Case 3:13-cv-02656-BEN-NLS Document 9 Filed 11/26/13 PageID.690 Page 1 of 15
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`MORGAN, LEWIS & BOCKIUS LLP
`MARIO MOORE (SBN 231644)
`mario.moore@morganlewis.com
`5 Park Plaza
`Suite 1750
`Irvine, CA 92614
`Tel: 949.399.7000
`Fax: 949.399.7001
`JAMES A. GLENN (admitted pro hac vice)
`jglenn@morganlewis.com
`1000 Louisiana Street, Suite 4000
`Houston, TX 77002
`Tel: 713.890.5000
`Fax: 713.890.5001
`Attorneys for Plaintiff
`N4D, LLC
`
`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF CALIFORNIA
`
`N4D, LLC,
`
`Plaintiff,
`
`vs.
`LEGEND3D, INC. f/k/a LEGEND
`FILMS, INC., BARRY B. SANDREW,
`CHARLES GREGORY PASSMORE
`a/k/a GREG PASSMORE, and BIRD
`ROCK MULTIMEDIA, INC. d/b/a
`PASSMORE LABS and/or Z MEDIA,
`Defendants.
`
`Case No. 3:13-CV-02656-BEN-NLS
`FIRST AMENDED COMPLAINT
`FOR DECLARATORY RELIEF
`(PATENT)
`DEMAND FOR JURY TRIAL
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`DB1/ 76785219.2
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`FIRST AMENDED COMPLAINT
`CASE NO. 3:13-CV-02656-BEN-NLS
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`MORGAN, LEWIS &
`BOCKIUS LLP
`ATTORNEYS AT LAW
`IRVINE
`
`Prime Focus Ex 1024-1
`Prime Focus v Legend3D
`IPR2016-01243
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`

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`Case 3:13-cv-02656-BEN-NLS Document 9 Filed 11/26/13 PageID.691 Page 2 of 15
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`Plaintiff, N4D, LLC (“N4D”), by and through its undersigned counsel,
`hereby alleges as follows:
`
`INTRODUCTION
`N4D operates a technology company specializing in the development
`1.
`of technology and software for the conversion of two dimensional (“2D”) films for
`three dimensional
`(“3D”) viewing, computer graphic rendering, volumetric
`rendering and related technology for the 3D viewing marketplace. N4D is also the
`successor in interest to 3DH Corporation a/k/a 3DH Company, LLC (“3DH”),
`which was a similarly situated company specializing in the same fields as N4D.
`2.
`Defendant Charles Gregory Passmore a/k/a Greg Passmore is, and at
`all relevant times hereto was, the President of Defendant Bird Rock Multimedia,
`Inc. d/b/a Passmore Labs and/or Z Media (collectively “Passmore”).
`3.
`From 2003 through 2009, Passmore
`entered into numerous
`employment
`agreements—and amendments
`thereto—with 3DH and N4D.
`Pursuant to those employment agreements, Passmore was hired for, among other
`things, the development of 2D to 3D film conversion, computer graphic rendering,
`volumetric rendering technology and software, and related technology for the 3D
`marketplace.
`Each of the employment agreements that Passmore signed with 3DH
`4.
`and N4D included provisions that all of the work and intellectual property that
`originated or was derived from the performance of Passmore’s duties would
`become the exclusive property of 3DH and/or N4D.
`5.
`On or about February 25, 2008, Passmore entered into a contract with
`Defendant Legend3D, Inc. f/k/a Legend Films, Inc. (“Legend”) and Legend’s
`founder, Defendant Barry B. Sandrew (“Sandrew”). The contract was titled “2D to
`3D Agreement” (the “Legend Agreement”), and provided that the parties wished
`“to enter into a business relationship to convert 2D content to 3D.” At the time of
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`IPR2016-01243
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`the original employment agreement between
`signing the Legend Agreement,
`Passmore and 3DH for development of 2D to 3D conversion technology—as well
`as three (3) subsequent amendments thereto—were in full effect.
`6.
`Legend holds itself out as “an innovative stereoscopic and visual
`effects company,” and claims that it “provides the highest-quality stereoscopic VFX
`and conversion in the industry.”
`7.
`On or about November of 2007, Passmore began filing a series of
`patent applications, the bases for which originated and/or were derived from the
`performance of Passmore’s duties pursuant to his employment agreements with
`3DH and/or N4D. The first of these applications was titled “SYSTEM AND/OR
`METHOD FOR AUTOMATED STEREOSCOPIC ALIGNMENT OF IMAGES”
`and was properly disclosed and assigned to 3DH per the employment agreements.
`This application, App. No. 11/986, 490, was filed on November 21, 2007 and was
`published on or about May 21, 2009, as Pub. No. 2009/0128621.
`8.
`On or about December 21, 2007, Passmore filed a provisional patent
`application, App. No. 61/016,355 (“’355 Provisional”), on behalf of—and paid for
`by—3DH. The patent attorney whom Passmore personally requested be used to
`file the ‘355 Provisional, was Joseph Mayo (“Mayo”), USPTO Customer 36067,
`Dalina Law Group, P.C. l/k/a ARC Patents (collectively “ARC”), 79120 Ivanhoe
`Ave., Suite 325, La Jolla, California 92037.
`9.
`On information and belief, it was not until on or about July 22, 2008,
`following questions by 3DH, that Passmore disclosed the ‘355 Provisional to 3DH.
`10. On or about December 22, 2008, Passmore—via Mayo and ARC—
`filed a patent application, App. No. 12/341,992 (“’992 Application”), claiming
`priority to the ‘355 Provisional. Passmore filed the ‘992 Application on behalf of
`3DH. On information and belief, neither Passmore nor anyone at ARC disclosed to
`3DH that they had filed the ‘992 Application on behalf of 3DH before, during, or
`after at the time of filing.
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`11. On or about February 18, 2009, Passmore unequivocally denied having
`filed a non-provisional application claiming priority to the ‘355 Provisional to 3DH,
`thus concealing the existence of the ‘992 Application from 3DH.
`12. On or about July 8, 2009, Passmore entered into an employment
`agreement with N4D following N4D’s succession of 3DH, under which Passmore
`agreed to provide additional services regarding the continued development of 2D to
`3D conversion technology, volumetric rendering, computer graphics rendering, and
`related technology (the “N4D Agreement”). The N4D Agreement was for a term of
`one year, from July 8, 2009 until July 8, 2010. The N4D Agreement continued and
`reaffirmed that all
`intellectual property that originated or was developed by
`Passmore during the course and scope of Passmore’s employment was the
`exclusive property of N4D.
`13. On or about August 17, 2009, Sandrew—via Mayo and ARC, the same
`firm and lawyer used to file patents on behalf of 3DH/N4D—filed a patent
`application, App. No. 12/542,498, as a continuation-in-part (“CIP”) to a previous
`patent application. This CIP, which listed Sandrew as the sole inventor, added new
`material describing stereoscopic 3D technology and 2D to 3D conversion, which
`was not included in the parent patent application. This new material
`included
`screenshots of N4D’s “Synth3D” proprietary software. This CIP application issued
`as U.S. Patent No. 7,907,793 (“’793 Patent”) (Exhibit A).
`14.
`Each issued claim of the ’793 Patent is supported by the material that
`was newly added in the CIP application. Stated differently, the parent patent
`application of the CIP application does not support the claims issued in the ’793
`Patent. For example, each independent claim of the ’793 Patent recites setting and
`applying a “depth parameter,” which is not disclosed in the parent patent
`application.
`15. However, the claims issued in the ’793 Patent find support in the
`disclosure of the ’992 Application. The ’992 Application, filed by Passmore eight
`FIRST AMENDED COMPLAINT
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`months prior to the CIP application, discloses depth information used to “provid[e]
`three-dimensional views from a two-dimensional image,” as recited in the Abstract
`of the ’992 Application. As a further example, the Abstract of the ’992 Application
`recites that “[d]epth information is assigned by the system to areas of a first image
`via a depth map.”
`the
`the development of
`16.
`Passmore—not Sandrew—was paid for
`Synth3D software by 3DH/N4D pursuant to the employment agreements signed
`between Passmore, 3DH and N4D. Synth3D is the exclusive property of N4D.
`17.
`Sandrew—via Mayo
`and ARC—subsequently filed numerous
`continuation, divisional, and CIP applications which contain the Synth3D software
`interface captures in addition to containing the 2D to 3D technology Passmore
`developed under his employment agreements with 3DH/N4D. Sandrew is listed as
`a co-inventor on each of these subsequent continuation applications along with
`Tony Baldridge and/or Jared Sandrew.
`18. Despite having been responsible for the development of N4D’s
`proprietary technology under his employment agreements, as well as providing
`N4D’s intellectual property to Sandrew and Legend as the basis for the continuation
`applications, Passmore is not listed as the inventor or co-inventor on any of the
`applications.
`Pursuant
`to his employment agreements, Passmore would be
`obligated to assign all rights to such patents to 3DH/N4D.
`19.
`In addition to the ‘793 Patent, these continuation applications were
`subsequently granted as U.S. Patent Nos. 8,396,328 (“’328 patent”) (Exhibit B);
`8,073,247 (“’247 patent”) (Exhibit C); 8,078,006 (“’006 patent”) (Exhibit D);
`8,160,390 (“’390 patent”) (Exhibit E); 8,401,336 (“’336 patent”) (Exhibit F); and
`8,385,684 (“’684 patent”) (Exhibit G) (collectively the “Legend Patents”). Various
`claims in these patents find support in the ’992 Application, although none of the
`patents lists Passmore as an inventor.
`20. None of these patent applications were disclosed to 3DH/N4D before,
`FIRST AMENDED COMPLAINT
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`during, or shortly after their filing by Passmore, Mayo or ARC.
`21.
`The ‘992 Application which Passmore, Mayo and ARC invoiced 3DH
`for, and later concealed from 3DH/N4D, went abandoned on or about June 8, 2012.
`This abandonment occurred after numerous attempts by the United States Patent
`and Trademark Office (“PTO”) to reach Passmore, Mayo and/or ARC—the named
`inventor and listed patent attorney/firm—were ignored. What’s more, over one
`month prior to the abandonment, the examiner from the PTO contacted Mayo/ARC
`on or about May 1, 2012, and left a voicemail that was never returned.
`22. During the period in which the ‘992 Application was in serious
`jeopardy of being abandoned, Sandrew filed multiple applications for the Legend
`Patents using the same counsel—Mayo and ARC—which the PTO could not get a
`response from Mayo and ARC regarding the ‘992 Application. This also coincided
`with Passmore entering into his 2008 agreement with Sandrew and Legend. A
`contract Passmore hid from 3DH/N4D.
`23.
`The value of the ‘992 Application that Passmore, Mayo and ARC
`allowed to be abandoned, as well as the Legend Patents which are based on the
`intellectual property invented by Passmore for which he was employed to invent via
`his employment agreements with 3DH/N4D, exceeds $75,000.00.
`24.
`There are at least four (4) separate court actions related to this matter:
`Bird Rock Multimedia, Inc. v. 3DH Communications, Inc., et al., San Diego
`Superior Court Case No. 37-2009-00100935-CU-BC-CTL; Bird Rock Multimedia,
`Inc. v. N4D, LLC, San Diego Superior Court Case No. 37-2010-00103118-CU-MC-
`CTL; N4D, LLC v. Passmore, et al., Georgia Superior Case No. 10-A-11197-7; and
`N4D, LLC v. Legend3D, Inc., et al., San Diego Superior Court Case No. 37-2012-
`00088480-CU-NP-CTL (collectively the “Pending Litigation”).
`Issues related to
`Passmore’s alleged breach of
`the Employment Agreements and the proper
`ownership of the Legend Patents are encompassed in the Pending Litigation, but
`none of the Courts where the Pending Litigation are being heard have jurisdiction to
`FIRST AMENDED COMPLAINT
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`decide the proper inventorship of the Legend Patents, as that jurisdiction rests
`exclusively with federal courts.
`25.
`Final disposition of the relief sought in the Pending Litigation cannot
`be accomplished until
`the issue of
`inventorship of
`the Legend Patents is
`determined.
`26. Among other relief, N4D seeks an order of specific performance that a
`change of inventorship be issued regarding the Legend Patents pursuant to 35
`U.S.C. § 256, naming Passmore as the inventor or, in the alternative, a co-inventor.
`PARTIES
`Plaintiff N4D is, and at all times relevant herein was, a limited liability
`27.
`corporation, organized and existing under the laws of the State of Delaware,
`operating a software development company in the County of Fresno, State of
`California, with its principal place of business at 865 S. Frankwood Ave., Reedley,
`California 93654.
`28.
`3DH was a corporation organized and existing under the laws of the
`State of Georgia, operating a software development company with its principal
`place of business in Suwanee, Georgia. N4D is the owner of certain assets
`previously owned by 3DH, including the claims alleged in this Complaint against
`Legend, Sandrew and Passmore, as a result of a June 22, 2009 foreclosure on
`3DH’s assets by 3DH’s primary creditor the Anthony and Vincent Balakian Family
`LLC (the “Balakian Company”) and a subsequent transfer of said assets by the
`Balakian Company to N4D.
`29. Defendant Legend3D, Inc. f/k/a Legend Films, Inc., on information
`and belief, is, and at all times relevant herein was, a corporation organized and
`existing under the laws of the State of California, operating in the County of San
`Diego, State of California, with its principal place of business at 2200 Faraday
`Avenue, Suite 100, Carlsbad, California 90038.
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`30. Defendant Barry B. Sandrew, on information and belief, is, and at all
`times relevant herein was, an individual residing and working in the County of San
`Diego, State of California, with his principal place of business at 2200 Faraday
`Avenue, Suite 100, Carlsbad, California 90038.
`31. Defendant Charles Gregory Passmore a/k/a Greg Passmore, on
`information and belief, is an individual residing and working in the County of San
`Diego, State of California, with his principal place of business at 4901 Morena
`Blvd., Suite 600, San Diego, California 92117.
`32. Defendant Bird Rock Multimedia, Inc. d/b/a Passmore Labs and/or Z
`Media is, and at all times relevant herein was, a corporation organized and existing
`under the laws of the State of California, operating in the County of San Diego,
`State of California, with its principal place of business at 4901 Morena Blvd., Suite
`600, San Diego, California 92117.
`JURISDICTION AND VENUE
`This Court has subject matter jurisdiction pursuant to 28 U.S.C. §
`33.
`1338(a)(1), because this is a civil action arising under an Act of Congress relating
`to patents and Plaintiff’s right to relief depends upon the resolution of a substantial
`question of federal patent
`law—namely the correction of inventorship of the
`Legend Patents.
`34. N4D’s declaratory relief claim regarding inventorship of issued United
`States patents is an action arising under 35 U.S.C. § 256, and therefore this Court
`has exclusive subject matter jurisdiction pursuant
`to 28 U.S.C. §§ 1331 and
`1338(a).
`
`A.
`
`BACKGROUND
`The Consulting Agreement and Amendments
`35. On or about May 1, 2003, 3DH entered into an employment agreement
`with Passmore titled “Software Development Agreement” (hereinafter
`the
`“Consulting Agreement”). The Consulting Agreement provided that Passmore was
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`the
`the development of software technology and software for
`working for
`conversion of 2D films for 3D viewing, computer graphic rendering, volumetric
`rendering, and related technology for the 3D viewing marketplace.
`36.
`The Consulting Agreement provided that all of the products developed
`by Passmore were to be developed as separate products and owned by 3DH in
`perpetuity.
`The Consulting Agreement stated that “under no circumstances shall
`37.
`[Passmore] be permitted to . . . use software which uses the Intellectual Property of
`[3DH].”
`The Consulting Agreement defined Intellectual Property, in relevant
`38.
`part, as “[a]ll proposals, research records, reports, recommendations, manuals,
`findings, evaluations, forms, reviews,
`information, software, data and written
`material originated or prepared by [Passmore’s] personnel
`for and in the
`performance of [Passmore’s] duties.” The Consulting Agreement further stated that
`this Intellectual Property “shall become the exclusive property of [3DH].”
`39.
`3DH and Passmore amended the Consulting Agreement on or about
`August 4, 2005 (“Amendment No. 1”), again on or about November 30, 2007
`(“Amendment No. 2”), and once more on or about January 7, 2008 (“Amendment
`No. 3”).
`40. Amendment No. 1 had an effective date of August 15, 2005 with a
`term of three (3) years. The stated purpose of Amendment No. 1 was to
`contemplate a payment schedule for additional work to be performed by Passmore
`for 3DH. Amendment No. 1 specifically stated that “[a]ll other non-conflicting
`clauses of the [Consulting Agreement] remain in force.”
`41.
`The purpose of Amendment No. 2 was to memorialize 3DH and
`Passmore’s agreement “to team up on 2D to 3D conversion work.”
`42. Amendment No. 3 was entered into on or about January 7, 2008 and
`extended the terms of the Consulting Agreement, as modified by Amendment No.
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`3, until August 15, 2011. In addition to memorializing the schedule and amount of
`payments for additional 2D to 3D work to be performed by Passmore for 3DH,
`Amendment No. 3 specifically provides that:
`
`“[3DH] and [Passmore] agree that [3DH] is the sole and exclusive
`owner of the complete list of products developed to date by [Passmore]
`on behalf of [3DH] as referenced in the attachment signed and dated
`12-28-07 and other future products that may be developed for [3DH]
`under the terms of this agreement.
`[Passmore] agrees that it will not
`sell or use the products listed without prior written consent from
`[3DH].”
`
`The attachment referenced in Amendment No. 3 specifically lists “2D-
`43.
`to-3D conversion,” as well as several other sub items.
`B.
`The Legend Agreement
`44. On or about February 25, 2008, Passmore, Sandrew and Legend
`entered into the Legend Agreement. The stated purpose of the Legend Agreement
`is that the parties wished to “enter into a business relationship to convert 2D content
`to 3D.”
`The Consulting Agreement as amended by Amendment Nos. 1, 2 and
`45.
`3 was in full-effect at the time of signing of the Legend Agreement.
`C.
`The Legend Option Agreement
`46. On or about March 2, 2009, Passmore, Sandrew and Legend entered
`into the “Legend Option Agreement.” Passmore represented in the Legend Option
`Agreement that he “developed and is the sole and exclusive owner and operator of
`certain technology and intellectual property related to stereosynthesis.”
`is that
`47.
`The recited purpose of
`the Legend Option Agreement
`“[Legend/Sandrew] and [Passmore] wish to jointly develop additional technology
`related to stereosynthesis,” resulting from the desirability of Passmore’s alleged
`sole and exclusive ownership of certain technology and intellectual property related
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`to stereosynthesis.
`also includes an option for
`48.
`The Legend Option Agreement
`Legend/Sandrew to purchase the current and future stereosynthesis technology
`outlined in the Legend Option Agreement and allegedly owned by Passmore.
`49.
`The Consulting Agreement as amended by Amendment Nos. 2 and 3
`were in full-effect at the time the Legend Option Agreement was signed.
`D.
`The N4D Agreement and Cross-License Agreement
`50. On or about July 8, 2009, Passmore and N4D entered into the N4D
`Agreement, under which Passmore agreed to provide additional services regarding
`the continued development of 2D to 3D conversion technology, volumetric
`rendering, computer graphics rendering, and related technology for a term of one
`(1) year.
`The N4D Agreement again reiterated that all intellectual property
`51.
`originated or prepared by Passmore—defined verbatim as it was in the Consulting
`Agreement—would become the exclusive property of N4D.
`52. On or about September 30, 2009, N4D and Passmore entered into a
`Technology Cross License Agreement (“Cross-License Agreement”).
`53. As previously described in paragraphs 1 through 24 and incorporated
`by reference herein, at the time the Cross-License Agreement was signed, N4D was
`unaware of the dealings between Passmore, Sandrew and Legend nor was it aware
`of Passmore, Sandrew, Legend, Mayo and ARC’s relationship and filing history
`with the PTO.
`54. By virtue of its acquisition of 3DH’s assets, N4D stepped into the
`shoes of 3DH with respect to Passmore’s obligations concerning ownership and
`assignment of intellectual property.
`55. On information and belief, Sandrew and Legend were aware of
`Passmore’s relationship and agreements with 3DH/N4D at the time the Legend
`Agreement and Legend Option Agreement were signed.
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`56. On information and belief, Sandrew and Legend were aware of
`Passmore’s obligations to assign all intellectual property rights developed under the
`Consulting Agreement, Amendments Nos. 1-3 and the N4D Agreement to 3DH
`and/or N4D for their exclusive ownership into perpetuity, including any patents.
`57. On information and belief, Passmore concealed the filing of the ‘992
`Application from 3DH/N4D to prevent 3DH/N4D from asserting its proper
`ownership rights in the ‘992 Application and subsequent Legend Patents.
`58. On information and belief, Passmore—not Sandrew, Baldrige or Jared
`Sandrew—is the true inventor of the Legend Patents.
`59.
`The actions of Passmore, Sandrew and Legend have damaged N4D
`and will continue to damage N4D unless the cloud over the title to its intellectual
`property is removed and Passmore is properly listed as the true inventor to the
`Legend Patents.
`60.
`The questions related to rightful ownership of the Legend Patents—an
`issue, among others, that is encompassed in the Pending Litigation—cannot be
`properly decided until the issue of inventorship has been resolved under this
`Court’s exclusive jurisdiction.
`FIRST CLAIM FOR RELIEF
`(Declaratory Relief)
`61. N4D incorporates and repleads by reference paragraphs 1 through 60
`of its Complaint.
`62. An actual controversy exists between N4D, Passmore, Sandrew and
`Legend regarding the inventorship of the Legend Patents. Moreover, Passmore,
`Sandrew and Legend may contend—in which case N4D denies—that Passmore is
`not the inventor of the Legend Patents or that
`they are not based upon the
`intellectual property that originated or was developed by Passmore under his
`employment agreements with 3DH and/or N4D.
`63.
`Pursuant to 35 U.S.C. § 256, N4D is entitled to a declaration as
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`between Passmore, Sandrew and Legend that Passmore is the true inventor, or in
`the alternative a co-inventor, of the Legend Patents.
`PRAYER FOR RELIEF
`WHEREFORE, N4D respectfully prays for the entry of judgment as follows:
`A.
`For a declaration that Passmore is the true inventor of the Legend
`Patents and a change of inventorship be ordered;
`B.
`For its costs incurred in connection with this action; and
`C.
`That the Court award such further relief as deemed just and proper.
`
`Respectfully submitted, this 26th day of November, 2013.
`
`MARIO MOORE
`MORGAN, LEWIS & BOCKIUS LLP
`
`By /s/ Mario Moore
`Mario Moore
`Attorneys for Plaintiff
`N4D, LLC
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`DB1/ 76785219.2
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`DEMAND FOR JURY TRIAL
`N4D hereby demands trial by jury on all issues so triable.
`Dated:
`November 26, 2013
`MORGAN, LEWIS & BOCKIUS LLP
`MARIO MOORE
`
`By /s/ Mario Moore
`MARIO MOORE
`Attorneys for Appellant
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`DB1/ 76785219.2
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`CERTIFICATE OF SERVICE
`I hereby certify that on November 26, 2013, I electronically filed the
`following document(s) with the Clerk of the Court for the United States District
`Court, Southern District of California by using the CM/ECF system:
`FIRST AMENDED COMPLAINT
`The participants listed below in the case whom are “active” registered
`CM/ECF users will be served by the CM/ECF system:
`Philip H. Dyson
`Law Offices of Philip H. Dyson
`8461 La Mesa Boulevard
`La Mesa, CA 91941
`Tel: (610) 462-3311
`Fax: (619) 462-3382
`Email:
`phil@phildysonlaw.com
`Danna J. Cotman
`ARC IP Law, PC
`7744 Herschel Avenue
`La Jolla, CA 92037
`Tel: (858) 729-0800
`Fax: (858) 777-5425
`Email:
`danna@arciplaw.com
`
`I declare that I am employed by a member of the bar of this Court, at whose
`direction this service was made.
`Dated: November 26, 2013
`
`/s/ Mario Moore
`Mario Moore
`
`DB1/ 76785219.2
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