Case 1:14-cv-02897-WFK-SMG Document 89 Filed 04/10/15 Page 1 of 22 PageID #: 809
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`-against-
`
`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF NEW YORK
`----------------------------------------------------------X
`YEOSHUA SORIAS and
` :
`ZILICON ACCESSORIES LLC,
` :
`
`Plaintiffs,
`
` :
`
`
` :
`
`
` :
`
`
` :
`NATIONAL CELLULAR USA, INC.,
` :
`MARK GROSSMAN, ZEEV GROSSMAN, :
`DAVID GROSSMAN, YISHAI Z. PLINER, :
`LLOYD GLADSTONE, PRONG, LLC,
` :
`and DOES 1 through 10,
` :
` Defendants.
`
` :
`----------------------------------------------------------X
`
`
`14 Civ. 2897 (WFK) (SMG)
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`
`
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`
`
`
`
`JURY TRIAL DEMANDED
`
`FOURTH AMENDED
`COMPLAINT FOR PATENT
`INFRINGEMENT, TRADE
`SECRETS VIOLATION,
`BREACH OF CONTRACT,
` :
`
`AND RESCISSION
`
`
`
`
`
`FOURTH AMENDED COMPLAINT
`
`
`
`Yeoshua Sorias (―Sorias‖) and Zilicon Accessories, LLC (―Zilicon‖) (collectively, the
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`―Plaintiffs‖), by and through their undersigned counsel, Sam P. Israel, P.C., as and for their
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`Fourth Amended Complaint against defendants National Cellular USA, Inc. (―NC‖), Mark
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`Grossman, Zeev Grossman, and David Grossman (collectively the ―Grossmans‖), Yishai Z.
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`Pliner (―Pliner‖), Lloyd Gladstone (―Gladstone‖), Prong, LLC (―Prong‖) (altogether, the
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`―Defendants‖)1 allege as follows:
`
`
`
`THE NATURE OF THE ACTION
`
`1.
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`This is an action for patent infringement, trade secrets violation, breach of a valid
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`and enforceable licensing agreement and unjust enrichment.
`
`2.
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`With his mobile phone integrated charger, Sorias stood to revolutionize the
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`industry for cell phone accessories. Sorias having designed and created the first charger case to
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`render standard wire-based chargers obsolete, cell phone users who formerly needed to carry
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`boxy, wire-based charger units to plug into phones, then electrical outlets, can now deploy one
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`
`1 The Grossmans and NC are collectively referred to herein as the ―NC Defendants‖; Pliner,
`Gladstone and Prong are collectively referred to herein as the ―Prong Defendants.‖
`
`Prong, Inc. Exh. 1004 p. 1
`
`

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`Case 1:14-cv-02897-WFK-SMG Document 89 Filed 04/10/15 Page 2 of 22 PageID #: 810
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`small, lightweight device to charge their phones, and even protect them from damage associated
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`with daily use. This combined phone case/ charger unit is uniquely designed with a distinctive
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`look, thinness, and efficiency, and has the extra feature of chargeability that previously did not
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`exist.
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`3.
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`While the idea of a mobile phone charger was neither novel nor even currently
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`unique, before Sorias‘ invention, none had solved the problem of bulk inherent in integrating
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`alternating-current (―A/C‖) electrical plugs into a cell phone case with portability and user
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`convenience. Sorias‘ innovative design features specially-made electrical components in a unique
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`arrangement to achieve a slim profile not previously thought possible, complemented by the A/C
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`prongs folding horizontally, away from each other and flush with the back of the case, in a way
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`that does not add much thickness to the cell phone case.
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`4.
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`The intellectual property attendant to this achievement is subject to broad
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`protection, including utility and design patents. Yet, its innovative design has led to imitation by
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`competitors, including by defendant Prong. As alleged in further detail below, through the NC
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`Defendants‘ breach of an aborted license conferred by Plaintiffs, and the NC Defendants‘
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`violation of a non-disclosure agreement, Prong obtained Sorias‘ trade secret and confidential
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`information and used it to design and manufacture a charger that looks and functions exactly like
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`the charger described in Sorias‘ patents. In fact, the Prong Defendants at all relevant times were
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`aware of the prosecution of Sorias‘ patent, and Prong‘s principal, Pliner, even approached Sorias
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`on at least one occasion with an offer to obtain a license or outright purchase the pending patent
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`from Sorias. Although the Plaintiffs rejected Pliner‘s offers, the Prong Defendants introduced into
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`the market a charger that directly infringes at least one of the claims of Sorias‘ now fully-
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`registered patents (the ―Prong Charger‖).
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`5.
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`The Plaintiffs seek to arrest the Prong Defendants‘ unlawful manufacturing,
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`marketing, offering to sell, and selling of the Prong Charger, as well as recover damages attendant
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`to Prong‘s unauthorized and infringing activities.
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`6.
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`Further, beyond their breaches of the governing license agreement, the NC
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`Defendants also intentionally or recklessly disclosed trade secret and confidential information in
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`derogation of their non-disclosure obligations, thereby leaking the information indirectly to
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`Prong and causing Plaintiffs to suffer damages, as further explained below.
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`
`
`2
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`Prong, Inc. Exh. 1004 p. 2
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`

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`Case 1:14-cv-02897-WFK-SMG Document 89 Filed 04/10/15 Page 3 of 22 PageID #: 811
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`THE PARTIES
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`7.
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`8.
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`Plaintiff Sorias is an individual residing in Kings County, New York.
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`Plaintiff Zilicon Accessories, LLC is a New York limited liability company, with a
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`principal place of business located at 1222 Avenue M, Brooklyn, New York, 11230 in which
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`Sorias is a principal and officer.
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`9.
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`Upon information and belief, defendant National Cellular USA Inc. (NC), is a
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`New York corporation engaged in the production, marketing of cell phone accessories, with its
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`principle place of business located at 5620 First Avenue, Brooklyn, New York.
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`10.
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`Upon information and belief, defendant Mark Grossman is an individual residing
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`in New York, New York, as well as a principal and officer of NC.
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`11.
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`Upon information and belief, defendant Zeev Grossman is an individual residing
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`in New York, New York, as well as a principal and officer of NC.
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`12.
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`Upon information and belief, defendant David Grossman is an individual residing
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`in New York, New York, as well as a principal and officer of NC.
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`13.
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`Upon information and belief, Mark Grossman, Zeev Grossman, and David
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`Grossman are brothers and jointly run all the affairs and make all of the key decisions relative to
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`the business of NC.
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`14.
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`Upon information and belief, defendant Prong, LLC (n/k/a Prong, Inc.) is a
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`Delaware limited liability company headquartered and doing business in New York, with its
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`principal place of business located at 1123 Broadway, Suite 700, New York, New York 10010.
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`Prong produces, markets, and sells cell phone cases with integrated A/C charging plugs to U.S.
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`consumers throughout the country and abroad.
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`15. Upon information and belief, defendant Yishai Z. Pliner is an individual residing
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`in New York, New York, as well as a principal and officer of Prong.
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`16. Upon information and belief, defendant Lloyd Gladstone is an individual residing
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`in New York, New York, as well as a principal and officer of Prong.
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`17.
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`Upon information and belief, Pliner and Gladstone jointly run the affairs and make
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`all of the key decisions relative to the business of Prong.
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`
`
`3
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`Prong, Inc. Exh. 1004 p. 3
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`

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`Case 1:14-cv-02897-WFK-SMG Document 89 Filed 04/10/15 Page 4 of 22 PageID #: 812
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`JURISDICTION AND VENUE
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`18.
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`This Court has personal jurisdiction over each of the Defendants by reason of
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`their residence in this District, their transaction of business in this District, and their commission
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`of infringing or injurious acts within this District.
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`19.
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`This Court has subject matter jurisdiction under 28 U.S.C. §1331 (federal
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`question), 28 U.S.C. §1338(a) (any Act of Congress relating to patents or trademarks), 28 U.S.C.
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`§1338(b) (any claim of unfair competition joined with claims arising under patent laws), and 28
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`U.S.C. §1367 (supplemental jurisdiction).
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`20.
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`Venue is proper in this Court pursuant to 28 U.S.C. §1391 and §1400 because the
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`Defendants transact business within this district and offer for sale and/or sell in this district
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`products that infringe Sorias‘ patents. Additionally, venue is proper because Sorias and the
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`individual defendants all reside in this district, and because Zilicon‘s principal place of business
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`is in this district.
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`
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`SORIAS‘ PATENTS AND PROTECTED TRADE SECRETS
`
`FACTS
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`21.
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`Sorias is an inventor and patent owner of various electronic devices and
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`accessories. He is a founder, principal, and officer of Zilicon Accessories, LLC—a company that
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`engages in designing and manufacturing innovative wireless and electronic devices. Sorias
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`invents, manufactures, and sells his creations, often in conjunction with Zilicon, which has an
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`exclusive license to manufacture and distribute several of his inventions, including the device
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`described in Sorias‘ patents at issue in this action.
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`22. Many of Sorias‘ inventions include technical elements and accessories associated
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`with mobile electronic devices, such as battery chargers that are implemented as functional
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`covers for mobile devices. Sorias has protected his innovative designs and technologies by
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`legally securing his intellectual property rights, including by applying for and being awarded a
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`number of U.S. patents.
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`23.
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`Having worked for over six years as the purchasing manager at a leading
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`distributor of cell phones and accessories, in 2010 Sorias invented the Detachably Integrated
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`4
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`Prong, Inc. Exh. 1004 p. 4
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`

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`Case 1:14-cv-02897-WFK-SMG Document 89 Filed 04/10/15 Page 5 of 22 PageID #: 813
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`Battery Charger For Mobile Cell Phones And Like Devices, a thin cell phone case that doubles
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`as a charger. Sorias‘ creation comprises a charger that can be kept attached to the backside of the
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`phone as a case, with A/C prongs folding in and out in opposite directions, and merging
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`horizontally onto the back of the charger, flush with the case. Its compactness and portability
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`make Sorias‘ charger look and feel like a regular cell phone cover, but with the added benefit of
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`the A/C prongs such that the cell phone can easily be plugged into an outlet and charged without
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`the need to utilize a standard, separate charging device.
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`24.
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`Sorias thus created the first practical and carryable mobile phone case with an
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`integrated A/C charger. Other, later-revealed patent applications showed charger designs for
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`other electronic devices with parallel A/C prong units that would detach or pivot in and out
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`vertically (thus substantially adding to the thickness of the case); none existed as envisioned by
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`Sorias—to wit, a protective cell phone case with an integrated wall charger, having the regular
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`thinness of a normal cell phone case case, by virtue of both the unique arrangement of specially-
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`made electrical components and the A/C prongs folding in and out horizontally (thus adding
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`almost no additional thickness to the case).
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`25.
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`The patent for Sorias‘ Detachably Integrated Battery Charger For Mobile Cell
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`Phones And Like Devices was granted by the United States Patent and Trademark Office (the
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`―USPTO‖) on April 29, 2014. See Exhibit A (U.S. Patent No. 8,712,486 [the ―„486 Patent‖]).
`
`26.
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`The ‗486 Patent derives from a provisional patent application, No. 61/432,050,
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`filed by Sorias on January 12, 2011 (the ―Provisional Application‖). See Exhibit B. Thus, the
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`‗486 Patent claims priority to the Provisional Application.
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`27.
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`Sorias is a named inventor on and owns all rights, title, and interest in and to the
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`‗486 Patent.
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`28.
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`Zilicon currently holds an exclusive license to manufacture and sell the invention
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`described in the ‗486 Patent.
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`29.
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`Because no such device existed when Sorias filed his patent application, he had
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`taken considerable measures to protect the secrecy of the invention. For instance, Sorias did not
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`reveal any information about the device and maintained in a private location all of the paperwork
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`and drawings pertaining to it, including the patent application materials. When Sorias began his
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`5
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`Prong, Inc. Exh. 1004 p. 5
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`search for potential investors who might lend the capital and manufacturing wherewithal to the
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`development and ultimate sale of his device, Sorias ensured that any and all such potential
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`investors were provided with, and signed, a non-disclosure agreement (―NDA‖).
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`30.
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`Other than Sorias‘ patent counsel and the individuals or entities who were parties
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`to (or covered by) the NDAs, no one else had access to the drawings or information pertaining to
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`Sorias‘ inventions prior to July 12, 2012 (the ―Publication Date‖), when the application that
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`resulted in the issuance of the ‗486 Patent was published and made publicly available by the
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`USPTO.
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`31.
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`During the pendency of this litigation, on March 3, 2015, Sorias was granted a
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`design patent for the ―ornamental design for a phone charger,‖ as depicted in the ‗486 Patent. See
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`Exhibit C (U.S. Patent No. D723,457 S [the “„457 Patent”]).
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`32.
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`The foregoing patents are a product of years‘ worth of Sorias‘ time, effort, and
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`skill. By filing his patents, Sorias intended to facilitate the making, marketing, and selling of the
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`devices in the United States and abroad. Sorias has himself invested $1,000,000.00 in his efforts
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`to develop and bring to market his invention.
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`THE SORIAS-NC LICENSING AGREEMENT AND GOVERNING NDA
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`33.
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`Prior to obtaining the ‗486 Patent but after Sorias filed the Provisional
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`Application, he set out to search for prospective investors who would be interested in partnership
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`and/or licensing opportunities in connection with the device as envisioned by Sorias.
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`34.
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`On or about January 13, 2011, Sorias met with the Grossmans and other NC
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`investors, namely Benjie Brecher and Al Brecher, during which a potential partnership or
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`licensing deal between Sorias and NC was discussed. After the Grossmans signed an NDA,
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`Sorias presented them with the materials and information included in the Provisional
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`Application, drawings of the device, and a prototype that simulated the charger, albeit without
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`the circuitry.
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`35.
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`Sorias‘ prototype consisted of a makeshift phone cover with two prongs that
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`simulated folding in and out horizontally, as depicted on the following photograph created by
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`Sorias:
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`6
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`Prong, Inc. Exh. 1004 p. 6
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`

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`Prong, Inc. Exh. 1004 p. 7
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`Prong, Inc. Exh. 1004 p. 7
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`

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`40.
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`Specifically, the blueprint provided to Sorias at the August 2011 meeting with NC
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`showed a charger-case intended for use with the iPhone 3G, with the ―charger‖ portion measured
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`at approximately 16 millimeters (―mm‖) in depth or ―thickness.‖ The blueprint separated the
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`thickness dimensions of the device into a charger-components section and a section for the
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`housing of the actual cell phone. The iPhone 3G possessed a thickness dimension of 12.3 mm,
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`and, when combined with the separately-measured charger-component section, the blueprint
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`depicted a device with an overall thickness of approximately 28 mm.
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`41. When Sorias objected that the depicted device was far too thick, NC represented
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`to him that, though they had tried, they found it impossible to make the charger device any
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`thinner than was shown in the blueprint. Sorias insisted that he would be able to make the
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`charger-components section with a thickness below 16 mm. Sorias rejected NC‘s proposed plans
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`and advised the Grossmans that the deal was off inasmuch as NC had not timely met the
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`requirements of the LOI.
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`42.
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`Despite their obligations to maintain the secrecy of the information produced to
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`them under the NDA, the Grossmans retaliated by threatening to disclose it unprotected to third
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`parties. Mark Grossman went so far as to proclaim that he had no compunction about disclosing
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`Sorias‘ trade secrets this way, stating to Sorias that ―nobody ever won a case based on an NDA
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`because I can find a way to go around it.‖ Mark Grossman further insisted that if Sorias failed to
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`cooperate with NC, NC would simply make and sell the device without him.
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`43.
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`In the fall of 2011, Sorias, seeking to prevent NC from disclosing his confidential
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`information or violating his patent, instituted against the NC Defendants an arbitration session
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`conducted by a rabbi in their community. The Grossmans failed to attend the first arbitration
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`session arranged by Sorias.
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`44.
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`Prior to the second arbitration session arranged by Sorias, NC contacted Sorias to
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`suggest a potential solution: given NC‘s representation at the August 2011 meeting that the
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`charger-component portion of the device could not be manufactured at a thickness below 16 mm,
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`and Sorias‘ insistence that the thicker NC device would not be marketable and that a thinner
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`device was indeed possible, each party would receive different rights to make the charger-case
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`based upon those representations of thickness.
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`45.
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`Upon NC‘s proposal of these new terms, by December 22, 2011 the Grossmans
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`8
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`Prong, Inc. Exh. 1004 p. 8
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`

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`and Sorias reached an agreement pursuant to which NC was given a license to manufacture and
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`sell chargers based on the Provisional Application having a thickness of 16 mm or greater, while
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`paying Sorias the agreed-upon royalty from the sale of those chargers. Sorias retained the
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`exclusive right to make and sell chargers with a thickness below 16 mm (he subsequently
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`granted Zilicon the exclusive license with respect to these devices). Attached as Exhibit D is a
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`true and correct copy of the License Agreement between the Plaintiffs and NC (the ―License
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`Agreement‖).
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`46.
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`The License Agreement states that Sorias ―grants National Cellular an exclusive
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`right and license to make the Sorias Product at a thickness which is equal to or greater than
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`16mm, until December 2018. … Sorias retains exclusive rights to manufacture and market, either
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`himself or through his assignees and/or licenses, the Sorias Product at thickness[] of less than
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`16mm.‖ Ex. D, License Agreement at ¶¶ 3–4.
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`47.
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`The ―thickness‖ of 16mm—as envisioned by the parties to the License Agreement
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`and confirmed through subsequent communications—was based upon the representation of the
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`device as contained in the August 2011 blueprint and relates to the measurement of the charger
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`unit, not including the parallel side panels of the case that hold the phone in place, as illustrated
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`by the following diagrams:
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`16 mm
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`9
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`Prong, Inc. Exh. 1004 p. 9
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`

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`16 mm
`
`
`
`
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`Additional thickness of
`the phone holder
`panels
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`16 mm
`“thickness”
`reserved for NC
`under Licensing
`Agreement
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`
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`
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`
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`48.
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`The License Agreement further provides that, ―within 180 days of the signing of
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`this Agreement … [NC] will have first production runs of the Sorias Product and will provide at
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`least three samples thereof to Yeoshua Sorias, as soon as available. If it fails to meet that
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`requirement, its License herein shall expire.‖ Ex. D, License Agreement at ¶ 10 (emphasis
`
`added).
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`49.
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`On or about June 20, 2012—after the agreed-upon 180-day period had already
`
`expired—and having received no updates or information from NC regarding the development of
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`the charger, despite repeated requests for same, Sorias went to NC‘s offices at the Grossmans‘
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`invitation, expecting to see the promised ―three samples.‖ Instead, the Grossmans refused to
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`present the samples, and instead insisted that Sorias sign a letter that they had prepared, which
`
`stated:
`
`Dear Josh,
`
`By signing below you are confirming receipt of the 3 working and
`completed samples of the iPhone case with outlet prongs as per our
`agreement specks (sic) (please see pictures below). Also, you agree
`that you have seen and verified the documentation from our
`overseas producers that the product production has begun.‖
`
`
`
`50.
`
`Yet, none of the so-called ―documentation from … [NC‘s] overseas producers…‖
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`had been shown to Sorias. When Sorias requested to see the referenced documentation prior to
`
`
`
`10
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`Prong, Inc. Exh. 1004 p. 10
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`

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`signing the letter, NC‘s representative Levy Salvay produced a small piece of paper,
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`approximately 1 x 1 inches in size, with three words handwritten on it. Upon information and
`
`belief, the three words on that scrap of paper were ―we start production‖ or ―we begin
`
`production.‖ The Grossmans refused to provide Sorias with any information regarding the
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`source of the scrap of paper or the manufacturers with whom NC was purportedly working.
`
`51. While, upon information and belief, NC did not even have three production
`
`samples of the charger at the time, the Grossmans demanded that Sorias certify that he had seen
`
`all three production samples before actually allowing him to see them. Yet, with misguided trust
`
`and an eagerness to inspect the promised samples, Sorias signed the letter expecting the
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`Grossmans‘ representations to be truthful and made in good faith.
`
`52.
`
`At the June 20, 2012 meeting, the Grossmans produced to Sorias‘ view three
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`―hand sample‖ (not production sample) chargers, ostensibly manufactured pursuant to the
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`License Agreement. Upon information and belief, all three samples were cosmetically identical,
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`other than the colors of the charger-cases. Sorias was allowed to hold, examine, and retain only
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`two of the samples shown by NC at the June 2012 meeting, and was not given the tools or
`
`opportunity to conduct any testing or measurement of the samples during the meeting.
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`53.
`
`Only after the June 2012 meeting, when Sorias measured NC‘s prototype charger,
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`he found its thickness to be below 16 mm— the threshold dimension beneath which Sorias
`
`reserved all rights to thinner products and which the parties had specifically carved out from
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`NC‘s exclusive license. Sorias informed the Grossmans that NC was in breach of its License
`
`Agreement, as only Sorias had the exclusive right to make and sell chargers with a thickness less
`
`than 16 mm.
`
`54.
`
`But NC now insisted that it had a different understanding, arguing that
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`―thickness‖ refers to the overall thickness of the charger case with the mobile phone, meaning so
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`long as the two together exceeded 16mm, NC could sell such a charger-case under the license.
`
`55.
`
`NC‘s claim, however, is belied by numerous emails and communications among
`
`Sorias and the Grossmans showing that NC‘s previous prototypes (untethered to a phone) were
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`thicker than 16 mm without accounting for the added ―thickness‖ of the phone. The NC
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`Defendants have encroached on the Plaintiffs‘ exclusive rights to make the charger with the
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`thickness of less than 16 mm, failed to provide three production samples of the charger by the
`
`
`
`11
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`Prong, Inc. Exh. 1004 p. 11
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`

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`contractually-mandated deadline, and failed to deal in good faith with Sorias during the parties‘
`
`meetings.
`
`56.
`
`Despite Sorias‘ clear and explicit notice to the NC Defendants that the License
`
`Agreement had been breached, and that NC no longer held any rights with regard to Sorias‘
`
`invention, the NC Defendants continued to manufacture and made efforts to sell mobile phone
`
`chargers using information provided to them by Sorias and in the application for the ‗486 Patent.
`
`57.
`
`Thus, the NC Defendants secretly marketed their non-compliant device to Apple,
`
`Inc. (―Apple‖) and, upon information and belief, even filed a competing patent application, in
`
`clear violation of the License Agreement.
`
`THE NC DEFENDANTS‘ INFRINGEMENT AFTER PUBLICATION
`
`58.
`
`The NC Defendants maintained these efforts to make and sell a contractually-
`
`barred mobile phone charger beyond the Publication Date.
`
`59.
`
`For example, between the Publication Date and the end of 2013, the NC
`
`Defendants were communicating with designers and manufacturers with regard to making
`
`mobile phone chargers that would incorporate technology described in the ‗486 Patent.
`
`60.
`
`Additionally, the NC Defendants made significant efforts between the Publication
`
`Date and December 2013 to sell and distribute to Apple and other retailers mobile phone
`
`chargers that would incorporate technology described in the ‗486 Patent.
`
`THE NC DEFENDANTS‘ MISUSE OF TRADE SECRETS
`
`61.
`
`From approximately spring of 2011 until at least mid-2012, NC‘s responsibilities
`
`as Sorias‘ licensee included locating a manufacturer that would be able to make Sorias‘ charger
`
`in accordance with the specifications provided in Sorias‘ secret designs. As part of those
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`obligations, NC‘s representatives frequently traveled to China during that time period, and/or
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`communicated with engineers, designers and certain professionals, both domestic and abroad,
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`regarding the making of Sorias‘ charger.
`
`62. Meanwhile, from the time he filed the Provisional Application and throughout the
`
`negotiations with NC, Sorias had carefully safeguarded the proprietary nature of his intellectual
`
`property, including its carefully preserved data and designs, which comprise legally protected
`
`trade secrets. The NC Defendants, for their part, failed to take measures to protect this
`
`12
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`
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`Prong, Inc. Exh. 1004 p. 12
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`

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`Case 1:14-cv-02897-WFK-SMG Document 89 Filed 04/10/15 Page 13 of 22 PageID #: 821
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`information when entrusted to them by Sorias in accordance with the strictures of the NDA,
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`which specifically prohibited NC Defendants from unbridled disclosure of such confidential
`
`information to third parties.
`
`63.
`
`Indeed, when disseminating the trade secret information preceding the full
`
`registration of Sorias‘ patents, the NC Defendants liberally supplied their content to various
`
`individuals in China and/or the United States without first ensuring that the recipients sign an
`
`NDA or treat the information as confidential.
`
`64.
`
`Indeed, as alleged above, in or about the fall of 2011, Mark Grossman admitted
`
`that he had no compunction about disclosing Sorias‘ trade secrets to third parties. In furtherance
`
`of his threat, at least one email communication sent from NC to certain individuals in China
`
`contained drawings and specifications of Sorias‘ charger, without the transmission of an NDA
`
`beforehand.
`
`65.
`
`Upon information and belief, by reason of the NC Defendants‘ intentional or
`
`reckless acts, Sorias‘ trade secret and confidential information became available to potential
`
`competitors of Zilicon, including Prong. Indeed, upon information and belief, Prong obtained
`
`Sorias‘ trade secret and confidential information, either by the Grossmans‘ disclosure to third
`
`parties or proximately through Prong‘s manufacturing and/or design contacts associated with
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`NC‘s manufacturing and/or design contacts.
`
`66.
`
`By approximately March 2012, Sorias came across a Kickstarter campaign page
`
`on which Prong was indeed advertising a device that was based on, and using the same
`
`technology and design as those described in the Provisional Application (and Sorias‘
`
`subsequently-granted patents). Sorias found that the charger depicted in the Kickstarter campaign
`
`looked exactly like the sample charger provided to Sorias by the Grossmans during the June 20,
`
`2012 meeting. NC‘s sample charger involved identical cosmetic and functional features, such as
`
`the ―ribbed‖ case sides and a release button for the A/C prongs.
`
`67.
`
`Sorias was personally acquainted with one of Prong‘s principals, Pliner, from a
`
`university in Israel, where Sorias worked as a dormitory counselor while Pliner attended as a
`
`student. Pliner did not have a background in engineering or experience in the cell phone
`
`accessories industry; likewise, Pliner‘s partner, Gladstone, was a lawyer from Florida lacking
`
`altogether the relevant education and industry experience to create the charger that they were
`
`
`
`13
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`Prong, Inc. Exh. 1004 p. 13
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`Case 1:14-cv-02897-WFK-SMG Document 89 Filed 04/10/15 Page 14 of 22 PageID #: 822
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`marketing on Kickstarter.
`
`PRONGS‘ INFRINGEMENT OF THE ‗486 PATENT AND THE DESIGN PATENT
`
`68.
`
`In or around September 2013, after the USPTO posted a favorable Office Action
`
`with regard to the application that became the ‗486 Patent, Pliner called Sorias to congratulate
`
`him on the pending approval of his patent and offered to meet to discuss a potential partnership
`
`with Prong, namely, a license to continue Prong‘s Kickstarter campaign to lawfully make and
`
`sell the Prong Charger.
`
`69.
`
`In or about October 2013, Sorias met with Pliner and Gladstone, and the three
`
`individuals discussed various options, including a royalty deal and partnership, as well as
`
`Prong‘s outright purchase of Sorias‘ prospective patent. During
`
`this meeting, Pliner
`
`acknowledged that once Sorias‘ patent was issued, Prong would be infringing if it continued to
`
`make, offer for sale and sell the Prong Charger.
`
`70.
`
`The day after the October 2013 meeting, Pliner sent emails to Sorias outlining
`
`Prong‘s proposed
`
`terms for agreements with Sorias. In
`
`their subsequent
`
`telephone
`
`communications after the meeting, Pliner represented that Prong would stop all of its efforts with
`
`respect to the Prong Charger once Sorias‘ patent issued.
`
`71. Whereas the Sorias-Prong negotiations fell apart, when the ‗486 Patent was issued
`
`on April 29, 2014, the Prong Defendants came to actually make, offer for sale, and sell a mobile
`
`phone charger with horizontally-folding A/C prongs that was the same as Sorias‘ device
`
`protected under the ‗486 Patent. The Prong Charger includes all of the limitations of at least one
`
`claim of the ‗486 Patent and the Design Patent.
`
`72.
`
`The Prong Defendants not only continued their infringing promotional and sales
`
`efforts via Kickstarter (which began no later than March 2012), but they announced their illegal
`
`efforts on Prong‘s website, www.prong.com, which promotes the Prong charger as ―the only
`
`case[] with integrated charging prongs‖ and the ―first of its kind in the world.‖ Further, upon
`
`information and belief, the Prong Defendants have sold and continue to sell the infringing Prong
`
`Charger through Kickstarter, Prong‘s website, and Amazon.com.
`
`73.
`
`As recently as February 25, 2015, another website, www.Indiegogo.com
`
`(―Indiegogo‖), has made its crowdfunding platform available to Prong to pool money from
`
`
`
`14
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`Case 1:14-cv-02897-WFK-SMG Document 89 Filed 04/10/15 Page 15 of 22 PageID #: 823
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`investors for a new model of the Prong Charger intended to be compatible with the iPhone 6,
`
`Indiegogo has purported to: ―highlight activities within [Prong‘s] network‖; ―Provid[e] a Partner
`
`Page‖ to ―Build[] brand recognition and influence through strategic brand placement on
`
`sponsored campaign pages‖; as well as ―Offer[] dedicated partner support, educational tools, and
`
`a partner launch at partnersupport@indiegogo.com.‖
`
`74.
`
`According to Indiegogo‘s website, Prong‘s CEO, Lloyd Gladstone said that, with
`
`Indiegogo‘s help, Prong has ―raised over $52,300, which is a pretty fantastic feat. … However,
`
`we‘re not done! We want to keep the ball rolling and let more people know about how they can
`
`cut the cord and take charge. Please help us by copying and pasting this link to share on social
`
`media: http://igg.me/at/prong.‖
`
`75.
`
`The Prong Defendants and Indiegogo raised more than enough funds needed to
`
`manufacture and distribute the infringing Prong Charger within the United States. Indeed,
`
`deliveries of the new infringing charger are expected in June of 2015.
`
`76.
`
`In addition to the monies raised through these crowdfunding campaigns, Prong
`
`has also received millions of dollars from private investors who clearly see merit in the charger-
`
`case concept (but may not be aware that Sorias, not Prong, holds the valid patent for such a
`
`device).
`
`
`
`COUNT I
`
`(Against the Prong Defendants for Patent Infringement)
`
`
`
`77.
`
`The Plaintiffs re-allege and incorporate by reference the above allegations of this
`
`Fourth Amended Complaint, as though fully set forth herein.
`
`78.
`
`The Plaintiffs own and have the rights, title, and interest in and to the ‗486 Patent
`
`and the Design Patent, the underlying invention of