Case 1:15-cv-01470-MJG Document 1 Filed 04/15/15 Page 1 of 79
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF NEW JERSEY
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`CTP INNOVATIONS, LLC,
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`Plaintiff,
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`v.
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`COMMAND WEB OFFSET COMPANY,
`INC.,
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`Defendant.
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` ) Civil Action No. __________________
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` ) JURY TRIAL DEMANDED
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`COMPLAINT FOR PATENT INFRINGEMENT
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`Plaintiff CTP Innovations, LLC, which has its principal place business at 715 Adams
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`Street, #H, Carmel, Indiana 46032, for its Complaint against Defendant Command Web Offset
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`Company, Inc., which upon information and belief has its principal place of business at 100
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`Castle Road, Secaucus, New Jersey 07096, states as follows:
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`I. PRELIMINARY STATEMENT
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`This lawsuit is one of over forty lawsuits that Plaintiff CTP Innovations, LLC (“CTP”)
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`has filed in district courts throughout the United States over the past eighteen months. In each of
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`those case, CTP asserted infringement of U.S. Patent Nos. 6,611,349 (the “’349 Patent”) and/or
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`6,738,155 (the “’155 Patent”). The vast majority of those cases have been resolved and
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`dismissed. The Judicial Panel on Multidistrict Litigation consolidated the remaining cases
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`before the District of Maryland in In re: CTP Innovations, LLC Patent Litigation, Case No.
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`MDL 14-MD-2581. This Complaint, therefore, is a “tag-a-long filing” that will be consolidated
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`under MDL 14-MD-2581.
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`On February 27, 2015, the District of Maryland provided all of the defendants in the
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`consolidated case the opportunity to stay litigation against them if they each agreed to sign the
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`6776492.1/46728-00002
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`Petitioners' Exhibit 1011, pg. 1
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`Case 1:15-cv-01470-MJG Document 1 Filed 04/15/15 Page 2 of 79
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`“Stipulation for Defendant(s) to be Bound by the Estoppel Effect of 35 U.S.C. § 315(e).” As of
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`the filing of this Complaint, all of the defendants have filed the stipulation.
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`The District of Maryland granted the option to stay because a group of third-party
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`manufacturers filed four petitions for inter partes review of the ’155 Patent and the ’349 Patent
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`with the Patent Trial and Appeal Board of the United States Patent and Trademark Office
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`(“PTAB”). Based on the petitions, PTAB instituted inter partes reviews of all of the claims of
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`the ’155 Patent and claims 1-3 and 10-13 of the ’349 Patent. PTAB declined to institute inter
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`partes review of claims 4-9 of the ’349 Patent.
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`Plaintiff asserts infringement against Defendant in this case of claim 4 and potentially
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`claims 5 through 9 of the ’349 Patent upon further discovery. Plaintiff does not assert
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`infringement of claims 1-3 and 10-13 of the ’349 Patent. CTP will notify the District of
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`Maryland regarding the filing of this Complaint. Plaintiff anticipates that this matter will be
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`promptly transferred for consolidation with MDL 14-MDL-2581.
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`II. THE PARTIES
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`1.
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`Plaintiff CTP Innovations, LLC (“CTP”) is a Delaware limited liability company.
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`2. Upon information and belief, Defendant Command Web Offset Company, Inc.,
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`(“Defendant”) is a New Jersey corporation with its principal place of business located at 100
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`Castle Road, Secaucus, New Jersey 07096. Defendant does business in New Jersey, including in
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`this district. Defendant may be served with process at, 100 Castle Road, Secaucus, New Jersey
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`07096.
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`III. NATURE OF ACTION
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`3.
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`This is a patent infringement action to stop Defendant’s infringement of U.S. Patent
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`No 6,611,349 (the “’349 Patent”).
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`6776492.1/46728-00002
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`- 2 -
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`Petitioners' Exhibit 1011, pg. 2
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`Case 1:15-cv-01470-MJG Document 1 Filed 04/15/15 Page 3 of 79
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`IV. JURISDICTION AND VENUE
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`4.
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`This Court has subject matter jurisdiction over this action under 28 U.S.C. §§ 1331
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`and 1338(a) because it arises under the Patent Laws of the United States, United States Code,
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`Title 35.
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`5. Venue is proper in this district under 28 U.S.C. §§ 1391(c) and 1400(b). On
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`information and belief, Defendant has a regular and established place of business in this district,
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`has transacted business in this district, and/or has committed acts of patent infringement in this
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`district.
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`6. On information and belief, Defendant is subject to this Court’s specific and general
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`personal jurisdiction pursuant to due process and/or the New Jersey Long Arm Statute, due at
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`least to its substantial business in this forum including but not limited to: (i) at least a portion of
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`the infringements 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 New Jersey and in this district.
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`V. GENERAL SUMMARY OF THE TECHNOLOGY AT ISSUE
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`The invention in the ’349 Patent relates generally to the field of publishing and
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`7.
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`printing.
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`8. More specifically, the invention relates to systems and methods of providing
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`publishing and printing services via a communication network involving computer to plate
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`technology.
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`9.
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`Simplistically, computer to plate technology involves transferring an image to
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`printing plate without the middle step of creating a film of the image that is imprinted on the
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`plate. The plate is then used in a printing press to transfer the image to different types of media,
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`for example, but not by way of limitation, newspaper, card stock, or standard paper. By directly
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`6776492.1/46728-00002
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`Petitioners' Exhibit 1011, pg. 3
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`Case 1:15-cv-01470-MJG Document 1 Filed 04/15/15 Page 4 of 79
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`transferring the image to the plate, the printing company eliminates the need for film and related
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`developer chemicals, improves image quality, and may produce plates more quickly. The
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`claimed methods and systems provide a solution for communicating and managing printing and
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`publishing services without the need to physically transfer copies of design files and proofs
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`through workflows that result in the generation of a plate ready file.
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`VI. BACKGROUND OF THE INVENTION IN THE ’349 PATENT
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`10. Key steps for producing printed materials using a plate process include (1)
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`preparing copy elements for reproduction, (2) prepress production, (3) platemaking, (4) printing,
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`and (5) binding, finishing and distribution.
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`11.
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`In the printing production process, an “end user” prepares copy elements for
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`reproduction. In this “design” stage of the printing process, the end user provides images and
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`data using slides or computer files to create one or more “pages.” Pages can be designed using
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`computer programs such as QuarkXpress, Adobe InDesign, Adobe Illustrator, Photoshop, or
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`other printing or publishing software packages. Prior to the invention claimed in the ’349 Patent,
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`slides or computer disks containing pages to be printed were sent (via mail or express carrier) to
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`be prepared for creation of a plate.
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`12.
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`In the prepress production stage, the end user input (or “copy”) is transformed into
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`a medium that is reproducible for printing. Typically, prepress involves typesetting, illustration,
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`page building and design, image capture, image color correction, file conversion, RIPing,
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`trapping, proofing, imposition, filmsetting, and platesetting. “Proofing” involves producing a
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`proof, or sample, of what the printed product will look like. Prior to the invention claimed in the
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`’349 Patent, the proof was sent by mail or express carrier to the end user for review and
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`approval. After alterations are made, new proofs are sent to the end user. Once approval of the
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`proof is given by the end user, a medium, such as a computer to plate (CTP) file is produced and
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`6776492.1/46728-00002
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`Petitioners' Exhibit 1011, pg. 4
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`Case 1:15-cv-01470-MJG Document 1 Filed 04/15/15 Page 5 of 79
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`sent to the printer. “Imposition” involves the set of pages on a particular plate as well as their
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`positioning and orientation. Imposition is particularly important in the creation of booklets or
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`catalogs, where pages are positioned using register marks to assist in the stripping, collating, and
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`folding of the printed product.
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`13.
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`In the platemaking stage, a “printer” manufactures a printing plate using the
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`medium created during prepress. In the printing stage, the printer uses the printing plate to create
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`the printed product. In the binding, finishing and distribution stage, the printed product is
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`prepared in its final form.
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`14. Each step in the printing production process described briefly above can be
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`accomplished using a variety of different known systems and techniques. Nevertheless, such
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`conventional systems have many delays, particularly in the transporting of pages and proofs to
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`and from the end user and prepress provider. Due to delays and the fragmented nature of
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`conventional printing production systems, errors often occur. Further, typical printing
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`production systems are limited in their ability to re-purpose data, manage content of pages, and
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`piece together individual processes or tasks to establish an efficient production system or
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`“workflow”. Indeed, no conventional system prior to the invention claimed in the ’349 Patent
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`combines prepress, content management, infrastructure (server, storage & distribution) and
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`workflow services.
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`15. Prior to the invention claimed in the ’349 Patent, conventional printing and
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`publishing systems generally include Macintosh computers or workstations which communicate
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`with each other using the AppleTalk protocol. AppleTalk protocol could not, however, be
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`communicated over switched networks such as the Internet and private networks where nodes in
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`the network have IP (Internet Protocol) addresses. As such, conventional systems could not
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`6776492.1/46728-00002
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`Petitioners' Exhibit 1011, pg. 5
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`Case 1:15-cv-01470-MJG Document 1 Filed 04/15/15 Page 6 of 79
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`merely be coupled to a communication network for remotely controlling design, prepress and
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`print processes.
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`16. Prior to the invention claimed in the ’349 Patent, there was a need for a system
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`which combines design, prepress, content management, infrastructure (server, storage &
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`distribution) and workflow. For end users in particular, there was a need for a system and a
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`method to gain control of the design, prepress, and print processes. To save time and costs, there
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`was a need to eliminate manual shipping of proofs back and forth to a prepress provider.
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`Further, there was a need for a prepress capability at a local facility without the time and costs of
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`shipping proofs back and forth to a prepress provider. Even further, there was a need for a
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`system and method to provide plate-ready files over a communications network for delivery to a
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`CTP device. Moreover, for commercial printers, there was a need for a system and method to
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`remotely drive a plate-setting device located at a printer’s facility. Further, there was a need to
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`decrease the amount of time necessary to generate printing plates after processing of the pages
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`(i.e., the cycle time). Even further, there was a need for providing access to the functionality of
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`high-end server, storage, and networking equipment to the printer facility without the associated
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`capital investments.
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`VII. INTER PARTES REVIEW
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`17. On July 29, 2013, Printing Industries of America (“PIA”) filed a petition to institute
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`an inter partes review proceeding with the United States Patent and Trademark Office’s Patent
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`Trial and Appeal Board (“PTAB”). That case was captioned Printing Industries of America v.
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`CTP Innovations, LLC (Case No. IPR2013-00474) (“IPR2013-00474”).
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`18.
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`In IPR2013-00474, the petitioner challenged the validity of each and every claim in
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`the ’349 patent.
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`6776492.1/46728-00002
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`Petitioners' Exhibit 1011, pg. 6
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`Case 1:15-cv-01470-MJG Document 1 Filed 04/15/15 Page 7 of 79
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`19. On December 31, 2013, the PTAB found that the petition in IPR2013-00474 did
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`not demonstrate that there was a reasonable likelihood that the petitioner would prevail with
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`respect to invalidating at least one of the claims in the ’349 Patent.
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`20. A true and correct copy of the PTAB’s determination in IPR2013-00474 is attached
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`hereto as Exhibit 1.
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`21.
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`On May 20, 2014, Eastman Kodak Company, Agfa Corporation, Esko
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`Software BVBA and Heidelberg, USA filed inter partes review petitions IPR2014-00790 and
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`IPR2014-00791 seeking review of all the claims of the ’349 Patent.
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`22. On November 28, 2014, the PTAB took up the petitions and instituted review of
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`claims 1-3 and 10-14 of the ’349 Patent. Claims 4-9 of the ’349 Patent are not part of the
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`instituted review.
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`VIII. INFRINGEMENT OF THE ’349 AND ’155 PATENTS IS “UBIQUITOUS”
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`23. Upon information and belief, PIA is the largest trade association representing the
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`printing and graphic communications industry in the United States.
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`24. Michael Makin, president and CEO of PIA (petitioner in IPR2013-00474) testified
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`before the Senate Committee on the Judiciary, that the inventions in the ’349 and ’155 Patents
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`relate[ ] to how a digital file, like a PDF file, is handled and manipulated in a print
`production operation up until the time it is used to image a printing plate. This
`method of digital workflow and plate imaging was new in the 1990s when the
`patent was issued but has become ubiquitous in the industry now.
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`6776492.1/46728-00002
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`Petitioners' Exhibit 1011, pg. 7
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`Case 1:15-cv-01470-MJG Document 1 Filed 04/15/15 Page 8 of 79
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`Statement of Michael F. Makin, MBA, President & CEO of Printing Industries of America,
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`Before the Senate Committee on the Judiciary, titled “Protecting Small Business and Promoting
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`Innovation by Limiting Patent Troll Abuse,” dated December 17, 2013 (the “PIA Statement”), at
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`4-5 (emphasis in original). A true and correct copy of the PIA Statement is attached hereto as
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`Exhibit 2.
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`25.
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`In so making this statement, it is clear that Makin and PIA were able to determine
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`from the face of the ’349 Patent that infringement of the ’349 Patent was “ubiquitous in the
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`industry now.”
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`IX. CAUSES OF ACTION
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`COUNT I
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`26. CTP incorporates the preceding paragraphs 1-25 as though fully set forth herein.
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`27. CTP owns, by assignment, the ’349 Patent entitled “System and Method of
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`Generating a Printing Plate File in Real Time Using a Communication Network.” A true and
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`correct copy of the ’349 Patent is attached hereto as Exhibit 3.
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`28. Upon information and belief, Defendant, in violation of 35 U.S.C. § 271, has
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`infringed, literally or through the doctrine of equivalents, and continues to infringe at least claim
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`4 of the ’349 Patent and likely claims 5-9 of the ’349 Patent as well through Defendant’s using a
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`method of generating a plate-ready file configured for the creation of a printing plate, said plate-
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`ready file being associated with page layouts and being provided in real time from a remote
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`location using a communication network and selling and offering services that include this
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`method (the “Infringing Services”).
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`6776492.1/46728-00002
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`Petitioners' Exhibit 1011, pg. 8
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`Case 1:15-cv-01470-MJG Document 1 Filed 04/15/15 Page 9 of 79
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`29. Defendant has not given the Infringing Services a specific and publicly-available
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`name. Accordingly, Plaintiff cannot provide the name used by Defendant for such services
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`without the benefit of discovery.
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`30. Exemplary Infringing Services include, without limitation, systems and methods
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`used by Defendant in connection with, at least, its offset sheet-fed and web printing services that
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`involve workflows related to plate-ready files and/or the generation of such files.
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`31. Exemplary Infringing Services do not include variable data printing because that
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`type of printing does not involve the generation of a plate-ready file.
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`32. Defendant has sufficient experience and knowledge of computer to plate
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`technology generally, and of its systems and methods specifically, to determine which of its
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`systems and methods involve the generation of plate-ready files.
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`33. Defendant has sufficient experience and knowledge of computer to plate
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`technology generally, and of its systems and methods specifically, to determine which of its
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`systems and methods do not involve the generation of plate-ready files.
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`34. Defendant has had constructive and actual notice of the ’349 Patent due to the
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`significant publicity in the printing industry regarding the ’349 Patent and lawsuits involving
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`allegations of infringement of the ’349 Patent.
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`35. Upon information and belief, Defendant was a member of PIA on December 17,
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`2013, when PIA’s CEO, Mr. Makin testified before Congress. PIA issued a number of press
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`releases regarding Mr. Makin’s testimony, and during his testimony he directly referenced a
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`cease and desist letter sent by CTP’s counsel to an alleged infringer.
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`36. On information and belief, Defendant will continue to infringe the ’349 Patent
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`unless enjoined by this Court.
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`6776492.1/46728-00002
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`Petitioners' Exhibit 1011, pg. 9
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`Case 1:15-cv-01470-MJG Document 1 Filed 04/15/15 Page 10 of 79
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`37. On information and belief, Defendant’s infringement of the ’349 Patent is, has
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`been, and continues to be willful and deliberate in whole or in part because Defendant was aware
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`of the ’349 Patent from the substantial publicity in the printing industry relating to the ’349
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`Patent, Defendant’s membership in PIA, and Mr. Makin’s testimony and related press releases.
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`Defendant has also received this Complaint, and yet continues to engage in its infringing
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`conduct.
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`38. As a direct and proximate result of Defendant’s infringement of the ’349 Patent,
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`CTP has been and continues to be damaged in an amount yet to be determined.
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`39. Unless Defendant’s ongoing infringement is enjoined, CTP will suffer irreparable
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`injury for which there is no adequate remedy at law.
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`40. This is an exceptional case such that CTP should be entitled to its reasonable
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`attorney fees and expenses incurred in prosecuting this action and defending any counterclaims
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`brought by Defendant.
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`IX. REQUEST FOR RELIEF
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`Wherefore, CTP requests the following relief:
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`1. A judgment in favor of CTP that Defendant has infringed claims 4-9 of the ’349
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`Patent and that such infringement was willful;
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`2. A permanent injunction enjoining Defendant and its officers, directors, agents,
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`servants, affiliates, employees, divisions, branches, subsidiaries, parents, and all other actors
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`acting in active concert therewith from infringing the ’349 Patent;
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`3. A judgment and order requiring Defendant to pay CTP its damages in an amount
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`not less than a reasonable royalty, treble damages, costs, expenses, and prejudgment and post-
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`6776492.1/46728-00002
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`Petitioners' Exhibit 1011, pg. 10
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`Case 1:15-cv-01470-MJG Document 1 Filed 04/15/15 Page 11 of 79
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`judgment interest for Defendant’s infringement of the ’349 Patent, as provided under 35 U.S.C. §
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`284;
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`4. A judgment and order finding that this is an exceptional case within the meaning of
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`35 U.S.C. § 285, and awarding to CTP its reasonable attorney fees and expenses; and
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`5. Any and all other relief that the Court deems just and proper.
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`X. JURY DEMAND
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`CTP requests a jury for all issues so triable.
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`Dated: April 15, 2015
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`Respectfully submitted,
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`MITCHELL SILBERBERG & KNUPP LLP
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`By: s/ Bradley J. Mullins
`Bradley J. Mullins (SBN No. 006262012)
`bym@msk.com
`12 East 49th Street, 30th Floor
`New York, New York 10017
`Telephone: (212) 509-3900
`Facsimile: (212) 509-7239
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`and
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`Samuel F. Miller (BPR No. 22936) (pro hac
`forthcoming)
`Maia T. Woodhouse (BPR No. 30438) (pro hac
`forthcoming)
`Baker Donelson Center, Suite 800
`211 Commerce Street
`Nashville, Tennessee 37201
`Telephone: (615) 726-5594
`Facsimile: (615) 744-5594
`Email: smiller@bakerdonelson.com
`mwoodhouse@bakerdonelson.com
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`Attorneys for Plaintiff CTP Innovations, LLC
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`6776492.1/46728-00002
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`Petitioners' Exhibit 1011, pg. 11
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`Case 1:15-cv-01470-MJG Document 1 Filed 04/15/15 Page 12 of 79
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`Of Counsel:
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`BAKER, DONELSON, BEARMAN,
`CALDWELL & BERKOWITZ, P.C.
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`L. Clint Crosby, GA Bar No. 197877
`Monarch Plaza, Suite 1600
`3414 Peachtree Road, N.E.
`Atlanta, Georgia 30326
`Telephone: (678) 406-8702
`Fax: (678) 406-8802
`Email: ccrosby@bakerdonelson.com
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`Attorney for CTP Innovations, LLC
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`6776492.1/46728-00002
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`Petitioners' Exhibit 1011, pg. 12
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`Case 1:15-cv-01470-MJG Document 1 Filed 04/15/15 Page 13 of 79
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`EXHIBIT 1
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`EXHIBIT 1
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`Petitioners' Exhibit 1011, pg. 13
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`Case 1:15-cv-01470-MJG Document 1 Filed 04/15/15 Page 14 of 79
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`Petitioners' Exhibit 1011, pg. 14
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`Case 1:15-cv-01470-MJG Document 1 Filed 04/15/15 Page 15 of 79
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`Petitioners' Exhibit 1011, pg. 15
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`Case 1:15-cv-01470-MJG Document 1 Filed 04/15/15 Page 16 of 79
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`Petitioners' Exhibit 1011, pg. 16
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`Case 1:15-cv-01470-MJG Document 1 Filed 04/15/15 Page 17 of 79
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`Petitioners' Exhibit 1011, pg. 17
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`Case 1:15-cv-01470-MJG Document 1 Filed 04/15/15 Page 18 of 79
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`Petitioners' Exhibit 1011, pg. 18
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`Case 1:15-cv-01470-MJG Document 1 Filed 04/15/15 Page 19 of 79
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`Petitioners' Exhibit 1011, pg. 19
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`Case 1:15-cv-01470-MJG Document 1 Filed 04/15/15 Page 20 of 79
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`Petitioners' Exhibit 1011, pg. 20
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`Case 1:15-cv-01470-MJG Document 1 Filed 04/15/15 Page 21 of 79
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`Petitioners' Exhibit 1011, pg. 21
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`Case 1:15-cv-01470-MJG Document 1 Filed 04/15/15 Page 22 of 79
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`Petitioners' Exhibit 1011, pg. 22
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`Case 1:15-cv-01470-MJG Document 1 Filed 04/15/15 Page 23 of 79
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`Petitioners' Exhibit 1011, pg. 23
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`Case 1:15-cv-01470-MJG Document 1 Filed 04/15/15 Page 24 of 79
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`Petitioners' Exhibit 1011, pg. 24
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`Case 1:15-cv-01470-MJG Document 1 Filed 04/15/15 Page 25 of 79
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`Petitioners' Exhibit 1011, pg. 25
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`Case 1:15-cv-01470-MJG Document 1 Filed 04/15/15 Page 26 of 79
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`Petitioners' Exhibit 1011, pg. 26
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`Case 1:15-cv-01470-MJG Document 1 Filed 04/15/15 Page 27 of 79
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`Petitioners' Exhibit 1011, pg. 27
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`Case 1:15-cv-01470-MJG Document 1 Filed 04/15/15 Page 28 of 79
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`Petitioners' Exhibit 1011, pg. 28
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`Case 1:15-cv-01470-MJG Document 1 Filed 04/15/15 Page 29 of 79
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`Petitioners' Exhibit 1011, pg. 29
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`Case 1:15-cv-01470-MJG Document 1 Filed 04/15/15 Page 30 of 79
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`Petitioners' Exhibit 1011, pg. 30
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`Case 1:15-cv-01470-MJG Document 1 Filed 04/15/15 Page 31 of 79
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`Petitioners' Exhibit 1011, pg. 31
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`Case 1:15-cv-01470-MJG Document 1 Filed 04/15/15 Page 32 of 79
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`EXHIBIT 2
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`EXHIBIT 2
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`Petitioners' Exhibit 1011, pg. 32
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`Case 1:15-cv-01470-MJG Document 1 Filed 04/15/15 Page 33 of 79
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`Statement of Michael F. Makin, MBA
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`President & CEO of
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`Printing Industries of America
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`Before the
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`Senate Committee on the Judiciary
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`“Protecting Small Business and Promoting Innovation by
`Limiting Patent Troll Abuse”
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`December 17, 2013
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`Petitioners' Exhibit 1011, pg. 33
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`Case 1:15-cv-01470-MJG Document 1 Filed 04/15/15 Page 34 of 79
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`I.
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`Introduction
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`Thank you, Chairman Leahy and Ranking Member Grassley. It is a privilege
`to address the members of the Judiciary Committee on an issue very near and
`dear to the printing industry in America. Protecting small business and
`promoting innovation are passions of mine; therefore, I am pleased the
`Committee is examining the harm caused to both by abusive patent
`practices in this country.
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`Pure and simple, printers promote free speech. Our mission is entirely
`compatible with the promotion of progress and the useful arts which is the
`constitutional beacon of this nation’s copyright and patent laws. Print is also
`the proverbial “poster child” for Main Street and small business.
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`Today I’m speaking on behalf of America’s largest trade association
`representing the printing and graphic communications industry. There are
`more than 30,000 individual printing plants in this country in virtually every
`city and town in America. The average printing company employs just 27
`workers and more than 60 percent of printing companies are family-owned
`businesses – a statistic to which I know the Chairman can relate personally. In
`aggregate, we employed over 800,000 workers and in 2012 shipped over $147
`billion in products.
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`Print is an historic industry that traces its roots to Johannes Gutenberg and
`Benjamin Franklin; yet, its modern face is high-tech and innovative – it must
`be in order to survive. Today’s print marketplace is all about using a cross-
`media mix to drive the economy. Companies are transforming themselves
`well beyond the traditional stereotype of a printer. They set up digital
`storefronts to make it easy for customers to order print over the Web; execute
`personalized marketing campaigns for customers that integrate print, digital
`communications, and social media; and offer a host of other services such as
`database management and fulfillment. Digital printing as a process has
`grown from just under one percent of the overall printing industry in 2009 to
`10.6 percent in 2010 – and continues to be one of the fastest growing
`segments in our industry. In fact, many printing firms are changing their
`company names to reflect the new world of integrated communications.
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`Petitioners' Exhibit 1011, pg. 34
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`Case 1:15-cv-01470-MJG Document 1 Filed 04/15/15 Page 35 of 79
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`Unfortunately, we’re also an industry that has attracted the damaging attention
`of patent assertion entities (PAE) or “patent trolls.” I realize that there
`is no concrete legal definition of a patent troll, so my testimony will be based
`on the belief that a PAE is a company whose business model is to
`obtain patents primarily to pursue licensing fees and/or litigation against
`manufacturers that are already using a patented technology. Patent trolls in our
`estimation do not innovate, do not promote economic growth, and do
`not contribute to the greater good of education or scientific research. Most
`importantly, patent trolls do not create jobs – our businesses do.
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`Patent trolls are increasingly aggressive and more and more predatory. A
`study commissioned by the US Government Accountability Office found
`trolls now account for almost 60 percent of patent infringement lawsuits in
`America. In 2011, patent troll activity cost the US economy $80 billion dollars
`and productive companies made $29 billion in direct payouts. In 2012, trolls
`sued more non-tech companies than tech, spanning a wide range of industries.
`Given all of this activity, it was only a matter of time before trolls began
`targeting America’s quintessential small business industry – the printing and
`graphic communications industry – an industry in transition and one which
`employs new developing technologies every day.
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`II. Patent Trolls Target the Printing Industry
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`Prior to 2013, it was relatively unknown for printing companies to be accused
`of patent infringement. That is no longer the case. Owners of patents covering
`Quick Response (QR) codes, scanning, computer-to-plate workflow, and
`online ordering are all approaching printers demanding a licensing fee or
`threatening costly litigation. Currently we know of eight patent owners –
`many of which may be considered trolls – that are seeking licensing fees from
`printers. All encounters follow a similar path, with printers receiving a mailed
`letter, often from an attorney, alleging infringement of a specific technology
`used in the company’s administration, production, or customer
`communications. The letter briefly describes the patents and technology in
`question and offers to provide a license for their continued use. The fee may
`be identified and the threat of a lawsuit is either stated or implied. Rarely will
`the patent owner provide specific evidence of infringement and the specific
`claims at issue.
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`Petitioners' Exhibit 1011, pg. 35
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`Case 1:15-cv-01470-MJG Document 1 Filed 04/15/15 Page 36 of 79
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`For small printers especially, this is often their first experience with patent law
`and civil litigation – not to mention “trolling” – and they are astounded at the
`dollar figures included in these demand letters. One common demand letter
`issued to a Kansas printer with just 40 employees asked for a $75,000
`licensing payment within two weeks of issuing its notice; after two weeks, the
`letters indicated the amount would rise to $95,000.
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`Needless to say threats of litigation are intimidating and place undue stress on
`an industry already struggling with low profits and challenging demand. The
`general estimate is that printers are forced to spend between $10,000
`to $15,000 initially just to hire lawyers to investigate the claims of their
`apparent infringement. This is on top of anywhere from 125-150 hours
`printers must devote to this activity. One of our members in Colorado reports
`that he has a two-inch pile of patent claim charts on his desk; his company is
`already in its six month of ongoing patent troll activity.
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`Keep in mind, Mr. Chairman, that these are job creators in the manufacturing
`sector; these are not attorneys. Yet, there are now dozens upon dozens of
`printing company owners who have been forced to become patent ligation
`experts. As the president of one Virginia printing company aptly stated:
`“Patent trolling is a colossal distraction and…a drain on everybody.”
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`III. Patent Trolls Chill Growth & Innovation in the Printing Industry
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`In our estimation, the stock-in-trade of patent trolls are software- and
`computer-related patents that have broadly written claims addressing the
`method of accomplishing certain activities. The patents are often years old
`with trolls asserting that their patents cover technology that has already
`advanced a generation or two since the patent was issued. In my written
`statement, I’ve included a chart that details the known patent infringement
`actions against the printing industry, but I would like to highlight three
`examples:
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`Computer-to-Plate Technology: This patent relates to how a digital file, like a
`PDF file, is handled and manipulated in a print production operation up until
`the time it is used to image a printing plate. This method of digital workflow
`and plate imaging was new in the 1990s when the patent was issued but has
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`Petitioners' Exhibit 1011, pg. 36
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`Case 1:15-cv-01470-MJG Document 1 Filed 04/15/15 Page 37 of 79
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`become ubiquitous in the industry now. We believe there is compelling
`evidence to support that it should never have been issued to begin with and
`have a petition to this effect before the United States Patent &
`Trademark Office (PTO). Fast forward 15 years later, however, and a shell
`company run by lawyers, which acquired the antiquated patent and which has
`no technological or innovative tie to the patent, has issued demand letters to
`printers all over the United States seeking licensing fees or threatening
`litigation. At least 35 of these companies have been sued.
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`Web-to-Print Technology: In this case, the combined patents describe the use
`of an on-line system for pricing and accepting orders, accepting payment,
`checking inventory, preparing shipments and more. Thousands of companies
`inside and outside of the printing industry use this general method of
`accepting orders on-line today. To date, we know of seven printers – that have
`been sued based on this technology. Ironically, they are being sued based on
`technology methods invented in the mid-1990s to accept orders for products
`other than what our members produce. Essentially, the claims are from a pre-
`Internet era where nobody used a web portal to conduct business. The patent
`troll in this case will not even reveal how much the licensing fee is until a
`printer signs a non-disclosure agreement with it. So far, the printers in
`question have refused to sign.
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`QR Code Technology: This patent deals with a use of an “