CardXX v. Dynamics Et. Al.

download CardXX v. Dynamics Et. Al.

of 16

  • date post

    03-Apr-2018
  • Category

    Documents

  • view

    215
  • download

    0

Embed Size (px)

Transcript of CardXX v. Dynamics Et. Al.

  • 7/28/2019 CardXX v. Dynamics Et. Al.

    1/16

    COMPLAINT

    No.- 1 -

    Rimon, P.C.7920 SE Steller WaySnoqualmie, Washington 98065Telephone: (206) 696-9095

    1

    2

    3

    4

    5

    6

    7

    8

    9

    10

    11

    12

    13

    14

    15

    16

    17

    18

    19

    20

    21

    22

    23

    24

    25

    26

    27

    IN THE UNITED STATES DISTRICT COURT

    WESTERN DISTRICT OF WASHINGTON

    AT SEATTLE

    CardXX, Inc.,

    Plaintiff,

    v.

    Dynamics Inc., UMB Bank, n.a., and Visa, Inc.,

    Defendants.

    Civil Action No.

    COMPLAINT

    Jury Demanded

    Pursuant to Fed. R. Civ. P. 7, 8, and 10, Plaintiff CardXX, Inc. ("CardXX") brings this

    action against Defendants Dynamics Inc. ("Dynamics"), UMB Bank, n.a., and Visa, Inc. ("Visa")

    and alleges as follows:

    1. This is a case for patent infringement under the patent laws of the United States of

    America, including 35 U.S.C. 271 et seq. Plaintiff CardXX owns all right, title, and interest in

    several U.S. patents, including the right to sue for past infringement, and contends that

    Defendants infringe one or more claims of two such patents, U.S. Patent No. 8,012,809 and U.S.

    Patent No. 8,324,021.

    NATURE OF THE CASE

  • 7/28/2019 CardXX v. Dynamics Et. Al.

    2/16

    COMPLAINT

    No.- 2 -

    Rimon, P.C.7920 SE Steller WaySnoqualmie, Washington 98065Telephone: (206) 696-9095

    1

    2

    3

    4

    5

    6

    7

    8

    9

    10

    11

    12

    13

    14

    15

    16

    17

    18

    19

    20

    21

    22

    23

    24

    25

    26

    27

    2. Plaintiff CardXX is a for-profit corporation with its principal places of business

    being outside Seattle, Washington and near Denver, Colorado. CardXX is in the business of

    inventing, designing, making, and selling advanced smart cards, and licensing advanced smart

    card technology and other related technology, as well as providing innovative manufacturing

    solutions more generally. Among other things, CardXX is currently working with a number of

    partners on the components and designs for advanced smart cards, including powered biometric

    smart cards with integrated fingerprint sensors on the surface.

    THE PARTIES

    3. On information and belief, Defendant Dynamics is a Delaware corporation with

    its principal place of business at 493 Nixon Road, Cheswick, Pennsylvania 15024. According to

    its website athttp://www.poweredcards.com/history.php:

    Dynamics Inc. was founded and seeded in 2007 by Jeffrey Mullen, its CEO.Dynamics produces and manufactures intelligent powered cards such as advancedpayment cards . . . . Dynamics is backed by Bain Capital Ventures and AdamsCapital Management. Dynamics is headquartered in Pittsburgh, Pennsylvania,with offices in Silicon Valley and New York City.

    4. On information and belief, Defendant UMB Bank, n.a. is a fully-owned

    subsidiary of UMB Financial Corporation, a diversified financial holding company with more

    than $700 million in annual revenues. UMB Bank, n.a. ("UMB") is a major bank and financial

    institution, which offers a "comprehensive suite of banking products and services." (UMB.com).

    UMB, a for-profit Missouri company, is headquartered at 1010 Grand Boulevard, Kansas City,

    Missouri 64106. Among other things, UMB issues credit cards to customers, including credit

    cards designed and manufactured by Dynamics. UMB's annual revenues exceed $150 million a

    year.

    5. On information and belief, Defendant Visa is a for profit corporation, with its

    principal place of business at 900 Metro Center Boulevard, Foster City, California 94404.

    According to its website, Visa is a "global payments technology company that enables

    consumers, businesses, financial institutions, and governments to use electronic payments

    http://www.poweredcards.com/history.phphttp://www.poweredcards.com/history.phphttp://www.poweredcards.com/history.phphttp://www.poweredcards.com/history.php
  • 7/28/2019 CardXX v. Dynamics Et. Al.

    3/16

    COMPLAINT

    No.- 3 -

    Rimon, P.C.7920 SE Steller WaySnoqualmie, Washington 98065Telephone: (206) 696-9095

    1

    2

    3

    4

    5

    6

    7

    8

    9

    10

    11

    12

    13

    14

    15

    16

    17

    18

    19

    20

    21

    22

    23

    24

    25

    26

    27

    instead of cash or checks." On information and belief, Visa does not make or issue credit cards.

    Instead, Visa puts its logo on a variety of credit cards, including some credit cards designed,

    made, and sold by Dynamics, and offered by UMB. Those credit cards can then be used to access

    the Visa payment network, called VisaNet, "providing three essential functions . . . transaction

    processing services, risk management services, and information services." (Visa.com).

    6. This Court has subject matter jurisdiction over this case, because it "arises under"

    the U.S. patent laws, including but not limited to 35 U.S.C. 271, 281, 283-285. See 28 U.S.C.

    1331 (actions arising under the laws of the United States) and 28 U.S.C. 1338(a) (actions

    arising under patent law).

    JURISDICTION AND VENUE

    7. Venue is appropriate under 28 U.S.C. 1391(a) and (b) in that a substantial part

    of the events or omissions giving rise to the claims occurred within the Western District of

    Washington and 28 U.S.C. 1400(a) in that Defendants Dynamics, UMB, and Visa, and/or their

    agents may be found within the Western District of Washington and conduct a substantial

    volume of business in Washington State.

    8. This Court has jurisdiction over the "person" of Defendants Dynamics, UMB, and

    Visa consistent with the principles of due process and the Washington Long Arm Statute, which

    extends to the limits of due process. On information and belief, Defendants Dynamics, UMB,

    and Visa conduct such a volume of commercial activity in Washington as to be deemed to be

    "present" throughout the State. Additionally, the Court has "specific" jurisdiction over these

    Defendants because significant revenues for each company derive from the sale or use of

    advanced smart cards in this State, which are the specific infringing products at issue in this case.

    Finally, some of the Defendants have facilities or offices in this State or have appointed agents

    for receipt of service of process in Washington State, which constitutes consent to be sued in the

    State.

    9. Plaintiff CardXX is the assignee and owner of all right, title, and interest in

    FACTUAL BACKGROUND

  • 7/28/2019 CardXX v. Dynamics Et. Al.

    4/16

    COMPLAINT

    No.- 4 -

    Rimon, P.C.7920 SE Steller WaySnoqualmie, Washington 98065Telephone: (206) 696-9095

    1

    2

    3

    4

    5

    6

    7

    8

    9

    10

    11

    12

    13

    14

    15

    16

    17

    18

    19

    20

    21

    22

    23

    24

    25

    26

    27

    several patents, including U.S. Patent No. 8,012,809 (the 809 patent), issued on September 6,

    2011 and entitled "Method for Making Advanced Smart Cards with Integrated Electronics Using

    Isotropic Thermoset Adhesive Materials with High Quality Exterior Surfaces." A true and

    correct copy of the 809 patent is attached as Exhibit A to this Complaint. CardXX is also the

    assignee and owner of all right, title, and interest in U.S. Patent No. 8,324,021 (the 021 patent),

    issued on December 4, 2012 and entitled "Advanced Smart Cards with Integrated Electronics in

    Bottom Layer and Method of Making Such Advanced Smart Cards." A true and correct copy of

    the 021 patent is attached as Exhibit B to this Complaint. These two patents, referred to in this

    Complaint as the "patents-in-suit" or the "CardXX patents," are currently in full force and effect,

    with all maintenance and other fees having been paid. The patents derive from and trace their

    priority to the original March 23, 2005 filing of a PCT application. The CardXX patents, and

    each claim of the CardXX patents, are presumed to be valid under 35 U.S.C. 282. None of the

    three Defendants is licensed under the CardXX patents, either explicitly or implicitly, and none

    of them has the right to practice the inventions defined by the claims without CardXX's

    permission, which has not been granted. CardXX has the right and authority to sue for all past,

    present, and future infringement of these patents.

    10. Plaintiff CardXX is in the business of inventing, designing, using, and selling

    advanced smart cards and licensing advanced smart card technology and other related

    technology, as well as providing innovative manufacturing solutions more generally. CardXX

    owns several patents reflecting some of its innovations in the advanced smart card technology

    field or art. The patents-in-suit generally disclose a novel method for making advanced smart

    cards through a low temperature and low pressure process that allows electronic components to

    be packaged within the approximate dimensions of a credit card in a precise, consistent, and

    reliable way with high-volume production equipment and without damaging the electronic

    components. In contrast, earlier, prior-art processes require temperatures and pressures that often

    damage the electronic components (chips, batteries, microprocessors, antennae, LEDs, etc.) or

    that produce cards with insufficient volume, quality, and/or reliability to be as commercially

  • 7/28/2019 CardXX v. Dynamics Et. Al.

    5/16

    COMPLAINT

    No.- 5 -

    Rimon, P.C.7920 SE Steller WaySnoqualmie, Washington 98065Telephone: (206) 696-9095

    1

    2

    3

    4

    5

    6

    7

    8

    9

    10

    11

    12

    13

    14

    15

    16

    17

    18

    19

    20

    21

    22

    23

    24

    25

    26

    27

    viable.

    11. As part of its business model, CardXX licenses its technology. For example,

    CardXX gave a company called Innovatier, Inc. a limited, non-exclusive, non-transferable

    license to certain defined advanced smart card technology. In the 2009-2010 timeframe,

    Innovatier used that CardXX licensed technology to make prototype advanced smart cards for

    Defendant Dynamics. Dynamics was having difficulty discovering a process that would allow

    the high volume, reliable production of high-quality advanced smart cards. Again, existing

    processes used high heat and high pressure that too often damaged the electronics components

    (including batteries) contained in advanced smart cards.

    12. Dynamics approached Innovatier to make cards for it, using the CardXX

    technology. The license agreement between CardXX and Innovatier did not

    13. In approximately July and August of 2012, Paul Reed, CardXX's President and

    CEO, repeatedly called Dynamics personnel (at least 10 times), including Jeff Mullen, President

    and CEO of Dynamics, Daniel Gantt, General Counsel for Dynamics, and Andrew Veter, Patent

    Counsel for Dynamics, to notify them about CardXX's technology and patent rights, including

    the 809 patent. After leaving numerous messages, and receiving no calls back from Mr. Mullen,

    Mr. Gantt, or Mr. Veter, Mr. Reed faxed a note to Mullen, Gantt, and Veter on September 5,

    2012. That note states the following in pertinent part:

    allow Innovatier to

    share CardXX's technology with third parties or to sublicense or further license the CardXX

    technology. Nevertheless, through repeated contacts and communications, and through an

    iterative process of designing electronics that were integrated into advanced smart cards by

    Innovatier, and subsequently evaluated and tested by Dynamics, Dynamics learned about the

    CardXX technology, equipment, materials, and processes, through Innovatier and otherwise, and

    thereafter began to make, use, sell, offer to sell, or import advanced smart cards that fall within

    the claims of the patents-in-suit.

    CardXX recently received U.S. Pat. No. 8,012,809 for a method formanufacturing advanced smart cards containing batteries, visual displays, input

  • 7/28/2019 CardXX v. Dynamics Et. Al.

    6/16

    COMPLAINT

    No.- 6 -

    Rimon, P.C.7920 SE Steller WaySnoqualmie, Washington 98065Telephone: (206) 696-9095

    1

    2

    3

    4

    5

    6

    7

    8

    9

    10

    11

    12

    13

    14

    15

    16

    17

    18

    19

    20

    21

    22

    23

    24

    25

    26

    27

    devices, and other electronics, and we have also received a Notification ofAllowance for the 12/942,706 patent application for Advanced Smart Cards. Asthe President, CEO, and named inventor for many patents issued to Dynamics, Iam sure that you understand how important it is for Dynamics and their customersto have legitimate rights to the technology, processes, and associated Intellectual

    Property used by Dynamics.(Faxed Note from Reed to Mullen of 9/5/12). A true and correct copy of the note from Reed to

    Mullen is attached as Exhibit C to this Complaint. Reed thus provided Dynamics with explicit

    notice of the 809 patent and the Notice of Allowance for Application No. 12/942,706, which

    issued as the 021 patent less than three months later. Neither Mr. Mullen, nor anyone else from

    Dynamics ever responded to any of these communications. Defendant Dynamics has thus been

    given prior notice of its infringement.

    14. Defendant Dynamics currently makes, uses, sells, and offers to sell, and/or

    contributes to or induces others to make, use, sell, or offer to sell, advanced smart cards that

    infringe one or more claims of the patents-in-suit literally and/or under the doctrine of

    equivalents and directly and/or indirectly. One such line of infringing advanced smart cards is

    the so called Dynamics ePlate card ("Dynamics UMB Card"). These cards are currently being

    sold to consumers throughout the United States, including to hundreds or thousands of

    consumers within Washington State.

    15. The Dynamics UMB Card appears as follows:

  • 7/28/2019 CardXX v. Dynamics Et. Al.

    7/16

    COMPLAINT

    No.- 7 -

    Rimon, P.C.7920 SE Steller WaySnoqualmie, Washington 98065Telephone: (206) 696-9095

    1

    2

    3

    4

    5

    6

    7

    8

    9

    10

    11

    12

    13

    14

    15

    16

    17

    18

    19

    20

    21

    22

    23

    24

    25

    26

    27

    As shown, the Dynamics UMB Card is made by or for Defendant Dynamics and issued, sold,

    and offered for sale by Defendant UMB to its customers, and used in connection with Defendant

    Visa's services, including access to VisaNet. Plaintiff CardXX has knowledge of all these facts.

    The Dynamics UMB or ePlate card is offered on and through the Dynamics website, among

    other places. Thousands of customers use these cards on an ongoing basis, thereby directly

    infringing CardXX's patent rights.

    16. The Dynamics UMB Card can be acquired from UMB for an annual fee of $99.

    The paperwork accompanying a new Dynamics UMB Card specifically indicates that the entity

    issuing the card is UMB and that "UMB" and "the bank" "refer to UMB Bank, n.a. a national

    banking association whose headquarters is located in Kansas City, Missouri." A true and correct

    copy of excerpted language from the ePlate Cardholder Agreement is attached to this

    Complaint as Exhibit D. As shown above, the Dynamics UMB Card is offered as a Visa card,

    which gives the user access to the VisaNet network and other services and privileges of a "Visa

    card." Dynamics has continued to sell infringing advanced smart cards, such as the ePlate

    product line, even though it has actual notice of the patents-in-suit and of the objectively high

    likelihood that its actions constitute infringement of a valid patent. Dynamics has been recklessly

    indifferent to CardXX's patent rights and is willfully infringing CardXX's patents-in-suit. UMB

    and Visa received notice of CardXX's patent rights at least as early as the filing of this lawsuit.

    17. Although this Complaint discusses the Dynamics UMB or ePlate Card in detail,

    the lawsuit is directed at any infringing advanced smart cards made, used, sold, offered for sale,

    or imported by any of the Defendants, including the ePlate card, Dynamics' Citibank

    ThankYou 2G card, Dynamics' Hidden card, Dynamics' MultiAccountTM card, Dynamics'

    Redemption card, Dynamics' DynamicTM credit card, Dynamics LifecodeTM card, and any other

    advanced smart card that falls within the claims of the asserted patents.

  • 7/28/2019 CardXX v. Dynamics Et. Al.

    8/16

    COMPLAINT

    No.- 8 -

    Rimon, P.C.7920 SE Steller WaySnoqualmie, Washington 98065Telephone: (206) 696-9095

    1

    2

    3

    4

    5

    6

    7

    8

    9

    10

    11

    12

    13

    14

    15

    16

    17

    18

    19

    20

    21

    22

    23

    24

    25

    26

    27

    FIRST COUNT

    (Infringement of the 021 Patent)

    18. Plaintiff CardXX incorporates each of the allegations contained in paragraphs 1-

    17 of this Complaint as if fully set forth here.

    19. Defendant Dynamics makes, uses, sells, and offers to sell within the United

    States, and/or imports into the United States, advanced smart cards, including the Dynamics Card

    or ePlate card, that infringe one or more claims of the 021 patent, including but not limited to

    claims 1, 2, 3, 9, and 14 of that patent. Dynamics literally infringes the limitations of each of

    those claims, and perhaps other claims. In the event the Dynamics UMB Card and other

    Dynamics advanced smart cards are deemed not to literally meet one or more limitations of those

    or other claims, then the card products meet all limitations of the claims literally and/or under the

    doctrine of equivalents.

    20. For example, claim 14 of the 021 patent reads as follows:

    An advanced smart card comprising a top layer, a core layer of thermosetpolymeric material, and a bottom layer comprising an integrated electronicsassembly mounted on a substrate formed according to the following steps: (1)using an integrated electronics assembly mounted on a substrate, with maximumdimensions of 54 mm wide, 85.6 mm long, and 0.50 mm thick, and positioningthe integrated electronics assembly mounted on a substrate in a bottom mold; (2)positioning a top layer comprising synthetic paper or other plastic material in atop mold; (3) closing the top mold to the bottom mold in a manner that creates avoid space between the top layer and the bottom layer comprising the integratedelectronics assembly; (4) injecting a thermosetting polymeric material into thevoid space to form a core layer consisting of polymeric material, the injectiontaking place at a temperature less than 150 degrees F. and pressure less than 100PSI which are such that: (a) the top layer of material is at least partially cold, lowpressure molded into a cavity in the top mold; (b) gases and excess polymericmaterial are driven out of the void space; (c) the injected polymeric material flowsover and around all exposed portions of the electronics components of theintegrated electronics assembly positioned on the top surface of the bottom layersuch that the bottom surface of the bottom layer remains free of the injectedpolymeric material; and (d) the thermosetting polymeric material bonds with boththe top layer and the bottom layer to produce a unified precursor advanced smartcard body; (5) removing the unified precursor advanced smart card body from thetop and bottom molds; and (6) trimming the precursor advanced smart card to a

  • 7/28/2019 CardXX v. Dynamics Et. Al.

    9/16

    COMPLAINT

    No.- 9 -

    Rimon, P.C.7920 SE Steller WaySnoqualmie, Washington 98065Telephone: (206) 696-9095

    1

    2

    3

    4

    5

    6

    7

    8

    9

    10

    11

    12

    13

    14

    15

    16

    17

    18

    19

    20

    21

    22

    23

    24

    25

    26

    27

    desired dimension to produce a finished advanced smart card.

    (021 patent, claim 14) (Exhibit B). CardXX's infringement analysis, which includes both direct

    and circumstantial evidence, strongly suggests that the Dynamics UMB Card infringes each and

    every limitation of claim 14 of the 021 patent on a more-probable-than-not basis.

    21. For example, the Dynamics UMB Card is an advanced smart card, as defined in

    the patents-in-suit. Physical, chemical, and x-ray analysis all support that the Dynamics UMB

    Card is comprised of at least three layers (and perhaps more), a top layer, a bottom layer

    comprising an integrated electronics assembly mounted on a substrate, and a core or middle layer

    comprised of thermoset polymeric material. Infrared Photospectometry confirms that the core of

    the Dynamics UMB Card is, in fact, comprised of a thermoset polymeric material, including

    unsaturated polyester. There is thus no question that the Dynamics UMB Card was made through

    a thermoset polymer injection molding process. The top and bottom layers include at least one

    polymeric, plastic element, specifically polyvinylchloride ("PVC"), a material specifically cited

    in the patent specifications as proper and appropriate for the top and bottom layers. (See 021

    patent, col. 3, lines 46-48, col. 4, lines 12-18).

    22. The Dynamics UMB Card has an integrated electronics assembly mounted on a

    substrate that includes PVC. That integrated electronics assembly includes at least a battery, a

    microchip, light displays (LEDs), and perhaps other electronic components. (See Exhibit E). The

    top and bottom layers were necessarily mounted in the top and bottom portions of a mold,

    although "top" and "bottom" are relative terms as taught in the prior art and as understood by a

    person of ordinary skill in the art. The integrated electronics assembly of the Dynamics UMB

    Card was measured and was found to fall within the maximum dimensions of 54 mm wide, 85.6

    mm long, and 0.50 mm thick, as described in the claim. There is no doubt whatsoever that theDynamics UMB Card is made through a thermoset polymer injection molding process, involving

    positioning top and bottom layers in respective top and bottom portions of the mold. The mold

    would then be closed, as a necessary part of the process, with a void space created between top

    and bottom layers. The core thermoset material was then injected into this void space; the core

  • 7/28/2019 CardXX v. Dynamics Et. Al.

    10/16

    COMPLAINT

    No.- 10 -

    Rimon, P.C.7920 SE Steller WaySnoqualmie, Washington 98065Telephone: (206) 696-9095

    1

    2

    3

    4

    5

    6

    7

    8

    9

    10

    11

    12

    13

    14

    15

    16

    17

    18

    19

    20

    21

    22

    23

    24

    25

    26

    27

    layer being confirmed to be a thermoset material by Infrared Photospectometry. The injection

    took place at temperatures below 150 F. and at pressures below 100 PSI to avoid damaging the

    electronics, which are routinely damaged at temperatures and pressures greater than those. The

    top layer was at least partially cold, low pressure molded in a cavity in the top mold. Gases and

    excess polymeric material were driven out of the mold to prevent bubbles and other

    imperfections from forming in the cards. The injected thermoset material flowed over all

    exposed portions of the electronics assembly, but not over (or under) the bottom surface of the

    electronics assembly, and bonded the top layer and the bottom layer to produce a unified

    precursor smart card body. That card body was then removed from the mold and trimmed to

    produce the smart cards being made, used, sold, and offered for sale by the Defendants. In sum,

    the Dynamics UMB Card is made through the injection molding process as described in the

    patents-in-suit, including in claim 14 of the 021 patent, and meets all the limitations of that

    claim, as shown by CardXX's testing and analysis. The card also infringes claim 1, 2, 3, 9, and

    other claims of the patent, for the same reasons.

    23. In any case, recent binding Federal Circuit case law has reinforced that a patent

    holder need not analyze, assert, or discuss specific claims or claim limitations in a complaint for

    patent infringement, in light of Rule 84 of the Federal Rules of Civil Procedure and Form 18. See

    In re Bill of Lading Transmission and Processing Sys. Patent Lit., 681 F.3d 1323, 1334-35 (Fed.

    Cir. 2012). Form 18 requires only that CardXX allege:

    (1) an allegation of jurisdiction; (2) a statement that the plaintiff owns the patent;(3) a statement that defendant has been infringing the patent by making, selling,and using [the device] embodying the patent; (4) a statement that the plaintiff hasgiven the defendant notice of its infringement; and (5) a demand for an injunctionand damages.

    Id. at 1334. CardXX has alleged all that and more. As previously alleged, Defendant Dynamics

    infringes, literally and/or under the doctrine of equivalents, one or more claims of the 021

    patent, including but not limited to claims 1, 2, 3, 9, and 14 of that patent, by making, using,

    selling, and offering to sell within the United States, and/or importing into the United States

  • 7/28/2019 CardXX v. Dynamics Et. Al.

    11/16

    COMPLAINT

    No.- 11 -

    Rimon, P.C.7920 SE Steller WaySnoqualmie, Washington 98065Telephone: (206) 696-9095

    1

    2

    3

    4

    5

    6

    7

    8

    9

    10

    11

    12

    13

    14

    15

    16

    17

    18

    19

    20

    21

    22

    23

    24

    25

    26

    27

    certain advanced smart cards, including the Dynamics Card or ePlate card and any other

    advanced smart card made according to the injection molding process described in the patents-

    in-suit. See 35 U.S.C. 271(a). In the event that Dynamics pre-molds, pre-makes, or contracts

    out any portion of the manufacture of its infringing advanced smart cards to another

    manufacturer, then Dynamics still infringes the 021 patent, because it at least sells and offers to

    sell the card made through the claimed process, and that process does not require that one person

    or entity complete the entire process by itself. Moreover, Dynamics is knowingly contributing to

    the infringement of the patent claims by UMB, UMB's customers, and others by making, selling,

    or offering to sell a portion of the advanced smart card for material use in the infringing

    advanced card, knowing of CardXX's rights in the patents-in-suit (through prior notice), and

    knowing that the portion that Dynamics is making, selling, or offering to sell is especially made

    or adapted for use in the infringement of CardXX's patents-in-suit. Any portion of an advanced

    smart card body has no existing, substantial, non-infringing use, since there are no non-infringing

    advanced smart cards under production at this time. Any alleged non-infringing use would thus

    be experimental, illusory, or theoretical at this time.

    24. Defendants UMB and Visa likewise directly infringe one or more claims of the

    021 patent, including but not limited to claims 1, 2, 3, 9, and 14 of that patent. See 35 U.S.C.

    271(a). At this time, CardXX believes that UMB does not make cards like the Dynamics UMB

    Card. But it certainly sells, offers to sell, and uses those cards. For example, UMB sells or offers

    to sell the cards to its customers, who then also use the cards, creating additional direct

    infringement. CardXX is aware of actual customers who have purchased the Dynamics UMB

    Card and whose use of the card would constitute direct infringement. Visa likewise at least

    "uses" the infringing cards, by offering its services to cardholders who gain the benefits of the

    Visa network when they use their cards. Under the law, the definition of infringing "uses" is

    broad and would include use of a credit card to market or access the Visa network and to gain

    Visa benefits. The infringing advanced smart cards drive demand in a particular niche market for

    more technically advanced credit cards. That market exists, with respect to the infringing cards,

  • 7/28/2019 CardXX v. Dynamics Et. Al.

    12/16

    COMPLAINT

    No.- 12 -

    Rimon, P.C.7920 SE Steller WaySnoqualmie, Washington 98065Telephone: (206) 696-9095

    1

    2

    3

    4

    5

    6

    7

    8

    9

    10

    11

    12

    13

    14

    15

    16

    17

    18

    19

    20

    21

    22

    23

    24

    25

    26

    27

    only because Dynamics is making, selling, and offering to sell the cards, and UMB is buying,

    using, selling, and offering to sell the cards. Visa, too, is using the infringing cards, and helping

    to sell or offering to sell, or inducing use by customers of those cards by offering its services on,

    through, and in connection with such infringing cards.

    25. Each Defendant also indirectly infringes one or more claims of the 021 patent, by

    inducing customers to use the infringing advanced smart card products, for example by

    advertising and promoting those cards. When customers "use" the cards, they are directly

    infringing the 021 patent. Attached as Exhibit E are true and correct copies of various online

    promotional materials, downloaded on July 1, 2013, which illustrate some of Defendants' efforts

    to market and sell the specific features of the Dynamics UMB ePlate card and other advanced

    smart cards. For example, the Dynamics website emphasizes the advanced electronics of the

    ePlate card, instructing: "Press a button. Swipe. Get the button's reward. (Exhibit E)." The

    Dynamics advertisement further explains: "The electronic credit card that lets you choose your

    rewards with every swipe." UMB's website also highlights the unique, programmable features of

    the advanced ePlate smart card by offering to businesses and other customers "the opportunity

    to offer exclusive credit card rewards . . . ."

    26. Both the Dynamics and the UMB websites show the Dynamics UMB ePlate

    card with a VISA logo, indicating that a card user or purchaser gets the benefits of the card being

    a Visa Card. The Dynamics and UMB websites use the VISA logo with the permission of the

    Defendant Visa, which therefore approves of the content of those advertisements and is also

    promoting the sale and use of the Dynamics UMB ePlate card. Following their knowledge,

    notice, awareness, or willful blindness about the existence of the CardXX patents, the

    Defendants' sale, promotion, and other inducement of customers to buy and use such advanced

    smart cards constitutes indirect, induced infringement, because Defendants know of CardXX's

    patent rights and specifically know and intent that customers' use of such advanced smart cards

    will constitute infringement of CardXX's patent rights. They intend such infringement by

    customers, because that is how they make money through customers' use of the cards.

  • 7/28/2019 CardXX v. Dynamics Et. Al.

    13/16

    COMPLAINT

    No.- 13 -

    Rimon, P.C.7920 SE Steller WaySnoqualmie, Washington 98065Telephone: (206) 696-9095

    1

    2

    3

    4

    5

    6

    7

    8

    9

    10

    11

    12

    13

    14

    15

    16

    17

    18

    19

    20

    21

    22

    23

    24

    25

    26

    27

    Defendants thus induce infringement knowing of the patents-in-suit, knowing that cards such as

    the Dynamics UMB Card infringe the patent claims, and specifically intending that the induced

    customers infringe those claims by using the infringing cards. See 35 U.S.C. 271(b).

    27. Dynamics and UMB also contributorily infringe the claims of the 021 patent, by

    contributing to consumers' direct infringing uses of the infringing advanced smart card products.

    Thousands of specific customers, who can be identified through discovery, have purchased

    infringing advanced smart cards and use those cards in daily transactions precisely because of the

    distinctive features allowed by the electronics within advanced smart cards. (See Exhibit E).

    Knowing of CardXX's patent rights, Dynamics and UMB sell and offer to sell a product or

    component of the advanced smart cards, which constitutes a material component of the

    inventions described in the claims of the 021 patent, knowing that product or component to be

    especially made to infringe the CardXX patent claims. Such advanced smart card products or

    components are also not staple articles or commodities of commerce suitable for substantial

    noninfringing use, as Defendants know. See 35 U.S.C. 271(c). Any portion of an advanced

    smart card body assembly has no existing, substantial, non-infringing use, since there are no non-

    infringing advanced smart cards under production at this time. Any alleged non-infringing use

    would thus be experimental, illusory, or theoretical at this time.

    28. Defendants', and particularly Dynamics', infringement of the claims of the 021

    patent is ongoing and willful. Defendants continue their activities despite an objectively high

    likelihood that their actions infringe CardXX's valid patent claims and under circumstances

    where that objectively high risk is either known to Defendants or is so obvious that it should

    have been known to Defendants. This ongoing infringement is irreparably harming CardXX's

    business opportunities and revenues. Defendants' ongoing infringement will continue unless

    enjoined by this Court, preliminarily and/or permanently, under 35. U.S.C. 283. CardXX is

    also entitled to damages for Defendants' infringement, which damages should in no event be less

    than a reasonable royalty, and CardXX may be entitled to enhanced damages and attorneys' fees

    under 35. U.S.C. 284 and 285.

  • 7/28/2019 CardXX v. Dynamics Et. Al.

    14/16

    COMPLAINT

    No.- 14 -

    Rimon, P.C.7920 SE Steller WaySnoqualmie, Washington 98065Telephone: (206) 696-9095

    1

    2

    3

    4

    5

    6

    7

    8

    9

    10

    11

    12

    13

    14

    15

    16

    17

    18

    19

    20

    21

    22

    23

    24

    25

    26

    27

    SECOND COUNT

    29. Plaintiff CardXX incorporates each of the allegations contained in paragraphs 1-

    28 of this Complaint as if fully set forth here.

    (Infringement of the 809 Patent)

    30. Defendant Dynamics also uses the process described in the claims of the 809

    patent to make advanced smart cards. As previously alleged, Dynamics then makes, uses, sells,

    and offers to sell within the United States, and/or imports into the United States advanced smart

    cards, including the Dynamics UMB Card or ePlate card, that infringe one or more claims of

    the 021 patent. But in making such cards, Dynamics practices the method set forth in one or

    more claims of the 809 patent, including but not limited to claims 1, 2, 3, 9, and 13 of that

    patent. Dynamics infringes the limitations of each of those claims, and perhaps other claims,

    literally and/or under the doctrine of equivalents.

    31. Dynamics' infringement of the claims of the 809 patent is ongoing and willful.

    CardXX gave Dynamics actual notice of the claims of the809 patent months ago, but Dynamics

    simply disregarded that information and continued its infringing conduct in reckless disregard of

    CardXX's patent rights. Dynamics continues its activities despite an objectively high likelihood

    that its actions infringe CardXX's valid patent claims and under circumstances where that

    objectively high risk is either known to Dynamics or is so obvious that it should have been

    known to Dynamics. Dynamics' ongoing infringement is irreparably harming CardXX's business

    opportunities and revenues and will continue unless enjoined by this Court, preliminarily and/or

    permanently, under 35. U.S.C. 283. CardXX is also entitled to damages for Defendants'

    infringement, which damages should in no event be less than a reasonable royalty. CardXX may

    also be entitled to enhanced damages and attorneys' fees under 35. U.S.C. 284 and 285.

    Plaintiff CardXX respectfully requests the Court to order the following relief:

    PRAYER FOR RELIEF

  • 7/28/2019 CardXX v. Dynamics Et. Al.

    15/16

    COMPLAINT

    No.- 15 -

    Rimon, P.C.7920 SE Steller WaySnoqualmie, Washington 98065Telephone: (206) 696-9095

    1

    2

    3

    4

    5

    6

    7

    8

    9

    10

    11

    12

    13

    14

    15

    16

    17

    18

    19

    20

    21

    22

    23

    24

    25

    26

    27

    A. An order declaring that each Defendant has infringed one or more claims of the021 patent, directly or indirectly, and literally or under the doctrine of equivalents;

    B. An order declaring that Dynamics has infringed one or more claims of the 809patent, directly or indirectly, and literally or under the doctrine of equivalents;

    C. An order declaring that the claims of the patents-in-suit are valid, if challenged;D. Damages adequate to compensate CardXX for infringement of one or more

    claims of the patents-in-suit, based on any applicable damages theory, including at least a

    reasonable royalty;

    E. An order declaring that Defendants have no right to practice the CardXX patents;F. A declaration that Defendants', and particularly Dynamics', infringement of the

    patents-in-suit has been willful and that this case is exceptional under 35 U.S.C. 285;

    G. Enhanced damages, costs, and attorneys' fees, if appropriate, under 35 U.S.C. 284, 285 and other applicable provisions;

    H. A preliminary and permanent injunction (if warranted and appropriate) barringDefendants, and all those in active participation or concert with them, from continuing to

    infringe, directly or indirectly, one or more claims of the patents-in-suit under 35 U.S.C. 283;

    I. An award of pre-judgment and post-judgment interest;J. An order requiring Defendants to destroy or deliver to CardXX all infringing

    products; and

    K. Any other relief this Court deems to be just and appropriate.

    Pursuant to Rule 38(b) of the Federal Rules of Civil Procedure, Plaintiff CardXX hereby

    demands a jury trial of all issues so triable.

    DEMAND FOR JURY TRIAL

  • 7/28/2019 CardXX v. Dynamics Et. Al.

    16/16

    COMPLAINT

    NRimon, P.C.

    1

    2

    3

    4

    5

    6

    7

    8

    9

    10

    11

    12

    13

    14

    15

    16

    17

    18

    19

    20

    21

    22

    23

    24

    25

    26

    27

    Dated: July 1, 2013 Respectfully submitted,

    /s/ Paul H. BeattiePaul H. Beattie, WSBA No. 30277

    John Boyd (Pro Hac Vice Pending)RIMON, P.C.7920 Steller WaySnoqualmie, Washington 98065Phone: (206) [email protected]

    Attorneys for Plaintiff, CardXX, Inc.