Case 6:13-cv-00351-LED Document 11 Filed 04/22/13 Page 1 of 12 PageID #: 489
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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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`VIRNETX INC. and
`SCIENCE APPLICATIONS
`INTERNATIONAL CORPORATION,
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`vs.
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`MICROSOFT CORPORATION,
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`Defendant.
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`§
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`Civil Action No. 13-cv-351
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`JURY TRIAL DEMANDED
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`PLAINTIFF VIRNETX INC.’S AND PLAINTIFF SCIENCE APPLICATIONS
`INTERNATIONAL CORPORATION’S ORIGINAL COMPLAINT
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`Plaintiff VirnetX Inc. (“VirnetX”) and Plaintiff Science Applications International
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`Corporation (“SAIC”) file this Original Complaint against Defendant Microsoft Corporation
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`(“Microsoft”) for patent infringement under 35 U.S.C. § 271 and allege, based on its own
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`personal knowledge with respect to its own actions and based upon information and belief with
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`respect to all others’ actions, as follows:
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`THE PARTIES
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`1.
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`Plaintiff VirnetX Inc. is a corporation organized and existing under the laws of the State
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`of Delaware, and maintains its principal place of business at 308 Dorla Ct., Zephyr Cove,
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`Nevada 89448.
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`2.
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`Science Applications International Corporation (“SAIC”) is a corporation formed under
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`the laws of the state of Delaware with a principal place of business at 1710 SAIC Drive,
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`Mclean, Virginia 22102.
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`PLAINTIFFS’ ORIGINAL COMPLAINT
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`PAGE 1
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`Page 1 of 12
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`VIRNETX EXHIBIT 2006
`Microsoft v. VirnetX
`Trial IPR2014-00558
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`Case 6:13-cv-00351-LED Document 11 Filed 04/22/13 Page 2 of 12 PageID #: 490
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`3.
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`Defendant Microsoft Corporation is a corporation organized under the laws of the State
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`of Washington, having its principal place of business at One Microsoft Way, Redmond,
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`Washington 98052. Microsoft is registered to conduct business in the State of Texas,
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`Filing No. 10404606, and has designated Corporation Service Company, 211 E. 7th
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`Street, Suite 620, Austin, Texas 78701, as its agent 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).
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`5.
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`This Court has personal jurisdiction over Microsoft. Microsoft conducts business and has
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`6.
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`7.
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`committed acts of patent infringement and/or has induced acts of patent infringement by
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`others in this district and/or has contributed to patent infringement by others in this
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`district, the State of Texas, and elsewhere in the United States.
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`Microsoft has also previously availed itself to this judicial district by filing suit against
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`other litigants in this district.
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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, Microsoft 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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`8.
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`Venue is also proper in this district pursuant to an enforceable agreement between the
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`parties that the Eastern District of Texas shall be the sole and exclusive venue for any
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`lawsuit arising out of or relating to the settlement agreement between VirnetX and
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`Microsoft.
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`PLAINTIFFS’ ORIGINAL COMPLAINT
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`Case 6:13-cv-00351-LED Document 11 Filed 04/22/13 Page 3 of 12 PageID #: 491
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`PATENTS-IN-SUIT
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`9.
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`On December 31, 2002, the United States Patent and Trademark Office duly and legally
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`issued U.S. Patent No. 6,502,135 (the “’135 patent”), entitled “Agile Network Protocol
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`for Secure Communications with Assured System Availability.” A true and correct copy
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`of the ’135 patent is attached hereto as Exhibit A.
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`10.
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`On March 6, 2007, the United States Patent and Trademark Office duly and legally issued
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`U.S. Patent No. 7,188,180 (the “’180 patent”), entitled “Method for Establishing Secure
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`Communication Link Between Computers of Virtual Private Network.” A true and
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`correct copy of the ’180 patent is attached hereto as Exhibit B.
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`11.
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`On August 26, 2008, the United States Patent and Trademark Office duly and legally
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`issued United States Patent No. 7,418,504 (the “’504 patent”) entitled “Agile Network
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`Protocol for Secure Communications Using Secure Domain Names.” A copy of the ’504
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`patent is attached as Exhibit C.
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`12.
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`On February 10, 2009, the United States Patent and Trademark Office duly and legally
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`issued United States Patent No. 7,490,151 (the “’151 patent”) entitled “Establishment of
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`a Secure Communication Link Based on a Domain Name Service (DNS) Request.” A
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`copy of the ’151 patent is attached as Exhibit D.
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`13.
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`On April 5, 2011, the United States Patent and Trademark Office duly and legally issued
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`United States Patent No. 7,921,211 (the “’211 patent”) entitled “Agile Network Protocol
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`for Secure Communications Using Secure Domain Names.” A copy of the ’211 patent is
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`attached as Exhibit E.
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`14.
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`On July 26, 2011, the United States Patent and Trademark Office duly and legally issued
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`United States Patent No. 7,987,274 (“the ’274 patent”) entitled “Method for establishing
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`PLAINTIFFS’ ORIGINAL COMPLAINT
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`Case 6:13-cv-00351-LED Document 11 Filed 04/22/13 Page 4 of 12 PageID #: 492
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`secure communication link between computers of virtual private network.” A copy of the
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`’274 patent is attached as Exhibit F.
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`15.
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`VirnetX, together with SAIC, owns all rights, title, and interest in and to the ’135, ’180,
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`’504, ’151, ’211, and ’274 patents1 and possesses all rights of recovery.
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`FACTUAL ALLEGATIONS
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`16.
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`On February 15, 2007, VirnetX filed suit against Microsoft for patent infringement,
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`including infringement of the ’135 patent. VirnetX subsequently amended its complaint
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`to assert the ’180 patent against Microsoft.
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`17.
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`On March 16, 2010, a jury found Microsoft liable for willful infringement of all tried
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`claims. The jury also awarded $105,750,000 in damages.
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`18.
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`On April 6, 2010, VirnetX moved for entry of judgment on the verdict and for a
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`permanent injunction against Microsoft’s continued infringement.
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`19.
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`On May 14, 2010, VirnetX and Microsoft entered into a settlement agreement and license
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`in which VirnetX granted a limited license to Microsoft. The license that VirnetX
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`granted to Microsoft was explicitly limited in scope, and Microsoft is not licensed to
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`practice VirnetX’s technology in certain excluded ways, particularly across non-
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`Windows platforms.
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`20.
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`“Skype” refers collectively to internet communication software applications, Skype-
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`branded hardware or software applications, servers that are used to facilitate Skype
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`communications, the Qik branded software applications and includes any improvements,
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`modifications, enhancements, fixes, updates, upgrades and future versions through trial.
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`1 SAIC maintains an equity interest and review rights related to the ’135, ’180, ’504, ’151, ’211,
`and ’274 patents.
`PLAINTIFFS’ ORIGINAL COMPLAINT
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`Case 6:13-cv-00351-LED Document 11 Filed 04/22/13 Page 5 of 12 PageID #: 493
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`21.
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`On October 13, 2011, Microsoft acquired all of the issued and outstanding shares of
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`Skype Global S.á r.l. for approximately $8.5 billion.
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`22. Microsoft now develops and markets Skype.
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`23.
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`Skype runs on a number of platforms including Microsoft Windows, Windows Phone,
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`OS X, iOS, Linux, Android, BlackBerry, and Symbian.
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`24.
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`“Lync” refers collectively to Microsoft internet communication software applications,
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`Lync Server, Lync Online, Lync client software, Lync Web App, other Lync-branded
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`hardware or software applications, servers that are used to facilitate Lync
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`communications and includes any improvements, modifications, enhancements, fixes,
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`updates, upgrades and future versions through trial.
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`25.
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`Lync runs on a number of platforms including Microsoft Windows, Windows Phone,
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`OS X, iOS, Android, BlackBerry, and Symbian.
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`26. Microsoft has integrated or is integrating Skype into Lync.
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`27. Microsoft has committed and continues to commit acts of infringement under
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`35 U.S.C. § 271 with Skype and Lync, and these acts of infringement fall outside of the
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`scope of the license that VirnetX granted to Microsoft. In committing these acts of
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`infringement, Microsoft acted despite an objectively high likelihood that its actions
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`constituted infringement of at least one valid patent, and Microsoft actually knew or
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`should have known that its actions constituted an unjustifiably high risk of infringement
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`of at least one valid and enforceable patent.
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`COUNT ONE: PATENT INFRINGEMENT BY MICROSOFT
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`28.
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`29.
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`VirnetX incorporates by reference the preceding paragraphs as if fully set forth herein.
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`As described below, Microsoft has infringed and continues to infringe the ’135, ’180,
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`’504, ’151, ’211, and ’274 patents (the “patents-in-suit”).
`PLAINTIFFS’ ORIGINAL COMPLAINT
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`Case 6:13-cv-00351-LED Document 11 Filed 04/22/13 Page 6 of 12 PageID #: 494
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`30.
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`Skype meets claims of the patents-in-suit.
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`31. Microsoft’s products that include Skype, such as Lync, meet claims of the patents-in-suit.
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`32. Microsoft’s Lync meets claims of at least the ’135, ’504, ’151, and ’211 patents.
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`33. Microsoft makes, uses, offers to sell, sells and/or imports Skype and Microsoft products
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`that include Skype within the United States or into the United States without authority
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`from VirnetX. This infringement is outside of the scope of the limited license that
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`VirnetX granted to Microsoft.
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`34. Microsoft makes, uses, offers to sell, sells and/or imports Lync within the United States
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`or into the United States without authority from VirnetX. This infringement is outside of
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`the scope of the limited license that VirnetX granted to Microsoft.
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`35. Microsoft therefore infringes the patents-in-suit under 35 U.S.C. § 271(a).
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`36. Microsoft has actual knowledge of the ’135 patent at a minimum through the prior
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`litigation and/or the license between VirnetX and Microsoft.
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`37. Microsoft has actual knowledge of the ’180 patent at a minimum through the prior
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`litigation and/or the license between VirnetX and Microsoft.
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`38. Microsoft has actual knowledge of the ’504 patent at a minimum through the prior
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`litigation and/or the license between VirnetX and Microsoft.
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`39. Microsoft has actual knowledge of the ’151 patent at a minimum through the prior
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`litigation and/or the license between VirnetX and Microsoft.
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`40. Microsoft has actual knowledge of the ’211 patent at a minimum through the prior
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`litigation and/or the license between VirnetX and Microsoft.
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`41. Microsoft has actual knowledge of the ’274 patent at a minimum through the prior
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`litigation and/or the license between VirnetX and Microsoft.
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`PLAINTIFFS’ ORIGINAL COMPLAINT
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`42. Microsoft indirectly infringes the patents-in-suit by inducing infringement by others, such
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`as product assemblers, resellers, and end-user customers, because Microsoft, for example,
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`instructs and/or requires these third parties to make, use, sell, offer to sell or import
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`Skype and/or Microsoft products that include Skype in or into the United States.
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`Microsoft additionally indirectly infringes the patents-in-suit by instructing and/or
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`requiring Skype and/or Microsoft products that include Skype to be sold and offered for
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`sale in the United States, and by instructing or requiring Skype and/or Microsoft products
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`to be installed and used in the United States.
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`43. Microsoft indirectly infringes the ’135, ’504, ’151, and ’211 patents by inducing
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`infringement by others, such as product assemblers, resellers, and end-user customers,
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`because Microsoft, for example, instructs and/or requires these third parties to make, use,
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`sell, offer to sell or import Lync in or into the United States. Microsoft additionally
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`indirectly infringes the patents-in-suit by instructing and/or requiring Lync to be sold and
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`offered for sale in the United States, and by instructing or requiring Lync to be installed
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`and used in the United States.
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`44. Microsoft took the above actions intending to cause infringing acts by others.
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`45. Microsoft was aware of the patents-in-suit and knew that the others’ actions, if taken,
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`would constitute infringement of those patents. Alternatively, Microsoft believed there
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`was a high probability that others would infringe the patents-in-suit but remained
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`willfully blind to the infringing nature of others’ actions. Microsoft therefore infringes
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`the patents-in-suit under 35 U.S.C. § 271(b), and this infringement is outside of the scope
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`of the limited license that VirnetX granted to Microsoft.
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`PLAINTIFFS’ ORIGINAL COMPLAINT
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`Case 6:13-cv-00351-LED Document 11 Filed 04/22/13 Page 8 of 12 PageID #: 496
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`46. Microsoft indirectly infringes the patents-in-suit by contributing to infringement by
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`others, such as product assemblers, resellers, and end-user customers by offering to sell
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`and/or selling within the United States products that contain Skype-related components
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`that constitute a material part of the inventions claimed in the patents-in-suit, and
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`components of products that are used to practice one or more processes/methods covered
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`by the claims of the patents-in-suit and that constitute a material part of the inventions
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`claimed in the patents-in-suit. Such Skype-related components are, for example, the
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`software components that perform DNS-proxy functionality claimed in the patents-in-
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`suit, the software components that perform domain name resolution and support
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`establishing secure communication links, the software components that transmit queries
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`to perform domain name resolution and support establishing secure communication links,
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`the software components that resolve secure domain names, and the software components
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`that install Skype on a computer or server.
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`47. Microsoft indirectly infringes the patents-in-suit by contributing to infringement by
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`others, such as product assemblers, resellers, and end-user customers by offering to sell
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`and/or selling within the United States products that contain Lync-related components
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`that constitute a material part of the inventions claimed in the patents-in-suit, and
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`components of products that are used to practice one or more processes/methods covered
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`by the claims of the patents-in-suit and that constitute a material part of the inventions
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`claimed in the patents-in-suit. Such Lync-related components are, for example, the
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`software components that perform DNS-proxy functionality claimed in the patents-in-
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`suit, the software components that perform domain name resolution and support
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`establishing secure communication links, the software components that query Lync
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`PLAINTIFFS’ ORIGINAL COMPLAINT
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`servers to perform domain name resolution and support establishing secure
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`communication links, and the software components that install Lync on a computer or
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`server.
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`48.
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`In the above offering to sell and/or selling, Microsoft has known these Skype-related and
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`Lync-related components to be especially made or especially adapted for use in an
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`infringement of the patents-in-suit and are not a staple article or commodity of commerce
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`suitable for substantial non-infringing use. Alternatively, Microsoft believed there was a
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`high probability that others would infringe the patents-in-suit but remained willfully blind
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`to the infringing nature of others’ actions. Microsoft therefore infringes the patents-in-
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`suit under 35 U.S.C. § 271(c), and this infringement is outside of the scope of the limited
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`license that VirnetX granted to Microsoft.
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`49. Microsoft’s acts of infringement have caused damage to VirnetX. VirnetX is entitled to
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`recover from Microsoft the damages sustained by VirnetX as a result of Microsoft’s
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`wrongful acts in an amount subject to proof at trial. In addition, the infringing acts and
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`practices of Microsoft have caused, are causing, and, unless such acts and practices are
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`enjoined by the Court, will continue to cause immediate and irreparable harm to VirnetX
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`for which there is no adequate remedy at law, and for which VirnetX is entitled to
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`injunctive relief under 35 U.S.C. § 283.
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`50. Microsoft has received actual notice of its infringement prior to this lawsuit, including at
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`least through VirnetX’s previous litigation against Microsoft and the license between
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`Microsoft and VirnetX. Microsoft has also received constructive notice as VirnetX
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`marks its products in compliance with 35 U.S.C. § 287.
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`PLAINTIFFS’ ORIGINAL COMPLAINT
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`Case 6:13-cv-00351-LED Document 11 Filed 04/22/13 Page 10 of 12 PageID #: 498
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`51. Microsoft has committed and continues to commit acts of infringement under
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`35 U.S.C. § 271 with Skype and Lync, and these acts of infringement fall outside of the
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`scope of the license that VirnetX granted to Microsoft. In committing these acts of
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`infringement, Microsoft acted despite an objectively high likelihood that its actions
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`constituted infringement of at least one valid claim of at least one patent-in-suit, and
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`Microsoft actually knew or should have known that its actions constituted an
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`unjustifiably high risk of infringement of at least one valid and enforceable patent.
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`52. Microsoft’s infringement of the patents-in-suit has been and continues to be willful.
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`DEMAND FOR JURY TRIAL
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`VirnetX hereby demands a jury for all issues so triable.
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`PRAYER FOR RELIEF
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`WHEREFORE, VirnetX prays for the following relief:
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`1. A judgment that Microsoft has directly infringed the patents-in-suit, contributorily
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`infringed the patents-in-suit, and/or induced the infringement of the patents-in-suit;
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`2. A preliminary and permanent injunction preventing Microsoft 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/or inducing the infringement of the patents-in-suit;
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`3. A judgment that Microsoft’s infringement of the patents-in-suit has been willful;
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`4. A ruling that this case be found to be exceptional under 35 U.S.C. § 285, and a judgment
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`awarding VirnetX to its attorneys’ fees incurred in prosecuting this action;
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`5. A judgment and order requiring Microsoft to pay VirnetX damages under
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`35 U.S.C. § 284, including supplemental damages for any continuing post-verdict
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`PLAINTIFFS’ ORIGINAL COMPLAINT
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`infringement up until entry of the final judgment, with an accounting, as needed, and
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`enhanced damages for willful infringement as provided by 35 U.S.C. § 284;
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`6. A judgment and order requiring Microsoft to pay VirnetX the costs of this action
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`(including all disbursements);
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`7. A judgment and order requiring Microsoft to pay VirnetX pre-judgment and post-
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`judgment interest on the damages awarded;
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`8. A judgment and order requiring that in the event a permanent injunction preventing
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`future acts of infringement is not granted, VirnetX be awarded a compulsory ongoing
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`licensing fee; and
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`9. Such other and further relief as the Court may deem just and proper.
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`Dated: April 22, 2013
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`Respectfully submitted,
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`ALDWELL CASSADY & CURRY
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`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
`CALDWELL CASSADY & CURRY
`1717 McKinney, Suite 700
`Dallas, Texas 75202
`Telephone: (214) 810-4705
`Facsimile: (214) 481-1757
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`PLAINTIFFS’ ORIGINAL COMPLAINT
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`Case 6:13-cv-00351-LED Document 11 Filed 04/22/13 Page 12 of 12 PageID #: 500
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`Robert M. Parker
`Texas State Bar No. 15498000
`Email: rmparker@pbatyler.com
`R. Christopher Bunt
`Texas State Bar No. 00787165
`Email: rcbunt@pbatyler.com
`PARKER, BUNT & AINSWORTH, P.C.
`100 East Ferguson, Suite 1114
`Tyler, Texas 75702
`Telephone: (903) 531-3535
`Telecopier: (903) 533-9687
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`ATTORNEYS FOR PLAINTIFF
`VIRNETX INC.
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`
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`/s/ Andy Tindel
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`ANDY TINDEL (Lead Counsel)
`State Bar No. 20054500
`Mann, Tindel & Thompson –
`Attorneys at Law
`112 East Line Street, Suite 304
`Tyler, Texas 75702
`Telephone: (903) 596-0900
`Facsimile: (903) 596-0909
`Email: atindel@andytindel.com
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`Of Counsel:
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`DONALD URRABAZO
`California State Bar No. 189509
`ARTURO PADILLA
`California State Bar No. 188902
`URRABAZO LAW, P.C.
`2029 Century Park East, Suite 1370
`Los Angeles, CA 90067
`Direct: (310) 388-9099
`Facsimile: (310) 388-9088
`Email: durrabazo@ulawpc.com
`Email: apadilla@ulawpc.com
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`ATTORNEYS FOR PLAINTIFF
`SCIENCE APPLICATIONS
`INTERNATIONAL CORPORATION
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`PLAINTIFFS’ ORIGINAL COMPLAINT
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