throbber
Case 5:18-md-02834-BLF Document 903-2 Filed 09/15/23 Page 1 of 14
`
`Exhibit 1
`
`

`

`
`
`Mark Holscher (SBN 139582)
`mark.holscher@kirkland.com
`Michael Shipley (SBN 233674)
`michael.shipley@kirkland.com
`KIRKLAND & ELLIS LLP
`555 South Flower Street
`Los Angeles, CA 90071
`Telephone: (213) 680-8400
`
`Attorneys for Plaintiffs Europlay Capital
`Advisors, LLC and Claria Innovations, LLC;
`Element Entertainment Inc.; Eurocapital and
`Business Development LLC
`
`[Additional counsel on signature page]
`
`SUPERIOR COURT OF THE STATE OF CALIFORNIA
`COUNTY OF LOS ANGELES–CENTRAL DISTRICT
`
`Case No.
`
`
`
`COMPLAINT FOR DECLARATORY
`JUDGMENT
`
`
`
`
`EUROPLAY CAPITAL ADVISORS LLC;
`ELEMENT ENTERTAINMENT INC.;
`EUROCAPITAL BUSINESS DEVELOPMENT
`LLC; CLARIA INNOVATIONS LLC;
`MONTO HOLDINGS PTY LTD.; KINETECH,
`INC.; BRILLIANT DIGITAL
`ENTERTAINMENT, INC.
`
`Plaintiffs,
`
`v.
`
`AMAZON.COM, INC.; AMAZON WEB
`SERVICES, INC.; TWITCH INTERACTIVE,
`INC.
`
`
`Defendants.
`
`
`
`
`
`COMPLAINT FOR DECLARATORY JUDGMENT
`
`
`
`
`
`
`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
`
`Electronically FILED by Superior Court of California, County of Los Angeles on 02/27/2023 05:39 PM David W. Slayton, Executive Officer/Clerk of Court, by D. Williams,Deputy Clerk
`
`Assigned for all purposes to: Stanley Mosk Courthouse, Judicial Officer: Gregory Keosian
`
`23STCV04364
`
`

`

`Case 5:18-md-02834-BLF Document 903-2 Filed 09/15/23 Page 3 of 14
`
`
`
`1.
`
`Plaintiffs Europlay Capital Advisors LLC, Element Entertainment Inc., Eurocapital Business
`Development LLC, Claria Innovations LLC, Monto Holdings Pty Ltd., Kinetech, Inc. and Brilliant
`Digital Entertainment, Inc. (collectively, “Plaintiffs”), by and through their undersigned attorneys, bring
`this Cross-Complaint for Declaratory Judgment against Amazon.com, Inc., Amazon Web Services, Inc.,
`and Twitch Interactive, Inc. (collectively “Defendants”).
`NATURE OF THE ACTION
`PersonalWeb Technologies LLC (“Personal Web”) brought an ultimately unsuccessful,
`but hard-fought and non-frivolous patent litigation against Amazon. After finding that the action was
`“exceptional” under 35 U.S.C. § 285, the United States District Court for the Northern District of
`California found PersonalWeb liable for Amazon’s costs and attorneys’ fees in defending against the
`litigation. PersonalWeb is unable to pay that judgment, which Amazon is attempting to enforce even
`though it remains on appeal.
`2.
`Having spent more than a year taking extraordinarily broad post-judgment discovery,
`Amazon’s next apparent step is to have Plaintiffs—PersonalWeb’s direct or indirect owners—held liable
`for PersonalWeb’s judgment debt. Amazon appears bent on using its substantial resources to force
`Plaintiffs to pay for PersonalWeb’s judgment by piercing through multiple layers of limited liability
`afforded by Texas and then Delaware law. Amazon wants to make an example out of Plaintiffs in order
`to deter intellectual property inventors and owners whose patents Amazon may in the future infringe and
`whom it hypocritically labels as “patent trolls.”
`3.
`Amazon’s cause is a popular one amongst tech company executives. But, as the Federal
`Circuit recently explained, “the patent statute does not restrict enforceable patent rights to those who
`practice the patent, to the exclusion of research institutions and their exclusive licensees engaged to
`perform needed enforcement activities in which the inventors, or research institutions, may lack
`expertise or experience.” Thermolife Int’l LLC v. GNC Corp., 922 F.3d 1347, 1363 (Fed. Cir. 2019).
`4.
`Amazon does not have clean hands. Amazon is the subject of a Federal Trade
`Commission investigation and has been sued for its anti-competitive behavior by multiple state attorney
`generals, including very recently, by the Attorney General of California, and has been repeatedly
`accused of knocking off products it sells on its website and of exploiting its vast trove of internal data to
`
`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 DECLARATORY JUDGMENT
`
`

`

`Case 5:18-md-02834-BLF Document 903-2 Filed 09/15/23 Page 4 of 14
`
`
`promote its own merchandise at the expense of other sellers. (See https://tinyurl.com/2p8x9xts.) Amazon
`now seeks to intimidate those who research, invent and own patented intellectual property but, often—
`through the actions of Amazon and its fellow technology cohorts—cannot or do not practice the patents
`they own or acquire, from enjoying the exclusive rights granted to them as patent owners or exclusive
`licensees.
`5.
`There is no basis in fact or law to facilitate Amazon’s agenda or to afford Amazon the
`remedy it is on the cusp of seeking. PersonalWeb was adequately capitalized. It obeyed corporate
`formalities. It had separate accounts. It was not a conduit or vehicle for fraud.
`6.
`Legitimate businesses often fail. Their creditors go unpaid. But that does not entitle the
`creditors to go after the business owners. (Notably Plaintiffs are also creditors of PersonalWeb who may
`not be fully repaid. That, after all, is why PersonalWeb is currently in a receivership.) In its zeal,
`Amazon seeks a result that would fundamentally alter the corporate ecosystem by undermining
`principles of corporate separateness essential for the efficient functioning of business enterprises.
`7.
`Plaintiffs are accordingly entitled to a declaration from the Court that there is no basis to
`pierce PersonalWeb’s corporate veil to make Plaintiffs jointly liable as debtors on Amazon’s attorneys’
`fee award.
`
`PARTIES AND RELEVANT NON-PARTIES
`8.
`PersonalWeb is a Texas limited liability company with its principal place of business
`formerly in Tyler, Texas. Certain secured creditors petitioned this court to put PersonalWeb into
`receivership in a related action that is pending in this Court. See Brilliant Digital Entertainment, Inc., et
`al. v. PersonalWeb Technologies, LLC, No. 21VECV00575 (L.A. Super. filed Apr. 27, 2021) (“Related
`Case”). Amazon has intervened in the Related Case.
`9.
`Plaintiff Brilliant Digital Entertainment, Inc. (“BDE”) is a Delaware corporation whose
`principal place of business is Los Angeles, California. BDE holds a secured note from PersonalWeb
`under which, as of March 31, 2021, PersonalWeb owed BDE $2,871,948 in principal and about $2.7
`million in accrued interest.
`
`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 DECLARATORY JUDGMENT
`
`

`

`Case 5:18-md-02834-BLF Document 903-2 Filed 09/15/23 Page 5 of 14
`
`
`
`10.
`Plaintiff Kinetech, Inc. (“Kinetech”) is a Delaware corporation whose principal place of
`business is Los Angeles, California. Kinetech is a wholly owned subsidiary of BDE. Kinetech holds
`68.977 percent of the equity in PersonalWeb.
`11.
`Plaintiff Europlay Capital Advisors LLC (“ECA”) is a Delaware limited liability
`company whose principal place of business is Los Angeles, California.
`12.
`Plaintiff Element Entertainment Inc. (“Element”) is a Delaware corporation whose
`principal place of business is Los Angeles, California.
`13.
`Plaintiff Eurocapital Business Development LLC (“EBD,” and together with Element and
`ECA, “Europlay”) is a Delaware limited liability company whose principal place of business is Los
`Angeles, California.
`14.
`Plaintiff Claria Innovations LLC (“Claria”) is a Delaware limited liability company
`whose principal place of business is Los Angeles, California. Claria holds a secured note from
`PersonalWeb under which, as of March 31, 2021, PersonalWeb owed Claria $264,600 in principal and
`about $325,000 in accrued interest. Claria is owned by Europlay.
`15.
`EBD holds 9.791 percent of the equity in PersonalWeb. ECA also holds a secured note to
`PersonalWeb under which, as of March 31, 2021, PersonalWeb owes ECA $532,622 in principal and
`about $550,000 in accrued interest.
`16.
`Plaintiff Monto Holdings Pty Ltd. (“Monto”) is an Australian limited entity (the
`equivalent of a corporation) with its principal place of business in Australia. Monto currently holds a
`secured note from PersonalWeb under which, as of March 31, 2021, PersonalWeb owes Monto
`$10,020,609 in principal and about $2.6 million in accrued interest, which was assigned to it on or about
`October 31, 2018, by non-party Topodia, Ltd. (“Topodia”), formerly a Cyprus entity that was a
`subsidiary of Monto. Monto also holds 20.022 percent of the equity in PersonalWeb, which was
`originally held by Topodia.
`17.
`Non-party SAM Ventures is an investment partnership comprised of partners at a law
`firm. SAM Ventures holds 1.1 percent of the equity in PersonalWeb.
`18.
`Non-Party PersonalWeb, Inc. is a Texas Corporation that holds a 0.110 percent interest in
`PersonalWeb.
`
`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 DECLARATORY JUDGMENT
`
`

`

`Case 5:18-md-02834-BLF Document 903-2 Filed 09/15/23 Page 6 of 14
`
`
`
`19.
`Defendant Amazon.com, Inc. is a Delaware corporation with its principal place of
`business in Seattle, Washington.
`20.
`Defendant Amazon Web Services, Inc. is a wholly owned subsidiary of Amazon.com,
`Inc., and a Delaware corporation with its principal place of business in Seattle, Washington.
`21.
`Defendant Twitch Interactive, Inc. is a wholly owned subsidiary of Amazon.com, Inc.,
`and a Delaware corporation with its principal place of business in San Francisco, California. (All
`defendants, collectively, “Amazon”).
`FACTUAL ALLEGATIONS
`
`A.
`The Creation of PersonalWeb.
`22.
`In January 2010, Claria (then a limited liability company 10 percent owned and managed
`by Europlay) acquired technology and intellectual property that was developed by a company called
`Claria Corporation and assigned for the benefit of that corporation’s creditors to Jellycloud (Assignment
`for the Benefit of Creditors), LLC, in its sole and limited capacity as the assignee of the former Claria
`Corporation’s assets (“Jellycloud ABC”) dealing with personalized targeted online advertising and web
`pages. PersonalWeb Technologies, LLC was formed to restart the former Claria business using its
`technology to develop personalized web-based advertising products.
`23. When that effort proved unsuccessful, PersonalWeb reconveyed the personalized targeted
`online advertising technology acquired from Claria and shifted gears to focus on developing a student-
`focused chat and file sharing platform, which became known as StudyPods. The StudyPods concept
`combined two technologies developed by other companies. It employed a patented technology for data-
`processing systems that use a hash algorithm to assign each data item a substantially unique name that
`depends entirely on the item’s content. These “True Names Patents” were jointly owned by Level 3
`Communications, LLC (“Level 3”) and by Kinetech, which had been acquired by BDE in 2007 for $2
`million. The other technology was a research search engine and natural language processor developed
`by Topodia.
`24.
`Kinetech and Level 3 were parties to an agreement between Kinetech, Inc. and Digital
`Island, Inc. (as predecessor in interest to Level 3), dated September 1, 2000 (the “DI Agreement”).
`Pursuant to the DI Agreement, Kinetech and Level 3 each owned a fifty percent (50%) undivided
`
`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 DECLARATORY JUDGMENT
`
`

`

`Case 5:18-md-02834-BLF Document 903-2 Filed 09/15/23 Page 7 of 14
`
`
`interest in and to the True Names Patents (including U.S. Patent Nos. 5,978,791, 6,415,280, 6,928,442,
`7,802,310, 7,945,539, 7,945,544, 7,949,662, 8,001,096 and 8,099,420.) The interests of Level 3 were
`limited to an exclusive field, with all remaining rights held by Kinetech.
`25.
`To facilitate development and exploitation of the True Names Patents and the
`development of StudyPods, in July 2011, Kinetech contributed the True Names Patents to PersonalWeb
`and Topodia contributed its search engine technology to PersonalWeb. In exchange, Kinetech received a
`68.977 percent equity interest in PersonalWeb and Topodia received a 20.022 percent interest, which
`was subsequently assigned to Monto on October 21, 2018. The remainder of the equity of the company
`is held by EBD (9.791 percent), non-party SAM Ventures (1.1 percent), and non-party PersonalWeb,
`Inc. (.110 percent).
`
`26.
`These transactions were fully and properly documented.
`27.
`Along with the equity investments in PersonalWeb, over the years up to April 2021,
`BDE, Europlay, Claria, and Topodia (with Monto assuming Topodia’s rights and obligations in 2018),
`loaned PersonalWeb in excess of $13.7 million in the aggregate at a commercial rate of interest so
`PersonalWeb could continue product development, pay its employees, and pay daily operating expenses.
`These loans were fully and properly documented including by a variety of Promissory Notes, Security
`Agreements, and UCC filings, as amended from time to time.
`28.
`Each Plaintiff is a separately incorporated or organized entity entitled to its limited
`liability and corporate separateness.
`
`6
`COMPLAINT FOR DECLARATORY JUDGMENT
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`

`

`Case 5:18-md-02834-BLF Document 903-2 Filed 09/15/23 Page 8 of 14
`
`
`
`29.
`PersonalWeb had its own offices, email system, accounting system, bank accounts, and
`intellectual property. It filed separate tax returns. PersonalWeb also abided by all of the corporate
`formalities that are required of a company chartered under the Texas Limited Liability Company Act.
`30.
`PersonalWeb was adequately capitalized at the inception of the patent litigation discussed
`below. In addition to the True Names Patents—originally acquired by Kinetech for $2 million and
`extensively licensed and previously validated in litigation—it had approximately $13.7 million in loans
`that Plaintiffs advanced to it.
`31.
`Claria owns no equity in PersonalWeb at all.
`32.
`Plaintiffs are also separate from each other. Europlay does not share any common
`ownership or employees with BDE or Monto. They do not share offices, equipment, email systems, or
`accounts. BDE sub-leases an office from Europlay under a written lease and for which it pays monthly
`rent.
`
`33.
`PersonalWeb had its own bank accounts. Plaintiffs did not intermingle any of their funds
`with each other or with those of PersonalWeb. All intercompany transactions were documented and
`properly accounted for.
`34.
`PersonalWeb did not make any capital distributions to its owners. It also did not regularly
`pay the interest accruing on its secured notes to Europlay, Claria, BDE, and Topodia/Monto. On a few
`occasions, the most recent of which occurred in 2017, PersonalWeb made payments credited to interest
`or principal on the Secured Notes. These payments generally coincided with settlements or licensing
`agreements regarding the True Names Patents. At the time of these payments, PersonalWeb was
`adequately capitalized with both intellectual property that was well-valued at the time—it, after all,
`merited the settlements—and cash.
`
`B.
`The PersonalWeb Patent Litigation.
`35. While developing StudyPods, PersonalWeb also began enforcing its rights under the True
`Names Patents as their prior owners had done since the late 1990s. It filed a series of patent
`infringement litigations and continued to file patent applications and continuations expanding the family
`of True Names Patents. These enforcement efforts met with success. PersonalWeb settled litigation
`
`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 DECLARATORY JUDGMENT
`
`

`

`Case 5:18-md-02834-BLF Document 903-2 Filed 09/15/23 Page 9 of 14
`
`
`against Microsoft, Hewlett Packard, Nexsan, NEC, and IBM, amongst others, receiving aggregate
`licensing fees in the mid eight-figure range as a result.
`36.
`As PersonalWeb prosecuted the True Names cases, various alleged infringers instituted
`inter partes review of certain of the asserted claims of the True Name Patents before the Patent Trial and
`Appeal Board (“PTAB”), resulting in extended stays of the ligations. The PTAB ruled that certain of the
`asserted claims of the patents were invalid as anticipated from the prior art. The U.S. Court of Appeals
`for the Federal Circuit affirmed the PTAB as to certain of the asserted claims of certain of the True
`Name Patents. But for one key patent (the “‘310 Patent”) the Federal Circuit twice reversed the PTAB’s
`prior art findings. PersonalWeb Techs., LLC v. Apple, Inc., 917 F.3d 1376, 1383 (Fed. Cir. 2019);
`PersonalWeb Techs., LLC v. Apple, Inc., 848 F.3d 987, 994 (Fed. Cir. 2017). Due to delays and stays
`caused by the PTAB proceedings, multiple actions against alleged infringers such as Google, EMC
`Corporation, VMware and Apple recommenced after the second Federal Circuit decision upholding
`various asserted claims.
`37.
`A significant source of alleged infringement were Amazon Web Services customers who
`used its data storage and computing services. PersonalWeb commenced infringement actions against 85
`Amazon customers after the second Federal Circuit ruling, expecting such cases to be consolidated.
`Those cases were ultimately consolidated in a multidistrict litigation in the United States District Court
`for the Northern District of California. See In Re: PersonalWeb Technologies, LLC et al., Patent
`Litigation, MDL No. 2834, 18-md-02834-BLF (N.D. Cal.).
`38.
`In 2018, Amazon sued PersonalWeb for a declaration of non-infringement in the United
`States District Court for the Northern District of California. See Amazon.com Inc. v. PersonalWeb
`Technologies LLC, No. 5:18-cv-00767-BLF (N.D. Cal. filed Feb. 5, 2018). PersonalWeb
`counterclaimed, alleging that Amazon infringed its patents. Amazon’s declaratory judgment action was
`joined with the MDL against the Amazon customers. The court subsequently selected PersonalWeb’s
`action against Amazon subsidiary Twitch Interactive, Inc. as a representative infringement case against
`an Amazon customer in the MDL. See PersonalWeb Technologies LLC, v. Twitch Interactive, Inc., No.
`5:18-cv-05619-BLF (N.D. Cal.).
`
`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 DECLARATORY JUDGMENT
`
`

`

`Case 5:18-md-02834-BLF Document 903-2 Filed 09/15/23 Page 10 of 14
`
`
`
`39.
`On April 4, 2019, the district court ruled that certain of PersonalWeb’s infringement
`claims were barred by res judicata and the so-called “Kessler doctrine,” because a prior lawsuit brought
`by PersonalWeb against Amazon had been voluntarily dismissed with prejudice. In re PersonalWeb
`Techs., LLC, et al. Pat. Litig., No. 18-MD-02834-BLF, 2019 WL 1455332 (N.D. Cal. Apr. 2, 2019). The
`Federal Circuit affirmed on June 17, 2020. In re PersonalWeb Techs. LLC, 961 F.3d 1365, 1379 (Fed.
`Cir. 2020). PersonalWeb filed a petition for writ of certiorari with the United States Supreme Court. The
`Supreme Court requested the view of the Solicitor General of the United States. The Solicitor General
`explained that the Federal Circuit erred because the Kessler doctrine should not apply absent the first
`court’s having rendered a judgment of non-infringement, although she recommended denying the writ
`on prudential grounds. Certiorari was denied.
`40. While the res judicata and Kessler doctrine appeal proceeded, the district court issued a
`claims construction on the Patents favorable to Amazon. That ultimately led to the entry of summary
`judgment in favor of Amazon. In re PersonalWeb Techs., LLC Pat. Litig., No. 18-MD-02834-BLF, 2020
`WL 6821074, at *1 (N.D. Cal. Feb. 3, 2020). The Federal Circuit affirmed that judgment in 2021. In re
`PersonalWeb Techs. LLC, No. 2020-1566, 2021 WL 3557196, at *1 (Fed. Cir. Aug. 12, 2021).
`41.
`In PersonalWeb’s case against Google—which was not part of the MDL—a different
`federal judge in the Northern District of California subsequently ruled that the ‘310 patent and two
`others were invalid under 35 U.S.C. § 101, as they were directed to an abstract idea. PersonalWeb
`Techs. LLC v. Google LLC, No. 5:13-CV-01317-EJD, 2020 WL 520618, at *14 (N.D. Cal. Jan. 31,
`2020). PersonalWeb appealed that ruling, which was subsequently affirmed by the Federal Circuit.
`PersonalWeb Techs. LLC v. Google LLC, 8 F.4th 1310, 1319 (Fed. Cir. 2021).
`42.
`Following the entry of summary judgment in its favor in February 2020, Amazon moved
`for an award of its attorneys’ fees under 35 U.S.C. § 285, which permits a court to award fees to a
`prevailing party in a “exceptional” patent case. See Octane Fitness, LLC v. ICON Health & Fitness, Inc.,
`572 U.S. 545, 554 (2014). The district court granted Amazon’s motion on October 6, 2020. On March 2,
`2021, the district court entered an order (the “Fee Award”) granting Amazon $4,615,242.28 in fees and
`$203,300.10 in costs. The court subsequently granted a supplemental motion adding $571,961.00 in fees
`
`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 DECLARATORY JUDGMENT
`
`

`

`Case 5:18-md-02834-BLF Document 903-2 Filed 09/15/23 Page 11 of 14
`
`
`and $11,120.97 in costs. PersonalWeb has appealed the Fee Award but the Federal Circuit has not yet
`reached a decision. Enforcement of the Fee Award judgment has not been stayed pending that appeal.
`43.
`On April 27, 2021, Europlay, Claria, BDE and Monto filed the Related Case against
`PersonalWeb to collect on the unpaid balances of the Secured Notes and to preserve the assets of the
`now-insolvent PersonalWeb. The Court appointed a receiver. And on October 3, 2022, the Court of
`Appeal issued an opinion permitting Amazon to intervene in the Related Case. Amazon filed its
`complaint in intervention on December 14, 2022.
`
`C.
`Amazon’s Post Judgment Enforcement Efforts.
`44.
`Following the Fee Award, Amazon began a campaign of aggressive judgment
`enforcement discovery under Rule 69 of the Federal Rules of Civil Procedure. This included
`extraordinarily broad third-party subpoenas on Europlay, Claria, BDE and Monto. These subpoenas’
`document demands significantly exceed the scope of ordinary third-party discovery under Rule 69,
`under which third-parties can be examined only regarding whether they possess any assets that belong to
`the judgment debtor. Amazon has demanded and obtained hundreds of thousands of pages of documents
`directed to the ownership structure, interrelations, internal communications and finances of Europlay,
`Claria, BDE and Monto.
`45.
`The end goal of this discovery is not obscure. Amazon intends to move to add some or all
`of Plaintiffs to the judgment and make them jointly and severally liable for the fee award on an alter ego
`or similar theory. California state law (incorporated into Rule 69) permits such a practice under
`California Code of Civil Procedure § 187. Indeed, Amazon has confirmed that intent in briefings,
`noting, for instance, that it needed BDE and Europlay’s financial statements because those “documents
`are at the core of Amazon’s post-judgment enforcement and effort to prove alter ego liability.”
`46.
`There is thus a live controversy between the parties with respect to whether Plaintiffs, or
`any of them, are alter egos of PersonalWeb.
`47.
`The federal court cannot decide the controversy because adding a new defendant to a
`judgment is outside of its ancillary subject matter jurisdiction and there is no separate basis for federal
`subject matter jurisdiction, such as the complete diversity of the parties.
`
`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 DECLARATORY JUDGMENT
`
`

`

`Case 5:18-md-02834-BLF Document 903-2 Filed 09/15/23 Page 12 of 14
`
`
`
`D.
`Plaintiffs Are Not Alter Egos of PersonalWeb
`48.
`Under California law, the “law of the state or other jurisdiction under which a foreign
`limited liability company is formed governs . . . [t]he liability of a member as member and a manager as
`manager for the debts, obligations, or other liabilities of the limited liability company.” Corps. Code
`§ 17708.01. Amazon’s effort to pierce PersonalWeb’s veil is thus governed by Texas law.
`49.
`Under Texas law, “[e]xcept as and to the extent the company agreement specifically
`provides otherwise, a member or manager is not liable for a debt, obligation, or liability of a limited
`liability company, including a debt, obligation, or liability under a judgment, decree, or order of a
`court.” Tex. Bus. Orgs. Code § 101.114. Because PersonalWeb’s LLC Agreement does not provide for
`such liability for its members, they are not liable under Amazon’s attorney fee judgement under any
`circumstance.
`50.
`Alternatively, the owner of membership interests in a Texas LLC can be held liable for
`the obligations of the LLC on the basis that the owner is the alter ego of the LLC only if the owner
`caused the LLC to be used for the purpose of perpetrating and did, in fact, perpetrate an actual fraud
`primarily for the direct personal benefit of the owner. Tex. Bus. Orgs. Code §§ 21.223(a)(2), (b);
`101.102(a).
`51.
`There is no fraud here, and there has never been. PersonalWeb is not a sham company
`created or used for the purpose of perpetrating a fraud against Amazon. Indeed, earlier in the True
`Names Patent litigation, in a case against Amazon which Amazon claims was, for different reasons,
`effectively res judicata, the United States District Court in the Eastern District of Texas specifically
`found that “PersonalWeb is a legitimate company operating a legitimate business in East Texas.”
`PersonalWeb Techs., LLC v. Amazon.com, No. 6:11-cv-658-LED, dkt. #109 at 14 (E.D. Tex. Mar. 21,
`2013).
`
`52.
`Because there is no basis to pierce the corporate veil of PersonalWeb, there is no further
`basis to pierce the veils of the companies higher in its capital structure, under the laws of each of their
`respective jurisdictions.
`
`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 DECLARATORY JUDGMENT
`
`

`

`Case 5:18-md-02834-BLF Document 903-2 Filed 09/15/23 Page 13 of 14
`
`
`
`COUNT I
`(DECLARATORY JUDGMENT)
`By All Plaintiffs Against All Defendants
`53.
`Paragraphs 1 through 52 are incorporated herein for reference.
`54.
`There exists an actual controversy between Plaintiffs and Amazon concerning whether
`Amazon can pierce PersonalWeb’s corporate veil such that some or all of the Plaintiffs would be liable
`for the fee award.
`55.
`These interests are real and adverse.
`56.
`These interests are ripe for judicial determination that Plaintiffs are not liable to Amazon
`for the Fee Award under an alter ego or veil piercing theory.
`PRAYER FOR RELIEF
`57. WHEREFORE, Plaintiffs respectfully request that the Court enter judgment as follows:
`a.
`Declaring that Plaintiffs, and each of them, are not alter egos of PersonalWeb.
`b.
`Declaring that respecting the corporate separateness of PersonalWeb would not
`result in fraud or injustice.
`Awarding Plaintiffs their attorneys’ fees and costs of suit.
`Awarding any other relief that is just, appropriate, and equitable.
`
`c.
`d.
`
`Dated: February 27, 2023
`
`
`Respectfully Submitted,
`KIRKLAND & ELLIS LLP
`
` /s/ Mark Holscher
`Mark Holscher (SBN 139582)
`mark.holscher@kirkland.com
`Michael Shipley (SBN 233674)
`michael.shipley@kirkland.com
`Matthew Gamsin (SBN 307830)
`matthew.gamsin@kirkland.com
`Kyle Gosselin (SBN 342575)
`kyle.gosselin@kirkland.com
`555 South Flower Street
`Los Angeles, CA 90071
`Telephone: (213) 680-8400
`
`
`
`Attorneys for Plaintiffs Europlay Capital Advisors,
`LLC and Claria Innovations, LLC; Element
`
`12
`COMPLAINT FOR DECLARATORY JUDGMENT
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`

`

`Case 5:18-md-02834-BLF Document 903-2 Filed 09/15/23 Page 14 of 14
`
`Entertainment Inc.; Eurocapital and Business
`Development LLC
`
`FRANDZEL ROBINS BLOOM & CSATO, L.C.
`
` /s/ Thomas Robins
`Thomas M. Robins III (SBN 054423)
`trobins@frandzel.com
`Michael Gerard Fletcher (SBN 070849)
`mfletcher@frandzel.com
`Bruce David Poltrock (SBN 162448)
`bpoltrock@frandzel.com
`1000 Wilshire Boulevard, 19th Floor
`Los Angeles, California 90017-2427
`Telephone: (323) 852-1000
`
`Attorneys for Plaintiffs Monto Holdings Pty Ltd,
`Kinetech, Inc., and Brilliant Digital Entertainment,
`Inc.
`
`
`13
`COMPLAINT FOR DECLARATORY JUDGMENT
`
`
`
`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
`
`

This document is available on Docket Alarm but you must sign up to view it.


Or .

Accessing this document will incur an additional charge of $.

After purchase, you can access this document again without charge.

Accept $ Charge
throbber

Still Working On It

This document is taking longer than usual to download. This can happen if we need to contact the court directly to obtain the document and their servers are running slowly.

Give it another minute or two to complete, and then try the refresh button.

throbber

A few More Minutes ... Still Working

It can take up to 5 minutes for us to download a document if the court servers are running slowly.

Thank you for your continued patience.

This document could not be displayed.

We could not find this document within its docket. Please go back to the docket page and check the link. If that does not work, go back to the docket and refresh it to pull the newest information.

Your account does not support viewing this document.

You need a Paid Account to view this document. Click here to change your account type.

Your account does not support viewing this document.

Set your membership status to view this document.

With a Docket Alarm membership, you'll get a whole lot more, including:

  • Up-to-date information for this case.
  • Email alerts whenever there is an update.
  • Full text search for other cases.
  • Get email alerts whenever a new case matches your search.

Become a Member

One Moment Please

The filing “” is large (MB) and is being downloaded.

Please refresh this page in a few minutes to see if the filing has been downloaded. The filing will also be emailed to you when the download completes.

Your document is on its way!

If you do not receive the document in five minutes, contact support at support@docketalarm.com.

Sealed Document

We are unable to display this document, it may be under a court ordered seal.

If you have proper credentials to access the file, you may proceed directly to the court's system using your government issued username and password.


Access Government Site

We are redirecting you
to a mobile optimized page.





Document Unreadable or Corrupt

Refresh this Document
Go to the Docket

We are unable to display this document.

Refresh this Document
Go to the Docket