Case 6:15-cv-00145-JRG-KNM Document 1 Filed 02/25/15 Page 1 of 12 PageID #: 1
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`TYLER DIVISION
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`Plaintiffs,
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`SMARTFLASH LLC, and
`SMARTFLASH TECHNOLOGIES
`LIMITED,
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`v.
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`APPLE INC.
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`Defendants.
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`§
`§
`§
`§
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`§
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`§
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`Civil Action No. 6:15-cv-145
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`JURY TRIAL DEMANDED
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`PLAINTIFFS’ COMPLAINT FOR PATENT INFRINGEMENT
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`Plaintiffs Smartflash LLC and Smartflash Technologies Limited file this Complaint
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`against Defendant Apple Inc. for patent infringement under 35 U.S.C. § 271 and allege, based on
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`their own personal knowledge with respect to their own actions and based upon information and
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`belief with respect to all others’ actions, as follows:
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`THE PARTIES
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`1.
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`Plaintiff Smartflash LLC is a limited liability corporation organized and existing under
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`the laws of the State of Texas, and maintains its principal place of business at 100 E.
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`Ferguson, Suite 406, Tyler, Texas, 75702. Smartflash LLC maintains a website at
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`www.smartflashllc.com.
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`2.
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`Plaintiff Smartflash Technologies Limited is a limited company organized and existing
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`under the laws of the British Virgin Islands, and maintains a principal place of business
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`on the island of Tortola.
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`Apple Exhibit 1042
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`3.
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`Defendant Apple Inc. (“Apple”) is a California corporation with a principal place of
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`business at 1 Infinite Loop, Cupertino, California 95014. Apple has designated CT
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`Corporation System, 350 N. St. Paul Street, Suite 2900, Dallas, Texas 75201 as its agent
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`for service of process.
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`JURISDICTION AND VENUE
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`4.
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`This is an action for patent infringement arising under the patent laws of the United
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`States, 35 U.S.C. §§ 1 et seq. This Court has jurisdiction over this action pursuant to 28
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`U.S.C. §§ 1331 and 1338(a). This Court has personal jurisdiction over Apple. Apple
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`conducts business and has committed acts of patent infringement and/or have induced
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`acts of patent infringement by others in this district and/or have contributed to patent
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`infringement by others in this district, the State of Texas, and elsewhere in the United
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`States.
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`5.
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`Venue is proper in this district pursuant to 28 U.S.C. §§ 1391(b), 1391(c) and 1400(b)
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`because, among other things, Defendant is subject to personal jurisdiction in this district,
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`has regularly conducted business in this judicial district, and certain of the acts
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`complained of herein occurred in this judicial district.
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`PATENTS-IN-SUIT
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`6.
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`On February 26, 2008, the United States Patent and Trademark Office duly and legally
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`issued U.S. Patent No. 7,334,720 (the “’720 patent”) entitled “Data Storage and Access
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`Systems.”
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`7.
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`On May 17, 2011, the United States Patent and Trademark Office duly and legally issued
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`U.S. Patent No. 7,942,317 (the “’317 patent”) entitled “Data Storage and Access
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`Systems.”
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`8.
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`On October 11, 2011, the United States Patent and Trademark Office duly and legally
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`issued U.S. Patent No. 8,033,458 (the “’458 patent”) entitled “Data Storage and Access
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`Systems.”
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`9.
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`On November 22, 2011, the United States Patent and Trademark Office duly and legally
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`issued U.S. Patent No. 8,061,598 (the “’598 patent”) entitled “Data Storage and Access
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`Systems.”
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`10.
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`On February 21, 2012, the United States Patent and Trademark Office duly and legally
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`issued U.S. Patent No. 8,118,221 (the “’221 patent”) entitled “Data Storage and Access
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`Systems.”
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`11.
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`On December 25, 2012, the United States Patent and Trademark Office duly and legally
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`issued U.S. Patent No. 8,336,772 (the “’772 patent”) entitled “Data Storage and Access
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`Systems.”
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`12.
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`On August 5, 2014, the United States Patent and Trademark Office duly and legally
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`issued U.S. Patent No. 8,794,516 (the “’516 patent”) entitled “Data Storage and Access
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`Systems.”
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`13.
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`Smartflash LLC, together with Smartflash Technologies Limited,1 owns all rights, title,
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`and interest in and to the ’720, ’317, ’458, ’598, ’221, ’772, and ‘516 patent (the “patents-
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`in-suit”) and possesses all rights of recovery.
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`14.
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`Smartflash incorporates the patents-in-suit herein by reference.
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`FACTUAL ALLEGATIONS
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`15.
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`The patents-in-suit generally cover devices, methods, and systems for transmitting,
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`retrieving, downloading, storing, and accessing content, content information, DRM data,
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`1 Smartflash Technologies Limited joins as a co-plaintiff in this lawsuit only to avoid a dispute
`as to whether it should be added for standing purposes.
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`payment data, and supplementary data. For example, some of the claims in the patents-
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`in-suit cover devices that retrieve data, store data, and manage access to the data via
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`payment information and/or use rules. As another example, some of the claims in the
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`patents-in-suit cover a computer system (e.g., one or more connected servers) or a supply
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`server that transmits content or data to requesters.
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`16.
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`In or around the year 2000, Patrick Racz, one of the co-inventors of the patents-in-suit,
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`met with various personnel of Gemplus (now Gemalto S.A.) to discuss the technology
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`claimed in the patents-in-suit. Mr. Augustin Farrugia was one of the people at Gemplus
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`who learned of the technology of the patents-in-suit.
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`17. Mr. Farrugia subsequently joined Apple and is currently a Senior Director at Apple Inc.
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`18.
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`On February 24, 2015, a jury determined that Apple willfully infringed claim 13 of the
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`’720 patent, claim 32 of the ’221 patent, and claims 26 and 32 of the ’772 Patent.
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`19.
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`iTunes is an Apple application that supports the purchase, download, organization and
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`playback of digital audio and video files and is available for both Mac and Windows-
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`based computers.
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`20.
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`iTunes Store is an Apple service that allows customers to discover, purchase, rent, and
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`21.
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`22.
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`download applications and other digital content.
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`iTunes is integrated with the iTunes Store.
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`Apple sells and delivers digital content and applications through the iTunes Store, which
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`includes Apple’s App Store and iBookstore.
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`23.
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`Apple’s end-user customers can use the App Store app on their portable Apple devices,
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`such as the iPhone, iPad, iPad Mini and iPod Touch, to purchase and download digital
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`content and applications.
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`24.
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`An application developer or publisher can use Apple’s in-application payment
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`functionality to collect payment for enhanced functionality or additional content usable
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`by the application.
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`25.
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`26.
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`Apple provides its in-application payment functionality through its Store Kit framework.
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`Apple’s Store Kit connects to the App Store on behalf of an application to securely
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`process payments from the user.
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`27.
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`Apple’s Store Kit prompts the user to authorize the payment and then notifies the
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`application that called Store Kit so that the application can provide items the user
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`purchased.
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`28.
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`An application developer or publisher can use Apple’s iAd advertising platform to deliver
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`ads to users.
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`29.
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`Apple sells the ads through its iAd advertising platform and serves such ads to iAd
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`enabled apps.
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`Apple provides its iAd advertising platform through its iOS SDK.
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`Apple provides its iAd advertising platform through its iAd Creative Toolkit.
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`Apple provides its iAd advertising platform through its iAd Bundle Development Kit.
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`Apple has committed and continues to commit acts of infringement under 35 U.S.C. §
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`271 with (i) its iPhone 6, the iPhone 6+, iPad mini 3, and iPad Air 2 devices containing
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`any version of iTunes that can access the iTunes Store and/or any version of the the App
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`Store app; and (ii) Apple’s internal servers, including those involved in operating Apple’s
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`iTunes Store, including Apple’s App Store, as well as Apple’s servers involved in
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`Apple’s in-application payment functionality or availability of iTunes Store, App Store,
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`or content via iCloud as well as Apple’s servers involved in Apple’s iAd Network
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`30.
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`31.
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`32.
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`33.
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`(collectively referred to as “Apple’s Accused Instrumentalities”). In committing these
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`acts of infringement, Apple acted despite an objectively high likelihood that its actions
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`constituted infringement of at least one valid patent, and Apple actually knew or should
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`have known that its actions constituted an unjustifiably high risk of infringement of at
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`least one valid and enforceable patent.
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`COUNT ONE: PATENT INFRINGEMENT BY APPLE INC.
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`34.
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`35.
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`36.
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`37.
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`38.
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`39.
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`Plaintiffs incorporate by reference the preceding paragraphs as if fully set forth herein.
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`As described below, Apple has infringed and continues to infringe the patents-in-suit.
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`Apple’s Accused Instrumentalities meet claims of the patents-in-suit.
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`Apple makes, uses, offers to sell, sells and/or imports Apple’s Accused Instrumentalities
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`within the United States or into the United States without authority from Plaintiffs.
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`Apple therefore infringes the patents-in-suit under 35 U.S.C. § 271(a).
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`Apple has actual knowledge of the patents-in-suit at least from the filing of Smartflash’s
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`filing original complaint in Smartflash LLC v. Apple Inc., 13-cv-447 (E.D. Tex.).
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`40.
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`Apple indirectly infringes the patents-in-suit by inducing infringement by others, such as
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`product assemblers, resellers, app developers and publishers, digital content publishers,
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`and end-user customers, by, for example, requiring product assemblers to import Apple’s
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`Accused Instrumentalities into the United States, by encouraging resellers to sell and
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`offer to sell Apple’s Accused Instrumentalities within the United States, by instructing
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`and encouraging app developers and publishers and digital content publishers to sell and
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`offer to sell digital content, applications and advertisements in the United States through
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`Apple’s Accused Instrumentalities, and by instructing end-user customers to install and
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`use Apple’s Accused Instrumentalities in the United States.
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`41.
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`Apple took the above actions intending to cause infringing acts by others.
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`Apple was aware of the patents-in-suit and knew that the others’ actions, if taken, would
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`constitute infringement of those patents at least because a jury has already found that
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`Apple infringes. Alternatively, Apple believed there was a high probability that others
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`would infringe the patents-in-suit but remained willfully blind to the infringing nature of
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`others’ actions. Apple therefore infringes the patents-in-suit under 35 U.S.C. § 271(b).
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`42.
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`Apple indirectly infringes the patents-in-suit by contributing to infringement by others,
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`such as product assemblers, resellers, app developers and publishers, digital content
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`publishers, and end-user customers by offering to sell and/or selling within the United
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`States products that contain components that constitute a material part of the inventions
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`claimed in the patents-in-suit, and components of products that are used to practice one or
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`more processes/methods covered by the claims of the patents-in-suit and that constitute a
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`material part of the inventions claimed in the patents-in-suit. Such components are, for
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`example, the software components responsible for purchasing of digital content or
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`applications from iTunes, the App Store, the software components responsible for
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`providing digital content or applications upon payment validation, the software
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`components that provide in-application payment functionality, the software components
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`that provide in-application advertising functionality, the software components that store
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`payment distribution information indicating to whom payments should be made for
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`purchased digital content or applications, and the software components that install, on a
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`computer or server, any version of iTunes that can access iTunes Store, any version of the
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`App Store app.
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`43.
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`In the above offering to sell and/or selling, Apple has known these components to be
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`especially made or especially adapted for use in an infringement of the patents-in-suit and
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`that these components are not a staple article or commodity of commerce suitable for
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`substantial non-infringing use. Alternatively, Apple believed there was a high probability
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`that others would infringe the patents-in-suit but remained willfully blind to the
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`infringing nature of others’ actions. Apple therefore infringes the patents-in-suit under 35
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`U.S.C. § 271(c).
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`44.
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`Apple’s acts of infringement have caused damage to Plaintiffs. Plaintiffs are entitled to
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`recover from Apple the damages sustained by Plaintiffs as a result of Apple’s wrongful
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`acts in an amount subject to proof at trial. In addition, the infringing acts and practices of
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`Apple have caused, are causing, and, unless such acts and practices are enjoined by the
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`Court, will continue to cause immediate and irreparable harm to Plaintiffs for which there
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`is no adequate remedy at law, and for which Plaintiffs are entitled to injunctive relief
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`under 35 U.S.C. § 283.
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`45.
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`Apple has committed and continues to commit acts of infringement under 35 U.S.C. §
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`271 with the Apple Accused Instrumentalities. In committing these acts of infringement,
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`Apple acted despite an objectively high likelihood that its actions constituted
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`infringement of at least one valid patent, and Apple actually knew or should have known
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`that its actions constituted an unjustifiably high risk of infringement of at least one valid
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`and enforceable patent.
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`46.
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`Apple’s infringement of the patents-in-suit has been and continues to be willful.
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`47.
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`To the extent that Apple releases any new version of Apple’s Accused Instrumentalities,
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`such instrumentalities meet the claims of the patents-in-suit and infringe 35 U.S.C. §
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`271(a)-(c) in ways analogous to Apple’s current infringement described above.
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`48.
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`These allegations of infringement are made subject to and without waiver of any post-
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`verdict and/or post-judgment relief in Smartflash LLC v. Apple, 13-cv-447 (E.D. Tex.)
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`DEMAND FOR JURY TRIAL
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`Plaintiffs hereby demand a jury for all issues so triable.
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`PRAYER FOR RELIEF
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`1. A judgment that the Apple has directly infringed the patents-in-suit, contributorily
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`infringed the patents-in-suit, and induced the infringement of the patents-in-suit;
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`2. A preliminary and permanent injunction preventing Apple and its officers, directors,
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`agents, servants, employees, attorneys, licensees, successors, and assigns, and those in
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`active concert or participation with any of them, from directly infringing, contributorily
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`infringing, and inducing the infringement of the patents-in-suit;
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`3. A ruling that this case be found to be exceptional under 35 U.S.C. § 285, and a judgment
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`awarding to Plaintiffs its attorneys’ fees incurred in prosecuting this action;
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`4. A judgment and order requiring Apple to pay Plaintiffs damages under 35 U.S.C. § 284,
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`including supplemental damages for any continuing post-verdict infringement up until
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`entry of the final judgment, with an accounting, as needed.
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`5. A judgment and order requiring Apple to pay Plaintiffs the costs of this action (including
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`all disbursements);
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`6. A judgment and order requiring Apple to pay Plaintiffs pre-judgment and post-judgment
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`interest on the damages awarded;
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`7. A judgment and order requiring that in the event a permanent injunction preventing
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`future acts of infringement is not granted, that Plaintiffs be awarded a compulsory
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`ongoing licensing fee; and
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`8. Such other and further relief as the Court may deem just and proper.
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`Dated: February 25, 2015
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`Respectfully submitted,
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`ALDWELL CASSADY & CURRY
`
`
`Bradley W. Caldwell
`Texas State Bar No. 24040630
`Email: bcaldwell@caldwellcc.com
`Jason D. Cassady
`Texas State Bar No. 24045625
`Email: jcassady@caldwellcc.com
`John Austin Curry
`Texas State Bar No. 24059636
`Email: acurry@caldwellcc.com
`Daniel R. Pearson
`Texas State Bar No. 24070398
`Email: dpearson@caldwellcc.com
`Hamad M. Hamad
`Texas State Bar No. 24061268
`Email: hhamad@caldwellcc.com
`Jason S. McManis
`Texas State Bar No. 24088032
`Email: jmcmanis@caldwellcc.com
`CALDWELL CASSADY CURRY P.C.
`2101 Cedar Springs Road, Suite 1000
`Dallas, Texas 75201
`Telephone: (214) 888-4848
`Facsimile: (214) 888-4849
`
`T. John Ward
`Texas State Bar No. 20848000
`Email: tjw@wsfirm.com
`T. John Ward, Jr.
`Texas State Bar No. 00794818
`Email: jw@wsfirm.com
`WARD & SMITH LAW FIRM
`P.O. Box 1231
`1127 Judson Road, Suite 220
`Longview, Texas 75606
`Telephone: (903) 757-6400
`Facsimile: (903) 757-2323
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`ATTORNEYS FOR PLAINTIFFS
`SMARTFLASH LLC AND
`SMARTFLASH TECHNOLOGIES
`LIMITED
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`CERTIFICATE OF SERVICE
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`The undersigned certifies that the foregoing document was filed electronically in
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`compliance with Local Rule CV-5(a). As such, this document was served on all counsel who
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`have consented to electronic service on this 25th day of February, 2015. Local Rule CV-
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`5(a)(3)(A).
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`/s/ Bradley W. Caldwell
`Bradley W. Caldwell
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