Ryonet v. Lodsys et. al.

download Ryonet v. Lodsys et. al.

of 14

Transcript of Ryonet v. Lodsys et. al.

  • 8/2/2019 Ryonet v. Lodsys et. al.

    1/14

    12

    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

    28

    29

    1COMPLAINT FOR DECLARATORY JUDGMENT3/8/2012 6:16:07 PM RYOC.016

    Kurt M. Rylander, WSBA No. 27819

    [email protected]

    Mark E. Beatty, WSBA No. 37076

    [email protected]

    RYLANDER & ASSOCIATES PC

    406 West 12th StreetVancouver, WA 98660

    Tel: 360.750.9931

    Fax: 360.397.0473

    Attorneys for Plaintiff

    UNITED STATES DISTRICT COURT

    WESTERN DISTRICT OF WASHINGTONTACOMA DIVISION

    RYONET CORPORATION,

    a Washington Corporation,

    Plaintiff(s),

    v.

    LODSYS, LLC, a Texas limited

    liability company; and LODSYSGROUP, LLC, a Texas limited

    liability company,

    Defendant(s).

    No._________________

    COMPLAINT FOR

    DECLARATORY JUDGMENT

    (An action related to Patents)

    COMES NOW Plaintiff, RYONET CORPORATION, by and through

    undersigned counsel, and by this Complaint seeks declaratory judgment

    against Defendants LODSYS, LLC and LODSYS GROUP, LLC (collectively

    Lodsys), and alleges as follows:

  • 8/2/2019 Ryonet v. Lodsys et. al.

    2/14

    12

    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

    28

    29

    2COMPLAINT FOR DECLARATORY JUDGMENT3/8/2012 6:16:07 PM RYOC.016

    JURISDICTION AND VENUE

    1. This is an action for a declaratory judgment that RYONET does

    not infringe any valid claim of United States Patent Nos. 5,999,908 (the "'908

    patent), 7,133,834 (the "'834 patent), 7,222,078 (the "'078 patent), and

    7,620,565 (the "'565 patent), and collectively hereinafter, the Asserted

    Patents", and for a declaratory judgment that the claims of the Asserted

    Patents are invalid.

    2. The United States Patent & Trademark Office has instituted

    reexamination proceedings related to the 078 patent and the 565 patent.

    3. Exhibit Ahereto, and incorporated herein, is a true and correct

    copy of the '908 patent.

    4. Exhibit B hereto, and incorporated herein, is a true and correct

    copy of the '834 patent.

    5. Exhibit C hereto, and incorporated herein, is a true and correct

    copy of the '078 patent.

    6. Exhibit D hereto, and incorporated herein, is a true and correct

    copy of the '565 patent.

    7. This action arises under the patent laws of the United States,

    Title 35 of the United States Code (35 U.S.C. 1, et seq.), and under the

    Federal Declaratory Judgment Act (28 U.S.C. 2201 and 2202).

    8. This Court has subject matter jurisdiction over this action

    pursuant to 28 U.S.C. 1331 (federal question) and 1338(a) (action arising

  • 8/2/2019 Ryonet v. Lodsys et. al.

    3/14

    12

    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

    28

    29

    3COMPLAINT FOR DECLARATORY JUDGMENT3/8/2012 6:16:07 PM RYOC.016

    under an Act of Congress relating to patents).

    9. Plaintiff is informed and believes and on that basis alleges that

    this Court has personal jurisdiction over Lodsys because it has constitutionally

    sufficient contacts with Washington so as to make personal jurisdiction proper

    in this Court. Plaintiff is informed and believes and on that basis alleges that

    Lodsys maintains ongoing contractual relationships within this district and

    conducts or solicits business within this district.

    10. Venue is proper in this district pursuant to 28 U.S.C. 1391(b),

    (c) and 1400(b).

    11. There are presently pending or recently closed numerous

    declaratory judgment actions against Lodsys dealing with one or more of the

    Asserted Patents. In almost all, if not all, of these actions, in California,

    Wisconsin, Illinois, Arizona, and Texas, Lodsys has been represented by a

    Seattle firm, with offices only in the State of Washington, named Kelley,

    Donion, Gill, Huck & Goldfarb PLLC (www.kdg-Iaw.com.

    PARTIES

    12. Plaintiff, Ryonet Corporation (RYONET), is incorporated in

    Washington and has a principal place of business in Clark County,

    Washington. RYONET is an internet retailer of silk screen printing equipment

    and supplies.

    13. Plaintiff is informed and believes and on that basis alleges that

  • 8/2/2019 Ryonet v. Lodsys et. al.

    4/14

    12

    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

    28

    29

    4COMPLAINT FOR DECLARATORY JUDGMENT3/8/2012 6:16:07 PM RYOC.016

    Defendant, Lodsys, LLC is a Texas limited liability company and claims to have

    a principal place of business at 505 East Travis Street, Suite 207, Marshall,

    Texas, 75670.

    14. Plaintiff is informed and believes and on that basis alleges that

    Defendant Lodsys Group, LLC is a Texas limited liability company and claims

    to have a principal place of business at 505 East Travis Street, Suite 207,

    Marshall, Texas, 75670.

    15. Plaintiff is informed and believes and on that basis alleges that

    Lodsys LLC and Lodsys Group LLC are alter egos of each other and/or that

    Lodsys Group is a mere continuation of Lodsys LLC, and that Lodsys Group

    LLC is otherwise liable fully for, and liable as if it was the same as, Lodsys,

    LLC. Hereinafter, Lodsys LLC and Lodsys Group LLC will be referred to

    simply as Lodsys.

    16. Plaintiff is informed and believes and on that basis alleges that

    Mark Small is the Chief Executive Officer of Lodsys, LLC and Lodsys Group

    LLC; and that Mr. Small conducts Lodsys' business from an office located in

    Wisconsin.

    17. Plaintiff is informed and believes and on that basis alleges that

    Lodsys owns the Asserted Patents.

    18. Plaintiff is informed and believes and on that basis alleges that,

    Lodsys agents and/or employees executives have made numerous trips to the

    State of Washington related to the Asserted Patents, and for licensing

  • 8/2/2019 Ryonet v. Lodsys et. al.

    5/14

    12

    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

    28

    29

    5COMPLAINT FOR DECLARATORY JUDGMENT3/8/2012 6:16:07 PM RYOC.016

    negotiations with Washington based companies including Microsoft

    Corporation, Smilebox, Inc. and Photobucket Corporation (formally

    Photobucket, Inc.) among others, and potentially Intellectual Ventures.

    19. Plaintiff is informed and believes and on that basis alleges that

    Lodsys has engaged in, and continues to engage in, substantial licensing and

    other relationship, contracts, and financing in the State of Washington and

    with residents of the State of Washington.

    20. Plaintiff is informed and believes and on that basis alleges that

    Lodsys conducts business and engages in contracts and other substantive

    contact in the State of Washington, and by such extensive conduct, resides in

    the State of Washington.

    THE PRESENCE OF AN ACTUAL CONTROVERSY

    21. Plaintiff pays to third party vendor Provide Support $250 per

    month to use the Provide Support customer chat service.

    22. On January 3, 2012, Mr. Small of Lodsys sent a letter by Federal

    Express to Ryan Moor, President of RYONET. A copy of this letter is attached

    hereto as Exhibit E.

    23. The January 3, 2012 letter stated that it regarded RYONETs use

    of Provide Supports customer chat service as Infringement of U.S. Patent Nos.

    5,999,908, 7,133,834, 7,222,078, and 7,620,565 (Abelow)

    24. The January 3, 2012 letter also stated:

  • 8/2/2019 Ryonet v. Lodsys et. al.

    6/14

    12

    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

    28

    29

    6COMPLAINT FOR DECLARATORY JUDGMENT3/8/2012 6:16:07 PM RYOC.016

    We have reviewed your use of the Lodsys Patents and have

    prepared the enclosed claim chart demonstrating at least

    one instance of how you utilize the inventions embodied in

    the Lodsys Patents. The images used in the charts are

    representative only and in addition to the charted claim of

    the referenced patent, you should consider the remainingclaims of that patent and the other Lodsys Patents both

    with respect to the charted utilization and to other products

    and services offered by you.

    25. The January 3, 2012 letter also stated that Lodsys has, among

    others, ''retained the firm[] of Kelley, Donion, Gill, Huck & Goldfarb PLLC

    (www.kdg-Iaw.com) based in Seattle, Washington, to assist the company in

    licensing of the Lodsys Patents."

    26. The January 3, 2012letter also stated:

    Notice

    Lodsys LLC reserves all rights with regard to the '908, '834,

    '078, and '565 patents, including: (1) the fight to seek

    damages anytime within the last six years that your

    company started to make use of Lodsys' patented

    technology; (2) the right to change its royalty rates at any

    time; (3) the right to change this licensing program at anytime without notice, including variance to conform to

    applicable laws. You should not rely on any communication

    or lack of communication from Lodsys, Kelley, Donion, Gill,

    Huck & Goldfarb PLLC, or The Davis Firm Group as a

    relinquishment of any of Lodsys' rights.

    27. The January 3, 2012 letter also included an "Infringement Claim

    Chart," setting forth how RYONETs use of Provide Supports Live Chat on

    through RYONETs online store allegedly infringes claim 1 of the '078 patent.

    28. Upon information and belief, Lodsys is solely a licensing entity,

    does not practice the inventions described in the Asserted Patents, and without

    enforcement it receives no benefits from the Asserted Patents.

  • 8/2/2019 Ryonet v. Lodsys et. al.

    7/14

    12

    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

    28

    29

    7COMPLAINT FOR DECLARATORY JUDGMENT3/8/2012 6:16:07 PM RYOC.016

    29. On February 11, 2011, Lodsys filed a lawsuit in the Eastern

    District of Texas against twelve companies alleging infringement of one or

    more of the Asserted Patents. That case is styled Lodsys, LLC v. Brother

    InternationalCorporation, et al., Case No. 2:11-cv-00090.

    30. On May 31, 2011, Lodsys filed another lawsuit in the Eastern

    District of Texas against seven additional companies, all developers of Apple

    iPhone applications, alleging infringement of the Asserted Patents. The case is

    styled Lodsys, LLCv. Combay, Inc., et al., C.A. No. 2:ll-cv-000272.

    31. On June 10, 2011, Lodsys filed another lawsuit in the Eastern

    District of Texas against ten additional companies, alleging infringement of the

    Asserted Patents. The case is styled Lodsys, LLC v. Adidas America, Inc., et al.,

    C.A. No. 2:ll-cv-00283.

    32. On July 5, 2011, Lodsys filed another lawsuit in the Eastern

    District of Texas against six additional companies, alleging infringement of the

    Asserted Patents. The case is styled Lodsys, LLC v. DriveTimeAutomotive

    Group, Inc. et al., C.A. No. 2:11-cv-309.

    33. In all four Texas cases, counsel of record to Lodsys are Kelley,

    Donion, Gill, Huck & Goldfarb, PLLC, based in Seattle, WA, and The Davis

    Finn, P.C., based in Longview, Texas.

    34. Plaintiff is informed and believes and on that basis alleges that

    Kelley, Donion, Gill, Huck & Goldfarb, PLLC, based in Seattle, WA has and

    continues to represent Lodsys in all cases relating to the Asserted Patents.

  • 8/2/2019 Ryonet v. Lodsys et. al.

    8/14

    12

    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

    28

    29

    8COMPLAINT FOR DECLARATORY JUDGMENT3/8/2012 6:16:07 PM RYOC.016

    35. By Lodsys' actions, RYONET is in reasonable apprehension of an

    imminent patent infringement suit relating to the Asserted Patents.

    36. RYONET denies that it infringes any valid claim of the Asserted

    Patents. RYONET now seeks a declaratory judgment that it does not infringe

    any valid claim of the Asserted Patents.

    37. Plaintiff is informed and believes and on that basis alleges that

    that Defendant has a relationship to or with and/or has transactions related to

    or with a Seattle based company known as Intellectual Ventures, LLC.

    COUNT ONE--DECLARATORY JUDGMENT

    OF NON-INFRINGEMENT OF THE '908 PATENT

    38. Plaintiff re-alleges every paragraph in this Complaint.

    39. RYONETs website does not infringe any valid claim of the '908

    Patent threatened by Lodsys.

    40. An actual controversy exists between RYONET and the

    Defendants as to whether or not RYONET has infringed, or is infringing, the

    '908 Patent; has contributed, or is contributing, to infringement of the '908

    Patent; or has induced, or is inducing, infringement of the '908 Patent.

    41. The controversy is such that, pursuant to Federal Ru1e of Civil

    Procedure 57 and 28 U.S.C. 2201 et seq., RYONET is entitled to a declaration,

    in the form of a judgment, that by its activities RYONET has not infringed and

    is not infringing any valid and enforceable claim of the '908 Patent threatened

  • 8/2/2019 Ryonet v. Lodsys et. al.

    9/14

    12

    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

    28

    29

    9COMPLAINT FOR DECLARATORY JUDGMENT3/8/2012 6:16:07 PM RYOC.016

    by Lodsys; has not contributed to infringement and is not contributing to

    infringement of the '908 Patent; and/or has not induced infringement and is not

    inducing infringement of the '908 Patent. Such a determination and declaration

    is necessary and appropriate at this time.

    COUNT TWO--DECLARATORY JUDGMENT

    OF NON-INFRINGEMENT OF THE '834 PATENT

    42. Plaintiff re-alleges every paragraph in this Complaint.

    43. RYONETs website does not infringe any valid claim of the '834

    Patent threatened by Lodsys.

    44. An actual controversy exists between RYONET and the

    Defendants as to whether or not RYONET has infringed, or is infringing, the

    '834 Patent; has contributed, or is contributing, to infringement of the '834

    Patent; or has induced, or is inducing, infringement of the '834 Patent.

    45. The controversy is such that, pursuant to Federal Ru1e of Civil

    Procedure 57 and 28 U.S.C. 2201 et seq., RYONET is entitled to a declaration,

    in the form of a judgment, that by its activities RYONET has not infringed and

    is not infringing any valid and enforceable claim of the '834 Patent; has not

    contributed to infringement and is not contributing to infringement of the '834

    Patent; and/or has not induced infringement and is not inducing infringement

    of the '834 Patent. Such a determination and declaration is necessary and

    appropriate at this time.

  • 8/2/2019 Ryonet v. Lodsys et. al.

    10/14

    12

    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

    28

    29

    10COMPLAINT FOR DECLARATORY JUDGMENT3/8/2012 6:16:07 PM RYOC.016

    COUNT THREE--DECLARATORY JUDGMENT

    OF NON-INFRINGEMENT OF THE '078 PATENT

    46. Plaintiff re-alleges every paragraph in this Complaint.

    47. RYONETs website does not infringe any valid claim of the '078

    Patent threatened by Lodsys.

    48. An actual controversy exists between RYONET and the

    Defendants as to whether or not RYONET has infringed, or is infringing, the

    '078 Patent; has contributed, or is contributing, to infringement of the '078

    Patent; or has induced, or is inducing, infringement of the '078 Patent.

    49. The controversy is such that, pursuant to Federal Ru1e of Civil

    Procedure 57 and 28 U.S.C. 2201 et seq., RYONET is entitled to a declaration,

    in the form of a judgment, that by its activities RYONET has not infringed and

    is not infringing any valid and enforceable claim of the '078 Patent threatened

    by Lodsys; has not contributed to infringement and is not contributing to

    infringement of the '078 Patent; and/or has not induced infringement and is not

    inducing infringement of the '078 Patent. Such a determination and declaration

    is necessary and appropriate at this time.

    COUNT FOUR--DECLARATORY JUDGMENT

    OF INVALIDITY OF THE '078 PATENT

    50. Plaintiff re-alleges every paragraph in this Complaint.

  • 8/2/2019 Ryonet v. Lodsys et. al.

    11/14

    12

    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

    28

    29

    11COMPLAINT FOR DECLARATORY JUDGMENT3/8/2012 6:16:07 PM RYOC.016

    51. Based on the above-stated conduct, RYONET is informed and

    believes that the Defendants contend that RYONET infringes one or more

    claims of the '078 Patent.

    52. RYONET denies that it infringes any valid and enforceable claim

    of the '078 Patent threatened by Lodsys, and avers that the assertions of

    infringement cannot be maintained consistently with statutory conditions of

    patentability and the statutory requirements for disclosure and claiming that

    must be satisfied for patent validity under at least one of 35 U.S.C. 101, 102,

    103, and 112.

    53. Accordingly, an actual controversy exists between RYONET and

    the Defendants as to the validity of the '078 Patent. The controversy is such

    that, pursuant to Federal Rules of Civil Procedure 57 and 28 U.S.C. 2201 et

    seq., RYONET is entitled to a declaration, in the form of a judgment, that the

    '908 Patent is invalid. Such a determination and declaration is necessary and

    appropriate at this time.

    COUNT FIVE--DECLARATORY JUDGMENT

    OF NON-INFRINGEMENT OF THE '565 PATENT

    54. Plaintiff re-alleges every paragraph in this Complaint.

    55. RYONETs website does not infringe any valid claim of the '565

    Patent threatened by Lodsys.

    56. An actual controversy exists between RYONET and Defendants as

  • 8/2/2019 Ryonet v. Lodsys et. al.

    12/14

    12

    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

    28

    29

    12COMPLAINT FOR DECLARATORY JUDGMENT3/8/2012 6:16:07 PM RYOC.016

    to whether or not RYONET has infringed, or is infringing, the '565 Patent; has

    contributed, or is contributing, to infringement of the '565 Patent; or has

    induced, or is inducing, infringement of the '565 Patent.

    57. The controversy is such that, pursuant to Federal Ru1e of Civil

    Procedure 57 and 28 U.S.C. 2201 et seq., RYONET is entitled to a declaration,

    in the form of a judgment, that by its activities RYONET has not infringed and

    is not infringing any valid and enforceable claim of the '565 Patent; has not

    contributed to infringement and is not contributing to infringement of the '565

    Patent; and/or has not induced infringement and is not inducing infringement

    of the '565 Patent. Such a determination and declaration is necessary and

    appropriate at this time.

    COUNT SIX--DECLARATORY JUDGMENT

    OF INVALIDITY OF THE '565 PATENT

    58. Plaintiff re-alleges every paragraph in this Complaint.

    59. Based on the above-stated conduct, RYONET is informed and

    believes that the Defendants contend that RYONET infringes one or more

    claims of the '565 Patent.

    60. RYONET denies that it infringes any valid and enforceable claim

    of the '565 Patent threatened by Lodsys, and avers that the assertions of

    infringement cannot be maintained consistently with statutory conditions of

    patentability and the statutory requirements for disclosure and claiming that

  • 8/2/2019 Ryonet v. Lodsys et. al.

    13/14

    12

    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

    28

    29

    13COMPLAINT FOR DECLARATORY JUDGMENT3/8/2012 6:16:07 PM RYOC.016

    must be satisfied for patent validity under at least one of 35 U.S.C. 101, 102,

    103, and 112.

    61. Accordingly, an actual controversy exists between RYONET and

    the Defendant as to the validity of the '565 Patent. The controversy is such

    that, pursuant to Federal Rules of Civil Procedure 57 and 28 U.S.C. 2201 et

    seq., RYONET is entitled to a declaration, in the form of a judgment, that the

    '565 Patent is invalid. Such a determination and declaration is necessary and

    appropriate at this time.

    PRAYER FOR RELIEF

    WHEREFORE Plaintiff prays for judgment in its favor as follows:

    A. For judgment in favor of Plaintiff against Defendants on all

    claims;

    B. Declaring that Plaintiffs website does not infringe any valid claim

    of the Asserted Patents;

    C. Declaring that the one or more claims of the Asserted Patents are

    invalid under one or more of 35 U.S.C. 101, 102, 103, and 112;

    D. Awarding Plaintiffs its reasonable attorneys fees and costs,

    including costs for experts, pursuant to State and Federal law,

    including 35 U.S.C. 285

    E. Awarding RYONET such other and further relief as this Court

    deems is just and proper.

  • 8/2/2019 Ryonet v. Lodsys et. al.

    14/14

    12

    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

    28

    29

    14COMPLAINT FOR DECLARATORY JUDGMENT

    DEMAND FOR A JURY TRIAL

    RYONET hereby demands a trial by jury on all counts so triable.

    DATED This March 8, 2012 /s/ Kurt M.Rylander_________________

    KURT M. RYLANDER, WSBA 27819

    /s/ Mark E. Beatty__________________

    MARK E. BEATTY, WSBA 37076

    RYLANDER & ASSOCIATES PC

    406 West 12th Street

    Vancouver, WA 98660Tel: (360) 750-9931

    Fax: (360) 397-0473

    E-mail: [email protected]

    Of Attorneys for Plaintiff