1 2 3 4 5 6 7 8 9 10 CardXX, Inc., 11 12 13 14 15 16 17 18 Pursuant to Fed. R. Civ. P. 7, 8, and 10, Plaintiff CardXX, Inc. ("CardXX") brings this Defendants. v.

Dynamics Inc., UMB Bank, n.a., and Visa, Inc., Jury Demanded Plaintiff, COMPLAINT IN THE UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE Civil Action No.

19 action against Defendants Dynamics Inc. ("Dynamics"), UMB Bank, n.a., and Visa, Inc. ("Visa") 20 and alleges as follows: 21 22 1. NATURE OF THE CASE This is a case for patent infringement under the patent laws of the United States of

23 America, including 35 U.S.C. 271 et seq. Plaintiff CardXX owns all right, title, and interest in 24 several U.S. patents, including the right to sue for past infringement, and contends that 25 Defendants infringe one or more claims of two such patents, U.S. Patent No. 8,012,809 and U.S. 26 Patent No. 8,324,021. 27
COMPLAINT

No.
-1-

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

1 2 2.

THE PARTIES Plaintiff CardXX is a for-profit corporation with its principal places of business

3 being outside Seattle, Washington and near Denver, Colorado. CardXX is in the business of 4 inventing, designing, making, and selling advanced smart cards, and licensing advanced smart 5 card technology and other related technology, as well as providing innovative manufacturing 6 solutions more generally. Among other things, CardXX is currently working with a number of 7 partners on the components and designs for advanced smart cards, including powered biometric 8 smart cards with integrated fingerprint sensors on the surface. 9 3. On information and belief, Defendant Dynamics is a Delaware corporation with

10 its principal place of business at 493 Nixon Road, Cheswick, Pennsylvania 15024. According to 11 its website at http://www.poweredcards.com/history.php: 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27
COMPLAINT

Dynamics Inc. was founded and seeded in 2007 by Jeffrey Mullen, its CEO. Dynamics produces and manufactures intelligent powered cards such as advanced payment cards . . . . Dynamics is backed by Bain Capital Ventures and Adams Capital 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

No.
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Rimon, P.C.
7920 SE Steller Way Snoqualmie, Washington 98065 Telephone: (206) 696-9095

1 instead of cash or checks." On information and belief, Visa does not make or issue credit cards. 2 Instead, Visa puts its logo on a variety of credit cards, including some credit cards designed, 3 made, and sold by Dynamics, and offered by UMB. Those credit cards can then be used to access 4 the Visa payment network, called VisaNet, "providing three essential functions . . . transaction 5 processing services, risk management services, and information services." (Visa.com). 6 7 6. JURISDICTION AND VENUE This Court has subject matter jurisdiction over this case, because it "arises under"

8 the U.S. patent laws, including but not limited to 35 U.S.C. 271, 281, 283-285. See 28 U.S.C. 9 1331 (actions arising under the laws of the United States) and 28 U.S.C. 1338(a) (actions 10 arising under patent law). 11 7. Venue is appropriate under 28 U.S.C. 1391(a) and (b) in that a substantial part

12 of the events or omissions giving rise to the claims occurred within the Western District of 13 Washington and 28 U.S.C. 1400(a) in that Defendants Dynamics, UMB, and Visa, and/or their 14 agents may be found within the Western District of Washington and conduct a substantial 15 volume of business in Washington State. 16 8. This Court has jurisdiction over the "person" of Defendants Dynamics, UMB, and

17 Visa consistent with the principles of due process and the Washington Long Arm Statute, which 18 extends to the limits of due process. On information and belief, Defendants Dynamics, UMB, 19 and Visa conduct such a volume of commercial activity in Washington as to be deemed to be 20 "present" throughout the State. Additionally, the Court has "specific" jurisdiction over these 21 Defendants because significant revenues for each company derive from the sale or use of 22 advanced smart cards in this State, which are the specific infringing products at issue in this case. 23 Finally, some of the Defendants have facilities or offices in this State or have appointed agents 24 for receipt of service of process in Washington State, which constitutes consent to be sued in the 25 State. 26 27 9.
COMPLAINT

FACTUAL BACKGROUND Plaintiff CardXX is the assignee and owner of all right, title, and interest in
Rimon, P.C.
-37920 SE Steller Way Snoqualmie, Washington 98065 Telephone: (206) 696-9095

No.

1 several patents, including U.S. Patent No. 8,012,809 (the 809 patent), issued on September 6, 2 2011 and entitled "Method for Making Advanced Smart Cards with Integrated Electronics Using 3 Isotropic Thermoset Adhesive Materials with High Quality Exterior Surfaces." A true and 4 correct copy of the 809 patent is attached as Exhibit A to this Complaint. CardXX is also the 5 assignee and owner of all right, title, and interest in U.S. Patent No. 8,324,021 (the 021 patent), 6 issued on December 4, 2012 and entitled "Advanced Smart Cards with Integrated Electronics in 7 Bottom Layer and Method of Making Such Advanced Smart Cards." A true and correct copy of 8 the 021 patent is attached as Exhibit B to this Complaint. These two patents, referred to in this 9 Complaint as the "patents-in-suit" or the "CardXX patents," are currently in full force and effect, 10 with all maintenance and other fees having been paid. The patents derive from and trace their 11 priority to the original March 23, 2005 filing of a PCT application. The CardXX patents, and 12 each claim of the CardXX patents, are presumed to be valid under 35 U.S.C. 282. None of the 13 three Defendants is licensed under the CardXX patents, either explicitly or implicitly, and none 14 of them has the right to practice the inventions defined by the claims without CardXX's 15 permission, which has not been granted. CardXX has the right and authority to sue for all past, 16 present, and future infringement of these patents. 17 10. Plaintiff CardXX is in the business of inventing, designing, using, and selling

18 advanced smart cards and licensing advanced smart card technology and other related 19 technology, as well as providing innovative manufacturing solutions more generally. CardXX 20 owns several patents reflecting some of its innovations in the advanced smart card technology 21 field or art. The patents-in-suit generally disclose a novel method for making advanced smart 22 cards through a low temperature and low pressure process that allows electronic components to 23 be packaged within the approximate dimensions of a credit card in a precise, consistent, and 24 reliable way with high-volume production equipment and without damaging the electronic 25 components. In contrast, earlier, prior-art processes require temperatures and pressures that often 26 damage the electronic components (chips, batteries, microprocessors, antennae, LEDs, etc.) or 27 that produce cards with insufficient volume, quality, and/or reliability to be as commercially
COMPLAINT

No.
-4-

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

1 viable. 2 11. As part of its business model, CardXX licenses its technology. For example,

3 CardXX gave a company called Innovatier, Inc. a limited, non-exclusive, non-transferable 4 license to certain defined advanced smart card technology. In the 2009-2010 timeframe, 5 Innovatier used that CardXX licensed technology to make prototype advanced smart cards for 6 Defendant Dynamics. Dynamics was having difficulty discovering a process that would allow 7 the high volume, reliable production of high-quality advanced smart cards. Again, existing 8 processes used high heat and high pressure that too often damaged the electronics components 9 (including batteries) contained in advanced smart cards. 10 12. Dynamics approached Innovatier to make cards for it, using the CardXX

11 technology. The license agreement between CardXX and Innovatier did not allow Innovatier to 12 share CardXX's technology with third parties or to sublicense or further license the CardXX 13 technology. Nevertheless, through repeated contacts and communications, and through an 14 iterative process of designing electronics that were integrated into advanced smart cards by 15 Innovatier, and subsequently evaluated and tested by Dynamics, Dynamics learned about the 16 CardXX technology, equipment, materials, and processes, through Innovatier and otherwise, and 17 thereafter began to make, use, sell, offer to sell, or import advanced smart cards that fall within 18 the claims of the patents-in-suit. 19 13. In approximately July and August of 2012, Paul Reed, CardXX's President and

20 CEO, repeatedly called Dynamics personnel (at least 10 times), including Jeff Mullen, President 21 and CEO of Dynamics, Daniel Gantt, General Counsel for Dynamics, and Andrew Veter, Patent 22 Counsel for Dynamics, to notify them about CardXX's technology and patent rights, including 23 the 809 patent. After leaving numerous messages, and receiving no calls back from Mr. Mullen, 24 Mr. Gantt, or Mr. Veter, Mr. Reed faxed a note to Mullen, Gantt, and Veter on September 5, 25 2012. That note states the following in pertinent part: 26 27 CardXX recently received U.S. Pat. No. 8,012,809 for a method for manufacturing advanced smart cards containing batteries, visual displays, input

COMPLAINT

No.
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Rimon, P.C.
7920 SE Steller Way Snoqualmie, Washington 98065 Telephone: (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 of Allowance for the 12/942,706 patent application for Advanced Smart Cards. As the President, CEO, and named inventor for many patents issued to Dynamics, I am sure that you understand how important it is for Dynamics and their customers to 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:

COMPLAINT

No.
-6-

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

1 As shown, the Dynamics UMB Card is made by or for Defendant Dynamics and issued, sold, 2 and offered for sale by Defendant UMB to its customers, and used in connection with Defendant 3 Visa's services, including access to VisaNet. Plaintiff CardXX has knowledge of all these facts. 4 The Dynamics UMB or ePlate card is offered on and through the Dynamics website, among 5 other places. Thousands of customers use these cards on an ongoing basis, thereby directly 6 infringing CardXX's patent rights. 7 16. The Dynamics UMB Card can be acquired from UMB for an annual fee of $99.

8 The paperwork accompanying a new Dynamics UMB Card specifically indicates that the entity 9 issuing the card is UMB and that "UMB" and "the bank" "refer to UMB Bank, n.a. a national 10 banking association whose headquarters is located in Kansas City, Missouri." A true and correct 11 copy of excerpted language from the ePlate Cardholder Agreement is attached to this 12 Complaint as Exhibit D. As shown above, the Dynamics UMB Card is offered as a Visa card, 13 which gives the user access to the VisaNet network and other services and privileges of a "Visa 14 card." Dynamics has continued to sell infringing advanced smart cards, such as the ePlate 15 product line, even though it has actual notice of the patents-in-suit and of the objectively high 16 likelihood that its actions constitute infringement of a valid patent. Dynamics has been recklessly 17 indifferent to CardXX's patent rights and is willfully infringing CardXX's patents-in-suit. UMB 18 and Visa received notice of CardXX's patent rights at least as early as the filing of this lawsuit. 19 17. Although this Complaint discusses the Dynamics UMB or ePlate Card in detail,

20 the lawsuit is directed at any infringing advanced smart cards made, used, sold, offered for sale, 21 or imported by any of the Defendants, including the ePlate card, Dynamics' Citibank
TM card, Dynamics' 22 ThankYou 2G card, Dynamics' Hidden card, Dynamics' MultiAccount TM TM 23 Redemption card, Dynamics' Dynamic credit card, Dynamics Lifecode card, and any other

24 advanced smart card that falls within the claims of the asserted patents. 25 26 27
COMPLAINT

No.
-7-

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

1 2 3 18.

FIRST COUNT (Infringement of the 021 Patent) Plaintiff CardXX incorporates each of the allegations contained in paragraphs 1-

4 17 of this Complaint as if fully set forth here. 5 19. Defendant Dynamics makes, uses, sells, and offers to sell within the United

6 States, and/or imports into the United States, advanced smart cards, including the Dynamics Card 7 or ePlate card, that infringe one or more claims of the 021 patent, including but not limited to 8 claims 1, 2, 3, 9, and 14 of that patent. Dynamics literally infringes the limitations of each of 9 those claims, and perhaps other claims. In the event the Dynamics UMB Card and other 10 Dynamics advanced smart cards are deemed not to literally meet one or more limitations of those 11 or other claims, then the card products meet all limitations of the claims literally and/or under the 12 doctrine of equivalents. 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27
COMPLAINT

20.

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

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

No.
-8-

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

desired dimension to produce a finished advanced smart card. 1 (021 patent, claim 14) (Exhibit B). CardXX's infringement analysis, which includes both direct 2 and circumstantial evidence, strongly suggests that the Dynamics UMB Card infringes each and 3 every limitation of claim 14 of the 021 patent on a more-probable-than-not basis. 4 21. 5 the patents-in-suit. Physical, chemical, and x-ray analysis all support that the Dynamics UMB 6 Card is comprised of at least three layers (and perhaps more), a top layer, a bottom layer 7 comprising an integrated electronics assembly mounted on a substrate, and a core or middle layer 8 comprised of thermoset polymeric material. Infrared Photospectometry confirms that the core of 9 the Dynamics UMB Card is, in fact, comprised of a thermoset polymeric material, including 10 unsaturated polyester. There is thus no question that the Dynamics UMB Card was made through 11 a thermoset polymer injection molding process. The top and bottom layers include at least one 12 polymeric, plastic element, specifically polyvinylchloride ("PVC"), a material specifically cited 13 in the patent specifications as proper and appropriate for the top and bottom layers. (See 021 14 patent, col. 3, lines 46-48, col. 4, lines 12-18). 15 22. 16 substrate that includes PVC. That integrated electronics assembly includes at least a battery, a 17 microchip, light displays (LEDs), and perhaps other electronic components. (See Exhibit E). The 18 top and bottom layers were necessarily mounted in the top and bottom portions of a mold, 19 although "top" and "bottom" are relative terms as taught in the prior art and as understood by a 20 person of ordinary skill in the art. The integrated electronics assembly of the Dynamics UMB 21 Card was measured and was found to fall within the maximum dimensions of 54 mm wide, 85.6 22 mm long, and 0.50 mm thick, as described in the claim. There is no doubt whatsoever that the 23 Dynamics UMB Card is made through a thermoset polymer injection molding process, involving 24 positioning top and bottom layers in respective top and bottom portions of the mold. The mold 25 would then be closed, as a necessary part of the process, with a void space created between top 26 and bottom layers. The core thermoset material was then injected into this void space; the core 27
COMPLAINT

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

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

No.
-9-

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

1 layer being confirmed to be a thermoset material by Infrared Photospectometry. The injection 2 took place at temperatures below 150 F. and at pressures below 100 PSI to avoid damaging the 3 electronics, which are routinely damaged at temperatures and pressures greater than those. The 4 top layer was at least partially cold, low pressure molded in a cavity in the top mold. Gases and 5 excess polymeric material were driven out of the mold to prevent bubbles and other 6 imperfections from forming in the cards. The injected thermoset material flowed over all 7 exposed portions of the electronics assembly, but not over (or under) the bottom surface of the 8 electronics assembly, and bonded the top layer and the bottom layer to produce a unified 9 precursor smart card body. That card body was then removed from the mold and trimmed to 10 produce the smart cards being made, used, sold, and offered for sale by the Defendants. In sum, 11 the Dynamics UMB Card is made through the injection molding process as described in the 12 patents-in-suit, including in claim 14 of the 021 patent, and meets all the limitations of that 13 claim, as shown by CardXX's testing and analysis. The card also infringes claim 1, 2, 3, 9, and 14 other claims of the patent, for the same reasons. 15 23. In any case, recent binding Federal Circuit case law has reinforced that a patent

16 holder need not analyze, assert, or discuss specific claims or claim limitations in a complaint for 17 patent infringement, in light of Rule 84 of the Federal Rules of Civil Procedure and Form 18. See 18 In re Bill of Lading Transmission and Processing Sys. Patent Lit., 681 F.3d 1323, 1334-35 (Fed. 19 Cir. 2012). Form 18 requires only that CardXX allege: 20 21 22 23 24 25 26 27
COMPLAINT

(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 has given the defendant notice of its infringement; and (5) a demand for an injunction and 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

No.
- 10 -

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

1 certain advanced smart cards, including the Dynamics Card or ePlate card and any other 2 advanced smart card made according to the injection molding process described in the patents3 in-suit. See 35 U.S.C. 271(a). In the event that Dynamics pre-molds, pre-makes, or contracts 4 out any portion of the manufacture of its infringing advanced smart cards to another 5 manufacturer, then Dynamics still infringes the 021 patent, because it at least sells and offers to 6 sell the card made through the claimed process, and that process does not require that one person 7 or entity complete the entire process by itself. Moreover, Dynamics is knowingly contributing to 8 the infringement of the patent claims by UMB, UMB's customers, and others by making, selling, 9 or offering to sell a portion of the advanced smart card for material use in the infringing 10 advanced card, knowing of CardXX's rights in the patents-in-suit (through prior notice), and 11 knowing that the portion that Dynamics is making, selling, or offering to sell is especially made 12 or adapted for use in the infringement of CardXX's patents-in-suit. Any portion of an advanced 13 smart card body has no existing, substantial, non-infringing use, since there are no non-infringing 14 advanced smart cards under production at this time. Any alleged non-infringing use would thus 15 be experimental, illusory, or theoretical at this time. 16 24. Defendants UMB and Visa likewise directly infringe one or more claims of the

17 021 patent, including but not limited to claims 1, 2, 3, 9, and 14 of that patent. See 35 U.S.C. 18 271(a). At this time, CardXX believes that UMB does not make cards like the Dynamics UMB 19 Card. But it certainly sells, offers to sell, and uses those cards. For example, UMB sells or offers 20 to sell the cards to its customers, who then also use the cards, creating additional direct 21 infringement. CardXX is aware of actual customers who have purchased the Dynamics UMB 22 Card and whose use of the card would constitute direct infringement. Visa likewise at least 23 "uses" the infringing cards, by offering its services to cardholders who gain the benefits of the 24 Visa network when they use their cards. Under the law, the definition of infringing "uses" is 25 broad and would include use of a credit card to market or access the Visa network and to gain 26 Visa benefits. The infringing advanced smart cards drive demand in a particular niche market for 27 more technically advanced credit cards. That market exists, with respect to the infringing cards,
COMPLAINT

No.
- 11 -

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

1 only because Dynamics is making, selling, and offering to sell the cards, and UMB is buying, 2 using, selling, and offering to sell the cards. Visa, too, is using the infringing cards, and helping 3 to sell or offering to sell, or inducing use by customers of those cards by offering its services on, 4 through, and in connection with such infringing cards. 5 25. Each Defendant also indirectly infringes one or more claims of the 021 patent, by

6 inducing customers to use the infringing advanced smart card products, for example by 7 advertising and promoting those cards. When customers "use" the cards, they are directly 8 infringing the 021 patent. Attached as Exhibit E are true and correct copies of various online 9 promotional materials, downloaded on July 1, 2013, which illustrate some of Defendants' efforts 10 to market and sell the specific features of the Dynamics UMB ePlate card and other advanced 11 smart cards. For example, the Dynamics website emphasizes the advanced electronics of the 12 ePlate card, instructing: "Press a button. Swipe. Get the button's reward. (Exhibit E)." The 13 Dynamics advertisement further explains: "The electronic credit card that lets you choose your 14 rewards with every swipe." UMB's website also highlights the unique, programmable features of 15 the advanced ePlate smart card by offering to businesses and other customers "the opportunity 16 to offer exclusive credit card rewards . . . ." 17 26. Both the Dynamics and the UMB websites show the Dynamics UMB ePlate

18 card with a VISA logo, indicating that a card user or purchaser gets the benefits of the card being 19 a Visa Card. The Dynamics and UMB websites use the VISA logo with the permission of the 20 Defendant Visa, which therefore approves of the content of those advertisements and is also 21 promoting the sale and use of the Dynamics UMB ePlate card. Following their knowledge, 22 notice, awareness, or willful blindness about the existence of the CardXX patents, the 23 Defendants' sale, promotion, and other inducement of customers to buy and use such advanced 24 smart cards constitutes indirect, induced infringement, because Defendants know of CardXX's 25 patent rights and specifically know and intent that customers' use of such advanced smart cards 26 will constitute infringement of CardXX's patent rights. They intend such infringement by 27 customers, because that is how they make money through customers' use of the cards.
COMPLAINT

No.
- 12 -

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

1 Defendants thus induce infringement knowing of the patents-in-suit, knowing that cards such as 2 the Dynamics UMB Card infringe the patent claims, and specifically intending that the induced 3 customers infringe those claims by using the infringing cards. See 35 U.S.C. 271(b). 4 27. Dynamics and UMB also contributorily infringe the claims of the 021 patent, by

5 contributing to consumers' direct infringing uses of the infringing advanced smart card products. 6 Thousands of specific customers, who can be identified through discovery, have purchased 7 infringing advanced smart cards and use those cards in daily transactions precisely because of the 8 distinctive features allowed by the electronics within advanced smart cards. (See Exhibit E). 9 Knowing of CardXX's patent rights, Dynamics and UMB sell and offer to sell a product or 10 component of the advanced smart cards, which constitutes a material component of the 11 inventions described in the claims of the 021 patent, knowing that product or component to be 12 especially made to infringe the CardXX patent claims. Such advanced smart card products or 13 components are also not staple articles or commodities of commerce suitable for substantial 14 noninfringing use, as Defendants know. See 35 U.S.C. 271(c). Any portion of an advanced 15 smart card body assembly has no existing, substantial, non-infringing use, since there are no non16 infringing advanced smart cards under production at this time. Any alleged non-infringing use 17 would thus be experimental, illusory, or theoretical at this time. 18 28. Defendants', and particularly Dynamics', infringement of the claims of the 021

19 patent is ongoing and willful. Defendants continue their activities despite an objectively high 20 likelihood that their actions infringe CardXX's valid patent claims and under circumstances 21 where that objectively high risk is either known to Defendants or is so obvious that it should 22 have been known to Defendants. This ongoing infringement is irreparably harming CardXX's 23 business opportunities and revenues. Defendants' ongoing infringement will continue unless 24 enjoined by this Court, preliminarily and/or permanently, under 35. U.S.C. 283. CardXX is 25 also entitled to damages for Defendants' infringement, which damages should in no event be less 26 than a reasonable royalty, and CardXX may be entitled to enhanced damages and attorneys' fees 27 under 35. U.S.C. 284 and 285.
COMPLAINT

No.
- 13 -

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

1 2 3 4 29. Plaintiff CardXX incorporates each of the allegations contained in paragraphs 1SECOND COUNT (Infringement of the 809 Patent)

5 28 of this Complaint as if fully set forth here. 6 30. Defendant Dynamics also uses the process described in the claims of the 809

7 patent to make advanced smart cards. As previously alleged, Dynamics then makes, uses, sells, 8 and offers to sell within the United States, and/or imports into the United States advanced smart 9 cards, including the Dynamics UMB Card or ePlate card, that infringe one or more claims of 10 the 021 patent. But in making such cards, Dynamics practices the method set forth in one or 11 more claims of the 809 patent, including but not limited to claims 1, 2, 3, 9, and 13 of that 12 patent. Dynamics infringes the limitations of each of those claims, and perhaps other claims, 13 literally and/or under the doctrine of equivalents. 14 31. Dynamics' infringement of the claims of the 809 patent is ongoing and willful.

15 CardXX gave Dynamics actual notice of the claims of the809 patent months ago, but Dynamics 16 simply disregarded that information and continued its infringing conduct in reckless disregard of 17 CardXX's patent rights. Dynamics continues its activities despite an objectively high likelihood 18 that its actions infringe CardXX's valid patent claims and under circumstances where that 19 objectively high risk is either known to Dynamics or is so obvious that it should have been 20 known to Dynamics. Dynamics' ongoing infringement is irreparably harming CardXX's business 21 opportunities and revenues and will continue unless enjoined by this Court, preliminarily and/or 22 permanently, under 35. U.S.C. 283. CardXX is also entitled to damages for Defendants' 23 infringement, which damages should in no event be less than a reasonable royalty. CardXX may 24 also be entitled to enhanced damages and attorneys' fees under 35. U.S.C. 284 and 285. 25 26 27
COMPLAINT

PRAYER FOR RELIEF Plaintiff CardXX respectfully requests the Court to order the following relief:

No.
- 14 -

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

A.

An order declaring that each Defendant has infringed one or more claims of the

2 021 patent, directly or indirectly, and literally or under the doctrine of equivalents; 3 B. An order declaring that Dynamics has infringed one or more claims of the 809

4 patent, directly or indirectly, and literally or under the doctrine of equivalents; 5 6 C. D. An order declaring that the claims of the patents-in-suit are valid, if challenged; Damages adequate to compensate CardXX for infringement of one or more

7 claims of the patents-in-suit, based on any applicable damages theory, including at least a 8 reasonable royalty; 9 10 E. F. An order declaring that Defendants have no right to practice the CardXX patents; A declaration that Defendants', and particularly Dynamics', infringement of the

11 patents-in-suit has been willful and that this case is exceptional under 35 U.S.C. 285; 12 G. Enhanced damages, costs, and attorneys' fees, if appropriate, under 35 U.S.C.

13 284, 285 and other applicable provisions; 14 H. A preliminary and permanent injunction (if warranted and appropriate) barring

15 Defendants, and all those in active participation or concert with them, from continuing to 16 infringe, directly or indirectly, one or more claims of the patents-in-suit under 35 U.S.C. 283; 17 18 I. J. An award of pre-judgment and post-judgment interest; An order requiring Defendants to destroy or deliver to CardXX all infringing

19 products; and 20 21 22 K. Any other relief this Court deems to be just and appropriate. DEMAND FOR JURY TRIAL Pursuant to Rule 38(b) of the Federal Rules of Civil Procedure, Plaintiff CardXX hereby

23 demands a jury trial of all issues so triable. 24 25 26 27

COMPLAINT

No.
- 15 -

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

Dated: July 1, 2013 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

COMPLAINT

Respectfully submitted,

/s/ Paul H. Beattie Paul H. Beattie, WSBA No. 30277 John Boyd (Pro Hac Vice Pending) RIMON, P.C. 7920 Steller Way Snoqualmie, Washington 98065 Phone: (206) 696-9095 paul.beattie@rimonlaw.com Attorneys for Plaintiff, CardXX, Inc.

No.
- 16 -

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