions. Id., ¶ 36. 40. Twilio has told customer(s) or potential customer(s) it was developing technology intended to offer the same features as TeleSign’s technology. Id., ¶ 31. 41. Customer(s) or potential customer(s) have compared prices of TeleSign’s technology to prices of Twilio’s technology. Id., ¶¶ 42-43. 42. TeleSign has suffered price erosion, lost customers, lost goodwill and other harm due to Twilio’s competition and infringement of one or more of TeleSign’s patented technologies. 43. Media reports and third parties consider Twilio and TeleSign competitors and providers of similar technologies, such as SMS technology (see Exhibit 107) and 2FA technology (see Exhibit 118). 44. Customers and potential customers consider Twilio and TeleSign competitors. See Exhibit 39 at pp. 334-335.9 45. On information and belief, Twilio has developed and or implemented plans to take customers and/or market share from TeleSign. 46. TeleSign sought a preliminary injunction in TeleSign I due to harm caused by Twilio’s infringement of U.S. Patent No. 7,945,034. See TeleSign I, ECF No. 23. VI. Twilio’s Prior Knowledge of the ’792 Patent and its related Application. 47. Twilio had received a copy of TeleSign’s original complaint in TeleSign I on or about April 30, 2015. TeleSign I, ECF No. 79 at ¶ 29. 48. On information and belief, Twilio had actual notice of the ’815 application on or near April 30, 2015, when it was served with the Complaint in TeleSign I, particularly given that the Parent Applications and the ’792 Patent share a 7 https://www.quora.com/What-are-the-product-comparisons-of-global-SMS-vendors-such-as- Nexmo-Twilio-and-TeleSign (last accessed March 15, 2016). 8 https://developer.salesforce.com/page/SMS-2FA (last accessed March 15, 2016). 9 https://news.ycombinator.com/item?id=9299005 (last accessed March 28, 2016). Case 2:16-cv-02106-PSG-SS Document 1 Filed 03/28/16 Page 7 of 43 Page ID #:7Case 1:16-cv-00830-RGA Document 23-1 Filed 03/21/17 Page 18 of 16 PageID #: 1258 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 8 COMPLAINT FOR PATENT INFRINGEMENT substantially similar specification and are related by parent/child relationships. 49. On information and belief, Twilio had actual notice of the ’889 Publication as of its publication date of July 30, 2015. 50. On information and belief, Twilio was aware of TeleSign’s ’815 application as a result of its diligence and investigation in TeleSign I. 51. On information and belief, Twilio learned of TeleSign’s patent family regarding the patents asserted in TeleSign I, which included the Parent Patents. In learning of the TeleSign’s patent family, Twilio would have learned and had actual notice of the ’815 application. 52. On information and belief, Twilio’s diligence in TeleSign I would have provided Twilio with actual notice of TeleSign’s ’889 Publication as of its publication date. 53. Twilio received a copy of the pending, published claims when TeleSign filed them as exhibits on February 22, 2016, in opposition to a motion filed by Twilio in TeleSign I. See Exhibit 12. 54. TeleSign also filed documents in TeleSign I, received by Twilio and submitted to the Patent and Trademark Office, which show that TeleSign’s ’792 Patent was granted after the Examiner considered Twilio’s Motion for Judgment on the Pleadings and Twilio’s inter partes review requests for the Parent Patents, and the related prior art. See Exhibits 5, 13, and 14. 55. TeleSign provided the complete prosecution history filings for the ’815 application to Twilio on March 8, 2016, including the pending claims and the Notice of Publication from the Patent and Trademark Office stating that the application was published as Publ. No. 2015/0215889. See Exhibits 12 and 14. 56. The claims of the ’792 Patent did not change during prosecution of the ’815 Application. 57. The claims in Publ. No. 2015/0215889 (Exhibit 3), published on July 30, 2015, Case 2:16-cv-02106-PSG-SS Document 1 Filed 03/28/16 Page 8 of 43 Page ID #:8Case 1:16-cv-00830-RGA Document 23-1 Filed 03/21/17 Page 19 of 16 PageID #: 1259 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 9 COMPLAINT FOR PATENT INFRINGEMENT are identical to the issued claims in Patent No. 9,300,792 (see Exhibits 2 and 12). 58. In summary, after Twilio received the TeleSign I complaint, on information an belief, it would have analyzed the patent families of Parent Patents in TeleSign I, learned of the ’815 Application and the ’889 Publication, and monitored the Application’s examination process by the Patent Office, including the Notices of Allowance (e.g., Exhibit 5) that would have confirmed that the claims allowed were the same as the claims as filed, and the Issue Notification (Exhibit 2), which would have given notice to Twilio that ’792 Patent’s was going to issue on March 29, 2016. 59. Finally, by and through service of this Complaint or communicating a copy of it to Twilio, Twilio received actual notice. 60. Thus, Twilio has and has had actual notice of the ’815 Application, the ’889 Publication, and the ’792 Patent, including before the filing of this Complaint. VII. COUNT I - Twilio Directly Infringes the ’792 Patent. 61. The paragraphs above are incorporated by reference herein. 62. On information and belief, Defendant Twilio has directly infringed the ’792 Patent and, unless enjoined, will continue to do so, by making, using, offering for sale, selling and/or importing products and services claimed by the ’792 Patent. 63. On information and belief, Twilio directly infringes the claims of the ’792 Patent by making, using, selling, offering to sell and/or importing at least the following Twilio products or services (alone or in combination with each other): Authy, Twilio’s “2FA” technology, multi-factor authentication or “MFA,” “2FA powered by SMS,” “Authy OneTouch,” “Authy 2FA App,” “Authy OneCode,” “Authy SoftToken,” “Authy Phone Intelligence,” “Authy 2FA,” “Authy Authentication,” “Authy Verification,” “Authy Mobile and Desktop,” and “Authy REST API,” the Twilio.com account portal, “Twilio SMS,” “Twilio Voice,” the Twilio API, and registration technology (hereafter collectively referred to as the “Accused Technologies”). Case 2:16-cv-02106-PSG-SS Document 1 Filed 03/28/16 Page 9 of 43 Page ID #:9Case 1:16-cv-00830-RGA Document 23-1 Filed 03/21/17 Page 20 of 16 PageID #: 1260 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 10 COMPLAINT FOR PATENT INFRINGEMENT 64. On information and belief, Twilio is making, using, selling, offering to sell and/or importing technology similar to the above-mentioned products and services but not known to TeleSign. If that is the case, such related technology is also within the scope of “Accused Technologies.” 65. On information and belief, Twilio makes, uses, sells, offers for sale, and/or imports in the United States the Accused Technologies, including through its website at www.twilio.com (Exhibit 15)10 as indicated by, for example, the “Two-Factor Auth” and “Authy” links/descriptors as shown below: 10 https://www.twilio.com/ (last accessed March 15, 2016). Case 2:16-cv-02106-PSG-SS Document 1 Filed 03/28/16 Page 10 of 43 Page ID #:10Case 1:16-cv-0 83 -RGA Document 23-1 Filed 03/21/17 Page 2 of 16 PageID #: 1261 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 11 COMPLAINT FOR PATENT INFRINGEMENT See Exhibit 15. 66. Claim 1 of the ’792 Patent is directed to a verification and notification method implemented by a computing system, the method comprising: receiving, from a user, information via a computing interface presented to the user as a result of an attempt by the user to access a service, the received information including a telephone number associated with the user; verifying the telephone number by: establishing a short message service (SMS) connection with the user using the received telephone number; communicating a verification code to the user through the SMS connection; receiving, via the computing interface, a submitted verification code that is entered by the user; and verifying the telephone number if the submitted verification code is the same as the communicated verification code; completing a registration of the user based on the received information and verified telephone number, wherein the completed registration enables the user to access the service; maintaining a record of one or more notification events associated with actions that require acknowledgement by the user; Case 2:16-cv-02106-PSG-SS Document 1 Filed 03/28/16 Page 11 of 43 Page ID #:11Case 1:16-cv-0 83 -RGA Document 23-1 Filed 03/21/17 Page 22 of 16 PageID #: 1262 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 12 COMPLAINT FOR PATENT INFRINGEMENT upon receiving an indication of an occurrence of an established notification event, transmitting a message addressed to the verified telephone number indicating the occurrence of the notification event; and receiving, from the user, an acknowledgement of an action associated with the established notification event. 67. Twilio provides verification technology as illustratively shown below: See Exhibit 16.11 68. Twilio explains that phone numbers will be “verified through SMS messaging,” as shown below: 11 https://www.authy.com/product/ (last accessed March 16, 2016). Case 2:16-cv-02106-PSG-SS Document 1 Filed 03/28/16 Page 12 of 43 Page ID #:12Case 1:16-cv-0 83 -RGA Document 23-1 Filed 03/21/17 Page 23 of 16 PageID #: 1263 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 13 COMPLAINT FOR PATENT INFRINGEMENT See Exhibit 17.12 69. Twilio requires subsequent verification processes in connection with the Accused Technologies. For example, Twilio states, “[w]hen changing the phone number you are using for two factor authentication, you will have to…go through the verification process again,” as shown below: See Exhibit 18.13 70. Twilio provides notifications to prevent unauthorized access at logon and/or to prevent fraud relating to a transaction/event, as shown below: 12 https://www.twilio.com/help/faq/twilio-basics/what-happens-when-i-enable-two-factor- authentication (last accessed March 16, 2016). 13 https://www.twilio.com/help/faq/twilio-basics/how-do-i-change-the-phone-number-i-want-to-use- for-two-factor-authentication (last accessed March 16, 2016). Case 2:16-cv-02106-PSG-SS Document 1 Filed 03/28/16 Page 13 of 43 Page ID #:13Case 1:16-cv-0 83 -RGA Document 23-1 Filed 03/21/17 Page 24 of 16 PageID #: 1264 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 14 COMPLAINT FOR PATENT INFRINGEMENT See Exhibit 16. See Exhibit 19.14 71. Twilio provides notifications and states, for example, that a code will be sent to a phone “on every login” or be required “every 30 days,” as shown below: See Exhibit 17. 72. Twilio receives information from a user as claimed, including a telephone number associated with the user. 73. For example, Twilio receives a cellphone number, as shown below: 14 https://docs.authy.com/totp.html (last accessed March 16, 2016). Case 2:16-cv-02106-PSG-SS Document 1 Filed 03/28/16 Page 14 of 43 Page ID #:14Case 1:16-cv-0 83 -RGA Document 23-1 Filed 03/21/17 Page 25 of 16 PageID #: 1265 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 15 COMPLAINT FOR PATENT INFRINGEMENT See Exhibit 20.15 74. In another example, Twilio receives a phone number as a backup for a primary phone, as shown below: See Exhibit 21.16 15 https://www.authy.com/tutorials/ (last accessed March 16, 2016). 16 https://www.authy.com/tutorials/enable-two-step-verification-dropbox/ (last accessed March 16, 2016). Case 2:16-cv-02106-PSG-SS Document 1 Filed 03/28/16 Page 15 of 43 Page ID #:15Case 1:16-cv-0 83 -RGA Document 23-1 Filed 03/21/17 Page 26 of 16 PageID #: 1266 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 16 COMPLAINT FOR PATENT INFRINGEMENT 75. Twilio receives a phone number “to get a user set up,” as shown in another example below: See Exhibit 22.17 76. As still another example, Twilio receives a phone number as shown below: See Exhibit 23.18 77. Twilio verifies the telephone number as claimed, by establishing a short message service (SMS) connection, communicating a verification code, receiving a submitted verification code and verifying the telephone number if the submitted verification code is the same as the communicated verification code. 78. Twilio verifies telephone numbers as claimed, as illustrated in the examples provided above and below. 17 https://www.twilio.com/docs/tutorials/walkthrough/two-factor-authentication/php/laravel (last accessed March 27, 2016). 18 https://www.twilio.com/docs/tutorials/walkthrough/account-verification/python/flask#0 (last accessed March 16, 2016). Case 2:16-cv-02106-PSG-SS Document 1 Filed 03/28/16 Page 16 of 43 Page ID #:16Case 1:16-cv-0 83 -RGA Document 23-1 Filed 03/21/17 Page 27 of 16 PageID #: 12 7 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 17 COMPLAINT FOR PATENT INFRINGEMENT 79. In one example, Twilio “[g]et account verification,” including an SMS option, as shown below: See Exhibit 20. 80. In another example, Twilio states it will “[v]erify your phone,” as shown below: Case 2:16-cv-02106-PSG-SS Document 1 Filed 03/28/16 Page 17 of 43 Page ID #:17Case 1:16-cv-0 83 -RGA Document 23-1 Filed 03/21/17 Page 28 of 16 PageID #: 1268 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 18 COMPLAINT FOR PATENT INFRINGEMENT See Exhibit 24.19 81. Twilio provides an SMS connection as claimed, by, for example, providing for “route connectivity” as shown below: See Exhibit 7. 82. Twilio communicates and receives a code as claimed, for example as shown below and in other examples: See Exhibit 25.20 19 https://www.authy.com/tutorials/enable-2-step-verification-gmail/ (last accessed March 16, 2016). 20 https://www.twilio.com/help/faq/twilio-basics/what-do-i-do-if-i-lose-my-phone-or-cant-sign-in- with-two-factor-authentication-enabled-on-my-account/screenshot_6_26_13_2_08_pm-2 (last accessed March 15, 2016). Case 2:16-cv-02106-PSG-SS Document 1 Filed 03/28/16 Page 18 of 43 Page ID #:18Case 1:16-cv-0 83 -RGA Document 23-1 Filed 03/21/17 Page 29 of 16 PageID #: 1269 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 19 COMPLAINT FOR PATENT INFRINGEMENT See Exhibit 26.21 See Exhibit 27.22 21 https://www.authy.com/product/options/ (last accessed March 16, 2016). 22 https://www.authy.com/tutorials/add-2-factor-authentication-facebook/ (last accessed March 16, 2016). Case 2:16-cv-02106-PSG-SS Document 1 Filed 03/28/16 Page 19 of 43 Page ID #:19Case 1:16-cv-0 83 -RGA Document 23-1 Filed 03/21/17 Page 30 of 16 PageID #: 1270 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 20 COMPLAINT FOR PATENT INFRINGEMENT See Exhibit 21. See Exhibit 9 at p. 112. See Exhibit 28.23 83. Twilio verifies as claimed (e.g,, if the submitted verification code is the same as the communicated verification code). For example, Twilio performs validation as shown below: 23 https://www.twilio.com/docs/tutorials/walkthrough/two-factor-authentication/node/express (last accessed March 27, 2016). Case 2:16-cv-02106-PSG-SS Document 1 Filed 03/28/16 Page 20 of 43 Page ID #:20Case 1:16-cv-0 83 -RGA Document 23-1 Filed 03/21/17 Page 31 of 16 PageID #: 1 71 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 21 COMPLAINT FOR PATENT INFRINGEMENT See Exhibit 9 at p. 116. See Exhibit 28. 84. Twilio completes a registration of the user based on the received information and verified telephone number as claimed. 85. For example, Twilio states “To use our Services, you will be asked to create an account. As part of the account creation process, you’ll be asked to provide your email address, create a password, and verify that you’re a human being by providing a telephone number to which we’ll send you a verification code to enter into the form. Until you apply for an account, your access to our Services will be limited…,” as shown below: Case 2:16-cv-02106-PSG-SS Document 1 Filed 03/28/16 Page 21 of 43 Page ID #:21Case 1:16-cv-0 83 -RGA Document 23-1 Filed 03/21/17 Page 3 of 16 PageID #: 1 72 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 22 COMPLAINT FOR PATENT INFRINGEMENT See Exhibit 29.24 86. In another example, Twilio states “you will have to…go through the verification process again to add a new phone number,” as shown below: See Exhibit 18; see also Exhibit 9. 87. Twilio maintains a record of one or more notification events as claimed. 88. For example, Twilio describes logon, high-value transactions, sensitive data and transactions, “given action[s],” and “different levels” of authentication as shown below: 24 https://www.twilio.com/legal/tos (last accessed March 15, 2016). Case 2:16-cv-02106-PSG-SS Document 1 Filed 03/28/16 Page 22 of 43 Page ID #:22Case 1:16-cv-0 83 -RGA Document 23-1 Filed 03/21/17 Page 33 of 16 PageID #: 1 73 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 23 COMPLAINT FOR PATENT INFRINGEMENT See Exhibit 16. See Exhibit 19. See Exhibit 17. 89. Twilio (or its customers) may also maintain records of events such as when their end users requests products and services. 90. Twilio, upon receiving an indication of an occurrence of an established notification event, transmits a message as claimed. 91. For example, Twilio transmits a message as shown below and as described in other examples herein: Case 2:16-cv-02106-PSG-SS Document 1 Filed 03/28/16 Page 23 of 43 Page ID #:23Case 1:16-cv-0 83 -RGA Document 23-1 Filed 03/21/17 Page 34 of 16 PageID #: 1 74 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 24 COMPLAINT FOR PATENT INFRINGEMENT See Exhibit 26. 92. Twilio receives an acknowledgement from the user as claimed. 93. For example, Twilio describes the verification code or token that a user enters, as shown below: Case 2:16-cv-02106-PSG-SS Document 1 Filed 03/28/16 Page 24 of 43 Page ID #:24Case 1:16-cv-0 83 -RGA Document 23-1 Filed 03/21/17 Page 35 of 16 PageID #: 1 75 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 25 COMPLAINT FOR PATENT INFRINGEMENT See Exhibit 25. See Exhibit 19. 94. Over one million unique Authy users existed by August 2014. See Exhibit 30 (“The Meteoric Rise of 2FA”).25 95. Twilio is liable as a direct infringer under 35 U.S.C. § 271(a), including liable under the “doctrine of equivalents.” VIII. COUNT II - Twilio Actively Induces Infringement of the ’792 Patent. 96. The paragraphs above are incorporated by reference herein. 97. Twilio is liable for induced infringement under 35 U.S.C. § 271(b). 98. Twilio’s customers directly infringe the ’792 Patent as single actors by making, using, selling, offering and/or importing one or more of the Accused Technologies. Twilio knowingly induces its customers’ infringement and possesses specific intent to encourage their infringement. Twilio knows of the ’792 Patent at least by way of this Complaint and knows that its induced acts constitute patent infringement. Further, Twilio knew of the claims of the ’792 Patent prior to the issuance of the ’792 Patent as described herein. 99. Alternatively or additionally, Twilio and its customers directly infringe the ’792 Patent with all steps being attributable to Twilio’s customers. Twilio knowingly induces its customers’ infringement and possesses specific intent to encourage their infringement. Twilio knows of the ’792 Patent at least by way of this Complaint and knows that its induced acts constitute patent infringement. Further, Twilio knew of 25 https://www.authy.com/blog/the-meteoric-rise-of-two-factor-authentication (last accessed March 15, 2016). Case 2:16-cv-02106-PSG-SS Document 1 Filed 03/28/16 Page 25 of 43 Page ID #:25Case 1:16-cv-0 83 -RGA Document 23-1 Filed 03/21/17 Page 36 of 16 PageID #: 1 76 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 26 COMPLAINT FOR PATENT INFRINGEMENT the claims of the ’792 Patent prior to the issuance of the ’792 Patent as described herein. 100. Twilio specially intends and relies on others using its Accused Technologies and seeks to have developers and customers use its API (for example) to build applications. TeleSign I, ECF No. 51 at ¶ 3 (“Twilio shares its groundbreaking cloud application programming interface (“API”) with the world so that software developers around the globe can build new and complex communications systems.”). VIII(A). Direct Infringement 101. As so-called “single actors” (in the case law), Twilio’s customers are direct infringers when they perform the same or similar steps that Twilio performs and as described in connection with Count I (Section VII), including by their making, using, selling, offering for sale and/or importing one or more of the Accused Technologies. 102. For example, on information and belief, Twilio customers receive a telephone number from an end user through a computing interface, use one or more of the Accused Technologies, such as Authy, to text or have a verification code texted to a user and checked that a corresponding response matches the verification code to verify a telephone number, complete the registration of a user based on the verified telephone number, keep a record (or uses Twilio to keep a record) of events users are to be notified of, sending a message to the user when one of those events occurs (including by using one or more of the Accused Technologies, such as Twilio SMS), and receive a user’s acknowledgement (including by using one or more of the Accused Technologies, such as Twilio SMS). Additional details are provided in the allegations below, including those regarding Twilio’s intent to induce customer infringement. 103. Alternatively or additionally, Twilio and its customers directly infringe the ’792 Patent with all steps being attributable to Twilio’s customers. The same or similar steps as described in connection with Count I (Section VII) would still be performed, Case 2:16-cv-02106-PSG-SS Document 1 Filed 03/28/16 Page 26 of 43 Page ID #:26Case 1:16-cv-0 83 -RGA Document 23-1 Filed 03/21/17 Page 37 of 16 PageID #: 1 77 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 27 COMPLAINT FOR PATENT INFRINGEMENT including by making, using, selling, offering for sale and/or importing one or more of the Accused Technologies. 104. For example, on information and belief, Twilio’s customers receive a telephone number from an end user through a computing interface, have Twilio text a verification code to a user and check that a corresponding response matches the verification code to verify a telephone number (using one or more of the Accused Technologies, such as Authy and/or Twilio SMS), complete the registration of a user based on the verified telephone number, keep a record (or have Twilio keep a record) of events users are to be notified of, have Twilio send a message to the user when one of those events occurs (including by using one or more of the Accused Technologies, such as Twilio SMS), and receive a user’s acknowledgement (including from Twilio by using one or more of the Accused Technologies, such as Twilio SMS). Additional details are provided in the allegations below, including those regarding Twilio’s intent to induce customer infringement. 105. Thus, in some cases, the performance of all or part of the claims in the ’792 Patent is attributable to Twilio’s customers or performed at the direction and control of Twilio’s customers. 106. In short, Twilio’s customer essentially contract out certain claimed steps to Twilio. 107. As an example, on information and belief, Twilio’s customers use Twilio’s technology or services to verify a telephone number. In these cases, the use of the claimed technology is attributable to Twilio’s customers. 108. Twilio makes commitments or obligations to its customers such that Twilio cannot unilaterally refuse to provide its products or services. 109. Twilio promises to provide 60 days’ written notice to its customers prior to terminating or suspending its services. See Exhibit 32, §14.2. 26 26 https://www.twilio.com/legal/service-level-agreement (last accessed March 15, 2016). Case 2:16-cv-02106-PSG-SS Document 1 Filed 03/28/16 Page 27 of 43 Page ID #:27Case 1:16-cv-0 83 -RGA Document 23-1 Filed 03/21/17 Page 38 of 16 PageID #: 1 8 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 28 COMPLAINT FOR PATENT INFRINGEMENT 110. Similarly, Twilio’s prior Terms of Service, in effect prior to February 1, 2016, also promised to provide Twilio’s customers 60 days’ written notice before changes in service (§ 2.5) or non-renewal (§ 7.1), and 180 days’ written notice before termination of Twilio’s services (§ 7.2). See Exhibit 31.27 This is relevant to Twilio inducing the claims of the ’792 Patent as they existed since the publication of the ’889 Publication. 111. Twilio’s Terms of Service require Twilio’s customers to indemnify Twilio for certain activity, indicating that the activity is attributable to Twilio’s customers. 112. For example, customers must “defend, indemnify and hold Twilio and its affiliates harmless against any actual or threatened claim, loss, liability, proceeding, third-party discovery demand, governmental investigation or enforcement action arising out of or relating to your activities under these Terms or your acts or omissions in connection with the provision of Your [Customer] Application, including, without limitation, any intellectual property claims relating to the Your [Customer] Application,” as shown below: See Exhibit 29 at p. 285. 113. Similarly, Twilio’s prior Terms of Service also required customers to indemnify Twilio. See Exhibit 31, § 8.1. This is relevant to Twilio inducing the claims of the ’792 Patent as they existed since the publication of the ’889 Publication. 114. Twilio’s Service Level Agreement promises customers that Twilio will provide its services, thus performing steps at the direction and control of Twilio’s Customers. 115. For example, Twilio promises its API will be available 99.95% of the time in a month. See Exhibit 32, §1. 27 https://www.twilio.com/legal/tos/archive/2014 (last accessed March 15, 2016). Case 2:16-cv-02106-PSG-SS Document 1 Filed 03/28/16 Page 28 of 43 Page ID #:28Case 1:16-cv-0 83 -RGA Document 23-1 Filed 03/21/17 Page 39 of 16 PageID #: 1 79 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 29 COMPLAINT FOR PATENT INFRINGEMENT 116. If Twilio does not meet this goal, its customers are eligible for service credits as a remedy. 117. Twilio has made other promises or statements of uptime rates in connection with Accused Technologies, as shown below: See Exhibit 33.28 118. As another example, Twilio states that a customer’s application “tells Twilio” to send a text message, as shown below: See Exhibit 34.29 119. The Accused Technologies is used by “over 10,000 websites and mobile apps.” See Exhibit 7. 120. Twilio admits that: “Twilio shares its groundbreaking cloud application programming interface (“API”) with the world so that software developers around the 28 https://www.authy.com/blog/authy-twilio-a-year-of-transformation (last accessed March 15, 2016). 29 https://www.twilio.com/elements/two-factor-authentication (last accessed March 15, 2016). Case 2:16-cv-02106-PSG-SS Document 1 Filed 03/28/16 Page 29 of 43 Page ID #:29Case 1:16-cv-0 83 -RGA Document 23-1 Filed 03/21/17 Page 40 of 16 PageID #: 1 80 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 30 COMPLAINT FOR PATENT INFRINGEMENT globe can build new and complex communication systems.” TeleSign I, ECF No. 55- 1 at ¶ 3. 121. Twilio admits that it routes SMS messages for its customers. TeleSign I, ECF No. 55-1 at ¶ 24 (“Twilio is one of many companies that route SMS messages for its customers.”). VIII(B). Specific Intent 122. The paragraphs above are incorporated by reference here. 123. Twilio has known and knows it induces its customers’ infringement and possesses specific intent to encourage their direct infringement. 124. In the face of the knowledge of the ’792 Patent alleged herein (including in Section VI), on information and belief, Twilio encourages, instructs and recommends that its customers make, use, sell, offer to sell and/or import the Accused Technologies, and on information and belief, Twilio’s customers follow such instructions and recommendations, and thereby directly infringe the ’792 Patent. 125. Twilio advertises and provides support for its customers to make, use, sell, offer to sell and/or import Twilio’s Accused Technologies. 126. Twilio markets to its customers to make, use, or otherwise benefit from the Accused Technologies. 127. For example, Twilio recommends and encourages its customers to verify accounts using one or more of the Accused Technologies (such as Authy and Twilio SMS) “[w]hen a new user signs up for your application…[t]here are many layers of security you can put in place…one of the best is account verification via SMS,” as shown below: Case 2:16-cv-02106-PSG-SS Document 1 Filed 03/28/16 Page 30 of 43 Page ID #:30Case 1:16-cv-0 83 -RGA Document 23-1 Filed 03/21/17 Page 41 of 16 PageID #: 1281 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 31 COMPLAINT FOR PATENT INFRINGEMENT See Exhibit 35.30 128. Twilio recommends and encourages its customers to perform account verification “[b]efore a registration is fully completed,” and to “complete” registration, as shown above. See also Exhibit 9. 129. Twilio recommends and encourages its customers to implement one or more of the Accused Technologies (as shown below, using Twilio 2FA and Twilio SMS for example) to “[s]trengthen or replace a username and password”: See Exhibit 36.31 30 https://www.twilio.com/docs/tutorials/walkthrough/account-verification/python/flask (last accessed March 15, 2016). 31 https://www.twilio.com/use-cases/two-factor-authentication (last accessed March 15, 2016). Case 2:16-cv-02106-PSG-SS Document 1 Filed 03/28/16 Page 31 of 43 Page ID #:31Case 1:16-cv-0 83 -RGA Document 23-1 Filed 03/21/17 Page 42 of 16 PageID #: 1282 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 32 COMPLAINT FOR PATENT INFRINGEMENT 130. Twilio recommends and encourages its customers to “[a]dd strong authentication to your app with second-factor passwords sent to a user’s phone via SMS or Voice for an extra layer of security,” as shown below: See Exhibit 37.32 131. Twilio recommends and encourages its customers to “make it harder for evildoers to compromise a user account by also validating something a user has, like a mobile phone,” and use “Two Factor Authentication (2FA)” because it “helps keep you [sic] user accounts secure,” as shown below: See Exhibit 22 at p. 204. 32 https://www.twilio.com/use-cases (last accessed March 15, 2016). Case 2:16-cv-02106-PSG-SS Document 1 Filed 03/28/16 Page 32 of 43 Page ID #:32Case 1:16-cv-0 83 -RGA Document 23-1 Filed 03/21/17 Page 4 of 16 PageID #: 1283 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 33 COMPLAINT FOR PATENT INFRINGEMENT 132. Twilio recommends and encourages its customers to “secure your apps with two-factor auth,” and to “[a]dd two-factor auth to any app,” as shown below: See Exhibit 37. 133. Twilio recommends and encourages its customers to verify a user’s mobile phone, for example as shown below: See Exhibit 28 at p. 277. Case 2:16-cv-02106-PSG-SS Document 1 Filed 03/28/16 Page 33 of 43 Page ID #:33Case 1:16-cv-0 83 -RGA Document 23-1 Filed 03/21/17 Page 44 of 16 PageID #: 1284 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 34 COMPLAINT FOR PATENT INFRINGEMENT See Exhibit 36. 134. Twilio recommends and encourages, in a video from Twilio’s Signal conference available online, to “[m]ake sure your 2-FA enrollment process is complete before enabling 2-FA or your user will be locked out,” as shown below: 135. Twilio recommends and encourages its customers to receive information from a user as claimed, including a telephone number associated with an end user of a Case 2:16-cv-02106-PSG-SS Document 1 Filed 03/28/16 Page 34 of 43 Page ID #:34Case 1:16-cv-0 83 -RGA Document 23-1 Filed 03/21/17 Page 45 of 16 PageID #: 1285 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 35 COMPLAINT FOR PATENT INFRINGEMENT customer’s program or application, for example, as shown below, including instructing customers in a tutorial to “make sure” to ask for a user’s phone number: See Exhibit 22 at p. 204. See Exhibit 22 at p. 210. 136. Twilio recommends and encourages its customers to verify a telephone number and complete registration as claimed. For example, Twilio recommends and encourages its customers to verify accounts “[b]efore a registration is fully Case 2:16-cv-02106-PSG-SS Document 1 Filed 03/28/16 Page 35 of 43 Page ID #:35Case 1:16-cv-0 83 -RGA Document 23-1 Filed 03/21/17 Page 46 of 16 PageID #: 1286 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 36 COMPLAINT FOR PATENT INFRINGEMENT completed,” in order to “complete” registration. See Exhibit 35. As shown in other examples, Twilio recommends and encourages its customers to complete registrations as claimed, including incident to using an “SMS verification token” that was “sent out to the user’s phone”: See Exhibit 9 at p. 098. See Exhibit 22 at p. 222. 137. Twilio recommends and encourages its customers to maintain a record of one or more notification events as claimed (e.g., confirming a transaction), for example as shown below: Case 2:16-cv-02106-PSG-SS Document 1 Filed 03/28/16 Page 36 of 43 Page ID #:36Case 1:16-cv-0 83 -RGA Document 23-1 Filed 03/21/17 Page 47 of 16 PageID #: 1287 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 37 COMPLAINT FOR PATENT INFRINGEMENT See Exhibit 7. 138. Twilio recommends and encourages its customers to use Accused Technologies, and to make, use, sell, offer to sell and/or import Accused Technologies, including, for example, by recommending and encouraging its customers to “build with” and “integrate” Accused Technologies into Twilio’s customers’ applications, as shown below: See Exhibit 38.33 See Exhibit 7. 139. Given Twilio’s amount of knowledge of the ’792 Patent’s claims as described herein, Twilio’s maintaining availability of its encouragement, recommendations, and instructions to its customers to make, use, sell, or offer the Accused Technologies 33 https://www.authy.com/resources/buy-and-build-2fa-whitepaper/ (last accessed March 21, 2016). Case 2:16-cv-02106-PSG-SS Document 1 Filed 03/28/16 Page 37 of 43 Page ID #:37Case 1:16-cv-0 83 -RGA Document 23-1 Filed 03/21/17 Page 48 of 16 PageID #: 1288 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 38 COMPLAINT FOR PATENT INFRINGEMENT indicates Twilio’s affirmative intent to cause its customers to directly infringe the claims of the ’792 Patent. VIII(C). Knowledge 140. The paragraphs above are incorporated by reference here. 141. Twilio has known of the ’792 Patent and that Twilio’s induced acts constitute infringement. 142. Twilio knows of the ’792 Patent at least by way of this Complaint, has known of the claims of the ’792 Patent (as explained in Section VI). 143. Twilio has known since the publication of the ’889 Publication that the induced acts (including those explained in as explained in Section VIII(B)) would constitute infringement of the claims recited therein, which are the same as the claims of the ’792 Patent). 144. Twilio also knows, since service of this Complaint, that the induced acts constitute infringement (as explained in Section VIII(B)) of the ’792 Patent. 145. On information and belief, Twilio became aware that it would be liable for potentially infringing the claims of the ’889 Publication if they were to issue in a granted patent, decided to continue its actions and continue making available the aforementioned illustrative recommendations, encouragements, and instructions, and then the claims of the ’889 Publication did issue in the ’792 Patent. 146. On information and belief, despite this awareness, Twilio continued to provide tutorials, sample code, API(s), demonstrations, instructional videos, customer service and support, and events such as conferences and demonstrations, including those cited herein, with the knowledge that the activities encouraged by Twilio would directly infringe TeleSign’s patent claims. 147. On information and belief, Twilio continued and continues to market and instruct its customers to use, make, sell, offer for sell and/or import Accused Technologies with the knowledge that these activities would directly infringe Case 2:16-cv-02106-PSG-SS Document 1 Filed 03/28/16 Page 38 of 43 Page ID #:38Case 1:16-cv-0 83 -RGA Document 23-1 Filed 03/21/17 Page 49 of 16 PageID #: 12 9 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 39 COMPLAINT FOR PATENT INFRINGEMENT TeleSign’s patent claims. 148. On information and belief, Twilio also continued to provide its services and technologies, used at the direction and control of Twilio’s customers, to infringe TeleSign’s patent claims with the knowledge that these activities would directly infringe TeleSign’s patent claims. 149. On information and belief, Twilio has not discontinued activities including those described herein that induce its customers to directly infringe TeleSign’s patent claims. 150. Twilio has actively induced the aforementioned illustrative acts with knowledge of the patent claims and knowledge of the infringement by Twilio’s customers. 151. Twilio intended its customers to infringe the ’792 Patent. 152. On information and belief, Twilio knew that its customers’ acts, which it induced, constituted direct infringement of the claims of the ’792 Patent. 153. On information and belief, Twilio knew it had induced and continues to induce acts that constitute infringement of TeleSign’s ’792 Patent. IX. Willful Infringement 154. The paragraphs above are incorporated by reference herein. 155. On information and belief, Twilio’s infringement of the ’792 Patent is willful. 156. On information and belief, Twilio has had knowledge of the ’792 Patent (including actual knowledge) as described above, including in Section VI. 157. On information and belief, Twilio acted despite an objectively high likelihood that its actions constituted infringement of a valid patent, the ’792 Patent, and the objectively-defined risk was either known to Twilio or so obvious that it should have been known to Twilio. 158. For example, as explained in Section VI, Twilio was aware of TeleSign’s pending patent application, its published claims, and the Notice of Allowance indicating those claims would issue as the ’792 Patent, as alleged above and was Case 2:16-cv-02106-PSG-SS Document 1 Filed 03/28/16 Page 39 of 43 Page ID #:39Case 1:16-cv-0 83 -RGA Document 23-1 Filed 03/21/17 Page 50 of 16 PageID #: 12 0 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 40 COMPLAINT FOR PATENT INFRINGEMENT aware of TeleSign’s patent family and TeleSign’s allegations regarding Twilio’s two- factor authentication technology in TeleSign I-but, on information and belief, did not avoid or discontinue its infringement of the ’792 Patent. 159. Twilio knew of the objectively high risk of infringement of TeleSign’s ’792 Patent given Twilio’s analysis in TeleSign I. 160. Twilio was aware that its motion for judgment on the pleadings was denied, regarding the alleged invalidity Parent Patents in the same patent family as the ’792 Patent, in TeleSign I. See TeleSign I, ECF No. 123. 161. The ’792 Patent issued despite the Patent Office’s consideration of additional prior art and Twilio’s Section 101 patent-ineligibility motion-further indicating that the ’792 Patent was duly issued and will remain valid. 162. Despite TeleSign I and service of this Complaint, on information and belief, Twilio continues to convey or make available the information contained in this Complaint and corresponding exhibits. X. PRAYER FOR RELIEF 154. TeleSign demands trial by jury for all issues so triable by a jury. WHEREFORE, TeleSign respectfully requests this Court to: A. Enter judgment for TeleSign that Twilio has infringed and is infringing one or more claims of the ’792 Patent; B. Enter judgment for TeleSign that Twilio has actively induced infringement and is actively inducing infringement of one or more claims of the ’792 Patent; C. Enter judgment for TeleSign that Twilio has willfully infringed and is willfully infringing one or more claims the ’792 Patent; D. Issue a preliminarily injunction enjoining Twilio (including its officers, directors, employees, agents, customers and all persons acting in concert with them) from infringing the ’792 Patent; Case 2:16-cv-02106-PSG-SS Document 1 Filed 03/28/16 Page 40 of 43 Page ID #:40Case 1:16-cv-0 83 -RGA Document 23-1 Filed 03/21/17 Page 51 of 16 PageID #: 1291 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 41 COMPLAINT FOR PATENT INFRINGEMENT E. Issue a permanent injunction enjoining Twilio (including its officers, directors, employees, agents, customers and all persons acting in concert with them) from infringing the ’792 Patent; F. Order that Twilio pay compensatory damages to TeleSign for Twilio’s infringement of the ’792 Patent, including but not limited to, damages for lost profits and in no event less than a reasonable royalty; G. Award damages based TeleSign’s provisional rights under 35 U.S.C. § 154(d); H. Find this to be an exceptional case, award TeleSign treble damages due to Twilio’s deliberate and willful conduct, and order Twilio to pay TeleSign’s costs of suit and attorneys’ fees; I. Award TeleSign interest and costs under 35 U.S.C. § 284; J. Award TeleSign pre-judgment interest; and K. Order such other relief as the Court deems appropriate. Dated: March 28, 2016 Signed:/s/ Tony M. Diab Tony M. Diab (tdiab@shb.com) Shook, Hardy & Bacon L.L.P. Jamboree Center 5 Park Plaza, Suite 1600 Irvine, California 92614 Telephone: 949.475.1500 Facsimile: 949.475.0016 Case 2:16-cv-02106-PSG-SS Document 1 Filed 03/28/16 Page 41 of 43 Page ID #:41Case 1:16-cv-0 83 -RGA Document 23-1 Filed 03/21/17 Page 52 of 16 PageID #: 1292 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 42 COMPLAINT FOR PATENT INFRINGEMENT [This page intentionally left blank.] Case 2:16-cv-02106-PSG-SS Document 1 Filed 03/28/16 Page 42 of 43 Page ID #:42Case 1:16-cv-0 83 -RGA Document 23-1 Filed 03/21/17 Page 53 of 16 PageID #: 1293 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 43 COMPLAINT FOR PATENT INFRINGEMENT [This page intentionally left blank.] Case 2:16-cv-02106-PSG-SS Document 1 Filed 03/28/16 Page 43 of 43 Page ID #:43Case 1:16-cv-0 83 -RGA Document 23-1 Filed 03/21/17 Page 5 of 16 PageID #: 1294 EXHIBIT C Case 1:16-cv-00830-RGA Document 23-1 Filed 03/21/17 Page 55 of 163 PageID #: 1295 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE RAINDANCE TECHNOLOGIES, INC. and THE UNIVERSITY OF CHICAGO, Plaintiffs, v. 10X GENOMICS, INC., Defendant. ) ) ) ) ) ) ) ) ) ) C.A. No. 15-152 (RGA) DEMAND FOR JURY TRIAL FIRST AMENDED COMPLAINT RainDance Technologies, Inc. (“RainDance”) and the University of Chicago (collectively, “Plaintiffs”) hereby allege for their First Amended Complaint (“Complaint”) against Defendant 10X Genomics, Inc. (“10X,” or “Defendant”), on personal knowledge as to their own actions and on information and belief as to the actions of others, as follows: NATURE OF THE ACTION 1. This is an action for patent infringement arising under the United States Patent Act 35 U.S.C. §§1 et seq., including 35 U.S.C. § 271. 2. RainDance by itself brings this action to halt 10X’s infringement of RainDance’s rights under the Patent Laws of the United States 35 U.S.C. §1, et. seq., which arise under U.S. Patent No. 8,658,430 (“the ’430 Patent”). 3. RainDance and the University of Chicago bring this action to halt 10X’s infringement of Plaintiff’s rights under the Patent Laws of the United States 35 U.S.C. §1, et. seq., which arise under U.S. Patent Nos. 8,273,573 (“the ’573 Patent”); 8,304,193 (“the ’193 Patent”); 8,329,407 (“the ’407 Patent”); 8,822,148 (“the ’148 Patent”); 8,889,083 (“the ’083 Patent”); and 7,129,091 (“the ’091 Patent”) (collectively, the “Ismagilov Patents”). Case 1:15-cv-00152-RGA Document 12 Filed 04/23/15 Page 1 of 36 PageID #: 715Case 1:16-cv 00830-RGA Document 23- Filed 03/21/17 Page 56 f 1 3 PageID #: 296 2 THE PARTIES 4. RainDance is a corporation organized and existing under the laws of Delaware, with its principal place of business at 749 Middlesex Turnpike, Billerica, MA 01821. 5. The University of Chicago is an Illinois not-for profit institution with a principal place of business at 5801 S. Ellis Ave, Chicago, Illinois 60637. Chicago is the patent owner and licensor for the ’573, ’193, ’407, ’148, ’083, and ‘091 Patents. 6. 10X is a company organized and existing under the laws of Delaware, with its principal place of business at 7068 Koll Center Parkway, Suite 401, Pleasanton, CA, 94566. JURISDICTION AND VENUE 7. This action for patent infringement arises under the patent laws of the United States, Title 35 of the United States Code. 8. This Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1338(a). 9. This Court has personal jurisdiction over defendant 10X. 10X has substantial contacts with the forum as a consequence of conducting business in Delaware, and has purposefully availed itself of the benefits and protections of Delaware state law by incorporating under Delaware law. 10. Venue is proper in this District under 28 U.S.C. §§ 1391(b) and (c), and 1400(b) because RainDance and 10X are both Delaware corporations and Delaware is a convenient forum for resolution of the parties’ disputes set forth herein. Case 1:15-cv-00152-RGA Document 12 Filed 04/23/15 Page 2 of 36 PageID #: 716Case 1:16-cv 00830-RGA Document 23- Filed 03/21/17 Page 57 f 1 3 PageID #: 297 3 BACKGROUND 11. Since its founding, RainDance has led the transformation in disease research by making innovative tools using its proprietary technologies that simplify complex genetic analysis. RainDance’s patented and proven RainDrop® digital droplet system fundamentally enhances the way researchers and scientists study cell-based and cell-free biomarkers in cancer, infectious disease, and inherited disorders. 12. 10X and RainDance are close competitors in the emerging field of using microfluidic devices to deliver biological reagents so that complex genetic analysis may be simplified and scaled. On information and belief, 10X monitors RainDance’s business and technical activities closely. For instance, representatives from 10X have frequently attended scientific meetings and seminars (such as the JP Morgan Healthcare Conference, the Advances in Genome Biology and Technology conference, and the American Association for Cancer Research conference) at which RainDance has presented its most recent technical developments. Representatives from 10X regularly interact directly with representatives from RainDance at such meetings regarding RainDance’s technology and research and development. In fact, on information and belief, 10X has recently described its technology as purportedly being the “next generation” of RainDance’s proprietary technology. 13. On information and belief, and as will likely have evidentiary support after a reasonable opportunity for further investigation or discovery, 10X has monitored and continues to monitor patents, published applications, and other publications relating to genetic analysis and genome sequencing, including the patents, published applications, and other publications of its competitors in the microfluidics and genetic analysis fields, such as RainDance. For instance, at least one 10X executive, Kevin Ness, expressly informed RainDance’s co-founder and chief Case 1:15-cv-00152-RGA Document 12 Filed 04/23/15 Page 3 of 36 PageID #: 717Case 1:16-cv 00830-RGA Document 23- Filed 03/21/17 Page 58 f 1 3 PageID #: 298 4 technology officer at scientific meetings that he has followed his technical work. Likewise, 10X’s general counsel and vice president of intellectual property “specializes in building and defending dominant intellectual property portfolios in the life science space” and thus, on information and belief, monitors intellectual property as part of his job duties. Exhibit L, available at http://10xgenomics.com/company. Furthermore, as set forth below, 10X has had knowledge of the Ismagilov Patents since well before the filing of this action. 14. Prior to January 2015, 10X had been operating in “stealth mode.” In or around January 2015, 10X emerged from stealth mode and began offering to sell a commercial genetic analysis tool, which it referred to as the 10X Genomics platform. On January 14, 2015, 10X presented details regarding its 10X Genomics platform at the JP Morgan Healthcare Conference. At that conference, 10X priced two components of its system: an instrument offered at $75,000 and consumables priced by application. 15. 10X is now marketing the commercial genetic analysis tool as the “GemCode Platform.” The GemCode Platform is 10X’s sole product, and includes three components: (1) the GemCode Instrument, (2) GemCode Reagents, and (3) GemCode Software. As 10X states on their webpage, the “GemCode Platform is a molecular barcoding and analysis suite that delivers structural variants, haplotypes, and other valuable long range contextual information for a broad range of applications including targeted, exome, and whole genome sequencing.” Exhibit M, available at http://10xgenomics.com/products. The GemCode Instrument is “designed to rapidly and efficiently automate the equivalent of over a million pipetting steps for highly parallel sample partitioning and molecular barcoding…The instrument utilizes advanced microfluidics that partition 8 samples in parallel in ~5 minutes.” Id. Case 1:15-cv-00152-RGA Document 12 Filed 04/23/15 Page 4 of 36 PageID #: 718Case 1:16-cv 00830-RGA Document 23- Filed 03/21/17 Page 59 f 1 3 PageID #: 299 5 16. Furthermore, on the “Technology” tab of its website, 10X explains that the “GemCode Technology underlying [the GemCode Platform] is an innovative reagent delivery system and set of algorithms and software.” Exhibit N, available at 10xgenomics.com/technology. 10X specifies that the “GemCode reagent delivery system partitions arbitrarily long DNA molecules (including >100kb) and prepares sequencing libraries in parallel such that all fragments produced within a partition share a common barcode. A simple workflow combines large partition numbers with a massively diverse barcode library to generate >100,000 barcode containing partitions in a matter of minutes.” Id. The following image from 10X’s website exemplifies the reagent delivery system of the 10X instrument, including the reagents and chemical components used in connection with the instrument: Id. 17. Similarly, 10X’s presentation at the January 2015 J.P. Morgan Healthcare Conference entitled the “Ultimate Reagent Delivery System” for “High-Throughput GEM Generation” contained nearly identical images that depict the structure of 10X’s GemCode Instrument along with the GemCode Gel-Beads that are part of the GemCode Reagents: Case 1:15-cv-00152-RGA Document 12 Filed 04/23/15 Page 5 of 36 PageID #: 719Case 1:16-cv 00830-RGA Document 23- Filed 03/21/17 Page 60 f 1 3 PageID #: 300 6 Exhibit O at 2. 18. Moreover, on February 27, 2015, 10X presented its GemCode Platform at the Advances in Genome Biology and Technology (AGBT) meeting in Marco Island, Florida. See Exhibit O. During that presentation, 10X provided another image of the reagent delivery system of the GemCode Instrument that was consistent with its earlier depictions: Exhibit P at 2. Case 1:15-cv-00152-RGA Document 12 Filed 04/23/15 Page 6 of 36 PageID #: 720Case 1:16-cv 00830-RGA Document 23- Filed 03/21/17 Page 61 f 1 3 PageID #: 1301 7 19. 10X described four steps that were part of the reagent delivery system: (1) molecular barcoding in GEMs, (2) Pool, Ligate Right adapter, (3) Sample Indexing PCR, (4) Sequence and Analyze. Exhibit P at 3. 20. 10X also explains on its website that the “GemCode Software maps short read data to original long molecules using the barcodes provided by the reagent delivery system.” Exhibit N, available at 10xgenomics.com/technology. 21. At the AGBT conference, 10X stated that the GemCode Platform was “available” and that 10x was “accepting orders.” 10X priced the GemCode Instrument at $75,000 and the GemCode Reagents at $500 per sample: Case 1:15-cv-00152-RGA Document 12 Filed 04/23/15 Page 7 of 36 PageID #: 721Case 1:16-cv 00830-RGA Document 23- Filed 03/21/17 Page 62 f 1 3 PageID #: 1302 8 Exhibit P at 4. In fact, at the AGBT meeting, 10X customers from institutions including the Broad Institute, the Dana Farber Cancer Institute, and multiple major research universities presented data based on use of the GemCode platform. 22. On information and belief, the reagent delivery system of Defendant’s GemCode Instrument directly infringes the ’430, ’573, ’193, ’407, ’148, ’083, and ’091 patents. COUNT I (By RainDance) (Infringement of U.S. Patent No. 8,658,430) 23. RainDance re-alleges and incorporates by this reference the allegations contained in paragraphs 1 through 22 above as relevant to this count. 24. On February 25, 2014, the United States Patent and Trademark Office duly and legally issued U.S. Patent No. 8,658,430 B2 (“the ’430 Patent”), entitled “Manipulating Droplet Size.” A copy of the ’430 Patent is attached to the Complaint as Exhibit A. Case 1:15-cv-00152-RGA Document 12 Filed 04/23/15 Page 8 of 36 PageID #: 722Case 1:16-cv 00830-RGA Document 23- Filed 03/21/17 Page 63 f 1 3 PageID #: 1303 9 25. Benjamin J. Miller, Qun Zhong, and Darren Roy Link, are the sole and true inventors of the ’430 Patent. By operation of law and as a result of written assignment agreements, RainDance obtained the entire right, title and interest to and in the ’430 Patent. 26. On information and belief, 10X has infringed and continues to infringe at least Claim 1 of the ’430 Patent pursuant to 35 U.S.C. § 271(a), literally or under the doctrine of equivalents, by using in the United States without authority microfluidic DNA sequencing products, devices, systems, and/or components of systems that perform the claimed method for droplet formation, including, but not limited to, 10X’s GemCode Instrument. See supra ¶¶ 16- 19. 27. On information and belief, and as will likely have evidentiary support after a reasonable opportunity for further investigation or discovery, 10X has had knowledge of the ’430 Patent by virtue of its efforts to monitor RainDance’s patent applications and publications. For instance, at least one 10X executive, Kevin Ness, has expressly informed RainDance’s co- founder and chief technology officer at scientific meetings that he has followed his technical work. 10X has also publicly described its technology as purportedly the “next generation” of RainDance’s proprietary technology. Likewise, 10X’s general counsel and vice president of intellectual property “specializes in building and defending dominant intellectual property portfolios in the life science space” and thus, on information and belief, monitors intellectual property as part of his job duties. In addition, 10X has had knowledge of and notice of the ’430 Patent and its infringement since at least, and through, the filing and service of this Complaint. Despite this knowledge 10X continues to commit the aforementioned infringing acts. 28. 10X actively, knowingly, and intentionally has induced, or has threatened to induce, infringement of at least Claim 1 of the ’430 Patent by controlling the design and Case 1:15-cv-00152-RGA Document 12 Filed 04/23/15 Page 9 of 36 PageID #: 723Case 1:16-cv 00830-RGA Document 23- Filed 03/21/17 Page 64 f 1 3 PageID #: 1 04 10 manufacture of, offering for sale, and selling the GemCode Instrument and GemCode Reagents with the knowledge and specific intent that its customers will use these components to infringe by performing the claimed method for droplet formation. 29. 10X has further actively, knowingly, and intentionally induced, or has threatened to induce, infringement of at least Claim 1 of the ’430 Patent with the knowledge and the specific intent to encourage and facilitate infringing uses of such products by its customers through, for instance, the dissemination of promotional and marketing materials relating to the GemCode Platform, the creation of distribution channels for the GemCode Platform in the United States, the distribution of instructions for use of the GemCode Platform in the United States, the provision of technical support for the GemCode Platform in the United States, and the open-source distribution of software for the analysis of data that results from the GemCode Instrument. For instance, 10X asserts on its website that the “GemCode Technology underlying [the GemCode Platform] is an innovative reagent delivery system and set of algorithms and software.” Exhibit N, available at 10xgenomics.com/technology. Likewise, 10X’s website asserts that the GemCode Software uses “barcodes provided by the reagent delivery system,” and that “the platform and tools used to build the GemCode Software are open-source.” Exhibit M, available at 10xgenomics.com/products. 10X induces infringement by, for instance, stating that it “encourage[s] others to contribute to the project and to use it to build their own informatics pipelines.” Exhibit Q, available at 10xgenomics.com/community. On information and belief, 10X distributes other instructional materials, product manuals, and technical materials with the knowledge and the specific intent to encourage and facilitate the infringing sale and use of its GemCode Platform. 10X is liable for its induced infringement of the ’430 Patent pursuant to 35 U.S.C. § 271 (b). Case 1:15-cv-00152-RGA Document 12 Filed 04/23/15 Page 10 of 36 PageID #: 724Case 1: 6-cv-00830-RGA Document 23-1 il 3/ 1/ 7 65 f 1 3 PageID #: 1305 11 30. 10X has contributed to, or has threatened to contribute to, the infringement by its customers of the ‘430 Patent by, without authority, selling and offering to sell within the United States materials and apparatuses for practicing the claimed invention of the ’430 Patent, including at least the GemCode Instrument and GemCode Reagents. See supra ¶¶ 16-19. When, for example, the GemCode Instrument and GemCode Reagents are used by 10X’s customers for partitioning long DNA molecules, the claimed method for droplet formation is performed, thereby infringing, literally or under the doctrine of equivalents, at least Claim 1 of the ’430 Patent. These components, supplied by 10X, constitute material parts of the claimed invention of the ’430 Patent. 31. On information and belief, 10X knows that the GemCode Instrument and GemCode Reagents constitute a material part of the inventions of the ‘430 Patent and not a staple article or commodity of commerce suitable for substantial noninfringing use. For example, 10X asserts that the reagent delivery system (which includes the GemCode Instrument and GemCode Reagents) of the GemCode platform is the “underlying technology” of the GemCode Platform. See Exhibit N, available at 10xgenomics.com/technology. Likewise, 10X knows that the reagent delivery system of the GemCode platform provides barcodes for use with the GemCode Software, and that the GemCode Instrument is not a staple article or commodity of commerce suitable for substantial non-infringing use because the GemCode Instrument has no use apart from infringing the ’430 Patent. 10X is liable for its contributory infringement of the ‘430 Patent pursuant to 35 U.S.C. § 271(c). 32. 10X’s infringement of the ‘430 Patent has injured RainDance in its business and property rights. RainDance is entitled to recover monetary damages for such injuries pursuant to 35 U.S.C. § 284 in an amount to be determined at trial. Case 1:15-cv-00152-RGA Document 12 Filed 04/23/15 Page 11 of 36 PageID #: 725Case 1: 6-cv-00830-RGA Document 23-1 il 3/ 1/ 7 66 f 1 3 PageID #: 1306 12 33. 10X’s infringement of the ‘430 Patent has caused irreparable harm to RainDance and will continue to cause such harm unless and until 10X’s infringing activities are enjoined by this Court. COUNT II (By RainDance and the University of Chicago) (Infringement of U.S. Patent No. 8,273,573) 34. Plaintiffs re-allege and incorporate by reference the allegations contained in paragraphs 1 through 22 above as relevant to this count. 35. On September 25, 2012, the United States Patent and Trademark Office duly and legally issued U.S. Patent No. 8,273,573 B2 (“the ’573 Patent’), entitled “Method for Obtaining a Collection of Plugs Comprising Biological Molecules.” A copy of the ‘573 Patent is attached to the Complaint as Exhibit B. 36. Rustem F. Ismagilov, Joshua David Tice, Cory John Gerdts, and Bo Zheng, are the sole and true inventors of the ’573 Patent. By operation of law and as a result of written assignment agreements, the University of Chicago obtained the entire right, title and interest to and in the ’573 Patent. 37. Pursuant to license agreements RainDance entered into with the University of Chicago, RainDance obtained an exclusive license to the ’573 Patent in the field of microfluidic systems, kits and chips. 38. On information and belief, 10X has infringed and continues to infringe at least Claim 1 of the ’573 Patent pursuant to 35 U.S.C. § 271(a), literally or under the doctrine of equivalents, by using, within the United States without authority microfluidic DNA sequencing products, devices, systems, and/or components of systems that perform the claimed method for obtaining a collection of plugs comprising at least one biological molecule, including, but not limited to 10X’s GemCode Instrument. See supra ¶¶ 16-19. Case 1:15-cv-00152-RGA Document 12 Filed 04/23/15 Page 12 of 36 PageID #: 726Case 1: 6-cv-00830-RGA Document 23-1 il 3/ 1/ 7 67 f 1 3 PageID #: 1307 13 39. 10X has had knowledge of the ’573 Patent at least as early as April 4, 2014, when it cited the ’573 Patent in an Information Disclosure Statement (“IDS”) filed in United States Patent Application Serial Nos. 14/104650, entitled “Methods and Systems for Processing Polynucleotides”; 14/175935, entitled “Partitioning and Processing of Analytes and Other Species”; 14/175973, entitled “Polynucleotide Barcode Generation”; and 13/966150, entitled “Capsule Array Devices and Methods of Use.” Copies of the IDSs are attached as Exhibits H, I, J, and K. In addition, 10X has had knowledge of and notice of the ’573 Patent and its infringement since at least, and through, the filing and service of Plaintiff’s original Complaint on February 12, 2015 and despite this knowledge continues to commit the aforementioned infringing acts. 40. 10X actively, knowingly, and intentionally has induced, or has threatened to induce, infringement of at least Claim 1 of the ’573 Patent by controlling the design and manufacture of, offering for sale, and selling the GemCode Instrument and GemCode Reagents with the knowledge and specific intent that its customers will use these components to infringe by performing the claimed method for obtaining a collection of plugs comprising at least one biological molecule. 41. 10X has further actively, knowingly, and intentionally induced, or has threatened to induce, infringement of at least Claim 1 of the ’573 Patent with the knowledge and the specific intent to encourage and facilitate infringing uses of such products by its customers through, for instance, the dissemination of promotional and marketing materials relating to the GemCode Platform, the creation of distribution channels for the GemCode Platform in the United States, the distribution of instructions for use of the GemCode Platform in the United States, the provision of technical support for the GemCode Platform in the United States, and the Case 1:15-cv-00152-RGA Document 12 Filed 04/23/15 Page 13 of 36 PageID #: 727Case 1: 6-cv-00830-RGA Document 23-1 il 3/ 1/ 7 68 f 1 3 PageID #: 1308 14 open-source distribution of software for the analysis of data that results from the GemCode Instrument. For instance, 10X asserts on its website that the “GemCode Technology underlying [the GemCode Platform] is an innovative reagent delivery system and set of algorithms and software.” Exhibit N, available at 10xgenomics.com/technology. Likewise, 10X’s website asserts that the GemCode Software uses “barcodes provided by the reagent delivery system,” and that “the platform and tools used to build the GemCode Software are open-source.” Exhibit M, available at 10xgenomics.com/products. 10X induces infringement by, for instance, stating that it “encourage[s] others to contribute to the project and to use it to build their own informatics pipelines.” Exhibit Q, available at 10xgenomics.com/community. On information and belief, 10X distributes other instructional materials, product manuals, and technical materials with the knowledge and the specific intent to encourage and facilitate the infringing sale and use of its GemCode Platform. 10X is liable for its induced infringement of the ’573 Patent pursuant to 35 U.S.C. § 271 (b). 42. 10X has contributed to, or has threatened to contribute to, the infringement by its customers of the ’573 Patent by, without authority, selling and offering to sell within the United States materials and apparatuses for practicing the claimed invention of the ’573 Patent, including at least the GemCode Instrument and GemCode Reagents. See supra ¶¶ 16-19. When, for example, the GemCode Instrument and GemCode Reagents are used by 10X’s customers for partitioning long DNA molecules, the claimed method for obtaining a collection of plugs is performed, thereby infringing, literally or under the doctrine of equivalents, at least Claim 1 of the ’573 Patent. These components, supplied by 10X, constitute material parts of the claimed invention of the ’573 Patent. Case 1:15-cv-00152-RGA Document 12 Filed 04/23/15 Page 14 of 36 PageID #: 728Case 1: 6-cv-00830-RGA Document 23-1 il 3/ 1/ 7 69 f 1 3 PageID #: 1309 15 43. On information and belief, 10X knows that the GemCode Instrument and GemCode Reagents constitute a material part of the inventions of the ‘573 Patent and not a staple article or commodity of commerce suitable for substantial noninfringing use. For example, 10X asserts that the reagent delivery system (which includes the GemCode Instrument and GemCode Reagents) of the GemCode platform is the “underlying technology” of the GemCode Platform. See Exhibit N, available at 10xgenomics.com/technology. Likewise, 10X knows that the reagent delivery system of the GemCode platform provides barcodes for use with the GemCode Software, and that the GemCode Instrument is not a staple article or commodity of commerce suitable for substantial non-infringing use because the GemCode Instrument has no use apart from infringing the ’573 Patent. 10X is liable for its contributory infringement of the ’573 Patent pursuant to 35 U.S.C. § 271(c). 44. 10X’s infringement of the ’573 Patent has injured Plaintiffs in their business and property rights. Plaintiffs are entitled to recover monetary damages for such injuries pursuant to 35 U.S.C. § 284 in an amount to be determined at trial. 45. 10X’s infringement of the ’573 Patent has caused irreparable harm to Plaintiffs and will continue to cause such harm unless and until 10X’s infringing activities are enjoined by this Court. COUNT III (By RainDance and the University of Chicago) (Infringement of U.S. Patent No. 8,304,193) 46. Plaintiffs re-allege and incorporate by reference the allegations contained in paragraphs 1 through 22 above as relevant to this count. 47. On November 6, 2012, the United States Patent and Trademark Office duly and legally issued U.S. Patent No. 8,304,193 B2 (“the ’193 Patent’), entitled “Method for Case 1:15-cv-00152-RGA Document 12 Filed 04/23/15 Page 15 of 36 PageID #: 729Case 1: 6-cv-00830-RGA Document 23-1 il 3/ 1/ 7 70 f 1 3 PageID #: 1310 16 Conducting an Autocatalytic Reaction in Plugs in a Microfluidic System.” A copy of the ’193 Patent is attached to the Complaint as Exhibit C. 48. Rustem F. Ismagilov, Joshua David Tice, Cory John Gerdts, and Bo Zheng, are the sole and true inventors of the ’193 Patent. By operation of law and as a result of written assignment agreements, the University of Chicago obtained the entire right, title and interest to and in the ’193 Patent. 49. Pursuant to license agreements RainDance entered into with the University of Chicago, RainDance obtained an exclusive license to the ’193 Patent in the field of microfluidic systems, kits and chips. 50. On information and belief, 10X has infringed and continues to infringe at least Claim 1 of the ‘193 Patent pursuant to 35 U.S.C. § 271(a), literally or under the doctrine of equivalents, by using within the United States without authority microfluidic DNA sequencing products, devices, systems, and/or components of systems that perform the claimed method for conducting an autocatalytic reaction in plugs in a microfluidic system, including, but not limited to 10X’s GemCode Instrument. See supra ¶¶ 16-19. 51. 10X has had knowledge of the ’193 Patent at least as early as April 4, 2014, when it cited the ’407 and ’573 Patents in an IDS filed in United States Patent Application Serial Nos. 14/104650, entitled “Methods and Systems for Processing Polynucleotides”; 14/175935, entitled “Partitioning and Processing of Analytes and Other Species”; 14/175973, entitled “Polynucleotide Barcode Generation”; and 13/966150, entitled “Capsule Array Devices and Methods of Use.” Copies of the IDSs are attached as Exhibits H, I, J, and K. The ’193, ’407, and ’573 Patents share the same specification and each claim priority to United States Provisional Application No. 60/379,927. In addition, 10X has had knowledge of and notice of Case 1:15-cv-00152-RGA Document 12 Filed 04/23/15 Page 16 of 36 PageID #: 730Case 1: 6-cv-00830-RGA Document 23-1 il 3/ 1/ 7 71 f 1 3 PageID #: 1311 17 the ’193 Patent and its infringement since at least, and through, the filing and service of Plaintiff’s original Complaint on February 12, 2015 and despite this knowledge continues to commit the aforementioned infringing acts. 52. 10X actively, knowingly, and intentionally has induced, or has threatened to induce, infringement of at least Claim 1 of the ’193 Patent by controlling the design and manufacture of, offering for sale, and selling the GemCode Instrument and GemCode Reagents with the knowledge and specific intent that its customers will use these components to infringe by performing the claimed method for conducting an autocatalytic reaction in plugs in a microfluidic system. 53. 10X has further actively, knowingly, and intentionally induced, or has threatened to induce, infringement of at least Claim 1 of the ’193 Patent with the knowledge and the specific intent to encourage and facilitate infringing uses of such products by its customers through, for instance, the dissemination of promotional and marketing materials relating to the GemCode Platform, the creation of distribution channels for the GemCode Platform in the United States, the distribution of instructions for use of the GemCode Platform in the United States, the provision of technical support for the GemCode Platform in the United States, and the open-source distribution of software for the analysis of data that results from the GemCode Instrument. For instance, 10X asserts on its website that the “GemCode Technology underlying [the GemCode Platform] is an innovative reagent delivery system and set of algorithms and software.” Exhibit N, available at 10xgenomics.com/technology. Likewise, 10X’s website asserts that the GemCode Software uses “barcodes provided by the reagent delivery system,” and that “the platform and tools used to build the GemCode Software are open-source.” Exhibit M, available at 10xgenomics.com/products. 10X induces infringement by, for instance, stating that Case 1:15-cv-00152-RGA Document 12 Filed 04/23/15 Page 17 of 36 PageID #: 731Case 1: 6-cv-00830-RGA Document 23-1 il 3/ 1/ 7 72 f 1 3 PageID #: 1312 18 it “encourage[s] others to contribute to the project and to use it to build their own informatics pipelines.” Exhibit Q, available at 10xgenomics.com/community. On information and belief, 10X distributes other instructional materials, product manuals, and technical materials with the knowledge and the specific intent to encourage and facilitate the infringing sale and use of its GemCode Platform. 10X is liable for its induced infringement of the ’193 Patent pursuant to 35 U.S.C. § 271 (b). 54. 10X has contributed to, or has threatened to contribute to, the infringement by its customers of the ’193 Patent by, without authority, selling and offering to sell within the United States materials and apparatuses for practicing the claimed invention of the ’193 Patent, including at least the GemCode Instrument and GemCode Reagents. See supra ¶¶ 16-19. When, for example, the GemCode Instrument and GemCode Reagents are used by 10X’s customers for partitioning long DNA molecules, the claimed method for conducting an autocatalytic reaction in plugs in a microfluidic system is performed, thereby infringing, literally or under the doctrine of equivalents, at least Claim 1 of the ’193 Patent. These components, supplied by 10X, constitute material parts of the claimed invention of the ’193 Patent. 55. On information and belief, 10X knows that the GemCode Instrument and GemCode Reagents constitute a material part of the inventions of the ‘193 Patent and not a staple article or commodity of commerce suitable for substantial noninfringing use. For example, 10X asserts that the reagent delivery system (which includes the GemCode Instrument and GemCode Reagents) of the GemCode platform is the “underlying technology” of the GemCode Platform. See Exhibit N, available at 10xgenomics.com/technology. Likewise, 10X knows that the reagent delivery system of the GemCode platform provides barcodes for use with the GemCode Software, and that the GemCode Instrument is not a staple article or commodity of commerce Case 1:15-cv-00152-RGA Document 12 Filed 04/23/15 Page 18 of 36 PageID #: 732Case 1: 6-cv-00830-RGA Document 23-1 il 3/ 1/ 7 73 f 1 3 PageID #: 1313 19 suitable for substantial non-infringing use because the GemCode Instrument has no use apart from infringing the ’193 Patent. 10X is liable for its contributory infringement of the ’193 Patent pursuant to 35 U.S.C. § 271(c). 56. 10X’s infringement of the ’193 Patent has injured Plaintiffs in their business and property rights. Plaintiffs are entitled to recover monetary damages for such injuries pursuant to 35 U.S.C. § 284 in an amount to be determined at trial. 57. 10X’s infringement of the ’193 Patent has caused irreparable harm to Plaintiffs and will continue to cause such harm unless and until 10X’s infringing activities are enjoined by this Court. COUNT IV (By RainDance and the University of Chicago) (Infringement of U.S. Patent No. 8,329,407) 58. Plaintiffs re-allege and incorporate by reference the allegations contained in paragraphs 1 through 22 above as relevant to this count. 59. On December 11, 2012 the United States Patent and Trademark Office duly and legally issued U.S. Patent No. 8,329,407 B2 (“the ’407 Patent’), entitled “Method for Conducting Reactions Involving Biological Molecules in Plugs in a Microfluidic System.” A copy of the ‘407 Patent is attached to the Complaint as Exhibit D. 60. Rustem F. Ismagilov, Joshua David Tice, Cory John Gerdts, and Bo Zheng, are the sole and true inventors of the ’407 Patent. By operation of law and as a result of written assignment agreements, the University of Chicago obtained the entire right, title and interest to and in the ’407 Patent. 61. Pursuant to license agreements RainDance entered into with the University of Chicago, RainDance obtained an exclusive license to the ’407 Patent in the field of microfluidic systems, kits and chips. Case 1:15-cv-00152-RGA Document 12 Filed 04/23/15 Page 19 of 36 PageID #: 733Case 1: 6-cv-00830-RGA Document 23-1 il 3/ 1/ 7 74 f 1 3 PageID #: 1 14 20 62. On information and belief, 10X has infringed and continues to infringe at least Claim 1 of the ’407 Patent pursuant to 35 U.S.C. § 271(a), literally or under the doctrine of equivalents, by using within the United States without authority microfluidic DNA sequencing products, devices, systems, and/or components of systems that perform the claimed method for conducting a reaction in plugs in a microfluidic system, including, but not limited to, 10X’s GemCode Instrument. See supra ¶¶ 16-19. 63. 10X has had knowledge of the ’407 Patent at least as early as April 4, 2014, when it cited the ’407 Patent in an IDS filed in United States Patent Application Serial Nos. 14/104650, entitled “Methods and Systems for Processing Polynucleotides”; 14/175935, entitled “Partitioning and Processing of Analytes and Other Species”; 14/175973, entitled “Polynucleotide Barcode Generation”; and 13/966150, entitled “Capsule Array Devices and Methods of Use.” Copies of the IDSs are attached as Exhibits H, I, J, and K. In addition, 10X has had knowledge of and notice of the ’407 Patent and its infringement since at least, and through, the filing and service of Plaintiff’s original Complaint on February 12, 2015 and despite this knowledge continues to commit the aforementioned infringing acts. 64. 10X actively, knowingly, and intentionally has induced, or has threatened to induce, infringement of at least Claim 1 of the ’407 Patent by controlling the design and manufacture of, offering for sale, and selling the GemCode Instrument and GemCode Reagents with the knowledge and specific intent that its customers will use these components to infringe by performing the claimed method for conducting a reaction in plugs in a microfluidic system. 65. 10X has further actively, knowingly, and intentionally induced, or has threatened to induce, infringement of at least Claim 1 of the ’407 Patent with the knowledge and the specific intent to encourage and facilitate infringing uses of such products by its customers Case 1:15-cv-00152-RGA Document 12 Filed 04/23/15 Page 20 of 36 PageID #: 734Case 1: 6-cv-00830-RGA Document 23-1 il 3/ 1/ 7 75 f 1 3 PageID #: 1315 21 through, for instance, the dissemination of promotional and marketing materials relating to the GemCode Platform, the creation of distribution channels for the GemCode Platform in the United States, the distribution of instructions for use of the GemCode Platform in the United States, the provision of technical support for the GemCode Platform in the United States, and the open-source distribution of software for the analysis of data that results from the GemCode Instrument. For instance, 10X asserts on its website that the “GemCode Technology underlying [the GemCode Platform] is an innovative reagent delivery system and set of algorithms and software.” Exhibit N, available at 10xgenomics.com/technology. Likewise, 10X’s website asserts that the GemCode Software uses “barcodes provided by the reagent delivery system,” and that “the platform and tools used to build the GemCode Software are open-source.” Exhibit M, available at 10xgenomics.com/products. 10X induces infringement by, for instance, stating that it “encourage[s] others to contribute to the project and to use it to build their own informatics pipelines.” Exhibit Q, available at 10xgenomics.com/community. On information and belief, 10X distributes other instructional materials, product manuals, and technical materials with the knowledge and the specific intent to encourage and facilitate the infringing sale and use of its GemCode Platform. 10X is liable for its induced infringement of the ’407 Patent pursuant to 35 U.S.C. § 271 (b). 66. 10X has contributed to, or has threatened to contribute to, the infringement by its customers of the ’407 Patent by, without authority, selling and offering to sell within the United States materials and apparatuses for practicing the claimed invention of the ’407 Patent, including at least the GemCode Instrument and GemCode Reagents. See supra ¶¶ 16-19. When, for example, the GemCode Instrument and GemCode Reagents are used by 10X’s customers for partitioning long DNA molecules, the claimed method for conducting a reaction in plugs in a Case 1:15-cv-00152-RGA Document 12 Filed 04/23/15 Page 21 of 36 PageID #: 735Case 1: 6-cv-00830-RGA Document 23-1 il 3/ 1/ 7 76 f 1 3 PageID #: 1316 22 microfluidic system is performed, thereby infringing, literally or under the doctrine of equivalents, at least Claim 1 of the ’407 Patent. These components, supplied by 10X, constitute material parts of the claimed invention of the ’407 Patent. 67. On information and belief, 10X knows that the GemCode Instrument and GemCode Reagents constitute a material part of the inventions of the ’407 Patent and not a staple article or commodity of commerce suitable for substantial noninfringing use. For example, 10X asserts that the reagent delivery system (which includes the GemCode Instrument and GemCode Reagents) of the GemCode platform is the “underlying technology” of the GemCode Platform. See Exhibit N, available at 10xgenomics.com/technology. Likewise, 10X knows that the reagent delivery system of the GemCode platform provides barcodes for use with the GemCode Software, and that the GemCode Instrument is not a staple article or commodity of commerce suitable for substantial non-infringing use because the GemCode Instrument has no use apart from infringing the ’407 Patent. 10X is liable for its contributory infringement of the ‘407 Patent pursuant to 35 U.S.C. § 271(c). 68. 10X’s infringement of the ’407 Patent has injured Plaintiffs in their business and property rights. Plaintiffs are entitled to recover monetary damages for such injuries pursuant to 35 U.S.C. § 284 in an amount to be determined at trial. 69. 10X’s infringement of the ’407 Patent has caused irreparable harm to Plaintiffs and will continue to cause such harm unless and until 10X’s infringing activities are enjoined by this Court. COUNT V (By RainDance and the University of Chicago) (Infringement of U.S. Patent No. 8,822,148) 70. Plaintiffs re-allege and incorporate by reference the allegations contained in paragraphs 1 through 22 above as relevant to this count. Case 1:15-cv-00152-RGA Document 12 Filed 04/23/15 Page 22 of 36 PageID #: 736Case 1: 6-cv-00830-RGA Document 23-1 il 3/ 1/ 7 77 f 1 3 PageID #: 1317 23 71. On September 2, 2014 the United States Patent and Trademark Office duly and legally issued U.S. Patent No.8,822,148 B2 (“the ’148 Patent”), entitled “Method of Performing PCR Reaction in Continuously Flowing Microfluidic Plugs.” A copy of the ‘148 Patent is attached to the Complaint as Exhibit E. 72. Rustem F. Ismagilov, Joshua David Tice, Cory John Gerdts, and Bo Zheng, are the sole and true inventors of the ’148 Patent. By operation of law and as a result of written assignment agreements, the University of Chicago obtained the entire right, title and interest to and in the ’148 Patent. 73. Pursuant to license agreements RainDance entered into with the University of Chicago, RainDance obtained an exclusive license to the ’148 Patent in the field of microfluidic systems, kits and chips. 74. On information and belief, 10X has infringed and continues to infringe at least Claim 1 of the ’148 Patent pursuant to 35 U.S.C. § 271(a), literally or under the doctrine of equivalents, by using within the United States without authority microfluidic DNA sequencing products, devices, systems, and/or components of systems that perform the claimed method of performing a PCR reaction in microfluidic plugs, including, but not limited to, 10X’s GemCode Instrument. See supra ¶¶ 16-19. 75. 10X has had knowledge of the ’148 Patent at least as early as April 4, 2014 when it cited the ’407 and ’573 Patents in an IDS filed in United States Patent Application Serial Nos. 14/104650, entitled “Methods and Systems for Processing Polynucleotides”; 14/175935, entitled “Partitioning and Processing of Analytes and Other Species”; 14/175973, entitled “Polynucleotide Barcode Generation”; and 13/966150, entitled “Capsule Array Devices and Methods of Use.” Copies of the IDSs are attached as Exhibits H, I, J, and K. The ’148, ’407, Case 1:15-cv-00152-RGA Document 12 Filed 04/23/15 Page 23 of 36 PageID #: 737Case 1: 6-cv-00830-RGA Document 23-1 il 3/ 1/ 7 78 f 1 3 PageID #: 1318 24 and ’573 Patents share the same specification and each claim priority to United States Provisional Application No. 60/379,927. In addition, 10X has had knowledge of and notice of the ’148 Patent and its infringement since at least, and through, the filing and service of Plaintiff’s original Complaint on February 12, 2015 and despite this knowledge continues to commit the aforementioned infringing acts. 76. 10X actively, knowingly, and intentionally has induced, or has threatened to induce, infringement of at least Claim 1 of the ’148 Patent by controlling the design and manufacture of, offering for sale, and selling the GemCode Instrument and GemCode Reagents with the knowledge and specific intent that its customers will use these components to infringe by performing the claimed method for performing a PCR reaction in microfluidic plugs. 77. 10X has further actively, knowingly, and intentionally induced, or has threatened to induce, infringement of at least Claim 1 of the ’148 Patent with the knowledge and the specific intent to encourage and facilitate infringing uses of such products by its customers through, for instance, the dissemination of promotional and marketing materials relating to the GemCode Platform, the creation of distribution channels for the GemCode Platform in the United States, the distribution of instructions for use of the GemCode Platform in the United States, the provision of technical support for the GemCode Platform in the United States, and the open-source distribution of software for the analysis of data that results from the GemCode Instrument. For instance, 10X asserts on its website that the “GemCode Technology underlying [the GemCode Platform] is an innovative reagent delivery system and set of algorithms and software.” Exhibit N, available at 10xgenomics.com/technology. Likewise, 10X’s website asserts that the GemCode Software uses “barcodes provided by the reagent delivery system,” and that “the platform and tools used to build the GemCode Software are open-source.” Exhibit M, Case 1:15-cv-00152-RGA Document 12 Filed 04/23/15 Page 24 of 36 PageID #: 738Case 1: 6-cv-00830-RGA Document 23-1 il 3/ 1/ 7 79 f 1 3 PageID #: 1319 25 available at 10xgenomics.com/products. 10X induces infringement by, for instance, stating that it “encourage[s] others to contribute to the project and to use it to build their own informatics pipelines.” Exhibit Q, available at 10xgenomics.com/community. On information and belief, 10X distributes other instructional materials, product manuals, and technical materials with the knowledge and the specific intent to encourage and facilitate the infringing sale and use of its GemCode Platform. 10X is liable for its induced infringement of the ’148 Patent pursuant to 35 U.S.C. § 271 (b). 78. 10X has contributed to, or has threatened to contribute to, the infringement by its customers of the ’148 Patent by, without authority, selling and offering to sell within the United States materials and apparatuses for practicing the claimed invention of the ’148 Patent, including at least the GemCode Instrument and GemCode Reagents. See supra ¶¶ 16-19. When, for example, the GemCode Instrument and GemCode Reagents are used by 10X’s customers for partitioning long DNA molecules, the claimed method for performing a PCR reaction in microfluidic plugs is performed, thereby infringing, literally or under the doctrine of equivalents, at least Claim 1 of the ’148 Patent. These components, supplied by 10X, constitute material parts of the claimed invention of the ’148 Patent. 79. On information and belief, 10X knows that the GemCode Instrument and GemCode Reagents constitute a material part of the inventions of the ‘148 Patent and not a staple article or commodity of commerce suitable for substantial noninfringing use. For example, 10X asserts that the reagent delivery system (which includes the GemCode Instrument and GemCode Reagents) of the GemCode platform is the “underlying technology” of the GemCode Platform. See Exhibit N, available at 10xgenomics.com/technology. Likewise, 10X knows that the reagent delivery system of the GemCode platform provides barcodes for use with the GemCode Case 1:15-cv-00152-RGA Document 12 Filed 04/23/15 Page 25 of 36 PageID #: 739Case 1: 6-cv-00830-RGA Document 23-1 il 3/ 1/ 7 80 f 1 3 PageID #: 1320 26 Software, and that the GemCode Instrument is not a staple article or commodity of commerce suitable for substantial non-infringing use because the GemCode Instrument has no use apart from infringing the ’148 Patent. 10X is liable for its contributory infringement of the ’148 Patent pursuant to 35 U.S.C. § 271(c). 80. 10X’s infringement of the ’148 Patent has injured Plaintiffs in their business and property rights. Plaintiffs are entitled to recover monetary damages for such injuries pursuant to 35 U.S.C. § 284 in an amount to be determined at trial. 81. 10X’s infringement of the ’148 Patent has caused irreparable harm to Plaintiffs and will continue to cause such harm unless and until 10X’s infringing activities are enjoined by this Court. COUNT VI (By RainDance and the University of Chicago) (Infringement of U.S. Patent No. 8,889,083) 82. Plaintiffs re-allege and incorporate by reference the allegations contained in paragraphs 1 through 22 above as relevant to this count. 83. On November 18, 2014 the United States Patent and Trademark Office duly and legally issued U.S. Patent No. 8,889,083 B2 (“the ’083 Patent”), entitled “Device and Method for Pressure-Driven Plug Transport and Reaction.” A copy of the ’083 Patent is attached to the Complaint as Exhibit F. 84. Rustem F. Ismagilov, Joshua David Tice, Helen Song, and Lewis Spencer Roach, Jr., are the sole and true inventors of the ’083 Patent. By operation of law and as a result of written assignment agreements, the University of Chicago obtained the entire right, title and interest to and in the ’083 Patent. Case 1:15-cv-00152-RGA Document 12 Filed 04/23/15 Page 26 of 36 PageID #: 740Case 1: 6-cv-00830-RGA Document 23-1 il 3/ 1/ 7 81 f 1 3 PageID #: 1321 27 85. Pursuant to license agreements RainDance entered into with the University of Chicago, RainDance obtained an exclusive license to the ‘083 Patent in the field of microfluidic systems, kits and chips. 86. On information and belief, 10X has infringed and continues to infringe at least Claim 20 of the ’083 Patent pursuant to 35 U.S.C. § 271(a), literally or under the doctrine of equivalents, by making, using, selling, and/or offering to sell in the United States without authority and/or importing into the United States without authority, microfluidic DNA sequencing products, devices, systems, and/or components of systems that perform the claimed method for conducting a reaction in plugs in a microchannel, including, but not limited to, 10X’s GemCode Instrument. See supra ¶¶ 16-19. 87. 10X has had knowledge of the ’083 Patent at least as early as April 4, 2014 when it cited the ’407 and ’573 Patents in an IDS filed in United States Patent Application Serial Nos. 14/104650, entitled “Methods and Systems for Processing Polynucleotides”; 14/175935, entitled “Partitioning and Processing of Analytes and Other Species”; 14/175973, entitled “Polynucleotide Barcode Generation”; and 13/966150, entitled “Capsule Array Devices and Methods of Use.” Copies of the IDSs are attached as Exhibits H, I, J, and K. The ’083, ’407, and ’573 Patents share the same specification and each claim priority to United States Provisional Application No. 60/379,927. In addition, 10X has had knowledge of and notice of the ’083 Patent and its infringement since at least, and through, the filing and service of Plaintiff’s original Complaint on February 12, 2015 and despite this knowledge continues to commit the aforementioned infringing acts. 88. 10X actively, knowingly, and intentionally has induced, or has threatened to induce, infringement of at least Claim 20 of the ’083 Patent by controlling the design and Case 1:15-cv-00152-RGA Document 12 Filed 04/23/15 Page 27 of 36 PageID #: 741Case 1: 6-cv-00830-RGA Document 23-1 il 3/ 1/ 7 82 f 1 3 PageID #: 1322 28 manufacture of, offering for sale, and selling the GemCode Instrument and GemCode Reagents with the knowledge and specific intent that its customers will use these components to infringe by performing the claimed method for conducting a reaction in plugs in a microchannel. 89. 10X has further actively, knowingly, and intentionally induced, or has threatened to induce, infringement of at least Claim 20 of the ’083 Patent with the knowledge and the specific intent to encourage and facilitate infringing uses of such products by its customers through, for instance, the dissemination of promotional and marketing materials relating to the GemCode Platform, the creation of distribution channels for the GemCode Platform in the United States, the distribution of instructions for use of the GemCode Platform in the United States, the provision of technical support for the GemCode Platform in the United States, and the open-source distribution of software for the analysis of data that results from the GemCode Instrument. For instance, 10X asserts on its website that the “GemCode Technology underlying [the GemCode Platform] is an innovative reagent delivery system and set of algorithms and software.” Exhibit N, available at 10xgenomics.com/technology. Likewise, 10X’s website asserts that the GemCode Software uses “barcodes provided by the reagent delivery system,” and that “the platform and tools used to build the GemCode Software are open- source.” Exhibit M, available at 10xgenomics.com/products. 10X induces infringement by, for instance, stating that it “encourage[s] others to contribute to the project and to use it to build their own informatics pipelines.” Exhibit Q, available at 10xgenomics.com/community. On information and belief, 10X distributes other instructional materials, product manuals, and technical materials with the knowledge and the specific intent to encourage and facilitate the infringing sale and use of its GemCode Platform. 10X is liable for its induced infringement of the ’083 Patent pursuant to 35 U.S.C. § 271 (b). Case 1:15-cv-00152-RGA Document 12 Filed 04/23/15 Page 28 of 36 PageID #: 742Case 1: 6-cv-00830-RGA Document 23-1 il 3/ 1/ 7 83 f 1 3 PageID #: 1323 29 90. 10X has contributed to, or has threatened to contribute to, the infringement by its customers of the ’083 Patent by, without authority, selling and offering to sell within the United States materials and apparatuses for practicing the claimed invention of the ’083 Patent, including at least the GemCode Instrument and GemCode Reagents. See supra ¶¶ 16-19. When, for example, the GemCode Instrument and GemCode Reagents are used by 10X’s customers for partitioning long DNA molecules, the claimed method for conducting a reaction in plugs in a microchannel is performed, thereby infringing, literally or under the doctrine of equivalents, at least Claim 20 of the ’083 Patent. These components, supplied by 10X, constitute material parts of the claimed invention of the ’083 Patent. 91. On information and belief, 10X knows that the GemCode Instrument and GemCode Reagents constitute a material part of the inventions of the ’083 Patent and not a staple article or commodity of commerce suitable for substantial noninfringing use. For example, 10X asserts that the reagent delivery system (which includes the GemCode Instrument and GemCode Reagents) of the GemCode platform is the “underlying technology” of the GemCode Platform. See Exhibit N, available at 10xgenomics.com/technology. Likewise, 10X knows that the reagent delivery system of the GemCode platform provides barcodes for use with the GemCode Software, and that the GemCode Instrument is not a staple article or commodity of commerce suitable for substantial non-infringing use because the GemCode Instrument has no use apart from infringing the ’083 Patent. 10X is liable for its contributory infringement of the ’083 Patent pursuant to 35 U.S.C. § 271(c). 92. 10X’s infringement of the ’083 Patent has injured Plaintiffs in their business and property rights. Plaintiffs are entitled to recover monetary damages for such injuries pursuant to 35 U.S.C. § 284 in an amount to be determined at trial. Case 1:15-cv-00152-RGA Document 12 Filed 04/23/15 Page 29 of 36 PageID #: 743Case 1: 6-cv-00830-RGA Document 23-1 il 3/ 1/ 7 84 f 1 3 PageID #: 1 24 30 93. 10X’s infringement of the ’083 Patent has caused irreparable harm to Plaintiffs and will continue to cause such harm unless and until 10X’s infringing activities are enjoined by this Court. COUNT VII (By RainDance and the University of Chicago) (Infringement of U.S. Patent No. 7,129,091) 94. Plaintiffs re-allege and incorporate by reference the allegations contained in paragraphs 1 through 22 above as relevant to this count. 95. On October 31, 2006, the United States Patent and Trademark Office duly and legally issued U.S. Patent No. 7,129,091 B2 (“the ’091 Patent”), entitled “Device and Method for Pressure-Driven Plug Transport and Reaction.” A copy of the ’091 Patent is attached to the Complaint as Exhibit G. 96. Rustem F. Ismagilov, Joshua David Tice, and Helen Song, are the sole and true inventors of the ’091 Patent. By operation of law and as a result of written assignment agreements, the University of Chicago obtained the entire right, title and interest to and in the ’091 Patent. 97. Pursuant to license agreements RainDance entered into with the University of Chicago, RainDance obtained an exclusive license to the ’091 Patent in the field of microfluidic systems, kits and chips. 98. On information and belief, 10X has infringed and continues to infringe at least Claim 1 of the ’091 Patent pursuant to 35 U.S.C. § 271(a), literally or under the doctrine of equivalents, by using within the United States without authority microfluidic DNA sequencing products, devices, systems, and/or components of systems that perform the claimed system and method for conducting a reaction in plugs in a microchannel, including, but not limited to, 10X’s GemCode Instrument. See supra ¶¶ 16-19. Case 1:15-cv-00152-RGA Document 12 Filed 04/23/15 Page 30 of 36 PageID #: 744Case 1: 6-cv-00830-RGA Document 23-1 il 3/ 1/ 7 85 f 1 3 PageID #: 1325 31 99. 10X has had knowledge of the ’091 Patent at least as early as April 4, 2014 when it cited the ‘407 and ‘573 Patents in an IDS filed in United States Patent Application Serial Nos. 14/104650, entitled “Methods and Systems for Processing Polynucleotides”; 14/175935, entitled “Partitioning and Processing of Analytes and Other Species”; 14/175973, entitled “Polynucleotide Barcode Generation”; and 13/966150, entitled “Capsule Array Devices and Methods of Use.” Copies of the IDSs are attached as Exhibits H, I, J, and K. The ’091, ’407, and ’573 Patents share substantially overlapping specifications and each claim priority to United States Provisional Application No. 60/379,927. In addition, 10X has had knowledge of and notice of the ’091 Patent and its infringement since at least, and through, the filing and service of Plaintiff’s original Complaint on February 12, 2015 and despite this knowledge continues to commit the aforementioned infringing acts. 100. 10X actively, knowingly, and intentionally has induced, or has threatened to induce, infringement of at least Claim 1 of the ’091 Patent by controlling the design and manufacture of, offering for sale, and selling the GemCode Instrument and GemCode Reagents with the knowledge and specific intent that its customers will use these components to infringe by performing the claimed method for conducting a reaction in plugs in a microchannel. 101. 10X has further actively, knowingly, and intentionally induced, or has threatened to induce, infringement of at least Claim 1 of the ’091 Patent with the knowledge and the specific intent to encourage and facilitate infringing uses of such products by its customers through, for instance, the dissemination of promotional and marketing materials relating to the GemCode Platform, the creation of distribution channels for the GemCode Platform in the United States, the distribution of instructions for use of the GemCode Platform in the United States, the provision of technical support for the GemCode Platform in the United States, and the Case 1:15-cv-00152-RGA Document 12 Filed 04/23/15 Page 31 of 36 PageID #: 745Case 1: 6-cv-00830-RGA Document 23-1 il 3/ 1/ 7 86 f 1 3 PageID #: 1326 32 open-source distribution of software for the analysis of data that results from the GemCode Instrument. For instance, 10X asserts on its website that the “GemCode Technology underlying [the GemCode Platform] is an innovative reagent delivery system and set of algorithms and software.” Exhibit N, available at 10xgenomics.com/technology. Likewise, 10X’s website asserts that the GemCode Software uses “barcodes provided by the reagent delivery system,” and that “the platform and tools used to build the GemCode Software are open-source.” Exhibit M, available at 10xgenomics.com/products. 10X induces infringement by, for instance, stating that it “encourage[s] others to contribute to the project and to use it to build their own informatics pipelines.” Exhibit Q, available at 10xgenomics.com/community. On information and belief, 10X distributes other instructional materials, product manuals, and technical materials with the knowledge and the specific intent to encourage and facilitate the infringing sale and use of its GemCode Platform. 10X is liable for its induced infringement of the ’091 Patent pursuant to 35 U.S.C. § 271 (b). 102. 10X has contributed to, or has threatened to contribute to, the infringement by its customers of the ’091 Patent by, without authority, selling and offering to sell within the United States materials and apparatuses for practicing the claimed invention of the ’091 Patent, including at least the GemCode Instrument and GemCode Reagents. See supra ¶¶ 16-19. When, for example, the GemCode Instrument and GemCode Reagents are used by 10X’s customers for partitioning long DNA molecules, the claimed method for conducting a reaction in plugs in a microchannel is performed, thereby infringing, literally or under the doctrine of equivalents, at least Claim 1 of the ’091 Patent. These components, supplied by 10X, constitute material parts of the claimed invention of the ’091Patent. Case 1:15-cv-00152-RGA Document 12 Filed 04/23/15 Page 32 of 36 PageID #: 746Case 1: 6-cv-00830-RGA Document 23-1 il 3/ 1/ 7 87 f 1 3 PageID #: 1327 33 103. On information and belief, 10X knows that the GemCode Instrument and GemCode Reagents constitute a material part of the inventions of the ’091 Patent and not a staple article or commodity of commerce suitable for substantial noninfringing use. For example, 10X asserts that the reagent delivery system (which includes the GemCode Instrument and GemCode Reagents) of the GemCode platform is the “underlying technology” of the GemCode Platform. See Exhibit N, available at 10xgenomics.com/technology. Likewise, 10X knows that the reagent delivery system of the GemCode platform provides barcodes for use with the GemCode Software, and that the GemCode Instrument is not a staple article or commodity of commerce suitable for substantial non-infringing use because the GemCode Instrument has no use apart from infringing the ’091 Patent. 10X is liable for its contributory infringement of the ’091 Patent pursuant to 35 U.S.C. § 271(c). 104. 10X’s infringement of the ’091 Patent has injured Plaintiffs in their business and property rights. Plaintiffs are entitled to recover monetary damages for such injuries pursuant to 35 U.S.C. § 284 in an amount to be determined at trial. 105. 10X’s infringement of the ’091 Patent has caused irreparable harm to Plaintiffs and will continue to cause such harm unless and until 10X’s infringing activities are enjoined by this Court. PRAYER FOR RELIEF WHEREFORE, RainDance and the University of Chicago pray for relief as follows: RainDance only: A. Judgment that 10X has infringed one or more claims of the ’430 Patent; Case 1:15-cv-00152-RGA Document 12 Filed 04/23/15 Page 33 of 36 PageID #: 747Case 1: 6-cv-00830-RGA Document 23-1 il 3/ 1/ 7 88 f 1 3 PageID #: 1328 34 B. An order permanently enjoining 10X from further infringement of the ’430 Patent; C. An award of damages pursuant to 35 U.S.C. § 284; D. An order for an accounting of damages from 10X’s infringement; E. An award to RainDance of its costs and reasonable expenses to the fullest extent permitted by law; F. A declaration that this case is exceptional pursuant to 35 U.S.C. § 285, and an award of attorneys’ fees and costs; and G. An award of such other and further relief as the Court may deem just and proper. RainDance and the University of Chicago: H. Judgment that 10X has infringed one or more claims of the ’573 Patent; I. Judgment that 10X has infringed one or more claims of the ’193 Patent; J. Judgment that 10X has infringed one or more claims of the ’407 Patent; K. Judgment that 10X has infringed one or more claims of the ’148 Patent; L. Judgment that 10X has infringed one or more claims of the ’083 Patent; M. Judgment that 10X has infringed one or more claims of the ’091 Patent; N. An order permanently enjoining 10X from further infringement of the ’573, ’193, ’407, ’148, ’083, and ’091 Patents; O. An award of damages pursuant to 35 U.S.C. § 284; P. An award to RainDance and the University of Chicago of their costs and reasonable expenses to the fullest extent permitted by law; Case 1:15-cv-00152-RGA Document 12 Filed 04/23/15 Page 34 of 36 PageID #: 748Case 1: 6-cv-00830-RGA Document 23-1 il 3/ 1/ 7 89 f 1 3 PageID #: 1329 35 Q. A declaration that this case is exceptional pursuant to 35 U.S.C. § 285, and an award of attorneys’ fees and costs; and R. An award of such other and further relief as the Court may deem just and proper. DEMAND FOR JURY TRIAL Pursuant to Federal Rule of Civil Procedure 38(b), RainDance and the University of Chicago hereby demand a trial by jury on all issues so triable. OF COUNSEL: Edward R. Reines Sonal N. Mehta Derek C. Walter Blake Davis WEIL, GOTSHAL & MANGES LLP 201 Redwood Shores Parkway Redwood Shores, CA 94065 (650) 8002-3000 MORRIS, NICHOLS, ARSHT & TUNNELL LLP /s/ Jack B. Blumenfeld Jack B. Blumenfeld (#1014) Karen Jacobs (#2881) 1201 North Market Street P.O. Box 1347 Wilmington, DE 19899 (302) 658-9200 jblumenfeld@mnat.com kjacobs@mnat.com Attorneys for Plaintiffs April 23, 2015 Case 1:15-cv-00152-RGA Document 12 Filed 04/23/15 Page 35 of 36 PageID #: 749Case 1: 6-cv-00830-RGA Document 23-1 il 3/ 1/ 7 90 f 1 3 PageID #: 1330 CERTIFICATE OF SERVICE I hereby certify that on April 23, 2015, I caused the foregoing to be electronically filed with the Clerk of the Court using CM/ECF, which will send notification of such filing to all registered participants. I further certify that I caused copies of the foregoing document to be served on April 23, 2015, upon the following in the manner indicated: Steven J. Balick, Esquire Tiffany Geyer Lydon, Esquire Andrew C. Mayo, Esquire ASHBY & GEDDES 500 Delaware Avenue, 8th Floor Wilmington, DE 19801 Attorneys for Defendant VIA ELECTRONIC MAIL David Isaac Gindler, Esquire Andrei Iancu, Esquire Lindsay Androski Kelly, Esquire Lauren Nicole Drake, Esquire Elizabeth Chenyi Tuan, Esquire IRELL & MANELLA LLP 1800 Avenue of the Stars, Suite 900 Los Angeles, CA 90067 Attorneys for Defendant VIA ELECTRONIC MAIL /s/ Jack B. Blumenfeld Jack B. Blumenfeld (#1014) Case 1:15-cv-00152-RGA Document 12 Filed 04/23/15 Page 36 of 36 PageID #: 750Case 1: 6-cv-00830-RGA Document 23-1 il 3/ 1/ 7 91 f 1 3 PageID #: 1331 EXHIBIT D Case 1:16-cv-00830-RGA Document 23-1 Filed 03/21/17 Page 92 of 163 PageID #: 1332 1 Exhibit D - Claim Elements Not Supported in FAC’s Summary of Accused Products At least the following elements of the asserted claims - underlined and highlighted in bold in the listing of the claims below - are not supported by any disclosure in SIPCO’s FAC with respect to the alleged features of the accused Streetline products: ‘516 Patent, claim 1: 1. A server providing a gateway between two networks, where at least one of the two networks is a wireless network, said server comprising: a radio modem capable of communicating with a first network that operates, at least in part, by wireless communication; a network interface capable of communicating with a second network; and a digital controller coupled to said radio modem and to said network interface, said digital controller communicating with said first network via said radio modem and communicating with said second network via said network interface, said digital controller passing data packets received from said first network that are destined for said second network to said second network, and passing data packets received from said second network that are destined for said first network to said first network, said digital controller maintaining a map of data packet transmission paths of a plurality of clients of said first network, where a transmission path of a client of said first network to said server can be through one or more of other clients of said first network; wherein said digital controller changes the transmission paths of clients to optimize the transmission paths including changing the transmission path from the client to the gateway so that the path to the gateway is chosen from the group consisting essentially of the path to the gateway through the least possible number of additional clients, the path to the gateway through the most robust additional clients, the path to the gateway through the clients with the least amount of traffic, and the path to the gateway through the fastest clients. ‘692 Patent, claim 1: 1. A system for remote data collection, assembly, and storage comprising: Case 1:16-cv-00830-RGA Document 23-1 Filed 03/21/17 Page 93 of 163 PageID #: 1333 2 a computer configured to execute at least one computer program that formats and stores select information for retrieval upon demand from a remotely located device, said computer integrated with a wide area network (WAN); at least one wireless transmitter configured to transmit select information and transmitter identification information; a plurality of relatively low-power radio-frequency (RF) transceivers dispersed geographically at defined locations configured to receive select information transmitted from at least one nearby wireless transmitter and further configured to transmit the select information, the transmitter identification information and transceiver identification information; and at least one gateway connected to the wide area network configured to receive and translate the select information, the transmitter identification information, and transceiver identification information, said gateway further configured to farther transmit the translated information to the computer over the WAN. ‘893 patent, claim 1: 1. A system for communicating commands and sensed data between remote devices, the system comprising: a plurality of transceivers, each transceiver being in communication with at least one other of the plurality of transceivers, wherein each transceiver has a unique address, wherein the unique address identities an individual transceiver, wherein each transceiver is geographically remote from the other of the plurality of transceivers, wherein each transceiver communicates with each of the other transceivers via preformatted messages; a controller, connected to one of the plurality of transceivers, the controller being in communications with each of the plurality of transceivers via a controller transceiver, the controller communicating via preformatted messages; wherein the preformatted messages comprises at least one packet, wherein the packet comprises: a receiver address comprising a scalable address of the at least one of the intended receiving transceivers; sender address comprising the unique address of the sending transceiver; a command indicator comprising a command code; at least one data value comprising a scalable message; and an error detector comprising a redundancy check error detector; Case 1:16-cv-00830-RGA Document 23-1 Filed 03/21/17 Page 94 of 163 PageID #: 1334 3 and wherein the controller sends preformatted command messages via the controller transceiver, and the plurality of transceivers send preformatted response messages. ‘893 patent, claim 37: 37. A method of communicating between geographically remote devices, the method comprising: sending a message; receiving the message at one or more of the remote devices; processing the message; preparing a response message; receiving the response message; processing the response message wherein all messages comprise at least one packet, the packet having a predetermined format; wherein the predetermined format comprises: a receiver address comprising a scalable address of the at least one of the intended receiving remote devices; a sender address comprising an unique address of the sender; a command indicator comprising a command code; a scalable data value comprising a scalable message; and an error detector that is a redundancy check error detector; and wherein the steps of sending and receiving are repeated until the message is received by the intended receiver. ‘511 patent, claim 1: 1. A wireless communication network adapted for use in an automated monitoring system for monitoring and controlling a plurality of remote devices via a host computer connected to a wide area network, the wireless communication network comprising: a plurality of wireless transceivers having unique identifiers, each of the plurality of wireless transceivers configured to receive a sensor data signal from one of the plurality of remote devices and transmit an original data message using a predefined wireless communication protocol, the original data message comprising the corresponding unique identifier and sensor data signal, Case 1:16-cv-00830-RGA Document 23-1 Filed 03/21/17 Page 95 of 163 PageID #: 1335 4 and further configured to receive the original data message transmitted by one of the other wireless transceivers and transmit a repeated data message using the predefined communication protocol, the repeated data message including the sensor data signal and the corresponding unique identifier; and a site controller in communication with at least one of the plurality of wireless transceivers, the site controller configured to receive the original data messages and the repeated data messages, identify the remote device associated with the corresponding sensor data signal, and provide information related to the sensor data signal to the wide area network for delivery to the host computer. ‘661 patent, claim 5: 5. A system for monitoring remote devices, comprising: at least one sensor adapted to generate an electrical signal in response to a physical condition; at least one wireless transmitter electrically interfaced with the sensor and configured to encode the electrical signal, the wireless transmitter further configured to transmit the encoded electrical signal and transmitter identification information in a radio-frequency (RF) signal; one or more additional wireless transmitters each electrically interfaced with a sensor and configured to receive the RF signal and retransmit the RF signal; at least one gateway connected a wide area network (WAN) configured to receive and translate the retransmitted RF signal, the gateway further configured to deliver the encoded electrical signal and transmitter identification information to a computer on the WAN; and a computer configured to execute at least one computer program that formats and stores select information responsive to the electrical signal for retrieval upon demand from a remotely located device. ‘661 patent, claim 8: 8. The system of claim 5, wherein the gateway translates the encoded electrical signal, the transmitter identification, and the transceiver identification information into TCP/IP for communication over the WAN. ‘492 patent, claim 8: Case 1:16-cv-00830-RGA Document 23-1 Filed 03/21/17 Page 96 of 163 PageID #: 1336 5 8. A method of communicating command and sensed data between remote wireless devices, the method comprising: providing a receiver to receive at least one message; wherein the message has a packet that comprises a command indicator comprising a command code, a scalable data value comprising a scalable message, and an error detector that is a redundancy check error detector; and providing a controller to determine if at least one received message is a duplicate message and determining a location from which the duplicate message originated. ‘492 patent, claim 10: 10. The method of claim 8, further comprising providing at least one remote wireless communication device, wherein at least one of the devices has a unique address and the packet further comprises at least one scalable address field to contain the unique address for at least one device. ‘492 patent, claim 13: 13. The method of claim 8, further comprising determining if an error exists in a packet of the at least one message. ‘010 patent, claim 16: 15. A vehicle parking monitoring system, comprising: a parking space sensor enabled to detect the presence of at least one vehicle in a first parking space of a first parking area; a parking area transceiver in communication with the parking space sensor, the parking area transceiver configured to receive information from the parking space sensor and transmit the information to a gateway, the parking area transceiver also configured to receive information from the gateway; an ingress sensor in communication with a second parking area transceiver, the ingress sensor is enabled to provide a first data message to the second parking area transceiver when the vehicle enters the first parking area; an egress sensor in communication with a third parking area transceiver, the egress sensor is enabled to provide a second data Case 1:16-cv-00830-RGA Document 23-1 Filed 03/21/17 Page 97 of 163 PageID #: 1337 6 message to the parking area transceiver when the vehicle exits the first parking area; and wherein the gateway is connected to a wide area network and configured to receive information from the first, second, and third parking area transceivers and transmit the information to the wide area network, the gateway also configured to receive information from the wide area network and transmit the information to the first, second, and third parking area transceivers. 16. The vehicle parking monitoring system in claim 15, further comprising a server enabled to receive the information from the gateway via the wide area network and send information to the gateway via the wide area network. ‘471 patent, claim 17: 17. A wireless network system comprising: a first node including a first node controller and a first node radio modem, said first node controller implementing a first node process that includes controlling of said first node radio modem, said first node process including receiving and transmitting data packets via said first node radio modem; a plurality of second nodes each including a second node controller implementing a second node process that includes controlling a second node radio modem, said second node process including receiving and transmitting data packets via said second node radio modem, wherein said second node process of each of said second nodes includes initiating a radio transmission path to said first node that is a link to said first node through at least one of the remainder of said plurality of second nodes; and wherein said first node process dynamically updates a second node link tree comprising second node link entries and dynamically modifies the second node link tree so that the data packet transmission from the first node is optimized. ‘471 patent, claim 28: 28. A wireless network system comprising: a first node including a first node controller and a first node radio modem, said first node controller implementing a first node process that includes controlling of said first node radio modem, said first node process including receiving and transmitting data packets via said first node radio modem; Case 1:16-cv-00830-RGA Document 23-1 Filed 03/21/17 Page 98 of 163 PageID #: 1338 7 a plurality of second nodes each including a second node controller implementing a second node process that includes controlling a second node radio modem, said second node process including receiving and transmitting data packets via said second node radio modem, wherein said second node process of each of said second nodes includes initiating a radio transmission path to said first node that is a direct link to said first node through at least one of the remainder of said plurality of second nodes; and wherein said first node process maintains a second node link tree comprising second node link entries. ‘496 patent, claim 11: 11. A method for providing wireless network communication comprising: utilizing a server implementing a server process including receiving data packets via RF transmission, sending data packets via RF transmission, communicating with a network, and performing housekeeping functions; and utilizing a plurality of clients, each client providing a client process including sending and receiving data packet via RF transmission, maintaining a send/receive data buffer in digital memory, and selecting a transmission path to said server that is one of a direct link to said server and an indirect link to said server through at least one of the remainder of said plurality of clients, wherein the server process: receives information identifying the selected transmission path from each of the plurality of clients, determines a server selected transmission path for each of the plurality of clients based on the selected transmission paths received from the plurality of clients, sends information identifying the server selected transmission path for each of the clients to the respective clients; and maintains a client link tree having client link entries representing each of the plurality of clients. ‘496 patent, claim 27: 27. In a wireless system comprising a plurality of second nodes and a first node configured to implement a first node process, the first node process including receiving data packets via a first node wireless radio, sending data packets via said wireless radio, communicating with a network, performing node link tree housekeeping functions, maintaining a second node link tree having second node link entries representing each of the plurality of second Case 1:16-cv-00830-RGA Document 23-1 Filed 03/21/17 Page 99 of 163 PageID #: 1339 8 nodes, dynamically updating the tree to reflect the current operational status of the second nodes, and rerouting data packets around inactive or malfunctioning second nodes, a second node in the plurality of second nodes, the second node configured to implement a second node process including: sending and receiving data packet via a second node wireless radio; maintaining a send/receive data buffer in a digital memory; and selecting a link to the first node that is one of a direct link to the first node and an indirect link to the first node through at least one of the remainder of the plurality of second nodes. ‘842 patent, claim 16: 16. A device for communicating information, the device comprising: a processor; and a memory, the memory comprising logical instructions that when executed by the processor are configured to cause the device to: wirelessly transmit a signal comprising instruction data for delivery to a network of addressable low-power transceivers; establish a communication link between at least one low-power transceiver in the network of addressable low-power transceivers and a central location based on an address included in the signal, the communication link comprising one or more low-power transceivers in the network of addressable low-power transceivers; and receive one or more low-power RF signals and communicate information contained within the signals to the central location along with a unique transceiver identification number over the communication link. Case 1:16-cv-00830-RGA Document 23-1 Filed 03/21/17 Page 100 of 163 PageID #: 1340 EXHIBIT E Case 1:16-cv-00830-RGA Document 23-1 Filed 03/21/17 Page 101 of 163 PageID #: 1341 ME1 22314983v.1 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE KONINKLIJKE PHILIPS N.V., U.S. PHILIPS CORPORATION, Case No.: 15-1125-GMS JURY TRIAL DEMANDED Plaintiffs, v. ASUSTEK COMPUTER INC., ASUS COMPUTER INTERNATIONAL, Defendants. FIRST AMENDED COMPLAINT FOR PATENT INFRINGEMENT Plaintiffs Koninklijke Philips N.V. and U.S. Philips Corporation (collectively, “Plaintiffs” or “Philips”), bring this First Amended Complaint for patent infringement against Defendants ASUSTeK Computer Inc. and ASUS Computer International (collectively, “Defendants” or “ASUS”), and hereby allege as follows: Nature of the Action 1. This is an action for patent infringement under 35 U.S.C. § 271, et seq., by Philips against ASUS for infringement of United States Patent Nos. RE 44,913 (“the ’913 patent”), 6,690,387 (“the ’387 patent”), 7,184,064 (“the ’064 patent”), 7,529,806 (“the ’806 patent”), 5,910,797 (“the ’797 patent”), 6,522,695 (“the ’695 patent”), RE 44,006 (“the ’006 patent”), 8,543,819 (“the ’819 patent”), 6,772,114 (“the ’114 patent”), and RE 43,564 (“the ’564 patent”) (collectively, the “patents-in-suit”). Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 1 of 62 PageID #: 241Case 1:16-cv-00830-RGA Document 23- Filed 03/2 / 7 Page 102 of 163 PageID #: 342 ME1 22314983v.1 -2- The Parties 2. Plaintiff Koninklijke Philips N.V., formerly known as Koninklijke Philips Electronics N.V., is a corporation duly organized and existing under the laws of the Netherlands. Its principal place of business is High Tech Campus 5, 5656 AE Eindhoven, the Netherlands. 3. Plaintiff U.S. Philips Corporation is a corporation duly organized and existing under the laws of Delaware. Its principal place of business is 3000 Minuteman Road, Andover, Massachusetts, 01810. 4. Upon information and belief, ASUSTeK Computer Inc. is a corporation organized and existing under the laws of Taiwan, with its principal place of business located at No. 15, Li- Te Road, Peitou, Taipei 112, Taiwan, R.O.C. 5. Upon information and belief, ASUS Computer International is a corporation organized and existing under the laws of California, with its principal place of business located at 800 Corporate Way, Fremont, California 94539. Jurisdiction and Venue 6. This is an action for patent infringement arising under the patent laws of the United States, Title 35 of the United States Code. This Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1338. 7. This Court has personal jurisdiction over Defendants because Defendants have, directly or through intermediaries, committed acts within Delaware giving rise to this action and/or have established minimum contacts with Delaware such that the exercise of jurisdiction would not offend traditional notions of fair play and substantial justice. Defendants have placed, and are continuing to place, infringing products into the stream of commerce, via an established Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 2 of 62 PageID #: 242Case 1:16-cv-00830-RGA Document 23- Filed 03/2 / 7 Page 103 of 163 PageID #: 1343 ME1 22314983v.1 -3- distribution channel, with the knowledge and/or understanding that such products are sold in the State of Delaware, including in this District. Upon information and belief, Defendants have derived substantial revenues from their infringing acts occurring within the State of Delaware and within this District. 8. In addition, Defendants have knowingly induced and continue to knowingly induce infringement within this District by advertising, marketing, offering for sale and/or selling devices that include hardware and/or software containing infringing functionality within this District, to consumers, customers, manufacturers, distributers, resellers, partners, and/or end users, and providing instructions, user manuals, advertising, and/or marketing materials which facilitate, direct or encourage the use of infringing functionality with knowledge thereof. 9. In addition, Defendants have contributorily infringed and continue to contributorily infringe within this District by offering to sell or selling within the United States or importing into the United States hardware and/or software containing infringing functionality to be used within this District by others, including customers and other end users, knowing that such functionality includes or constitutes a material part of the claimed invention, is especially made or adapted for use by others to practice the infringing functionality and thereby directly infringe, and that such functionality is not a staple article or commodity of commerce suitable for substantial, non-infringing use. 10. Venue is proper under 28 U.S.C. §§ 1391(b) and (c), and 1400. Philips’ Patents-in-Suit 11. On May 27, 2014, the U.S. Patent and Trademark Office duly and legally issued United States Patent No. RE 44,913, entitled “Text entry method and device therefor,” to Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 3 of 62 PageID #: 243Case 1:16-cv-00830-RGA Document 23- Filed 03/2 / 7 Page 104 of 163 PageID #: 1344 ME1 22314983v.1 -4- inventor Matthew J. Bickerton. Koninklijke Philips N.V. is the assignee and owner of the ’913 patent, a true copy of which is attached hereto as Exhibit 1. 12. On February 10, 2004, the U.S. Patent and Trademark Office duly and legally issued United States Patent No. 6,690,387, entitled “Touch-screen image scrolling system and method,” to inventors John Zimmerman and Jacquelyn Annette Martino. Koninklijke Philips N.V. is the assignee and owner of the ’387 patent, a true copy of which is attached hereto as Exhibit 2. 13. On February 27, 2007, the U.S. Patent and Trademark Office duly and legally issued United States Patent No. 7,184,064, entitled “Touch-screen image scrolling system and method,” to inventors John Zimmerman and Jacquelyn Annette Martino. Koninklijke Philips N.V. is the assignee and owner of the ’064 patent, a true copy of which is attached hereto as Exhibit 3. 14. On May 5, 2009, the U.S. Patent and Trademark Office duly and legally issued United States Patent No. 7,529,806, entitled “Partitioning of MP3 content file for emulating streaming,” to inventor Yevgeniy Eugene Shteyn. Koninklijke Philips N.V. is the assignee and owner of the ’806 patent, a true copy of which is attached hereto as Exhibit 4. 15. On June 8, 1999, the U.S. Patent and Trademark Office duly and legally issued United States Patent No. 5,910,797, entitled “Portable data processing apparatus provided with a screen and a gravitation-controlled sensor for screen orientation,” to inventor Leonardus G.M. Beuk. U.S. Philips Corporation is the assignee and owner of the ’797 patent, a true copy of which is attached hereto as Exhibit 5. 16. On February 18, 2003, the U.S. Patent and Trademark Office duly and legally Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 4 of 62 PageID #: 244Case 1:16-cv-00830-RGA Document 23- Filed 03/2 / 7 Page 105 of 163 PageID #: 1345 ME1 22314983v.1 -5- issued United States Patent No. 6,522,695, entitled “Transmitting device for transmitting a digital information signal alternately in encoded form and non-encoded form,” to inventors Alphons A.M.L. Bruekers, Johannes M.M. Verbakel, and Marcel S.E. Van Nieuwenhoven. Koninklijke Philips N.V. is the assignee and owner of the ’695 patent, a true copy of which is attached hereto as Exhibit 6. 17. On February 19, 2013, the U.S. Patent and Trademark Office duly and legally issued United States Patent No. RE 44,006, entitled “User interface for television,” to inventors Lisa Cherian, Robert Andrew Lambourne, and Guy James Roberts. Koninklijke Philips N.V. is the assignee and owner of the ’006 patent, a true copy of which is attached hereto as Exhibit 7. 18. On September 24, 2013, the U.S. Patent and Trademark Office duly and legally issued United States Patent No. 8,543,819, entitled “Secure authenticated distance measurement,” to inventor Franciscus Lucas Antonius Johannes Kamperman. Koninklijke Philips N.V. is the assignee and owner of the ’819 patent, a true copy of which is attached hereto as Exhibit 8. 19. On August 3, 2004, the U.S. Patent and Trademark Office duly and legally issued United States Patent No. 6,772,114, entitled “High frequency and low frequency audio signal encoding and decoding system,” to inventors Robert Johannes Sluijter, Andreas Johannes Gerrits, Rakesh Taori, and Samir Chennoukh. Koninklijke Philips N.V. is the assignee and owner of the ’114 patent, a true copy of which is attached hereto as Exhibit 9. 20. On August 7, 2012, the U.S. Patent and Trademark Office duly and legally issued United States Patent No. RE 43,564, entitled “Hand-held with auto-zoom for graphical display of web page,” to inventor Jan Van Ee. Koninklijke Philips N.V. is the assignee and owner of the Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 5 of 62 PageID #: 245Case 1:16-cv-00830-RGA Document 23- Filed 03/2 / 7 Page 106 of 163 PageID #: 1346 ME1 22314983v.1 -6- ’564 patent, a true copy of which is attached hereto as Exhibit 10. Factual Background 21. Philips is a world-renowned company that expends enormous efforts and resources to advance research and development in various technological fields. One of those fields is applied electronics, in which Philips has conducted groundbreaking research relating to graphical user interfaces, electronic displays of information, touch screen interfaces, the control of content delivery between multiple devices, and audio/video encoding and decoding, among other things. The patents-in-suit stem from this work and claim protection for interactive systems for which users can control apparatuses, displays, and content in an intuitive manner. These intuitive mechanisms are used in present-day smartphones and tablet computers and other electronic devices. Notice to Defendants 22. Upon information and belief, Defendants are well-aware of Plaintiffs’ patent portfolio relating to Defendants’ smartphones, tablet computers, notebooks, All-in-One PCs, and 2-in-1 PCs. Plaintiffs’ patent portfolio in this area has been the subject of extensive discussion between the parties. 23. Upon information and belief, Defendants have had knowledge of the ’913 patent in advance of the filing of the original Complaint. ASUS was given notice of its infringement of the ’913 patent at least upon receiving a letter from Philips dated May 21, 2013, which disclosed U.S. Patent No. 6,885,318 of which the ’913 patent is a reissue, upon viewing a presentation on the ’913 patent made by Philips on January 29, 2015, and through other communications, meetings, and presentations. At the very latest, ASUS was given notice of its infringement of the Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 6 of 62 PageID #: 246Case 1:16-cv-00830-RGA Document 23- Filed 03/2 / 7 Page 107 of 163 PageID #: 1347 ME1 22314983v.1 -7- ’913 patent upon the filing and service of the original Complaint in this action. 24. Upon information and belief, Defendants have had knowledge of the ’387 patent in advance of the filing of the original Complaint. ASUS was given notice of its infringement of the ’387 patent at least upon receiving a letter from Philips dated May 21, 2013 and through other communications, meetings, and presentations. At the very latest, ASUS was given notice of its infringement of the ’387 patent upon the filing and service of the original Complaint in this action. 25. Upon information and belief, Defendants have had knowledge of the ’064 patent in advance of the filing of the original Complaint. ASUS was given notice of its infringement of the ’064 patent at least upon receiving a letter from Philips dated May 21, 2013 and through other communications, meetings, and presentations. At the very latest, ASUS was given notice of its infringement of the ’064 patent upon the filing and service of the original Complaint in this action. 26. Upon information and belief, Defendants have had knowledge of the ’806 patent in advance of the filing of the original Complaint. ASUS was given notice of its infringement of the ’806 patent at least upon viewing a presentation made by Philips on November 21, 2013 and through other communications, meetings, and presentations. At the very latest, ASUS was given notice of its infringement of the ’806 patent upon the filing and service of the original Complaint in this action. 27. Upon information and belief, Defendants have had knowledge of the ’797 patent in advance of the filing of the original Complaint. ASUS was given notice of its infringement of the ’797 patent at least upon viewing a presentation made by Philips on November 21, 2013 and Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 7 of 62 PageID #: 247Case 1:16-cv-00830-RGA Document 23- Filed 03/2 / 7 Page 108 of 163 PageID #: 1348 ME1 22314983v.1 -8- through other communications, meetings, and presentations. At the very latest, ASUS was given notice of its infringement of the ’797 patent upon the filing and service of the original Complaint in this action. 28. Upon information and belief, Defendants have had knowledge of the ’695 patent in advance of the filing of the original Complaint. ASUS was given notice of its infringement of the ’695 patent at least upon receiving a letter from Philips dated May 21, 2013 and through other communications, meetings, and presentations. At the very latest, ASUS was given notice of its infringement of the ’695 patent upon the filing and service of the original Complaint in this action. 29. Upon information and belief, Defendants have had knowledge of the ’006 patent in advance of the filing of the original Complaint. ASUS was given notice of its infringement of the ’006 patent at least upon receiving a letter from Philips dated May 21, 2013 and upon receiving a letter from Philips dated December 14, 2015. At the very latest, ASUS was given notice of its infringement of the ’006 patent upon the filing and service of the original Complaint in this action. 30. Upon information and belief, Defendants have had knowledge of the ’819 patent in advance of the filing of the original Complaint. ASUS was given notice of its infringement of the ’819 patent at least upon receiving a letter from Philips dated November 19, 2015. At the very latest, ASUS was given notice of its infringement of the ’819 patent upon the filing and service of the original Complaint in this action. 31. Upon information and belief, Defendants have had knowledge of the ’114 patent in advance of the filing of the original Complaint. ASUS was given notice of its infringement of Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 8 of 62 PageID #: 248Case 1:16-cv-00830-RGA Document 23- Filed 03/2 / 7 Page 109 of 163 PageID #: 1349 ME1 22314983v.1 -9- the ’114 patent at least upon receiving a letter from Philips dated May 21, 2013 and through other communications, meetings, and presentations. At the very latest, ASUS was given notice of its infringement of the ’114 patent upon the filing and service of the original Complaint in this action. 32. Upon information and belief, Defendants have had knowledge of the ’564 patent in advance of the filing of the original Complaint. ASUS was given notice of its infringement of the ’564 patent at least upon receiving a letter from Philips dated May 21, 2013 and through other communications, meetings, and presentations. At the very latest, ASUS was given notice of its infringement of the ’564 patent upon the filing and service of the original Complaint in this action. Defendants’ Infringing Activities 33. Upon information and belief, Defendants are, and have been, engaged in the business of making, having made, using, selling and/or offering to sell within the United States, and/or importing into the United States smartphones, tablet computers, notebooks, All-in-One PCs, and 2-in-1 PCs that include hardware and/or software containing functionality covered by one or more claims of the patents-in-suit. 34. Non-limiting examples of these smartphones, tablet computers, notebooks, All-in- One PCs, and 2-in-1 PCs are the ZenFone family of smartphones, the PadFone family of smartphones, the ZenPad family of tablets, the Transformer Pad family of tablets, the Vivo Tab family of tablets, the Nexus family of tablets, the MeMo Pad family of tablets, the Eee Slate B121 tablet, the ZenBook family of notebooks, the Chromebooks family of notebooks, ZenBook Prime family of notebooks, the Zen AiO family of All-in-One PCs, the Vivo AiO family of All- Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 9 of 62 PageID #: 249Case 1:16-cv-00830-RGA Document 23- Filed 03/2 / 7 Page 110 of 163 PageID #: 1350 ME1 22314983v.1 -10- in-One PCs, the Portable AiO family of All-in-One PCs, and the Transformer Book Series family of 2-in-1 PCs which, on information and belief, have been sold within this judicial District, without limitation, through http://store.asus.com/us/, and the websites and retail locations of third parties. 35. Upon information and belief, Defendants purposefully direct sales and offers for sale of these smartphones, tablet computers, notebooks, All-in-One PCs, and 2-in-1 PCs, including but not limited to those specifically identified above, toward the state of Delaware, including this District. 36. Upon information and belief, Defendants maintain established distribution channels within the United States that permit Defendants to ship these smartphones, tablet computers, notebooks, All-in-One PCs, and 2-in-1 PCs, including but not limited to those specifically identified above, to the state of Delaware, including this District, within a few days. First Cause of Action: Infringement of U.S. Patent No. RE 44,913 37. Philips repeats and incorporates by reference each and every allegation of paragraphs 1 through 36 of this First Amended Complaint, as though set forth here in its entirety. 38. Koninklijke Philips N.V. is the sole owner of the entire right, title, and interest in and to the ’913 patent, including the right to sue and recover for any and all infringements thereof. 39. Claim 1 of the ’913 patent is illustrative of the method claims of the ’913 patent and is directed toward a method for inputting a character to a device including a keypad, which includes a plurality of keys. At least one of the keys has a primary character, a plurality of secondary characters, and an associated display area. In a default state, the keypad displays the Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 10 of 62 PageID #: 250Case 1:16-cv 00830-RGA Document 23- Filed 03/2 /17 Page 1 1 f 163 PageID #: 1351 ME1 22314983v.1 -11- primary character associated with the at least one key in the associated display area. In the default state, the primary character is returned as an input character in response to selection of the at least one key for a period shorter than a predetermined time period. A second state is switched to after a first key selection of the at least one key is detected for a period longer than the predetermined time period. In the second state, each of the secondary characters associated with the first selected key is displayed in a respective display area, a second key selection is detected, the secondary character associated with the second key selection is selected for the input character, and the keypad is returned to the default state. 40. Claim 4 of the ’913 patent is illustrative of the device claims of the ’913 patent and is directed toward a device for receiving character input having a keypad having a plurality of keys. At least one of the keys has a primary character, a plurality of secondary characters, and an associated display area. The device has means for displaying, in a default state, the primary character associated with the at least one key in the associated display area. The device has means for returning, in a default state, the primary character as an input character in response to selection of the at least one key for a period shorter than a predetermined time period and means for switching to a second state responsive to a first key selection of the at least one key for a period longer than the predetermined time period. The device has means for displaying, in the second state, each of the secondary characters associated with the selected key in a respective display area, means responsive to a second key selection for selecting as the input character the secondary character associated with the second key selection, and means for returning the keypad to the default state. 41. Defendants have directly infringed and continue to directly infringe the ’913 Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 11 of 62 PageID #: 251Case 1:16-cv 00830-RGA Document 23- Filed 03/2 /17 Page 1 2 f 163 PageID #: 1352 ME1 22314983v.1 -12- patent in violation of 35 U.S.C. § 271 by using in the United States, without authority, smartphones, tablet computers, notebooks, All-in-One PCs, and 2-in-1 PCs to practice, either literally or under the doctrine of equivalents, each step of at least the method of claim 1 of the ’913 patent. 42. Defendants have directly infringed and continue to directly infringe the ’913 patent in violation of 35 U.S.C. § 271 by making, having made, using, selling and/or offering to sell within the United States, and/or importing into the United States, without authority, smartphones, tablet computers, notebooks, All-in-One PCs, and 2-in-1 PCs that embody, either literally or under the doctrine of equivalents, each element of at least claim 4 of the ’913 patent. 43. As one example, the ASUS ZenPad 8.0 is a tablet which runs the Android Operating System and which has keypad entry functionality, summarized in the next paragraph (“the ’913 Accused Functionality”), that meets every element of at least claim 4 of the ’913 patent, either literally or under the doctrine of equivalents, and which results in the practice of every step of at least claim 1 of the ’913 patent, either literally or under the doctrine of equivalents, when operated by Defendants or other end users. 44. The ASUS ZenPad 8.0 has a keypad having a plurality of keys. At least one key (e.g., the “a” key) has a primary character (e.g., the “a” character), a plurality of secondary characters (e.g., characters such as “à” and “á”), and an associated display area (e.g., a portion of the screen associated with the “a” key). In a default state, the keypad displays the primary character associated with the at least one key in the associated display area (e.g., the “a” character is displayed in the portion of the screen associated with the “a” key). In the default state, the primary character is returned as an input character (e.g., the “a” character is returned as Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 12 of 62 PageID #: 252Case 1:16-cv 00830-RGA Document 23- Filed 03/2 /17 Page 1 3 f 163 PageID #: 1353 ME1 22314983v.1 -13- the input character) in response to selection of the at least one key for a period shorter than a predetermined time period (e.g., the “a” key is pressed and not held). A second state is switched to after a first key selection of the at least one key is detected for a period longer than the predetermined time period (e.g., the “a” key is pressed and held). In the second state, each of the secondary characters associated with the first selected key is displayed in a respective display area (e.g., each of the characters such as “à” and “á” that are associated with the selected key, the “a” key, is displayed in a respective portion of the screen), a second key selection is detected (e.g., the selection of the key associated with the “á” character is detected), the secondary character associated with the second key selection is selected for the input character (e.g., the “á” character is selected as the input character), and the keypad is returned to the default state (e.g., the keypad returns to display of the “a” character). 45. Upon information and belief, Defendants make, have made, use, sell, and/or offer to sell within the United States and/or import into the United States smartphones, tablet computers, notebooks, All-in-One PCs, and 2-in-1 PCs that include the above-referenced ’913 Accused Functionality or similar functionality (e.g., by being pre-loaded with the Android Operating System, the Chrome Operating System, or the Windows Operating System version 8 or higher; see, e.g., https://support.google.com/chromebook/answer/177893?hl=en , http://windows.microsoft.com/en-us/windows-8/using-touch-keyboard) including, without limitation, the ZenFone family of smartphones, the PadFone family of smartphones, the ZenPad family of tablets, the Transformer Pad family of tablets, the Vivo Tab family of tablets, the Nexus family of tablets, the MeMo Pad family of tablets, the Chromebooks family of notebooks, and the Transformer Book Series family of 2-in-1 PCs (“the ’913 Accused Devices”) and/or Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 13 of 62 PageID #: 253Case 1:16-cv 00830-RGA Document 23- Filed 03/2 /17 Page 1 4 f 163 PageID #: 1 54 ME1 22314983v.1 -14- software updates that include the ’913 Accused Functionality or similar functionality. 46. Upon information and belief, Defendants themselves, their customers, and other end users actually use the ‘913 Accused Functionality or similar functionality in the ’913 Accused Devices to practice each step of at least the method of claim 1 of the ’913 patent. 47. Defendants have also induced, and continue to induce, others to infringe the ’913 patent in violation of 35 U.S.C. § 271, by taking active steps to encourage and facilitate others’ direct infringement of at least the method of claim 1 of the ’913 patent with knowledge or willful blindness of that infringement. Upon information and belief, these affirmative acts include, without limitation, advertising, marketing, promoting, offering for sale and/or selling to others, including customers and other end users, the ’913 Accused Devices that include the ’913 Accused Functionality or similar functionality (e.g., by being pre-loaded with the Android Operating System, the Chrome Operating System, or the Windows Operating System version 8 or higher) and/or software updates that include the ’913 Accused Functionality or similar functionality, such functionality being especially adapted for use in practicing at least the method of claim 1 of the ’913 patent. Further, Defendants provide instructions, user manuals, advertising, and/or marketing materials which facilitate, direct or encourage others, including customers and other end users, to directly infringe at least the method of claim 1 of the ’913 patent. 48. Upon information and belief, Defendants are aware that the ’913 Accused Devices have no substantial non-infringing use at least because the ’913 Accused Functionality or similar functionality included therein can only be used to infringe the ’913 patent. Further, Defendants expect and intend customers and other end users of the ’913 Accused Devices to use Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 14 of 62 PageID #: 254Case 1:16-cv 00830-RGA Document 23- Filed 03/2 /17 Page 1 5 f 163 PageID #: 1355 ME1 22314983v.1 -15- the various features included therein, including the ’913 Accused Functionality or similar functionality. 49. Defendants also provide user manuals (see, e.g., http://promos.asus.com/us/zipdownload/AndroidUsersGuide-30-100.pdf and http://promos.asus.com/US/Newsletter2012/Mobile_Feb12/Stories/ICS_Story.html) which facilitate, direct, or encourage others, including customers and other end users, to use the ’913 Accused Functionality or similar functionality and thereby directly infringe at least the method of claim 1 of the ’913 patent. For example, the Android 3.0 User’s Guide provided by Asus includes at least the following instructions that direct a user to practice the ’913 Accused Functionality on page 48: “Touch & hold a vowel or the C, N, or S key to open a small panel where you can drag onto the accented vowel or other alternate letter or number you want to enter.” Defendants have knowledge that the instructions in this user manual encourage and facilitate the direct infringement of the ’913 patent by others, including customers and other end users, as Defendants have had notice of the ’913 patent since at least May 21, 2013 as explained above. 50. Defendants have also contributorily infringed, and continue to contributorily infringe, the ’913 patent in violation of 35 U.S.C. § 271 by offering to sell or selling within the United States or importing into the United States the ’913 Accused Devices that include the ’913 Accused Functionality or similar functionality (e.g., by being pre-loaded with the Android Operating System, the Chrome Operating System, or the Windows Operating System version 8 or higher) and/or software updates that include the ’913 Accused Functionality or similar functionality for use in practicing at least the method of claim 1 of the ’913 patent. Defendants Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 15 of 62 PageID #: 255Case 1:16-cv 00830-RGA Document 23- Filed 03/2 /17 Page 1 6 f 163 PageID #: 1356 ME1 22314983v.1 -16- have had notice of the ’913 patent since at least May 21, 2013 as explained above. Therefore, Defendants know that such functionality includes or constitutes a material part of the inventions claimed in the ’913 patent and is especially made or adapted for use by others, including customers and other end users, to practice the methods of the ’913 patent and thereby directly infringe at least the method of claim 1 of the ’913 patent. Further, Defendants know that such functionality is not a staple article or commodity of commerce suitable for substantial, non- infringing use. 51. By reason of Defendants’ infringing activities, Plaintiffs have suffered, and will continue to suffer, substantial damages in an amount to be determined at trial. 52. Defendants have had actual notice of the ’913 patent since at least May 21, 2013 as explained above, and upon information and belief, have known or should have known that their activities outlined in this Cause of Action infringe the ’913 patent directly or indirectly. Plaintiffs have on multiple occasions met and communicated with Defendants to explain Defendants’ infringement of the ’913 patent. Defendants have nonetheless continued to engage in their infringing acts despite an objectively high likelihood that their actions constitute infringement of a valid patent and despite this objective risk being either known or obvious to Defendants. Accordingly, Defendants’ infringement is willful and deliberate, and this case is exceptional under 35 U.S.C. § 285. Second Cause of Action: Infringement of U.S. Patent No. 6,690,387 53. Philips repeats and incorporates by reference each and every allegation of paragraphs 1 through 36 of this First Amended Complaint, as though set forth here in its entirety. 54. Koninklijke Philips N.V. is the sole owner of the entire right, title, and interest in Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 16 of 62 PageID #: 256Case 1:16-cv 00830-RGA Document 23- Filed 03/2 /17 Page 1 7 f 163 PageID #: 1357 ME1 22314983v.1 -17- and to the ’387 patent, including the right to sue and recover for any and all infringements thereof. 55. Claim 9 of the ’387 patent is illustrative of the method claims of the ’387 patent and is directed toward a method for controlling the scroll-like display of data on an electronic display screen. The duration of finger touch contact time with an electronic display screen having scrollable data displayed on it is sensed. The speed and direction of motion of the finger touch contact with the display screen is sensed. A scrolling motion of the scrollable data on the display screen is initiated in the sensed direction and at the sensed speed. The speed of the scrolling motion is slowed from its initiated speed at a predetermined rate. The scrolling motion is terminated when a condition of a substantially stationary finger touch having a finite duration is sensed or a condition of an end-of-scroll signal is sensed. 56. Claim 11 of the ’387 patent depends from claim 9 and is directed toward the method of claim 9 comprising the further step of sensing a finger touch on the screen having a duration greater than a first given preset minimum time and less than a second given preset minimum time which is greater than the first given time and then moving the display in correspondence with movement of the finger touch. 57. Claim 12 of the ’387 patent depends from claim 9 and is directed toward the method of claim 9 comprising the further step of sensing a stationary finger touch on the screen having a duration greater than a second preset given minimum time which is greater than a first given preset time and then moving a touch-selected item relative to the stationary display in correspondence with movement of the finger touch. 58. Defendants have directly infringed and continue to directly infringe the ’387 Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 17 of 62 PageID #: 257Case 1:16-cv 00830-RGA Document 23- Filed 03/2 /17 Page 1 8 f 163 PageID #: 1358 ME1 22314983v.1 -18- patent in violation of 35 U.S.C. § 271 by using in the United States, without authority, smartphones, tablet computers, notebooks, All-in-One PCs, and 2-in-1 PCs to practice, either literally or under the doctrine of equivalents, each step of at least the methods of claims 9, 11, and 12 of the ’387 patent. 59. As one example, the ASUS ZenPad 8.0 is a tablet which runs the Android Operating System and which has scrolling control functionality, summarized in the next three paragraphs (“the ’387 Accused Functionality”), which results in the practice of every step of at least claims 9, 11, and 12 of the ’387 patent, either literally or under the doctrine of equivalents, when operated by Defendants or other end users. 60. The ASUS ZenPad 8.0 has a touch screen and controls the scroll-like display of data on the touch screen. The ASUS ZenPad 8.0 contains hardware and/or software that sense the duration of finger touch contact time with the touch screen having scrollable data (e.g., website content in an Internet browser or application icons in a folder) displayed on it. The ASUS ZenPad 8.0contains hardware and/or software that sense the speed and direction of the finger touch contact with the touch screen. The ASUS ZenPad 8.0 contains hardware and/or software that initiate a scrolling motion of the scrollable data in the sensed direction and at the sensed speed (e.g., when a finger touching the screen is sensed as moving up the screen at a fast rate the website content or application icons in a folder are scrolled up the screen quickly or, as another example, when a finger touching the screen is sensed as moving down the screen at a slow rate the website content or application icons in a folder are scrolled down the screen slowly). The ASUS ZenPad 8.0 contains hardware and/or software that slow the speed of the scrolling motion from its initiated speed at a predetermined rate (e.g., the speed of the scrolling Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 18 of 62 PageID #: 258Case 1:16-cv 00830-RGA Document 23- Filed 03/2 /17 Page 1 9 f 163 PageID #: 1359 ME1 22314983v.1 -19- motion is slowed at a predetermined rate until motion is stopped). The ASUS ZenPad 8.0 contains hardware and/or software that terminate the scrolling motion when a condition of a substantially stationary finger touch having a finite duration is sensed (e.g., the scrolling motion is terminated if the finger touch is sensed as being substantially stationary for a finite duration) or a condition of an end-of-scroll signal is sensed (e.g., the scrolling motion is terminated if the bottom of the website content or application icons in a folder was reached). 61. Further, the ASUS ZenPad 8.0 contains hardware and/or software that sense a finger touch on the screen having a duration greater than a first given preset minimum time (e.g., a finger touch on the screen is sensed as having a duration greater than the minimum duration for a “short press” touch) and less than a second given preset minimum time which is greater than the first given time (e.g., the sensed duration is less than the minimum duration for a “long press” touch, which is longer than the “short press” touch duration) and then moving the display in correspondence with movement of the finger touch (e.g., the display is scrolled in a corresponding manner to the finger’s movement when the finger touch on the screen is sensed as being longer than a “short press” touch but not long enough to be a “long press” touch). 62. Further, the ASUS ZenPad 8.0 contains hardware and/or software that sense a stationary finger touch on the screen having a duration greater than a second preset given minimum time (e.g., a stationary finger touch on the screen is sensed as having a duration greater than the minimum duration for a “long press” touch) which is greater than a first given preset time (e.g., the duration of a “long press” touch is longer than the duration for a “short press” touch) and then moving a touch-selected item (e.g., an application icon that has been touched and selected by the “long press” touch) relative to the stationary display in correspondence with Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 19 of 62 PageID #: 259Case 1:16-cv 00830-RGA Document 23- Filed 03/2 /17 Page 120 f 163 PageID #: 1360 ME1 22314983v.1 -20- movement of the finger touch (e.g., the application icon is moved along the stationary display in a corresponding manner to the finger’s movement). 63. Upon information and belief, Defendants make, have made, use, sell and/or offer to sell within the United States and/or import into the United States smartphones, tablet computers, notebooks, All-in-One PCs, and 2-in-1 PCs that include the above-referenced ’387 Accused Functionality or similar functionality (e.g., by being pre-loaded with the Android Operating System, the Chrome Operating System, or the Windows Operating System version 7 or higher; see, e.g., https://support.google.com/chromebook/answer/2766492?hl=en, http://windows.microsoft.com/en-us/windows7/using-touch-gestures and http://windows.microsoft.com/en-us/windows-8/touch-swipe-tap-beyond) including, without limitation, the ZenFone family of smartphones, the PadFone family of smartphones, the ZenPad family of tablets, the Transformer Pad family of tablets, the Vivo Tab family of tablets, the Nexus family of tablets, the MeMo Pad family of tablets, the Eee Slate B121 tablet, the ZenBook family of notebooks, the Chromebooks family of notebooks, ZenBook Prime family of notebooks, the Zen AiO family of All-in-One PCs, the Vivo AiO family of All-in-One PCs, the Portable AiO family of All-in-One PCs, and the Transformer Book Series family of 2-in-1 PCs (“the ’387 Accused Devices”) and/or software updates that include the ’387 Accused Functionality or similar functionality. 64. Upon information and belief, Defendants themselves, their customers, and other end users actually use the ‘387 Accused Functionality or similar functionality in the ’387 Accused Devices to practice each step of at least the methods of claims 9, 11, and 12 of the ’387 patent. Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 20 of 62 PageID #: 260Case 1:16-cv 00830-RGA Document 23- Filed 03/2 /17 Page 1 1 f 163 PageID #: 1361 ME1 22314983v.1 -21- 65. Defendants have also induced, and continue to induce, others to infringe the ’387 patent in violation of 35 U.S.C. § 271, by taking active steps to encourage and facilitate others’ direct infringement of at least the methods of claims 9, 11, and 12 of the ’387 patent with knowledge or willful blindness of that infringement. Upon information and belief, these affirmative acts include, without limitation, advertising, marketing, promoting, offering for sale and/or selling to others, including customers and other end users, the ’387 Accused Devices that include the ’387 Accused Functionality or similar functionality (e.g., by being pre-loaded with the Android Operating System, the Chrome Operating System, or the Windows Operating System version 7 or higher) and/or software updates that include the ’387 Accused Functionality or similar functionality, such functionality being especially adapted for use in practicing at least the methods of claims 9, 11, and 12 of the ’387 patent. Further, Defendants provide instructions, user manuals, advertising, and/or marketing materials which facilitate, direct or encourage others, including customers and other end users, to directly infringe at least the methods of claims 9, 11, and 12 of the ’387 patent. 66. Upon information and belief, Defendants are aware that the ’387 Accused Devices have no substantial non-infringing use at least because the ’387 Accused Functionality or similar functionality included therein can only be used to infringe the ’387 patent. Further, Defendants expect and intend customers and other end users of the ’387 Accused Devices to use the various features included therein, including the ’387 Accused Functionality or similar functionality. 67. Defendants also provide user manuals (see, e.g., http://dlcdnet.asus.com/pub/ASUS/EeePAD/Zenpad/Z380KL/E10438_Z380_SERIES_EM_UPD Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 21 of 62 PageID #: 261Case 1:16-cv 00830-RGA Document 23- Filed 03/2 /17 Page 1 2 f 163 PageID #: 1362 ME1 22314983v.1 -22- ATED_2.pdf) which facilitate, direct, or encourage others, including customers and other end users, to use the ’387 Accused Functionality or similar functionality and thereby directly infringe at least the methods of claims 9, 11, and 12 of the ’387 patent. For example, the ASUS ZenPad 8.0 user manual includes at least the following instructions that direct a user to practice the ’387 Accused Functionality on pages 23-24: “Scroll your finger up or down to go through web pages or list of items” and “To move an app or widget, tap and hold then drag it to the location where you want it to be.” Defendants have knowledge that the instructions in this user manual encourage and facilitate the direct infringement of the ’387 patent by others, including customers and other end users, as Defendants have had notice of the ’387 patent since at least May 21, 2013 as explained above. 68. Defendants have also contributorily infringed, and continue to contributorily infringe, the ’387 patent in violation of 35 U.S.C. § 271 by offering to sell or selling within the United States or importing into the United States the ’387 Accused Devices that include the ’387 Accused Functionality or similar functionality (e.g., by being pre-loaded with the Android Operating System, the Chrome Operating System, or the Windows Operating System version 7 or higher) and/or software updates that include the ’387 Accused Functionality or similar functionality for use in practicing at least the methods of claims 9, 11, and 12 of the ’387 patent. Defendants have had notice of the ’387 patent since at least May 21, 2013 as explained above. Therefore, Defendants know that such functionality includes or constitutes a material part of the inventions claimed in the ’387 patent and is especially made or adapted for use by others, including customers and other end users, to practice the methods of the ’387 patent and thereby directly infringe at least the methods of claims 9, 11, and 12 of the ’387 patent. Further, Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 22 of 62 PageID #: 262Case 1:16-cv 00830-RGA Document 23- Filed 03/2 /17 Page 1 3 f 163 PageID #: 1363 ME1 22314983v.1 -23- Defendants know that such functionality is not a staple article or commodity of commerce suitable for substantial, non-infringing use. 69. By reason of Defendants’ infringing activities, Plaintiffs have suffered, and will continue to suffer, substantial damages in an amount to be determined at trial. 70. Defendants have had actual notice of the ’387 patent since at least May 21, 2013 as explained above, and upon information and belief, have known or should have known that their activities outlined in this Cause of Action infringe the ’387 patent directly or indirectly. Plaintiffs have on multiple occasions met and communicated with Defendants to explain Defendants’ infringement of the ’387 patent. Defendants have nonetheless continued to engage in their infringing acts despite an objectively high likelihood that their actions constitute infringement of a valid patent and despite this objective risk being either known or obvious to Defendants. Accordingly, Defendants’ infringement is willful and deliberate, and this case is exceptional under 35 U.S.C. § 285. Third Cause of Action: Infringement of U.S. Patent No. 7,184,064 71. Philips repeats and incorporates by reference each and every allegation of paragraphs 1 through 36 of this First Amended Complaint, as though set forth here in its entirety. 72. Koninklijke Philips N.V. is the sole owner of the entire right, title, and interest in and to the ’064 patent, including the right to sue and recover for any and all infringements thereof. 73. Claim 1 of the ’064 patent is illustrative of the system claims of the ’064 patent and is directed to an improved touch-screen image scrolling system. The system has an electronic image display screen and a microprocessor coupled to the screen to display Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 23 of 62 PageID #: 263Case 1:16-cv 00830-RGA Document 23- Filed 03/2 /17 Page 1 4 f 163 PageID #: 1 64 ME1 22314983v.1 -24- information on the screen and to receive interactive signals from the screen. The system has timer means associated with the microprocessor to provide timing capacity for it. The system has a source of scroll format data that is capable of being displayed on the screen. The system has finger touch program instructions associated with the microprocessor to sense the speed, direction, and time duration of a finger touch contact with the screen. The system has scrolling motion program instructions associated with the microprocessor that is responsive to the duration of the finger touch contact such that if the duration exceeds a first preset minimum time and is accompanied by motion along the surface of the screen followed by separation of the finger from the screen, a scroll format display on the screen is caused to begin to scroll in the sensed direction and at the sensed initial speed. The system has time decay program instructions associated with the microprocessor to reduce the rate of scrolling displacement on the screen at a given rate until motion is terminated. The system has stopping motion program instructions associated with the microprocessor to terminate the scrolling displacement of the image on the screen upon first occurrence of a signal comprising a substantially stationary finger touch on the screen for longer than a preset minimum or an end-of scroll signal received from the scroll format data source. 74. Claim 2 of the ’064 patent depends from claim 1 and is directed toward the system of claim 1 wherein the scrolling motion program instructions further comprise instructions to move the display in correspondence with movement of the finger touch, in response to movement following a touch having a stationary duration greater than the first preset given minimum time and less than a second given preset minimum time. 75. Claim 3 of the ’064 patent depends from claim 1 and is directed toward the Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 24 of 62 PageID #: 264Case 1:16-cv-00830-RGA Document 23- Filed 03/2 /17 Page 1 5 f 163 PageID #: 1365 ME1 22314983v.1 -25- system of claim 1 wherein scrolling motion program instructions further comprise instructions to move a touch-selected item relative to the stationary display in correspondence with movement of the finger touch, in response to motion following a touch having a stationary duration greater than a second given preset minimum time. 76. Defendants have directly infringed and continue to directly infringe the ’064 patent in violation of 35 U.S.C. § 271 by making, having made, using, selling and/or offering to sell within the United States, and/or importing into the United States, without authority, smartphones, tablet computers, notebooks, All-in-One PCs, and 2-in-1 PCs that embody, either literally or under the doctrine of equivalents, each element of at least claims 1, 2, and 3 of the ’064 patent. 77. As one example, the ASUS ZenPad 8.0 is a tablet which runs the Android Operating System and which has scrolling control functionality, summarized in the next three paragraphs (“the ’064 Accused Functionality”), that meets every element of at least claims 1, 2, and 3 of the ’064 patent, either literally or under the doctrine of equivalents. 78. The ASUS ZenPad 8.0 has a touch screen and a microprocessor (e.g., the Intel Atom x3 C3200) which displays information on the screen and receives interactive signals from the screen. The ASUS ZenPad 8.0 contains hardware and/or software that provide timing capacity for the microprocessor. The ASUS ZenPad 8.0 contains hardware and/or software that are a source of scroll format data (e.g., a memory holding scrollable data such as website content in an Internet browser or application icons in a folder) that can be displayed on the screen. The ASUS ZenPad 8.0 contains software program instructions associated with the microprocessor that sense the speed, direction, and time duration of a finger touch contact with the screen. The Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 25 of 62 PageID #: 265Case 1:16-cv 00830-RGA Document 23- Filed 03/2 /17 Page 1 6 f 163 PageID #: 1366 ME1 22314983v.1 -26- ASUS ZenPad 8.0 contains software program instructions associated with the microprocessor that is responsive to the duration of the finger touch contact such that if the duration exceeds a first preset minimum time (e.g., the duration of a finger touching the screen is sensed as being greater than the minimum duration for a “short press” touch) and is accompanied by motion along the surface of the screen followed by separation of the finger from the screen, a scroll format display on the screen is caused to begin to scroll in the sensed direction and at the sensed initial speed (e.g., when a finger touching the screen is sensed as moving up the screen at a fast rate the website content or application icons in a folder are scrolled up the screen quickly or, as another example, when a finger touching the screen is sensed as moving down the screen at a slow rate the website content or application icons in a folder are scrolled down the screen slowly). The ASUS ZenPad 8.0 contains software program instructions associated with the microprocessor that reduce the rate of scrolling displacement on the screen at a given rate until motion is terminated (e.g., the scrolling displacement is slowed at a given rate until motion is stopped). The ASUS ZenPad 8.0 contains software program instructions associated with the microprocessor that terminate the scrolling displacement of the image on the screen upon first occurrence of a signal comprising a substantially stationary finger touch on the screen for longer than a preset minimum (e.g., the scrolling displacement of the image on the screen is terminated if the finger touch is sensed as being substantially stationary for longer than a preset minimum) or an end-of-scroll signal is received from the scroll format data source (e.g., the scrolling displacement of the image on the screen is terminated if the bottom of the website content or application icons in a folder was reached). 79. Further, the ASUS ZenPad 8.0 contains scrolling motion program instructions to Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 26 of 62 PageID #: 266Case 1:16-cv 00830-RGA Document 23- Filed 03/2 /17 Page 1 7 f 163 PageID #: 1367 ME1 22314983v.1 -27- move the display in correspondence with movement of the finger touch (e.g., the display is scrolled in a corresponding manner to the finger’s movement when the finger touching the screen is sensed as being longer than a “short press” touch but not long enough to be a “long press” touch as described below), in response to movement following a touch having a stationary duration greater than the first preset given minimum time (e.g., the stationary duration of a finger touching the screen is sensed as being greater than the minimum duration for a “short press” touch) and less than a second given preset minimum time (e.g., the sensed duration is less than the minimum duration for a “long press” touch). 80. Further, the ASUS ZenPad 8.0 contains scrolling motion program instructions to move a touch-selected item (e.g., an application icon that has been touched and selected by the “long press” touch as described below) relative to the stationary display in correspondence with movement of the finger touch (e.g., the application icon is moved along the stationary display in a corresponding manner to the finger’s movement), in response to motion following a touch having a stationary duration greater than a second given preset minimum time (e.g., the sensed stationary duration is greater than the minimum duration for a “long press” touch). 81. Upon information and belief, Defendants make, have made, use, sell and/or offer to sell within the United States and/or import into the United States smartphones, tablet computers, notebooks, All-in-One PCs, and 2-in-1 PCs that include the above-referenced ’064 Accused Functionality or similar functionality (e.g., by being pre-loaded with the Android Operating System, the Chrome Operating System, or the Windows Operating System version 7 or higher; see, e.g., https://support.google.com/chromebook/answer/2766492?hl=en, http://windows.microsoft.com/en-us/windows7/using-touch-gestures and Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 27 of 62 PageID #: 267Case 1:16-cv 00830-RGA Document 23- Filed 03/2 /17 Page 1 8 f 163 PageID #: 1368 ME1 22314983v.1 -28- http://windows.microsoft.com/en-us/windows-8/touch-swipe-tap-beyond) including, without limitation, the ZenFone family of smartphones, the PadFone family of smartphones, the ZenPad family of tablets, the Transformer Pad family of tablets, the Vivo Tab family of tablets, the Nexus family of tablets, the MeMo Pad family of tablets, the Eee Slate B121 tablet, the ZenBook family of notebooks, the Chromebooks family of notebooks, ZenBook Prime family of notebooks, the Zen AiO family of All-in-One PCs, the Vivo AiO family of All-in-One PCs, the Portable AiO family of All-in-One PCs, and the Transformer Book Series family of 2-in-1 PCs (“the ’064 Accused Devices”) and/or software updates that include the ’064 Accused Functionality or similar functionality. 82. By reason of Defendants’ infringing activities, Plaintiffs have suffered, and will continue to suffer, substantial damages in an amount to be determined at trial. 83. Defendants have had actual notice of the ’064 patent since at least May 21, 2013 as explained above, and upon information and belief, have known or should have known that their activities outlined in this Cause of Action infringe the ’064 patent directly. Plaintiffs have on multiple occasions met and communicated with Defendants to explain Defendants’ infringement of the ’064 patent. Defendants have nonetheless continued to engage in their infringing acts despite an objectively high likelihood that their actions constitute infringement of a valid patent and despite this objective risk being either known or obvious to Defendants. Accordingly, Defendants’ infringement is willful and deliberate, and this case is exceptional under 35 U.S.C. § 285. Fourth Cause of Action: Infringement of U.S. Patent No. 7,529,806 84. Philips repeats and incorporates by reference each and every allegation of Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 28 of 62 PageID #: 268Case 1:16-cv 00830-RGA Document 23- Filed 03/2 /17 Page 1 9 f 163 PageID #: 1369 ME1 22314983v.1 -29- paragraphs 1 through 36 of this First Amended Complaint, as though set forth here in its entirety. 85. Koninklijke Philips N.V. is the sole owner of the entire right, title, and interest in and to the ’806 patent, including the right to sue and recover for any and all infringements thereof. 86. Claim 1 of the ’806 patent is illustrative of the method claims of the ’806 patent and is directed toward a method of forming a media presentation at a client device from multiple related files, including a control information file, stored on one or more server computers within a computer network. The control information file is downloaded to the client device. The client device parses the control information file and based thereon, the client device: identifies multiple alternative files corresponding to a given segment of the media presentation, determines which file of the multiple alternative files to retrieve based on system restraints, and retrieves the determined file to begin a media presentation. If the determined file is one of a plurality of files required for the media presentation, the client device retrieves a next file concurrent with the media presentation and uses content of the next file to continue the media presentation. 87. Claim 12 of the ’806 patent is illustrative of the device claims of the ’806 patent and is directed toward a client device for forming a media presentation from multiple related files stored on server computers within a computer network. The client device has means for downloading files to the client device. The client device has means for parsing a control information file and based thereon identifying multiple alternative files corresponding to a given segment of the media presentation, determining which file of the alternative files to retrieve based on system restraints, and retrieving the determined file to begin a media presentation. If the determined file is one of a plurality of files required for the media presentation, the means for Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 29 of 62 PageID #: 269Case 1:16-cv 00830-RGA Document 23- Filed 03/2 /17 Page 130 f 163 PageID #: 1370 ME1 22314983v.1 -30- parsing comprises means for retrieving a next file concurrent with the media presentation and using content of the next file to continue the media presentation. 88. Defendants have directly infringed and continue to directly infringe the ’806 patent in violation of 35 U.S.C. § 271 by using in the United States, without authority, smartphones, tablet computers, notebooks, All-in-One PCs, and 2-in-1 PCs to practice, either literally or under the doctrine of equivalents, each step of at least the method of claim 1 of the ’806 patent. 89. Defendants have directly infringed and continue to directly infringe the ’806 patent in violation of 35 U.S.C. § 271 by making, having made, using, selling and/or offering to sell within the United States, and/or importing into the United States, without authority, smartphones, tablet computers, notebooks, All-in-One PCs, and 2-in-1 PCs that embody, either literally or under the doctrine of equivalents, each element of at least claim 12 of the ’806 patent. 90. As one example, the ASUS ZenPad 8.0 is a tablet which runs the Android Operating System and which has streaming video functionality, summarized in the next paragraph (“the ’806 Accused Functionality”), that meets every element of at least claim 12 of the ’806 patent, either literally or under the doctrine of equivalents, and which results in the practice of every step of at least claim 1 of the ’806 patent, either literally or under the doctrine of equivalents, when operated by Defendants or other end users. 91. The ASUS ZenPad 8.0 runs the Android Operating System and ran Android Operating System version 5.0 when it was released (see, e.g., http://www.asus.com/us/Tablets/ASUS_ZenPad_80_Z380CX/specifications/). Since Android Operating System version 3.0, the Android Operating System has supported HTTP Live Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 30 of 62 PageID #: 270Case 1:16-cv 00830-RGA Document 23- Filed 03/2 /17 Page 1 1 f 163 PageID #: 1371 ME1 22314983v.1 -31- Streaming (HLS) (see, e.g., http://developer.android.com/about/versions/android-3.0- highlights.html). Since Android Operating System version 4.4, the Android Operating System has supported MPEG-DASH (Dynamic Adaptive Streaming over HTTP) (see, e.g., http://developer.android.com/about/versions/kitkat.html). HLS and MPEG-DASH are video streaming technologies that allow a device, such as the ASUS ZenPad 8.0, to form a media presentation from multiple related files stored on server computers in a computer network by use of the ASUS ZenPad 8.0’s Internet browser and/or a video playback application such as YouTube. The ASUS ZenPad 8.0 has a wireless modem and related software for downloading a control information file (e.g., a MPD file for MPEG-DASH or a M3U8 file for HLS) to the ASUS ZenPad 8.0. The ASUS ZenPad 8.0 has a processor (e.g., the Intel Atom x3 C3200) programmed to parse the control information file (e.g., the processor parses the MPD file or M3U8 file) and based thereon, identifying multiple alternative files corresponding to a given segment of the media presentation (e.g., identifying based on the MPD file or M3U8 file alternative files that correspond to a video segment; for example, a video is encoded into higher quality and lower quality streams and each stream is divided into chunks, such as MPEG-2 transport stream files, and higher quality and lower quality files that correspond to a given video segment are identified based on the MPD file or M3U8 file), determining which file of the alternative files to retrieve based on system restraints (e.g., determining that a lower quality file should be retrieved when bandwidth is more limited or a higher quality file should be retrieved when bandwidth is less limited), and retrieving the determined file to begin a media presentation. If the determined file is one of a plurality of files required for the media presentation, the processor retrieves a next file concurrent with the media presentation and uses content of the Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 31 of 62 PageID #: 271Case 1:16-cv 00830-RGA Document 23- Filed 03/2 /17 Page 1 2 f 163 PageID #: 1372 ME1 22314983v.1 -32- next file to continue the media presentation. 92. Upon information and belief, Defendants make, have made, use, sell, and/or offer to sell within the United States and/or import into the United States smartphones, tablet computers, notebooks, All-in-One PCs, and 2-in-1 PCs that include the above-referenced ’806 Accused Functionality or similar functionality (e.g., by being pre-loaded with the Android Operating System version 3.0 or higher that supports HLS, the Android Operating System version 4.4 or higher that supports MPEG-DASH, or the Windows Operating System version 8 or higher that supports HLS and MPEG-DASH; see, e.g., https://blogs.msdn.microsoft.com/ie/2015/01/29/simplified-adaptive-video-streaming- announcing-support-for-hls-and-dash-in-windows-10/ and https://blogs.msdn.microsoft.com/ie/2013/09/05/online-professional-quality-video-premium- media-experiences-without-plug-ins-in-internet-explorer-11/) including, without limitation, the ZenFone family of smartphones, the PadFone family of smartphones, the ZenPad family of tablets, the Transformer Pad family of tablets, the Vivo Tab family of tablets, the Nexus family of tablets, the MeMo Pad family of tablets, the ZenBook family of notebooks, the Zen AiO family of All-in-One PCs, the Vivo AiO family of All-in-One PCs, the Portable AiO family of All-in-One PCs, and the Transformer Book Series family of 2-in-1 PCs (“the ’806 Accused Devices”) and/or software updates that include the ’806 Accused Functionality or similar functionality. 93. Upon information and belief, Defendants themselves, their customers, and other end users actually use the ‘806 Accused Functionality or similar functionality in the ’806 Accused Devices to practice each step of at least the method of claim 1 of the ’806 patent. Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 32 of 62 PageID #: 272Case 1:16-cv 00830-RGA Document 23- Filed 03/2 /17 Page 1 3 f 163 PageID #: 1373 ME1 22314983v.1 -33- 94. Defendants have also induced, and continue to induce, others to infringe the ’806 patent in violation of 35 U.S.C. § 271, by taking active steps to encourage and facilitate others’ direct infringement of at least the method of claim 1 of the ’806 patent with knowledge or willful blindness of that infringement. Upon information and belief, these affirmative acts include, without limitation, advertising, marketing, promoting, offering for sale and/or selling to others, including customers and other end users, the ’806 Accused Devices that include the ’806 Accused Functionality or similar functionality (e.g., by being pre-loaded with the Android Operating System version 3.0 or higher that supports HLS, the Android Operating System version 4.4 or higher that supports MPEG-DASH, or the Windows Operating System version 8 or higher that supports HLS and MPEG-DASH) and/or software updates that include the ’806 Accused Functionality or similar functionality, such functionality being especially adapted for use in practicing at least the method of claim 1 of the ’806 patent. Further, Defendants provide instructions, user manuals, advertising, and/or marketing materials which facilitate, direct or encourage others, including customers and other end users, to directly infringe at least the method of claim 1 of the ’806 patent. 95. Upon information and belief, Defendants are aware that the ’806 Accused Devices have no substantial non-infringing use at least because the ’806 Accused Functionality or similar functionality included therein can only be used to infringe the ’806 patent. Further, Defendants expect and intend customers and other end users of the ’806 Accused Devices to use the various features included therein, including the ’806 Accused Functionality or similar functionality. 96. Defendants also provide to their users customized Android Operating System Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 33 of 62 PageID #: 273Case 1:16-cv 00830-RGA Document 23- Filed 03/2 /17 Page 1 4 f 163 PageID #: 1 74 ME1 22314983v.1 -34- software updates (see, e.g., http://www.asus.com/Phone/PadFone_2_A68/HelpDesk_Download/ and https://www.asus.com/News/erQeeWtyGE8CaiNw, including availability of Android Operating System kernel source code) which facilitate, direct, or encourage others, including customers and other end users, to use the ’806 Accused Functionality or similar functionality and thereby directly infringe at least the method of claim 1 of the ’806 patent. Defendants have knowledge that these software updates and instructions encourage and facilitate the direct infringement of the ’806 patent by others, including customers and other end users, as Defendants have had notice of the ’806 patent since at least November 21, 2013 as explained above and are aware that these software updates support MPEG-DASH and/or HLS (see, e.g., http://developer.android.com/about/versions/android-3.0-highlights.html describing new features in Android Operating System v3.0: “Applications can now pass an M3U playlist URL to the media framework to begin an HTTP Live streaming session. The media framework supports most of the HTTP Live streaming specification, including adaptive bit rate.” and http://developer.android.com/about/versions/kitkat.html describing new features in Android Operating System v4.4: “Android now supports the Common Encryption (CENC) for MPEG- DASH, providing a standard, multiplatform DRM scheme for managing protecting content. Apps can take advantage of CENC through Android's modular DRM framework and platform APIs for supporting DASH.”). 97. Defendants have also contributorily infringed, and continue to contributorily infringe, the ’806 patent in violation of 35 U.S.C. § 271 by offering to sell or selling within the United States or importing into the United States the ’806 Accused Devices that include the ’806 Accused Functionality or similar functionality (e.g., by being pre-loaded with the Android Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 34 of 62 PageID #: 274Case 1:16-cv 00830-RGA Document 23- Filed 03/2 /17 Page 1 5 f 163 PageID #: 1375 ME1 22314983v.1 -35- Operating System version 3.0 or higher that supports HLS, the Android Operating System version 4.4 or higher that supports MPEG-DASH, or the Windows Operating System version 8 or higher that supports HLS and MPEG-DASH) and/or software updates that include the ’806 Accused Functionality or similar functionality for use in practicing at least the method of claim 1 of the ’806 patent. Defendants have had notice of the ’806 patent since at least November 21, 2013 as explained above. Therefore, Defendants know that such functionality includes or constitutes a material part of the inventions claimed in the ’806 patent and is especially made or adapted for use by others, including customers and other end users to practice the methods of the ’806 patent and thereby directly infringe at least the method of claim 1 of the ’806 patent. Further, Defendants know that such functionality is not a staple article or commodity of commerce suitable for substantial, non-infringing use. 98. By reason of Defendants’ infringing activities, Plaintiffs have suffered, and will continue to suffer, substantial damages in an amount to be determined at trial. 99. Defendants have had actual notice of the ’806 patent since at least November 21, 2013 as explained above, and upon information and belief, have known or should have known that their activities outlined in this Cause of Action infringe the ’806 patent directly or indirectly. Plaintiffs have on multiple occasions met and communicated with Defendants to explain Defendants’ infringement of the ’806 patent. Defendants have nonetheless continued to engage in their infringing acts despite an objectively high likelihood that their actions constitute infringement of a valid patent and despite this objective risk being either known or obvious to Defendants. Accordingly, Defendants’ infringement is willful and deliberate, and this case is exceptional under 35 U.S.C. § 285. Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 35 of 62 PageID #: 275Case 1:16-cv 00830-RGA Document 23- Filed 03/2 /17 Page 1 6 f 163 PageID #: 1376 ME1 22314983v.1 -36- Fifth Cause of Action: Infringement of U.S. Patent No. 5,910,797 100. Philips repeats and incorporates by reference each and every allegation of paragraphs 1 through 36 of this First Amended Complaint, as though set forth here in its entirety. 101. U.S. Philips Corporation is the sole owner of the entire right, title, and interest in and to the ’797 patent, including the right to sue and recover for any and all infringements thereof. 102. Claim 6 of the ’797 patent is illustrative of the apparatus claims of the ’797 patent and is directed to a manipulatable apparatus that has data processing means and screen means for displaying one or more graphical or other objects presented by the data processing means. The apparatus has a gravitation-controlled sensor integrated with the screen means and feeding the data processing means for measuring an acceleration of the screen means that is induced by user manipulation of the screen means. The data processing means have programmed calculating means for, under control of a screen motion sensed by the sensing means, imparting an acceleration based motion pattern to a predetermined selection among the objects. The motion is nonuniform in time under control of a static orientation of the screen means. 103. Defendants have directly infringed and continue to directly infringe the ’797 patent in violation of 35 U.S.C. § 271 by making, having made, using, selling and/or offering to sell within the United States, and/or importing into the United States, without authority, smartphones, tablet computers, notebooks, All-in-One PCs, and 2-in-1 PCs that embody, either literally or under the doctrine of equivalents, each element of at least claim 6 of the ’797 patent. 104. As one example, the ASUS ZenPad 8.0 is a tablet which runs the Android Operating System and which has gravitation-controlled motion functionality, summarized in the Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 36 of 62 PageID #: 276Case 1:16-cv 00830-RGA Document 23- Filed 03/2 /17 Page 1 7 f 163 PageID #: 1377 ME1 22314983v.1 -37- next paragraph (“the ’797 Accused Functionality”), that meets every element of at least claim 6 of the ’797 patent, either literally or under the doctrine of equivalents. 105. The ASUS ZenPad 8.0 has a processor (e.g., the Intel Atom x3 C3200) and a display screen for displaying one or more graphical or other objects (e.g., a virtual keyboard) presented by the processor. The ASUS ZenPad 8.0 has a gravitation controlled sensor (e.g., an accelerometer) that is integrated with the display screen and feeds the processor and measures the acceleration of the screen that is induced by a user manipulating the display screen (e.g., the accelerometer measures the acceleration of the screen when a user changes the orientation of the screen from portrait to landscape). The processor has software that, under the control of a screen motion sensed by the sensor (e.g., when the accelerometer senses a screen motion such as when the screen’s orientation is changed from portrait to landscape), imparts an acceleration based motion pattern to predetermined selected objects (e.g., the processor imparts an acceleration- based motion pattern that rotates the virtual keyboard from a portrait orientation to a landscape orientation). The motion is nonuniform in time under control of a static orientation of the screen (e.g., when the screen is held in a static landscape orientation after being rotated from a portrait orientation to a landscape orientation, the virtual keyboard rotates from the portrait orientation to the landscape orientation with a motion that is nonuniform in time). 106. Upon information and belief, Defendants make, have made, use, sell and/or offer to sell within the United States and/or import into the United States smartphones, tablet computers, notebooks, All-in-One PCs, and 2-in-1 PCs that include the above-referenced ’797 Accused Functionality or similar functionality (e.g., by being pre-loaded with the Android Operating System, the Chrome Operating System, or the Windows Operating System version 7 Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 37 of 62 PageID #: 277Case 1:16-cv 00830-RGA Document 23- Filed 03/2 /17 Page 1 8 f 163 PageID #: 1378 ME1 22314983v.1 -38- or higher; see, e.g., https://blogs.msdn.microsoft.com/b8/2012/01/24/supporting-sensors-in- windows-8/ and https://blogs.msdn.microsoft.com/patricka/2011/05/04/developing-a-native- win32-application-for-windows-7-touch/) including, without limitation, the ZenFone family of smartphones, the PadFone family of smartphones, the ZenPad family of tablets, the Transformer Pad family of tablets, the Vivo Tab family of tablets, the Nexus family of tablets, the MeMo Pad family of tablets, the Eee Slate B121 tablet, the Chromebooks family of notebooks, and the Transformer Book Series family of 2-in-1 PCs (“the ’797 Accused Devices”) and/or software updates that include the ’797 Accused Functionality or similar functionality. 107. By reason of Defendants’ infringing activities, Plaintiffs have suffered, and will continue to suffer, substantial damages in an amount to be determined at trial. 108. Defendants have had actual notice of the ’797 patent since at least November 21, 2013 as explained above, and upon information and belief, have known or should have known that their activities outlined in this Cause of Action infringe the ’797 patent directly. Plaintiffs have on multiple occasions met and communicated with Defendants to explain Defendants’ infringement of the ’797 patent. Defendants have nonetheless continued to engage in their infringing acts despite an objectively high likelihood that their actions constitute infringement of a valid patent and despite this objective risk being either known or obvious to Defendants. Accordingly, Defendants’ infringement is willful and deliberate, and this case is exceptional under 35 U.S.C. § 285. Sixth Cause of Action: Infringement of U.S. Patent No. 6,522,695 109. Philips repeats and incorporates by reference each and every allegation of paragraphs 1 through 36 of this First Amended Complaint, as though set forth here in its entirety. Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 38 of 62 PageID #: 278Case 1:16-cv 00830-RGA Document 23- Filed 03/2 /17 Page 1 9 f 163 PageID #: 1379 ME1 22314983v.1 -39- 110. Koninklijke Philips N.V. is the sole owner of the entire right, title, and interest in and to the ’695 patent, including the right to sue and recover for any and all infringements thereof. 111. Claim 14 of the ’695 patent is illustrative of the device claims of the ’695 patent and is directed to a receiver that has receiving means for receiving a composite signal from a transmission medium and demultiplexing means for deriving at least one signal portion from the composite signal and for deriving a first identification signal of a first type and of a second type from the composite signal. The receiver has decoding means for decoding at least one signal portion. If a control signal is of a first type, the decoding means decodes a signal portion into a portion of a digital information signal and supplies the portion of the digital information and if a control signal is of a second type, the decoding means supplies a signal portion as a portion of the digital information signal in a substantially unmodified form. The receiver also has means for generating the control signal for application to the decoding means including a control signal of the first type depending on the first identification signal of the first type. 112. Defendants have directly infringed and continue to directly infringe the ’695 patent in violation of 35 U.S.C. § 271 by making, having made, using, selling and/or offering to sell within the United States, and/or importing into the United States, without authority, smartphones, tablet computers, notebooks, All-in-One PCs, and 2-in-1 PCs that embody, either literally or under the doctrine of equivalents, each element of at least claim 14 of the ’695 patent. 113. As one example, the ASUS ZenPad 8.0 is a tablet which runs the Android Operating System and which has audio decoding functionality, summarized in the next paragraph (“the ’695 Accused Functionality”), that meets every element of at least claim 14 of Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 39 of 62 PageID #: 279Case 1:16-cv 00830-RGA Document 23- Filed 03/2 /17 Page 140 f 163 PageID #: 1380 ME1 22314983v.1 -40- the ’695 patent, either literally or under the doctrine of equivalents. 114. The ASUS ZenPad 8.0 runs the Android Operating System and ran Android Operating System version 5.0 when it was released (see, e.g., http://www.asus.com/us/Tablets/ASUS_ZenPad_80_Z380CX/specifications/). The ASUS ZenPad 8.0 has audio hardware and/or software that recognize and support FLAC (Free Lossless Audio Codec) and that can process audio signals encoded in the FLAC format (see, e.g., http://developer.android.com/guide/appendix/media-formats.html, detailing that the Android Operating System version 3.1 or higher supports FLAC decoding). The ASUS ZenPad 8.0’s audio hardware and/or software receiver receives a composite signal (e.g., a FLAC encoded audio signal) from a transmission medium (e.g., from memory or the Internet). The ASUS ZenPad 8.0’s audio hardware and/or software demultiplexer demultiplexes the composite signal and derives at least one signal portion from the composite signal (e.g., the demultiplexer demultiplexes the FLAC signal and derives an audio subframe) and derives a first identification signal of a first type and of a second type from the composite signal (e.g., the demultiplexer derives from the FLAC signal a subframe type, a first identification signal, that indicates either an LPC subframe, a first type, or a verbatim subframe, a second type; see, e.g., https://xiph.org/flac/format.html). The ASUS ZenPad 8.0’s audio hardware and/or software decoder decodes at least one signal portion (e.g., the decoder decodes at least one audio subframe). If a control signal is of a first type (e.g., a control signal indicates LPC encoded audio), the decoder decodes a signal portion into a portion of a digital information signal and supplies the portion of the digital information (e.g., the subframe is LPC decoded into a portion of a digital information signal and is supplied) and if a control signal is of a second type (e.g., a Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 40 of 62 PageID #: 280Case 1:16-cv 00830-RGA Document 23- Filed 03/2 /17 Page 1 1 f 163 PageID #: 1381 ME1 22314983v.1 -41- control signal indicates verbatim encoded audio), the decoder supplies a signal portion as a portion of the digital information signal in a substantially unmodified form (e.g., the subframe is supplied substantially unmodified as a portion of the digital information signal). The ASUS ZenPad 8.0’s audio hardware and/or software generates the control signal for application to the decoder including a control signal of the first type depending on the first identification signal of the first type (e.g., a control signal indicating LPC encoded audio, a first type, is generated for application to the decoder depending on the first identification signal indicating an LPC subframe, a first type). 115. Upon information and belief, Defendants make, have made, use, sell and/or offer to sell within the United States and/or import into the United States smartphones, tablet computers, notebooks, All-in-One PCs, and 2-in-1 PCs that include the above-referenced ’695 Accused Functionality or similar functionality (e.g., by being pre-loaded with the Android Operating System version 3.1 or higher that supports FLAC or the Windows Operating System version 10 that supports FLAC; see, e.g., http://www.pcworld.com/article/2852595/audio-snobs- rejoice-windows-10-will-have-system-wide-flac-support.html and https://msdn.microsoft.com/en-us/library/windows/apps/hh986969.aspx) including, without limitation, the ZenFone family of smartphones, the PadFone family of smartphones, the ZenPad family of tablets, the Transformer Pad family of tablets, the Vivo Tab family of tablets, the Nexus family of tablets, the MeMo Pad family of tablets, the ZenBook family of notebooks, the Zen AiO family of All-in-One PCs, and the Transformer Book Series family of 2-in-1 PCs (“the ’695 Accused Devices”) and/or software updates that include the ’695 Accused Functionality or similar functionality. Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 41 of 62 PageID #: 281Case 1:16-cv 00830-RGA Document 23- Filed 03/2 /17 Page 1 2 f 163 PageID #: 1382 ME1 22314983v.1 -42- 116. By reason of Defendants’ infringing activities, Plaintiffs have suffered, and will continue to suffer, substantial damages in an amount to be determined at trial. 117. Defendants have had actual notice of the ’695 patent since at least May 21, 2013 as explained above, and upon information and belief, have known or should have known that their activities outlined in this Cause of Action infringe the ’695 patent directly. Plaintiffs have on multiple occasions met and communicated with Defendants to explain Defendants’ infringement of the ’695 patent. Defendants have nonetheless continued to engage in their infringing acts despite an objectively high likelihood that their actions constitute infringement of a valid patent and despite this objective risk being either known or obvious to Defendants. Accordingly, Defendants’ infringement is willful and deliberate, and this case is exceptional under 35 U.S.C. § 285. Seventh Cause of Action: Infringement of U.S. Patent No. RE 44,006 118. Philips repeats and incorporates by reference each and every allegation of paragraphs 1 through 36 of this First Amended Complaint, as though set forth here in its entirety. 119. Koninklijke Philips N.V. is the sole owner of the entire right, title, and interest in and to the ’006 patent, including the right to sue and recover for any and all infringements thereof. 120. Claim 1 of the ’006 patent is illustrative of the device claims of the ’006 patent and is directed toward an electronic device that has at least one display apparatus and a controller arranged to cause the display apparatus to show a rotating elliptical menu comprising a plurality of menu options. The menu is displayed with a perspective in which all of the menu options that are displayed appear to lie substantially in an elliptical arrangement located on a single apparent Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 42 of 62 PageID #: 282Case 1:16-cv 00830-RGA Document 23- Filed 03/2 /17 Page 1 3 f 163 PageID #: 1383 ME1 22314983v.1 -43- plane disposed about a menu center displayed offset from a display center of the display apparatus, so that at least one menu option appears to be rotatable off an edge of the display apparatus at any one time. A sense of perspective is maintained by changing the shape or size of the displayed menu options during rotation of the menu. 121. Defendants have directly infringed and continue to directly infringe the ’006 patent in violation of 35 U.S.C. § 271 by making, having made, using, selling and/or offering to sell within the United States, and/or importing into the United States, without authority, smartphones, tablet computers, notebooks, All-in-One PCs, and 2-in-1 PCs that embody, either literally or under the doctrine of equivalents, each element of at least claim 1 of the ’006 patent. 122. As one example, the ASUS ZenPad 8.0 is a tablet which runs the Android Operating System and which has rotating elliptical menu functionality, summarized in the next paragraph (“the ’006 Accused Functionality”), that meets every element of at least claim 1 of the ’006 patent, either literally or under the doctrine of equivalents. 123. The ASUS ZenPad 8.0 runs the Android Operating System and ran Android Operating System version 5.0 when it was released (see, e.g., http://www.asus.com/us/Tablets/ASUS_ZenPad_80_Z380CX/specifications/). The ASUS ZenPad 8.0 is an electronic device that has a display and a processor (e.g., the Intel Atom x3 C3200) arranged to cause the display to show a rotating elliptical menu comprising a plurality of menu options (e.g., the recents screen found in Android Operating System version 5.0 or higher is a rotating elliptical menu of recently accessed activities and tasks; see, e.g., http://developer.android.com/about/versions/android-5.0.html#UI and http://developer.android.com/guide/components/recents.html). The menu is displayed with a Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 43 of 62 PageID #: 283Case 1:16-cv 00830-RGA Document 23- Filed 03/2 /17 Page 1 4 f 163 PageID #: 1 84 ME1 22314983v.1 -44- perspective in which all of the menu options that are displayed appear to lie substantially in an elliptical arrangement located on a single apparent plane disposed about a menu center (e.g., the recently accessed activities and tasks in the recents screen are displayed such that they appear to lie in an elliptical arrangement on a plane extending into the display disposed about a menu center) displayed offset from a display center of the display apparatus, so that at least one menu option appears to be rotatable off an edge of the display apparatus at any one time (e.g., the center of the recently accessed activities and tasks is offset from the display center and at least one recently accessed activity or task appears to be rotatable off of an edge of the display in response to a finger moving across the screen). A sense of perspective is maintained by changing the shape or size of the displayed menu options during rotation of the menu (e.g., recently accessed activities or tasks appear smaller or bigger as they rotate away or towards the user, respectively). 124. Upon information and belief, Defendants make, have made, use, sell, and/or offer to sell within the United States and/or import into the United States smartphones, tablet computers, notebooks, All-in-One PCs, and 2-in-1 PCs that include the above-referenced ’006 Accused Functionality or similar functionality (e.g., by being pre-loaded with the Android Operating System version 5.0 or higher or the Windows Operating System version 7; see, e.g., http://windows.microsoft.com/en-us/windows7/using-aero-flip-3d) including, without limitation, the ZenFone family of smartphones, the ZenPad family of tablets, the Eee Slate B121 tablet, and the Zenbook Prime series of notebooks (“the ’006 Accused Devices”) and/or software updates that include the ’006 Accused Functionality or similar functionality. 125. By reason of Defendants’ infringing activities, Plaintiffs have suffered, and will Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 44 of 62 PageID #: 284Case 1:16-cv-00830-RGA Document 23- Filed 03/2 /17 Page 1 5 f 163 PageID #: 1385 ME1 22314983v.1 -45- continue to suffer, substantial damages in an amount to be determined at trial. 126. Defendants have had actual notice of the ’006 patent since at least May 21, 2013 as explained above, and upon information and belief, have known or should have known that their activities outlined in this Cause of Action infringe the ’006 patent directly. Defendants have nonetheless continued to engage in their infringing acts despite an objectively high likelihood that their actions constitute infringement of a valid patent and despite this objective risk being either known or obvious to Defendants. Accordingly, Defendants’ infringement is willful and deliberate, and this case is exceptional under 35 U.S.C. § 285. Eighth Cause of Action: Infringement of U.S. Patent No. 8,543,819 127. Philips repeats and incorporates by reference each and every allegation of paragraphs 1 through 36 of this First Amended Complaint, as though set forth here in its entirety. 128. Koninklijke Philips N.V. is the sole owner of the entire right, title, and interest in and to the ’819 patent, including the right to sue and recover for any and all infringements thereof. 129. Claim 1 of the ’819 patent is illustrative of the method claims of the ’819 patent and is directed toward a method for determining whether protected content stored on a first communication device can be accessed by a second communication device. The method comprises performing a round trip time measurement between the first communication device and the second communication device. The round trip time measurement comprises transmitting a first signal to the second device at a first time, receiving a second signal from the second device at a second time, generating a third signal using a common secret, determining whether the second signal and the third signal are identical to verify that the second signal was generated Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 45 of 62 PageID #: 285Case 1:16-cv 00830-RGA Document 23- Filed 03/2 /17 Page 1 6 f 163 PageID #: 1386 ME1 22314983v.1 -46- using the common secret, generating the round trip time as a difference between the first time and the second time, checking whether the round trip time is within a predefined interval. Access to the protected content is allowed provided that the round trip time is within the predefined interval, the second signal and the third signal are identical, and the second device is authenticated. The first device authenticates the second device by receiving a certificate of the second device, verifying that the certificate of the second device identifies the second device as complying with a set of predefined compliance rules, and the first device securely shares the common secret with the second device according to a key management protocol after having authenticated the second device. 130. Claim 10 of the ’819 patent is illustrative of the device claims of the ’819 patent and is directed toward a first communication device configured for determining whether protected content stored on the first communication device is available for access by a second communication device. The first communication device comprises means for performing an authentication of the second communication device, which comprises: receiving a certificate of the second device and verifying that that the certificate of said second device identifies the second device as complying with a set of predefined compliance rules. The first communication device comprises means for securely sharing a common secret with the second communication device after the second communication device is authenticated. The first communication device comprises means for performing a round trip time measurement between the first communication device and the second communication device, which comprises: transmitting a first signal to the second device at time t1, receiving at time t2 a second signal from the second device, said second signal being generated using the common secret, and determining the round trip time Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 46 of 62 PageID #: 286Case 1:16-cv-00830-RGA Document 23- Filed 03/2 /17 Page 1 7 f 163 PageID #: 1387 ME1 22314983v.1 -47- measurement as a difference between time t1 and time t2. The first communication device comprises means for checking whether the measured round trip time is within a predefined interval, means for generating a third signal using the common secret, means for checking whether the second signal and the third signal are identical, and means for allowing access to the protected content when the round trip time measurement is within the predefined interval and the second and third signals are identical. 131. Defendants have directly infringed and continue to directly infringe the ’819 patent in violation of 35 U.S.C. § 271 by using in the United States, without authority, smartphones, tablet computers, notebooks, All-in-One PCs, and 2-in-1 PCs to practice, either literally or under the doctrine of equivalents, each step of at least the method of claim 1 of the ’819 patent. 132. Defendants have directly infringed and continue to directly infringe the ’819 patent in violation of 35 U.S.C. § 271 by making, having made, using, selling and/or offering to sell within the United States, and/or importing into the United States, without authority, smartphones, tablet computers, notebooks, All-in-One PCs, and 2-in-1 PCs that embody, either literally or under the doctrine of equivalents, each element of at least claim 10 of the ’819 patent. 133. As one example, the ASUS ZenPad 8.0 is a tablet which runs the Android Operating System and which has content protection functionality, summarized in the next paragraph (“the ’819 Accused Functionality”), that meets every element of at least claim 10 of the ’819 patent, either literally or under the doctrine of equivalents, and which results in the practice of every step of at least claim 1 of the ’819 patent, either literally or under the doctrine of equivalents, when operated by Defendants or other end users. Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 47 of 62 PageID #: 287Case 1:16-cv 00830-RGA Document 23- Filed 03/2 /17 Page 1 8 f 163 PageID #: 1388 ME1 22314983v.1 -48- 134. The ASUS ZenPad 8.0 has Miracast hardware and/or software that support the High-bandwidth Digital Content Protection (HDCP) Specification Rev. 2.2 Interface Independent Adaptation (see, e.g., http://www.digital- cp.com/sites/default/files/specifications/HDCP%20Interface%20Independent%20Adaptation%2 0Specification%20Rev2_2_FINAL.pdf) (“HDCP on Miracast Specification”). A first communication device (e.g., an HDCP transmitter such as the ASUS ZenPad 8.0), has hardware and/or software that determine whether protected content that it stores can be accessed by a second communication device (e.g., an HDCP receiver such as a television). The ASUS ZenPad 8.0 performs a round trip time measurement between itself and the second communication device. The round trip time measurement comprises transmitting a first signal to the second device at a first time (e.g., transmitting the message LC_Init, which starts a locality check; see, e.g., HDCP on Miracast Specification, Figure 2.4), receiving a second signal from the second device at a second time (e.g., receiving the message LC_Send_L_prime, thereby receiving L’; see, e.g., HDCP on Miracast Specification, Figure 2.4), generating a third signal using a common secret (e.g., generating L using the common secret, the key km, from which kd is derived; see, e.g., HDCP on Miracast Specification, Figures 2.4 and 2.11), determining whether the second signal and the third signal are identical to verify that the second signal was generated using the common secret (e.g., determining that the received L’ is equal to the generated L; see, e.g., HDCP on Miracast Specification, Figure 2.4), generating the round trip time as a difference between the first time and the second time, checking whether the round trip time is within a predefined interval (e.g., checking if the round-trip time is within 7 ms; see, e.g., HDCP on Miracast Specification, Figure 2.4). Access to the protected content is allowed provided that the Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 48 of 62 PageID #: 288Case 1:16-cv 00830-RGA Document 23- Filed 03/2 /17 Page 1 9 f 163 PageID #: 1389 ME1 22314983v.1 -49- round trip time is within the predefined interval, the second signal and the third signal are identical, and the second device is authenticated. The ASUS ZenPad 8.0 authenticates the second device (e.g., the television) by receiving a certificate of the second device (e.g., the certificate received in the AKE_Send_Cert message; see, e.g., HDCP on Miracast Specification, Figure 2.1), verifying that the certificate of the second device identifies the second device as complying with a set of predefined compliance rules (e.g., verifying the signature on the certificate; see, e.g., HDCP on Miracast Specification, Figure 2.1), and the ASUS ZenPad 8.0 securely shares the common secret with the second device according to a key management protocol after having authenticated the second device (e.g., km is transmitted securely in the message AKE_No_Stored_km after the second device is authenticated; see, e.g., HDCP on Miracast Specification, Figure 2.1). 135. A first communication device (e.g., an HDCP transmitter such as the ASUS ZenPad 8.0), is configured for determining whether protected content that it stores is available for access by a second communication device (e.g., an HDCP receiver such as a television). The ASUS ZenPad 8.0 has hardware and/or software that perform an authentication of the second communication device, which comprises: receiving a certificate of the second device (e.g., the certificate received in the AKE_Send_Cert message; see, e.g., HDCP on Miracast Specification, Figure 2.1) and verifying that that the certificate of said second device identifies the second device as complying with a set of predefined compliance rules (e.g., verifying the signature on the certificate; see, e.g., HDCP on Miracast Specification, Figure 2.1). The ASUS ZenPad 8.0 has hardware and/or software that securely share a common secret with the second communication device after the second communication device is authenticated (e.g., km is Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 49 of 62 PageID #: 289Case 1:16-cv 00830-RGA Document 23- Filed 03/2 /17 Page 150 f 163 PageID #: 1390 ME1 22314983v.1 -50- transmitted securely in the message AKE_No_Stored_km after the second device is authenticated; see, e.g., HDCP on Miracast Specification, Figure 2.1). The ASUS ZenPad 8.0 has hardware and/or software that perform a round trip time measurement between the first communication device and the second communication device, which comprises: transmitting a first signal to the second device at time t1 (e.g., transmitting the message LC_Init, which starts a locality check; see, e.g., HDCP on Miracast Specification, Figure 2.4), receiving at time t2 a second signal from the second device, said second signal being generated using the common secret (e.g., receiving the message LC_Send_L_prime, thereby receiving L’ which is generated using the common secret, the key km, from which kd is derived; see, e.g., HDCP on Miracast Specification, Figures 2.4 and 2.11), and determining the round trip time measurement as a difference between time t1 and time t2 (e.g., checking if the round-trip time is within 7 ms; see, e.g., HDCP on Miracast Specification, Figure 2.4). The ASUS ZenPad 8.0 has hardware and/or software that check whether the measured round trip time is within a predefined interval (e.g., checking if the round-trip time is within 7 ms as explained above), hardware and/or software that generate a third signal using the common secret (e.g., generating L using the common secret, the key km, from which kd is derived; see, e.g., HDCP on Miracast Specification, Figures 2.4 and 2.11), hardware and/or software that check whether the second signal and the third signal are identical (e.g., checking that the received L’ is equal to the generated L; see, e.g., HDCP on Miracast Specification, Figure 2.4), and hardware and/or software that allow access to the protected content when the round trip time measurement is within the predefined interval and the second and third signals are identical. 136. Upon information and belief, Defendants make, have made, use, sell and/or offer Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 50 of 62 PageID #: 290Case 1:16-cv 00830-RGA Document 23- Filed 03/2 /17 Page 1 1 f 163 PageID #: 1391 ME1 22314983v.1 -51- to sell within the United States and/or import into the United States smartphones, tablet computers, notebooks, All-in-One PCs, and 2-in-1 PCs (see, e.g., http://www.asus.com/Phone- Accessory/ASUS_Miracast_Dongle/specifications/) that include the above-referenced ’819 Accused Functionality or similar functionality (e.g., by being pre-loaded with HDCP version 2.0 or higher on, for example, MHL, Miracast, HDMI, and/or DisplayPort) including, without limitation, the ZenFone family of smartphones, the PadFone family of smartphones, the ZenPad family of tablets, the Transformer Pad family of tablets, the Vivo Tab family of tablets, the Nexus family of tablets, the MeMo Pad family of tablets, and the Transformer Book Series family of 2-in-1 PCs (“the ’819 Accused Devices”) and/or software updates that include the ’819 Accused Functionality or similar functionality. 137. Upon information and belief, Defendants themselves, their customers, and other end users actually use the ‘819 Accused Functionality or similar functionality in the ’819 Accused Devices to practice each step of at least the method of claim 1 of the ’819 patent. 138. Defendants have also induced, and continue to induce, others to infringe the ’819 patent in violation of 35 U.S.C. § 271, by taking active steps to encourage and facilitate others’ direct infringement of at least the method of claim 1 of the ’819 patent with knowledge or willful blindness of that infringement. Upon information and belief, these affirmative acts include, without limitation, advertising, marketing, promoting, offering for sale and/or selling to others, including customers and other end users, the ’819 Accused Devices that include the ’819 Accused Functionality or similar functionality (e.g., by being pre-loaded with HDCP version 2.0 or higher on, for example, MHL, Miracast, HDMI, and/or DisplayPort) and/or software updates that include the ’819 Accused Functionality or similar functionality, such functionality being Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 51 of 62 PageID #: 291Case 1:16-cv 00830-RGA Document 23- Filed 03/2 /17 Page 1 2 f 163 PageID #: 1392 ME1 22314983v.1 -52- especially adapted for use in practicing at least the method of claim 1 of the ’819 patent. Further, Defendants provide instructions, user manuals, advertising, and/or marketing materials which facilitate, direct or encourage others, including customers and other end users, to directly infringe at least the method of claim 1 of the ’819 patent. 139. Upon information and belief, Defendants are aware that the ’819 Accused Devices have no substantial non-infringing use at least because the ’819 Accused Functionality or similar functionality included therein can only be used to infringe the ’819 patent. Further, Defendants expect and intend customers and other end users of the ’819 Accused Devices to use the various features included therein, including the ’819 Accused Functionality or similar functionality. 140. Defendants also provide to their customers a user manual (see, e.g., https://www.asus.com/us/Tablets/ASUS_ZenPad_80_Z380CX/specifications/) which facilitates, directs, or encourages others, including customers and other end users, to use of the ’819 Accused Functionality or similar functionality and thereby directly infringe at least the method of claim 1 of the ’819 patent. For example, the user manual includes at least the following specifications that encourage a user to practice the ’819 Accused Functionality: “Support Miracast” Defendants also provide a Miracast Dongle and provide a list of all ASUS devices that support Miracast and are compatible with the Miracast Dongle (see, e.g., http://www.asus.com/Phone-Accessory/ASUS_Miracast_Dongle/specifications/). Defendants have knowledge that the user manual encourages and facilitates the direct infringement of the ’819 patent by others, including customers and other end users, as Defendants have had notice of the ’819 patent since at least November 19, 2015 as explained above. Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 52 of 62 PageID #: 292Case 1:16-cv 00830-RGA Document 23- Filed 03/2 /17 Page 1 3 f 163 PageID #: 1393 ME1 22314983v.1 -53- 141. Defendants have also contributorily infringed, and continue to contributorily infringe, the ’819 patent in violation of 35 U.S.C. § 271 by offering to sell or selling within the United States or importing into the United States the ’819 Accused Devices that include the ’819 Accused Functionality or similar functionality (e.g., by being pre-loaded with HDCP version 2.0 or higher on, for example, MHL, Miracast, HDMI, and/or DisplayPort) and/or software updates that include the ’819 Accused Functionality or similar functionality for use in practicing at least the method of claim 1 of the ’819 patent. Defendants have had notice of the ’819 patent since at least November 19, 2015 as explained above. Therefore, Defendants know that such functionality includes or constitutes a material part of the inventions claimed in the ’819 patent and is especially made or adapted for use by others, including customers and other end users, to practice the methods of the ’819 patent and thereby directly infringe at least the method of claim 1 of the ’819 patent. Further, Defendants know that such functionality is not a staple article or commodity of commerce suitable for substantial, non-infringing use. 142. By reason of Defendants’ infringing activities, Plaintiffs have suffered, and will continue to suffer, substantial damages in an amount to be determined at trial. 143. Defendants have had actual notice of the ’819 patent since at least November 19, 2015 as explained above, and upon information and belief, have known or should have known that their activities outlined in this Cause of Action infringe the ’819 patent directly or indirectly. Defendants have nonetheless continued to engage in their infringing acts despite an objectively high likelihood that their actions constitute infringement of a valid patent and despite this objective risk being either known or obvious to Defendants. Accordingly, Defendants’ infringement is willful and deliberate, and this case is exceptional under 35 U.S.C. § 285. Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 53 of 62 PageID #: 293Case 1:16-cv 00830-RGA Document 23- Filed 03/2 /17 Page 1 4 f 163 PageID #: 1 94 ME1 22314983v.1 -54- Ninth Cause of Action: Infringement of U.S. Patent No. 6,772,114 144. Philips repeats and incorporates by reference each and every allegation of paragraphs 1 through 36 of this First Amended Complaint, as though set forth here in its entirety. 145. Koninklijke Philips N.V. is the sole owner of the entire right, title, and interest in and to the ’114 patent, including the right to sue and recover for any and all infringements thereof. 146. Claim 20 of the ’114 patent is illustrative of the device claims of the ’114 patent and is directed toward a receiver having a first decoder that receives a first coded signal with a low frequency range. The first decoder sequentially applies a narrow-band decoder, an up- sampler, and a low-pass filter to the first coded signal to generate a first reconstructed signal within the low frequency range. The receiver has a second decoder that receives a second coded signal within a high frequency range that is higher than the low frequency range. Based on the second coded signal, the second decoder sequentially applies a high-pass filter, a LPC synthesis filter, and an amplifier to a noise signal to generate a second reconstructed signal within the high frequency range. The receiver also has a combiner for combining the first reconstructed signal and the second reconstructed signal. 147. Defendants have directly infringed and continue to directly infringe the ’114 patent in violation of 35 U.S.C. § 271 by making, having made, using, selling and/or offering to sell within the United States, and/or importing into the United States, without authority, smartphones, tablet computers, notebooks, All-in-One PCs, and 2-in-1 PCs that embody, either literally or under the doctrine of equivalents, each element of at least claim 20 of the ’114 patent. 148. As one example, the ASUS ZenPad 8.0 is a tablet which runs the Android Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 54 of 62 PageID #: 294Case 1:16-cv 00830-RGA Document 23- Filed 03/2 /17 Page 1 5 f 163 PageID #: 1395 ME1 22314983v.1 -55- Operating System and which has audio decoding functionality, summarized in the next paragraph (“the ’114 Accused Functionality”), that meets every element of at least claim 20 of the ’114 patent, either literally or under the doctrine of equivalents. 149. The ASUS ZenPad 8.0 has hardware and/or software that support the Adaptive Multi-Rate Wideband (AMR-WB) Standard 3GPP TS 26.190 (“AMR-WB Standard”). AMR- WB is supported by the Android Operating System (see, e.g., http://developer.android.com/guide/appendix/media-formats.html) including, but not limited to, in a voice memo recording application or in an audio playback application. The ASUS ZenPad 8.0 audio hardware and/or software that support the AMR-WB Standard 3GPP TS 26.190 have a receiver with a first decoder that receives a first coded signal with a low frequency range (see, e.g., Figure 3 of the AMR-WB Standard). The first decoder sequentially applies a narrow-band decoder (see, e.g., Section 6.1 of the AMR-WB Standard describing several such decoders), an up-sampler (see, e.g., Section 6.2 of the AMR-WB Standard describing upsampling by 5), and a low-pass filter (see, e.g., Section 6.2 of the AMR-WB Standard describing low pass filtering through Hdecim(z); see, e.g., Section 5.1 describing Hdecim(z) as a low pass filter) to the first coded signal to generate a first reconstructed signal within the low frequency range. The receiver has a second decoder that receives a second coded signal within a high frequency range that is higher than the low frequency range (see, e.g., Section 6.3.1 of the AMR-WB Standard describing the received gain index in 23.85 kbit/s mode, which contains high frequency power information). Based on the second coded signal, the second decoder sequentially applies a high-pass filter (see, e.g., Section 6.3.3 of the AMR-WB Standard describing high pass filtering through HHB(z), a filter which passes the relevant high frequency band), a LPC synthesis filter (see, e.g., Section Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 55 of 62 PageID #: 295Case 1:16-cv 00830-RGA Document 23- Filed 03/2 /17 Page 1 6 f 163 PageID #: 1396 ME1 22314983v.1 -56- 6.3.2.2 of the AMR-WB Standard describing synthesis filter AHB(z)), and an amplifier to a noise signal (see, e.g., Section 6.3.1 of the AMR-WB Standard describing amplifying white noise signal uHB1(n)) to generate a second reconstructed signal within the high frequency range. The receiver also has a combiner for combining the first reconstructed signal and the second reconstructed signal (see, e.g., Section 6.3.3 of the AMR-WB Standard). 150. Upon information and belief, Defendants make, have made, use, sell and/or offer to sell within the United States and/or import into the United States smartphones, tablet computers, notebooks, All-in-One PCs, and 2-in-1 PCs that include the above-referenced ’114 Accused Functionality or similar functionality (e.g., by being pre-loaded with the Android Operating System that supports AMR-WB Standard 3GPP TS 26.190) including, without limitation, the ZenFone family of smartphones, the PadFone family of smartphones, the ZenPad family of tablets, the Transformer Pad family of tablets, the Nexus family of tablets, and the MeMo Pad family of tablets (“the ’114 Accused Devices”) and/or software updates that include the ’114 Accused Functionality or similar functionality. 151. By reason of Defendants’ infringing activities, Plaintiffs have suffered, and will continue to suffer, substantial damages in an amount to be determined at trial. 152. Defendants have had actual notice of the ’114 patent since at least May 21, 2013 as explained above, and upon information and belief, have known or should have known that their activities outlined in this Cause of Action infringe the ’114 patent directly. Plaintiffs have on multiple occasions met and communicated with Defendants to explain Defendants’ infringement of the ’114 patent. Defendants have nonetheless continued to engage in their infringing acts despite an objectively high likelihood that their actions constitute infringement of Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 56 of 62 PageID #: 296Case 1:16-cv 00830-RGA Document 23- Filed 03/2 /17 Page 1 7 f 163 PageID #: 1397 ME1 22314983v.1 -57- a valid patent and despite this objective risk being either known or obvious to Defendants. Accordingly, Defendants’ infringement is willful and deliberate, and this case is exceptional under 35 U.S.C. § 285. Tenth Cause of Action: Infringement of U.S. Patent No. RE 43,564 153. Philips repeats and incorporates by reference each and every allegation of paragraphs 1 through 36 of this First Amended Complaint, as though set forth here in its entirety. 154. Koninklijke Philips N.V. is the sole owner of the entire right, title, and interest in and to the ’564 patent, including the right to sue and recover for any and all infringements thereof. 155. Claim 1 of the ’564 patent is illustrative of the device claims of the ’564 patent and is directed toward a handheld communication device having a wireless modem for receiving data, a display that has a substantially small size suitable for the handheld communication device, a data processing system connected to the modem and to the display for processing the received data and for rendering an image corresponding to the data received, and a touch screen for enabling a user to interact with the device. The system operates to enable the user to select, through a touch location on the touch screen, a portion of the image when it is displayed at a first scale. The selected portion is rendered on the display at a second scale larger than the first scale thereby facilitating a selection of a feature. The selected portion when rendered at the second scale is a zoomed-in version of part of the image at the first scale substantially centered around the touch location. 156. Claim 7 of the ’564 patent depends from claim 1 and is directed toward the device of claim 1 wherein the data processing system is further operative to cause a window containing Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 57 of 62 PageID #: 297Case 1:16-cv 00830-RGA Document 23- Filed 03/2 /17 Page 1 8 f 163 PageID #: 1398 ME1 22314983v.1 -58- the selected portion displayed at the second scale to scroll across the image such that successive new selected portions of the image are displayed at the second scale. 157. Defendants have directly infringed and continue to directly infringe the ’564 patent in violation of 35 U.S.C. § 271 by making, having made, using, selling and/or offering to sell within the United States, and/or importing into the United States, without authority, smartphones, tablet computers, notebooks, All-in-One PCs, and 2-in-1 PCs that embody, either literally or under the doctrine of equivalents, each element of at least claims 1 and 7 of the ’564 patent. 158. As one example, the ASUS ZenPad 8.0 is a tablet which runs the Android Operating System and which has zoom functionality, summarized in the next two paragraphs (“the ’564 Accused Functionality”), that meets every element of at least claims 1 and 7 of the ’564 patent, either literally or under the doctrine of equivalents. 159. The ASUS ZenPad 8.0 runs the Android Operating System and ran Android Operating System version 5.0 when it was released (see, e.g., http://www.asus.com/us/Tablets/ASUS_ZenPad_80_Z380CX/specifications/). The ASUS ZenPad 8.0 is a handheld communication device having a wireless modem for receiving data, a display that has a substantially small size suitable for the handheld communication device, a processor (e.g., the Intel Atom x3 C3200) connected to the modem and to the display for processing the received data and for rendering an image corresponding to the data received (e.g., a rendered image of received website content), and a touch screen for enabling a user to interact with the device. The system operates to enable the user to select, through a touch location on the touch screen, a portion of the image when it is displayed at a first scale (e.g., the user selects, Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 58 of 62 PageID #: 298Case 1:16-cv 00830-RGA Document 23- Filed 03/2 /17 Page 1 9 f 163 PageID #: 1399 ME1 22314983v.1 -59- using a magnification gesture, a portion of the website when it is displayed at a first scale; see, e.g., https://support.google.com/accessibility/android/answer/6006949?hl=en and https://sites.google.com/a/blinddroid.org/blinddroid/training/magnification-gestures, detailing that the Android Operating System version 4.2 or higher supports magnification gestures). The selected portion is rendered on the display at a second scale larger than the first scale thereby facilitating a selection of a feature (e.g., the selected portion of the image is magnified to facilitate selection of a feature such as a link to a webpage). The selected portion when rendered at the second scale is a zoomed-in version of part of the image at the first scale substantially centered around the touch location (e.g., the magnified portion is substantially centered around the user’s touch location). 160. Further, the data processing system is further operative to cause a window containing the selected portion displayed at the second scale to scroll across the image such that successive new selected portions of the image are displayed at the second scale (e.g., a magnification window containing the selected portion that is magnified scrolls across the image such that successive new selected portions of the image are magnified). 161. Upon information and belief, Defendants make, have made, use, sell, and/or offer to sell within the United States and/or import into the United States smartphones, tablet computers, notebooks, All-in-One PCs, and 2-in-1 PCs that include the above-referenced ’564 Accused Functionality or similar functionality (e.g., by being pre-loaded with the Android Operating System version 4.2 or higher or the Windows Operating System version 7 or higher; see, e.g., http://download.microsoft.com/download/7/e/4/7e4154ae-7ac2-4235-a2f1- 3d25b1d161cd/win8_accessibility_tutorials.doc and http://windows.microsoft.com/en- Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 59 of 62 PageID #: 299Case 1:16-cv 00830-RGA Document 23- Filed 03/2 /17 Page 160 f 163 PageID #: 1400 ME1 22314983v.1 -60- us/windows7/using-touch-gestures) including, without limitation, the ZenFone family of smartphones, the PadFone family of smartphones, the ZenPad family of tablets, the Transformer Pad family of tablets, the Vivo Tab family of tablets, the Nexus family of tablets, the MeMo Pad family of tablets, the Eee Slate B121 tablet, the ZenBook family of notebooks, ZenBook Prime family of notebooks, the Zen AiO family of All-in-One PCs, the Vivo AiO family of All-in-One PCs, the Portable AiO family of All-in-One PCs, and the Transformer Book Series family of 2- in-1 PCs (“the ’564 Accused Devices”) and/or software updates that include the ’564 Accused Functionality or similar functionality. 162. By reason of Defendants’ infringing activities, Plaintiffs have suffered, and will continue to suffer, substantial damages in an amount to be determined at trial. 163. Defendants have had actual notice of the ’564 patent since at least May 21, 2013 as explained above, and upon information and belief, have known or should have known that their activities outlined in this Cause of Action infringe the ’564 patent directly. Plaintiffs have on multiple occasions met and communicated with Defendants to explain Defendants’ infringement of the ’564 patent. Defendants have nonetheless continued to engage in their infringing acts despite an objectively high likelihood that their actions constitute infringement of a valid patent and despite this objective risk being either known or obvious to Defendants. Accordingly, Defendants’ infringement is willful and deliberate, and this case is exceptional under 35 U.S.C. § 285. Prayer for Relief WHEREFORE, Plaintiffs respectfully request the Court to enter judgment as follows: A. That Defendants have directly infringed, indirectly infringed, induced others to Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 60 of 62 PageID #: 300Case 1:16-cv 00830-RGA Document 23- Filed 03/2 /17 Page 1 1 f 163 PageID #: 1401 ME1 22314983v.1 -61- infringe, and contributed to the infringement of the patents-in-suit; B. That Defendants be ordered to pay damages adequate to compensate Plaintiffs for Defendants’ infringement of the patents-in-suit, but in no event less than a reasonable royalty, together with prejudgment and post-judgment interest thereon; C. That Defendants be ordered to account for post-verdict infringement and pay no less than a reasonable royalty, together with interest, thereon; D. That Defendants’ infringement is deliberate and willful and that Defendants be ordered to pay treble damages under 35 U.S.C. § 284; E. That this is an exceptional case under 35 U.S.C. § 285 and that Plaintiffs be awarded its reasonable attorneys’ fees, costs, and expenses; and F. That Plaintiffs be granted such other and additional relief as the Court deems just and proper. Jury Demand Plaintiffs hereby demand a jury trial as to all issues so triable. Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 61 of 62 PageID #: 301Case 1:16-cv 00830-RGA Document 23- Filed 03/2 /17 Page 1 2 f 163 PageID #: 1402 ME1 22314983v.1 -62- Dated: April 11, 2016 Of Counsel: Michael P. Sandonato John D. Carlin Jonathan M. Sharret Daniel A. Apgar FITZPATRICK, CELLA, HARPER & SCINTO 1290 Avenue of the Americas New York, New York 10104-3800 Tel: (212) 218-2100 Fax: (212) 218-2200 msandonato@fchs.com jcarlin@fchs.com jsharret@fchs.com dapgar@fchs.com MCCARTER & ENGLISH, LLP /s/ Daniel M. Silver Michael P. Kelly (#2295) Daniel M. Silver (#4758) Benjamin A. Smyth (#5528) Renaissance Centre 405 N. King Street, 8th Floor Wilmington, Delaware 19801 (302) 984-6300 mkelly@mccarter.com dsilver@mccarter.com bsmyth@mccarter.com Attorneys for Plaintiffs Case 1:15-cv-01125-GMS Document 18 Filed 04/11/16 Page 62 of 62 PageID #: 302Case 1:16-cv 00830-RGA Document 23- Filed 03/2 /17 Page 1 3 f 163 PageID #: 1403