Case 1:15-cv-00261-RGA Document 21 Filed 06/01/15 Page 1 of 11 PageID #: 1285
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
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`CHESTNUT HILL SOUND INC.,
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`v.
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`APPLE INC.,
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`Plaintiff,
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`Defendant.
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`C.A. No. 15-261-RGA
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`JURY TRIAL DEMANDED
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`PLAINTIFF’S FIRST AMENDED COMPLAINT
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`Plaintiff Chestnut Hill Sound Inc. (“Chestnut Hill Sound”) files this First Amended
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`Complaint against Defendant Apple Inc. (“Apple”) for patent infringement under 35 U.S.C. §
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`271. Plaintiff alleges, based on its own personal knowledge with respect to its own actions and
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`based upon information and belief with respect to all others’ actions, as follows:
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`THE PARTIES
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`1.
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`Plaintiff Chestnut Hill Sound is a Delaware corporation organized and existing under the
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`laws of the State of Delaware, and maintains its principal place of business in Newton,
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`Massachusetts. Chestnut Hill Sound maintains a website at http://www.chillsound.com/.
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`2.
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`Defendant Apple is a California corporation with its principal place of business at
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`1 Infinite Loop, Cupertino, California 95014. Apple has designated The Corporation
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`Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware
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`19801 as its agent for service of process.
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`JURISDICTION AND VENUE
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`3.
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`This action includes a claim of patent infringement arising under the patent laws of the
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`United States, 35 U.S.C. §§ 1 et seq. This Court has jurisdiction over this action pursuant
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`to 28 U.S.C. §§ 1331 and 1338(a).
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`CHS Ex. 2014
`Apple v. CHS IPR2016-00794
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`4.
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`This Court has personal jurisdiction over Apple. Apple conducts business and has
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`committed acts of patent infringement and has induced acts of patent infringement by
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`others in this district and has contributed to patent infringement by others in this district,
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`the State of Delaware, and elsewhere in the United States. Apple also has affirmatively
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`availed itself of the benefits of this district by filing complaints and counterclaims here.
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`5.
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`Venue is proper in this district pursuant to 28 U.S.C. §§ 1391(b), 1391(c) and 1400(b)
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`because, among other things, Defendant is subject to personal jurisdiction in this district,
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`has regularly conducted business in this judicial district, and certain of the acts
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`complained of herein occurred in this judicial district.
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`ASSERTED PATENTS
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`6.
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`On January 3, 2012, the United States Patent and Trademark Office duly and legally
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`issued U.S. Patent No. 8,090,309 (the “’309 patent”) entitled “Entertainment System with
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`Unified Content Selection.” A copy of the ’309 patent is attached as Exhibit A.
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`7.
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`On May 13, 2014, the United States Patent and Trademark Office duly and legally issued
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`U.S. Patent No. 8,725,063 (the “’063 patent”) entitled “Multi-Mode Media Device Using
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`Metadata to Access Media Content.” A copy of the ’063 patent is attached as Exhibit B.
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`8.
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`Chestnut Hill Sound owns all rights, title, and interest in and to the ’309 and ’063 patents
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`(the “patents-in-suit”) and possesses all rights of recovery.
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`9.
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`Chestnut Hill Sound incorporates the patents-in-suit herein by reference.
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`10.
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`On or about July 29, 2004, Chestnut Hill Sound was originally incorporated in
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`FACTUAL ALLEGATIONS
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`Massachusetts as The Multinational Sound Company, Inc. On or about August 31, 2005,
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`The Multinational Sound Company, Inc. changed its name to Chestnut Hill Sound Inc.
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`On or about January 4, 2007, Chestnut Hill Sound Inc. was migrated from Massachusetts
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`to Chestnut Hill Sound Inc., a Delaware corporation (“Chestnut Hill Sound”).
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`Throughout this complaint, “Chestnut Hill Sound” will be used to refer to The
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`Multinational Sound Company, Inc. and Chestnut Hill Sound Inc., regardless of the time
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`period.
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`11.
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`In October 2004, Chestnut Hill Sound disclosed to Apple its concept that Apple’s iPod
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`could be the center of the digital audio system for the home and office if it could be
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`controlled, inter alia, from a true bi-directional remote control.
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`12.
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`On or about October 28, 2004, representatives of Chestnut Hill Sound met with Apple
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`representatives, including Don Ginsburg, iPod Connector License Mgr, Craig Keithley,
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`iPod Evangelist and David Harrington, Manager Hardware Developer Relations, in
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`Cupertino, CA.
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`13.
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`During the October 28, 2004 meeting, Chestnut Hill Sound disclosed its business strategy
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`to Apple, including its plans to develop new products that worked with the iPod.
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`14.
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`Based on the filing of Chestnut Hill Sound’s provisional patent applications that had just
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`taken place a day earlier, certain of Chestnut Hill Sound’s presentation materials at the
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`October 28, 2004 meeting were marked “patent pending.”
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`15.
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`Apple’s representatives told the representatives of Chestnut Hill Sound at the conclusion
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`of that meeting that they were impressed with Chestnut Hill Sound’s technology plans
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`and that no one else in the industry had approached Apple with a similar plan.
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`16.
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`In March 2005, Chestnut Hill Sound demonstrated its confidential and proprietary system
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`emulator to Don Ginsburg, Craig Keithley, Rick Jackman, Apple Store US Merchandise
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`Manager, Eric Romberg, Apple Website Merchandise Manager and Greg Zeren, Apple
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`Store Marketing Manager via videoconference.
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`17.
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`On or about August 19, 2005, Chestnut Hill Sound performed an in-person demonstration
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`in Cupertino, CA to Don Ginsburg and the Apple Retail Store team of Chestnut Hill
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`Sound’s first integrated hardware and software product prototype that was marked on its
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`external rear panel with a Patent Pending notice. At Mr. Ginsburg’s request, Chestnut
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`Hill Sound representatives allowed Mr. Ginsburg to take temporary custody of the
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`prototype in order to show Chestnut Hill Sound’s prototype to representatives of Apple’s
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`senior management.
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`18.
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`On or about October 7, 2005, CHS presented its product strategy to Apple. The
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`presentation specifically discussed CHS’s “patent pending” remote control technology.
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`See Exhibit C at 16 (“Patent Pending” notice); id. at 6 (“Easy-to-use, intuitive remote that
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`completely controls a wide variety of digital music sources”).
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`19.
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`At the Macworld tradeshow in January 2007, the same event at which Apple introduced
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`the iPhone to the public, Chestnut Hill Sound launched its first product, named GeorgeTM,
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`an integrated iPod audio system. GeorgeTM was named one of Macworld Magazine’s
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`Best of Show Award winners and was subsequently recognized as a Product of the Year
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`by PC World and Macworld magazines. On January 17, 2007, Chestnut Hill Sound’s first
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`pending utility patent application (filed in 2005, based on the 2004 and 2005 priorities of
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`its provisional patent applications) was published by the United States Patent and
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`Trademark Office.
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`20.
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`Chestnut Hill Sound’s first retail partner for distribution of GeorgeTM was with Apple’s
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`retail stores and Apple.com. Initially, the retail distribution relationship included only
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`Apple’s flagship stores, but was expanded to approximately eighty stores and continued
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`through late 2008.
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`21.
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`Chestnut Hill Sound secured widespread distribution of GeorgeTM in the summer of 2008,
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`with Best Buy, Sharper Image, Tweeter, and other retailers. Chestnut Hill Sound also
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`secured online distribution through Amazon.com.
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`22.
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`From October 2004 through late 2008, Chestnut Hill Sound raised over $5 million of debt
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`and equity investment.
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`23.
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`In October 2008, Chestnut Hill Sound was forced to cease development and
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`manufacturing of GeorgeTM.
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`24.
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`In late 2008, Chestnut Hill Sound discussed with Apple the benefits of Chestnut Hill
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`Sound’s patent pending technologies. Shortly thereafter, Apple submitted to the United
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`States Patent and Trademark Office certain of Chestnut Hill Sound’s patent applications
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`as prior art to some of its own pending patent applications.
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`25.
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`At no point during its meetings and discussions with Apple did Chestnut Hill Sound grant
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`Apple a license to Chestnut Hill Sound’s intellectual property, including trade secrets and
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`its then pending patent applications. Chestnut Hill Sound never signed or agreed to any
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`covenant not to enforce Chestnut Hill Sound’s intellectual property against Apple. See
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`Exhibit D.
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`26.
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`Chestnut Hill Sound’s patents and patent applications were cited as prior art during the
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`prosecution of numerous patents owned by Apple, including for example, U.S. Patent
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`Nos. 8,315,555; 8,986,029; 7,567,777; 7,702,279; 8,041,300; 8,280,465; 8,369,785;
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`8,478,913; and 8,762,605.
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`27.
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`The patents-in-suit generally cover a method of using a media device as a remote control
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`in two modes. The first mode is a method to select and play content on the media device
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`itself. The second mode is a method to use the media device to control a remote media
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`source, either by selecting and playing content on the device being controlled, or by using
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`the media device to request content from a remote source on the Internet and send that
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`content to an output device that is not the media device.
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`28.
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`Apple has committed and continues to commit acts of infringement under 35 U.S.C. §
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`271 (i) with any version of numerous Apple hardware products (including, for example,
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`iPhone, iPhone 3G, iPhone 3GS, iPhone 4, iPhone 4S, iPhone 5, iPhone 5C, iPhone 5S,
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`iPhone 6, iPhone 6 Plus, iPad, iPad 2, iPad 3rd Generation, iPad 4th Generation, iPad
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`mini, iPad mini 2, iPad mini 3, iPad Air, iPad Air 2, iPod Touch 1st generation, iPod
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`Touch 2nd generation, iPod Touch 3rd generation, iPod Touch 4th generation, and iPod
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`Touch 5th generation, and any later models); (ii) with any version of Apple Watch,
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`Apple Watch Sport, and Apple Watch Edition, paired with an iPhone 5, iPhone 5C,
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`iPhone 5S, iPhone 6, or iPhone 6 Plus running iOS 8.0 or later; (iii) with any version of
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`Apple’s iTunes media server when used in combination with Apple’s hardware products
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`(e.g., the products listed in (i)) or Apple Watches (e.g., the products listed in (ii)); (iv)
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`with Apple’s Remote app for iTunes; (v) with Apple’s Music app on Apple Watches; and
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`(vi) with any version of Apple’s iRadio server when used in combination with Apple’s
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`hardware products (e.g., the products listed in (i)) or Apple Watches (e.g., the products
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`listed in (ii)) (the “Accused Instrumentalities”). In committing these acts of infringement,
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`Apple acted despite an objectively high likelihood that its actions constituted
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`infringement of at least one valid and enforceable patent, and Apple knew or should have
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`known that its actions constituted an unjustifiably high risk of infringement of at least one
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`valid and enforceable patent.
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`29.
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`30.
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`31.
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`32.
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`33.
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`34.
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`COUNT ONE: PATENT INFRINGEMENT
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`Plaintiff incorporates by reference the preceding paragraphs as if fully set forth herein.
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`As described below, Apple has infringed and continues to infringe the patents-in-suit.
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`Apple’s Accused Instrumentalities meet the claims of the patents-in-suit.
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`Apple makes, uses, offers to sell, sells and imports Apple’s Accused Instrumentalities
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`within the United States or into the United States without authority from Plaintiff.
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`Apple therefore infringes the patents-in-suit under 35 U.S.C. § 271(a).
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`Apple has actual knowledge of the patents-in-suit. For example, Chestnut Hill Sound
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`informed Apple of its pending patent applications during meetings with Apple prior to
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`and subsequent to entering the Made for iPod license program in 2004. Chestnut Hill
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`Sound also discussed the sale of or license to its intellectual property with Apple in 2008.
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`35.
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`Apple indirectly infringes the patents-in-suit by inducing infringement by others, such as
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`end-user customers, by, for example, encouraging and instructing end-user customers to
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`install and use the Apple Remote app in the United States, and by preinstalling the
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`Remote app on Apple Watches. As another example, Apple induces infringement by
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`preinstalling the Remote and Music apps on the Watch and encouraging and instructing
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`customers to use the Remote and Music apps on the Apple Watch in the United States.
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`Apple took the above actions intending to cause infringing acts by others.
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`Apple was aware of the patents-in-suit and knew that the others’ actions, if taken, would
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`constitute infringement of those patents. Alternatively, Apple subjectively believed there
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`was a high probability that others would infringe the patents-in-suit but took deliberate
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`steps to avoid confirming that it was actively inducing infringement by others. Apple
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`therefore infringes the patents-in-suit under 35 U.S.C. § 271(b).
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`36.
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`37.
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`38.
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`Apple indirectly infringes the patents-in-suit by contributing to infringement by others,
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`such as end-user customers by offering to sell and selling within the United States
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`components that constitute a material part of the inventions claimed in the patents-in-suit,
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`and components of products that are used to practice one or more processes/methods
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`covered by the claims of the patents-in-suit and that constitute a material part of the
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`inventions claimed in the patents-in-suit. Such components are, for example, the Apple
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`Remote app, the components of an Apple computer that allow that device to be controlled
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`by the Apple Remote app, and the download package that contains the Apple Remote
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`App. Apple’s end-user customers directly infringe Plaintiff’s patents by, for example,
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`installing and using the Apple Remote app in the United States and by making a device
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`that meets the elements of the patents-in-suit with the download package. As another
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`example, Apple’s end-users directly infringe Plaintiff’s patents by using the preinstalled
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`Remote and Music apps on the Apple Watch.
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`39.
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`In offering to sell and selling the components specified above, Apple has known these
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`components to be especially made or especially adapted for use in an infringement of the
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`patents-in-suit and that these components are not a staple article or commodity of
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`commerce suitable for substantial non-infringing use. Alternatively, Apple subjectively
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`believed there was a high probability that these components to be especially made or
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`especially adapted for use in an infringement of the patents-in-suit and that these
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`components are not a staple article or commodity of commerce suitable for substantial
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`non-infringing use but took deliberate steps to avoid confirming the same. Apple
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`therefore infringes the patents-in-suit under 35 U.S.C. § 271(c).
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`40.
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`Apple’s acts of infringement have caused damage to Chestnut Hill Sound. Chestnut Hill
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`Sound is entitled to recover from Apple the damages sustained by Chestnut Hill Sound as
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`a result of Apple’s wrongful acts in an amount adequate to compensate Chestnut Hill
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`Sound for Apple’s infringement subject to proof at trial. In addition, the infringing acts
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`and practices of Apple have caused, are causing, and, unless such acts and practices are
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`enjoined by the Court, will continue to cause immediate and irreparable harm to Chestnut
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`Hill Sound for which there is no adequate remedy at law, and for which Chestnut Hill
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`Sound is entitled to injunctive relief under 35 U.S.C. § 283.
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`41.
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`Apple has committed and continues to commit acts of infringement under
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`35 U.S.C. § 271 with the Accused Instrumentalities. In committing these acts of
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`infringement, Apple acted despite an objectively high likelihood that its actions
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`constituted infringement of a valid patent, and Apple actually knew or should have
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`known that its actions constituted an unjustifiably high risk of infringement of a valid and
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`enforceable patent.
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`42.
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`43.
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`Apple’s infringement of the patents-in-suit has been and continues to be willful.
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`To the extent that Apple releases any new version of the Accused Instrumentalities, such
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`instrumentalities will meet the claims of the patents-in-suit and infringe 35 U.S.C. §
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`271(a)-(c) in ways analogous to Apple’s current infringement described above.
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`DEMAND FOR JURY TRIAL
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`Plaintiff hereby demands a jury for all issues so triable.
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`Plaintiff hereby seeks the following relief from this Court:
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`PRAYER FOR RELIEF
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`1. A judgment that Apple has directly infringed the patents-in-suit, contributorily infringed
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`the patents-in-suit, and induced the infringement of the patents-in-suit;
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`2. A preliminary and permanent injunction preventing Apple and its officers, directors,
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`agents, servants, employees, attorneys, licensees, successors, and assigns, and those in
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`active concert or participation with any of them, from directly infringing, contributorily
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`infringing, and inducing the infringement of the patents-in-suit;
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`3. A judgment that Apple’s infringement of the patents-in-suit has been willful;
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`4. A judgment and order requiring Apple to pay Plaintiff damages under 35 U.S.C. § 284,
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`including supplemental damages for any continuing post-verdict infringement through
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`entry of the final judgment, with an accounting, as needed, and enhanced damages for
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`willful infringement as provided by 35 U.S.C § 284;
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`5. A ruling that this case be found to be exceptional under 35 U.S.C. § 285, and a judgment
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`awarding to Plaintiff its attorneys’ fees incurred in prosecuting this action;
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`6. A judgment and order requiring Apple to pay Plaintiff the costs of this action (including
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`all disbursements);
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`7. A judgment and order requiring Apple to pay Plaintiff pre-judgment and post-judgment
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`interest on the damages awarded;
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`8. In the event a permanent injunction preventing future acts of infringement is not granted,
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`an order requiring Apple to pay to Plaintiff an ongoing royalty for its continued
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`infringement with periodic accountings; and
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`9. Such other and further relief as the Court may deem just and proper.
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`Of Counsel:
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`Warren J. McCarty
`Bradley W. Caldwell
`Jason D. Cassady
`John Austin Curry
`CALDWELL CASSADY & CURRY
`2101 Cedar Springs Road, Suite 1000
`Dallas, Texas 75201
`Telephone: (214) 888-4848
`Facsimile: (214) 888-4849
`wmccarty@caldwellcc.com
`bcaldwell@caldwellcc.com
`jcassady@caldwellcc.com
`acurry@caldwellcc.com
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`Dated: June 1, 2015
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`ASHBY & GEDDES
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`/s/ Andrew C. Mayo
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`John G. Day (#2403)
`Tiffany Geyer Lydon (#3950)
`Andrew C. Mayo (#5207)
`500 Delaware Avenue, 8th Floor
`P.O. Box 1150
`Wilmington, DE 19899
`(302) 654-1888
`jday@ashby-geddes.com
`tlydon@ashby-geddes.com
`amayo@ashby-geddes.com
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`Attorneys for Plaintiff
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