Uniloc USA, Inc. et al v. NATIONAL INSTRUMENTS CORP. et al

Filing 79

SafeNet, Inc.'s ANSWER to 1 Complaint, and, COUNTERCLAIM against Uniloc Singapore Private Limited, Uniloc USA, Inc. by Safenet, Inc..(Healey, David)

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UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS TYLER DIVISION UNILOC USA, INC., ET AL. Plaintiff, Civil Action No. 6:10-cv-472-LED v. JURY TRIAL DEMANDED NATIONAL INSTRUMENTS CORP., ET AL., Defendants. DEFENDANT SAFENET INC.'S ANSWER, AFFIRMATIVE DEFENSES, AND COUNTERCLAIMS Pursuant to Rule 8 of the Federal Rules of Civil Procedure, Defendant SafeNet, Inc. ("SafeNet"), by and through its undersigned counsel, hereby responds to the Complaint of Plaintiffs Uniloc USA, Inc. and Uniloc Singapore Private Limited (collectively, "Uniloc"), on personal knowledge as to its own activities and on information and belief as to the activities of others, as follows. SafeNet denies each and every allegation contained in the Complaint that is not expressly admitted below. Any factual allegation admitted below is admitted only as to the specific admitted facts, not as to any purported conclusions, characterizations, implications, or speculations that may arguably follow from the admitted facts. SafeNet denies that Plaintiffs are entitled to the relief requested or any other. JURISDICTION AND VENUE 1. SafeNet admits that Unilocs Complaint purports to state a claim of alleged patent infringement and this Court has subject matter jurisdiction over patent claims. DEFENDANT SAFENET INC.'S ANSWER, AFFIRMATIVE DEFENSES, AND COUNTERCLAIMS - PAGE 1 Civil Action No. 6:10-CV-472 LED 2. SafeNet admits that it solicits and conducts business in this District. SafeNet denies that SafeNet has committed acts of patent infringement under any theory, including directly (whether individually or jointly) or indirectly (whether by contributory infringement or inducement of infringement), in the State of Texas or this District or elsewhere in the United States. SafeNet otherwise denies the remaining allegations of paragraph 2 with respect to SafeNet. 3. SafeNet admits that venue in this District is purportedly based on 28 U.S.C. §§ 1391(b), (c) and 1400 (b), but denies that this District is the most convenient venue for adjudication of the claims raised by Uniloc in this action. THE PARTIES 4. SafeNet is without information or knowledge sufficient to form a belief as to the truth or falsity of the allegations of paragraph 4 and therefore denies the same. 5. SafeNet is without information or knowledge sufficient to form a belief as to the truth or falsity of the allegations of paragraph 5 and therefore denies the same. 6. SafeNet is without information or knowledge sufficient to form a belief as to the truth or falsity of the allegations of paragraph 6 and therefore denies the same. 7. SafeNet is without information or knowledge sufficient to form a belief as to the truth or falsity of the allegations of paragraph 7 and therefore denies the same. 8. SafeNet is without information or knowledge sufficient to form a belief as to the truth or falsity of the allegations of paragraph 8 and therefore denies the same. 9. SafeNet is without information or knowledge sufficient to form a belief as to the truth or falsity of the allegations of paragraph 9 and therefore denies the same. DEFENDANT SAFENET INC.'S ANSWER, AFFIRMATIVE DEFENSES, AND COUNTERCLAIMS - PAGE 2 Civil Action No. 6:10-CV-472 LED 10. SafeNet admits that it is a Delaware corporation having a principal place of business at 4690 Millennium Drive, Belcamp, Maryland 21017. SafeNet admits that it solicits and conducts business in this District and may be served by the Secretary of State. SafeNet admits that it does not have a designated agent for service of process in Texas. SafeNet denies that SafeNet has committed acts of patent infringement under any theory, including directly (whether individually or jointly) or indirectly (whether by contributory infringement or inducement of infringement), in the State of Texas or this District or elsewhere in the United States. SafeNet otherwise denies the remaining allegations of paragraph 10. 11. SafeNet is without information or knowledge sufficient to form a belief as to the truth or falsity of the allegations of paragraph 11 and therefore denies the same. 12. SafeNet is without information or knowledge sufficient to form a belief as to the truth or falsity of the allegations of paragraph 12 and therefore denies the same. 13. SafeNet is without information or knowledge sufficient to form a belief as to the truth or falsity of the allegations of paragraph 13 and therefore denies the same. 14. SafeNet is without information or knowledge sufficient to form a belief as to the truth or falsity of the allegations of paragraph 14 and therefore denies the same. 15. SafeNet is without information or knowledge sufficient to form a belief as to the truth or falsity of the allegations of paragraph 15 and therefore denies the same. 16. SafeNet admits that Aladdin Knowledge Systems, Inc. ("AKS, Inc.") is a New York corporation with a principal place of business at 601 W. Campus Drive, Suite 3 C-1, Arlington Heights, Illinois 60004. SafeNet admits that AKS, Inc. solicits and conducts business in this District. SafeNet denies that AKS, Inc. has committed acts of patent infringement under any theory, including directly (whether individually or jointly) or indirectly (whether by DEFENDANT SAFENET INC.'S ANSWER, AFFIRMATIVE DEFENSES, AND COUNTERCLAIMS - PAGE 3 Civil Action No. 6:10-CV-472 LED contributory infringement or inducement of infringement), in the State of Texas or this District or elsewhere in the United States. SafeNet is otherwise without information or knowledge sufficient to form a belief as to the truth or falsity of the remaining allegations of paragraph 16 and therefore denies the same. 17. SafeNet admits that Aladdin Knowledge Systems Ltd. ("AKS, Ltd.") is an Israeli corporation with a principal place of business at 35 Efal Street, Kiryat Arye, Petach Tikva 49511 Israel and a U.S. headquarters office at 4690 Millennium Drive, Belcamp, Maryland 21017. SafeNet admits that AKS, Ltd. solicits and conducts business in this District. SafeNet denies that AKS, Ltd. has committed acts of patent infringement under any theory, including directly (whether individually or jointly) or indirectly (whether by contributory infringement or inducement of infringement), in the State of Texas or this District or elsewhere in the United States. SafeNet is otherwise without information or knowledge sufficient to form a belief as to the truth or falsity of the remaining allegations of paragraph 17 and therefore denies the same. COUNT FOR INFRINGEMENT OF U.S. PATENT NO. 5,490,216 18. 17. 19. SafeNet admits that U.S. Patent 5,490,216 (the "216 Patent") is entitled "System SafeNet incorporates by reference its responses to the allegations in Paragraphs 1- for Software Registration" and was issued by the United States Patent and Trademark Office on February 6, 1996. SafeNet denies that the 216 Patent was duly and legally issued to plaintiff Uniloc Singapore Private Limited. SafeNet is without information or knowledge sufficient to form a belief as to the truth or falsity of the remaining allegations of paragraph 19, and therefore denies them. DEFENDANT SAFENET INC.'S ANSWER, AFFIRMATIVE DEFENSES, AND COUNTERCLAIMS - PAGE 4 Civil Action No. 6:10-CV-472 LED 20. SafeNet is without information or knowledge sufficient to form a belief as to the truth or falsity of the allegations of paragraph 20 and therefore denies the same. 21. SafeNet is without information or knowledge sufficient to form a belief as to the truth or falsity of the allegations of paragraph 21 and therefore denies the same. 22. SafeNet is without information or knowledge sufficient to form a belief as to the truth or falsity of the allegations of paragraph 22, and therefore denies them. 23. SafeNet is without information or knowledge sufficient to form a belief as to the truth or falsity of the allegations of paragraph 23, and therefore denies them. 24. SafeNet is without information or knowledge sufficient to form a belief as to the truth or falsity of the allegations of paragraph 24, and therefore denies them. 25. SafeNet is without information or knowledge sufficient to form a belief as to the truth or falsity of the allegations of paragraph 25, and therefore denies them. 26. SafeNet admits that it produces and sells a line of products called Sentinel HASP SL. SafeNet denies that SafeNet has committed acts of patent infringement under any theory, including directly (whether individually or jointly) or indirectly (whether by contributory infringement or inducement of infringement), in the State of Texas or this District or elsewhere in the United States. SafeNet otherwise denies the allegations of paragraph 26. 27. SafeNet is without information or knowledge sufficient to form a belief as to the truth or falsity of the allegations of paragraph 27, and therefore denies them. 28. SafeNet is without information or knowledge sufficient to form a belief as to the truth or falsity of the allegations of paragraph 28, and therefore denies them. 29. SafeNet is without information or knowledge sufficient to form a belief as to the truth or falsity of the allegations of paragraph 29, and therefore denies them. DEFENDANT SAFENET INC.'S ANSWER, AFFIRMATIVE DEFENSES, AND COUNTERCLAIMS - PAGE 5 Civil Action No. 6:10-CV-472 LED 30. Based on information and belief, SafeNet denies that Onyx Graphics, Inc. ("Onyx") has committed acts of patent infringement under any theory, including directly (whether individually or jointly) or indirectly (whether by contributory infringement or inducement of infringement), in the State of Texas or this District or elsewhere in the United States. SafeNet otherwise denies the allegations of paragraph 30. 31. SafeNet is without information or knowledge sufficient to form a belief as to the truth or falsity of the allegations of paragraph 31, and therefore denies them. 32. SafeNet admits that AKS, Inc. and AKS, Ltd. produce and sell a line of products called Aladdin HASP SL. SafeNet denies that AKS, Inc. and AKS, Ltd. have committed acts of patent infringement under any theory, including directly (whether individually or jointly) or indirectly (whether by contributory infringement or inducement of infringement), in the State of Texas or this District or elsewhere in the United States. SafeNet otherwise denies the allegations of paragraph 32. 33. SafeNet denies the allegations of paragraph 33 as to SafeNet, AKS, Inc. and AKS, Ltd. SafeNet is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations of paragraph 33, and therefore denies the same. 34. SafeNet denies the allegations of paragraph 34 as to SafeNet, AKS, Inc. and AKS, Ltd. SafeNet is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations of paragraph 34, and therefore denies the same. AFFIRMATIVE DEFENSES 35. By way of further answer, and as Affirmative Defenses to the Complaint, SafeNet states as follows: DEFENDANT SAFENET INC.'S ANSWER, AFFIRMATIVE DEFENSES, AND COUNTERCLAIMS - PAGE 6 Civil Action No. 6:10-CV-472 LED First Affirmative Defense (Non-Infringement) 36. SafeNet and the use of SafeNets products do not infringe and have never infringed any claims of the 216 Patent. SafeNet has not and does not infringe, contribute to the infringement of, or actively induce others to infringe any valid, enforceable claim of the 216 Patent, either directly, indirectly, literally or under the doctrine of equivalents. Second Affirmative Defense (Invalidity) 37. The claims of the 216 Patent are invalid because they fail to satisfy one or more of the conditions for patentability specified in Title 35 of the United States Code, including, inter alia, §§ 101, 102, 103, 112, and 132, and the rules, regulations, and laws pertaining thereto. Third Affirmative Defense (Laches) 38. The 216 Patent issued on February 6, 1996. Uniloc has unreasonably delayed in filing suit against SafeNet, and is barred from enforcing the 216 Patent against SafeNet under the doctrine of laches. Fourth Affirmative Defense (Unenforceability) 39. Uniloc, including through their predecessors-in-interest in the 216 Patent, attorneys and/or agents and/or others owing a duty of candor to the United States Patent and Trademark Office ("USPTO"), committed acts constituting inequitable conduct during the prosecution of the patent application that issued as the 216 Patent ("the 216 Patent Application"), rendering the 216 Patent unenforceable. These acts of inequitable conduct include the failure to make the USPTO aware of highly material information known to the sole named inventor, Frederic B. Richardson, III ("Mr. Richardson"), as well as highly material misrepresentations made to the USPTO by or on behalf of Mr. Richardson, prior to issuance of DEFENDANT SAFENET INC.'S ANSWER, AFFIRMATIVE DEFENSES, AND COUNTERCLAIMS - PAGE 7 Civil Action No. 6:10-CV-472 LED the 216 Patent. The facts and circumstances surrounding these acts of inequitable conduct include at least the following: A. U.S. Patent No. 5,291,598 entitled "Method and System for Decentralized Manufacture of Copy-Controlled Software" ("the 598 Patent") was filed with the USPTO on April 7, 1992, and issued to Mr. Gregory Grundy on March 1, 1994. B. C. The 598 Patent is prior art to the 216 Patent. The 598 Patent renders one or more claims of the 216 Patent invalid by reason of anticipation. D. Shortly after filing the application for the 216 Patent, Mr. Richardson was informed by letter from Mr. Grundy that he owned the allowed U.S. Patent entitled "Method and System for Decentralized Manufacture of Copy-Controlled Software," which "covers exactly the system described in" a press release issued by Uniloc that, on information and belief, described the technology of the 216 Patent. E. Despite this, Mr. Richardson failed to cite this correspondence from Mr. Grundy to the USPTO for review in consideration of the pending claims of the 216 Patent Application. F. G. This information was not otherwise before the patent examiner. By withholding this information, Mr. Richardson breached his duty of candor and good faith to the USPTO. H. The withheld information is material to the patentability of the 216 Patent, in that it bears on the patentability of the invention, and is inconsistent with express misrepresentations made by Mr. Richardson during prosecution. DEFENDANT SAFENET INC.'S ANSWER, AFFIRMATIVE DEFENSES, AND COUNTERCLAIMS - PAGE 8 Civil Action No. 6:10-CV-472 LED I. On information and belief, Mr. Richardson withheld this highly material information with intent to deceive the USPTO into granting an invalid patent. J. unenforceable. K. The file history of Mr. Richardsons Australian Patent No. 678,985, which This conduct constitutes inequitable conduct that renders the 216 Patent is a foreign counterpart of the 216 Patent, contains a November 20, 1994, letter to the Examination Officer of the Australian Patent Registry from solicitor Mark J. Coorey, providing notice that Unilocs Australian patent application "is in direct conflict" with Mr. Grundys issued 598 Patent, and that the invention concerned is therefore not a patentable invention. L. Upon information and belief, Mr. Richardson knew about Mr. Cooreys November 30, 1994, letter to the Australian Patent Registry while the application for the 216 Patent was pending. M. The file history of Mr. Richardsons Australian Patent No. 678,985 also contains a January 11, 1995, letter from Mr. Coorey to the Examination Officer of the Australian Patent Registry forwarding a copy of U.S. Patent No. 5,375,240 ("the 240 Patent") issued to Mr. Grundy on December 20, 1994, which claimed priority from the application of the 598 Patent and which contains an identical disclosure to the 598 Patent. N. Upon information and belief, Mr. Richardson knew about Mr. Cooreys January 11, 1995, letter to the Australian Patent Registry while the application for the 216 Patent was pending. DEFENDANT SAFENET INC.'S ANSWER, AFFIRMATIVE DEFENSES, AND COUNTERCLAIMS - PAGE 9 Civil Action No. 6:10-CV-472 LED O. Despite knowledge of this prosecution history of Australian Patent No. 678,985 and despite the fact that Australian Patent No. 678,985 is the foreign counterpart to the patent-in-suit, Mr. Richardson failed to inform the United States patent examiner of the application that led to the 216 Patent that Mr. Coorey had on two occasions by letter challenged the patentability of the invention of the 216 Patent before the Australian Patent Registry in light of the 598 and 240 Patents. P. Q. This information was not otherwise before the patent examiner. By withholding this information, Mr. Richardson breached his duty of candor and good faith to the USPTO. R. The withheld information is material to the patentability of the 216 Patent, in that it bears on the patentability of the invention, and is inconsistent with express misrepresentations made by Mr. Richardson during prosecution. S. On information and belief, Mr. Richardson withheld this highly material information with intent to deceive the USPTO into granting an invalid patent. T. unenforceable. U. Mr. Richardson, and those acting on his behalf, did not disclose the 598 This conduct constitutes inequitable conduct that renders the 216 Patent Patent to the USPTO until after the first substantive office action, in which all of his claims were rejected. V. The examiner rejected all of the claims of the application that led to the 216 Patent in light of the 598 Patent. DEFENDANT SAFENET INC.'S ANSWER, AFFIRMATIVE DEFENSES, AND COUNTERCLAIMS - PAGE 10 Civil Action No. 6:10-CV-472 LED W. In responding to the rejection of the claims of the application that led to the 216 Patent in light of the 598 Patent, Mr. Richardson, and those acting on his behalf, narrowed the claims of the application by amendment. X. In responding to the rejection of the claims of the application that led to the 216 Patent in light of the 598 Patent, Mr. Richardson, and those acting on his behalf, made numerous highly material misrepresentations concerning the scope and content of the 598 Patent. Y. Mr. Richardson, and those acting on his behalf, made the following statement in an effort to distinguish the 598 Patent: "It is inherent in the system of the present application, as claimed, that the ,,Licensee Unique ID is entirely the product of data generated locally as distinct from data added . . . subsequently from a remote location (thereby distinguishing over Grundy)." Z. The representation in the quotation in the preceding paragraph is false, including because the 598 Patent discloses a value, specifically a checksum value generated from owner data that "is entirely the product of data generated locally." AA. On information and belief, this misrepresentation was made with the intent of deceiving the USPTO into granting the 216 Patent. BB. This misrepresentation was highly material, and, on information and belief, was persuasive to the Patent Examiner in his decision to allow the claims of the 216 Patent. CC. unenforceable. This conduct constitutes inequitable conduct that renders the 216 Patent DEFENDANT SAFENET INC.'S ANSWER, AFFIRMATIVE DEFENSES, AND COUNTERCLAIMS - PAGE 11 Civil Action No. 6:10-CV-472 LED DD. Mr. Richardson, and those acting on his behalf, made the following statement in an effort to distinguish the 598 Patent: "Applicant respectfully submits that the uniqueness of the identity upon which Grundy must ultimately rely for operation of its system of registration derives from a unique identifier provided from a remote location." EE. The representation in the quotation in the preceding paragraph is false, including because the 598 Patent discloses a unique identifier provided from a local location, including the name, address, and telephone number of the user. FF. On information and belief, this misrepresentation was made with the intent of deceiving the USPTO into granting the 216 Patent. GG. This misrepresentation was highly material, and, on information and belief, was persuasive to the Patent Examiner in his decision to allow the claims of the 216 Patent. HH. unenforceable. II. Mr. Richardson, and those acting on his behalf, made the following This conduct constitutes inequitable conduct that renders the 216 Patent statement in an effort to distinguish the 598 Patent: "It is not at all clear from the disclosure of Grundy as to whether the previously derived ,,Registration Code is ever utilized to help check the validity of the Authorization code: one is perfectly entitled to infer from the total disclosure of Grundy that any element of uniqueness to be associated with the software to be protected is injected and derived at the second platform (the remote location) and, furthermore, that whether an Authorization Code is valid or not derives directly from data first arising at the second platform (the remote location). This DEFENDANT SAFENET INC.'S ANSWER, AFFIRMATIVE DEFENSES, AND COUNTERCLAIMS - PAGE 12 Civil Action No. 6:10-CV-472 LED is the complete reverse of the system of the present invention where the uniqueness derives entirely locally." JJ. The representation in the quotation in the preceding paragraph is false, including because the 598 Patent discloses that an "element of uniqueness to be associated with the software to be protected is injected and derived at the" local location. KK. On information and belief, this misrepresentation was made with the intent of deceiving the USPTO into granting the 216 Patent. LL. This misrepresentation was highly material, and, on information and belief, was persuasive to the Patent Examiner in his decision to allow the claims of the 216 Patent. MM. This conduct constitutes inequitable conduct that renders the 216 Patent unenforceable. NN. Mr. Richardson, and those acting on his behalf, made the following statement in an effort to distinguish the 598 Patent: "It is submitted that this local generation of the unique identifying feature for each copy of the software to be protected is one distinguishing feature of the present invention. Grundy does not disclose or suggest this feature or manner of operation." OO. The representation in the quotation in the preceding paragraph is false, including because the 598 Patent discloses "local generation of the unique identifying feature for each copy of the software to be protected." PP. On information and belief, this misrepresentation was made with the intent of deceiving the USPTO into granting the 216 Patent. DEFENDANT SAFENET INC.'S ANSWER, AFFIRMATIVE DEFENSES, AND COUNTERCLAIMS - PAGE 13 Civil Action No. 6:10-CV-472 LED QQ. This misrepresentation was highly material, and, on information and belief, was persuasive to the Patent Examiner in his decision to allow the claims of the 216 Patent. RR. unenforceable. SS. Mr. Richardson, and those acting on his behalf, made the following This conduct constitutes inequitable conduct that renders the 216 Patent statement in an effort to distinguish the 598 Patent: "The fact that the algorithm which generates the unique ID generating means of the present invention is replicated at a remote location permits the following two features of the present invention not to be found in Grundy: (1) A direct comparison for matching purposes of the licensee unique ID data at the local location, and (2) A confirmation that the user details provided to the remote location match identically with the user details provided to the software to be protected and from which the unique ID is generated." TT. The representation in the quotation in the preceding paragraph is false, including because the 598 Patent discloses the use of the same checksum-generation algorithm at both the local and the remote locations, and further discloses (1) a "direct comparison for matching purposes of the [checksum] data at the local location," and (2) a "confirmation that the user details provided to the remote location match identically with the user details provided to the software to be protected and from which the [checksum] is generated." UU. On information and belief, this misrepresentation was made with the intent of deceiving the USPTO into granting the 216 Patent. DEFENDANT SAFENET INC.'S ANSWER, AFFIRMATIVE DEFENSES, AND COUNTERCLAIMS - PAGE 14 Civil Action No. 6:10-CV-472 LED VV. This misrepresentation was highly material, and, on information and belief, was persuasive to the Patent Examiner in his decision to allow the claims of the 216 Patent. WW. This conduct constitutes inequitable conduct that renders the 216 Patent unenforceable. Reservation of Defenses 40. 41. SafeNet expressly reserves the right to allege and assert additional defenses. SafeNet expressly incorporates by reference herein all defenses pled by co- defendants in this action in their respective Answers to Unilocs Complaint. JURY DEMAND 42. Pursuant to Local Rule CV-38 and Federal Rule of Civil Procedure 38, SafeNet hereby demands a trial by jury on all issues relating to Uniloc so triable in this action. COUNTERCLAIMS SafeNet asserts the following counterclaims against Uniloc: PARTIES 43. Counterclaim Defendant SafeNet, Inc. ("SafeNet") is a Delaware corporation with its principal place of business at 4690 Millennium Drive, Belcamp, Maryland 21017. 44. On information and belief, Counterclaim Defendant Uniloc USA, Inc. is a Texas corporation having a principal place of business at 2151 Michelson Drive, Irvine, California 92612. 45. On information and belief, Counterclaim Defendant Uniloc Singapore Private Limited is a Singapore corporation having a principal place of business at 80 Raffles Plaza, #33- DEFENDANT SAFENET INC.'S ANSWER, AFFIRMATIVE DEFENSES, AND COUNTERCLAIMS - PAGE 15 Civil Action No. 6:10-CV-472 LED 00 UOB Plaza I, Singapore 048624, (collectively with Counterclaim Defendant Uniloc USA Inc., "Uniloc"). JURISDICTION AND VENUE 46. This counterclaim arises under the patent laws of the United States as enacted under Title 35 of the United States Code and the provisions of the Federal Declaratory Judgment Act. The jurisdiction of this Court is proper under 35 U.S.C. §§ 271 et seq. and 28 U.S.C. §§ 1331, 1338 and 2201-02. 47. The Court has personal jurisdiction over Uniloc because, inter alia, Uniloc is the plaintiff in the underlying action. 48. To the extent that Unilocs action is proper in this venue, venue of SafeNets counterclaim is proper in this District pursuant to 28 U.S.C. §§ 1391 and 1400. COUNT I: DECLARATORY JUDGMENT OF NON-INFRINGEMENT 49. 50. The allegations of paragraphs 43-48 are incorporated herein by reference. SafeNet does not infringe and has not infringed any claims of the 216 Patent, either literally or under the doctrine of equivalents. 51. In its Complaint, Uniloc alleges that SafeNet has infringed, and continues to infringe the 216 Patent. Because SafeNet denies that it has infringed, or continues to infringe, any claim of the 216 Patent, either literally or under the doctrine of equivalents, an actual and justiciable controversy has arisen and now exists between SafeNet and Uniloc as to whether SafeNet infringes any of the claims of the 216 Patent. 52. Pursuant to the Federal Declaratory Judgment Act, 28 U.S.C. § 2201 et seq., SafeNet requests a declaration of the Court that SafeNet does not infringe any claim of the ,,216 Patent. DEFENDANT SAFENET INC.'S ANSWER, AFFIRMATIVE DEFENSES, AND COUNTERCLAIMS - PAGE 16 Civil Action No. 6:10-CV-472 LED COUNT II: DECLARATORY JUDGEMENT OF INVALIDITY 53. 54. The allegations of paragraphs 43-48 are incorporated herein by reference. The claims of the 216 Patent are invalid because they fail to satisfy the conditions of patentability specified in Title 35 of the United States Code, including inter alia, §§ 101, 102, 103 and 112. 55. In its Complaint, Uniloc alleges that the 216 Patent was "duly and legally issued." Given this and Unilocs filing of this lawsuit, and because SafeNet contends that the claims of the 216 Patent are invalid, an actual and justiciable controversy has arisen and now exists between SafeNet and Uniloc as to the validity of the 216 Patent. 56. Pursuant to the Federal Declaratory Judgment Act, 28 U.S.C. § 2201 et seq., SafeNet requests a declaration of the Court that the claims of the ,,216 Patent are invalid. COUNT III: DECLARATORY JUDGMENT OF UNENFORCEABILITY 57. 58. The allegations of paragraphs 43-48 are incorporated herein by reference. The 216 Patent issued on February 6, 1996. Uniloc has unreasonably delayed in filing suit against SafeNet, and is barred from enforcing the 216 Patent against SafeNet under the doctrine of laches. 59. Uniloc, including through their predecessors-in-interest in the 216 Patent, attorneys and/or agents and/or others owing a duty of candor to the USPTO, committed acts constituting inequitable conduct during the prosecution of the 216 Patent Application, rendering the 216 Patent unenforceable. These acts of inequitable conduct include the failure to make the USPTO aware of highly material information known to, and highly material misrepresentations made to the USPTO by or on behalf of, the sole named inventor, Mr. Richardson, prior to DEFENDANT SAFENET INC.'S ANSWER, AFFIRMATIVE DEFENSES, AND COUNTERCLAIMS - PAGE 17 Civil Action No. 6:10-CV-472 LED issuance of the 216 Patent. The facts and circumstances surrounding these acts of inequitable conduct include at least the following: A. U.S. Patent No. 5,291,598 entitled "Method and System for Decentralized Manufacture of Copy-Controlled Software" ("the 598 Patent") was filed with the USPTO on April 7, 1992, and issued to Mr. Gregory Grundy on March 1, 1994. B. C. The 598 Patent is prior art to the 216 Patent. The 598 Patent renders one or more claims of the 216 Patent invalid by reason of anticipation. D. Shortly after filing the application for the 216 Patent, Mr. Richardson was informed by letter from Mr. Grundy that he owned the allowed U.S. Patent entitled "Method and System for Decentralized Manufacture of Copy-Controlled Software," which "covers exactly the system described in" a press release issued by Uniloc that, on information and belief, described the technology of the 216 Patent. E. Despite this, Mr. Richardson failed to cite this correspondence from Mr. Grundy to the USPTO for review in consideration of the pending claims of the 216 Patent Application. F. G. This information was not otherwise before the patent examiner. By withholding this information, Mr. Richardson breached his duty of candor and good faith to the USPTO. H. The withheld information is material to the patentability of the 216 Patent, in that it bears on the patentability of the invention, and is inconsistent with express misrepresentations made by Mr. Richardson during prosecution. DEFENDANT SAFENET INC.'S ANSWER, AFFIRMATIVE DEFENSES, AND COUNTERCLAIMS - PAGE 18 Civil Action No. 6:10-CV-472 LED I. On information and belief, Mr. Richardson withheld this highly material information with intent to deceive the USPTO into granting an invalid patent. J. unenforceable. K. The file history of Mr. Richardsons Australian Patent No. 678,985, which This conduct constitutes inequitable conduct that renders the 216 Patent is a foreign counterpart of the 216 Patent, contains a November 20, 1994, letter to the Examination Officer of the Australian Patent Registry from solicitor Mark J. Coorey, providing notice that Unilocs Australian patent application "is in direct conflict" with Mr. Grundys issued 598 Patent, and that the invention concerned is therefore not a patentable invention. L. Upon information and belief, Mr. Richardson knew about Mr. Cooreys November 30, 1994, letter to the Australian Patent Registry while the application for the 216 Patent was pending. M. The file history of Mr. Richardsons Australian Patent No. 678,985 also contains a January 11, 1995, letter from Mr. Coorey to the Examination Officer of the Australian Patent Registry forwarding a copy of U.S. Patent No. 5,375,240 ("the 240 Patent") issued to Mr. Grundy on December 20, 1994, which claimed priority from the application of the 598 Patent and which contains an identical disclosure to the 598 Patent. N. Upon information and belief, Mr. Richardson knew about Mr. Cooreys January 11, 1995, letter to the Australian Patent Registry while the application for the 216 Patent was pending. DEFENDANT SAFENET INC.'S ANSWER, AFFIRMATIVE DEFENSES, AND COUNTERCLAIMS - PAGE 19 Civil Action No. 6:10-CV-472 LED O. Despite knowledge of this prosecution history of Australian Patent No. 678,985 and despite the fact that Australian Patent No. 678,985 is the foreign counterpart to the patent-in-suit, Mr. Richardson failed to inform the United States patent examiner of the application that led to the 216 Patent that Mr. Coorey had on two occasions by letter challenged the patentability of the invention of the 216 Patent before the Australian Patent Registry in light of the 598 and 240 Patents. P. Q. This information was not otherwise before the patent examiner. By withholding this information, Mr. Richardson breached his duty of candor and good faith to the USPTO. R. The withheld information is material to the patentability of the 216 Patent, in that it bears on the patentability of the invention, and is inconsistent with express misrepresentations made by Mr. Richardson during prosecution. S. On information and belief, Mr. Richardson withheld this highly material information with intent to deceive the USPTO into granting an invalid patent. T. unenforceable. U. Mr. Richardson, and those acting on his behalf, did not disclose the 598 This conduct constitutes inequitable conduct that renders the 216 Patent Patent to the USPTO until after the first substantive office action, in which all of his claims were rejected. V. The examiner rejected all of the claims of the application that led to the 216 Patent in light of the 598 Patent. DEFENDANT SAFENET INC.'S ANSWER, AFFIRMATIVE DEFENSES, AND COUNTERCLAIMS - PAGE 20 Civil Action No. 6:10-CV-472 LED W. In responding to the rejection of the claims of the application that led to the 216 Patent in light of the 598 Patent, Mr. Richardson, and those acting on his behalf, narrowed the claims of the application by amendment. X. In responding to the rejection of the claims of the application that led to the 216 Patent in light of the 598 Patent, Mr. Richardson, and those acting on his behalf, made numerous highly material misrepresentations concerning the scope and content of the 598 Patent. Y. Mr. Richardson, and those acting on his behalf, made the following statement in an effort to distinguish the 598 Patent: "It is inherent in the system of the present application, as claimed, that the ,,Licensee Unique ID is entirely the product of data generated locally as distinct from data added . . . subsequently from a remote location (thereby distinguishing over Grundy)." Z. The representation in the quotation in the preceding paragraph is false, including because the 598 Patent discloses a value, specifically a checksum value generated from owner data that "is entirely the product of data generated locally." AA. On information and belief, this misrepresentation was made with the intent of deceiving the USPTO into granting the 216 Patent. BB. This misrepresentation was highly material, and, on information and belief, was persuasive to the Patent Examiner in his decision to allow the claims of the 216 Patent. CC. unenforceable. This conduct constitutes inequitable conduct that renders the 216 Patent DEFENDANT SAFENET INC.'S ANSWER, AFFIRMATIVE DEFENSES, AND COUNTERCLAIMS - PAGE 21 Civil Action No. 6:10-CV-472 LED DD. Mr. Richardson, and those acting on his behalf, made the following statement in an effort to distinguish the 598 Patent: "Applicant respectfully submits that the uniqueness of the identity upon which Grundy must ultimately rely for operation of its system of registration derives from a unique identifier provided from a remote location." EE. The representation in the quotation in the preceding paragraph is false, including because the 598 Patent discloses a unique identifier provided from a local location, including the name, address, and telephone number of the user. FF. On information and belief, this misrepresentation was made with the intent of deceiving the USPTO into granting the 216 Patent. GG. This misrepresentation was highly material, and, on information and belief, was persuasive to the Patent Examiner in his decision to allow the claims of the 216 Patent. HH. unenforceable. II. Mr. Richardson, and those acting on his behalf, made the following This conduct constitutes inequitable conduct that renders the 216 Patent statement in an effort to distinguish the 598 Patent: "It is not at all clear from the disclosure of Grundy as to whether the previously derived ,,Registration Code is ever utilized to help check the validity of the Authorization code: one is perfectly entitled to infer from the total disclosure of Grundy that any element of uniqueness to be associated with the software to be protected is injected and derived at the second platform (the remote location) and, furthermore, that whether an Authorization Code is valid or not derives directly from data first arising at the second platform (the remote location). This DEFENDANT SAFENET INC.'S ANSWER, AFFIRMATIVE DEFENSES, AND COUNTERCLAIMS - PAGE 22 Civil Action No. 6:10-CV-472 LED is the complete reverse of the system of the present invention where the uniqueness derives entirely locally." JJ. The representation in the quotation in the preceding paragraph is false, including because the 598 Patent discloses that an "element of uniqueness to be associated with the software to be protected is injected and derived at the" local location. KK. On information and belief, this misrepresentation was made with the intent of deceiving the USPTO into granting the 216 Patent. LL. This misrepresentation was highly material, and, on information and belief, was persuasive to the Patent Examiner in his decision to allow the claims of the 216 Patent. MM. This conduct constitutes inequitable conduct that renders the 216 Patent unenforceable. NN. Mr. Richardson, and those acting on his behalf, made the following statement in an effort to distinguish the 598 Patent: "It is submitted that this local generation of the unique identifying feature for each copy of the software to be protected is one distinguishing feature of the present invention. Grundy does not disclose or suggest this feature or manner of operation." OO. The representation in the quotation in the preceding paragraph is false, including because the 598 Patent discloses "local generation of the unique identifying feature for each copy of the software to be protected." PP. On information and belief, this misrepresentation was made with the intent of deceiving the USPTO into granting the 216 Patent. DEFENDANT SAFENET INC.'S ANSWER, AFFIRMATIVE DEFENSES, AND COUNTERCLAIMS - PAGE 23 Civil Action No. 6:10-CV-472 LED QQ. This misrepresentation was highly material, and, on information and belief, was persuasive to the Patent Examiner in his decision to allow the claims of the 216 Patent. RR. unenforceable. SS. Mr. Richardson, and those acting on his behalf, made the following This conduct constitutes inequitable conduct that renders the 216 Patent statement in an effort to distinguish the 598 Patent: "The fact that the algorithm which generates the unique ID generating means of the present invention is replicated at a remote location permits the following two features of the present invention not to be found in Grundy: (1) A direct comparison for matching purposes of the licensee unique ID data at the local location, and (2) A confirmation that the user details provided to the remote location match identically with the user details provided to the software to be protected and from which the unique ID is generated." TT. The representation in the quotation in the preceding paragraph is false, including because the 598 Patent discloses the use of the same checksum-generation algorithm at both the local and the remote locations, and further discloses (1) a "direct comparison for matching purposes of the [checksum] data at the local location," and (2) a "confirmation that the user details provided to the remote location match identically with the user details provided to the software to be protected and from which the [checksum] is generated." UU. On information and belief, this misrepresentation was made with the intent of deceiving the USPTO into granting the 216 Patent. DEFENDANT SAFENET INC.'S ANSWER, AFFIRMATIVE DEFENSES, AND COUNTERCLAIMS - PAGE 24 Civil Action No. 6:10-CV-472 LED VV. This misrepresentation was highly material, and, on information and belief, was persuasive to the Patent Examiner in his decision to allow the claims of the 216 Patent. WW. This conduct constitutes inequitable conduct that renders the 216 Patent unenforceable. 60. Because Uniloc has attempted to enforce the 216 Patent against SafeNet, an actual and justiciable controversy has arisen and now exists between SafeNet and Uniloc as to the enforceability of the 216 Patent against SafeNet. 61. Pursuant to the Federal Declaratory Judgment Act, 28 U.S.C. § 2201 et seq., SafeNet requests a declaration of the Court that the patent-in-suit is unenforceable against SafeNet. PRAYER FOR RELIEF SafeNet respectfully requests a judgment against Uniloc as follows: A. A declaration that SafeNet does not infringe and has not infringed any valid claim of the 216 Patent; B. C. D. E. A declaration that the 216 Patent is invalid; A declaration that the 216 Patent is unenforceable against SafeNet; That Uniloc take nothing by its Complaint; That the Court enter judgment against Uniloc and in favor of SafeNet and that Unilocs Complaint against SafeNet be dismissed with prejudice; F. That the Court enter a judgment that this is an exceptional case under 35 U.S.C. § 285 and enter a judgment awarding SafeNet their costs and reasonable attorneys fees; and DEFENDANT SAFENET INC.'S ANSWER, AFFIRMATIVE DEFENSES, AND COUNTERCLAIMS - PAGE 25 Civil Action No. 6:10-CV-472 LED G. proper. That the Court grant SafeNet whatever further relief the Court may deem just and DEFENDANT SAFENET INC.'S ANSWER, AFFIRMATIVE DEFENSES, AND COUNTERCLAIMS - PAGE 26 Civil Action No. 6:10-CV-472 LED Dated: November 19, 2010 Respectfully submitted, By: /s/ David Healey David Healey E-mail: Healey@fr.com Texas State Bar No. 09327980 FISH & RICHARDSON P.C. 1 Houston Center 1221 McKinney Street Suite 2800 Houston, TX 77010 Phone: 713-654-5300 Fax: 713-652-0109 OF COUNSEL: Frank E. Scherkenbach E-mail: Scherkenbach@fr.com Kurt L. Glitzenstein E-mail: Glitzenstein@fr.com FISH & RICHARDSON P.C. One Marina Park Drive Boston, MA 02210-1878 617-542-5070 (Telephone) 617-542-8906 (Facsimile) Counsel for Defendant SAFENET, INC DEFENDANT SAFENET INC.'S ANSWER, AFFIRMATIVE DEFENSES, AND COUNTERCLAIMS - PAGE 27 Civil Action No. 6:10-CV-472 LED CERTIFICATE OF SERVICE The undersigned hereby certifies that a true and correct copy of the above and foregoing document has been served, via the Courts CM/ECF system per Local Rule CV-5(a)(3), upon all counsel of record, as identified below, on November 19, 2010: Paul Hayes Dean Bostock MINTZ, LEVIN, COHN, FERRIS, GLOVSKY and POPEO, P.C. One Financial Center Boston, Massachusetts 02111 Telephone: (617) 542-6000 Facsimile: (617) 542-2241 E-mail: PJHayes@mintz.com E-mail: DGBostock@mintz.com T. John Ward, Jr. Texas State Bar No. 00794818 J. Wesley Hill Texas State Bar No. 24032294 WARD & SMITH LAW FIRM 111 W. Tyler Street Longview, Texas 75601 Telephone: (903) 757-6400 Facsimile: (903) 757-2323 E-mail: jw@jwfirm.com E-mail: wh@jwfirm.com Attorney for Plaintiffs Uniloc USA, Inc. and Uniloc Singapore Private Limited Attorneys for Plaintiffs Uniloc USA, Inc. and Uniloc Singapore Private Limited /s/ David Healey_____________ David Healey

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