Case 2:16-cv-08033 Document 1 Filed 10/28/16 Page 1 of 12 Page ID #:1
`
`Douglas G. Muehlhauser (SBN 179495)
`doug.muehlhauser@knobbe.com
`Mark Lezama (SBN 253479)
`mark.lezama@knobbe.com
`Alexander J. Martinez (SBN 293925)
`alex.martinez@knobbe.com
`KNOBBE, MARTENS, OLSON & BEAR, LLP
`2040 Main Street, Fourteenth Floor
`Irvine, CA 92614
`Telephone: 949-760-0404
`Facsimile: 949-760-9502
`Attorneys for Plaintiff
`NOMADIX, INC.
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE CENTRAL DISTRICT OF CALIFORNIA
`WESTERN DIVISION
`
`NOMADIX, INC.,
`
`Plaintiff,
`
`v.
`
`Case No.
`2:16-cv-08033
`
`COMPLAINT FOR BREACH
`OF CONTRACT
`
`GUEST-TEK INTERACTIVE
`ENTERTAINMENT LTD.,
`
`and
`
`Defendant.
`
`DEMAND FOR JURY TRIAL
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`NOMADIX 2001
`Guest Tek v. Nomadix
`IPR2019-01191
`
`

`

`Case 2:16-cv-08033 Document 1 Filed 10/28/16 Page 2 of 12 Page ID #:2
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`
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`Plaintiff Nomadix hereby complains of Defendant Guest-Tek Interactive
`Entertainment Ltd. and alleges as follows:
`JURISDICTION, PARTIES, AND VENUE
`1.
`Plaintiff Nomadix and Defendant Guest-Tek Interactive Entertainment
`Ltd. entered into a written license agreement with effective date December 30,
`2010 (the “License Agreement”). This Complaint states a cause of action for
`breach of contract—specifically, for breach of the License Agreement. This Court
`has subject-matter jurisdiction under 28 U.S.C. § 1332(a).
`2.
`Plaintiff Nomadix is a Delaware corporation having its principal place
`of business at 30851 Agoura Road, Suite 102, Agoura Hills, California 91301.
`3.
`Defendant Guest-Tek Interactive Entertainment Ltd. (“Guest-Tek”) is
`an Alberta corporation having its principal place of business at Suite 600,
`777 8 Ave SW, Calgary, Alberta T2P 3R5, Canada.
`4.
`The amount in controversy exceeds $75,000, exclusive of interest and
`costs. Nomadix estimates that its damages exceed $11,000,000.
`5.
`The License Agreement specifies that disputes arising under the
`contract shall be brought in the United States District Court for the Central District
`of California. Under the License Agreement, with respect to Nomadix’s claim for
`breach of contract, Guest-Tek has consented to the Court’s exercise of personal
`jurisdiction over Guest-Tek. Guest-Tek has also waived any objections to venue in
`the present judicial district and to the Court’s exercise of personal jurisdiction over
`Guest-Tek.
`6.
`Guest-Tek sells or uses network devices in connection with Internet-
`access services it provides to hotels and other properties. For example, Guest-Tek
`offers the OneView Internet solution and RendezView solution.
`7.
`Guest-Tek owns and operates the website at www.guesttek.com.
`8.
`On its website, Guest-Tek states: “GuestTek’s OneView Internet
`solution (OVI) provides fast and reliable connectivity for your property, seamlessly
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`NOMADIX 2001
`Guest Tek v. Nomadix
`IPR2019-01191
`
`

`

`Case 2:16-cv-08033 Document 1 Filed 10/28/16 Page 3 of 12 Page ID #:3
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`
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`connecting your guests across all floors. Our High Speed Internet solution (HSIA)
`scales to help your property overcome increasingly complex internet and network
`challenges, with intelligent point of access designed to suit your guest’s
`applications and bandwidth needs.”
`9.
`On
`its website, Guest-Tek states: “GuestTek’s RendezView
`conferencing service platform extends your properties capabilities to improve
`efficiency, reduce costs and increase revenue. [¶] Turn your basic HSIA in your
`conference space into an a la carte menu of network provisioning options and
`captive portal page experiences.” Guest-Tek’s website also indicates that
`RendezView’s features and functionality include “[b]andwidth dedication and
`shaping.”
`10. Guest-Tek provides services based on its OneView Internet solution
`to numerous properties, including several hotels within this judicial district,
`including the JW Marriott Los Angeles L.A. LIVE at 900 West Olympic
`Boulevard, Los Angeles, California 90015; the Extended Stay America – Orange
`County – John Wayne Airport at 4881 Birch St., Newport Beach, California
`92660; and the Irvine Marriott at 18000 Von Karman Avenue, Irvine, California
`92612. As a result, Guest-Tek owes Nomadix royalties under the License
`Agreement in connection with these properties but has failed to pay Nomadix the
`royalties it owes.
`11.
`the License
`its royalty obligations under
`In connection with
`Agreement, Guest-Tek has sent reports to Nomadix in this judicial district; and
`although Guest-Tek has underpaid Nomadix overall, Guest-Tek has made
`payments under the License Agreement to Nomadix in this judicial district.
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`NOMADIX 2001
`Guest Tek v. Nomadix
`IPR2019-01191
`
`

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`Case 2:16-cv-08033 Document 1 Filed 10/28/16 Page 4 of 12 Page ID #:4
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`FIRST CLAIM FOR RELIEF:
`BREACH OF CONTRACT
`12.
`In 2009, Nomadix sued Guest-Tek in this judicial district for
`infringement of six Nomadix patents in a case captioned Nomadix, Inc. v. Hewlett-
`Packard Co. et al., No. CV09-08441 (the “2009 Litigation”). Nomadix eventually
`added a claim against Guest-Tek for infringement of a seventh Nomadix patent.
`Guest-Tek filed counterclaims for declaratory judgment of noninfringement and
`invalidity of those seven Nomadix patents.
`13.
`In late December 2010, Nomadix and Guest-Tek settled their claims
`against one another in the 2009 Litigation. As part of the settlement, Nomadix and
`Guest-Tek entered into the License Agreement. Exhibit 1 to this Complaint is a
`true and correct copy of the License Agreement as originally executed, excluding
`the original Schedule B.
`14. The License Agreement is a valid and enforceable written contract
`binding on Nomadix and Guest-Tek.
`15. Under the License Agreement, Nomadix granted Guest-Tek a royalty-
`bearing, limited, nonexclusive license under the patents involved in the 2009
`Litigation and certain related patents. Starting in 2011, the license authorizes
`Guest-Tek to include functionality patented under the licensed Nomadix patents in
`Guest-Tek’s OneView Internet devices and services, RendezView devices and
`services, and other devices and services, as long as those devices and services are
`used or provided as a result of, or in connection with, business or services provided
`by Guest-Tek to a particular hotel or other property located in the United States.
`16. Nomadix has performed all or substantially all of its obligations under
`the License Agreement, and by granting Guest-Tek this license, Nomadix has
`satisfied all conditions precedent, if any, to Guest-Tek’s performance of its
`payment obligations under the License Agreement. Nomadix has made a good-
`faith effort to comply with all its substantive obligations under the License
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`NOMADIX 2001
`Guest Tek v. Nomadix
`IPR2019-01191
`
`

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`Case 2:16-cv-08033 Document 1 Filed 10/28/16 Page 5 of 12 Page ID #:5
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`Agreement. Guest-Tek has not notified Nomadix of any alleged breaches by
`Nomadix of the License Agreement.
`17. On information and belief: Since 2011, Guest-Tek’s OneView
`Internet devices and services have been used as a result of, or in connection with,
`business or services provided by Guest-Tek to over 2,500 U.S. hotel properties.
`18. On information and belief: During each quarter beginning with the
`third quarter of 2012, Guest-Tek’s OneView Internet devices and services have
`been used as a result of, or in connection with, business or services provided by
`Guest-Tek to over 2,000 U.S. properties.
`19. During each quarter beginning with at least the third quarter of 2012,
`Guest-Tek’s OneView Internet devices and services have included functionality
`patented under at least one Nomadix patent licensed under the License Agreement.
`For example, the patented functionalities that Guest-Tek’s OneView Internet
`devices and services have included relate to captive portals, authentication,
`integration with property management systems, and bandwidth management.
`20. On information and belief: Guest-Tek has represented to one or more
`U.S. customers of its OneView Internet solutions that Guest-Tek has a license to
`Nomadix patents.
`21. On information and belief: Guest-Tek has represented to one or more
`U.S. customers of its OneView Internet solutions that Guest-Tek has a license to
`Nomadix patents that protects Guest-Tek or its customers from a patent-
`infringement lawsuit by Nomadix in connection with the OneView Internet
`solution.
`22. One of Guest-Tek’s co-defendants in the 2009 Litigation was iBAHN
`Corporation. In the 2009 Litigation, Nomadix alleged that iBAHN Corporation had
`infringed six of the seven Nomadix patents that Nomadix had asserted against
`Guest-Tek. iBAHN General Holdings Corporation eventually intervened in the
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`NOMADIX 2001
`Guest Tek v. Nomadix
`IPR2019-01191
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`

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`Case 2:16-cv-08033 Document 1 Filed 10/28/16 Page 6 of 12 Page ID #:6
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`2009 Litigation, and Nomadix alleged that iBAHN General Holdings Corporation
`infringed the same six Nomadix patents.
`23.
`In September 2013, iBAHN Corporation and iBAHN General
`Holdings Corporation (collectively, “iBAHN”) initiated bankruptcy proceedings in
`the United States Bankruptcy Court for the District of Delaware.
`24. During the iBAHN bankruptcy proceedings, Nomadix filed papers
`highlighting its patent-infringement claims against iBAHN and arguing that those
`patent-infringement claims made Nomadix a creditor of the debtors. Nomadix also
`filed a new lawsuit against iBAHN General Holdings Corporation in 2014 seeking
`compensation for iBAHN General Holdings Corporation’s patent infringement that
`had continued to occur during the bankruptcy proceedings as a result of iBAHN’s
`provision of Internet-access services.
`25.
`In the iBAHN bankruptcy proceedings, an auction or bidding process
`was conducted for the sale of substantially all of the debtors’ assets. Nomadix’s
`patent-infringement claims against the iBAHN debtors made the assets less
`attractive to most parties entertaining bids on iBAHN’s assets; the bidders knew
`that if they bought iBAHN’s assets and sought to continue providing Internet-
`access services based on iBAHN’s network devices, they would likely be facing a
`patent-infringement lawsuit from Nomadix. Because of the patent license it had
`received under the License Agreement, Guest-Tek was able to submit a bid to
`acquire the iBAHN assets without the same exposure to a patent-infringement
`lawsuit as entities without a license to Nomadix patents.
`26.
`In March 2014, the bankruptcy court approved Guest-Tek’s bid as the
`best offer, and Guest-Tek accordingly purchased substantially all of the assets
`belonging to the iBAHN debtors’ estates.
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`NOMADIX 2001
`Guest Tek v. Nomadix
`IPR2019-01191
`
`

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`Case 2:16-cv-08033 Document 1 Filed 10/28/16 Page 7 of 12 Page ID #:7
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`27. After the purchase of the iBAHN assets, Guest-Tek’s website showed
`the following announcement:
`
`
`28. As of October 27, 2016, Guest-Tek’s website includes a “Company
`History” page. On that page, an entry for the year 2014 reads: “GuestTek Acquires
`iBAHN.”
`29. Like Guest-Tek, iBAHN provided Internet-access services to hotels
`and other properties. Among the most valuable iBAHN assets for sale in the
`bankruptcy proceedings were the rights to the contracts that iBAHN had negotiated
`with its customers under which iBAHN’s customers owed iBAHN ongoing fees
`for its ongoing Internet-access services.
`30. On information and belief: Guest-Tek’s acquisition of iBAHN assets
`increased the number of U.S. properties with which Guest-Tek conducted business
`relating to Internet-access services by approximately 600 properties.
`31. Despite the substantial benefit Guest-Tek has received as a result of
`the License Agreement, Guest-Tek has not lived up to its obligations under the
`License Agreement.
`32. The License Agreement requires Guest-Tek to pay Nomadix royalties
`for each U.S. property that uses a network device or service that (1) includes
`functionality patented under at least one licensed patent and (2) is used or provided
`as a result of, or in connection with, business or services provided by Guest-Tek, as
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`NOMADIX 2001
`Guest Tek v. Nomadix
`IPR2019-01191
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`

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`Case 2:16-cv-08033 Document 1 Filed 10/28/16 Page 8 of 12 Page ID #:8
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`long as any such network device is not made by Nomadix or a third party with an
`appropriate license to Nomadix’s patents.
`33. Guest-Tek has failed to pay all the royalties it owes Nomadix under
`the License Agreement.
`34. The License Agreement requires Guest-Tek to submit quarterly
`reports with certain information concerning the U.S. properties it provides network
`devices or services to. Guest-Tek has failed to comply with all its reporting
`obligations under the License Agreement. Guest-Tek has thus prevented Nomadix
`from ascertaining the precise number of properties for which Guest-Tek owes
`royalties and the precise amount of royalties that Guest-Tek owes Nomadix. In
`certain instances, even when Guest-Tek has paid royalties in connection with a
`small number of properties, Guest-Tek’s failure to comply with its reporting
`obligations has prevented Nomadix from ascertaining whether Guest-Tek has
`applied the correct royalty rates under the License Agreement. Under the License
`Agreement, Guest-Tek’s inaccurate reports constitute misrepresentations and
`breaches of warranties.
`35. Exhibit 2 to this Complaint includes the quarterly reports that Guest-
`Tek has submitted under the License Agreement.
`36. On information and belief: During each quarter beginning with the
`third quarter of 2012, there have been more than 2,000 U.S. properties (1) that used
`Guest-Tek’s OneView Internet devices and services as a result of, or in connection
`with, business or services provided by Guest-Tek and (2) for which Guest-Tek has
`failed to pay Nomadix any royalties under the License Agreement.
`37. Guest-Tek owes Nomadix royalties under the License Agreement for
`each of those properties identified in paragraph 36.
`38. On information and belief: Guest-Tek has taken the position with one
`or more customers that its OneView Internet solution for their U.S. properties is
`covered by the license it received under the License Agreement, yet Guest-Tek has
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`NOMADIX 2001
`Guest Tek v. Nomadix
`IPR2019-01191
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`Case 2:16-cv-08033 Document 1 Filed 10/28/16 Page 9 of 12 Page ID #:9
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`failed to report those customers’ U.S. properties to Nomadix as being covered by
`the license and has failed to pay royalties for them under the License Agreement.
`39. Guest-Tek also owes Nomadix royalties under the License Agreement
`in connection with the properties whose contracts Guest-Tek assumed as a result of
`its acquisition of iBAHN assets. Those properties have used either OneView
`Internet devices and services or iBAHN Head-End Processor (“HEP”) devices as a
`result of, or in connection with, business or services provided by Guest-Tek. The
`HEP devices include functionality patented under several Nomadix patents
`licensed under the License Agreement.
`40. Guest-Tek’s RendezView solution also triggers royalties under the
`License Agreement. On information and belief: Guest-Tek has failed to pay
`Nomadix all the royalties it owes Nomadix in connection with its RendezView
`solution.
`For each quarter beginning with the third quarter of 2012, Nomadix
`41.
`has notified Guest-Tek that Guest-Tek has breached the License Agreement at least
`by failing to perform its reporting and payment obligations. Guest-Tek’s counsel
`sent Guest-Tek’s original quarterly report for the third quarter of 2012 to
`Nomadix’s counsel on October 30, 2012.
`42. Under the License Agreement, upon Nomadix’s written request,
`Guest-Tek must provide Nomadix’s counsel with source code and configuration
`files so that Nomadix can evaluate whether Guest-Tek has removed patented
`functionality from its devices. Guest-Tek has breached this obligation. For each
`quarter beginning at least with the third quarter of 2012, Nomadix has requested in
`writing that Guest-Tek provide source code and configuration files corresponding
`to the software running on Guest-Tek’s devices that quarter. For each quarter
`beginning at least with the first quarter of 2014, Guest-Tek has refused to provide
`any source code or configuration files.
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`NOMADIX 2001
`Guest Tek v. Nomadix
`IPR2019-01191
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`

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`Case 2:16-cv-08033 Document 1 Filed 10/28/16 Page 10 of 12 Page ID #:10
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`43. Under the License Agreement, Guest-Tek owes Nomadix late fees on
`its unpaid royalties.
`44. Under the License Agreement, Guest-Tek owes Nomadix its legal fees
`and costs to prepare for and conduct this action to enforce the License Agreement.
`45. As a direct, foreseeable, and proximate result of Guest-Tek’s breaches
`of the License Agreement, Nomadix has suffered damages in an amount to be
`proven at trial. Excluding interest, fees, and costs, Nomadix estimates that,
`beginning with the third quarter of 2012, Guest-Tek owes Nomadix over
`$11,000,000 in royalties under the License Agreement.
`PRAYER FOR RELIEF
`Nomadix respectfully prays for the following relief:
`A.
`an order adjudging Guest-Tek to have breached the License
`Agreement, including by having breached its royalty and reporting obligations;
`B.
`an award of general, compensatory, consequential, and special
`damages arising from Guest-Tek’s breach, including an award of all royalties,
`interest, and late fees owed to Nomadix;
`C.
`an award of prejudgment and postjudgment interest;
`D.
`an award of all legal fees and costs, including attorneys’ fees, that
`Nomadix incurs to prepare for and conduct this action against Guest-Tek;
`E.
`an order of specific performance of Guest-Tek’s reporting, disclosure,
`and marking obligations under the License Agreement; and
`F.
`such other relief as the Court deems just and proper.
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`NOMADIX 2001
`Guest Tek v. Nomadix
`IPR2019-01191
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`Case 2:16-cv-08033 Document 1 Filed 10/28/16 Page 11 of 12 Page ID #:11
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`Dated: October 28, 2016
`
`Respectfully submitted,
`KNOBBE, MARTENS, OLSON & BEAR, LLP
`
` /s/ Mark Lezama
`Douglas G. Muehlhauser
`Mark Lezama
`Alexander J. Martinez
`Attorneys for Plaintiff
`NOMADIX, INC.
`
`
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`NOMADIX 2001
`Guest Tek v. Nomadix
`IPR2019-01191
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`Case 2:16-cv-08033 Document 1 Filed 10/28/16 Page 12 of 12 Page ID #:12
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`DEMAND FOR JURY TRIAL
`Pursuant to Rule 38(b) of the Federal Rules of Civil Procedure, Plaintiff
`Nomadix hereby demands a trial by jury on all issues so triable.
`
`
`Respectfully submitted,
`KNOBBE, MARTENS, OLSON & BEAR, LLP
`
` /s/ Mark Lezama
`Douglas G. Muehlhauser
`Mark Lezama
`Alexander J. Martinez
`Attorneys for Plaintiff
`NOMADIX, INC.
`
`
`
`Dated: October 28, 2016
`
`
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`NOMADIX 2001
`Guest Tek v. Nomadix
`IPR2019-01191
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`

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`Case 2:16-cv-08033 Document 1-1 Filed 10/28/16 Page 1 of 1 Page ID #:13
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`EXHIBIT 1
`
`Proposed sealed document
`
`NOMADIX 2001
`Guest Tek v. Nomadix
`IPR2019-01191
`
`

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`Case 2:16-cv-08033 Document 1-2 Filed 10/28/16 Page 1 of 1 Page ID #:14
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`EXHIBIT 2
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`Proposed sealed document
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`NOMADIX 2001
`Guest Tek v. Nomadix
`IPR2019-01191
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`