`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF TEXAS
`WACO DIVISION
`
`
`
`
`
`
`ANCORA TECHNOLOGIES, INC.
`
`
`Plaintiff,
`
`
`v.
`
`LG ELECTRONICS INC., and LG
`ELECTRONICS U.S.A., INC.,
`
`
`
`Civil Action No. 2:19-cv-384
`
`Jury Trial Requested
`
`
`
`Defendants.
`
`
`
`
`COMPLAINT FOR PATENT INFRINGEMENT
`
`
`
`
`
`
`This is an action for patent infringement in which Ancora Technologies, Inc. makes the
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`following allegations against LG Electronics Inc., and LG Electronics U.S.A., Inc. (collectively,
`
`“LGE”):
`
`RELATED CASE
`
`1.
`
`This case is related to the action Ancora Technologies, Inc. v. Samsung Electronics,
`
`Co., Ltd., et al., filed June 21, 2019, in the United States District Court for the Western District of
`
`Texas, Waco Division.
`
`PARTIES
`
`2.
`
`Plaintiff Ancora Technologies, Inc. is a corporation organized and existing under the
`
`laws of the State of Delaware with a place of business at 23977 S.E. 10th Street, Sammamish,
`
`Washington 98075.
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`
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`Case 1:20-cv-00034-ADA Document 1 Filed 06/21/19 Page 2 of 16
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`3.
`
`Defendant LG Electronics Inc. is a corporation organized and existing under the laws
`
`of the Republic of Korea with a principal place of business at LG Twin Towers, 128 Yeoui-daero,
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`Yeongdungpo-gu, Seoul, South Korea.
`
`4.
`
`Defendant LG Electronics U.S.A., Inc. is a Delaware corporation with places of
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`business in Texas at least at 9420 Research Blvd, Austin, Texas 78759; 21251-2155 Eagle Parkway,
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`Fort Worth, Texas 76177; and 14901 Beach St, Fort Worth, TX 76177.
`
`5.
`
`Further, Defendant LG Electronics U.S.A., Inc. merged with LG Electronics
`
`MobileComm U.S.A., Inc., on August 1, 2018, and has stated that it assumed all rights and
`
`responsibilities of LG Electronics MobileComm U.S.A., Inc. 3G Licensing S.A., et al. v. LG
`
`Electronics, Inc., et al., Case No. 1:17-cv-00085-LPS (D. Del.) at Dkt. 144.
`
`6.
`
`Defendant LG Electronics U.S.A., Inc. thus is liable for any act for which LG
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`Electronics MobileComm U.S.A., Inc., otherwise would be or would have been liable, including for
`
`any infringement alleged in this matter, and references herein to Defendant LG Electronics U.S.A.,
`
`Inc. should be understood to encompass such acts by LG Electronics MobileComm U.S.A., Inc.
`
`JURISDICTION AND VENUE
`
`7.
`
`This action arises under the patent laws of the United States, Title 35 of the United
`
`States Code.
`
`8.
`
`9.
`
`This Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1338(a).
`
`This Court has personal jurisdiction over LG Electronics Inc., and LG Electronics
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`U.S.A., Inc., because, directly or through intermediaries, each has committed acts within the Western
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`District of Texas giving rise to this action and/or has established minimum contacts with the Western
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`District of Texas such that the exercise of jurisdiction would not offend traditional notions of fair
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`play and substantial justice.
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`
`
`2
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`
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`Case 1:20-cv-00034-ADA Document 1 Filed 06/21/19 Page 3 of 16
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`10.
`
`For example, on information and belief, Defendants LG Electronics U.S.A., Inc.
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`maintains one or more physical fixed places of business in Texas, including offices at 9420 Research
`
`Blvd, Austin, Texas 78759. See also https://lgecareers.com/search/?=&businessunit=
`
`LG%20Electronics%20USA&spage=2 (last visited June 20, 2019) (listing available LG Electronics
`
`USA job positions, including position in Austin, Texas).
`
`11.
`
`Further, on information and belief, LG Electronics Inc. directs and controls the
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`actions of LG Electronics U.S.A., Inc. such that it also effectively maintains places of business in
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`Texas, including at 9420 Research Blvd, Austin, Texas 78759.
`
`12.
`
`In addition, LG Electronics Inc. and LG Electronics U.S.A., Inc., have placed or
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`contributed to placing infringing products like the LG G5 into the stream of commerce via an
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`established distribution channel knowing or understanding that such products would be sold and
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`used in the United States, including in the Western District of Texas.
`
`13.
`
`On information and belief, LG Electronics Inc., and LG Electronics U.S.A., Inc., also
`
`have each derived substantial revenues from infringing acts in the Western District of Texas,
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`including from the sale and use of infringing products like the LG G5.
`
`14.
`
`15.
`
`Venue is proper under 28 U.S.C. § 1391(b)-(c) and 28 U.S.C. § 1400.
`
`In particular, LG Electronics Inc. is a corporation organized and existing under the
`
`laws of the Republic of Korea, and LG Electronics U.S.A., Inc. has maintained a regular and
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`established physical place of business in Austin, Texas, including at least at 9420 Research Blvd,
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`Austin, Texas 78759. In re HTC Corp., 889 F.3d 1349, 1354 (Fed. Cir. 2018); In re Cray Inc., 871
`
`F.3d 1355, 1362-63 (Fed. Cir. 2017).
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`
`
`3
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`
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`Case 1:20-cv-00034-ADA Document 1 Filed 06/21/19 Page 4 of 16
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`THE ASSERTED PATENT
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`16.
`
`This lawsuit asserts causes of action for infringement of United States Patent No.
`
`6,411,941 (“the ’941 patent”), which is entitled “Method of Restricting Software Operation Within a
`
`License Limitation.” A true and correct copy of the ’941 patent is attached as Exhibit A.
`
`17.
`
`The U.S. Patent and Trademark Office duly and legally issued the ’941 patent on June
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`25, 2002.
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`18.
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`Subsequent to issue, and at least by December 21, 2004, all right, title, and interest in
`
`the ’941 patent, including the sole right to sue for any infringement, were assigned to Ancora
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`Technologies, Inc., which has held, and continues to hold, all right, title, and interest in the ’941
`
`patent.
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`19.
`
`The president of Ancora Technologies, Inc.—Mr. Miki Mullor—is one of the
`
`inventors of the ’941 patent.
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`20.
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`A reexamination certificate to the ’941 patent subsequently was issued on June 1,
`
`2010. A true and correct copy of that certificate is attached as Exhibit A.
`
`21.
`
`Since being assigned to Ancora Technologies, Inc., the ’941 patent has been asserted
`
`in patent infringement actions filed against Microsoft Corporation, Dell Incorporated, Hewlett
`
`Packard Incorporated, Toshiba America Information Systems, Apple Incorporated, HTC America,
`
`Inc., and HTC Corporation.
`
`22.
`
`In the course of these litigations, a number of the’941 patent’s claim terms have been
`
`construed and the validity of the ’941 patent has repeatedly been affirmed.
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`23.
`
`For example, in December 2012, the United States District Court for the Northern
`
`District of California issued a claim construction order construing the terms (1) “volatile memory”;
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`(2) “non-volatile memory”; (3) “BIOS”; (4) “program”; (5) “license record”; and (6) “verifying the
`
`
`
`4
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`
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`Case 1:20-cv-00034-ADA Document 1 Filed 06/21/19 Page 5 of 16
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`program using at least the verification structure.” Ancora Techs., Inc. v. Apple Inc., No. 11–CV–
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`06357 YGR, 2012 WL 6738761, at *1 (N.D. Cal. Dec. 31, 2012).
`
`24.
`
`Further, in its order, the court rejected Apple’s indefiniteness arguments and further
`
`held that, at least with respect to Claims 1-3 and 5-17, “[t]he steps of the Claim do not need to be
`
`performed in the order recited.” Ancora Techs., Inc. v. Apple Inc., No. 11–CV–06357 YGR, 2012
`
`WL 6738761, at *5, 13 (N.D. Cal. Dec. 31, 2012).
`
`25.
`
`Subsequently, the United States Court of Appeals for the Federal Circuit affirmed the
`
`district court’s rejection of Apple’s indefiniteness argument. Ancora Techs., Inc. v. Apple, Inc., 744
`
`F.3d 732, 739 (Fed. Cir. 2014).
`
`26.
`
`Further, the Federal Circuit agreed with Ancora Technologies, Inc. that “the district
`
`court erred in construing ‘program’ to mean ‘a set of instructions for software applications that can
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`be executed by a computer’”—holding that, as Ancora had argued, the term should be accorded its
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`normal meaning of “‘a set of instructions’ for a computer.” Ancora Techs., Inc. v. Apple, Inc., 744
`
`F.3d 732, 734-35, 737 (Fed. Cir. 2014).
`
`27.
`
`Further, in a recent decision, the Federal Circuit again affirmed the validity of the
`
`’941 patent—stating: “[W]e conclude that claim 1 of the ’941 patent is not directed to an abstract
`
`idea.” Ancora Techs., Inc. v. HTC Am., Inc., 908 F.3d 1343 (Fed. Cir. 2018), as amended (Nov. 20,
`
`2018).
`
`28.
`
`In addition, the Patent Trial and Appeal Board rejected HTC’s request to institute
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`covered business method review proceedings on the ’941 patent—explaining that “the ’941 patent’s
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`solution to the addressed problem is rooted in technology, and thus, is a ‘technical solution’” and
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`also rejecting HTC’s argument that “the ’941 patent recites a technological solution that is not novel
`
`and nonobvious.” A true and correct copy of this decision is attached as Exhibit B.
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`
`
`5
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`Case 1:20-cv-00034-ADA Document 1 Filed 06/21/19 Page 6 of 16
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`COUNT 1 – INFRINGEMENT
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`29.
`
`Plaintiff repeats and incorporates by reference each preceding paragraph as if fully set
`
`forth herein and further state:
`
`30.
`
`LGE has infringed the ’941 patent in violation of 35 U.S.C. § 271(a) by, prior to the
`
`expiration of the ’941 patent, selling, and/or offering for sale in the United States, and/or importing
`
`into the United States, without authorization, products that are capable of performing at least Claim 1
`
`of the ’941 patent literally or under the doctrine of equivalents and/or, without authorization, causing
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`products to perform each step of at least Claim 1 of the ’941 patent.
`
`31.
`
`At a minimum, such Accused Products include those servers/software utilized by
`
`LGE to transmit an over-the-air (“OTA”) software update, as well as those smartphones and other
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`devices and technology that received from LGE, or received at LGE’s direction, an OTA update that
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`caused such device to perform the method recited in Claim 1 prior to the expiration of the ’941
`
`patent.
`
`32.
`
`Such Accused Products include products like the LG G5, which—as detailed below—
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`is configured by LGE such that it is capable of performing each step of Claim 1 of the ’941 patent
`
`and to which LGE provided one or more OTA updates on or about November 21, 2016, November
`
`29, 2016, November 30, 2016, February 20, 2017, and May 17, 2017, that would cause an LG G5
`
`device to perform each step of Claim 1 in order to upgrade its operating system to Android 7.0.1
`
`33.
`
`Such Accused Products also include products like the LG Aristo, LG Aristo 2, LG
`
`Aristo 2 plus, LG Classic, LG D.lite, LG Destiny, LG Eclipse 4G LTE, LG Enact, LG Encompass,
`
`
`1 This description of infringement is illustrative and not intended to be an exhaustive or limiting
`explanation of every manner in which each Accused Product infringes the ’941 patent. Further, on
`information and belief, the identified functionality of the LG G5 are representative of components
`and functionality present in all Accused Products.
`
`
`
`6
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`
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`Case 1:20-cv-00034-ADA Document 1 Filed 06/21/19 Page 7 of 16
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`LG Escape, LG Escape 2, LG Escape 3, LG F90, LG Fiesta, LG Fiesta 2, LG Fortune 2, LG G flex,
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`LG G flex 2, LG G Pad, LG G Pad 10.1 LTE, LG G Pad 7.0 LTE, LG G PAD 8.3, LG G Pad 8.3
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`LTE, LG G Pad F 7.0, LG G Pad F 8.0, LG G Pad F2 8.0, LG G Pad X 10.1, LG G Pad X 8.0, LG G
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`Pad X 8.0 LTE, LG G Pad X 8.3, LG G Pad X2 8.0, LG G stylo, LG G vista, LG G vista 2, LG G2,
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`LG G3, LG G3 vigor, LG G3(CDMA), LG G4, LG G5, LG G6, LG G6 plus, LG G7 THINQ, LG
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`Grace, LG Harmony, LG Intuition, LG K10, LG K10(4G), LG K11, LG K20, LG K20 plus, LG K20
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`V, LG K3, LG K30, LG K4, LG K7, LG K8, LG K8+, LG K8V, LG L90, LG Leo LTE, LG Leon
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`C50, LG Leon LTE, LG Logos, LG Lucid 2, LG Lucid 3, LG Lucky, LG Mach, LG Motion 4G, LG
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`Nexus 4, LG Nexus 5, LG Optimus dynamic II, LG Optimus exceed 2, LG Optimus extreme, LG
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`Optimus F3, LG Optimus F3Q, LG Optimus F5, LG Optimus F6, LG Optimus F60, LG Optimus F7,
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`LG Optimus fuel, LG Optimus G pro, LG Optimus L70, LG Optimus L9, LG Optimus L90, LG
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`Optimus plus, LG Optimus regard, LG Optimus select, LG Optimus showtime, LG Optimus
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`Ultimate, LG Optimus zone 2, LG Optimus zone 3, LG Phoenix 2, LG Phoenix 3, LG Phoenix 4, LG
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`Phoenix Plus, LG Power, LG Premier, LG Premier Pro, LG Prime, LG Q6, LG Q7+, LG Realm, LG
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`Rebel, LG Rebel 2, LG Rebel 3, LG Rebel 4, LG Rebel LTE, LG Risio 3, LG Risio cricket, LG Risio
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`LTE, LG Spectrum II, LG Spirit, LG Splendor, LG Stylo 2, LG Stylo 2 Plus, LG Stylo 2 V, LG Stylo
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`3, LG Stylo 3 LTE, LG Stylo 3 plus, LG Stylo 4, LG Stylus 2, LG Sunrise, LG Sunset, LG
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`Transpyre, LG Treasure LTE, LG Tribute, LG Tribute 2, LG Tribute 5, LG Tribute dynasty, LG
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`Tribute HD, LG Ultimate 2, LG V10, LG V20, LG V30, LG V30 plus, LG Venice, LG Volt, LG
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`Volt 2, LG Wine, LG Wine LTE, LG X charge, LG X power, LG X Style, LG X Venture, LG
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`Xpression Plus, LG Zone 4, to which LGE similarly provided an OTA update prior to the expiration
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`of the ’941 patent.
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`7
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`Case 1:20-cv-00034-ADA Document 1 Filed 06/21/19 Page 8 of 16
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`34.
`
`For example, Claim 1 of the ’941 patent claims “a method of restricting software
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`operation within a license for use with a computer including an erasable, non-volatile memory area
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`of a BIOS of the computer, and a volatile memory area; the method comprising the steps of: [1]
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`selecting a program residing in the volatile memory, [2] using an agent to set up a verification
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`structure in the erasable, non-volatile memory of the BIOS, the verification structure accommodating
`
`data that includes at least one license record, [3] verifying the program using at least the verification
`
`structure from the erasable non-volatile memory of the BIOS, and [4] acting on the program
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`according to the verification.”
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`35. When LGE transmitted an OTA update like those it sent on or about on or about
`
`November 21, 2016, November 29, 2016, November 30, 2016, February 20, 2017, and May 17,
`
`2017, LGE performed and/or caused to be performed each of these elements as part of what is
`
`described as “verified boot”:
`
`
`https://source.android.com/security/verifiedboot.
`
`
`
`36.
`
`In particular, each LG G5 contains both erasable, non-volatile memory in the form of
`
`ROM and volatile memory in the form of RAM.
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`
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`8
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`Case 1:20-cv-00034-ADA Document 1 Filed 06/21/19 Page 9 of 16
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`37.
`
`Further, each LG G5 was configured by LGE to perform the below described process
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`(or one substantially like it) in order to install an OTA update:
`
`
`https://source.android.com/devices/tech/ota/nonab.
`
`
`
`38.
`
`During this process, a program running on one or more OTA servers owned and/or
`
`controlled by LGE sets up a verification structure in the erasable, non-volatile memory of the BIOS
`
`of an LG G5 by transmitting to the device an OTA update, which the LG G5 is configured by LGE to
`
`thereafter save to a cache or data partition of the erasable, non-volatile memory of its BIOS.
`
`39.
`
`This OTA update contains a verification structure that include data accommodating at
`
`least one license record. Examples of such a license record include a cryptographic signature or key:
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`
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`9
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`
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`Case 1:20-cv-00034-ADA Document 1 Filed 06/21/19 Page 10 of 16
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`https://source.android.com/devices/tech/ota/sign_builds.
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`40.
`
`Such license record also may comprise a cryptographic hash or hash tree:
`
`
`https://source.android.com/security/verifiedboot/verified-boot.
`
`
`
`
`
`41.
`
`Once the verification structure has been set up in the BIOS, the LG G5 is configured
`
`by LGE to reboot into recovery mode, load the OTA update into its volatile memory (e.g., RAM),
`
`and use the at least one license record from the BIOS to verify the OTA update.
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`
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`10
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`Case 1:20-cv-00034-ADA Document 1 Filed 06/21/19 Page 11 of 16
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`42.
`
`If the OTA update is verified, the LG G5 is further configured to load and execute the
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`update.
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`43.
`
`In sum, as described above, once LGE has set up the verification structure by
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`transmitting to a device an OTA update like those LGE provided on or about November 21, 2016,
`
`November 29, 2016, November 30, 2016, February 20, 2017, and May 17, 2017, each Accused
`
`Product is configured to automatically perform each of the remaining Claim 1 steps.
`
`44.
`
`Further, on information and belief, when LGE provided an OTA update like those
`
`LGE provided on or about November 21, 2016, November 29, 2016, November 30, 2016, February
`
`20, 2017, and May 17, 2017, LGE performed or caused to be performed each of the Claim 1 steps.
`
`45.
`
`Further, LGE conditions participation in the OTA update process and the receipt of
`
`the benefit of a software update on the performance of each of the above steps.
`
`46.
`
`Primarily, as described above, LGE pre-configures/programs each Accused Product to
`
`perform the above described steps upon receiving an OTA update from LGE.
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`47.
`
`Further, LGE takes steps to ensure that each Accused Product cannot install an OTA
`
`update except by performing each of the above described steps.
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`48.
`
`For example, LGE precludes third parties from altering an Accused Product to allow
`
`it to install such updates in a different manner, including by stating in its Manufacturer’s Warranty
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`that potential damage from “unauthorized modifications” or “alterations” will not be within the
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`scope of the warranty. https://www.lg.com/us/mobile-phones/arbitration/legalterms.
`
`49.
`
`Further, LGE emphasizes the benefits associated with updating the software of its
`
`Accused Products.
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`50.
`
`For example, LGE has stated that updating products’ software with newer versions
`
`will “improve their operations or add new features” and has emphasized to consumers that “makes
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`
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`11
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`Case 1:20-cv-00034-ADA Document 1 Filed 06/21/19 Page 12 of 16
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`sure that your product always has the most up-to-date software version that does not compromise its
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`performance.” https://www.lg.com/uk/support/solutions/audio-video/software-update.
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`51.
`
`LGE also identified specific benefits associated with updating an LG G5 to Android
`
`7.0—the update that LGE released to such devices in the United States on or about November 21,
`
`2016, November 29, 2016, November 30, 2016, February 20, 2017, and May 17, 2017—including
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`“New customization options,” “Improved Productivity,” “More battery saving,” “Better graphics and
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`support virtual reality,” and “High level security”:
`
`
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`12
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`Case 1:20-cv-00034-ADA Document 1 Filed 06/21/19 Page 13 of 16
`Case 1:20-cv-00034—ADA Document 1 Filed 06/21/19 Page 13 of 16
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`Improved Productivity
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`I|n'v’hether you're answering work emails, and making plans with ‘irie nds, Android Nougat will make things easier with its new multitasking feature :
`
`Fast switching betmen applications:
`
`A double—click on the recent applications button {square} will switch you to the previous application.
`
`
`
`Multimindow or split window:
`You can see 2 applications at the same time. Resize the windows then drag and drop them to areas of the screen. Press the square button in applications
`compatible with mu Iti-window will see an icon. Click on it. After that choose another application for the lower part of the screen.
`
`Direct response:
`
`Respond directly to a notification without opening the application.
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`
`
`More battery saving
`
`
`
`Energy management has become even more adva noed and intelligent. Doze technology (released in Android Marshmallow} becomes smarter and more
`powerful.
`
`fielte
`
`This is the denomination of a project that dates back to the previous Android versions. With Android Nougat it showsit‘s full potential. Applications in the
`background will have lower priority when it comes to the RAM and CPU usage. it will lead to a prolongation of battery life.
`
`Twelve Mode
`
`The bat thing about Doze energy saving mode is that many people have not noticed its existence. This is how well it works. It puts your smartphone into a
`semi—lethargic mode, reducing CPU usage to a minimum and running only truly important things. In Android Nougat, this mode was slightjy improved. Now
`Doze detects whether you use your mobile phone while moving or itjust lies in your pocket.
`
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`13
`13
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`Case 1:20-cv-00034-ADA Document 1 Filed 06/21/19 Page 14 of 16
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`
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`
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`https://www.lg.com/uk/support/solusions/mobile/android-7-nougat.
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`52.
`
`LGE has made similar statements emphasizing the benefit of performing other OTA
`
`updates.
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`
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`14
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`
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`Case 1:20-cv-00034-ADA Document 1 Filed 06/21/19 Page 15 of 16
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`53.
`
`Further, LGE controlled the manner of the performance of such method. As set forth
`
`above, LGE configured each Accused Product such that, upon receiving an OTA update, it would
`
`automatically perform each remaining step of the claimed method.
`
`54.
`
`LGE also controlled the timing of the performance of such method by determining
`
`when to utilize its OTA servers/software to set up a verification structure in each Accused Product.
`
`55.
`
`LGE also had the right and ability to stop or limit infringement simply by not
`
`performing the initial step of using its OTA servers/software to set up a verification structure in each
`
`Accused Product. Absent this action by LGE, the infringement at issue would not have occurred.
`
`56.
`
`LGE’s infringement has caused damage to Ancora, and Ancora is entitled to recover
`
`from LGE those damages Ancora has sustained as a result of LGE’s infringement.
`
`DEMAND FOR JURY TRIAL
`
`57.
`
`Plaintiff hereby demands a jury trial for all issues so triable.
`
`PRAYER FOR RELIEF
`
`WHEREFORE, Plaintiff prays for judgment as follows:
`
`A.
`
`Declaring that LG Electronics Inc. and LG Electronics U.S.A., Inc. have infringed
`
`United States Patent No. 6,411,941 in violation of 35 U.S.C. § 271;
`
`B.
`
`Awarding damages to Ancora arising out of this infringement, including enhanced
`
`damages pursuant to 35 U.S.C. § 284 and prejudgment and post-judgment interest, in an amount
`
`according to proof;
`
`C.
`
`Awarding such other costs and relief the Court deems just and proper, including any
`
`relief that the Court may deem appropriate under 35 U.S.C. § 285.
`
`
`
`15
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`Case 1:20-cv-00034-ADA Document 1 Filed 06/21/19 Page 16 of 16
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`Date: June 21, 2019.
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`
`
`
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`Respectfully submitted,
`
`By: /s/ Charles Ainsworth
`
`Charles Ainsworth
`State Bar No. 00783521
`Robert Christopher Bunt
`State Bar No. 00787165
`PARKER, BUNT & AINSWORTH, P.C.
`100 E. Ferguson, Suite 418
`Tyler, TX 75702
`903/531-3535
`E-mail: charley@pbatyler.com
`E-mail: rcbunt@pbatyler.com
`
`
`
`16
`
`