Case 5:20-cv-09341-EJD Document 1 Filed 12/24/20 Page 1 of 50
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`YAR R. CHAIKOVSKY (SB# 175421)
`yarchaikovsky@paulhastings.com
`PHILIP OU (SB# 259896)
`philipou@paulhastings.com
`JOSEPH J. RUMPLER, II (SB# 296941)
`josephrumpler@paulhastings.com
`BERKELEY FIFE (SB# 325293)
`berkeleyfife@paulhastings.com
`BORIS LUBARSKY (SB# 324896)
`borislubarsky@paulhastings.com
`PAUL HASTINGS LLP
`1117 S. California Avenue
`Palo Alto, California 94304-1106
`Telephone: 1(650) 320-1800
`Facsimile: 1(650) 320-1900
`Attorneys for Plaintiff
`APPLIED MATERIALS, INC.
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`
`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
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`APPLIED MATERIALS, INC.,
`Plaintiff,
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`vs.
`DEMARAY LLC,
`Defendant.
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`CASE NO. 5:20-cv-9341
`COMPLAINT FOR DECLARATORY
`JUDGMENT
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`COMPLAINT FOR DECLARATORY
`JUDGMENT
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`Case 5:20-cv-09341-EJD Document 1 Filed 12/24/20 Page 2 of 50
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`NATURE OF THE ACTION
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`1. This is an action for declaratory relief arising under the patent laws of the United States.
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`Applied Materials, Inc. (“Applied”) brings the instant action because there is a substantial
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`controversy between Applied and Defendant Demaray LLC (“Demaray”), two parties having
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`adverse legal interests, of sufficient immediacy and reality to require a judicial declaration of the
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`parties’ legal rights. On July 14, 2020, Demaray filed lawsuits alleging that certain of Applied’s
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`customers, Intel and Samsung, infringe United States Patent Nos. 7,544,276 (the ’276 patent) and
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`7,381,657 (the ’657 patent) (collectively, the “Asserted Patents”) by using “semiconductor
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`manufacturing equipment including reactive magnetron sputtering reactors” manufactured by
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`Applied. (“Customer Suits”). True and correct copies of these complaints are attached as Exhibits
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`A and B (“Customer Complaints”).
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`2. The Asserted Patents are both entitled “Biased Pulse DC Reactive Sputtering of Oxide
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`Films” and share a common specification. The ’276 patent discloses only apparatus claims directed
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`to a reactor having certain hardware components (herein also, “the ’276 reactor patent”), and Intel
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`and Samsung’s alleged infringement is based on their use of Applied’s reactors to produce
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`semiconductor products. On information and belief, neither Samsung nor Intel makes, sells or
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`offers to sell reactors; the alleged infringement of the ’276 reactor patent by Samsung or Intel is
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`based on their use of the accused reactor supplied by the manufacturer, Applied. The ’657 patent
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`(herein also, “the ’657 process patent”) discloses method claims for depositing films, where again,
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`Intel and Samsung’s alleged use of the reactors supplied by Applied, allegedly infringes the claimed
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`methods. The Applied reactors identified and accused in the Customer Complaints are used for the
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`same applications by Applied in its own laboratories in the Northern District of California for
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`research and development and customer demonstrations.
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`Case 5:20-cv-09341-EJD Document 1 Filed 12/24/20 Page 3 of 50
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`3. Thus, contrary to the arguments Demaray has made to this Court, this is “a case where one
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`entity [Applied] makes an [allegedly] infringing product [Applied’s accused reactors], and its
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`customers [Intel and Samsung] are then sued for nothing more than purchasing and using it [as a
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`practical matter based on the commercial realities] in the only way possible.” Applied Materials,
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`Inc. v. Demaray LLC, Case No. 5:20-cv-5676-EJD (“DJ Action”), Dkt. No. 25, p. 6:5-9. As John
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`Forster, Applied’s Senior Director, Process Engineer for Metal Deposition Products, who has
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`worked at Applied since October 1993, explained in his declaration submitted to the Court in
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`opposing Demaray’s motion to dismiss for lack of subject matter jurisdiction in the DJ Action:
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`Customers like Intel and Samsung typically provide Applied with a set of
`specifications for a type of film they would like to deposit, and based on those
`specifications, Applied manufactures and configures the RMS reactors to deposit
`films according to the customers’ specifications. Post-installation modifications,
`such as modifying the power supply or adding an additional component, such as a
`filter, to the system as installed by Applied, could, for example, cause the RMS
`reactor to no longer meet the customers’ required specifications or impact the
`warranty of the reactor.
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`DJ Action, Dkt. No. 42-1, ¶ 6 (also attached hereto as Exhibit Q)
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`4. On information and belief, Demaray is well aware of these commercial realities and the
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`relationships between an equipment supplier like Applied and its customers, like Samsung and
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`Intel, who use Applied’s customized equipment for material deposition processes to manufacture
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`its products. Demaray’s principal, Dr. Ernest Demaray, is a former employee of Applied Komatsu,
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`a joint venture of Applied in the 1990s, and claims to have over fifty years of experience working
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`with or in the semiconductor industry. DJ Action, Dkt. No. 23-1, ¶¶ 2, 4. A true and correct copy
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`of Dr. Demaray’s declaration is also attached as Exhibit M. On information and belief, Demaray
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`also has extensive knowledge regarding the semiconductor industry through its purported
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`consultant attorney hired to manage the Customer Suits, Scot Griffin. On information and belief,
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`Mr. Griffin has extensive knowledge about the semiconductor industry, having worked for over a
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`decade in-house at Intel, Spansion, Inc. (another semiconductor manufacturer) and Tessera, Inc. (a
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`Case 5:20-cv-09341-EJD Document 1 Filed 12/24/20 Page 4 of 50
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`company that purported to be a global leader in the development of semiconductor packaging
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`technology). A true and correct copy of Mr. Griffin’s LinkedIn profile is attached as Exhibit R.
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`5. In considering the Customers Suits’ allegations with the commercial realities of Applied’s
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`relationships with its customers—including that Applied designs, manufactures and installs its
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`reactors at its customers’ fabrication facilities, and thereafter provides maintenance and support for
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`those reactors—Demaray’s affirmative act of filing the Customer Suits, which implicitly accused
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`Applied and Applied’s reactors of infringement, created a reasonable potential that infringement
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`claims could be brought against Applied based on the same allegations. As a result of Applied’s
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`reasonable apprehension of suit, on August 13, 2020, Applied filed a declaratory judgment action
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`of non-infringement of the Asserted Patents. Applied Materials, Inc. v. Demaray LLC, Case No.
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`5:20-cv-5676-EJD, Dkt. No. 1. On September 4, 2020, Applied moved for a preliminary injunction
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`to enjoin Demaray from proceeding with its Customer Suits during the pendency of the DJ Action.
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`Id., Dkt. No. 13.
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`6. Demaray opposed by arguing that the Court did not have subject matter jurisdiction over
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`the DJ Action by representing that its allegations in the Customer Suits were directed at “particular
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`configurations” made by Intel and Samsung to Applied’s reactors such that “Demaray [did not]
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`accuse Applied PVD reactors standing alone of infringement in the Texas cases—Demaray
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`accused particular reactor configurations, and methods of depositing thin films using them, of
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`infringement in the Texas cases…”. DJ Action, Dkt. No. 23, p. 5:26-6:9 (emphasis added). But
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`nowhere in the Customer Complaints did Demaray allege that its accusations of infringement did
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`not accuse “Applied PVD reactors standing alone”. Nor did Demaray provide any evidence, let
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`alone allege in the Customer Complaints, that Intel and Samsung’s alleged infringement was based
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`on post-installation modifications to the hardware of the PVD reactors after the reactors were
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`manufactured, configured, and installed by Applied. On information and belief, Demaray’s subject
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`Case 5:20-cv-09341-EJD Document 1 Filed 12/24/20 Page 5 of 50
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`matter jurisdiction challenge, including its arguments that the Customer Complaints were directed
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`to post-installation modifications by the customers, was simply a vehicle to slow down the DJ
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`Action while the Customer Suits proceeded. As explained below, Demaray’s representations that
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`it was not accusing “Applied PVD reactors standing alone of infringement” was not true, as
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`confirmed by Demaray’s recent statements that it may accuse Applied of infringement and
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`subsequently seeking discovery through subpoenas for documents and testimony directed to
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`Applied’s configuration of its reactors as supplied to the customers in order to determine “which
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`reactors are in dispute” (i.e., which allegedly infringe).
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`7. On information and belief, although the Customer Complaints did not make an express
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`allegation of infringement against Applied, Demaray, in particular Dr. Demaray and Mr. Griffin,
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`understood and knew that their allegations against Intel and Samsung based on their use of
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`Applied’s reactors would be objectively and reasonably interpreted as an implied assertion against
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`Applied. While their knowledge is not required to establish a justiciable case or controversy, it
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`undermines Demaray’s characterization of the allegations in the Customer Suits in challenging this
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`Court’s subject matter jurisdiction and further evidences Demaray’s bad faith in bringing that
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`challenge. Setting aside Demaray’s after-the-fact representations to the Court and the veracity of
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`those statements when considering Dr. Demaray’s and Mr. Griffin’s intimate knowledge and
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`experience in this industry, Applied did in fact reasonably and objectively interpret the Customer
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`Complaints at the time the DJ Action was filed as affirmative acts by Demaray that created a
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`reasonable potential that infringement claims could be brought against Applied. DJ Action, Dkt.
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`No. 42-1, ¶¶ 5-9 (also at Ex. Q).
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`8. On information and belief, the implications of Demaray’s statements and arguments made
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`in challenging subject matter jurisdiction were that Intel and Samsung further “configured”
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`Applied’s reactors such that their use of the further configured reactors allegedly infringed the
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`Case 5:20-cv-09341-EJD Document 1 Filed 12/24/20 Page 6 of 50
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`Asserted Patents, but the reactors as manufactured and sold by Applied, did not. The Court credited
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`Demaray’s representations regarding its allegations in its Customer Complaints in finding that there
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`was not an actual controversy that Applied might be liable for direct infringement at the time
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`Applied filed its DJ Action. DJ Action, Dkt. No. 46, p. 7:12-19 (“In particular, Demaray alleges
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`Intel and Samsung configure the reactors such that they are comprised of a pulsed DC power supply
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`coupled to the target area, a RF bias power supply coupled to the substrate, and a narrow band
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`rejection filter placed between the DC power supply and the target area in order to deposit the thin
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`layer films in its semiconductor products.”); p. 8:8-11 (“Although Applied is a supplier of the
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`reactors capable of this configuration and deposition method, Demaray does not allege in the
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`WDTX Actions that Applied itself configures the reactors or promotes the patented configuration
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`and method. See generally Intel Compl.; Samsung Compl (also at Exs. A–B). Without more,
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`Applied cannot be held liable for direct infringement.”) (emphasis added).
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`9. Since the filing of the DJ Action, Demaray’s conduct in the Customer Suits and in the DJ
`Action have (i) undermined the veracity of Demaray’s representations to this Court regarding its
`allegations in its Customer Complaints and (ii) demonstrated that even if an actual case or
`controversy did not exist at the time the DJ Action was filed (Applied maintains that one did), an
`actual case or controversy exists now and with respect to this new complaint. Based on the facts
`that exist today, there can be no good faith dispute as to the Court’s subject matter jurisdiction. The
`totality of these affirmative acts in contrast to the inconsistent statements made to the Court, are
`described in detail herein, are summarized in the tables below:
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`Case 5:20-cv-09341-EJD Document 1 Filed 12/24/20 Page 7 of 50
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`Demaray’s Representations (in red) / Affirmative Acts
`Supporting Subject Matter Jurisdiction (acts expressly
`directed at Applied in green) and/or Contradicting
`Representations
`July 14, 2020: Demaray files Customer Complaints against
`Applied’s customers accusing their use of Applied’s reactors of
`infringement and exclusively relying on Applied information
`September 25, 2020: Demaray represents to this Court that its
`allegations in the Customer Suits are not directed at Applied, but
`at post-installation configurations performed by Intel and
`Samsung relating to the power supply and narrow band-rejection
`filter limitations
`October 9, 2020: Demaray serves infringement contentions in
`Customer Suits relying on the same Applied information as
`Customer Complaints, but no allegations or evidence of post-
`installation modifications or “configurations” to relevant
`hardware
`October 9, 2020: Demaray continues prosecution of Customer
`Suits, despite receiving confirmation in declarations in DJ
`Action rebutting Demaray’s theory of post-installation
`configurations by the customers
`October 22, 2020: Demaray refuses to provide its infringement
`contentions, which would inform how one would objectively and
`reasonably interpret the allegations in the Customer Complaints,
`to Applied or the Court
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`Reference Citation
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`Infra, ¶¶ 30-39; Exs. A, B.
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`Infra, ¶ 42; DJ Action, Dkt.
`No. 23, p. 2:1-6, 2:21-23,
`4:22-5:2, 5:26-6:1, 6:4-9.
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`Infra, ¶¶ 43-44; Exs. C, D.
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`Infra, ¶ 45; DJ Action, Dkt.
`No. 26-12 at ¶¶ 15–16;
`Dkt. No. 26-8 at ¶¶ 10–11;
`Dkt. No. 26-10 at ¶ 12.
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`Infra, ¶¶ 43, 48; Ex. S
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`Case 5:20-cv-09341-EJD Document 1 Filed 12/24/20 Page 8 of 50
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`Demaray’s Representations (in red) / Affirmative Acts
`Supporting Subject Matter Jurisdiction (acts expressly
`directed at Applied in green) and/or Contradicting
`Representations
`November 18-30, 2020: Demaray refuses to inform Applied
`whether Demaray intends to file compulsory counterclaims of
`infringement against Applied
`November 23, 2020: Demaray moves to dismiss the DJ Action
`for lack of subject matter jurisdiction, continuing to allege that
`its Customer Complaints were directed to post-installation
`modifications or “configurations” by Samsung/Intel to relevant
`hardware
`November 23, 2020: Based on Demaray’s representations that
`Applied’s reactors standing alone did not infringe the Asserted
`Patents in the Customer Suits, Applied requests a covenant not
`to sue; to-date, none has been granted
`November 30, 2020: Demaray again represents that its
`allegations in the Customer Suits did not accuse “Applied’s
`reactors standing alone of infringement” despite declarations
`from Samsung and Intel in the DJ Action rebutting Demaray’s
`theory of post-installation configurations of Applied’s reactors
`by the customers
`November 30, 2020: Demaray claims that its infringement
`contentions are based on confidential reverse engineering reports
`“detailing Intel’s and Samsung’s infringing use of the claimed
`reactor configurations” but the contentions has no discussion or
`even reference to such reports
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`Reference Citation
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`Infra, ¶ 46-47; Ex. E; DJ
`Action, Dkt. No. 40
`(JCMS) at 5:26-27, 6:7-11
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`DJ Action, Dkt. No. 39
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`Infra, ¶ 46, Ex. E
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`DJ Action, Dkt. No. 40
`(JCMS) at 5:19-22
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`Infra, ¶ 47; DJ Action, Dkt.
`No. 40 (JCMS) at 5:15-22;
`11:8-11
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`Case 5:20-cv-09341-EJD Document 1 Filed 12/24/20 Page 9 of 50
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`Reference Citation
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`DJ Action, Dkt. No. 40
`(JCMS) at 5:6-11; 11:11-
`14
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`Infra, ¶¶ 14, 49-50; Ex. F
`and G
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`Demaray’s Representations (in red) / Affirmative Acts
`Supporting Subject Matter Jurisdiction (acts expressly
`directed at Applied in green) and/or Contradicting
`Representations
`November 30, 2020: Demaray confirms in the Joint Case
`Management Statement it will seek discovery from Applied’s
`regarding Applied’s configurations to determine whether it will
`allege infringement against Applied and that it may accuse
`Applied of infringement
`December 12, 2020: Demaray serves Applied with subpoenas
`for documents and deposition testimony regarding Applied’s
`configuration of the reactors supplied to Intel and Samsung,
`including for the specific hardware components Demaray
`claimed were configured by Intel and Samsung
`December 20, 2020: Demaray confirms in correspondence to
`the Court in the Customer Suits that the discovery sought in its
`subpoenas to Applied was “necessary to determine which
`reactors are in dispute” (i.e., which reactors allegedly infringe)
`“[g]iven Applied’s involvement in the development,
`manufacture, assembly and installation of reactors which are
`then used by Intel/Samsung in an infringing manner.”
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`10. On October 9, 2020, Demaray served its infringement contentions in the Customer Suits.
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`Infra, ¶¶ 15-16, 50; Ex. H
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`The contentions failed to provide any allegations or evidence of Intel or Samsung “configuring”
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`the reactors supplied by Applied in a manner that could be reasonably interpreted as alleging that
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`Intel and Samsung (as the users of the reactors) infringe, but that Applied (as the supplier of the
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`reactors) allegedly does not. For example, for claim 1 of the ’276 reactor patent, Demaray relied
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`Case 5:20-cv-09341-EJD Document 1 Filed 12/24/20 Page 10 of 50
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`exclusively on the same Applied documentation as referenced in the Customer Complaints, while
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`failing to cite to any evidence from Intel or Samsung. True and correct copies of public versions
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`of the infringement contentions against Intel and Samsung are attached as Exhibits C and D
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`respectively.
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`11. On the same day, in support of Applied’s motion for preliminary injunction, declarations
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`from Intel, Samsung and Applied were submitted in the DJ Action rebutting Demaray’s allegations
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`that Intel and Samsung “configure the reactors” in an allegedly infringing manner. DJ Action, Dkt.
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`No. 26-12 at ¶¶ 15–16; Dkt. No. 26-8 at ¶¶ 10–11; Dkt. No. 26-10 at ¶ 12. Accordingly, on
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`information and belief, at least as of October 9, 2020, Demaray was on notice that Intel and
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`Samsung did not perform the post-modification configurations Demaray purported to allege in
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`seeking to distinguish Intel and Samsung’s alleged infringement from any allegations that would
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`be directed at Applied. Demaray never challenged the veracity of those declarations, but only
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`argued that the Court should not consider them because they were created after the filing of the DJ
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`Action.
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`12. Demaray’s affirmative acts supporting subject matter jurisdiction continued. Between
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`November 18, 2020 and November 30, 2020, Applied and Demaray held multiple conferences and
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`exchanged multiple correspondence where Applied repeatedly asked Demaray whether it intended
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`to file compulsory counterclaims of infringement of the Asserted Patents against Applied in the DJ
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`Action. Demaray refused to confirm that it would not file infringement claims against Applied,
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`claiming it needed discovery from Applied. On information and belief, if Demaray’s infringement
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`allegations were truly directed at post-installation modifications of Applied’s reactors by Samsung
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`and Intel, as opposed to directed at the reactors manufactured, sold and installed by Applied,
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`Demaray could have confirmed that position and ended the inquiry. Demaray, of course, did not.
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`Applied also asked Demaray whether it would provide Applied with a covenant not to sue;
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`Case 5:20-cv-09341-EJD Document 1 Filed 12/24/20 Page 11 of 50
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`Demaray did not agree to provide one. A true and correct copy of the correspondence between
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`counsel is attached as Exhibit E.
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`13. Based on these exchanges and the developments since Demaray filed its Customer Suits, in
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`discussing a proposed schedule in the DJ Action, Applied reasoned in the Parties’ November 30,
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`2020 Joint Case Management Statement that “to the extent there was not a case or controversy at
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`the time Applied filed its declaratory judgment action (Applied contends there was), there certainly
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`is now in the absence of a covenant not to sue that Demaray has yet to provide.” DJ Action, Dkt.
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`No. 40 at 13:9-12. In response, Demaray did not disagree, only stating that “the Court and the
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`parties can address such a future case, and the jurisdictional merits associated therewith, if it is ever
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`brought.” Id. at 13:22-24.
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`14. Less than two weeks later, on December 12, 2020, Demaray took further affirmative acts
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`directed at Applied by serving Applied with subpoenas for the production of documents and
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`deposition testimony in the Customer Suits to determine whether Applied and its reactors supplied
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`to Intel and Samsung allegedly infringe. A true and correct copy of the subpoenas are attached as
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`Exhibit F and G. The subpoenas were directed at “each Applied reactor supplied to Intel or
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`Samsung with a RMS PVD chamber” and specifically requested documents regarding, for example,
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`“the configuration of the reactor” (Request No. 6); “any filters configured to be used with the power
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`sources” (Request No. 6); “the power sources to the target and the power sources to the substrate”
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`(Request No. 9); “the use of pulsed DC power to the target in RMS PVD chambers in Applied
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`reactors” (Request No. 10); “the use of an RF bias on the substrate and pulsed DC power to the
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`target in RMS PVD chamber in Applied reactors” (Request No. 11); and “the use of a filter with a
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`RMS PVD chamber in Applied reactors with an RF bias on the substrate and pulsed DC power to
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`the target” (Request No. 12), as well as deposition testimony regarding the same. Notably, these
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`hardware components and their “configuration” in the reactors are what Demaray repeatedly argued
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`COMPLAINT FOR DECLARATORY
`JUDGMENT
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`Case 5:20-cv-09341-EJD Document 1 Filed 12/24/20 Page 12 of 50
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`in multiple pleadings before this Court were “configurations” made by Applied’s customers, and
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`not Applied, to argue that this Court did not have subject matter jurisdiction over the DJ Action.
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`15. For avoidance of any ambiguity as to the purpose of the subpoenas and whether Demaray’s
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`allegations in the Customer Suits could be reasonably and objectively interpreted as being directed
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`at Applied and Applied’s reactors as manufactured and sold to its customers, on December 20,
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`2020, Demaray explained in correspondence to the Court in the Customer Suits that the discovery
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`sought was “necessary to determine which reactors are in dispute” (i.e., which reactors allegedly
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`infringe) and that it sought discovery from Applied “[g]iven Applied’s involvement in the
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`development, manufacture, assembly and installation of reactors which are then used by
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`Intel/Samsung in an infringing manner.” A true and correct copy of Demaray’s correspondence is
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`attached as Exhibit H. Nowhere in the subpoenas or correspondence to the Court in the Western
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`District of Texas did Demaray explain, as it did to this Court in the DJ Action, that its allegations
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`were directed at the use of reactors that allegedly infringed only after post-installation modifications
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`by Applied’s customers.
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`16. The subpoenas to Applied seeking discovery regarding Applied’s configurations of its
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`reactors supplied to Intel and Samsung, and not Intel/Samsung’s alleged post-installation
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`modifications or configurations of the reactors, “to determine which reactors are in dispute” are
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`additional affirmative acts directed at Applied giving rise to an actual case or controversy between
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`Demaray and Applied. The subpoenas further directly contradict Demaray’s prior representations
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`to this Court that the allegations in the Customer Complaints were directed to Samsung and Intel’s
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`alleged post-installation configurations of Applied’s reactors and confirm that the Customer
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`Complaints, objectively interpreted, made an implied assertion of infringement against Applied.
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`On information and belief, Demaray knows, and always has known including at the time it filed
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`the Customer Suits, that Intel and Samsung used the accused reactors as manufactured, sold and
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`COMPLAINT FOR DECLARATORY
`JUDGMENT
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`Case 5:20-cv-09341-EJD Document 1 Filed 12/24/20 Page 13 of 50
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`installed by Applied, such that any allegations against Intel and Samsung based on their use of the
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`reactors are implicit allegations against Applied for its manufacture and sale of the same reactors
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`for the same alleged reasons.
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`17. Under the totality of the evidence and the facts that exist today, which include: (i) the
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`commercial realities of the relationship between Applied and its customers using Applied’s
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`products; (ii) Demaray’s exclusive reliance on Applied’s products in the Customer Complaints;
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`(iii) Demaray’s infringement contentions in the Customer Suits; (iv) Applied’s customers’
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`confirmation that they do not perform the post-installation modifications to Applied’s reactors that
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`Demaray contended took place; (v) Demaray’s refusal to grant Applied a covenant not to sue; (vi)
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`Demaray’s refusal to inform Applied or the Court in the DJ Action whether it will assert
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`compulsory counterclaims; (vii) Demaray’s requests to obtain discovery from Applied to determine
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`if Applied allegedly infringes; (viii) Demaray’s serving of subpoenas to Applied for discovery
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`regarding the reactors it supplies to Intel and Samsung, including Applied’s configurations of the
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`hardware components Demaray previously alleged that Intel and Samsung configures on their own;
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`and (ix) Demaray’s representations in the Customer Suits that the discovery from Applied is
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`necessary to determine which reactors allegedly infringe—there is a substantial controversy
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`between the parties having adverse legal interests, of sufficient immediacy and reality regarding
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`the Asserted Patents.
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`18. Demaray’s filing and continued prosecution of the Customer Suits based on Samsung and
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`Intel’s use of equipment supplied by Applied give rise to a substantial controversy between Applied
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`and Demaray of sufficient immediacy and reality for another, independent reason—Applied’s
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`reactors (including their use by Applied’s customers) are already covered by a license to the
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`Asserted Patents. In December of 1998, Demaray’s founder, Dr. Ernest Demaray, along with
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`several colleagues from Applied or Applied Komatsu, left to form a new company: Symmorphix,
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`COMPLAINT FOR DECLARATORY
`JUDGMENT
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`

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`Case 5:20-cv-09341-EJD Document 1 Filed 12/24/20 Page 14 of 50
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`Inc. (“Symmorphix”). Symmorphix and Applied Komatsu negotiated a Sales and Relationship
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`Agreement (“SRA”) which facilitated the former employees’ continued work on technology they
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`had been developing at Applied Komatsu, including sputtered silicon deposition technology. A
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`true and correct copy of the December 11, 1998 SRA is attached as Exhibit I.
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`19. Symmorphix and Applied Komatsu were two sophisticated commercial entities that
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`negotiated an arms’ length commercial contract permitting Symmorphix to continue using Applied
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`Komatsu’s equipment and intellectual property to develop its own, granting Applied Komatsu a
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`license to certain Symmorphix patents (which include the Asserted Patents), and preventing
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`Applied Komatsu from competing with Symmorphix. The license and release provisions were set
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`forth in Exhibit C to the SRA, entitled “Future Dealings, Intellectual Property, Confidential
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`Information and Licenses.” A true and correct copy of Exhibit C to the December 11, 1998 SRA
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`is attached as Exhibit J.
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`20. On information and belief, after the SRA was executed, Symmorphix sought to amend
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`certain provisions of Exhibit C of the SRA, including by adding the clause “[t]o the extent required
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`by existing AKTA Employee Agreements with any Symmorphix personnel” to further limit the
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`scope of the license granted by Symmorphix to Applied to only the inventions of the former Applied
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`Komatsu employees with assignment provisions for which Applied Komatsu agreed to release. A
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`true and correct copy of the January 29, 1999 Modified Exhibit C is attached as Exhibit K.
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`21. The license grant expressly permitted Applied Komatsu to transfer or assign such license
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`grant to Applied, and expressly allowed its customers to use such inventions as well. Accordingly,
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`Demaray’s Customer Suits, based on Intel and Samsung’s use of equipment supplied by Applied,
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`violates the license grant in the SRA. Therefore, Applied’s reactors, including their use by Intel,
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`Samsung or any other customer of Applied that Demaray may sue in the future, cannot infringe.
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`COMPLAINT FOR DECLARATORY
`JUDGMENT
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`

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`Case 5:20-cv-09341-EJD Document 1 Filed 12/24/20 Page 15 of 50
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`22. On information and belief, the former Applied and Applied Komatsu employees continued
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`to use Applied’s confidential information, intellectual property and equipment to develop
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`technology at Symmorphix. On information and belief, Symmorphix also continued to hire
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`personnel from Applied and Applied Komatsu, including Mukundan Narasimhan, one of the four
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`named inventors on the Asserted Patents, who left Applied to join Symmorphix on April 16, 2001.
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`On information and belief, using confidential information produced, conceived, made or first
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`actually reduced to practice during either Mr. Narasimhan’s employment at Applied or within a
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`year of his termination, Mr. Narasimhan filed a patent application relating to his work at Applied
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`and that led to the Asserted Patents. Pursuant to Mr. Narasimhan’s employment agreement, his
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`ownership rights in the application automatically assigned to Applied, such that Demaray does not
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`have complete ownership over the Asserted Patents. That defect in the chain of title precludes
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`Demaray from asserting infringement of the Asserted Patents.
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`23. Therefore, Applied requests declaratory relief as follows: (1) a declaratory judgment that
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`Applied’s products do not infringe the Asserted Patents because they do not meet each and every
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`limitation of any asserted claim; (2) a declaratory judgment that Applied’s products cannot infringe
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`because Applied and its customers using Applied’s equipment have a license to use the Asserted
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`Patents by reason of a license granted in the SRA; and (3) a declaratory judgment that Applied’s
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`products