Case 6:24-cv-00143-ADA Document 1 Filed 03/18/24 Page 1 of 69
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`PROXENSE, LLC,
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`Plaintiff,
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` v.
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`APPLE, INC.
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`Defendant.
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`UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF TEXAS
`WACO DIVISION
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`Civil Action No. 6:24-cv-00143
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`JURY TRIAL REQUESTED
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`COMPLAINT FOR PATENT INFRINGEMENT
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`Plaintiff Proxense, LLC (“Proxense” or “Plaintiff”) hereby sets forth its Complaint for
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`patent infringement against Defendant Apple, Inc. (“Apple” or “Defendant”), for patent
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`infringement under 35 U.S.C. § 271 and alleges as follows:
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`NATURE OF THE CASE
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`1.
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`This action is for patent infringement arising under the patent laws of the United
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`States, 35 U.S.C. §§ 1, et seq. As further stated herein, Proxense alleges that Apple willfully
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`infringes one or more claims of patents owned by Proxense. Accordingly, Proxense seeks
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`monetary damages and injunctive relief in this action.
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`THE PARTIES
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`2.
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`Plaintiff Proxense, LLC is a Delaware company with its principal place of business
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`at 689 NW Stonepine Drive, Bend, Oregon 97703. Defendant Apple, Inc. is a corporation
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`organized and existing under the laws of California, with one or more regular and established
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`places of business in this District at least at 12545 Riata Vista Circle, Austin, Texas 78727; 12801
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`Delcour Drive, Austin, Texas 78727; 6800 W Parmer Lane, Austin, Texas 78729, and 3121 Palm
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`Way, Austin, Texas 78758. Apple may be served with process through its registered agent, the CT
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`Corp System, at 1999 Bryan St., Ste. 900 Dallas, Texas 75201-3136. In November 2019, Apple
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`stated that it had approximately 7,000 employees in Austin and that it expected to open, in 2022,
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`a $1 billion, 3 million-square foot campus with capacity for 15,000 employees. See Exhibit 7.
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`Apple is registered to do business in the State of Texas and has been since at least May 16, 1980.
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`JURISDICTION AND VENUE
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`3.
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`This Court has exclusive subject matter jurisdiction over this case pursuant to 28
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`U.S.C. §§ 1331, 1332, 1338, and 1367 on the grounds that this action arises under the Patent Laws
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`of the United States, 35 U.S.C. § 1 et seq., including, without limitation, 35 U.S.C. §§ 271, 281,
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`284, and 285.
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`4.
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`5.
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`The amount in controversy exceeds $75,000.
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`This Court has specific personal jurisdiction over Apple because Apple is a
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`multinational technology company that has a significant presence in the District through the
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`products and services Apple provides residents of this District. Defendant regularly conducts
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`business and have committed acts of patent infringement within this Judicial District that give rise
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`to this action and have established minimum contacts within this forum such that the exercise of
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`jurisdiction over Apple would not offend traditional notions of fair play and substantial justice.
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`Apple has committed and continues to commit acts of infringement in this Judicial District, by,
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`among other things, offering to sell, selling, using, importing, and/or making products and services
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`that infringe the asserted patents. Apple has further induced acts of patent infringement by others
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`in this Judicial District and/or has contributed to patent infringement by others in this Judicial
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`District, the State of Texas, and elsewhere in the United States.
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`6.
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`Apple operates retail stores located in this Judicial District that offer and sell
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`products on its behalf in this District, including products accused of infringement herein. For
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`example, Apple operates the Apple Domain NORTHSIDE store located at 3121 Palm Way,
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`Austin, Texas 78758 and the Apple Barton Creek store located at 2901 S Capital of Texas Hwy,
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`Austin, Texas 78746. A screenshot of a search for Waco, Texas in the “Find a Store” section of
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`Apple’s website, taken on February 10, 2024, reveals a picture of its Apple Domain NORTHSIDE
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`location:
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`7.
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`Apple’s website further indicates that its Apple Domain NORTHSIDE location
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`offers shopping, order pickup, and support/instruction (through the Genius Bar and scheduled
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`workshops).
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`8.
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`Apple also partners with third parties in this District acting as Apple Authorized
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`Retailers that can sell Apple products via their physical store(s). These include retailers Target
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`(e.g., the retail location at 5401 Bosque Blvd., Waco, TX), Walmart (e.g., the retail locations at
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`4320 Franklin Ave and 600 Hewitt Dr located in Waco, TX), Best Buy (e.g. the retail location at
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`4627 S Jack Kultgen Expy, Waco, TX), Office Depot (e.g., the retail locations at 5524 Bosque
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`Blvd and 4627 Jack Kultgen Fwy in Waco, TX), T-Mobile (e.g., the retail locations at 2448 W
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`Loop 340 Suite 24a and 100 N New Rd Ste 110 in Waco, TX), and Verizon (e.g., the retail
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`locations at 2812 W Loop 340 Ste H12 and 5301 Bosque Blvd Ste 120 in Waco, TX). On
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`information and belief, Apple Authorized Resellers are important to Apple's retail strategy and
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`represent a large portion of sales of Apple products worldwide.
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`9.
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`Proxense’s causes of action arise directly from Apple’s business contacts and other
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`activities in the State of Texas and this District.
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`10.
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`Apple has derived substantial revenues from its infringing acts within the State of
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`Texas and this District.
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`11.
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`Venue is proper in this Judicial District pursuant to 28 U.S.C. §§ 1400(b) and
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`1391(b) and (c) because Defendant is subject to personal jurisdiction in this Judicial District, has
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`committed acts of patent infringement in this Judicial District, and has a regular and established
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`place of business in this Judicial District. Defendant, through its own acts, makes, uses, sells,
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`and/or offers to sell infringing products within this Judicial District, regularly does and solicits
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`business in this Judicial District, and has the requisite minimum contacts with the Judicial District
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`such that this venue is a fair and reasonable one.
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`12.
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`Apple also maintains a significant physical presence in this Judicial District and
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`employs many people in this Judicial District. On November 20, 2019, Apple announced that it
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`was breaking ground on its $1 billion, 3-million-square-foot campus “as part of its broad expansion
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`in the city.” See Apple Newsroom, Press Release: Apple expands in Austin, Exhibit 7. Apple
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`also described in that 2019 press release that it was “steadily growing in Austin with approximately
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`7,000 employees in the city.” Id. Not only did Apple build a new campus in Austin, “Apple and
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`its manufacturing partners invested over $200 million in the Mac Pro facility in Austin, building
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`out the complex assembly line where the Mac Pro is produced.” Id.
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`13.
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`The Mac Pro is an accused product in this case capable of using Apple Pay. Apple’s
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`press release also revealed a photo of its Mac Pro facility in Austin, which it describes as
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`employing more than 500 people:
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`14.
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`In 2023, Apple “filed projects totaling $240 million for an expansion of its north
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`Austin campus…” Exhibit 8 “Capstone Phase Two AC09 and Capstone Phase Two AC07, as the
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`projects are called, are a four-story and a five-story building, respectively, set for construction at
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`6900 Parmer Lane. Between the two buildings, Apple is adding 419,441 square-feet of office
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`space. Construction begins for both buildings on September 30 of [2023] and have an estimated
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`completion date of March 30, 2025.” Id.
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`15.
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`The “Careers at Apple” section of Apple’s website highlights Austin as having a
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`“range of teams and specialties.” Exhibit 9. Among the categories of roles shown are Hardware,
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`Operations and Supply Chain, Corporate Functions, Support and Service, Software and Services,
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`and Sales and Business Development. So important to Apple is the Austin campus that Apple
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`recently threatened that one of its teams, located in California, to relocate to Austin or be
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`terminated. Exhibit 10.
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`16.
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`Among the teams located in Austin is the Apple Pay team. Apple Pay is pervasive
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`and ubiquitous, included in nearly all of Apple’s offerings, from the Mac Pro to the iPhone to the
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`recently introduced Vision Pro. Several key members of the Apple Pay team are located in Texas,
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`including:
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`- Alexander Antunovic is the Servicing and Readiness Lead for Apple Pay Business
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`Operations, located in Austin, Texas. Mr. Antunovic describes on his LinkedIn profile that
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`he has “[o]ver 15 years of contactless EMV payment experience that has involved physical
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`card issuance, digital (device & e-commerce) tokenization, merchant acceptance,
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`implementation, remediation, business development, commercialization, product roadmap
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`enhancement and drafting of business rules.” Mr. Antunovic has worked at Apple on its
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`Apple Pay team since January 2019. Prior to his role at Apple, Mr. Antunovic worked for
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`Mastercard in New York. He studied Computer Science at Concordia University. Exhibit
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`11.
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`- Alex Coulter is the Global Operations Project Manager for the Apple Pay group, located
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`in Austin, Texas.
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`- Geoff Johnson is a “proven business leader” working for Apple Pay Business Development
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`group, located in Austin, Texas. According to his LinkedIn profile, he “helps bring the
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`future of commerce to life with Apple Pay.” Exhibit 12.
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`-
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`Jennifer Cervantes is in Partner Operations for the Apple Pay group, located in Austin,
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`Texas. She has worked for the Apple Pay group since May 2020. Prior to her role at
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`Apple, Ms. Cervantes lived in California where she worked at TrustCommerce as a Vice
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`President of Account Management. Exhibit 13.
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`17.
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`Apple has also partnered with third parties, such as Austin Telco Federal Credit
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`Union, to utilize credit and debit cards issued by those third parties, with Apple Pay as “an easy,
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`secure, and private way to make purchases.” Exhibit 14. Apple Pay can also be used with
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`shopping apps such as those for Target.
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`18.
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`On information and belief, Apple has committed acts of willful direct and indirect
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`infringement in the Western District of Texas. For example, Apple sells computers (e.g., Mac
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`Pros, iMacs), laptops (e.g., MacBooks and MacBook Pros), iPads, iPhones, Apple Watches, and
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`the new Vision Pro to individuals in this Judicial District, which ship with various versions of
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`MacOS, iOS, iPadOS, watchOS, and visionOS. Apple also distributes Apple Pay, in this Judicial
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`District, available across its device offerings.
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`PATENTS-IN-SUIT
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`19.
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`On March 26, 2016, the United States Patent and Trademark Office duly and
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`legally issued U.S. Patent No. 9,298,905 (the “905 Patent”) entitled “Biometric Personal Data
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`Key (PDK) Authentication.” A true and correct copy of the 905 Patent is attached hereto as
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`Exhibit 1.
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`20.
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`On January 8, 2013, the United States Patent and Trademark Office duly and
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`legally issued U.S. Patent No. 8,352,730 (the “730 Patent”) entitled “Biometric Personal Data
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`Key (PDK) Authentication.” A true and correct copy of the 730 Patent is attached hereto as
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`Exhibit 2.
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`21.
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`On November 11, 2014, the United States Patent and Trademark Office duly and
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`legally issued U.S. Patent No. 8,886,954 (the “954 Patent”) entitled “Biometric Personal Data Key
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`(PDK) Authentication.” A true and correct copy of the 954 Patent is attached hereto as Exhibit 3.
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`22.
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`On June 30, 2020, the United States Patent and Trademark Office duly and legally
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`issued U.S. Patent No. 10,698,989 (the “989 Patent”) entitled “Biometric personal data key (PDK)
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`Authentication.” A true and correct copy of the 989 Patent is attached hereto as Exhibit 4.
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`23.
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`On June 2, 2015, the United States Patent and Trademark Office duly and legally
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`issued U.S. Patent No. 9,049,188 (the “188 Patent”) entitled “Hybrid Device Having a Personal
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`Digital Key and Receiver-Decoder circuit and Methods of Use.” A true and correct copy of the
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`188 Patent is attached hereto as Exhibit 5.
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`24.
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`On February 4, 2014, the United States Patent and Trademark Office duly and
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`legally issued U.S. Patent No. 8,646,042 (the “042 Patent”) entitled "Hybrid Device Having a
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`Personal Digital Key and Receiver-Decoder Circuit and Methods of Use." A true and correct copy
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`of the 042 Patent is attached hereto as Exhibit 6.
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`25.
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`Proxense is the sole and exclusive owner of all right, title, and interest to and in, or
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`is the exclusive licensee with the right to sue for, the 905, 730, 954, 989, 188, and 042 Patents
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`(together, the “Patents-in-Suit”), and holds the exclusive right to take all actions necessary to
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`enforce its rights to the Patents-in-Suit, including the filing of this patent infringement lawsuit.
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`Proxense also has the right to recover all damages for past, present, and future infringement of the
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`Patents-in-Suit and to seek injunctive relief as appropriate under the law.
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`26.
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`The technologies of the Patents-in-Suit were invented by John Giobbi and David
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`L. Brown. The 730, 954, and 905 Patents generally cover systems and methods for an integrated
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`device that persistently stores biometric data for a user in a tamper-resistant format. Subsequently,
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`scan data collected from a user (e.g., a fingerprint) can be compared against the stored biometric
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`data. Once the user has been biometrically verified by the integrated device, a code can be
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`wirelessly transmitted for authentication. The 989 Patent generally cover systems and methods of
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`verifying a user during authentication of an integrated device.
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`27.
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`The 188 and 042 Patents generally cover a hybrid device including a personal
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`digital key (“PDK”) and receiver-decoder circuit (“RDC”), wherein the PDK and RDC are coupled
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`for communication with each other. The 188 and 042 Patents also includes a number of system
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`configurations for use of the hybrid device including: use of the hybrid device in a cell phone;
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`simultaneous use of the PDK and the RDC functionality of hybrid device; and use of multiple links
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`of hybrid device to generate an enablement signal, use of multiple PDK links to the hybrid device
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`to generate an enablement signal.
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`FACTUAL ALLEGATIONS
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`I.
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`TECHNOLOGY BACKGROUND
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`28.
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`Authentication is the process by which the identity of a user is confirmed on a
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`device, including computers, tablets, and phones. When a person is authenticated, the goal is to
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`verify that the credentials presented are authentic. For years, users were authenticated with
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`usernames and passwords. However, with the amount of sensitive personal and financial
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`information currently stored on personal devices, and the rise of biometric readers and high-speed
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`networks, there was a need to implement improved authentication architectures. For over a decade,
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`Apple has integrated biometric reader hardware into its devices, beginning with fingerprint
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`scanners (i.e., Touch ID) and now spanning to facial (i.e., Face ID) and retina scanners (Optic ID),
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`the latter being introduced in the 2024-released Vision Pro augmented reality headset.
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`29.
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`In 2012, Apple acquired AuthenTec, a company focused on fingerprint-reading and
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`identification management software, for $356 million. By September 10, 2013, Apple would
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`integrate fingerprint reader technology in the iPhone 5S. The feature was marketed as “Touch
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`ID.” With the unveiling of the iPhone 6 and 6 Plus at a keynote event on September 9, 2014,
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`Touch ID was expanded from being used to unlock the device and authenticating App Store
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`purchases to also authenticating Apple Pay. The first generation of Touch ID was used in iPhone
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`and iPad products from 2013-2021, including the iPhone 5S, SE (1st generation), 6, and 6 Plus and
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`the iPad Pro 12.9 inch (2015) and 9.7 inch (2016), Air 2, Mini 3, Mini 4, and 5th to 9th generations
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`(2015-2021). The second generation of Touch ID was used in iPhone, iPad, MacBook, iMac, and
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`the Magic Keyboard from 2015 to products that Apple continues to sell today, including the iPhone
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`6S, 6S Plus, 7, 7 Plus, 8, 8 Plus, SE (2nd and 3rd generations); iPad (10th generation), iPad Pro (2nd
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`generation), Air (3rd to 5th generations), Mini (5th and 6th generations), MacBook Pro (from 2018-
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`2023), MacBook Air
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`30.
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`The successor to Touch ID was announced by Apple during the unveiling of the
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`iPhone X on September 12, 2017. It was marketed as Face ID. Like Touch ID, Face ID allows
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`biometric authentication for unlocking a device and making payments through Apple Pay. Face
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`ID has been available on newer iPhone models beginning with the iPhone X and all iPad Pro
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`models, including 2018 iPad Pros and later.
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`31.
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`In 2024, Apple introduced Retina ID with the Apple Vision Pro. Apple describes
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`that: “In the same way that Touch ID revolutionized authentication using a fingerprint and Face
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`ID revolutionized authentication using facial recognition, Optic ID revolutionizes authentication
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`using iris recognition.” Exhibit 15 (last visited February 11, 2024). “With a look, Optic ID
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`securely unlocks your Apple Vision Pro. You can use it to authorize purchases from the App Store
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`and Book Store, payments using Apple Pay, and more.” Id. “Developers can also allow you to use
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`Optic ID to sign into their apps.” Id. “Apps that support Touch ID or Face ID automatically support
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`Optic ID.” Id.
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`32.
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`Apple leverages the biometric readers integrated on its devices (and Touch ID /
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`Face ID / Optic ID) for authenticating financial transactions, through Apple Pay. as well as for
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`passwordless logins. For example, Apple uses “federated authentication” (also known as
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`“federated identity”), which relies on an external trusted system to provide the service and function
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`of authenticating users. See e.g. Exhibit 16. In a federated authentication solution, the system
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`being accessed must request authentication of the user from the external system that is providing
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`the user authentication functions and services. The external system providing the authentication
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`service will then communicate successful authentication back to the system being accessed.
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`Successful authentication is communicated between the two systems with the issuance security
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`tokens containing claims about user authentication. Upon successful authentication of a user, the
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`external system issues a security token which can be exchanged for access to the other system.
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`One such federated architecture is OpenID Connect, which Apple has adopted.
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`33. While OpenID and OAuth 2 based identity services limit the use of passwords, they
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`do not eliminate them. Authentication services geared towards eliminating passwords include
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`those utilizing the WebAuthn protocol and its derivative, FIDO2, an open authentication standard
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`developed by the FIDO Alliance, of which Apple is a member. Identity services utilizing the
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`WebAuthn protocol, and the derivative protocol FIDO2, utilize an asymmetric key pair to
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`authenticate a device. Possession and control of the device verifies the identity of the user. The
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`device, referred to as an authenticator, generates a private/public key pair and a credential ID
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`uniquely identifying the key pair. The public key and credential ID are sent to the authentication
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`service – called in the protocol the “relying party”. The private key is held by the authenticator.
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`During authentication, the authenticator sends a signature generated with its private key and the
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`credential ID identifying the private key used to generate the signature. The relying party (i.e.,
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`authentication service) uses the credential ID to retrieve the matching public key. The signature
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`is then verified with the public key. Upon successful verification of the signature, the relying party
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`authentication service issues an authentication response. Apple has also adopted FIDO2. Exhibit
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`17.
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`34. WebAuthn and federated protocols can be combined by an identity service
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`provider. When combined, the system to be accessed by the user requests authentication by a
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`WebAuthn / FIDO2 server of the identity service provider. The server issues an authentication
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`request to the user’s authenticator. The authenticator responds by providing a signature and
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`credential ID to the WebAuthn/FIDO2 server. If the signature is verified, the WebAuthn/FIDO2
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`server informs the OpenID / OAuth 2 server of successful authentication. The OpenID / OAuth 2
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`server of the identity service provider then sends a security token to be used to access the system
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`requesting authentication.
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`35.
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`Attempting to eliminate the use of passwords, Apple has developed a universal
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`platform “passwordless” architecture (e.g. Apple ID and “Sign in with Apple”). See Exhibit 18.
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`The architecture is universal in that it works across ecosystems, such as iOS (and the related
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`iPadOS, watchOS, and visionOS) and MacOS, as well as on PCs and even Android. It is password-
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`less in that passwords have been replaced with the use of passkeys. Exhibit 19. At Apple’s
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`Worldwide Developer Conference in 2022, Apple announced: “In macOS Monterey and iOS 15,
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`we announced a developer preview of the solution -- passkeys -- and got so much great feedback.
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`In macOS Ventura and iOS 16, we're excited to make passkeys available to everyone. Now is the
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`time to adopt them.” Exhibit 20.
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`36.
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`Apple’s architecture relies on the issuance of security tokens, adopting standards
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`OAuth 2.0 and OpenID Connect. The hub of Apple’s universal platform password-less
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`architecture is Apple ID, which receives authentication requests from external systems,
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`coordinates the action of trusted devices, and issues security tokens.
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`37.
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`Apple encourages its users to register an Apple ID to use various functionalities
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`across its operating systems, including iOS to MacOS.
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`38.
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`Apple leverages its vast userbase for “Sign in with Apple,” which allows users to
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`utilize their Apple ID to sign into a website. It starts with a button in the app or website labeled
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`“Sign In with Apple”. Exhibit 21.
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`39.
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`Apple uses OAuth 2.0 and OpenID Connect terminology in its documentation and
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`API calls. Applications providing “Sign in with Apple” must be registered in the Apple Developer
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`Portal. Apple uses a public/private key client authentication methodology.
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`40.
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`Apple users are typically locked into the Apple ecosystem. For example, Apple
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`users with iPhones typically buy compatible Apple Watches, which are tightly integrated in the
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`Apple ecosystem (other devices, like the newer models of Samsung’s Galaxy Watch, do not even
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`work with Apple devices). Apple utilizes “trusted devices” that a user owns to enhance two-factor
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`authentication. “A trusted device is an iPhone, iPad, iPod touch, Apple Watch, or Mac that you've
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`already signed in to using two-factor authentication. It's a device that we know is yours and that
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`can be used to verify your identity by displaying a verification code from Apple when you sign in
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`on a different device or browser. Exhibit 22. “When you sign in with your Apple ID user name
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`and password for the first time on a new device or the web, you'll receive a notification on your
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`trusted devices that someone is trying to sign in with your Apple ID.” Id.
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`41.
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`In Apple’s ecosystem, a user’s “Apple ID is the account that you use to access all
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`Apple services and make all of your devices work together seamlessly.” Exhibit 23. “After you
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`sign in, you can use the App Store, iCloud, iMessage, Apple Music, Apple TV+, and more.”
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`42.
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`Apple uses Apple ID (in conjunction with biometrics sensors available on various
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`devices) across its devices, including iPhone, iPad, and Apple Vision Pro. Apple instructs its users
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`to (1) Open the Settings app; (2) Tap Sign in to your [device]; and (3) Choose a way to sign in (see
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`Exhibit 23):
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`43.
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`For the “Use Another Apple Device Option,” Apple instructs that “If you have
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`another iPad or iPhone that’s signed in with your Apple ID, bring that device nearby and follow
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`the instructions on both devices to complete sign-in.” Exhibit 23. Further, “[i]f you're already
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`signed in on the iPhone paired with your Apple Watch, you will automatically be signed in to that
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`Apple ID on your watch.” Id. Apple ID is also used for Mac computers, Apple TV, and signing
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`into the web as well as other apps (and other devices), as described above. Id. Apple’s users are
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`directed to sign in using their Apple ID during the setup process (i.e., after purchase, upon first
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`turning on) of its devices.
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`44.
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`Federated authentication is not the only authentication architecture Apple has
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`incorporated into its operating systems; Apple Pay, which incorporates EMV’s payment
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`tokenization architecture utilizes token issued by a third-party and stored on the phone. The tokens
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`are a surrogate for a credit card, debit card, or other Primary Account Number (PAN), and can be
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`used anywhere the underlying account is accepted as payment. As with OpenID / OAuth 2 tokens,
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`EMV payment tokens indicate a previous authentication of the user. The tokens differ with respect
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`to authorization claims. OpenID / OAuth 2 authenticates the user and obtains the user’s consent
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`before issuing a token. As such, the token represents authentication of the user and what the user
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`has been authorized. As authorization is obtained before token issuance, a token can never be used
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`for more than authorization claim it contains. EMV tokens, on the other hand, contain no claims
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`with respect to authorization. Authorization, rather, is indicated by release of an EMV token from
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`a device. Unlike OpenID / OAuth 2 tokens, payment tokens are locked in a device and can only
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`be released following verification of the user by the device. As only the legitimate use can be
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`verified, release of an EMV token is indicative of user consent. Presentation of an EMV payment
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`token, accordingly, is indicative of user consent to the accompany charge to their account.
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`Regardless of the differences in their manner of representing authorization and the timing of
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`obtaining authorization, both OpenID / OAuth 2 tokens and EMV tokens are indicative of user
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`authentication and authorization.
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`45.
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`To facilitate the use of EMV’s payment tokenization architecture, Apple has
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`deployed technology to secure payment tokens in connection with its operating systems and Apple
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`Pay. Using biometric security features integrated into its devices (i.e., the ability to unlock Apple
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`devices through a fingerprint, facial recognition, or an iris scan), Apple offered biometric
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`authentication for Apple Pay beginning in 2014. See Exhibit 24.
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`46.
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`As the popularity of mobile payment solutions increased, Apple Pay surfaced as a
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`key player in the market. On information and belief, Apple Pay has over 45 million users in the
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`United States. On further information and belief, Apple Pay’s convenience and security features,
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`Case 6:24-cv-00143-ADA Document 1 Filed 03/18/24 Page 17 of 69
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`attributable to its use of (biometric) authentication, are the major driving forces of its adoption
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`among users.
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`47.
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`As for Sign in with Apple, Built With indicates that 15,258 sites utilize Apple’s
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`sign-in solution. This authentication mechanism competes with the likes of “Sign in with Google,”
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`“Sing in with Facebook,” and Microsoft Authentication.
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`II.
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`PROXENSE AND ITS INNOVATIVE TECHNOLOGIES
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`48.
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`Proxense was founded in 2001.1 From approximately 2004-2012, Proxense
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`developed, inter alia, mobile payment technologies and commercial products, employing over
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`thirty engineers, and investing many millions of dollars in product development and other research
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`and development efforts. Foundational capabilities of Proxense’s technologies included a secure
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`element, biometrics captured and stored thereon, retrieval of biometrics and token passing to a
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`trusted third party, and completion of a mobile payment transaction.
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`49.
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`Proxense also developed sophisticated, proprietary, proximity-based detection,
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`authentication, and automation technology, built on the concept of wirelessly detecting,
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`authenticating, and communicating with personal digital keys (“PDKs”). Proxense’s technology
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`enabled PDKs to run for as long as two years on tiny batteries. “ProxPay” technology also included
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`biometrically-based user and device authentication options, the ability to conduct biometric-
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`verified transactions without sending or exposing the underlying biometric data or storing it
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`anywhere except the PDK, and the incorporation of a registration for maintaining or verifying the
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`PDK. Significant financial and engineering resources were deployed to make this possible. The
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`1 The company was formally incorporated as an LLC in 2001 under the name Margent
`Development LLC; in 2005, the business was renamed to Proxense LLC.
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`Case 6:24-cv-00143-ADA Document 1 Filed 03/18/24 Page 18 of 69
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`resulting developments became primary differentiators of Proxense’s product line, and significant
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`elements on which its business was built.
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`50.
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`John Giobbi is the founder and CEO of Proxense. He is an experienced product
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`designer and prolific inventor (a named inventor on approximately 200 patents, including the
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`asserted patents), with over 35 years of experience as an entrepreneur and product development
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`executive. For example, Mr. Giobbi was a Senior Vice President at WMS Gaming, and managed
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`over 200 staff; in his six-year tenure at that company, its market capitalization soared from
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`approximately $80 million to about $1 billion. Mr. Giobbi was also the founder and President of
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`Prelude Technology Corp. and InPen.
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`51.
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`The innovative, visionary nature of Proxense’s technology was recognized in the
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`media, beginning in mid-2008, when, The Bulletin featured a story on Proxense’s mobile payment
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`technology, titled “A pint-sized virtual wallet.” Andrew Moore, The Bulletin (May 7, 2008),
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`Exhibit 25. The story describes a future that greatly resembles the present-day, including a
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`“wireless wallet” and “fingerprint” verification, including the use of such technology to pay for
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`goods using such wireless methods protected by biometric measures like a fingerprint. In 2009,
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`Trend Hunter ran a similar story titled “Virtual Biometric Wallets,” featuring Proxense and Mr.
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`Giobbi. Michael Plishka, Trend Hunter (January 4, 2009), See Exhibit 26.
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`52.
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`Another 2009 article, ran in DARKReading, a publication in InformationWeek’s
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`IT Network, also featured the company and Mr. Giobbi in an article titled “Startup May Just
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`Digitize Your Wallet.” George V. Hulme, DARKReading (February 8, 2009), See Exhibit 27.
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`The DARKReading article described that Proxense was “in the process of bringing to market a
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`proximity-based communications device that aims to provide a way to securely share information
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`and conduct payments.” Proxense’s Personal Digital Keys (PDKs) were described as “carried by
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`Case 6:24-cv-00143-ADA Document 1 Filed 03/18/24 Page 19 of 69
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`users, perhaps even within a cell phone, and can security hold data and manage authentication.”
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`Mr. Giobbi explained that “the data within the PDK also can be protected by additional layers of
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`authentication, such as biometric…”
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`53.
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`It would be years until products like Google Wallet (2011), Apple Pay (2014)