Case 8:16-cv-01790-JVS-AGR Document 1 Filed 09/27/16 Page 1 of 30 Page ID #:1
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`RUSS, AUGUST & KABAT
`Marc A. Fenster, SBN 181067
`mfenster@raklaw.com
`Ben Wang, SBN 228712
`bwang@raklaw.com
`12424 Wilshire Boulevard
`Twelfth Floor
`Los Angeles, California 90025
`Telephone: (310) 826-7474
`Facsimile: (310) 826-6991
`
`Attorneys for Plaintiff
`SPEX TECHNOLOGIES, INC.
`
`UNITED STATES DISTRICT COURT
`
`CENTRAL DISTRICT OF CALIFORNIA
`
`SOUTHERN DIVISION
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`
`
`
`SPEX TECHNOLOGIES, INC.,
`
`Case No. 8:16-cv-01790
`
`
`
`Plaintiff,
`COMPLAINT FOR PATENT
`INFRINGEMENT
`
`v.
`
`
`KINGSTON TECHNOLOGY
`CORPORATION, KINGSTON
`DIGITAL, INC., KINGSTON
`TECHNOLOGY COMPANY, INC.,
`IMATION CORPORATION,
`DATALOCKER INC., DATA
`LOCKER INTERNATIONAL, LLC
`
`
`
`JURY TRIAL DEMANDED
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`RUSS, AUGUST & KABAT
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`Defendants.
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`COMPLAINT
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`IPR2017-00430
`UNIFIED EX1028
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`

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`Case 8:16-cv-01790-JVS-AGR Document 1 Filed 09/27/16 Page 2 of 30 Page ID #:2
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`1.
`Plaintiff SPEX Technologies, Inc. ("SPEX" or "Plaintiff"), for its
`Complaint against Defendants Kingston Technology Corporation, Kingston Digital,
`Inc., Kingston Technology Company, Inc., Imation Corporation, DataLocker Inc.
`and Data Locker International, LLC (collectively, "Defendants"), hereby alleges as
`follows:
`
`PARTIES
`2.
`SPEX is a California corporation with its headquarters at 1860 Hartog
`Dr., San Jose, CA 95131.
`3.
`On information and belief, Kingston Technology Corporation is a
`California corporation with its headquarters at 17600 Newhope St., Fountain Valley,
`California 92708.
`4.
`On information and belief, Kingston Digital, Inc. ("Kingston Digital")
`is a Delaware corporation with its headquarters at 17600 Newhope St., Fountain
`Valley, California 92708.
`5.
`On information and belief, Kingston Technology Company, Inc. is a
`Delaware corporation with its headquarters at 17600 Newhope St., Fountain Valley,
`California 92708.
`6.
`Kingston Technology Corporation, Kingston Digital, Inc. and Kingston
`Technology Company, Inc. are referred to together as "Kingston."
`7.
`On information and belief, Imation Corporation ("Imation") is a
`Delaware corporation with its headquarters at 1 Imation way, Oakdale, Minnesota
`55128.
`8.
`On information and belief, DataLocker Inc. is a Kansas corporation
`with its headquarters at 7007 College Blvd., Suite 240, Overland Park, Kansas
`66211.
`9.
`On information and belief, Data Locker International, LLC is a
`Delaware corporation with its headquarters at 7007 College Blvd., Suite 240,
`Overland Park, Kansas 66211.
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`COMPLAINT
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`RUSS, AUGUST & KABAT
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`Case 8:16-cv-01790-JVS-AGR Document 1 Filed 09/27/16 Page 3 of 30 Page ID #:3
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`10. DataLocker Inc. and Data Locker International, LLC are referred to
`together as "DataLocker."
`NATURE OF THE ACTION
`11. This is a civil action for the infringement of United States Patent No.
`6,088,802 (the "'802 patent") (attached as Exhibit A) and United States Patent No.
`6,003,135 (the "'135 patent") (attached as Exhibit B) (collectively, the "Patents-in-
`Suit") under the patent laws of the United States, 35 U.S.C. § 1, et seq.
`12. This action involves Defendants' manufacture, use, sale, offer for sale,
`and/or importation into the United States of infringing products, methods, processes,
`services and systems that are hardware encrypting memory products that infringe
`one or more of the claims of the Patents-in-Suit.
`JURISDICTION AND VENUE
`13. This Court has original jurisdiction over the subject matter of this
`Complaint under 28 U.S.C. §§ 1331 and 1338(a) because this action arises under the
`patent laws of the United States, including 35 U.S.C. §§ 271, et seq.
`14. Defendants are subject to personal jurisdiction in this judicial district
`because Defendants regularly transact business in this judicial district by, among
`other things, offering Defendants' products and services to customers, business
`affiliates and partners located in this judicial district. In addition, Defendants have
`committed acts of direct infringement of one or more of the claims of one or more
`of the Patents-in-Suit in this judicial district.
`15. Venue in this district is proper under 28 U.S.C. §§ 1400(b) and 1391(b)
`and (c), because Defendants are subject to personal jurisdiction in this district and
`have committed acts of infringement in this district.
`16. On information and belief, joinder is appropriate because a portion of
`Plaintiff's right to relief is based on the making, using, importing, offering for sale
`and selling of IronKey-branded products. The IronKey brand was owned by Imation
`until February 2016, when it was acquired by Kingston and DataLocker. See, e.g.,
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`COMPLAINT
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`RUSS, AUGUST & KABAT
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`Case 8:16-cv-01790-JVS-AGR Document 1 Filed 09/27/16 Page 4 of 30 Page ID #:4
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`https://www.kingston.com/us/company/press/article/40465 (Imation sold the USB
`IronKey assets to Kingston Digital and the IronKey hard drive assets to DataLocker).
`The parties were therefore involved in the same transaction upon which at least a
`portion of Plaintiff's claims are based.
`FACTUAL BACKGROUND
`17. The Patents-in-Suit were originally assigned to Spyrus, Inc. ("Spyrus").
`SPEX acquired full rights to the Patents-in-Suit from Spyrus.
`SPYRUS IS A PIONEERING ENCRYPTION COMPANY THAT HAS
`DEVELOPED CRYPTOGRAPHIC PRODUCTS RELIED ON TO SECURE
`ALL TYPES OF SENSITIVE INFORMATION
`18. Spyrus was founded around October 1992 by two pioneering women.
`The founding concept of Spyrus was to make cryptography more affordable and
`usable for distributing and accessing electronic content.
`19.
`Instead of building up the company with venture capital money, Spyrus
`initially built itself up using small capital investments from friends and family.
`Spyrus' first major achievement was to propose and win a contract with the
`Department of Defense ("DoD") to design a specification for a hardware security
`module ("HSM") to be used for encrypting sensitive communications. In 1993,
`Spyrus released the LYNKS HSM based on an ARM processor.
`20.
`In approximately 1993 or 1994, in partnership with Mykotronx, Spyrus
`released the successor to the LYNKS HSM, the Fortezza Crypto Card, originally
`named the Tessera Crypto Card. See, e.g., https://en.wikipedia.org/wiki/Fortezza.
`The Fortezza Crypto Card and its successor versions were capable of protecting
`sensitive data, including classified data. The Fortezza Crypto Card was used in a
`number of government and military and applications.
`21. Around 1996 or 1997, Spyrus began expanding on the cryptographic
`technology embodied in the LYNKS HSM and Fortezza Crypto Card technologies.
`In particular, Spyrus developed its Hydra series of products, which added
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`COMPLAINT
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`Case 8:16-cv-01790-JVS-AGR Document 1 Filed 09/27/16 Page 5 of 30 Page ID #:5
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`rating
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`capabilities such as flash memory or modem functionalities to the family of LYNKS
`HSM and Fortezza Crypto Card technologies. Spyrus' initial Hydra products were
`released around 1997. Spyrus' Hydra-based products are still sold today. Spyrus'
`current Hydra-based products include the PocketVault P-3X, PocketVault P-384,
`PocketVault P-384E, Worksafe, Worksafe Pro and Secure Portable Workplace.
`22. Spyrus' Hydra-based products have won awards and have been
`See,
`e.g.,
`consistently
`praised.
`
`http://www.pcmag.com/article2/0,2817,2478715,00.asp
`(editor
`of
`"Excellent"
`for
`the
`Worksafe
`Pro);
`http://www.pcmag.com/article2/0,2817,2478716,00.asp (editor rating of "excellent"
`for the Worksafe); http://www.thessdreview.com/our-reviews/spyrus-worksafe-pro-
`wtg-secure-flash-drive-review-worlds-secure-flash-drive/3/ (Worksafe Pro was
`given an "Editor's Choice" award; called the "worlds most secure flash drive");
`http://www.spyrus.com/spyrus-named-winner-in-2011-golden-bridge-awards-for-
`virtual-office-technology/ (Secure Pocket Drive named the winner in the Virtual
`Office Technology category of the 3rd Annual 2011 Golden Bridge Awards as well
`as the Security Products Guide's Tomorrow's Technology Today award and the GSN
`Homeland Security award); http://www.darkreading.com/risk/nsa-approves-spyrus-
`hyrda-pc-for-protection-of-classified-government-data/d/d-id/1132286?print=yes
`(Hydra Privacy Card Series II was first commercial-off-the-shelf device approved
`by the DoD to protect confidential information at SECRET level and below);
`http://www.businesswire.com/news/home/20060612005367/en/Info-Security-
`Products-Guide-Names-SPYRUS-Hydra (Hydra Privacy Card Series II won 2006
`Global Excellence in Secure and Removable Mass Storage Device Award from Info
`Security Products Guide); http://www.scmagazine.com/spyrus-hydra-privacy-card-
`series-ii/review/1087/ (very positive review of Hydra Privacy Card Series II; "If you
`deal with sensitive data, especially on laptops, you need the Hydra").
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`Case 8:16-cv-01790-JVS-AGR Document 1 Filed 09/27/16 Page 6 of 30 Page ID #:6
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`23. SPEX was formed to facilitate licensing of the technology developed
`and practiced by Spyrus in both domestic and foreign markets.
`IMATION DISCUSSED A RELATIONSHIP WITH SPYRUS PRIOR TO
`ACQUIRING IRONKEY
`24.
`In approximately September 2011, Imation purchased the hardware
`of
`IronKey,
`Inc.
`("IronKey").
`assets
`http://www.computerworld.com/article/2511295/data-center/imation-buys-
`ironkey-s-hardware-assets.html.
`25. Prior to acquiring the assets from IronKey, Imation was in discussions
`with Spyrus regarding Spyrus and its technology.
`26. On March 9, 2010, Spyrus and Imation entered into a Confidential
`Disclosure Agreement.
`27. Spyrus and Imation had multiple meetings during 2010 and 2011 to
`discuss a potential business relationship between Spyrus and Imation. Topics
`discussed included synergies between Spyrus' technology and patents, and Imation's
`products.
`28.
`In April 2010, high-level executives of Spyrus and Imation met for an
`in-person meeting at Imation's headquarters in Minneapolis, Minnesota to discuss
`Imation's possible acquisition of Spyrus. The executives from Imation that attended
`the meeting included Dr. Subodh Kukarni (Chief Technology Officer and Vice
`President Global Commercial Business), Mark LeClair (Executive Directory
`Manufacturing Operations, Research, Development & Engineering) and Stephen
`Bradley (Director Strategic Growth Programs). During this meeting, among other
`things, Spyrus discussed its intellectual property, including the Patents-in-Suit, its
`other patents and its core technologies.
`29. On August 30th, 2010, Spyrus met again with Imation to continue the
`discussion of Imation's possible acquisition of Spyrus. Attendees included Mr.
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`Case 8:16-cv-01790-JVS-AGR Document 1 Filed 09/27/16 Page 7 of 30 Page ID #:7
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`Bradley and Jim Ellis (Vice President M&A and Strategy). The topics discussed
`were similar to those discussed in the April 2010 meeting.
`30. The discussions came to a permanent halt after Imation acquired
`IronKey
`and
`MXI
`Security
`(http://www.storagenewsletter.com/rubriques/security/imation-acquires-assets-
`mxi-security/).
`KINGSTON ENTERED INTO A PARTNERSHIP WITH SPYRUS AND
`THEN IMPROPERLY USED SPYRUS' CONFIDENTIAL INFORMATION
`BY DISCLOSING IT TO A THIRD PARTY IN ORDER TO COMPETE
`WITH SPYRUS
`DataTraveler 5000 and DataTraveler 6000
`31. On March 14, 2008, Spyrus and Kingston entered into a mutual Non-
`Disclosure Agreement ("NDA"). A copy of the NDA is attached as Exhibit C to this
`complaint. The NDA prohibited unauthorized disclosure of confidential information
`and limited the use of confidential information to "discuss opportunities for joint
`business partnerships including integration of SPYRUS components and Kingston
`components into products…and joint development of products and strategies." Ex.
`C at ¶¶ 1, 2.
`32. The purpose of the NDA was to allow Spyrus and Kingston to explore
`a potential partnership to develop a next generation version of Kingston's
`DataTraveler Black Box product. Among the topics discussed after the NDA was
`executed were synergies between Spyrus' technology and Kingston's business needs
`as well as Spyrus' patent portfolio, including the Patents-in-Suit.
`33. The discussions were successful and, on April 14, 2009, Spyrus and
`Kingston entered into a Technology License and executed the first Licensed Product
`Appendix. Paragraph 11 of the Technology License extended the terms of the NDA
`to cover the disclosure of the confidential information during the new joint
`development relationship: "The obligations regarding confidentiality shall be
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`Case 8:16-cv-01790-JVS-AGR Document 1 Filed 09/27/16 Page 8 of 30 Page ID #:8
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`governed by the Mutual Confidentiality Agreement between the parties effective
`May 14, 2008."1
`34. Paragraph 20.1 of the Technology License included a choice of law and
`venue clause agreeing to "personal and exclusive jurisdiction of and venue in the
`federal and state courts located in Orange County, California."
`35. The first Licensed Product Appendix was for the development of the
`Kingston DataTraveler Black Box Gen. 2. The Licensed Product Appendix licensed
`certain Spyrus patents, including the '802 patent, for the manufacture and sale of the
`DataTraveler Black Box Gen. 2.
`36. The DataTraveler Black Box Gen. 2 was to be the same size and form
`factor of the DataTraveler Black Box. To accomplish this goal, Spyrus shrank its
`existing Hydra technology to fit inside the Black Box case. The new technology
`was awarded FIPS 140-2 Level 2 certification.
`37. The Black Box Gen. 2 was renamed the DataTraveler 5000 and was
`released by Kingston in January 2010. The DataTraveler 5000 was a Kingston case
`and memory card combined with Spyrus' new smaller Hydra cryptographic
`technology. The DataTraveler 5000 was awarded FIPS 140-2 Level 2 certification
`by reusing Spyrus' FIPS 140-2 certification for the Hydra technology. The
`DataTraveler 5000 became Kingston’s first FIPS 140-2-certified product offering in
`the market.
`38. Federal Information Process Standards ("FIPS") are standards and
`guidelines developed by the National Institute of Standards and Technology
`("NIST")
`for
`use
`in
`federal
`computer
`systems.
`http://csrc.nist.gov/publications/fips/fips140-2/fips1402.pdf. FIPS 140-2 details the
`security requirements for cryptographic modules to be used in federal computer
`
`
`1 The Technology License is marked confidential information and therefore cannot
`be attached to the Complaint.
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`Case 8:16-cv-01790-JVS-AGR Document 1 Filed 09/27/16 Page 9 of 30 Page ID #:9
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`systems. Id. There are four levels of FIPS 140-2, with level 4 including the most
`stringent security. Id.
`39. Spyrus also developed the DataTraveler 6000, which was released by
`Kingston in September 2011. Like the DataTraveler 5000, the DataTraveler 6000
`was a Kingston case and memory card combined with Spyrus' new smaller Hydra
`cryptographic technology that had been certified to FIPS 140-2 Level 3. The
`DataTraveler 6000 was awarded FIPS 140-2 Level 3 certification by reusing the
`Spyrus FIPS 140-2 certification and became Kingston’s first FIPS 140-2 Level 3-
`certified product offering.
`40. On January 21, 2015, Kingston simultaneously informed Spyrus of its
`intent to release the DataTraveler 4000 G2, which had recently achieved FIPS 140-
`2 Level 3 certification, as well as its intent to cease supporting the DataTraveler
`6000.
`
`41. As a result of Kingston ceasing its support of the DataTraveler 6000,
`Spyrus sent a letter terminating the Technology License on January 21, 2015. The
`Technology License with Kingston terminated on April 21, 2015.
`Kingston Used Its Partnership With Spyrus As A Pretext To Improperly Receive
`And Use Spyrus' Confidential Information
`42. While Spyrus was fully dedicated to the partnership, Kingston was not.
`On information and belief, Kingston used the partnership with Spyrus to learn
`Spyrus' confidential information in order to develop its own competing technology
`in partnership with a Taiwanese company, Phison Electronics Corp. ("Phison").
`43. Between about November 2008 and April 2010, at Kingston's request,
`Spyrus shared highly confidential and proprietary technical information with
`Kingston. While some of the less detailed confidential information was needed for
`marketing purposes, Kingston did not need the detailed information it requested to
`perform its obligations under the Technology License. Rather, Kingston claimed it
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`needed Spyrus' highly confidential and proprietary technical information to confirm
`that Spyrus' cryptographic protections were as strong as Spyrus claimed.
`44. The highly confidential and proprietary information requested by
`Kingston comprised Spyrus' competitive advantage in the marketplace, such as
`Spyrus' proprietary method for encryption key unwrapping and asymmetric
`cryptography techniques. Spyrus did not share its information lightly. Spyrus,
`however, shared its information in an effort to solidify its partnership with Kingston.
`45.
`In or around September 15, 2009, for example, Spyrus engineers and
`Jason Chen of Kingston had technical discussions regarding Spyrus' proprietary
`password implementation. On the same day, Burt Tregub, Spyrus' Vice President
`Corporate Development, emailed and spoke with Jason Chen to confirm the
`confidentiality of the shared information. Jason Chen confirmed this understanding.
`46. At Kingston's request, confidential information in greater detail was
`discussed during a meeting on December 11, 2009 with Kingston's Technical
`Resource Group ("TRG"), including Jason Chen, at Kingston's headquarters in
`Fountain Valley, California. Kingston specifically requested, and received, the
`written materials used in the December 11 presentation. The written materials were
`marked with confidentiality designations.
`47. On January 11, 2010, Jason Chen called Spyrus' Duane Linsenbardt
`seeking further detailed, highly confidential information about Spyrus' technology.
`When Mr. Linsenbardt informed Jason Chen that he was in the car and asked Jason
`Chen to follow-up via email, Jason Chen responded that an email was not possible
`because Ben Chen (of Kingston) was in Taiwan and needed the information that
`night.
`48. Spyrus was not aware that Ben Chen, Director of Flash Engineering at
`Kingston, had a need to receive, let alone received, Spyrus' highly confidential and
`proprietary information while working in Taiwan. Until the January 11 call, Spyrus
`was only aware of Ben Chen's receipt of high-level information about Spyrus
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`Case 8:16-cv-01790-JVS-AGR Document 1 Filed 09/27/16 Page 11 of 30 Page ID #:11
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`technology. Learning that Ben Chen had received Spyrus' confidential information
`was particularly concerning because Spyrus was aware that Ben Chen was working
`on a project with Phison, who was and continues to be one of Spyrus' competitors.
`Further, Spyrus did not have an export license for its Technical Data or the Spyrus
`manufacturing tools.
`49. The January 11, 2010 call was also the first time that Spyrus learned
`that its confidential information was being shared and discussed outside of the
`United States. As cryptographic information, the information is export controlled
`and Spyrus did not have a license to export the Technical Data outside of the United
`States, including to Taiwan.
`50. Until Jason Chen's call, Spyrus believed that Kingston was complying
`with Spyrus' requirement that its proprietary, confidential information only be shared
`with necessary engineers in Kingston's Fountain Valley, California headquarters.
`51. On the day after Jason Chen's call, on January 12, 2010, Burt Tregub
`wrote a letter to John Terpening, Manager of Flash Engineering at Kingston,
`expressing Spyrus' concerns. The letter set out the relevant facts, including those
`above, and asked for confirmation that Spyrus' proprietary and confidential
`information had not been shared with third parties or people outside of the United
`States.
`52. More than a month later, on February 18, 2010, Calvin Leong, Director
`Legal Department at Kingston, responded to the January 12, 2010 letter. Mr. Leong
`indicated that Spyrus' confidential information had not been shared with any third
`party, including Phison, without Spyrus' knowledge. Mr. Leong further indicated
`that, as Jason Chen's boss, Ben Chen had the authority to access information about
`projects under development, including the DataTraveler 5000.
`53. Spyrus believed Kingston's assurances and continued working with
`Kingston.
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`COMPLAINT
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`RUSS, AUGUST & KABAT
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`Case 8:16-cv-01790-JVS-AGR Document 1 Filed 09/27/16 Page 12 of 30 Page ID #:12
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`54.
`In October 2010, Kingston and Phison announced the formation of a
`joint venture focusing on embedded memory system product development.
`http://www.phison.com/English/NewsView.asp?ID=199&SortID=35.
`55. On February 22, 2011, Kingston announced the release of the
`DataTraveler 4000, which was an encrypting flash drive, like the DataTraveler 5000.
`Kingston did not have permission to use Spyrus' patented technology in the
`DataTraveler 4000. On information and belief, the DataTraveler 4000 was
`developed as part of the joint venture between Kingston and Phison.
`56. While Spyrus was not pleased by Kingston's release of the DataTraveler
`4000, in light of Kingston's February 2010 representation, the weaker security
`protections on the DataTraveler 4000 and Kingston's intent to focus on sales of the
`DataTraveler 6000 with FIPS 140-2 Level 3 certification for higher security
`requirements, Spyrus had no reason to believe at the time that the DataTraveler 4000
`was developed by Kingston and Phison using Spyrus' highly confidential and
`proprietary information.
`57.
`In January 2015, Spyrus' belief changed. On January 21, 2015, Andrew
`Ewing, Kingston's manager of encrypted drives, informed Burt Tregub of the
`impending release of the DataTraveler 4000 G2 and that Kingston would no longer
`support the DataTraveler 6000. Unlike the original DataTraveler 4000, the
`DataTraveler 4000 G2 contained significantly upgraded security features consistent
`with Spyrus' proprietary and confidential information shared with Kingston and had
`been certified to FIPS 140-2 Level 3. Like the DataTraveler 4000, the DataTraveler
`4000 G2 uses Phison technology.
`58. On
`information and belief, despite Kingston's February 2010
`representation to the contrary, Kingston disclosed Spyrus' highly confidential and
`proprietary information to Phison to assist in the development of the hardware
`encrypting chips by Phison. The cryptographic feature set of the DataTraveler 4000
`
`
`
`11
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`COMPLAINT
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`RUSS, AUGUST & KABAT
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`

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`Case 8:16-cv-01790-JVS-AGR Document 1 Filed 09/27/16 Page 13 of 30 Page ID #:13
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`G2 makes it clear that the technology was developed using Spyrus' highly
`confidential and proprietary information.
`THE PATENTS-IN-SUIT
`59. SPEX is the owner by assignment of the Patents-in-Suit. SPEX owns
`all rights to the Patents-in-Suit, including the right to enforce the Patents-in-Suit.
`60. United States Patent No. 6,088,802, entitled "Peripheral Device With
`Integrated Security Functionality," issued on July 11, 2000 from United States Patent
`Application No. 08/869,305 filed on June 4, 1997. A true and correct copy of the
`'802 patent is attached as Exhibit A.
`61. United States Patent No. 6,003,135, entitled "Modular Security
`Device," issued on December 14, 1999 from United States Patent Application No.
`08/869,120 filed on June 4, 1997. A true and correct copy of the '135 patent is
`attached as Exhibit B.
`62. All maintenance fees for the Patents-in-Suit have been timely paid, and
`there are no fees currently due.
`
`COUNT I
`(KINGSTON'S INFRINGEMENT OF THE '802 PATENT)
`63. Paragraphs 1 through 62 are incorporated by reference as if fully
`restated herein.
`64. On information and belief, Kingston has made, used, offered for sale,
`sold and/or imported into the United States products that infringe various claims of
`the '802 patent, and continues to do so. By way of illustrative example, these
`infringing products include, without limitation, Kingston's hardware encrypting
`storage solutions, including but not limited to the DataTraveler 4000, DataTraveler
`4000 G2, DataTraveler Vault Privacy 3.0, DataTraveler 2000, IronKey D80,
`IronKey Enterprise S1000, IronKey Enterprise S250, IronKey Enterprise D250,
`IronKey F150, IronKey F100, IronKey Basic S1000, IronKey Basic S250, IronKey
`Basic D250, IronKey F200, IronKey Personal S250, IronKey D250, IronKey
`
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`12
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`COMPLAINT
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`RUSS, AUGUST & KABAT
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`

`
`Case 8:16-cv-01790-JVS-AGR Document 1 Filed 09/27/16 Page 14 of 30 Page ID #:14
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`Workspace W700, IronKey Workspace W500, IronKey Workspace W300, IronKey
`Workspace W200, IronKey Workspace W700SC, MXI M200, MXI M500, MXI
`M500 and MXP Bio.
`65. Kingston has been and now is directly infringing one or more claims of
`the '802 patent under 35 U.S.C. §271(a), in this judicial District and elsewhere in the
`United States, by, among other things, making, using, selling, offering to sell and/or
`importing into the United States for subsequent sale or use hardware encrypting
`storage solutions that include, for example, (a) a cryptographic processor for
`performing security operations on data; (b) mass storage memory, such as flash or
`magnetic storage; (c) an interface between the cryptographic processor and the mass
`storage memory; (d) an interface with the host computer (e.g., a USB or SATA
`interface); and (e) a mediating interface that ensures that data communicated
`between the host computer and mass storage memory passes through the
`cryptographic processor. Exemplary charts showing how Kingston infringes the
`'802 patent are attached as Exhibits D and E.2 Exhibits D and E are based on the
`public information available to Plaintiff, and Plaintiff reserves the right to amend
`Exhibits D and E based on information obtained through discovery. Accordingly,
`the aforementioned products infringe the '802 patent literally and/or under the
`doctrine of equivalents.
`66. Kingston actively, knowingly, and intentionally induces, and continues
`to actively, knowingly, and intentionally induce, infringement of the '802 patent
`under 35 U.S.C. §271(b) by its customers and end users.
`67. Kingston has had knowledge of and notice of the '802 patent and its
`infringement. For example, Kingston licensed the '802 patent from 2009 to 2015 to
`
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`2 Plaintiff reserves the right to assert additional claims of the '802 patent against
`Kingston as the litigation proceeds. For example, Plaintiff expressly reserves the
`right to assert additional claims in its infringement contentions to be served during
`the discovery process.
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`13
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`COMPLAINT
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`RUSS, AUGUST & KABAT
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`

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`Case 8:16-cv-01790-JVS-AGR Document 1 Filed 09/27/16 Page 15 of 30 Page ID #:15
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`produce and sell the DataTraveler 5000 and 6000. Kingston is aware of the scope
`of the '802 patent and its application to Kingston's products.
`68. Kingston has induced its customers and end users to infringe the '802
`patent by using hardware encrypting storage solutions to (a) communicate with a
`host computer to exchange data with the hardware encrypting storage solution; (b)
`perform security operations on the data; (c) store or retrieve the data; and (d) mediate
`communications so that data must first pass through the hardware encrypting
`processor. See, e.g., Exs. D, E. For example, Kingston encourages its customers
`and end users to perform infringing methods by the very nature of the products.
`When using the infringing products, security operations are performed on all data
`passed between Kingston's infringing products and the customer's or end user's
`computer.
`69. Kingston specifically intends its customers and/or end users infringe
`the '802 patent, either literally or by the doctrine of equivalents, because Kingston
`has known about the '802 patent and how Kingston's products infringe the claims of
`the '802 patent but Kingston has not taken steps to prevent infringement by its
`customers and/or end users. Accordingly, Kingston has acted with the specific intent
`to induce infringement of the '802 patent.
`70. Accordingly, Kingston has
`induced, and continues
`infringement of the '802 patent under 35 U.S.C. §271(b).
`71. As discussed above, Kingston has had knowledge of and notice of the
`'802 patent since at least April 2009, when it entered into the Technology License
`with Spyrus. Kingston was well aware of the scope of the '802 patent and agreed to
`mark the DataTraveler 5000 and 6000 with the '802 patent. Kingston is aware of the
`scope of the '802 patent and its application to Kingston's products. Furthermore, on
`information and belief, Kingston knowingly and intentionally used Spyrus' highly
`confidential and proprietary information to develop at least the DataTraveler 4000
`and 4000 G2. Kingston, at the very least, should be aware of its infringing actions.
`
`induce,
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`to
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`14
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`COMPLAINT
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`RUSS, AUGUST & KABAT
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`

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`Case 8:16-cv-01790-JVS-AGR Document 1 Filed 09/27/16 Page 16 of 30 Page ID #:16
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`Despite this knowledge, Kingston continues to commit tortious conduct by way of
`patent infringement.
`72. Kingston has been and continues to infringe one or more of the claims
`of the '802 patent through the aforesaid acts.
`73. Kingston has committed these acts of infringement without license or
`authorization.
`74. Plaintiff is entitled to recover damages adequate to compensate for the
`infringement.
`75. Kingston has and continues to infringe the '802 patent, acting with an
`objectively high likelihood that its actions constitute infringement of the '802 patent.
`Kingston has known or should have known of this risk at least as early as 2009.
`Accordingly, Kingston's infringement of the '802 patent has been and continues to
`be willful.
`
`COUNT II
`(KINGSTON'S INFRINGEMENT OF THE '135 PATENT)
`76. Paragraphs 1 through 62 are incorporated by reference as if fully
`restated herein.
`77. On information and belief, Kingston has made, used, offered for sale,
`sold and/or imported into the United States products that infringe various claims of
`the '135 patent, and continues to do so. By way