Case 1:13-cv-00047-LPS Document 8 Filed 02/12/13 Page 1 of 14 PageID #: 40
`Case 1:13—cv—0OO47—LPS Document 8 Filed 02/12/13 Page 1 of 14 Page|D #: 40
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`IN THE UNITED STATES DISTRICT COURT
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`FOR THE DISTRICT OF DELAWARE
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`C.A. No.13-047-LPS
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`TRIAL BY JURY DEMANDED
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`STEELHEAD LICENSING LLC,
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`Plaintiff,
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`V.
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`ZTE CORPORATION, ZTE (USA) INC_, and
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`ZTE SOLUTIONS, INC.,
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`Defendants.
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`AMENDED COMPLAINT FOR PATENT INFRINGEMENT
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`Plaintiff Steelhead Licensing LLC (“Steelhead”), by and through its undersigned counsel,
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`for its Complaint against ZTE Corporation (“ZTE”), ZTE (USA), Inc. (“ ZTE USA”), and ZTE
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`Solutions, Inc. (“ZTE Solutions”) (collectively, “Defendants”), alleges as follows:
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`NATURE OF THE ACTION
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`1.
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`This is an action for patent infringement arising under the patent laws of the
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`United States, Title 35 of the United States Code (“U.S.C.”) to prevent and enjoin Defendants
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`from infringing and profiting, in an illegal and unauthorized manner and without authorization
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`and/or consent from Steelhead, from U.S. Patent No. 5,491,834 (the “‘834 Patent”, attached
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`hereto as Exhibit A) pursuant to 35 U.S.C. §271, and to recover damages, attorneys’ fees, and
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`costs.
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`THE PARTIES
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`2.
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`Plaintiff Steelhead is a Delaware limited liability with its principal place of
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`business at 222 Delaware Avenue, PO Box 25130, Wilmington, DE 19899.
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`Exh. 1020
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`(cid:44)(cid:51)(cid:53)(cid:21)(cid:19)(cid:20)(cid:24)(cid:16)(cid:19)(cid:19)(cid:23)(cid:20)(cid:21)
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`Case 1:13-cv-00047-LPS Document 8 Filed 02/12/13 Page 2 of 14 PageID #: 41
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`3.
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`Defendant ZTE is a Chinese corporation with its principal place of business at No.
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`55, Hi-tech Road South, Shenzhen, P.R. China 518057. ZTE maintains business operations in
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`the United States at 2425 N. Central Expressway, Suite 600, Richardson, Texas 75080.
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`4.
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`ZTE USA is a New Jersey corporation with business operations at 33 Wood Ave.
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`South, Floor 2, Iselin, New Jersey 08830 and also at 2425 N. N. Central Expressway, Suite 600,
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`Richardson, Texas 75080. ZTE USA’s registered agent for service of process is Li Mo, 4585
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`Spencer Dr, Plano, Texas 75024.
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`5.
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`ZTE Solutions is a Delaware corporation with business operations at 2425 N. N.
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`Central Expressway, Suite 600, Richardson, Texas 75080. ZTE Solution’s registered agent for
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`service of process is Corporation Service Company, 2711 Centerville Road Suite 400,
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`Wilmington, Delaware 19808.
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`6.
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`7.
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`ZTE Solutions and ZTE USA are both subsidiaries of ZTE.
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`Defendants are in the business of making, using, selling, offering for sale and/or
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`importing mobile devices.
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`JURISDICTION AND VENUE
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`8.
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`This Court has subject matter jurisdiction over this action pursuant to 28 U.S.C.
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`§§1331 and 1338(a) because the action arises under the patent laws of the United States, 35
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`U.S.C. §§1 et seq.
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`9.
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`This Court has personal jurisdiction over Defendants by virtue of their systematic
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`and continuous contacts with this jurisdiction, as well as because of the injury to Steelhead and
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`the cause of action Steelhead has raised, as alleged herein.
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`10.
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`Defendants are subject to this Court’s specific and general personal jurisdiction
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`pursuant to due process and/or the Delaware Long-Arm Statute, Del Code. Ann. Tit. 3, §3104,
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`2
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`Case 1:13-cv-00047-LPS Document 8 Filed 02/12/13 Page 3 of 14 PageID #: 42
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`due to at least their substantial business in this forum, including: (i) at least a portion of the
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`infringement alleged herein; and (ii) regularly doing or soliciting business, engaging in other
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`persistent courses of conduct, and/or deriving substantial revenue from goods and services
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`provided to individuals in Delaware.
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`11.
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`Defendants have conducted and do conduct business within the state of Delaware,
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`directly or through intermediaries, resellers, agents, or offer for sale, sell, advertise products in
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`Delaware that infringe the ‘834 Patent.
`
`12.
`
`In addition to Defendants’ continuously and systematically conducting business in
`
`Delaware, the causes of action against Defendants are connected (but not limited) to
`
`Defendants’ purposeful acts committed in the state of Delaware, including Defendants’ making,
`
`using, importing, offering for sale, or selling products which include features that fall within the
`
`scope of at least one claim of the ‘834 Patent.
`
`13.
`
`Venue lies in this District under 28 U.S.C. §§1391 and 1400(b) because, among
`
`other reasons, Defendants are subject to personal jurisdiction in this District, and have committed
`
`and continues to commit acts of patent infringement in this District. For example, Defendants
`
`have used, sold, offered for sale, and/or imported infringing products in this District.
`
`JOINDER
`
`14.
`
`Defendants are properly joined under 35 U.S.C. §299(a)(1) because a right to
`
`relief is asserted against the parties jointly, severally, and in the alternative with respect to the
`
`same transactions, occurrences, or series of transactions or occurrences relating to the making,
`
`using, importing into the United States, offering for sale, and/or selling the same accused
`
`products. Specifically, as alleged in detail below, Defendants are alleged to infringe the ‘834
`
`
`
`3
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`

`
`Case 1:13-cv-00047-LPS Document 8 Filed 02/12/13 Page 4 of 14 PageID #: 43
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`
`
`Patent with respect to the same mobile devices including, but not limited to, the Flash™ mobile
`
`phone.
`
`15.
`
`Defendants are properly joined under 35 U.S.C. §299(a)(2). Questions of fact
`
`will arise that are common to all defendants, including for example, whether Defendants’
`
`products have features that meet the features of one or more claims of the ‘834 Patent, and what
`
`reasonable royalty will be adequate to compensate the owner of the ‘834 Patent for its
`
`infringement.
`
`16.
`
`Defendants ZTE USA and ZTE Solutions are wholly-owned subsidiaries of ZTE.
`
`By virtue of ZTE’s ownership of ZTE USA and ZTE Solutions, all offer the same mobile
`
`devices that infringe on the ‘834 Patent.
`
`17.
`
`Defendants use, make, sell, offer for sale and/or import mobile devices that, when
`
`used, infringe on the ‘834 Patent.
`
`18.
`
`At least one right to relief is asserted against these parties jointly, severally, or in
`
`the alternative with respect to or arising out of the same transaction, occurrence, or series of
`
`transactions or occurrences relating to the making, using, importing into the United States,
`
`offering for sale, or selling of the same accused product and/or process.
`
`FACTUAL ALLEGATIONS
`
`19.
`
`On February 13, 1996, the United States Patent and Trademark Office
`
`(“USPTO”) duly and legally issued the ‘834 Patent, entitled “Mobile Radio Handover Initiation
`
`Determination” after a full and fair examination. Steelhead is presently the owner of the patent
`
`and possesses all right, title and interest in and to the ‘834 Patent. Steelhead owns all rights of
`
`recovery under the ‘834 Patent, including the exclusive right to recover for past infringement.
`
`The ‘834 Patent is valid and enforceable.
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`
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`4
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`Case 1:13-cv-00047-LPS Document 8 Filed 02/12/13 Page 5 of 14 PageID #: 44
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`
`
`20.
`
`The ‘834 Patent contains eight independent claims and twelve dependent claims.
`
`Defendants commercialize, inter alia, methods that perform all the steps recited in one or more
`
`claim of the ‘834 Patent. Defendants make, use, import, and sell or offer for sale
`
`telecommunication products, including mobile devices, which encompass one or more of the
`
`features recited and which perform all the steps comprised in the patented claims.
`
`21.
`
`The invention claimed in the ‘834 Patent includes a process for determining the
`
`manner in which handover is performed in a mobile radio network including a plurality of cells,
`
`where each cell is associated with a base station supporting communication with a mobile
`
`device.
`
`22.
`
`The patented process includes the steps of monitoring the quality of a signal as a
`
`function of time respectively transmitted between candidate base stations and the mobile unit.
`
`The process further includes producing an indication of either the rise or fall of the signal’s
`
`quality as a function of time. Handover from a serving base station supporting communication
`
`with the mobile unit to another base station is initiated based on the rise or fall in the signal’s
`
`quality.
`
`23.
`
`For example, manufacturers of mobile telecommunications devices rely on the
`
`patented process to handle service associated with their mobile devices. Specifically, Defendants
`
`rely on the patented process to determine the manner in which communication service associated
`
`with a mobile device is to be handed over from one cell to another.
`
`24.
`
`Defendants commercialize mobile devices which support the Universal Mobile
`
`Telecommunications System (hereinafter, “UMTS”) standard. These products will be hereinafter
`
`identified as Defendants’ UMTS Products.
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`
`
`5
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`

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`Case 1:13-cv-00047-LPS Document 8 Filed 02/12/13 Page 6 of 14 PageID #: 45
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`
`
`25.
`
`Defendants commercialize mobile devices which support 3G Code-Division
`
`Multiple Access (hereinafter, CDMA) and/or Long Term Evolution (hereinafter, “LTE”)
`
`standards. These products will be hereinafter identified as Defendants’ CDMA/LTE Products.
`
`26.
`
`UMTS is a third-generation (3G) of mobile phone technology for radio systems.
`
`It is an integrated solution for mobile voice and data capabilities with wide area coverage. It
`
`allows users to send and/or receive text, voice, video, and multimedia files at theoretical transfer
`
`rates of up to 2Mbps.
`
`27.
`
`3G CDMA (or CDMA2000) is a leading mobile phone technology. CDMA
`
`technology operates by transmitting multiple digital signals simultaneously over the same carrier
`
`frequency (i.e., the same channel), thus optimizing the use of available bandwidth. In CDMA
`
`implementations, every user is allocated the entire spectrum all of the time, and connections are
`
`uniquely identified using codes.
`
`28.
`
`LTE is a fourth-generation (4G) wireless broadband technology. LTE provides
`
`high-speed communication and data transfer with increased bandwidth capacity. It derives from
`
`the GSM/UMTS technologies and is faster than 3G. Unlike earlier mobile technologies, all
`
`communication in LTE devices is handled as data.
`
`29.
`
`In mobile telephony, it is necessary to maintain an established user connection
`
`even if the user is changing locations, or the radio access environment surrounding the user is
`
`changing, while a connection is still active. “Handover” refers to the transfer of user connection
`
`from one access point to another. For Defendants’ CDMA/LTE Products and UMTS Products,
`
`Defendants rely on the patented process to determine mobile device communication conditions
`
`for initiating a handover from one cell to another.
`
`
`
`
`
`6
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`

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`Case 1:13-cv-00047-LPS Document 8 Filed 02/12/13 Page 7 of 14 PageID #: 46
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`
`
`DEFENDANTS’ INFRINGEMENT
`
`30.
`
`Defendants practice patented mobile telecommunications methods with respect to
`
`certain mobile telecommunications devices commercialized in this judicial district. Specifically,
`
`Defendants practice a method that determines the manner in which handover of service is
`
`performed among cells in a mobile network with respect to certain mobile devices.
`
`DEFENDANTS’ UMTS PRODUCTS
`
`31.
`
`Defendants’ UMTS Products include, but are not limited to, the Avail.
`
`32.
`
`Each Defendants’ UMTS Product forms a mobile terminal that can be used on a
`
`mobile radio network such as that provided by a telecommunications company or a carrier. This
`
`network is formed by a plurality of cells.
`
`33.
`
`Each Defendants’ UMTS Product includes a processor and a memory device with
`
`instructions stored therein. Upon execution, these instructions perform a handover determination
`
`method in which each of Defendants’ UMTS Products searches for a better cell pursuant to the
`
`cell reselection process stated in the UMTS standard.
`
`34.
`
`Each Defendants’ UMTS Product complies with the UMTS standard. As such,
`
`when communicating, it maintains an active list of base stations with which the Defendants’
`
`UMTS Product has sufficient signal strength to communicate. The active list of base stations is
`
`used by each Defendants’ UMTS Product itself to initiate cell reselection.
`
`35.
`
`Specifically, when Defendants’ UMTS Product is used in a mobile radio network,
`
`it receives signals from base stations within range. In accordance with the UMTS standard,
`
`Defendants’ UMTS Products periodically measure the signals received from base stations in the
`
`vicinity for handover determination purposes. Then, each Defendants’ UMTS Product generates
`
`an indication of the quality of the received signal. Each device produces a ranking of available
`
`
`
`7
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`

`
`Case 1:13-cv-00047-LPS Document 8 Filed 02/12/13 Page 8 of 14 PageID #: 47
`
`
`
`base stations based on a set of measured criteria, including but not limited to the quality of each
`
`received signal.
`
`36.
`
`Pursuant to the UMTS standard, Defendants’ UMTS Product initiates the switch
`
`to a new cell (the handover of communication) based on how the new cell is ranked and only if
`
`the new cell is ranked higher than the cell currently handling the communication for a given
`
`period of time. If the ranking of a potential new cell falls, such drop is an indication of a fall in
`
`the measured criteria (e.g., quality).
`
`37.
`
`Under the UMTS standard, when Defendants’ UMTS Product identifies a better
`
`candidate cell, it sends a message to the base station currently servicing the communication.
`
`Such message indicates that a switch should occur, such that communication is handed over to
`
`the new base station. The message sent by each Defendants’ UMTS Product initiates the
`
`handover of service from a current cell to a new, better cell.
`
`38.
`
`The patented method recited in one or more claims of the ‘834 Patent is
`
`performed when a cell reselection is made by any Defendants’ UMTS Product when it is using
`
`the UMTS standard to communicate.
`
`DEFENDANTS’CDMA/LTE PRODUCTS
`
`39.
`
`Defendants’ CDMA/LTE Products include, but are not limited to, the Flash™
`
`mobile phone.
`
`40.
`
`Each Defendants’ CDMA/LTE Product forms a mobile terminal that can be used
`
`on a mobile radio network such as that provided by a telecommunications company or a carrier.
`
`This network is formed by a plurality of cells.
`
`41.
`
`Each Defendants’ CDMA/LTE Product includes a processor and a memory
`
`device with instructions stored therein. Upon execution, these instructions perform a handover
`
`
`
`8
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`

`
`Case 1:13-cv-00047-LPS Document 8 Filed 02/12/13 Page 9 of 14 PageID #: 48
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`
`
`determination method in which each of Defendants’ CDMA/LTE Products searches for a better
`
`cell pursuant to the cell reselection process stated in the CDMA and/or LTE standards. Under
`
`CDMA standards, each Defendants’ CDMA/LTE Product sends out route update messages to the
`
`serving base stations, when conditions dictate, to initiate a cell reselection to a better base station.
`
`42.
`
`Each Defendants’ CDMA/LTE Product complies with the 3G CDMA and/or LTE
`
`standards. As such, when communicating, it maintains an active list of base stations with which
`
`the Defendants’ CDMA/LTE Product has sufficient signal strength to communicate. The active
`
`list of base stations is used by each Defendants’ CDMA/LTE Product itself to initiate cell
`
`reselection.
`
`43.
`
`Specifically, when Defendants’ CDMA/LTE Product is used in a mobile radio
`
`network, it receives signals from base stations within range. In accordance with CDMA
`
`standards, each Defendants’ CDMA/LTE Product maintains a set of pilot channels transmitted
`
`by each sector in the neighborhood of the serving sector in which the cell phone is used. The
`
`strength of each pilot channel is a quality of a signal from each candidate base station that is
`
`monitored by each Defendants’ CDMA/LTE Product as a function of time. The pilots are ranked
`
`in order of signal strength. The action of the drop timer in connection with monitoring the
`
`strength of the pilot channels evidence whether the strength or quality of each signal is rising or
`
`falling as a function of time. Whenever conditions indicate, each Defendants’ CDMA/LTE
`
`Product initiates a handover to a better cell by sending out a route update message. The initiation
`
`of the handover is based on the fact that, for example, the signal strength of the pilot was not
`
`disabled by the action of a drop timer.
`
`44. When using LTE standards to communicate, Defendants’ CDMA/LTE Products
`
`periodically measure the signals received from base stations in the vicinity for cell section and
`
`
`
`9
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`

`
`Case 1:13-cv-00047-LPS Document 8 Filed 02/12/13 Page 10 of 14 PageID #: 49
`
`
`
`reselection purposes. Then, each Defendants’ CDMA/LTE Product selects a suitable cell based
`
`on idle mode measurements and cell selection criteria, including quality of the signal. When
`
`camped on a cell, the Defendants’ CDMA/LTE Product will regularly search for better cells
`
`according to the cell selection criteria. For example, if the ranking of the new cell rises above
`
`the ranking of the serving cell during a particular time frame, then the characteristics of the
`
`potential new cell may rise as a function of time. Conversely, if the ranking of the new cell falls
`
`below the ranking of the serving cell during a particular time frame, then the characteristics of
`
`the potential new cell may fall as a function of time. Thus, the behavior of the characteristics of
`
`the potential new cell over the certain time interval produces an indication of the rise or fall of at
`
`least one measurement or criteria as a function of time. If a better cell is found, then that better
`
`cell is selected which initiates the handover of Defendants’ CDMA/LTE Product from a current
`
`cell to the better cell. The initiation of a handover is based on the fact that, for example, the new
`
`cell did not fall below the quality of the serving cell during the time frame.
`
`45.
`
`The patented method recited in one or more claims of the ‘834 Patent is
`
`performed when a cell reselection is made by any Defendants’ CDMA/LTE Product when it is
`
`using either the 3G CDMA or LTE standards to communicate.
`
`DIRECT INFRINGEMENT OF THE ‘834 PATENT
`
`COUNT 1:
`
`
` Plaintiff realleges and incorporates by reference the allegations set forth in
`
`46.
`
`paragraphs 1-45.
`
`47.
`
`Defendants’ UMTS Products and Defendants’ CDMA/LTE Products shall be
`
`collectively referred to hereinafter as Defendants’ Infringing Products.
`
`
`
`10
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`

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`Case 1:13-cv-00047-LPS Document 8 Filed 02/12/13 Page 11 of 14 PageID #: 50
`
`
`
`48.
`
`Taken together, either partially or entirely, the features included in the
`
`Defendants’ Infringing Products perform the process recited in one or more claims of the ‘834
`
`Patent.
`
`49.
`
`Defendants directly infringe one or more claims of the ‘834 Patent by using
`
`Defendants’ Infringing Products, which perform the process defined by one or more claims of
`
`the ‘834 Patent. For example, without limitation, Defendants directly infringe at least claim 8 of
`
`the ‘834 Patent by using Defendants’ Infringing Products, including use by Defendants’
`
`employees and agents, use during product development and testing processes, and use when
`
`servicing and/or repairing phones on behalf of customers.
`
`50.
`
`Additionally, Defendants directly infringe one or more claims of the ‘834 Patent
`
`by offering to sell Defendants’ Infringing Products and by licensing—to end users in a
`
`commercial transaction—software embedded in Defendants’ Infringing Products that performs
`
`the process defined by one or more claims of the ‘834 Patent. For example, without limitation,
`
`Defendant directly infringe at least claim 8 of the ‘834 Patent by offering to sell and conveying
`
`Defendants’ Infringing Products to end users including a license to a fully operational software
`
`program implementing and thus embodying the claimed method.
`
`51.
`
`By engaging in the conduct described herein, Defendants have injured Steelhead
`
`and are thus liable for infringement of the ‘834 Patent, pursuant to 35 U.S.C. §271.
`
`52.
`
`Defendants have committed these acts of infringement without license or
`
`authorization.
`
`53.
`
`To the extent that facts learned in discovery show that Defendants’ infringement
`
`of the ‘834 Patent is or has been willful, Steelhead reserves the right to request such a finding at
`
`the time of trial.
`
`
`
`11
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`Case 1:13-cv-00047-LPS Document 8 Filed 02/12/13 Page 12 of 14 PageID #: 51
`
`
`
`54.
`
`As a result of Defendants’ infringement of the ‘834 Patent, Steelhead has suffered
`
`monetary damages and is entitled to a monetary judgment in an amount adequate to compensate
`
`for Defendants’ past infringement, together with interests and costs.
`
`55.
`
`Steelhead will continue to suffer damages in the future unless Defendants’
`
`infringing activities are enjoined by this Court. As such, Steelhead is entitled to compensation
`
`for any continuing or future infringement up until the date that Defendants are finally and
`
`permanently enjoined from further infringement.
`
`56.
`
`Steelhead has also suffered and will continue to suffer severe and irreparable
`
`harm unless this Court issues a permanent injunction prohibiting Defendants, their officers,
`
`directors, agents, servants, employees, attorneys, affiliates, divisions, branches, parents, and
`
`those persons in active concert or participation with any of them from directly or indirectly
`
`infringing the ‘834 Patent.
`
`INDUCING INFRINGEMENT OF THE ‘834 PATENT
`
`COUNT 2:
`
`57.
`
`Plaintiff realleges and incorporates by reference the allegations set forth in
`
`paragraphs 1-56.
`
`58.
`
`Defendants have had knowledge of infringement of the ‘834 Patent at least as of
`
`the service of the complaint filed on January 4, 2013 (D.I. 1).
`
`59.
`
`Specifically, on January 24, 2013, Defendants were put on notice of their
`
`infringement of the ‘834 Patent by a letter that contained an exemplary presentation showing
`
`how Defendants’ products infringe the patent-in-suit (Exhibit B).
`
`60.
`
`Despite having been put on notice, Defendants have been and still are indirectly
`
`infringing by way of inducing infringement by others of the ‘834 Patent in the State of Delaware,
`
`in this ju