Michael T. Pieja (CA Bar No. 250351)
`Alan E. Littmann (pro hac vice to be filed)
`Lauren Abendshien (pro hac vice to be filed)
`GOLDMAN ISMAIL TOMASELLI
` BRENNAN & BAUM LLP
`200 South Wacker Dr., 22nd Floor
`Chicago, IL 60606
`Tel: (312) 681-6000
`Fax: (312) 881-5191
`mpieja@goldmanismail.com
`alittmann@goldmanismail.com
`labendshien@goldmanismail.com
`
`(Additional counsel listed in signature block)
`
`Attorneys for Plaintiff Apple Inc.
`
`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
`SAN JOSE DIVISION
`
`APPLE INC.,
`
`Plaintiff,
`
`v.
`KOSS CORPORATION,
`Defendant.
`
`Case No. 5:20-cv-05504
`APPLE INC.’S COMPLAINT FOR
`BREACH OF CONTRACT AND
`DECLARATORY JUDGMENT OF NON-
`INFRINGEMENT
`DEMAND FOR JURY TRIAL
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`COMPLAINT FOR BREACH OF CONTRACT AND
`DECLARATORY JUDGMENT OF NON-INFRINGEMENT
`
`i
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`Case No. 5:20-cv-05504
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`Koss 2005
`IPR2021-00255, Apple Inc. v. Koss Corporation
`
`

`

`
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`Plaintiff Apple Inc. (“Apple”) files this Complaint to enjoin Defendant Koss Corporation
`(“Koss”) from further breaching the Parties’ Confidentiality Agreement, as well as for a declaratory
`judgment of non-infringement. In support of its Complaint, Apple alleges as follows:
`NATURE OF THE ACTION
`1.
`On July 22, 2020, Koss filed a patent infringement action against Apple in the United
`States District Court for the Western District of Texas. (Compl., Koss Corporation v. Apple Inc., No.
`6:20-cv-00665, Dkt. No. 1 (“Texas Complaint”).) Koss’ Texas Complaint (a) is barred by, and is a
`breach of, a 2017 Confidentiality Agreement that the parties entered at Koss’ insistence, and (b)
`asserts baseless claims of patent infringement. This Complaint seeks relief for Apple on each of these
`grounds.
`2.
`In 2017, Koss sought out Apple in a purported attempt to engage in licensing
`discussions. Despite Apple’s request that all discussions be conducted without restriction, Koss
`insisted that the parties enter into a written Confidentiality Agreement. The parties ultimately signed
`such an agreement, with an effective date of August 6, 2017 (the “Confidentiality Agreement”). In
`the Confidentiality Agreement, Koss and Apple agreed that neither party would “use or attempt to
`use any Communications [between the parties], or the existence thereof, in a litigation or any other
`administrative or court proceeding for any purpose.”
`3.
`According to the terms of the Confidentiality Agreement, while the agreement was in
`force, Apple could not advise a Court of Koss’ threats to file baseless infringement claims or ask a
`Court to declare Apple’s rights and resolve the legal uncertainty it faced. The Confidentiality
`Agreement also restricted how Apple could disclose and use the existence and contents of the
`discussions. But the agreement also protected Apple—Koss was not permitted to later use the fact
`that Apple had agreed to a discussion with Koss, or the contents of the discussion, against Apple in
`litigation. In other words, having enticed Apple to participate in discussions, reveal information, and
`forego some of its legal options, Koss could not use Apple’s participation against it as a “gotcha” to
`bring claims in a later litigation.
`4.
`That, however, is exactly what Koss did. After securing Apple’s assent to the
`Confidentiality Agreement, Koss filed the Texas Complaint, which revealed and described the parties’
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`COMPLAINT FOR DECLARATORY JUDGMENT
`OF NON-INFRINGEMENT
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`Case No. 5:20-cv-05504
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`Koss 2005
`IPR2021-00255, Apple Inc. v. Koss Corporation
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`discussions, and included multiple different claims that relied on the very discussions Koss had
`agreed not to use in litigation. For example, Koss alleged in the Texas Complaint that it had “informed
`Apple that it was infringing” one of its patents on September 7, 2017, and that, “over the following
`two and a half years, Koss and its representatives met with Apple a total of four times in Apple’s
`California offices” to discuss claim charts and infringement allegations.
`5.
`Koss’ willful violation of the Confidentiality Agreement must be addressed
`immediately. Koss has shown that it will not abide by the agreement and is willing to violate its
`express terms without any regard for its contractual obligations or for the harm inflicted on Apple.
`Unless enjoined, Koss is likely to continue impermissibly breaching the Confidentiality Agreement.
`6.
`Although Koss has sued Apple in Texas, it had no legal right to do so—the claims it
`brought are squarely foreclosed by the Confidentiality Agreement. But the filing of Koss’ Texas
`Complaint, and the allegations in it, make clear that Koss has a long history of threatening Apple with
`alleged violations of its patent rights, and that it has no intention of stopping any time soon. Koss’
`infringement allegations are baseless: as Koss knows from the very confidential discussions it has
`impermissibly used and disclosed, Apple does not infringe any of Koss’ asserted claims. To finally
`put Koss’ litany of infringement threats to rest, therefore, in addition to seeking to enjoin Koss from
`its continuing breach of the Confidentiality Agreement, Apple seeks a declaratory judgment of non-
`infringement.
`7.
`The appropriate venue for this dispute is California. As Koss noted in its Texas
`Complaint, Koss and Apple met several times in this District, where Apple is headquartered, and the
`allegedly infringing products are designed and developed by Apple engineers working in or near
`Apple’s Cupertino, California, headquarters.
`THE PARTIES
`8.
`Plaintiff Apple Inc. is a California corporation having its principal place of business
`at One Apple Park Way, Cupertino, California 95014. Apple has over 35,000 employees who work
`in or near its headquarters in Cupertino, California.
`9.
`Apple is a leading designer and manufacturer of mobile communication devices,
`personal computers, portable digital media players, and headphones. As a result of its significant
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`COMPLAINT FOR DECLARATORY JUDGMENT
`OF NON-INFRINGEMENT
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`3
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`Case No. 5:20-cv-05504
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`IPR2021-00255, Apple Inc. v. Koss Corporation
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`investment in research and development, Apple has developed innovative technologies that have
`changed the face of the computing and telecommunications industries for four decades.
`10.
`Apple’s many pioneering and revolutionary products reflect decades of innovation,
`and include the Macintosh PC (first released in 1984), PowerBook (first released in 1991), Newton
`(first released in 1993), PowerMac (first released in 1994), iMac (first released in 1998), iPod (first
`released in 2001), iTunes Store (opened in 2003), MacBook (first released in 2006), iPhone and Apple
`TV (first released in 2007), Apple App Store (opened in 2008), Siri (first released 2010), iPad (first
`released in 2010), Apple Watch (first released in 2015), and AirPods (first released in 2016).
`11.
`The United States Patent & Trademark Office has awarded Apple thousands of patents
`protecting the technological inventions underlying Apple’s groundbreaking products and services,
`including on technology relating to Apple’s AirPods and HomePod products. Many well-known
`functionalities and features of Apple’s products were made possible with the inventions of Apple
`engineers working in and around its Cupertino headquarters.
`12.
`On information and belief, Defendant Koss Corporation is a company organized and
`existing under the laws of Delaware with a principal place of business at 4129 N. Port Washington
`Avenue, Milwaukee, Wisconsin 53212.
`JURISDICTION AND VENUE
`13.
`The Court has subject matter jurisdiction over the declaratory-judgment claims
`presented in this action pursuant to 28 U.S.C. §§ 1331 and 1338(a) because these claims arising under
`the patent laws of the United States, 35 U.S.C. § 1, et seq., and under the Federal Declaratory
`Judgment Act, 28 U.S.C. §§ 2201 and 2202.
`14.
`On July 22, 2020, Koss filed a complaint against Apple in the Western District of
`Texas alleging that certain of Apple’s products infringe United States Patent Nos. 10,206,025 (the
`“’025 Patent”); 10,298,451 (the “’451 patent”); 10,469,934 (the “’934 Patent”); 10,491,982 (the
`“’982 Patent”); and 10,506,325 (the “’325 Patent”) (collectively, the “Patents-in-Suit”).
`15. While the timing and form of Koss’ claims in the Texas Complaint are barred by the
`parties’ Confidentiality Agreement, the Texas Complaint makes clear that there is and remains a
`substantial controversy between Apple and Koss with regard to the non-infringement of the Patents-
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`OF NON-INFRINGEMENT
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`Case No. 5:20-cv-05504
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`in-Suit, and that this controversy is of sufficient immediacy and reality to warrant the issuance of a
`declaratory judgment of non-infringement. In particular, Apple asserts that Apple’s products,
`including its AirPods and HomePod, do not infringe the Patents-in-Suit (as identified below), directly
`or indirectly, literally or under the doctrine of equivalents. As the Texas Complaint reveals, Koss
`contends that Apple’s products do infringe the Patents-in-Suit. This Court thus has subject-matter
`jurisdiction over Apple’s claims seeking a declaratory judgment to resolve Apple’s rights with respect
`to these legal issues.
`16.
`The Court has supplemental jurisdiction over the breach-of-contract claims asserted
`herein pursuant to 28 U.S.C. § 1367, because those claims are so related to the declaratory-judgment
`claims that they comprise part of the same case or controversy. For example, the breach-of-contract
`claims asserted herein are based in part on the fact that Koss has asserted claims against Apple relating
`to the patents at issue in the declaratory-judgment claims that are barred by the contract at issue.
`17.
`The Court also has jurisdiction over the breach-of-contract claims asserted herein
`pursuant to 28 U.S.C. § 1332(a)(1) because Apple and Koss are citizens of different states and the
`amount in controversy herein exceeds $75,000. As set forth above, Apple is incorporated in and has
`its principal place of business in the state of California. Koss is incorporated in the state of Delaware
`and has its principal place of business in Wisconsin. Therefore, the claims asserted herein are between
`citizens of different states.
`18.
`Further, the amount in controversy of the breach-of-contract claims herein exceeds
`$75,000. These claims seek relief in the form of an injunction barring Koss from violating a
`contractual agreement between the parties by, among other things, making contractually-barred (and
`false) claims that Apple willfully infringes certain patents. The value of this relief exceeds $75,000
`at least because the cost to Apple of defending against claims brought in breach of the parties’
`contractual obligations would exceed that amount.
`19.
`The Court has personal jurisdiction over Koss in this action because Koss has directed
`and continues to direct acts to this District, including acts pertaining to the Patents-in-Suit and acts
`giving rise to the claims for relief asserted in this action. Further, Koss has, and has had, continuous
`and systematic contacts within the State of California, including this District, and has purposefully
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`OF NON-INFRINGEMENT
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`directed business activities into and in this District. For example, Koss directs sales of its own
`products to consumers in this District and has placed its products into the stream of commerce with
`the knowledge that they will be sold and used in this District. In addition, a substantial part of the
`events giving rise to the claims alleged in this Complaint occurred in this District.
`20.
`As Koss alleged in the Texas Complaint, over the course of two and a half years, Koss
`and its representatives traveled on multiple occasions to Apple’s offices in this District, to meet with
`Apple and discuss Koss’ patent portfolio, including Koss’ allegations that Apple infringed the
`Patents-in-Suit. (Texas Complaint ¶ 71.) As Koss also recounted in the Texas Complaint, Koss’
`employees and representatives directed correspondence alleging
`infringement
`to Apple’s
`representatives in California and entered into an agreement with Apple in California to preserve the
`confidentiality of the substance and existence of their communications. (Id. e.g. ¶¶ 72, 85, 99, etc.)
`21.
`As further recounted in the Texas Complaint, Koss has made statements in this District
`alleging that Apple’s AirPods and HomePod infringe the Patents-in-Suit, including through claim
`charts directed to Apple in this District. (Id. ¶¶ 95, 96, 99, etc.) Koss asserted during the meetings in
`this District that Apple requires a license to Koss’ patent portfolio, including the Patents-in-Suit
`(which Apple disputes). Further, Koss has filed multiple litigations against other manufacturers of
`wearable devices alleging infringement of the Patents-in-Suit, including suits against Bose
`Corporation (alleged to infringe the ’025 and ’934 Patents), Peag LLC (alleged to infringe
`the ’025, ’982, and ’325 Patents), Plantronics (alleged to infringe the ’025 and ’325 Patents), and
`Skullcandy (alleged to infringe the ’025, ’934, ’982, and ’325 Patents).
`22.
`As set forth above, Koss has purposefully availed itself of the benefits of doing
`business and conducting activities in California, and has more than sufficient minimum contacts with
`California, including within this District, such that this declaratory judgment action meets the
`requirements of California’s long-arm statute. Further, the assertion of jurisdiction over Koss here is
`reasonable and fair, at least because Koss engaged in activity giving rise to the causes of action herein
`in this District and directed its activities to a resident of this District.
`23.
`Venue is proper in this District. Apple resides in this District and Koss has alleged that
`Apple has committed acts of infringement in this District related to the Patents-in-Suit. This District
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`COMPLAINT FOR DECLARATORY JUDGMENT
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`Case No. 5:20-cv-05504
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`IPR2021-00255, Apple Inc. v. Koss Corporation
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`A.
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`is the most convenient District for the present declaratory judgment claims because, among other
`things, the witnesses and evidence concerning the Apple Accused Products are located in this District.
`This District is also the most convenient District for injunctive relief because Apple’s witnesses and
`evidence concerning the Confidentiality Agreement are located in this District.
`INTRA-DISTRICT ASSIGNMENT
`24.
`For purposes of intra-district assignment under Civil Local Rules 3-2(c) and 3-5(b),
`this intellectual property action will be assigned on a district-wide basis.
`FACTUAL BACKGROUND
`The Confidentiality Agreement.
`25.
`Koss and Apple entered into a written agreement entitled “Confidentiality Agreement”
`with an effective date of August 6, 2017 (the “Confidentiality Agreement”). The Confidentiality
`Agreement identified Apple and Koss as the parties thereto, stating: “This Confidentiality Agreement
`(the “Agreement”) is entered into and is effective as of August 6, 2017 (the “Effective Date”) by and
`between Apple Inc., having its principal place of business at 1 Infinite Loop, Cupertino, California
`95014, and its affiliates (“Apple”) and Koss Corporation, a Delaware corporation, having its principal
`place of business at 4129 N. Port Washington Rd., Milwaukee, WI 53212, its affiliates and successors
`in interest to the Patents (collectively “Company”) (each of Apple and Company a “Party” and
`together “Parties”).”
`26.
`The Confidentiality Agreement is an enforceable contract.
`27.
`Paragraph 5 of the Confidentiality Agreement states that “the Parties agree not to use
`or attempt to use any Communications, or the existence thereof, in a litigation or any other
`administrative or court proceeding for any purpose.”
`28.
`Paragraph 1 of the Confidentiality Agreement defines “Communications” as
`“communications, discussions, presentations, documents, or notes exchanged between the Parties in
`any form, whether before or during the Term, in connection with the Purpose, including any other
`materials reflecting the content thereof.”
`/ / /
`/ / /
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`COMPLAINT FOR DECLARATORY JUDGMENT
`OF NON-INFRINGEMENT
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`Case No. 5:20-cv-05504
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`IPR2021-00255, Apple Inc. v. Koss Corporation
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`29.
`The Confidentiality Agreement defines the “Purpose” as discussions and evaluations
`regarding “a potential license, acquisition or other transactions relating to patents that [Koss]
`represents it owns or controls.”
`30.
`Under Paragraph 14 of the Confidentiality Agreement, the obligations of Paragraph 5,
`including their restriction on the use of any Communications, survives any termination of the
`Agreement. Although the Confidentiality Agreement was terminated by Koss as of July 22, 2020,
`Paragraph 14 states that “Termination of this Agreement shall not relieve Recipient of its
`confidentiality and use obligations with respect to Discloser’s Confidential Information and
`Communications disclosed prior to the date of termination.” Paragraph 14 further states that
`“Sections . . . 5 (Restrictions on Use of Communications) . . . shall survive termination.” The
`obligations of Paragraph 5 of the Confidentiality Agreement were therefore in force on July 22, 2020,
`and remain in force today.
`31.
`Under Paragraph 20 of the Confidentiality Agreement, Apple may seek an injunction
`or other equitable relief in this District to enforce any right or obligation under the agreement,
`including to enforce the restrictions on the use of communications described in Paragraph 5.
`32.
`Duly authorized representatives of Apple and Koss, with authority to bind their
`respective parties, signed the Confidentiality Agreement.
`33.
`The promises embodied in the Confidentiality Agreement were supported by
`consideration.
`34.
`On July 22, 2020, Koss filed a lawsuit against Apple in the Western District of Texas,
`Waco Division, styled Koss Corporation v. Apple Inc. (the “Texas Complaint”).
`35.
`On at least eighteen separate occasions, the Texas Complaint describes, references,
`uses, and relies on communications between Koss and Apple. Some examples are provided below.
`36.
`Paragraph 70 of the Texas Complaint states: “On September 7, 2017 Koss informed
`Apple that it was infringing U.S. Patent No. 9,729,959, a parent of several of the Patents-in-Suit.”
`37.
`The reference in Paragraph 70 of the Texas Complaint to “Koss inform[ing] Apple”
`of its supposed infringement of the ‘959 Patent is a reference to a communication from Koss, or its
`attorneys or agents, to Apple.
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`COMPLAINT FOR DECLARATORY JUDGMENT
`OF NON-INFRINGEMENT
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`Case No. 5:20-cv-05504
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`IPR2021-00255, Apple Inc. v. Koss Corporation
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`38.
`The communication by which Koss allegedly “informed” Apple of its supposed
`infringement of the ‘959 Patent, as referenced in Paragraph 70 of the Texas Complaint, is a
`“Communication” within the definition of Paragraph 5 of the Confidentiality Agreement between
`Koss and Apple.
`39.
`By including Paragraph 70 in the Texas Complaint, Koss has used, in litigation,
`Communications subject to Paragraph 5 of the Confidentiality Agreement.
`40.
`Paragraph 71 of the Texas Complaint states: “Over the following two and a half years,
`Koss and its representatives met with Apple a total of four times in Apple’s California offices and in
`the course of those meetings, as well as several additional email exchanges, provided Apple with
`claim charts identifying how Apple infringed certain of Koss’s patents, including each of the Patents-
`in-Suit.”
`41.
`The references in Paragraph 71 of the Texas Complaint to “meetings” and “email
`exchanges” by which Koss “provided Apple with claim charts” are references to written or oral
`communications between Koss, or its attorneys or agents, and Apple.
`42.
`The “meetings” and “email exchanges” by which Koss “provided Apple with claim
`charts,” as referenced in Paragraph 71 of the Texas Complaint, are “Communications” within the
`definition of Paragraph 5 of the Confidentiality Agreement between Koss and Apple.
`43.
`By including Paragraph 71 in the Texas Complaint, Koss has used, in litigation,
`Communications subject to Paragraph 5 of the Confidentiality Agreement.
`44.
`Paragraph 72 of the Texas Complaint states: “Prior to the filing of the instant
`Complaint, Koss informed Apple of its belief that Apple was infringing each of the Patents-in-Suit.”
`45.
`The reference in Paragraph 72 of the Texas Complaint to “Koss inform[ing] Apple”
`of its supposed infringement of the Patents-in-Suit is a reference to a communication from Koss, or
`its attorneys or agents, to Apple.
`46.
`The communication by which Koss allegedly “informed” Apple of its supposed
`infringement of the Patents-in-Suit, as referenced in Paragraph 72 of the Texas Complaint, is a
`“Communication” within the definition of Paragraph 5 of the Confidentiality Agreement between
`Koss and Apple.
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`47.
`By including Paragraph 72 in the Texas Complaint, Koss has used, in litigation,
`Communications subject to Paragraph 5 of the Confidentiality Agreement.
`48.
`Paragraph 85 of the Texas Complaint states: “Upon information and belief, Apple was
`aware of its infringement of the ’025 Patent at least as early as February 12, 2019, when the ’025
`Patent issued, through Apple’s own freedom-to-operate analysis, initiated, in part, due to the
`communications Apple was having with Koss at that time.” (Emphasis added.)
`49.
`The reference in Paragraph 85 of the Texas Complaint to “the communications Apple
`was having with Koss at that time” is a reference to communications between Koss, or its attorneys
`or agents, and Apple.
`50.
`The “communications Apple was having with Koss,” referenced in Paragraph 85 of
`the Texas Complaint, are “Communications” within the definition of Paragraph 5 of the
`Confidentiality Agreement between Koss and Apple.
`51.
`By including Paragraph 85 in the Texas Complaint, Koss has used, in litigation,
`Communications subject to Paragraph 5 of the Confidentiality Agreement.
`52.
`Koss’ Texas Complaint alleges that Apple induced infringement of each of the
`Patents-in-Suit. This claim requires, as Koss acknowledges, that Apple had knowledge of the Patents-
`in-Suit prior to the filing of the Texas Complaint and that Apple acted with knowledge that it was
`inducing infringement. Koss’ only bases for these allegations in its Texas Complaint are
`communications whose use in litigation is barred under the Confidentiality Agreement.
`53.
`Koss’ Texas Complaint alleges that Apple is liable for contributory infringement of
`each of the Patents-in-Suit. This claim requires, as Koss acknowledges, that Apple had knowledge of
`the Patents-in-Suit prior to the filing of the Texas Complaint and that Apple acted with knowledge
`that its products were especially made for use in an infringement of the relevant patents. Koss’ only
`bases for these allegations in its Texas Complaint are communications whose use in litigation is
`barred under the Confidentiality Agreement.
`54.
`Koss’ Texas complaint alleges that Apple willfully infringed each of the Patents-in-
`Suit. This claim requires, as Koss acknowledges, that Apple had knowledge of the Patents-in-Suit
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`prior to the filing of the Texas Complaint. Koss’ only bases for these allegations in its Texas
`Complaint are communications whose use in litigation is barred under the Confidentiality Agreement.
`B.
`The Patents-in-Suit.
`55.
`On February 12, 2019, the Patent Office issued the ’025 Patent, entitled “System With
`Wireless Earphones,” naming as inventors Michael J. Koss, Michael J. Pelland, Michael Sagan,
`Steven R. Reckamp, Gregory J. Hallingstad, Jeffery K. Bovee, and Morgan J. Lowery. A true and
`correct copy of the ’025 Patent is attached to this Complaint as Exhibit 1. On information and belief,
`Koss purports to own by assignment the ’025 Patent.
`56.
`On May 21, 2019, the Patent Office issued the ’451 Patent, entitled “Configuring
`Wireless Devices For A Wireless Infrastructure Network,” naming as inventors Michael J. Koss,
`Michael J. Pelland, and Joel L. Haynie. A true and correct copy of the ’451 Patent is attached to this
`Complaint as Exhibit 2. On information and belief, Koss purports to own by assignment the ’451
`Patent.
`
`57.
`On November 5, 2019, the Patent Office issued the ’934 Patent, entitled “System With
`Wireless Earphones,” naming as inventors Michael J. Koss, Michael J. Pelland, Michael Sagan,
`Steven R. Reckamp, Gregory J. Hallingstad, Jeffery K. Bovee, and Morgan J. Lowery. A true and
`correct copy of the ’934 Patent is attached to this Complaint as Exhibit 3. On information and belief,
`Koss purports to own by assignment the ’934 Patent.
`58.
`On November 26, 2019, the Patent Office issued the ’982 Patent, entitled “System
`With Wireless Earphones,” to Michael J. Koss, Michael J. Pelland, Michael Sagan, Steven R.
`Reckamp, Gregory J. Hallingstad, Jeffery K. Bovee, and Morgan J. Lowery. A true and correct copy
`of the ’982 patent is attached to this Complaint as Exhibit 4. On information and belief, Koss purports
`to own by assignment the ’982 Patent.
`59.
`On December 10, 2019, the Patent Office issued the ’325 Patent, entitled “System
`With Wireless Earphones,” to Michael J. Koss, Michael J. Pelland, Michael Sagan, Steven R.
`Reckamp, Gregory J. Hallingstad, Jeffery K. Bovee, and Morgan J. Lowery. A true and correct copy
`of the ’325 Patent is attached to this Complaint as Exhibit 5. On information and belief, Koss purports
`to own by assignment the ’325 Patent.
`
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`COMPLAINT FOR DECLARATORY JUDGMENT
`OF NON-INFRINGEMENT
`
`11
`
`
`
`Case No. 5:20-cv-05504
`
`Koss 2005
`IPR2021-00255, Apple Inc. v. Koss Corporation
`
`

`

`
`
`COUNT ONE
`Breach of Contract (Paragraph 5 of the Confidentiality Agreement)
`60.
`Apple incorporates by reference the preceding allegations of its Complaint.
`61.
`Under Paragraph 5 of the Confidentiality Agreement, Koss was prohibited from using
`or attempting to use “any Communications, or the existence thereof, in a litigation or any other
`administrative or court proceeding for any purpose.”
`62.
`The Confidentiality Agreement was and is a valid written contract between Apple and
`Koss, executed by duly authorized representatives of the parties thereto, and supported by
`consideration.
`63.
`The obligations of Paragraph 5 of the Confidentiality Agreement were in effect and in
`force as of July 22, 2020, and remain in effect today.
`64.
`In filing the Texas Complaint on July 22, 2020, Koss disclosed and used
`“Communications,” as that term is defined in the Confidentiality Agreement. At least Paragraphs 70,
`71, 72, 81, 82, 85, 95, 96, 99, 109, 110, 113, 123, 124, 127, 137, 138, and 141 of the Texas Complaint
`disclose the existence or substance of, or use, Communications subject to the Confidentiality
`Agreement.
`65.
`By using the Parties’ Communications in the Texas Litigation as set forth above, Koss
`has breached at least Paragraph 5 of the Confidentiality Agreement.
`66.
`Unless enjoined by this Court, there is a substantial risk that Koss will continue to
`violate the Confidentiality Agreement. For instance, as set forth above, Koss has filed numerous
`litigations against other defendants for allegedly infringing various patents including the Patents-in-
`Suit and other, related patents. Further, Koss continues to prosecute patent applications related
`directly to the Patents-in-Suit. Unless enjoined by this Court, there is a substantial likelihood that
`Koss will again violate the Confidentiality Agreement, for instance by using protected
`communication to assert additional issued patents against Apple, or by using protected
`communications in the course of prosecuting patents related to the Patents-in-Suit, in an effort to
`obtain additional patents that can be asserted against Apple.
`/ / /
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`
`COMPLAINT FOR DECLARATORY JUDGMENT
`OF NON-INFRINGEMENT
`
`12
`
`
`
`Case No. 5:20-cv-05504
`
`Koss 2005
`IPR2021-00255, Apple Inc. v. Koss Corporation
`
`

`

`
`
`67.
`Unless Koss is enjoined by this Court, Apple will suffer irreparable harm. For instance,
`Apple will be forced to divert resources to defend against legal claims that Koss is contractually
`barred from asserting. Apple will also suffer harm from being the subject of false and legally
`impermissible allegations that it willfully infringed Koss’ patents. These damages cannot be fully
`quantified or reduced to a dollar value or similar measure and are not compensable through money
`damages alone.
`
`COUNT TWO
`Non-Infringement of United States Patent No. 10,206,025
`68.
`Apple incorporates by reference the preceding allegations of its Complaint.
`69.
`Claim 1 of the ’025 Patent requires a “headphone assembly” containing a “processor
`[] for, upon activation of a user-control of the headphone assembly, initiating transmission of a
`request to the remote, network-connected server.” (Ex. 1, ’025 Pat. 18:30–33.)
`70.
`Koss has asserted, at least through its Texas Complaint, that Apple’s AirPods infringe
`claim 1 of the ’025 Patent.
`71.
`Apple’s AirPods do not “initiate transmission of a request” to any “remote, network-
`connected, server,” as the ’025 Patent requires. Rather, Apple’s AirPods only communicate with, and
`initiate transmission to, a local device.
`72.
`For at least the exemplary reasons set forth above, Apple has not infringed and does
`not infringe at least claim 1 of the ’025 Patent, either directly or indirectly, literally or under the
`doctrine of equivalents, including through its making, use, sale or offer for sale in, or importation into
`the United States of the Apple AirPods.
`
`COUNT THREE
`Non-Infringement of United States Patent No. 10,298,451
`73.
`Apple incorporates by reference the preceding allegations of its Complaint.
`74.
`Claim 1 of the ’451 Patent requires a “system” in which a “mobile computer device”
`“transmit[s] to the electronic device . . . credential data for the infrastructure wireless network stored
`by the one or more host servers.” (Ex. 2, ’451 Pat. 8:42–47.)
`/ / /
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`28
`
`COMPLAINT FOR DECLARATORY JUDGMENT
`OF NON-INFRINGEMENT
`
`13
`
`
`
`Case No. 5:20-cv-05504
`
`Koss 2005
`IPR2021-00255, Apple Inc. v. Koss Corporation
`
`

`

`
`
`75.
`Koss has asserted, at least through its Texas Complaint, that Apple’s HomePod, used
`in connection with other Apple devices, infringes claim 1 of the ’451 Patent.
`76.
`The HomePod is not sent “credential data” from storage on “one or more host servers.”
`Rather, the HomePod may connect to a wireless network by receiving data stored on another local
`device.
`77.
`For at least the exemplary reasons set forth above, Apple has not infringed and does
`not infringe at least claim 1 of the ’451 Patent, either directly or indirectly, literally or under the
`doctrine of equivalents, including through its making, use, sale or offer for sale in, or importation into
`the United States of the Apple HomePod.
`COUNT FOUR
`Non-Infringement of United States Patent No. 10,469