`
`UNITED STATES DISTRICT COURT
`DISTRICT OF DELAWARE
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`ALMONDNET, INC.,
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`
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`
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`Plaintiff,
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`
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`Civil Action No.
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`Jury Trial Demanded
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`v.
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`OATH HOLDINGS INC.
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`
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`
`
`
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`Defendant.
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`COMPLAINT
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`Plaintiff AlmondNet, Inc. (“AlmondNet”) for
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`its Complaint for patent
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`infringement against defendant Oath Holdings Inc. (“Oath”), including Oath’s BrightRoll
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`and former Yahoo units, hereby demand a jury trial and allege as follows:
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`NATURE OF THE ACTION
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`1.
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`This is a civil action charging Oath with infringement of a patent owned
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`by AlmondNet, arising under the patent laws of the United States, 35 U.S.C. § 1, et seq.,
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`and more particularly 35 U.S.C. § 271.
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`ALMONDNET AND ITS ACTIVITIES
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`2.
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`Plaintiff AlmondNet is a corporation organized and existing under the
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`laws of the State of Delaware, having its principal place of business at 37-18 Northern
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`Boulevard, Suite 404, Long Island City, New York 11101.
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`3.
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`Founded
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`in 1998, AlmondNet specializes
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`in media and Internet
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`advertising software and solutions. AlmondNet developed an extensive suite of targeted-
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`advertising products, which helped revolutionize display and search advertising and
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`increase the efficiency of the Internet-advertising market.
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`1
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`4.
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`AlmondNet owns a significant portfolio of patents relevant
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`to
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`advertisement targeting, including in such areas as profile-based bidding, behavioral
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`targeting, addressable advertising, and multi-platform advertising. AlmondNet is
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`currently focused on R&D and the licensing of its patents, while its subsidiaries
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`(Datonics, LLC and Intent IQ, LLC) offer services to the public, generally in the fields of
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`data aggregation, data distribution, and cross-device targeting.
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`5.
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`In particular, based on AlmondNet patented technology, Datonics offers
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`data users (including ad networks, ad exchanges, demand side platforms, and publishers)
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`pre-packaged or customized keyword-based “data segments” that can facilitate the
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`delivery of advertisements to consumers wherever they go online, with the ads being
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`focused on subjects relevant to the individual consumer yet delivered in a privacy-
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`sensitive way. Intent IQ operates a “demand side platform” (DSP) that competes with
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`Oath’s DSP. A DSP is a system that allows advertisers or their representatives (who buy
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`digital advertising inventory) to place ads by managing multiple accounts with ad
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`exchange and data exchange companies through one interface. Such exchanges act as
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`intermediaries to facilitate sale of space on websites and other “media properties.”
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`OATH AND ITS ACTIVITIES
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`6.
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`Defendant Oath is a corporation organized and existing under the laws of
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`the State of Delaware, having its principal place of business at 701 First Avenue,
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`Sunnyvale, CA 94089.
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`7.
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`BrightRoll is, upon information and belief, a unit of Oath. Oath was
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`formerly known as Yahoo!. AlmondNet is suing Oath for acts performed by both Oath
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`directly, and before it, Yahoo!, and its Brightroll unit.
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`2
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`8.
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`Oath is a world-wide provider of various Internet-based products and
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`services, including online advertising services. Oath offers advertising services including
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`search, content, and behavioral advertising on Oath-owned and -operated properties,
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`across the web and across devices including personal computers and mobile devices.
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`9.
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`Oath facilitates its advertising services to advertisers through various ad
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`solutions. Oath’s services allow delivery of advertisements in a variety of formats based
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`on user profile information – originating from search, mail, digital content consumption,
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`Smart TV, mobile app usage, registrations, offline purchases, and more – for delivery on
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`both Oath and non-Oath properties, across consumers’ desktops,
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`tablets, and
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`smartphones.
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`10.
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`Oath facilitates advertising services using different platforms including ad
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`exchanges and online ad management platforms. In or about January 2014, Oath’s
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`predecessor Yahoo! announced a service called Yahoo Ad Exchange (YAX) and a
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`targeting product called Yahoo Audience Ads. YAX allows “audience sharing,” enabling
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`ad space buyers on the exchange to target audiences from multiple data providers to
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`deliver targeted ads on Yahoo or non-Yahoo websites. Yahoo Audience Ads allows
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`targeting ads both on properties in the Yahoo content network and off-network.
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`11.
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`In November 2014, Yahoo! acquired Brightroll for $640 million.
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`BrightRoll is a world-wide provider of online-advertising services. Brightroll offers video
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`advertising
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`platforms
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`called
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`BrightRoll
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`Exchange,
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`available
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`at
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`http://www.brightroll.com/exchange and BrightRoll Demand Side Platform, available at
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`http://www.brightroll.com/demand-side-platform. Through those platforms, Brightroll
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`delivers, manages, and measures the performance of digital video ad campaigns across
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`3
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`web, mobile, and connected TV. BrightRoll allows advertisers to purchase targeted ads,
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`which are shown to website visitors who fit the advertisers’ interest criteria, including on
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`non-Yahoo websites.
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`12.
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`In March 2015, Yahoo! announced that Brightroll would begin using
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`Yahoo audience data, i.e., information about visitors to Yahoo-owned or Yahoo-operated
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`websites, in its ad targeting.
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`13.
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`In September 2015 Yahoo! announced that it had consolidated all of its
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`programmatic ad technology under a single umbrella – the BrightRoll brand.
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`14.
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`In July 2016, Verizon entered into a stock purchase agreement with
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`Yahoo! Inc. Pursuant to the Purchase Agreement Verizon agreed to acquire the stock of
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`one or more subsidiaries of Yahoo! holding all of Yahoo’s operating business.
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`15.
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`On or about July 20, 2016, Yahoo! Inc. formed Yahoo Holdings, Inc. as its
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`Agreement. Yahoo Holdings, Inc. is a Delaware corporation with an office located at 701
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`wholly owned subsidiary, which Verizon agreed to purchase pursuant to the Purchase
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`First Avenue, Sunnyvale, California, 94089.
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`16.
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`Effective June 13, 2017, Yahoo! Inc. transferred to Yahoo Holdings, Inc.
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`the operating business of Yahoo! Yahoo Holdings, Inc. then became a wholly owned
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`subsidiary of Verizon Communications, Inc.
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`17.
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`In February 2018, Yahoo Holdings, Inc. changed its name to Oath
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`Holdings Inc.
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`18.
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`Upon information and belief, Oath Holdings Inc. owns, operates, and
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`controls the platforms, services, and computer systems referenced in this Complaint.
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`4
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`JURISDICTION AND VENUE
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`19.
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`This Court has jurisdiction over the subject matter of this action under, at
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`least, 35 U.S.C. §281 and 28 U.S.C. §§1331, 1332, 1338(a), 2201, and 2202.
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`20.
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`Personal jurisdiction over Oath is proper because Oath is incorporated in
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`Delaware.
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`21.
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`Venue is proper in this District under 28 U.S.C. §§ 1391(b) and (c) and
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`1400(b) because Oath is incorporated in Delaware.
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`THE PATENT AND ITS FAMILY
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`22.
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`On November 28, 2017, the United States Patent & Trademark Office
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`issued U.S. Patent 9,830,615, entitled “Electronic ad direction through a computer system
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`controlling ad space on multiple media properties based on a viewer’s previous website
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`visit” (“the ‘615 Patent). A true and correct copy of the ‘615 Patent is attached as Exhibit
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`A, including a certificate of correction.
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`23.
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`24.
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`AlmondNet owns and has the right to enforce the ‘615 Patent.
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`The ‘615 Patent has an effective filing date of June 14, 2007, and claims
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`priority to two provisional applications, filed June 16 and 19, 2006.
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`25.
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`The ‘615 Patent is the eighth patent that issued from the original patent
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`specification filed on June 14, 2007. AlmondNet refers to the ‘615 Patent and its seven
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`related patents as the “Media Property Selection” (MPS) family.
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`26.
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`AlmondNet’s CEO, Roy Shkedi, is the inventor of the ‘615 Patent.
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`OATH’S DIRECT INFRINGEMENT OF THE ’615 PATENT
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`27.
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`Oath infringes each and every one of the 17 claims of the ‘615 Patent.
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`5
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`28.
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`Via at least the platforms, products, and services described in this
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`Complaint, Oath has sold or facilitated the sale of targeted ads to advertisers, so that
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`when users visit a website on which Oath has the capabilities to show those users ads, ads
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`relevant to each user’s specific interest are shown on behalf of those advertisers.
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`29.
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`By marketing, selling, offering to sell, providing, instructing, supplying,
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`operating, licensing, or supporting the services, platforms, products, or activities
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`described in this Complaint, Oath infringes the claims of the ‘615 Patent, especially
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`through its demand side platforms, whether labeled Oath, Yahoo, Brightroll, or other
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`(“Oath’s DSP”). The following paragraphs specify how Oath’s services, platforms,
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`products, and activities infringe the ‘615 Patent. The descriptions below are not intended
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`as exclusive; discovery may reveal additional infringement types, instances, or methods.
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`30.
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`Oath, through Oath’s DSP computer systems, infringes the claims of the
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`‘615 Patent on behalf of various of its advertiser customers. Oath’s DSP includes
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`computer systems that are programmed to automatically perform the methods described
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`in each of claims 1-8 of the ‘615 Patent. Oath’s DSP computer systems are structured and
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`programmed as indicated in each of claims 9-13 of the ‘615 Patent. Oath’s DSP contains
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`tangible computer storage devices that encode software that, when applied to the
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`computer system, instruct Oath’s DSP in the manners indicated in each of claims 14-17
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`of the ‘615 Patent.
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`31.
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`Oath’s DSP performs techniques claimed in the ‘615 Patent automatically
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`for advertiser clients or their representatives who wish to advertise on websites that are
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`not Oath-owned or -operated properties. Oath’s infringement of the ‘615 Patent through
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`its Oath’s DSP computer systems includes the action of recording, in visitor profiles
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`6
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`Case 1:18-cv-00943-RGA Document 1 Filed 06/26/18 Page 7 of 14 PageID #: 7
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`maintained by Oath on Oath computers, profile data collected when a visitor computer
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`visits a website. The profile data may reflect what a user did on the website, one example
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`of which is a search requested by the user, or demographic information disclosed by the
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`user on the website. This information may be collected in the form of profile attributes
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`and may be categorized into “segments.”
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`32.
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`The websites visited by such visitor computers may be (a) the advertiser’s
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`own websites, where the advertiser desires to retarget ads to its website visitors on other
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`websites, (b) Oath-owned or -operated websites, or non-Oath websites, that contributed
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`attribute data (directly or via a data aggregator such as BlueKai) that the Oath customer
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`may wish to use to do ad targeting, or (c) sites of publishers desiring to implement
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`audience extension to deliver advertiser ads on properties other than the publisher’s
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`properties, including publishers on which an Oath customer has an arrangement to deliver
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`its ads. In the capacities described in this paragraph, Oath acts as a behavioral targeting
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`company (“BT company” in the claims), and Oath’s DSP qualifies as a “BT computer
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`system” in the claims.
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`33.
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`The visitor computer may be a laptop, tablet, smart phone, or desktop
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`computer.
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`34.
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`Oath’s DSP communicates with various entities, such as ad exchanges or
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`supply side platforms (SSPs), each of which have one or more computer systems
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`controlling ad space on many non-Oath media properties. The controlled ad space is on
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`media properties that are typically websites on which the ad space is controlled only
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`temporarily, but they may also be media properties other than Internet sites.
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`7
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`35.
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`Oath’s infringement of the ‘615 Patent through Oath’s DSP computer
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`systems includes the action of arranging for a particular one of the above-described
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`entities to tag visitor computers to the above-described websites with a tag readable by
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`computers within the domain of the entity. The tag, which may be a cookie, identifies the
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`visitor computer as associated with Oath’s DSP. Oath’s DSP typically performs this task
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`by arranging for the above-described entities to associate a cookie stored on the visitor’s
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`computer with Oath’s DSP, which may be done by cookie mapping or ID swapping
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`between Oath’s DSP and the SSP or ad network.
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`36.
`
`In performing the task described in the previous paragraph, Oath’s DSP
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`does not transfer to the entity any profile information related to the visitor.
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`37.
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`Oath’s infringement of the ‘615 Patent through its Oath’s DSP computer
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`systems includes the action of automatically electronically transmitting a bid to one of the
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`above-described entities. The bid contains a price cap identifying a maximum price that
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`Oath is willing to pay for allowing delivery of a customer’s advertisement in an ad space
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`controlled by such entity. The price that the advertiser (Oath’s customer) is willing to
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`pay, and in turn the price that Oath’s DSP bids, depends on which profile attributes match
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`the specific end user. By delivering a “real time bidding” bid under the “open RTB”
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`standard with a price cap, Oath’s DSP thereby causes the ad exchange or SSP to display
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`the ad only if it can do so for a charge less than the price cap in the bid.
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`38.
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`Oath’s infringement of the ‘615 Patent through Oath’s DSP computer
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`systems includes the following actions: After the time Oath’s DSP arranges for the
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`above-described entity to associate the tag with the Oath DSP (see para. 35, supra), when
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`a visitor computer is viewing a website or other media property having advertising space
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`8
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`Case 1:18-cv-00943-RGA Document 1 Filed 06/26/18 Page 9 of 14 PageID #: 9
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`controlled by the above-referenced entity, Oath’s DSP receives a redirection of the visitor
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`computer if Oath DSP’s bid is accepted. Upon receipt of the redirection, Oath’s DSP
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`causes the targeted or retargeted advertisement to be delivered to the visitor computer
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`based on associated profile attributes, either by serving the ad directly or by calling an ad
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`server to serve the ad. The ad may be delivered to the visitor computer along with content
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`of the website visited by the visitor.
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`39.
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`In some instances, Oath’s DSP uses the profile information associated
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`with the visitor to select the advertisement and serves the advertisement to the visitor
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`computer in the above-referenced ad space.
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`40.
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`Afterwards, Oath’s DSP may save data indicating that Oath owes the price
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`for the ad space to the SSP or ad exchange on account of the ad having been shown to the
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`visitor computer as described above.
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`41.
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`AlmondNet has further described its knowledge of the Oath DSP
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`computer systems through the infringement contentions describing Oath’s infringement
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`of the related MPS patents in the New York lawsuit referenced below.
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`OATH’S KNOWLEDGE OF THE MPS FAMILY AND OF THE ’615 PATENT
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`AND WILLFUL INFRINGEMENT
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`42.
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`On information and belief, Oath had actual knowledge of the above-listed
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`patent by virtue of the following facts.
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`43.
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`AlmondNet and Oath’s predecessor, Yahoo! Inc., had discussions about
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`AlmondNet’s inventions in at least 2006, 2013, and 2015.
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`44.
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`In 2015 at least, AlmondNet specifically advised Yahoo of a large number
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`of patents that had issued by that time, including certain patents that were parents to the
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`9
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`Case 1:18-cv-00943-RGA Document 1 Filed 06/26/18 Page 10 of 14 PageID #: 10
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`‘615 Patent in the MPS patent family, and of AlmondNet’s belief that Yahoo’s activities
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`and computer systems infringed the MPS patents.
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`45.
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`AlmondNet and its subsidiaries, Datonics and IIQ, sued Yahoo in the
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`Eastern District of New York in 2016 for infringement of, inter alia, two parent patents
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`to the ‘615 Patent in the MPS family of patents. In April 2017, AlmondNet added a third
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`MPS parent to that lawsuit. AlmondNet contended through that complaint, and
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`subsequent papers filed and served on Yahoo including the amended complaint, that the
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`MPS family applied to activity in the above-described fields of Yahoo, and later Yahoo
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`Holdings and Oath.
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`46.
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`Yahoo, and later Oath, monitored the progress of the application that
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`issued as the ‘615 Patent and noted its issuance.
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`47.
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`The ‘615 Patent issued after presentation to the patent examiner of the
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`prior art references that Yahoo contended applied to invalidate the parent MPS patents.
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`48.
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`Yahoo’s arguments in the New York lawsuit for non-infringement of the
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`parent MPS patents do not apply to the ‘615 Patent.
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`49.
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`In 2017, Yahoo filed two “covered business method” (CBM) petitions
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`with the Patent Office related to the two parent MPS patents listed in the 2016 New York
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`complaint. Through those petitions, Yahoo sought to declare both patents invalid as not
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`patent-eligible under 35 U.S.C. §101. The Patent Office refused to institute the
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`proceeding, holding that the two patents were not “covered business method” patents.
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`Thus Yahoo was unsuccessful in having the parent MPS patents declared not patent-
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`eligible.
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`10
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`Case 1:18-cv-00943-RGA Document 1 Filed 06/26/18 Page 11 of 14 PageID #: 11
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`50.
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`It its above-described CBM petitions, though, Yahoo directed the Patent
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`Office to the then-pending ‘762 Application, which eventually issued as this ‘615 Patent.
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`At the time of the petitions, the examiner had rejected the claims as patent-ineligible
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`under Section 101 but applicant had not responded, and Yahoo utilized this fact to
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`support its arguments of patent-ineligibility. Yahoo presented as an exhibit to its CBM
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`petitions the then-current part of the ‘762 Applicant’s file history. With Patent Owner’s
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`Preliminary Statement filed in September 2017, AlmondNet supplied an updated part of
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`the file history, which extended through the notice of allowance. It is clear, therefore, that
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`Yahoo and Yahoo Holdings (since renamed Oath) monitored the pending ‘762
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`Application and had information that the application was allowed.
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`51.
`
`The ‘615 Patent issued after AlmondNet pointed the patent examiner to
`
`Yahoo’s arguments in its CBM petitions. From the updated file history provided to it,
`
`Yahoo knew that the patent examiner had reviewed Yahoo’s prior art cited against the
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`parent MPS patents and Yahoo’s CBM filings in connection with the examiner’s issuance
`
`of the notice of allowance.
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`52.
`
`Accordingly, Oath’s infringement of the ‘615 Patent was, and continues to
`
`be, willful and deliberate.
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`53.
`
`AlmondNet has been damaged by Oath’s infringement of the above-listed
`
`patents and will suffer irreparable injury unless the infringement is enjoined by this
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`Court. AlmondNet’s subsidiaries Datonics and IIQ are operating entities whose ongoing
`
`businesses are being harmed by Oath’s infringement. Datonics and IIQ have non-
`
`exclusive licenses under the ‘615 Patent. Among other harm, IIQ could have significantly
`
`higher business from its DSP system, if Oath did not utilize the invention claimed in the
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`11
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`Case 1:18-cv-00943-RGA Document 1 Filed 06/26/18 Page 12 of 14 PageID #: 12
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`‘615 Patent. AlmondNet is a stockholder in each of Datonics and IIQ and will be harmed
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`as well by virtue of expected loss of value of its ownership stake in those operating
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`entities. On account of Oath’s infringement of the patents-in-suit, AlmondNet’s activities
`
`in furthering the operation of its operating subsidiaries’ businesses have become difficult.
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`OATH’S INDIRECT INFRINGEMENT
`
`54.
`
`In the alternative, Oath may be found to have induced infringement of the
`
`‘615 Patent. As indicated above, Oath had knowledge of the ‘615 Patent and intended to
`
`induce infringement. Oath also has knowledge of the ‘615 Patent by (1) the filing of this
`
`Complaint, (2) discussions with Oath counsel before service, and (3) the service of this
`
`Complaint.
`
`55.
`
`Oath has encouraged and continues to encourage others to infringe. In
`particular, Oath instructs and supports the use of the infringing DSP system by its
`
`customers through Oath’s DSP online website interface, customer instruction manuals
`
`and instruction sheets, and statements made by customer service and training
`
`representatives.
`
`56.
`
`To the extent Oath does not control the DSP system, Oath’s customers put
`
`the DSP system, configured as described above, into operation under their control and
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`benefit from use of the apparatus, pursuant to Oath’s encouragement, instruction, and
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`support.
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`JURY DEMAND
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`57.
`
`Pursuant to Rule 38(b) of the Federal Rules of Civil Procedure,
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`AlmondNet hereby respectfully requests a jury trial on all issues and claims so triable.
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`
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`12
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`Case 1:18-cv-00943-RGA Document 1 Filed 06/26/18 Page 13 of 14 PageID #: 13
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`PRAYER FOR RELIEF
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`WHEREFORE, Plaintiffs pray for judgment as follows:
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`A. A judgment that Oath has infringed, or in the alternative actively induced others
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`to infringe, the ‘615 Patent;
`
`B. A judgment that Oath’s infringement of the ‘615 Patent is willful;
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`C. Orders enjoining Oath, its officers, directors, servants, managers, employees,
`
`agents, successors, and assignees, and all persons in concert or participation with
`
`them, from infringing, or actively inducing others to infringe, the ‘615 Patent;
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`D. An award, pursuant to 35 U.S.C. § 284, to AlmondNet of all damages sufficient to
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`compensate for Oath’s infringement of the ‘615 Patent owned by AlmondNet,
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`together with pre-judgment and post-judgment interest and costs;
`
`E. An award of increased damages, pursuant to 35 U.S.C. § 284, in an amount not
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`less than three times the amount of actual damages awarded to AlmondNet, by
`
`reason of Oath’s willful infringement of the patents-in-suit.
`
`F. An award of reasonable attorneys’ fees, pursuant to 35 U.S.C. § 285, as this is an
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`exceptional case.
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`G. An award to AlmondNet of such other and further relief as this Court deems just
`
`and proper.
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`13
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`Case 1:18-cv-00943-RGA Document 1 Filed 06/26/18 Page 14 of 14 PageID #: 14
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`Dated: June 26, 2018
`
`Of Counsel:
`
`Louis J. Hoffman
`LOUIS J. HOFFMAN, P.C.
`7689 East Paradise Lane, Suite 2
`Scottsdale, Arizona 85260
`Telephone: (480) 948-3295
`Email: louis@valuablepatents.com
`
`Ian B. Crosby, Esq.
`SUSMAN GODFREY L.L.P.
`1201 Third Avenue, Suite 3800
`Seattle, Washington 98101-3000
`Telephone: (206) 516-3880
`Email: icrosby@susmangodfrey.com
`
`
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`Respectfully submitted,
`
`FARNAN LLP
`
`
`
`/s/ Brian E. Farnan
`Brian E. Farnan (Bar No. 4089)
`Michael J. Farnan (Bar No. 5165)
`919 North Market Street, 12th Floor
`Wilmington, DE 19801
`Telephone: (302) 777-0300
`Facsimile: (302) 777-0301
`bfarnan@farnanlaw.com
`mfarnan@farnanlaw.com
`
`
`
`
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`Attorneys for Plaintiff
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`14
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