Steelhead Licensing LLC v. Apple Inc.

Filing 1

COMPLAINT FOR PATENT INFRINGEMENT - filed with Jury Demand against Apple Inc. - Magistrate Consent Notice to Pltf. ( Filing fee $ 350, receipt number 0311-1200430.) - filed by Steelhead Licensing LLC. (Attachments: # 1 Exhibit A, # 2 Civil Cover Sheet)(rwc)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
STEELHEAD LICENSING LLC,
Plaintiff,
C.A. No.________________
v.
TRIAL BY JURY DEMANDED
APPLE INC.,
Defendants.
COMPLAINT FOR PATENT INFRINGEMENT
Plaintiff Steelhead Licensing LLC (“Steelhead”), by and through its undersigned counsel,
for its Complaint against Apple Inc. (“Apple” or “Defendant”), alleges as follows:
NATURE OF THE ACTION
1.

This is an action for patent infringement arising under the patent laws of the

United States, Title 35 of the United States Code (“U.S.C.”) to prevent and enjoin Defendant
from infringing and profiting, in an illegal and unauthorized manner and without authorization
and/or consent from Steelhead, from U.S. Patent No. 5,491,834 (the “‘834 Patent”), attached
hereto as Exhibit A) pursuant to 35 U.S.C. §271, and to recover damages, attorneys’ fees, and
costs.
THE PARTIES
2.

Plaintiff Steelhead is a Delaware limited liability company with its principal place

of business at 222 Delaware Avenue, P.O. Box 25130, Wilmington, DE 19899.
3.

Defendant Apple is a California corporation with its principal place of business at

1 Infinite Loop, Cupertino, California 95014. Apple can be served with process through its agent
CT Corporation System, 818 W 7th St., Los Angeles, California 90017.

4.

Defendant is in the business of making, using, selling, offering for sale and/or

importing mobile devices.
JURISDICTION AND VENUE
5.

This Court has subject matter jurisdiction over this action pursuant to 28 U.S.C.

§§1331 and 1338(a) because the action arises under the patent laws of the United States, 35
U.S.C. §§1 et seq.
6.

This Court has personal jurisdiction over Defendant by virtue of its systematic

and continuous contacts with this jurisdiction, as well as because of the injury to Steelhead and
the cause of action Steelhead has raised, as alleged herein.
7.

Defendant is subject to this Court’s specific and general personal jurisdiction

pursuant to due process and/or the Delaware Long-Arm Statute, Del Code. Ann. Tit. 3, §3104,
due to at least its substantial business in this forum, including: (i) at least a portion of the
infringement alleged herein; and (ii) regularly doing or soliciting business, engaging in other
persistent courses of conduct, and/or deriving substantial revenue from goods and services
provided to individuals in Delaware.
8.

Defendant has conducted and does conduct business within the state of Delaware,

directly or through intermediaries, resellers, agents, or offer for sale, sell, advertise products in
Delaware that infringe the ‘834 Patent.
9.

In addition to Defendant’s continuously and systematically conducting business in

Delaware, the causes of action against Defendant are connected (but not limited) to Defendant’s
purposeful acts committed in the state of Delaware, including Defendant’s making, using,
importing, offering for sale, or selling products which include features that fall within the scope
of at least one claim of the ‘834 Patent.

2

10.

Venue lies in this District under 28 U.S.C. §§1391 and 1400(b) because, among

other reasons, Defendant is subject to personal jurisdiction in this District, and have committed
and continues to commit acts of patent infringement in this District. For example, Defendant has
used, sold, offered for sale, and/or imported infringing products in this District.
FACTUAL ALLEGATIONS
11.

On February 13, 1996, the United States Patent and Trademark Office

(“USPTO”) duly and legally issued the ‘834 Patent, entitled “Mobile Radio Handover Initiation
Determination” after a full and fair examination. Steelhead is presently the owner of the patent
and possesses all right, title and interest in and to the ‘834 Patent. Steelhead owns all rights of
recovery under the ‘834 Patent, including the exclusive right to recover for past infringement.
The ‘834 Patent is valid and enforceable.
12.

The ‘834 Patent contains eight independent claims and twelve dependent claims.

Defendants commercialize, inter alia, methods that perform all the steps recited in one or more
claim of the ‘834 Patent.

Defendants make, use, import, and sell or offer for sale

telecommunication products, including mobile devices, which encompass one or more of the
features recited and which perform all the steps comprised in the patented claims.
13.

The invention claimed in the ‘834 Patent includes a process for determining the

manner in which handover is performed in a mobile radio network including a plurality of cells,
where each cell is associated with a base station supporting communication with a mobile
device.
14.

The patented process includes the steps of monitoring the quality of a signal as a

function of time respectively transmitted between candidate base stations and the mobile unit.
The process further includes producing an indication of either the rise or fall of the signal’s

3

quality as a function of time. Handover from a serving base station supporting communication
with the mobile unit to another base station is initiated based on the rise or fall in the signal’s
quality.
15.

For example, manufacturers of mobile telecommunications devices rely on the

patented process to handle service associated with their mobile devices. Specifically, Defendant
relies on the patented process to determine the manner in which communication service
associated with a mobile device is to be handed over from one cell to another.
16.

Defendant commercializes mobile devices that support both Universal Mobile

Telecommunications System (hereinafter, “UMTS”) and Long Term Evolution (hereinafter,
“LTE”) standards. These products will be hereinafter identified as Apple UMTS/LTE Products.
17.

In addition, Defendant also commercialize mobile devices which support both 3G

Code-Division Multiple Access (hereinafter, CDMA) and Long Term Evolution (hereinafter,
“LTE”) standards. These products will be hereinafter identified as Apple CDMA/LTE Products.
18.

UMTS is a third-generation (3G) of mobile phone technology for radio systems.

It is an integrated solution for mobile voice and data capabilities with wide area coverage. It
allows users to send and/or receive text, voice, video, and multimedia files at theoretical transfer
rates of up to 2Mbps.
19.

3G CDMA (or CDMA 2000) is a leading mobile phone technology. CDMA

technology operates by transmitting multiple digital signals simultaneously over the same carrier
frequency (i.e., the same channel), thus optimizing the use of available bandwidth. In CDMA
implementations, every user is allocated the entire spectrum all of the time and connections are
uniquely identified using codes.

4

20.

LTE is a fourth-generation (4G) wireless broadband technology. LTE provides

high-speed communication and data transfer with increased bandwidth capacity. It derives from
the GSM/UMTS technologies and is faster than 3G. Unlike earlier mobile technologies, all
communication in LTE devices is handled as data.
21.

In mobile telephony, it is necessary to maintain an established user connection

even if the user is changing locations, or the radio access environment surrounding the user is
changing, while the connection is still active.

“Handover” refers to the transfer of user

connection from one access point to another. For both Apple UMTS/LTE Products and Apple
CDMA/LTE Products, Defendant relies on the patented process to determine mobile device
communication conditions for initiating a handover from one cell to another.
DEFENDANT’S INFRINGEMENT
22.

Defendant practices patented mobile telecommunications methods with respect to

certain mobile telecommunications devices commercialized in this judicial district. Specifically,
Defendant practices a method that determines the manner in which handover of service is
performed among cells in a mobile network with respect to certain mobile devices.
APPLE UMTS/LTE PRODUCTS
23.

Apple UMTS/LTE Products include, but are not limited to, the iPhone5 Model

A1428 mobile phone.
24.

Each Apple UMTS/LTE Product forms a mobile terminal that can be used on a

mobile radio network such as that provided by a telecommunications company or a carrier. This
network is formed by a plurality of cells.
25.

Each Apple UMTS/LTE Product includes a processor and a memory device with

instructions stored therein. Upon execution, these instructions perform a handover determination

5

method in which each of Apple UMTS/LTE Products searches for a better cell pursuant to the
cell reselection process stated in the UMTS and LTE standards.
26.

Each Apple UMTS/LTE Product complies with the UMTS and LTE standards.

As such, when communicating, it maintains an active list of base stations with which the Apple
UMTS/LTE Product has sufficient signal strength to communicate. The active list of base
stations is used by each Apple UMTS/LTE Product itself to initiate cell reselection.
27.

Specifically, when each Apple UMTS/LTE Product is used in a mobile radio

network, it receives signals from base stations within range. In accordance with UMTS and LTE
standards, Apple UMTS/LTE Products periodically measure the signals received from base
stations in the vicinity for handover determination purposes. Then, each Apple UMTS/LTE
Product generates an indication of the quality of the received signal. Each device produces a
ranking of available base stations based on a set of measured criteria, including but not limited to
the quality of each received signal.
28.

Pursuant to the UMTS standard, each Apple UMTS/LTE Product initiates the

switch to a new cell (the handover of communication) based on how the new cell is ranked and
only if the new cell is ranked higher than the cell currently handling the communication for a
given period of time. If the ranking of a potential new cell falls, such drop is an indication of a
fall in the measured criteria (e.g., quality).
29.

Under the UMTS standard, when each Apple UMTS/LTE Product identifies a

better candidate cell, it sends a message to the base station currently servicing the
communication. Such message indicates that a switch should occur, such that communication is
handed over to the new base station. The message sent by each Apple UMTS/LTE Product
initiates the handover of service from a current cell to a new, better cell.

6

30.

When each Apple UMTS/LTE Product operates under the LTE standard, the

devices periodically measure the signals received from base stations in the vicinity for cell
section and reselection purposes. Then, each Apple UMTS/LTE Product selects a suitable cell
based on idle mode measurements and cell selection criteria, including quality of the signal.
When camped on a cell, Apple UMTS/LTE Product will regularly search for better cells
according to the cell selection criteria. For example, if the ranking of the new cell rises above
the ranking of the serving cell during a particular time frame, then the characteristics of the
potential new cell may rise as a function of time. Conversely, if the ranking of the new cell falls
below the ranking of the serving cell during a particular time frame, then the characteristics of
the potential new cell may fall as a function of time. Thus, the behavior of the characteristics of
the potential new cell over the certain time interval produces an indication of the rise or fall of at
least one measurement or criteria as a function of time. If a better cell is found, then that better
cell is selected which initiates the handover of the Apple UMTS/LTE Product from a current cell
to the better cell. The initiation of a handover is based on the fact that, for example, the new cell
did not fall below the quality of the serving cell during the time frame.
31.

The patented method recited in one or more claims of the ‘834 Patent is

performed when a cell reselection is made by any Apple UMTS/LTE Product when it is using
either the UMTS or LTE standards to communicate.
APPLE CDMA/LTE PRODUCTS
32.

Apple CDMA/LTE Products include, but are not limited to, the iPhone5 Model

A1429 mobile phone.

7

33.

Each Apple CDMA/LTE Product forms a mobile terminal that can be used on a

mobile radio network such as that provided by a telecommunications company or a carrier. This
network is formed by a plurality of cells.
34.

Each Apple CDMA/LTE Product includes a processor and a memory device with

instructions stored therein. Upon execution, these instructions perform a handover determination
method in which each of Apple CDMA/LTE Products searches for a better cell pursuant to the
cell reselection process stated in the CDMA and LTE standards. Under CDMA standards, each
Apple CDMA/LTE Product sends out route update messages to the serving base stations, when
conditions dictate, to initiate a cell reselection to a better base station.
35.

Each Apple CDMA/LTE Product complies with the 3G CDMA and LTE

standards. As such, when communicating, it maintains an active list of base stations with which
the Apple CDMA/LTE Product has sufficient signal strength to communicate. The active list of
base stations is used by each Apple CDMA/LTE Product itself to initiate cell reselection.
36.

Specifically, when Apple CDMA/LTE Product is used in a mobile radio network,

it receives signals from base stations within range. In accordance with CDMA standards, each
Apple CDMA/LTE Product maintains a set of pilot channels transmitted by each sector in the
neighborhood of the serving sector in which the cell phone is used. The strength of each pilot
channel is a quality of a signal from each candidate base station that is monitored by each Apple
CDMA/LTE Product as a function of time. The pilots are ranked in order of signal strength.
The action of the drop timer in connection with monitoring the strength of the pilot channels
evidence whether the strength or quality of each signal is rising or falling as a function of time.
Whenever conditions indicate, each Apple CDMA/LTE Product initiates a handover to a better

8

cell by sending out a route update message. The initiation of the handover is based on the fact
that, for example, the signal strength of the pilot was not disabled by the action of a drop timer.
37.

When using LTE standards to communicate, Apple CDMA/LTE Products

periodically measure the signals received from base stations in the vicinity for cell section and
reselection purposes. Then, each Apple CDMA/LTE Product selects a suitable cell based on idle
mode measurements and cell selection criteria, including but not limited to, quality of the signal.
When camped on a cell, the Apple CDMA/LTE Product will regularly search for better cells
according to the cell selection criteria. If the ranking of the new cell rises above the ranking of
the serving cell during a particular time frame, then the characteristics of the potential new cell
may rise as a function of time. Conversely, if the ranking of the new cell falls below the ranking
of the serving cell during a particular time frame, then the characteristics of the potential new
cell may fall as a function of time. Thus, the behavior of the characteristics of the potential new
cell over the certain time interval produces an indication of the rise or fall of at least one
measurement or criteria as a function of time. If a better cell is found, then that better cell is
selected which initiates the handover of Apple CDMA/LTE Product from a current cell to the
better cell. The initiation of a handover is based on the fact that, for example, the new cell did
not fall below the quality of the serving cell during the time frame.
38.

The patented method recited in one or more claims of the ‘834 Patent is

performed when a cell reselection is made by any Apple CDMA/LTE Product when it is using
either the CDMA or LTE standards to communicate.
COUNT 1
DIRECT INFRINGEMENT OF THE ‘834 PATENT
39.

Plaintiff realleges and incorporates by reference the allegations set forth in

paragraphs 1-38.
9

40.

Apple UMTS Products and Apple CDMA/LTE Products shall be collectively

referred to hereinafter as Apple’s Infringing Products.
41.

Taken together, either partially or entirely, the features included in Apple’s

Infringing Products including, but not limited to, iPhone5 Model A1428 and iPhone5 Model
A1429 mobile phones, perform the process recited in one or more claims of the ‘834 Patent.
42.

Defendant directly infringe one or more claims of the ‘834 Patent by using

Apple’s Infringing Products, which perform the process defined by one or more claims of the
‘834 Patent. For example, without limitation, Defendant directly infringes at least claim 8 of the
‘834 Patent by using Apple’s Infringing Products, including use by Defendant’s employees and
agents, use during product development and testing processes, and use when activating servicing
and/or repairing phones on behalf of customers.
43.

By engaging in the conduct described herein, Defendant has injured Steelhead and

are thus liable for infringement of the ‘834 Patent, pursuant to 35 U.S.C. §271.
44.

Defendant has committed these acts of infringement without license or

authorization.
45.

To the extent that facts learned in discovery show that Defendant’s infringement

of the ‘834 Patent is or has been willful, Steelhead reserves the right to request such a finding at
the time of trial.
46.

As a result of Defendant’s infringement of the ‘834 Patent, Steelhead has suffered

monetary damages and is entitled to a monetary judgment in an amount adequate to compensate
for Defendant’s past infringement, together with interests and costs.
47.

Steelhead will continue to suffer damages in the future unless Defendant’s

infringing activities are enjoined by this Court. As such, Steelhead is entitled to compensation

10

for any continuing or future infringement up until the date that Defendant is finally and
permanently enjoined from further infringement.
48.

Steelhead has also suffered and will continue to suffer severe and irreparable

harm unless this Court issues a permanent injunction prohibiting Defendant, its officers,
directors, agents, servants, employees, attorneys, affiliates, divisions, branches, parents, and
those persons in active concert or participation with any of them from directly or indirectly
infringing the ‘834 Patent.
DEMAND FOR JURY TRIAL
49.

Steelhead demands a trial by jury of any and all causes of action.
PRAYER FOR RELIEF

Steelhead respectfully prays for the following relief:
1.

That Defendant be adjudged to have infringed the ‘834 Patent;

2.

That Defendant, its officers, directors, agents, servants, employees,

attorneys, affiliates, divisions, branches, parents, and those persons in active concert or
participation with any of them, be preliminarily and permanently restrained and enjoined
from directly and/or indirectly infringing the ‘834 Patent;
3.

An award of damages pursuant to 35 U.S.C. §284 sufficient to compensate

Steelhead for Defendant’s past infringement and any continuing and/or future
infringement up until the date that Defendant is finally and permanently enjoined from
further infringement, including compensatory damages;
4.

An assessment of pre-judgment and post-judgment interests and costs

against Defendant, together with an award of such interests and costs, in accordance with
35 U.S.C. §284;

11

5.

That Defendants be directed to pay enhanced damages, including

Steelhead’s attorneys’ fees incurred in connection with this lawsuit pursuant to 35 U.S.C.
§285; and
6.

That Steelhead have such other and further relief as this Court may deem

just and proper.

Dated: January 4, 2013

BAYARD, P.A.

OF COUNSEL:

/s/ Stephen B. Brauerman
Richard D. Kirk (#0922)
Stephen B. Brauerman (#4952)
Vanessa R. Tiradentes (#5398)
222 Delaware Avenue, Suite 900
P.O. Box 25130
Wilmington, DE 19899
[phone]
[e-mail]
[e-mail]
[e-mail]

Eugenio Torres-Oyola
FERRAIUOLI LLC
221 Plaza 5th Floor
221 Ponce de León Ave.
San Juan, Puerto Rico 00917
[phone]
[e-mail]

Attorneys for Plaintiff Steelhead Licensing LLC

12