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MORGAN, LEWIS & BOCKIUS LLP MARIO MOORE (SBN 231644) mario.moore@morganlewis.com 5 Park Plaza Suite 1750 Irvine, CA 92614 Tel: 949.399.7000 Fax: 949.399.7001 Attorneys for Plaintiff N4D, LLC

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA N4D, LLC, Plaintiff, vs. LEGEND3D, INC. f/k/a LEGEND FILMS, INC., BARRY B. SANDREW, CHARLES GREGORY PASSMORE a/k/a GREG PASSMORE, and BIRD ROCK MULTIMEDIA, INC. d/b/a PASSMORE LABS and/or Z MEDIA, Defendants. Case No.

'13 CV2656 MMA NLS

COMPLAINT FOR DECLARATORY RELIEF (PATENT), BREACH OF CONTRACT, AND SPECIFIC PERFORMANCE

DEMAND FOR JURY TRIAL

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Plaintiff, N4D, LLC (N4D), by and through its undersigned counsel, hereby alleges as follows: INTRODUCTION 1. N4D operates a technology company specializing in the development

of technology and software for the conversion of two dimensional (2D) films for three dimensional (3D) viewing, computer graphic rendering, volumetric rendering and related technology for the 3D viewing marketplace. N4D is also the successor in interest to 3DH Corporation a/k/a 3DH Company, LLC (3DH), which was a similarly situated company specializing in the same fields as N4D. 2. Defendant Charles Gregory Passmore a/k/a Greg Passmore is, and at

all relevant times hereto was, the President of Defendant Bird Rock Multimedia, Inc. d/b/a Passmore Labs and/or Z Media (collectively Passmore). 3. From 2003 through 2009, Passmore entered into numerous

employment agreementsand amendments theretowith 3DH and N4D. Pursuant to those employment agreements, Passmore was hired for, among other things, the development of 2D to 3D film conversion, computer graphic rendering, volumetric rendering technology and software, and related technology for the 3D marketplace. 4. Each of the employment agreements that Passmore signed with 3DH

and N4D included provisions that all of the work and intellectual property that originated or was derived from the performance of Passmores duties would become the exclusive property of 3DH and/or N4D. 5. On or about February 25, 2008, Passmore entered into a contract with

Defendant Legend3D, Inc. f/k/a Legend Films, Inc. (Legend) and Legends founder, Defendant Barry B. Sandrew (Sandrew). The contract was titled 2D to 3D Agreement (the Legend Agreement), and provided that the parties wished to enter into a business relationship to convert 2D content to 3D. At the time of 1
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signing the Legend Agreement, the original employment agreement between Passmore and 3DH for development of 2D to 3D conversion technologyas well as three (3) subsequent amendments theretowere in full effect. 6. Legend holds itself out as an innovative stereoscopic and visual

effects company, and claims that it provides the highest-quality stereoscopic VFX and conversion in the industry. 7. On or about November of 2007, Passmore began filing a series of

patent applications, the bases for which originated and/or were derived from the performance of Passmores duties pursuant to his employment agreements with 3DH and/or N4D. The first of these applications was titled SYSTEM AND/OR METHOD FOR AUTOMATED STEREOSCOPIC ALIGNMENT OF IMAGES and was properly disclosed and assigned to 3DH per the employment agreements. This application, App. No. 11/986, 490, was filed on November 21, 2007 and was published on or about May 21, 2009, as Pub. No. 2009/0128621. 8. On or about December 21, 2007, Passmore filed a provisional patent

application, App. No. 61/016,355 (355 Provisional), on behalf ofand paid for by3DH. The patent attorney whom Passmore personally requested be used to file the 355 Provisional, was Joseph Mayo (Mayo), USPTO Customer 36067, Dalina Law Group, P.C. l/k/a ARC Patents (collectively ARC), 79120 Ivanhoe Ave., Suite 325, La Jolla, California 92037. 9. On information and belief, it was not until on or about July 22, 2008,

following questions by 3DH, that Passmore disclosed the 355 Provisional to 3DH. 10. On or about December 22, 2008, Passmorevia Mayo and ARC

filed a patent application, App. No. 12/341,992 (992 Application), claiming priority to the 355 Provisional. Passmore filed the 992 Application on behalf of 3DH. On information and belief, neither Passmore nor anyone at ARC disclosed to 3DH that they had filed the 992 Application on behalf of 3DH before, during, or after at the time of filing. 2
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11.

On or about February 18, 2009, Passmore unequivocally denied having

filed a non-provisional application claiming priority to the 355 Provisional to 3DH, thus concealing the existence of the 992 Application from 3DH. 12. On or about July 8, 2009, Passmore entered into an employment

agreement with N4D following N4Ds succession of 3DH, under which Passmore agreed to provide additional services regarding the continued development of 2D to 3D conversion technology, volumetric rendering, computer graphics rendering, and related technology (the N4D Agreement). The N4D Agreement was for a term of one year, from July 8, 2009 until July 8, 2010. The N4D Agreement continued and reaffirmed that all intellectual property that originated or was developed by Passmore during the course and scope of Passmores employment was the exclusive property of N4D. 13. On or about August 17, 2009, Sandrewvia Mayo and ARC, the same

firm and lawyer used to file patents on behalf of 3DH/N4Dfiled a patent application, App. No. 12/542,498, as a continuation-in-part (CIP) to a previous patent application which was unrelated to stereoscopic 3D technology and 2D to 3D conversion. This CIP, however, added new material to the prior application and listed Sandrew as the sole inventor. This new material related to stereoscopic 3D technology and 2D to 3D conversion, including screenshots of N4Ds Synth3D proprietary software. This CIP application issued as U.S. Patent No. 7,907,793 (793 Patent) (Exhibit A). 14. Passmorenot Sandrewwas paid for the development of the

Synth3D software by 3DH/N4D pursuant to the employment agreements signed between Passmore, 3DH and N4D. Synth3D is the exclusive property of N4D. 15. Sandrewvia Mayo and ARCsubsequently filed numerous

continuation, divisional, and CIP applications which contain the Synth3D software interface captures in addition to containing the 2D to 3D technology Passmore developed under his employment agreements with 3DH/N4D. Sandrew is listed as 3
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a co-inventor on each of these subsequent continuation applications along with Tony Baldridge and/or Jared Sandrew. 16. Despite having been responsible for the development of N4Ds

proprietary technology under his employment agreements, as well as providing N4Ds intellectual property to Sandrew and Legend as the basis for the continuation applications, Passmore is not listed as the inventor or co-inventor on any of the applications. Pursuant to his employment agreements, Passmore would be

obligated to assign all rights to such patents to 3DH/N4D. 17. In addition to the 793 Patent, these continuation applications were

subsequently granted as U.S. Patent Nos. 8,396,328 (328 patent) (Exhibit B); 8,073,247 (247 patent) (Exhibit C); 8,078,006 (006 patent) (Exhibit D); 8,160,390 (390 patent) (Exhibit E); 8,401,336 (336 patent) (Exhibit F); and 8,385,684 (684 patent) (Exhibit G) (collectively the Legend Patents). 18. None of these patent applications were disclosed to 3DH/N4D before,

during, or shortly after their filing by Passmore, Mayo or ARC. 19. The 992 Application which Passmore, Mayo and ARC invoiced 3DH

for, and later concealed from 3DH/N4D, went abandoned on or about June 8, 2012. This abandonment occurred after numerous attempts by the United States Patent and Trademark Office (PTO) to reach Passmore, Mayo and/or ARCthe named inventor and listed patent attorney/firmwere ignored. Whats more, over one month prior to the abandonment, the examiner from the PTO contacted Mayo/ARC on or about May 1, 2012, and left a voicemail that was never returned. 20. During the period in which the 992 Application was in serious

jeopardy of being abandoned, Sandrew filed multiple applications for the Legend Patents using the same counselMayo and ARCwhich the PTO could not get a response from Mayo and ARC regarding the 992 Application. This also coincided with Passmore entering into his 2008 agreement with Sandrew and Legend. A contract Passmore hid from 3DH/N4D. 4
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21.

The value of the 992 Application that Passmore, Mayo and ARC

allowed to be abandoned, as well as the Legend Patents which are based on the intellectual property invented by Passmore for which he was employed to invent via his employment agreements with 3DH/N4D, exceeds $75,000.00. 22. Among other relief, N4D seeks an order of specific performance that a

change of inventorship be issued regarding the Legend Patents pursuant to 35 U.S.C. 256, naming Passmore as the inventor or, in the alternative, a co-inventor. 23. N4D further seeks a declaration that Passmore is obligated under

contract, common law and California Labor Code Section 2860 to assign to N4D all intellectual property developed, originated or prepared by Passmore or Passmores personnel for and in the performance of his duties of his employment agreements with 3DH/N4D. N4D asks that this assignment include any rights Passmore may have or claim to have in the Legend Patents, as Passmore was employed to invent all of the aforementioned intellectual property and rights exclusively for 3DH/N4D. 24. N4D finally seeks a declaration that Sandrew and Legend have no

ownership interest in the Legend Patents, that Passmore willfully breached numerous provisions in his employment agreements with 3DH and N4D, and that Legend knew, or should have known, of Passmores relationship with 3DH and/or N4D at the time they began their competing business agreements. PARTIES 25. Plaintiff N4D is, and at all times relevant herein was, a limited liability

corporation, organized and existing under the laws of the State of Delaware, operating a software development company in the County of Fresno, State of California, with its principal place of business at 865 S. Frankwood Ave., Reedley, California 93654. 26. 3DH was a corporation organized and existing under the laws of the

State of Georgia, operating a software development company with its principal place of business in Suwanee, Georgia. 5
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N4D is the owner of certain assets

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previously owned by 3DH, including the claims alleged in this Complaint against Legend, Sandrew and Passmore, as a result of a June 22, 2009 foreclosure on 3DHs assets by 3DHs primary creditor the Anthony and Vincent Balakian Family LLC (the Balakian Company) and a subsequent transfer of said assets by the Balakian Company to N4D. 27. Defendant Legend3D, Inc. f/k/a Legend Films, Inc., on information

and belief, is, and at all times relevant herein was, a corporation organized and existing under the laws of the State of California, operating in the County of San Diego, State of California, with its principal place of business at 2200 Faraday Avenue, Suite 100, Carlsbad, California 90038. 28. Defendant Barry B. Sandrew, on information and belief, is, and at all

times relevant herein was, an individual residing and working in the County of San Diego, State of California, with his principal place of business at 2200 Faraday Avenue, Suite 100, Carlsbad, California 90038. 29. Defendant Charles Gregory Passmore a/k/a Greg Passmore, on

information and belief, is an individual residing and working in the County of San Diego, State of California, with his principal place of business at 4901 Morena Blvd., Suite 600, San Diego, California 92117. 30. Defendant Bird Rock Multimedia, Inc. d/b/a Passmore Labs and/or Z

Media is, and at all times relevant herein was, a corporation organized and existing under the laws of the State of California, operating in the County of San Diego, State of California, with its principal place of business at 4901 Morena Blvd., Suite 600, San Diego, California 92117. JURISDICTION AND VENUE 31. This Court has subject matter jurisdiction pursuant to 28 U.S.C.

1338(a)(1), because this is a civil action arising under an Act of Congress relating to patents and Plaintiffs right to relief depends upon the resolution of a substantial question of federal patent lawnamely the correction of inventorship of the 6
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Legend Patents and assignment of the rights to the Legend Patents. 32. Venue is proper in this judicial district pursuant to 28 U.S.C. 1391(a)

because defendants Passmore, Sandrew and Legend are either residents of this district or have their principle place of business in this district. Additionally, a substantial part of the events or omissions giving rise to the claim occurred within this judicial district and the amount in controversy exceeds $75,000.00 exclusive of interest and costs. BACKGROUND A. The Consulting Agreement and Amendments 33. On or about May 1, 2003, 3DH entered into an employment agreement

with Passmore titled Software Development Agreement (hereinafter the Consulting Agreement). The Consulting Agreement provided that Passmore was working for the development of software technology and software for the conversion of 2D films for 3D viewing, computer graphic rendering, volumetric rendering, and related technology for the 3D viewing marketplace. 34. The Consulting Agreement provided that all of the products developed

by Passmore were to be developed as separate products and owned by 3DH in perpetuity. 35. The Consulting Agreement stated that under no circumstances shall

[Passmore] be permitted to . . . use software which uses the Intellectual Property of [3DH]. 36. The Consulting Agreement defined Intellectual Property, in relevant

part, as [a]ll proposals, research records, reports, recommendations, manuals, findings, evaluations, forms, reviews, information, software, data and written material originated or prepared by [Passmores] personnel for and in the performance of [Passmores] duties. The Consulting Agreement further stated that this Intellectual Property shall become the exclusive property of [3DH]. 37. 3DH and Passmore amended the Consulting Agreement on or about 7
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August 4, 2005 (Amendment No. 1), again on or about November 30, 2007 (Amendment No. 2), and once more on or about January 7, 2008 (Amendment No. 3). 38. Amendment No. 1 had an effective date of August 15, 2005 with a The stated purpose of Amendment No. 1 was to

term of three (3) years.

contemplate a payment schedule for additional work to be performed by Passmore for 3DH. Amendment No. 1 specifically stated that [a]ll other non-conflicting clauses of the [Consulting Agreement] remain in force. 39. The purpose of Amendment No. 2 was to memorialize 3DH and

Passmores agreement to team up on 2D to 3D conversion work. 40. Amendment No. 3 was entered into on or about January 7, 2008 and

extended the terms of the Consulting Agreement, as modified by Amendment No. 3, until August 15, 2011. In addition to memorializing the schedule and amount of payments for additional 2D to 3D work to be performed by Passmore for 3DH, Amendment No. 3 specifically provides that: [3DH] and [Passmore] agree that [3DH] is the sole and exclusive owner of the complete list of products developed to date by [Passmore] on behalf of [3DH] as referenced in the attachment signed and dated 12-28-07 and other future products that may be developed for [3DH] under the terms of this agreement. [Passmore] agrees that it will not sell or use the products listed without prior written consent from [3DH]. 41. The attachment referenced in Amendment No. 3 specifically lists 2Dto-3D conversion, as well as several other sub items. B. The Legend Agreement 42. On or about February 25, 2008, Passmore, Sandrew and Legend

entered into the Legend Agreement. The stated purpose of the Legend Agreement is that the parties wished to enter into a business relationship to convert 2D content to 3D. 8
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43.

The Consulting Agreement as amended by Amendment Nos. 1, 2 and

3 was in full-effect at the time of signing of the Legend Agreement. C. The Legend Option Agreement 44. On or about March 2, 2009, Passmore, Sandrew and Legend entered

into the Legend Option Agreement. Passmore represented in the Legend Option Agreement that he developed and is the sole and exclusive owner and operator of certain technology and intellectual property related to stereosynthesis. 45. The recited purpose of the Legend Option Agreement is that

[Legend/Sandrew] and [Passmore] wish to jointly develop additional technology related to stereosynthesis, resulting from the desirability of Passmores alleged sole and exclusive ownership of certain technology and intellectual property related to stereosynthesis. 46. The Legend Option Agreement also includes an option for

Legend/Sandrew to purchase the current and future stereosynthesis technology outlined in the Legend Option Agreement and allegedly owned by Passmore. 47. The Consulting Agreement as amended by Amendment Nos. 2 and 3

were in full-effect at the time the Legend Option Agreement was signed. D. The N4D Agreement and Cross-License Agreement 48. On or about July 8, 2009, Passmore and N4D entered into the N4D

Agreement, under which Passmore agreed to provide additional services regarding the continued development of 2D to 3D conversion technology, volumetric rendering, computer graphics rendering, and related technology for a term of one (1) year. 49. The N4D Agreement again reiterated that all intellectual property

originated or prepared by Passmoredefined verbatim as it was in the Consulting Agreementwould become the exclusive property of N4D. 50. On or about September 30, 2009, N4D and Passmore entered into a
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Technology Cross License Agreement (Cross-License Agreement). 9

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51.

As previously described in paragraphs 1 through 24 and incorporated

by reference herein, at the time the Cross-License Agreement was signed, N4D was unaware of the dealings between Passmore, Sandrew and Legend nor was it aware of Passmore, Sandrew, Legend, Mayo and ARCs relationship and filing history with the PTO. 52. As a condition of his employment with 3DH and N4D and under the

unambiguous terms of his employment contracts, Passmore was required to assign all rights to any intellectual property to 3DH and N4D for their exclusive use into perpetuity. 53. In addition to his contractual obligations, Passmore was obligated

under common law, California Labor Code Section 2850, and the theory of employed to invent to assign any and all intellectual property rights to 3DH and N4D for their exclusive ownership into perpetuity. 54. By virtue of its acquisition of 3DHs assets, N4D stepped into the

shoes of 3DH with respect to Passmores obligations concerning ownership and assignment of intellectual property. 55. On information and belief, Sandrew and Legend were aware of

Passmores relationship and agreements with 3DH/N4D at the time the Legend Agreement and Legend Option Agreement were signed. 56. On information and belief, Sandrew and Legend were aware of

Passmores obligations to assign all intellectual property rights developed under the Consulting Agreement, Amendments Nos. 1-3 and the N4D Agreement to 3DH and/or N4D for their exclusive ownership into perpetuity, including any patents. 57. On information and belief, Passmore concealed the filing of the 992

Application from 3DH/N4D to prevent 3DH/N4D from asserting its proper ownership rights in the 992 Application and subsequent Legend Patents. 58. On information and belief, Passmorenot Sandrew, Baldrige or Jared
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Sandrewis the true inventor of the Legend Patents. 10

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59.

The actions of Passmore, Sandrew and Legend have damaged N4D

and will continue to damage N4D unless the cloud over the title to its intellectual property is removed, Passmore is properly listed as the true inventor to the Legend Patents, and Passmore is specifically compelled to comply with his assignment obligations to N4D. FIRST CLAIM FOR RELIEF (Declaratory Relief) 60. N4D incorporates and repleads by reference paragraphs 1 through 59

of its Complaint. 61. An actual controversy exists between N4D and Passmore, Sandrew

and Legend regarding the Legend Patents, in that N4D contents that it is the sole and rightful owner of the Legend Patents and that Passmore is required to assign any rights or claimed rights he has in the Legend Patents to N4D. Moreover, Passmore, Sandrew and Legend may contendin which case N4D deniesthat Passmore is not the inventor of the Legend Patents or that they are not based upon the intellectual property that originated or was developed by Passmore under his employment agreements with 3DH and/or N4D. 62. N4D is entitled to a declaration as between it and Passmore, Sandrew

and Legend that N4D is the sole legal and equitable owner of the Legend Patents and that the Legend Patents were a result of the intellectual property developed by Passmore in the course and scope of his employment with 3DH and/or N4D for which he was employed to invent and were the precise subject of his employment. 63. Pursuant to 35 U.S.C. 256, N4D is entitled to a declaration as

between Passmore, Sandrew and Legend that Passmore is the true inventor, or in the alternative a co-inventor, of the Legend Patents and that Sandrew and Legend have no ownership interest in the Legend Patents. 64. N4D is entitled to a declaration as between it and Passmore that
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and rightful owner in that any such ownership interest Passmore has accrued from the intellectual property developed in the course and of his employment with 3DH and/or N4D and must be assigned to N4D. SECOND CLAIM FOR RELIEF (Breach of Contract) 65. N4D incorporates and repleads by reference paragraphs 1 through 64

of its Complaint. 66. Pursuant to the Consulting Agreement, Amendments Nos. 1-3 and the

N4D Agreement (collectively the Employment Agreements), Passmore was required to assign to 3DH and/or N4D any interest he claimed to have, or rightfully has, in the Legend Patents. 67. 3DH and/or N4D performed all, or substantially all, of the significant

things that the Employment Agreements required of them including, but not limited to, cumulative payments to Passmore in excess of $6,400,000.00. 68. It was not until after Passmore had ceased his employment with N4D,

on or about December 31, 2009, that N4D became aware of the concealed financial relationship and agreements between Passmore and Legend that were in direct breach of Passmores obligations under the Employment Agreements. 69. Passmore has breached his obligations pursuant to the Employment

Agreements to disclose to 3DH and/or N4D any interest he claims to have, or rightfully has, in the Legend Patents. 70. Passmore has breached his obligations pursuant to the Employment

Agreements to assign to 3DH and/or N4D any interest he claims to have, or rightfully has, in the Legend Patents. 71. Passmore has breached his obligations pursuant to the Employment

Agreements to disclose his relationship with Sandrew and Legend to 3DH and/or N4D, as well as any/all patents that Passmore filed or helped file. 72. Passmore has breached his obligations pursuant to the Employment 12
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Agreements to not compete with N4D in the stereoscopic and 2D to 3D conversion marketplace. 73. Passmore has breached his obligations pursuant to the Employment

Agreements to avoid taking any action to jeopardize, limit or interfere in any manner with N4Ds ownership of any rights with respect to N4Ds intellectual property. 74. As a direct and proximate result of Passmores breaches and Sandrew

and Legends intentional interference with 3DH and/or N4Ds contractual relationship with Passmore, N4D has suffered damages in excess of $75,000.00 exclusive of interest and costs. N4D will set forth the full amount of said damages when they are more fully ascertained or proven. THIRD CLAIM FOR RELIEF (Specific Performance) 75. N4D incorporates and repleads by reference paragraphs 1 through 74

of its Complaint. 76. Pursuant to Passmores contractual obligations, common law and

California Labor Code Section 2860, Passmore was employed to invent the intellectual property for 3DH and/or N4D made basis of this suit, including the stereoscopic and 2D to 3D conversion technology contained in the Legend Patents. 77. Passmore was employed by 3DH/N4D to make certain inventions,

succeeded in making those inventions during his term of service, and is thus bound to assign to N4D any/all patents obtained upon those inventions. 78. Passmore was employed by 3DH/N4D to invent stereoscopic and 2D

to 3D conversion technology, and the Legend Patents are a result of that which Passmore was employed by 3DH/N4D for and are the precise subject of the Employment Agreements. 79. N4D is entitled to an order of specific performance that Passmore
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transfer all ownership interests in the Legend Patents to N4D following a correction 13
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of inventorship pursuant to 35 U.S.C. 256. PRAYER FOR RELIEF WHEREFORE, N4D respectfully prays for the entry of judgment as follows: A. For a declaration that Passmore is the true inventor of the Legend

Patents and a change of inventorship be ordered; B. For a declaration that Sandrew and Legend have no ownership interest

in the Legend Patents; C. For a declaration that Sandrew and Legend knew, or should have

known, of Passmores contractual relationship with 3DH and N4D and proceeded to engage in a competing relationship with Passmore with willful indifference; D. For a declaration that Passmore has an obligation to assign to N4D any

and all rights or claimed rights to such intellectual property he may have developed in the course and cope of his employment by 3DH or N4D; E. For an order compelling Passmore to specifically perform his

obligations to assign to N4D all rights or claimed rights to intellectual property, including the Legend Patents; F. For compensatory damages in excess of $75,000.00 from Passmore,

Sandrew and Legend according to proof; G. H. I. For pre-judgment interest on all compensatory damages; For its costs incurred in connection with this action; and That the Court award such further relief as deemed just and proper.

Respectfully submitted, this 5th day of November, 2013.

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MARIO MOORE MORGAN, LEWIS & BOCKIUS LLP

By /s/ Mario Moore Mario Moore Attorneys for Plaintiff N4D, LLC

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DEMAND FOR JURY TRIAL N4D hereby demands trial by jury on all issues so triable. Dated: November 5, 2013 MORGAN, LEWIS & BOCKIUS LLP MARIO MOORE

By /s/ Mario Moore MARIO MOORE Attorneys for Appellant

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