Trademark Trial and Appeal Board Electronic Filing System. http://estta.uspto.gov
`ESTTA635846
`ESTTA Tracking number:
`10/29/2014
`
`Filing date:
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`92057201
`Plaintiff
`NexPay, Inc.
`JOHN S TORKELSON
`CARTER STAFFORD ARNETT HAMADA & MOCKLER PLLC
`8150 N CENTRAL EXPRESSWAY, SUITE 1950
`DALLAS, TX 75206
`UNITED STATES
`dhouse@carterstafford.com, trademarks@carterstafford.com, jtorkel-
`son@carterstafford.com
`Response to Board Order/Inquiry
`Dyan M. House
`dhouse@carterscholer.com, trademarks@carterscholer.com
`/Dyan House/
`10/29/2014
`2014.10-29 Joint Status of Civil Action re Order (10-03-14).pdf(76554 bytes )
`Exhibit A.pdf(73262 bytes )
`Exhibit B.pdf(164706 bytes )
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`Proceeding
`Party
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`Correspondence
`Address
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`Submission
`Filer's Name
`Filer's e-mail
`Signature
`Date
`Attachments
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`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
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`Cancellation No. 92057201
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`§
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`NexPay, Inc.,
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`Petitioner,
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`v.
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`StoneEagle Services, Inc.,
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`Registrant.
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`JOINT STATUS OF CIVIL ACTION
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`Pursuant to the Board’s Order dated October 3, 2014, Petitioner NexPay, Inc. and
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`Registrant StoneEagle Services, Inc. hereby inform the Board that the action which
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`occasioned the suspension of this proceeding, StoneEagle Services, Inc. v. David Gillman, et al,
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`Case No. 3:11-cv-02408-P in the United States District Court for the Northern District of
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`Texas, Dallas Division (the “First Action”), has been dismissed by the District Court.
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`Attached as Exhibit A is a copy of the Court’s Order dated August 29, 2014.
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`On August 29, 2014, the same day as the Order dismissing the First Action,
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`Registrant filed a new lawsuit in the United States District Court for the Northern District of
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`Texas, Dallas Division, styled StoneEagle Services, Inc. v. Talon Transaction Technologies, Inc., et al,
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`Case No. 3:14-cv-03120-M (the “Second Action”). A copy of Registrant’s Original
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`Complaint and Request for Preliminary Injunction in the Second Action is attached as
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`Exhibit B. The trademark issues raised in the Second Action are identical to those raised in
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`the lawsuit that is the basis for the suspension of this proceeding. As with the First Action,
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`the determination of these issues by the District Court in the Second Action will be
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`dispositive of the issues involved in this proceeding. Petitioner is a defendant in the Second
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`Action.
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`The parties therefore respectfully request the continued suspension of this
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`proceeding pursuant to Trademark Rule 2.117(a), 37 C.F.R. §2.117(a). Whopper-Burger, Inc. v.
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`Burger King Corp., 171 U.S.P.Q. 805, 807 (TTAB 1971) (suspending Cancellation proceeding
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`in light of pending federal litigation because “the outcome of the civil action will have a
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`direct bearing on the question of the rights of the parties herein and may in fact completely
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`resolve all the issues.”).
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`Dated this 29th day of October 2014.
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`Respectfully submitted,
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`/s/ Dyan M. House
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`Dyan M. House
`Texas Bar No. 24036923
`dhouse@carterscholer.com
`J. Robert Arnett II
`Texas State Bar No. 01332900
`John T. Mockler
`Texas State Bar No. 00789495
`John S. Torkelson
`Texas State Bar No. 00795154
`CARTER SCHOLER ARNETT
`HAMADA & MOCKLER, PLLC
`8150 N. Central Expressway
`5th Floor
`Dallas, Texas 75206
`214-550-8188 Telephone
`214-550-8185 Facsimile
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`ATTORNEYS FOR PETITIONER
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`/s/ Andriy Lytvyn
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`Andriy Lytvyn
`Florida State Bar No. 100298
`SMITH & HOPEN, P.A.
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`180 Pine Avenue North
`Oldsmar, Florida 34677
`813.925.8505 Telephone
`800.726.1491 Facsimile
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`ATTORNEYS FOR REGISTRANT
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`CERTIFICATE OF SERVICE
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`I hereby certify that a true copy of the foregoing Status of Civil Action to has been
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`served on Registrant’s Attorney, Registrant’s Attorney, Andriy Lytvyn, Smith & Hopen, P.A.,
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`180 Pine Avenue North, Oldsmar, Florida 34677, via email (by agreement) on this 29th day
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`of October 2014.
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`/s/ Dyan M. House
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`Dyan M. House
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`EXHIBIT A
`EXHIBIT A
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`Case 3:11-cv-02408-P Document 486 Filed 08/29/14 Page 1 of 3 PageID 13806
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF TEXAS
`DALLAS DIVISION
`
`STONEEAGLE SERVICES, INC.,
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`Plaintiff,
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`v.
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`DAVID GILLMAN, et al.,
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`Defendants.
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`§
`§
`§
`§
`§
`§
`§
`§
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`ORDER
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`3:11-CV-2408-P
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`Now before the Court is Plaintiffs Motion to Sever, filed on June 6, 2014. Doc. 480.
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`Defendants filed a Response on June 9, 2014. Doc. 484. Plaintiff filed its Reply on June 23,
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`2014. Doc. 484. Also before the Court is a Judgment and Mandate from the Federal Circuit,
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`instructing the Court to dismiss this suit. Docs. 482-83. After reviewing the parties' briefing,
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`the evidence, the applicable law, and the Federal Circuit's mandate, the Court DENIES
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`Plaintiffs Motion to Sever and DISMISSES this case.
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`I.
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`Background
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`The case at issue involves an intellectual property dispute concerning like products that
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`provide electronic payment services aimed at healthcare billing. On September 16, 2011,
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`PlaintiffStoneEage Services Inc. ("StoneEagle") filed Civil Action No. 3:11-CV-2408-P ("2011
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`case") in federal court. Doc. 1. 1 On October 31, 2012, Defendant NexPay, Inc. ("NexPay"),
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`who was not an original defendant in the 2011 case, filed Civil Action No. 3:12-CV-4397-P
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`("2012 case"), which was quickly consolidated with the 2011 case. Docs. 1, 11, 3:12-CV-4397-
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`P. Prior to consolidation, StoneEagle filed a Motion to Dismiss NexPay's Complaint in the 2012
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`1 Unless otherwise specified, all references are to docket entries in the 2011 case.
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`Order
`3:12-CV-2408-P
`Page 1 of3
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`

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`Case 3:11-cv-02408-P Document 486 Filed 08/29/14 Page 2 of 3 PageID 13807
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`case. Doc. 8, 3:12-CV-4397-P. After consolidation, the Court granted StoneEagle's Motion to
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`Dismiss, dismissing NexPay's Complaint in its entirety. Doc. 246.
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`During the course of the 2011 case, the Court entered a preliminary injunction against
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`Defendants David Gillman ("Gillman") and Talon Transaction Technologies, Inc. ("Talon"),
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`which Gillman and Talon appealed to the Federal Circuit. See Docs. 16, 246, 269. On March
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`26, 2014, the Federal Circuit entered its judgment, finding that this Court lacked subject matter
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`jurisdiction over the 2011 case at the time that it was filed. See Doc. 471-1. On June 4, 2014,
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`StoneEagle filed its Motion to Sever at the eleventh hour, asking the Court to sever the 2012
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`case. Doc. 480. The Federal Circuit issued its mandate on June 6, 2014, ordering this Court to
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`dismiss the 2011 case. Doc. 482.
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`II.
`
`Discussion
`
`Rule 21 provides that "[ o ]n motion or on its own, the court may at any time, on just
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`terms, add or drop a party." Fed. R. Civ. P. 21. "The trial court has broad discretion to sever
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`issues to be tried before it." Brunet v. United Gas Pipeline Co., 15 F.3d 500, 505 (5th Cir.
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`1994). When seeking a severance, the movant bears the burden of showing that severance is
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`proper. Johnson v. Bae Sys. Land & Armaments, L.P., 2014 WL 1714487, *35 (N.D. Tex. Apr.
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`30, 2014).
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`Defendants first argue that the Federal Circuit's mandate precludes severance. Doc. 484
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`at 1-5. StoneEagle, unsurprisingly, argues that the mandate does not preclude severance. Doc.
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`485 at 1-2. However, the Court does not address this argument because the Court finds that,
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`regardless of any binding effect of the mandate, severance is improper. First, the Court notes
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`that it dismissed NexPay's Complaint from the 2012 case in its entirety; thus, before the Court
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`could sever that claim, it would be required to revisit its order of dismissal. Even if the Court
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`Order
`3: 12-CV -2408-P
`Page 2 of3
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`

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`Case 3:11-cv-02408-P Document 486 Filed 08/29/14 Page 3 of 3 PageID 13808
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`were to do this, it is unclear how this action would retroactively create subject matter jurisdiction
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`for the claims that StoneEagle seeks to keep alive. Thus, although StoneEagle argues that
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`severance will prevent substantial re-litigation of issues already decided by the Court, the Court
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`is not convinced that if it severed the 2012 case that the claims StoneEagle seeks to preserve
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`could proceed as if the Federal Circuit's mandate had not been given. Given that StoneEagle has
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`not shown how the Court would have jurisdiction over the claims it seeks to preserve even if the
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`Court were to sever the case and in light of the Federal Circuit's mandate, the Court declines to
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`sever the 2012 Case.
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`III.
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`Conclusion
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`For the foregoing reasons, the Court the Court DENIES Plaintiffs Motion to Sever and
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`DISMISSES this case.
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`IT IS SO ORDERED.
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`Signed this ;2_CfJ{ day of August, 2014.
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`. SOLIS
`JORGE
`UNITED STATES DISTRICT JUDGE
`
`Order
`3:12-CV-2408-P
`Page 3 of3
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`

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`EXHIBIT B
`EXHIBIT B
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`

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`Case 3:14-cv-03120-M Document 1 Filed 08/29/14 Page 1 of 20 PageID 1
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF TEXAS
`DALLAS DIVISION
`
`
`STONEEAGLE SERVICES, INC.,
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`
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`Plaintiff,
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`
`v.
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`TALON TRANSACTION
`TECHNOLOGIES, INC., a Texas
`Corporation, TALON TRANSACTION
`TECHNOLOGIES, INC., an Oklahoma
`Corporation, NEXPAY, INC., and DAVID
`GILLMAN,
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`Defendants.
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`Civil Action No. ______________
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`§§§§§§§§§§§§§§
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`PLAINTIFF’S ORIGINAL COMPLAINT
`AND REQUEST FOR PRELIMINARY INJUNCTION
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`Plaintiff STONEEAGLE SERVICES, INC. hereby complains of Defendants Talon
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`Transaction Technologies,
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`Inc., a Texas corporation
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`(“T3-TX”), Talon Transaction
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`Technologies, Inc., an Oklahoma corporation (“T3-OK”), NexPay, Inc., a South Dakota
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`corporation (“NexPay”), and David Gillman (collectively, “Defendants”).
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`PARTIES, JURISDICTION, AND VENUE
`
`1.
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`StoneEagle is a Texas corporation with its principal place of business in Dallas
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`County, Texas.
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`2.
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`Defendant Talon Transaction Technologies, Inc., a Texas corporation, may be
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`served through its registered agent, E.A. Bedford, at 15455 Dallas Parkway, Suite 525, Addison,
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`Texas 75001, or wherever he may be found.
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`3.
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`Defendant Talon Transaction Technologies, Inc., an Oklahoma corporation, is a
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`non-resident, foreign corporation that does business in Texas, which may be served through its
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`PLAINTIFF’S ORIGINAL COMPLAINT AND REQ. FOR PERMANENT INJ.
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`PAGE 1
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`

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`Case 3:14-cv-03120-M Document 1 Filed 08/29/14 Page 2 of 20 PageID 2
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`registered agent, E.A. Bedford, at 15455 Dallas Parkway, Suite 525, Addison, Texas 75001, or
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`wherever he may be found.
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`4.
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`Defendant NexPay, a South Dakota corporation, is a non-resident, foreign
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`corporation that does business in Texas, which may be served through its registered agent, E.A.
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`Bedford, Sr., at 15455 N. Dallas Parkway, Suite 525, Addison, Texas 75001-4690.
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`5.
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`Defendant David Gillman is an individual domiciled in Dallas, Texas and may be
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`served with process at 15455 Dallas Parkway, Suite 600, Addison, Texas 75001, or wherever he
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`may be found.
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`6.
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`The Court has subject matter jurisdiction because this case arises under the laws
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`of the United States. 28 U.S.C. § 1331. In addition, the Court has exclusive subject matter
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`jurisdiction over this matter because this is an action for patent infringement and a declaration of
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`inventorship arising under Title 35 of the United States Code. See 28 U.S.C. § 1338(a); 35
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`U.S.C. §§ 256, 271. The Court also has subject matter jurisdiction because this is an action for
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`unfair competition under the Lanham Act, joined with substantial and related actions for patent
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`and trademark infringement. 28 U.S.C. § 1338(b). Finally, the Court has supplemental
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`jurisdiction over the state law claims in this matter. 28 U.S.C. § 1367.
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`DISCLOSURE OF RELATED LITIGATION
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`7.
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`The parties were involved in related litigation in the case styled StoneEagle
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`Services, Inc. v. David Gillman, et al., Civil Action No. 3:11-CV-2408-P, in the United States
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`District Court for the Northern District of Texas, Dallas Division before the Honorable Judge
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`Jorge Solis (the “Related Case”). On March 26, 2014, the Federal Circuit issued an opinion in an
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`appeal of the related case ordering that the case be dismissed because there was no federal
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`subject matter jurisdiction at the time StoneEagle filed the case. The District Court dismissed the
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`Related Case by Order dated August 29, 2014.
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`PLAINTIFF’S ORIGINAL COMPLAINT AND REQ. FOR PERMANENT INJ.
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`PAGE 2
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`

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`Case 3:14-cv-03120-M Document 1 Filed 08/29/14 Page 3 of 20 PageID 3
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`8.
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`On July 13, 2013, T3-TX filed Talon Transaction Technologies, Inc. v. Robert
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`Allen, Philip Bogner, Brent Allen, Jeffrey Brown, Richard Maxwell, Erika Evans, Oscar
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`Contreras, Zach Ballard, Lynette Lillis, StoneEagle Services, Inc., and VPay, Inc., Civil Action
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`No. 4:12-cv-00440, in the Eastern District of Texas, Sherman Division (the “First Database
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`Case”). T3-TX non-suited the First Database Case and on February 27, 2013, NexPay and T3-
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`TX filed Talon Transaction Technologies, Inc. and NexPay, Inc. v. StoneEagle Services, Inc.,
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`VPay, Inc., Robert Mark Allen, Phillip Andrew Bogner, Jeffrey Warren Brown, Richard Alan
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`Maxwell, John Does (1-7), and Jane Does (1-7), Civil Action No. 3:13-cv-00902-D, in the
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`United States District Court for the Northern District of Texas, Dallas Division before the
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`Honorable Judge Jorge Solis (the “Second Database Case”). NexPay and T3-TX filed claims for
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`various violations of the Computer Fraud and Abuse Act, but also a claim for misappropriation
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`of trade secrets whereby it claimed ownership of the provider database and other purported trade
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`secrets.
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`FACTS
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`9.
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`StoneEagle Conceived a Medical Payment System Based on Its Auto
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`Payments System. In 2002, StoneEagle began developing a system involved in making a virtual
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`payment through a secured delivery method in the automotive industry, i.e., a method of
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`facilitating warranty payments of automotive-related benefits on behalf of a payor comprising
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`the step of electronically transmitting a stored-value card account payment of the authorized
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`benefit amount concurrently with an explanation of payment (the “Warranty Payments System”).
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`In 2003, StoneEagle filed an application for a patent for the Warranty Payments System. The
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`application remains pending.
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`10.
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`In late 2005, StoneEagle’s current Chairman and Chief Executive Officer, Robert
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`M. Allen, began looking for applications for his virtual payment technology in other industries
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`PLAINTIFF’S ORIGINAL COMPLAINT AND REQ. FOR PERMANENT INJ.
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`PAGE 3
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`

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`Case 3:14-cv-03120-M Document 1 Filed 08/29/14 Page 4 of 20 PageID 4
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`and conceived of a new invention: an application of the Auto Payments System to the healthcare
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`industry that would operate as a proprietary medical benefits payment processing system and
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`accompanying technology (the “Medical Payment System”). In the spring 2006, Allen met with
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`Gillman about building out and marketing the Medical Payment System.
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`11.
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`The Parties Reach Agreements to Protect StoneEagle’s Rights in the Medical
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`Payment System. On or about May 1, 2006, StoneEagle entered a Mutual Non-Disclosure
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`Agreement (the “Non-Disclosure Agreement”) with Gillman, the company he represented at that
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`time (Gillman Software Systems), and its affiliates and subsidiaries. A true and correct copy of
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`the Non-Disclosure Agreement is attached hereto as Exhibit A.
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`12.
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`On or about June 29, 2006, StoneEagle granted a license to use StoneEagle’s
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`technology to Gillman’s Texas company, T3-TX (the “License”). A true and correct copy of the
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`License is attached as Exhibit B. The enunciated business purpose of T3-TX was to market the
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`technology covered by the License. The License specifically provides that “[StoneEagle] is the
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`owner of the subject Technology,” i.e., the Medical Payment System and any related technology,
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`among other things. The definition of “Technology” expressly includes all “improvements” to
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`the technology. At the time of the License, Defendants did not possess the ability to create or
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`process virtual payments.
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`13.
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`T3-TX agreed that the License provides that it is binding upon all successors and
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`assigns of T3-TX, and that the parties’ successors or assigns must execute any instrument
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`required to that end.
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`14.
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`In August 2008, StoneEagle and T3-OK formed VPay Assist, Inc. (later changed
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`to VPay, Inc.) (“VPay”). StoneEagle and T3-OK each owned 50% of VPay.
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`15.
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`StoneEagle Continues Development on the Medical Payment System. After
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`signing the License, StoneEagle, T3, and Gillman conducted an extensive trial and error process
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`PLAINTIFF’S ORIGINAL COMPLAINT AND REQ. FOR PERMANENT INJ.
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`PAGE 4
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`

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`Case 3:14-cv-03120-M Document 1 Filed 08/29/14 Page 5 of 20 PageID 5
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`to effectuate Allen’s invention. Despite Gillman’s involvement, Allen maintained intellectual
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`domination over, and conceived of the Medical Payment System, both in its development and in
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`its final form as it was put into practice.
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`16.
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`The Medical Payment System is comprised of acquiring a primary account
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`number, such as a credit card or debit card number, and merging that account number with an
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`explanation of benefits from a medical benefits payor. The Medical Payment System then
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`facilitates the delivery of the primary account number to the payee by secured transmission. The
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`payee’s contact information and payment preferences are contained in a database (the “Provider
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`Database”) developed using StoneEagle/VPay’s resources and funds. The Medical Payment
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`System includes both StoneEagle’s patented process and the trade secrets needed to effectuate
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`the process.
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`17.
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`StoneEagle Patents the Medical Payment System. On December 5, 2006,
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`Allen applied for a United States Patent via patent application number 11/566,930 (the
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`“Application”) to protect his rights in the Medical Payment System. In the Application, Allen
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`listed himself as its sole inventor. Allen sent Gillman and Vince Valentine one or more drafts of
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`the Application while Allen was preparing it. Gillman only slightly revised the Application on
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`December 4, 2006, the day before it was filed. Vince Valentine provided some of the drawings
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`used in the Application. Despite the fact that Allen was always listed as the sole inventor on the
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`application, Gillman never once objected or claimed that he was also an inventor of the Medical
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`Payment System prior to the Application’s filing.
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`18.
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`In July 2010, after T3-OK failed to make requested capital contributions to VPay
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`and reimburse StoneEagle for StoneEagle’s significant capital contributions to VPay, Gillman
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`requested that StoneEagle buy out T3-OK’s interest in VPay, thus making VPay a wholly owned
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`and wholly controlled subsidiary of StoneEagle. On July 15, 2010, Gillman, T3-TX, and T3-OK
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`PLAINTIFF’S ORIGINAL COMPLAINT AND REQ. FOR PERMANENT INJ.
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`PAGE 5
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`

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`Case 3:14-cv-03120-M Document 1 Filed 08/29/14 Page 6 of 20 PageID 6
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`entered an Agreement (the “Patent Release”) whereby StoneEagle refunded Gillman and T3-OK
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`the minimal expenses paid by them, and Defendants:
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` Release[d] any and all claims to any right, title, or interest in the . . . Patent
`Pending [for the Medical Payment System];
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` Agree[d] not to challenge or assist others in challenging the, the validity or
`enforceability of the . . . Patent Pending [for the Medical Payment System];
`and
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` Assigned and transferred to StoneEagle any right, title, or interest that
`Defendants may have had in the Patent Pending [for the Medical Payment
`System].
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` true and correct copy of the Patent Release is attached hereto as Exhibit C. The release bars
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` A
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`Defendants from asserting any inventorship or ownership interest in the Medical Payment
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`System and the Patent.
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`19.
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`On September 7, 2010, the United States Patent and Trademark Office duly and
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`legally issued United States Patent No. 7,792,686 B2 entitled “Medical Benefits Payment
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`System,” which was reissued on January 1, 2013, as United States Patent Number US RE43,904
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`E (the “Patent”). A true and correct copy of the Patent is attached as Exhibit D. The Patent
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`protects the Medical Payment System (absent StoneEagle’s confidential information and trade
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`secrets). Allen is the sole inventor of the invention covered by the Patent and is listed as the
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`inventor therein. StoneEagle is the owner by assignment of all right, title, and interest in and to
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`the Patent, and is listed as the assignee therein.
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`20.
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`Defendants Received the Rights to Use the “VPay” and “VCard” Marks. On
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`July 27, 2010, StoneEagle and T3-TX (through Gillman) entered a Service Mark Agreement,
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`whereby StoneEagle licensed the following service marks to T3-TX: (a) VPay;1 and (b) VCard.2
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`1 Registered with the United States Patent and Trademark Office on May 20, 2008, at RN: 3,432,014 as an
`“electronic process of insurance claims and payment data.”
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`PLAINTIFF’S ORIGINAL COMPLAINT AND REQ. FOR PERMANENT INJ.
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`PAGE 6
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`

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`Case 3:14-cv-03120-M Document 1 Filed 08/29/14 Page 7 of 20 PageID 7
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`A true and correct copy of the Service Mark Agreement is attached as Exhibit E. The “VPay”
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`and “VCard” marks are StoneEagle’s registered service marks. The marks are inherently
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`distinctive. The “VPay” and “VCard” marks are also protectable due to their acquired secondary
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`meaning (i.e., because they have become distinctive of VPay’s goods in commerce) as signifying
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`processing of virtual payments in the healthcare industry. Also, the marks are fanciful in that
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`“VPay” and “VCard” are coined terms that identify the product facilitated by the Medical
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`Payment System.
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`21. Gillman Created a Controversy Regarding Inventorship, Ownership, and
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`Enforceability of Patent. On or about August 31, 2011, Allen and other representatives from
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`StoneEagle met with representatives from a potential investor for StoneEagle’s business, which
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`is built on the value of the Medical Payment System (which includes the Patent and the
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`intellectual property rights associated with it, and StoneEagle’s confidential information and
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`trade secrets). StoneEagle invited Gillman to the meeting to introduce the potential investor to
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`Gillman, as the representative of the license holder in the technology. When StoneEagle’s Patent
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`and the value of the Patent became the subject of discussion, and after hearing that the potential
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`investors associated a great deal of value to the Patent, Gillman suddenly and falsely claimed that
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`it is his patent, that he wrote the Patent, that it is on his computer, and that he “authored” or
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`“wrote” it, or words to that effect implying that he was both the inventor and owner of the Patent.
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`Having breached the Patent Release and destroyed further negotiations of the potential
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`investment into StoneEagle by creating an actual controversy as to the enforceability of
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`StoneEagle’s highly valuable Patent and related intellectual property rights, Gillman threw down
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`his business cards and left the meeting. Later, Gillman met directly with the investors without
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`StoneEagle’s representatives present.
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`2 Registered with the United States Patent and Trademark Office on August 24, 2010, at RN: 3,839,239 as an
`“electronic process of insurance claims and payment data.”
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`PLAINTIFF’S ORIGINAL COMPLAINT AND REQ. FOR PERMANENT INJ.
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`PAGE 7
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`Case 3:14-cv-03120-M Document 1 Filed 08/29/14 Page 8 of 20 PageID 8
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`22.
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`In the Related Case, Gillman admitted that he was not an inventor but continues
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`to make other claims of inventorship. As recently as late 2013, Gillman and NexPay held
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`themselves out in marketing materials and at trade shows as the “inventors of virtual payment
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`technology for healthcare.”
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`23.
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`Defendants Are Caught Setting Up a Competing Product. With their
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`suspicions aroused by Gillman’s conduct in the August 31st meeting, StoneEagle began
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`investigating Gillman’s motives in September 2011. Upon investigation, StoneEagle discovered
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`that Defendants were working on setting up a competing product that infringed on the Patent.
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`24.
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`The Court in the Related Case Entered a Preliminary Injunction Against
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`Defendants. After StoneEagle learned of Defendants’ plan to set up a competing business,
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`StoneEagle filed the Related Case and sought injunctive relief on September 16, 2011. The
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`Court entered a preliminary injunction on October 14, 2011, and clarified it on February 19,
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`2013, prohibiting Defendants from using certain trade secrets.
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`25.
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`StoneEagle Terminates the License and Service Mark Agreements.
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`StoneEagle terminated the License on October 17, 2011. Termination of the License terminated
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`the Service Mark Agreement. A true and correct copy of the Notice of Termination is attached
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`as Exhibit F.
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`26.
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`Defendants Begin Processing Payments for Their Competing Company with
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`AIMS. Despite the preliminary injunction and the termination of the License and Service Mark
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`Agreement, Defendants continued to setup a competing product that infringed on the Patent. To
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`facilitate those efforts, Defendants set up a new company: NexPay.
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`27.
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`From at least December 14, 2011, through February 4, 2012, Defendants and/or
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`NexPay processed over $900,000 in payments for AIMS (a former client of StoneEagle/VPay)
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`using the product name “NexPay” instead of “VPay,” the registered service mark for the product
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`PLAINTIFF’S ORIGINAL COMPLAINT AND REQ. FOR PERMANENT INJ.
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`PAGE 8
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`Case 3:14-cv-03120-M Document 1 Filed 08/29/14 Page 9 of 20 PageID 9
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`that the Medical Payment System facilitates. The payment advice for the NexPay product is
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`substantially identical to the payment advice for the VPay product (which is covered by the
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`Patent), except that the name “VPay” has been replaced with “NexPay.” Defendants’ use of
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`StoneEagle’s patented payment advice was and is completely unauthorized, and Defendants have
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`paid StoneEagle no royalty for its use.
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`28.
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`Further, on at least December 14, 2011, December 16, 2011, December 20, 2011,
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`December 21, 2011, February 1, 2012, and February 4, 2012, the Valentines used their
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`@t3vpay.com e-mail addresses on behalf of Defendants to communicate with the President and
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`Chief Executive Officer of AIMS, Jean Johnson, regarding the funds to be processed.
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`29.
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`In the February 1, 2012, e-mail, Vincent Valentine, as “Programmer” for
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`Defendant T3, forwarded to Johnson an e-mail titled “VPay File Processed – AIM9071212.”
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`The forwarded e-mail was from the “IT Group” at “VPay” at StoneEagle/VPay’s address (“111
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`W. Spring Valley Road. Ste. 220, Richardson, Texas 75081”) and stated that a $1,546,046.56
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`AIMS payment file had been loaded “into VPay’s system.” Defendants’ use of StoneEagle’s
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`patented VPay process, as well as their use of the registered “VPay” service mark, were wholly
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`unauthorized, and occurred over three months after the License and the Service Mark Agreement
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`terminated.
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`30.
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`Defendants’ conduct in marketing their competing “NexPay” product and using
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`StoneEagle’s “VPay” mark actually confused AIMS as to whether the “NexPay” product
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`Defendants sold AIMS was actually StoneEagle’s “VPay” product. Defendants used
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`StoneEagle’s marks with the intent to, among other things, deceive purchasers in the marketplace
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`regarding that misrepresentation.
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`31.
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`Defendants Shut Off All VPay Processing and Switched VPay Customers to
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`Defendants’ NexPay and QuicRemit. On March 22, 2012, Defendants began processing
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`PLAINTIFF’S ORIGINAL COMPLAINT AND REQ. FOR PERMANENT INJ.
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`PAGE 9
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`Case 3:14-cv-03120-M Document 1 Filed 08/29/14 Page 10 of 20 PageID 10
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`virtual payments using the product names “NexPay” and “QuicRemit.” Defendants replaced
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`StoneEagle/VPay’s functions using third parties including Comdata Network, Inc., Regions
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`Bank, ECHO Health, Inc., HP Enterprise Services, and WEXBank. The NexPay product uses
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`and infringes upon StoneEagle’s patented Medical Payment System.
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`32.
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`Defendants use a payment advice that is substantially identical to StoneEagle’s
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`patented payment advice, except for the replacement of the “VPay” logo with “NexPay” or
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`“QuicRemit.” A “QuicRemit” instruction sheet included the product name “QuicRemit” on the
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`virtual card image, but still has “VPay®” everywhere else, uses the “VCard” mark, and even
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`includes StoneEagle’s address and customer service phone number as if they were QuicRemit’s.
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`Defendants essentially cut-and-pasted a VPay for their own use, but failed to scrub all references
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`to VPay/StoneEagle in the copied document. Defendants told at least one purchaser that VPay
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`had changed its name to QuicRemit.
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`33.
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`On information and belief, Defendants and NexPay deliberately used the federal
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`registration symbol ® with the “VPay” mark on the QuicRemit/VPay Instruction Sheet with the
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`intent to deceive or mislead the public. The QuicRemit/VPay Instruction Sheet demonstrates
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`that: (1) Defendants’ “QuicRemit” payment advice and instruction sheets are replicated versions
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`of those patented by VPay; and (2) Defendants’ use of StoneEagle’s “VPay” and “VCard” marks
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`are causing actual confusion in the marketplace between Defendants’ competing “QuicRemit”
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`and “NexPay” products and StoneEagle’s “VPay” product.
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`34.
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`All conditions precedent to this action have occurred or have been waived or
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`excused.
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`COUNT ONE: DECLARATORY JUDGMENT
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`35.
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`The above facts show that there is a substantial and actual controversy between
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`the parties in that they assert adverse legal interests regarding the inventorship, ownership, and
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`PLAINTIFF’S ORIGINAL COMPLAINT AND REQ. FOR PERMANENT INJ.
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`PAGE 10
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`Case 3:14-cv-03120-M Document 1 Filed 08/29/14 Page 11 of 20 PageID 11
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`enforceability of the Patent, as demonstrated in part by Gillman’s behavior at the meeting and
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`Defendants’ continued marketing of theirselves as the “inventors of virtual payment technology
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`for healthcare,” which has caused, and will continue to cause, uncertainty, insecurity, and
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`controversy regarding the inventorship, ownership, and enforceability issues.
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`36.
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`The controversy is sufficiently immediate and real to warrant the issuance of a
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`declaratory
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`judgment because Defendants are currently disparaging
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`the
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`inventorship,
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`enforceability, and ownership of the Patent, which has already prevented StoneEagle from
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`attracting investors or potential purchasers to its business and has impeded its value, and
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`continues to do so. An actual controversy exists between StoneEagle and Gillman within the
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`meaning of 28 U.S.C. § 2201. This Court is vested with the power to declare the rights, status
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`and other legal relations of the parties to this action with reference to the inventorship,
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`enforceability, and ownership issues raised by Gillman and noted in this Complaint to clarify and
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`settle those issues.
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`37.
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`Gillman is not an inventor or owner of the Patent or its subject matter, and he and
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`the other Defendants have expressly released and waived any contention to the contrary by
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`entering the Patent Release and/or by not objecting to Allen’s designation as sole inventor on the
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`draft application for the Patent.
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`38.
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`StoneEagle requests that the Court declare that:
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`a.
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`b.
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`c.
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`d.
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`e.
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`StoneEagle is the owner of the Patent;
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`Allen is the sole inventor of the subject matter reflected in the
`Patent;
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`Gillman is not the sole or joint inventor of the subject matter
`reflected in the Patent, in whole or in part;
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`Gillman is not an owner of the Patent, in whole or in part;
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`T3-TX is not an owner of the Patent, in whole or in part;
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`PLAINTIFF’S ORIGINAL COMPLAINT AND REQ. FOR PERMANENT INJ.
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`PAGE 11
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`Case 3:14-cv-03120-M Document 1 Filed 08/29/14 Page 12 of 20 PageID 12
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`f.
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`g.
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`T3-OK is not an owner of the Patent, in whole or in part; and
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`NexPay is not an owner of the Patent, in whole or in part.
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`COUNT TWO: BREACH OF CONTRACT — PATENT RELEASE
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`39.
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`40.
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`StoneEagle hereby realleges all of the allegations in the abov