You are on page 1of 53

Case 2:11-cv-08904-RGK-AN

Document 1

Filed 10/27/11

Page 1 of 53

Page ID #:2

Case 2:11-cv-08904-RGK-AN

Document 1

Filed 10/27/11

Page 2 of 53

Page ID #:3

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

28

Plaintiff, Network Signatures, Inc., alleges:

JURISDICTION AND VENUE

  • 1. This is a civil action for patent infringement arising under the Patent Act of

the United States, 35 U.S.C. §§ 1 et seq. This court has subject matter jurisdiction of such

federal-question claims under 28 U.S.C. §§ 1331 and 1338(a).

  • 2. Venue is proper under 28 U.S.C. §§ 1391(b), 1391(c) and 1400(b) in that the

acts and transactions complained of herein were conceived, carried out, made effective, and

had effect within the State of California and within this district, among other places.

Defendant resides in this judicial district by virtue of its business activities in this district

and, on information and belief, has committed acts of infringement or of contributory

infringement and inducement of infringement within this judicial district.

THE PARTIES

  • 3. Plaintiff, Network Signatures, is a corporation duly organized and existing

under the laws of Delaware with its principal place of business at 30021 Tomas Street,

Suite 300, Rancho Santa Margarita, California 92688. As is alleged below, the United

States of America has granted to Network Signatures an exclusive license concerning the

patented technology at issue in this lawsuit.

  • 4. Defendant, Exxon Mobil Corporation (“ExxonMobil”) is a corporation duly

organized and existing under the laws of the State of New Jersey with its principal place of

business in Irving, Texas. Defendant’s website describes it as “the world’s largest publicly

traded international oil and gas company” and “the world’s largest refiner and marketer of

petroleum products.”

  • 5. Defendant has its headquarters at 5959 Las Colinas Blvd. Irving, Texas

75039-2298, and conducts business operations throughout the United States, including in

this judicial district. Examples of Defendant’s operations in this judicial district include the

ExxonMobil Refinery at 3700 West 190th Street in Torrance; petroleum distribution

2

COMPLAINT

Case 2:11-cv-08904-RGK-AN

Document 1

Filed 10/27/11

Page 3 of 53

Page ID #:4

  • 1 terminals in Anaheim, Vernon, and Torrance and on Terminal Island; and the ExxonMobil

  • 2 Vernon Lube Plant in Vernon.

  • 3 THE NAVAL RESEARCH LABORATORY

  • 4 The Naval Research Laboratory (“NRL”) is one of the most accomplished

6.

  • 5 research-and-development organizations in the country. NRL scientists have not only

  • 6 made remarkable breakthroughs in military technology; they have literally changed the

  • 7 world for all of us. Without their efforts, we would not have GPS, modern radar, and any

  • 8 number of other technological innovations that we now take for granted. This lawsuit

  • 9 concerns another such innovation: technology that allows for the safe and secure

  • 10 communication of sensitive information over the Internet, such as personal, banking,

  • 11 commercial, financial, and other information.

  • 12 Federal law empowers the United States Government to license its patents to

7.

  • 13 private parties for commercialization as well as for enforcement of the patent without the

  • 14 United States as a party. 37 C.F.R. § 404.5(b)(2). By doing so, the government can use

  • 15 market forces to better capitalize on its technologies, the way a private party would. In

  • 16 addition, a license agreement can give the private licensee the proper incentives to protect

  • 17 the government’s intellectual property from theft, a task often handled better by a private

  • 18 entity.

  • 19 NETWORK SIGNATURES LICENSES THE NAVY’S TECHNOLOGY

  • 20 On April 23, 1996, the United States Patent and Trademark Office duly and

8.

  • 21 legally issued United States Patent No. 5,511,122 (“the ’122 Patent”), entitled

  • 22 “Intermediate Network Authentication.”

  • 23 The ’122 patent claims, among other things, a critical method of

9.

  • 24 authenticating a computer in which a private electronic key is used, together with a

  • 25 validating public electronic key, to create a cryptographic signature; the cryptographic

  • 26 signature is transmitted in at least one packet to the validating computer; and the signature

  • 27 is verified by the validating computer, using its private key and the public key of the

  • 28 computer to be authenticated. This authentication method allows for the safe and secure

3

COMPLAINT

Case 2:11-cv-08904-RGK-AN

Document 1

Filed 10/27/11

Page 4 of 53

Page ID #:5

  • 1 communication of sensitive information, such as personal, banking, commercial, financial,

  • 2 and other information, as is transmitted between computers by Defendant and its

  • 3 employees, customers, vendors, and business partners.

  • 4 The ’122 Patent is owned by the United States of America, represented by the

10.

  • 5 Secretary of the Navy. To allow enforcement, commercialization and protection of this

  • 6 patent and the technology it represents, in September 2004, the United States Navy entered

  • 7 into an exclusive license agreement with Metrix Services, Inc. (the “Exclusive License

  • 8 Agreement”) expressly granting Metrix Services the exclusive right to practice, enforce,

  • 9 and sublicense the ’122 Patent, among other rights, subject to the general limitations

10

imposed by federal law. A true and correct copy of the Exclusive License Agreement is

11

attached hereto as Exhibit A and incorporated here by reference. With the express approval

12

of the United States Navy, Metrix Services transferred its entire right, title, and interest in

13

and to the ’122 Patent to Network Signatures on February 14, 2006. A true and correct

14

copy of the First Amendment to the Exclusive License Agreement, which, among other

15

things, approved the assignment of the Ex clusive License Agreement to Network

16

Signatures, is attached hereto as Exhibit B and incorporated here by reference. A true and

17

correct copy of the Assignment from Metrix to Ne twork Signatures is attached as Exhibit C

18

and incorporated here by reference.

19

11.

In accordance with its rights under the Exclusive License Agreement, Network

20

Signatures has begun the commercial development of a product, known as EasyConnect,

21

that practices the ’122 Patent. Network Signatures has demonstrated the product to NRL

22

personnel and has received NRL’s recognition of its development efforts. A true and

23

correct copy of an October 12, 2006, letter from the Navy to Network Signatures reflects

24

this and is attached as Exhibit D and incorporated by reference here.

25

12.

Network Signatures has also begun exercising its other primary obligation

26

under the Exclusive License Agreement: protecting the Navy’s intellectual property rights

27

from infringement.

28

4

COMPLAINT

 

Case 2:11-cv-08904-RGK-AN

Document 1

Filed 10/27/11

Page 5 of 53

Page ID #:6

1

FIRST CLAIM FOR RELIEF

2

(AGAINST EXXON MOBIL CORPORATION FOR INFRINGEMENT OF U.S.

3

PATENT NO. 5,511,122)

4

13.

Plaintiff incorporates here by reference the allegations set forth in Paragraphs

5

1-12 of the Complaint as though fully set forth here.

 

6

14.

A true and correct copy of the ’122 Patent is attached as Exhibit E and

7

incorporated here by reference. On information and belief, Defendant uses digital

8

certificates and digital signatures implemented though the use of public key infrastructure

9

to facilitate communication with its employees, business partners, affiliates, and customers.

  • 10 For example, Defendant enables a computer of a Defendant customer, affiliate, business

  • 11 partner, or employee (“sending computer”) to send a secure communication over the

  • 12 Internet to another computer (“receiving computer”) by using a confidential private key,

  • 13 and a public key, to digitally sign the message being sent. When the receiving computer

  • 14 receives the signed message, it uses the sending computer’s public key, and its private key,

  • 15 to decrypt the signature (collectively referred to as “Defendant Authentication Activities”).

  • 16 By making, using, selling, and offering for sale Defendant Authentication

15.

  • 17 Activities, Defendant has directly infringed and continues to directly infringe the ’122

  • 18 Patent, including infringement under 35 U.S.C. § 271(a) and (f).

 
  • 19 On information and belief, Defendant has also indirectly infringed and

16.

  • 20 continues to indirectly infringe the ’122 Patent by actively inducing direct infringement by

  • 21 other persons—specifically, customers, vendors, and business partners of Defendant—who

  • 22 operate methods that embody or otherwise practice one or more of the claims of the ’122

  • 23 Patent when Defendant had knowledge of the ’122 Patent and knew or should have known

  • 24 that their actions would induce direct infringement by others and intended that their actions

  • 25 would induce direct infringement by others.

 
  • 26 On information and belief, Defendant has also indirectly infringed and

17.

  • 27 continues to indirectly infringe the ’122 Patent by contributory infringement by providing

  • 28 non-staple articles of commerce to others for use in an infringing system or method with

5

COMPLAINT

 

Case 2:11-cv-08904-RGK-AN

Document 1

Filed 10/27/11

Page 6 of 53

Page ID #:7

1

knowledge of the ’122 Patent and knowledge that these non-staple articles of commerce are

2

used as a material part of the claimed invention of the ’122 Patent.

 

3

  • 18. On information and belief, Defendant’s foregoing acts of infringement

4

include infringement by use and implementation of the Defendant Authentication

5

Activities.

6

  • 19. On information and belief, Defendant will continue to infringe the ’122 Patent

7

unless enjoined by this Court.

8

  • 20. As a direct and proximate result of Defendant’s infringement of the ’122

9

Patent, Network Signatures and the United States Government have been and continue to

10

be damaged in an amount yet to be determined.

11

  • 21. Unless a preliminary and permanent injunction are issued enjoining

12

Defendant and its officers, agents, servants and employees, and all others acting on their

13

behalves or in concert with Defendant, from infringing the ’122 Patent, Network Signatures

14

and the United States Government will be greatly and irreparably harmed.

15

16

PRAYER FOR RELIEF

17

WHEREFORE, Network Signatures prays for judgment against Defendant as

18

follows:

19

  • 1. For a judicial determination and declaration that Defendant has directly

20

infringed, and continues to directly infringe, United States Patent No. 5,511,122;

21

  • 2. For a judicial determination and declaration that Defendant has induced, and

22

continues to induce, infringement of the ’122 Patent;

23

  • 3. For a judicial determination and declaration that Defendant has contributorily

24

infringed, and continues to contributorily infringe, the ’122 Patent;

25

  • 4. For a judicial determination and decree that Defendant’s infringement of the

26

’122 Patent has been, and continues to be, willful and deliberate;

27

  • 5. For preliminary and permanent injunctions prohibiting Defendant, its

28

respective subsidiaries, officers, agents, servants, employees, licensees, and all other

6

COMPLAINT

 

Case 2:11-cv-08904-RGK-AN

Document 1

Filed 10/27/11

Page 7 of 53

Page ID #:8

1

persons or entities acting or attempting to act in active concert or participation with them or

2

acting on their behalf, from infringing the ’122 Patent;

 

3

  • 6. For an order requiring that Defendant notify all of their customers, vendors

4

and users of the infringement and their participation in it and that Defendant encourage its

5

customers, vendors and users to cease all such infringing actions;

 

6

  • 7. For an order that Defendant account for and pay to Network Signatures all

7

damages caused to Network Signatures by reason of Defendant’s infringement, in

8

accordance with 35 U.S.C. Section 284, as well as enhanced damages under 35 U.S.C.

9

Section 285;

10

11

12

13

14

15

16

17

18

  • 8. For an award of damages according to proof;

  • 9. For a judicial determination that this case is exceptional under 35 U.S.C.

Section 285 and that Defendant be ordered to pay Network Signatures’ costs, expenses, and

reasonable attorney’s fees under 35 U.S.C. Sections 284 and 285;

  • 10. For a judicial order awarding Network Signatures pre-judgment and post-

judgment interest on the damages caused to it by Defendant’s infringement and any other

amounts awarded to Network Signatures; and

  • 11. For any such other and further relief as the Court may deem just and proper

under the circumstances.

19

20

21

22

23

24

25

26

27

Dated: October 27, 2011

ONE LLP

Case 2:11-cv-08904-RGK-AN Document 1 Filed 10/27/11 Page 7 of 53 Page ID #:8 1 persons or

William J. O’Brien Attorneys for Plaintiff, NETWORK SIGNATURES, INC.

28

7

COMPLAINT

Case 2:11-cv-08904-RGK-AN

Document 1

Filed 10/27/11

Page 8 of 53

Page ID #:9

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

28

DEMAND FOR JURY TRIAL

Plaintiff, Network Signatures, Inc., hereby demands trial by jury in this action.

Dated: October 27, 2011

ONE LLP

Case 2:11-cv-08904-RGK-AN Document 1 Filed 10/27/11 Page 8 of 53 Page ID #:9 1 2 3

William J. O’Brien Attorneys for Plaintiff, NETWORK SIGNATURES, INC.

8

COMPLAINT

Case 2:11-cv-08904-RGK-AN

Document 1

Filed 10/27/11

Page 9 of 53

Page ID #:10

Case 2:11-cv-08904-RGK-AN

Document 1

Filed 10/27/11

Page 10 of 53

Page ID #:11

Case 2:11-cv-08904-RGK-AN

Document 1

Filed 10/27/11

Page 11 of 53

Page ID #:12

Case 2:11-cv-08904-RGK-AN

Document 1

Filed 10/27/11

Page 12 of 53

Page ID #:13

Case 2:11-cv-08904-RGK-AN

Document 1

Filed 10/27/11

Page 13 of 53

Page ID #:14

Case 2:11-cv-08904-RGK-AN

Document 1

Filed 10/27/11

Page 14 of 53

Page ID #:15

Case 2:11-cv-08904-RGK-AN

Document 1

Filed 10/27/11

Page 15 of 53

Page ID #:16

Case 2:11-cv-08904-RGK-AN

Document 1

Filed 10/27/11

Page 16 of 53

Page ID #:17

Case 2:11-cv-08904-RGK-AN

Document 1

Filed 10/27/11

Page 17 of 53

Page ID #:18

Case 2:11-cv-08904-RGK-AN

Document 1

Filed 10/27/11

Page 18 of 53

Page ID #:19

Case 2:11-cv-08904-RGK-AN

Document 1

Filed 10/27/11

Page 19 of 53

Page ID #:20

Case 2:11-cv-08904-RGK-AN

Document 1

Filed 10/27/11

Page 20 of 53

Page ID #:21

Case 2:11-cv-08904-RGK-AN

Document 1

Filed 10/27/11

Page 21 of 53

Page ID #:22

Case 2:11-cv-08904-RGK-AN

Document 1

Filed 10/27/11

Page 22 of 53

Page ID #:23

Case 2:11-cv-08904-RGK-AN

Document 1

Filed 10/27/11

Page 23 of 53

Page ID #:24

Case 2:11-cv-08904-RGK-AN

Document 1

Filed 10/27/11

Page 24 of 53

Page ID #:25

Case 2:11-cv-08904-RGK-AN

Document 1

Filed 10/27/11

Page 25 of 53

Page ID #:26

Case 2:11-cv-08904-RGK-AN

Document 1

Filed 10/27/11

Page 26 of 53

Page ID #:27

Case 2:11-cv-08904-RGK-AN

Document 1

Filed 10/27/11

Page 27 of 53

Page ID #:28

Case 2:11-cv-08904-RGK-AN

Document 1

Filed 10/27/11

Page 28 of 53

Page ID #:29

Case 2:11-cv-08904-RGK-AN

Document 1

Filed 10/27/11

Page 29 of 53

Page ID #:30

Case 2:11-cv-08904-RGK-AN

Document 1

Filed 10/27/11

Page 30 of 53

Page ID #:31

Case 2:11-cv-08904-RGK-AN

Document 1

Filed 10/27/11

Page 31 of 53

Page ID #:32

Case 2:11-cv-08904-RGK-AN

Document 1

Filed 10/27/11

Page 32 of 53

Page ID #:33

Case 2:11-cv-08904-RGK-AN

Document 1

Filed 10/27/11

Page 33 of 53

Page ID #:34

Case 2:11-cv-08904-RGK-AN

Document 1

Filed 10/27/11

Page 34 of 53

Page ID #:35

Case 2:11-cv-08904-RGK-AN

Document 1

Filed 10/27/11

Page 35 of 53

Page ID #:36

Case 2:11-cv-08904-RGK-AN

Document 1

Filed 10/27/11

Page 36 of 53

Page ID #:37

Case 2:11-cv-08904-RGK-AN

Document 1

Filed 10/27/11

Page 37 of 53

Page ID #:38

Case 2:11-cv-08904-RGK-AN

Document 1

Filed 10/27/11

Page 38 of 53

Page ID #:39

Case 2:11-cv-08904-RGK-AN

Document 1

Filed 10/27/11

Page 39 of 53

Page ID #:40

Case 2:11-cv-08904-RGK-AN

Document 1

Filed 10/27/11

Page 40 of 53

Page ID #:41

Case 2:11-cv-08904-RGK-AN

Document 1

Filed 10/27/11

Page 41 of 53

Page ID #:42

Case 2:11-cv-08904-RGK-AN

Document 1

Filed 10/27/11

Page 42 of 53

Page ID #:43

Case 2:11-cv-08904-RGK-AN

Document 1

Filed 10/27/11

Page 43 of 53

Page ID #:44

Case 2:11-cv-08904-RGK-AN

Document 1

Filed 10/27/11

Page 44 of 53

Page ID #:45

Case 2:11-cv-08904-RGK-AN

Document 1

Filed 10/27/11

Page 45 of 53

Page ID #:46

Case 2:11-cv-08904-RGK-AN

Document 1

Filed 10/27/11

Page 46 of 53

Page ID #:47

Case 2:11-cv-08904-RGK-AN

Document 1

Filed 10/27/11

Page 47 of 53

Page ID #:48

Case 2:11-cv-08904-RGK-AN

Document 1

Filed 10/27/11

Page 48 of 53

Page ID #:49

Case 2:11-cv-08904-RGK-AN

Document 1

Filed 10/27/11

Page 49 of 53

Page ID #:50

Case 2:11-cv-08904-RGK-AN

Document 1

Filed 10/27/11

Page 50 of 53

Page ID #:51

Case 2:11-cv-08904-RGK-AN

Document 1

Filed 10/27/11

Page 51 of 53

Page ID #:52

Case 2:11-cv-08904-RGK-AN

Document 1

Filed 10/27/11

Page 52 of 53

Page ID #:53

Case 2:11-cv-08904-RGK-AN

Document 1

Filed 10/27/11

Page 53 of 53

Page ID #:54