Microsoft Corporation v. Barnes & Noble, Inc. et al

Filing 34

MOTION to Stay by Defendants Foxconn Electronics, Inc., Foxconn International Holdings Ltd., Foxconn Precision Component Co., Ltd., Hon Hai Precision Industry Co., Ltd.. (Attachments: # 1 Declaration of Inchan A. Kwon, # 2 Exhibit A, # 3 Exhibit B, # 4 Exhibit C, # 5 Exhibit D, # 6 Proposed Order) Noting Date 6/3/2011, (Stewart, Douglas)

EXHIBIT B

UNITED STATES INTERNATIONAL TRADE COMMISSION
WASHINGTON, D.C.

In the Matter of
CERTAIN HANDHELD ELECTRONIC
COMPUTING DEVICES,
RELATED SOFTWARE, AND

Investigation No. _ _

COMPONENTS THEREOF
AMENDED VERIFIED COMPLAINT OF MICROSOFT CORPORATION
UNDER SECTION 337 OF THE TARIFF ACT OF 1930, AS AMENDED
COMPLAINANTS

PROPOSED RESPONDENTS

Microsoft Corporation
One Microsoft Way
Redmond, W A 98052
Telephone: [phone]

Barnes & Noble, Inc.
122 Fifth Avenue
New York, NY 10011

COUNSEL FOR COMPLAINANTS

V. James Adduci II
Andrew Pratt
Jonathan J. Engler
ADDUCI, MASTRIANI & SCHAUMBERG, LLP
1200 Seventeenth Street, NW, Fifth Floor
Washington, D.C. 20036
Telephone: [phone]
Facsimile: [phone]
Dale M. Heist
Daniel J. Goettle
Aleksander J. Goranin
WOODCOCK WASHBURN LLP
Cira Centre, 12th Floor
2929 Arch Street
Philadelphia, P A 19104
Telephone: [phone]
Facsimile: [phone]

barnesandnoble.com LLC
76 9th Avenue, 9th Floor
New York, NY 10011
Hon Hai Precision Industry Co., Ltd.
2 Zihyou Street, Tucheng City
Taipei County, 236
Taiwan, ROC
Foxconn Electronics, Inc.
2 Zihyou Street, Tucheng City
Taipei County, 236
Taiwan, ROC
Foxconn Precision Component (Shenzhen) Co.
Ltd.
No.2, East Ring Road,
No. 10 Industrial Zone,
Yousong,Longhua,Shenzhen
Guandong 518109, PRC

Brian R. Nester
Kevin C. Wheeler
SIDLEY AUSTIN LLP
1501 K Street, NW
Washington, D.C. 20005
Telephone: [phone]
Facsimile: [phone]
Richard A. Cederoth
John W. McBride
SIDLEY AUSTIN LLP
One South Dearborn
Chicago, IL 60603
Telephone: [phone]
Facsimile: [phone]

Foxconn International Holdings Ltd.
8F Peninsula Tower
538 Castle Peak Road
Cheung Sha Wan Kowloon
New Territories
Hong Kong S.A.R., PRC
Inventec Corporation
Inventec Building
No. 66 Hou-Kang Street
Shin-Lin District
Taipei County, 111
Taiwan, ROC

TABLE OF CONTENTS

I.

INTRODUCTION .............................................................................................................. 1

II.

THE PARTIES ................................................................................................................... 3
A.

Complainant ............................................................................................................ 3

B.

Proposed Respondents ............................................................................................ 4

III.

THE PRODUCTS AT ISSUE ............................................................................................ 7

IV.

THE PATENTS AT ISSUE ................................................................................................ 7
A.

U.S. Patent No. 5,778,372 ...................................................................................... 7
1.
2.

Non-Technical Description of the Patented Inventions .............................. 8

3.
B.

Identification of the Patent and Ownership by Microsoft ........................... 7

Foreign Counterparts to the '372 Patent ...................................................... 8

U.S. Patent No. 5,889,522 ...................................................................................... 9
1.
2.

Non-Technical Description of the Patented Inventions .............................. 9

3.
C.

Identification of the Patent and Ownership by Microsoft ........................... 9

Foreign Counterparts to the '522 Patent ...................................................... 9

U.S. Patent No. 6,339,780 .................................................................................... 10
1.

2.

Non-Technical Description ofthe Patented Inventions ............................ 10

3.
D.

Identification of the Patent and Ownership by Microsoft ......................... 10

Foreign Counterparts to the '780 Patent.. .................................................. 10

U.S. Patent No. 6,891,551 .................................................................................... 11
1.

2.

Non-Technical Description of the Patented Inventions ............................ 11

3.
E.

Identification of the Patent and Ownership by Microsoft ......................... 11

Foreign Counterparts to the '551 Patent.. .................................................. 11

U.S. Patent No. 6,957,233 .................................................................................... 11

1

1.
2.

Non-Technical Description of the Patented Inventions ............................ 12

3.
V.

Identification ofthe Patent and Ownership by Microsoft ......................... 11

Foreign Counterparts to the '233 Patent.. .................................................. 12

THE DOMESTIC INDUSTRY ........................................................................................ 13
A.

Microsoft's Domestic Industry .............................................................................. 13

B.

Amazon.com's Domestic Industry ........................................................................ 14

VI.

SPECIFIC INSTANCES OF IMPORTATION AND SALE ........................................... 16

VII.

UNLAWFUL AND UNFAIR ACTS COMMITTED BY THE
PROPOSED RESPONDENTS ......................................................................................... 17

VIII.

RELATED LITIGATION ................................................................................................ 19

IX.

RELIEF REQUESTED ..................................................................................................... 19

11

EXHIBIT LIST

Exhibit 1.

Microsoft Corporation Form 10-K

Exhibit 2.

Company Profiles of Proposed Respondents

Exhibit 3.

Certified Copy of U.S. Patent No. 5,778,372

Exhibit 4.

Certified Copy of Assignment(s) of U.S. Patent No. 5,778,372

Exhibit 5.

Certified Copy of U.S. Patent No. 5,889,522

Exhibit 6.

Certified Copy of Assignment(s) of U.S. Patent No. 5,889,522

Exhibit 7.

Certified Copy of U.S. Patent No. 6,339,780

Exhibit 8.

Certified Copy of Assignment(s) of U.S. Patent No. 6,339,780

Exhibit 9.

Certified Copy of U.S. Patent No. 6,891,551

Exhibit 10.

Certified Copy of Assignment(s) of U.S. Patent No. 6,891,551

Exhibit 11.

Certified Copy of U.S. Patent No. 6,957,233

Exhibit 12.

Certified Copy of Assignment(s) of U.S. Patent No. 6,957,233

Exhibit 13.

Foreign Patents and Patent Applications Corresponding to U.S. Patent No.
6,957,233

Exhibit 14C. Patent License and Covenant Agreement (Confidential)
Exhibit 15C. Declaration of Glen Copping on Behalf of Microsoft Corporation (Confidential)
Exhibit 16.

Claim Chart Demonstrating Practice of U.S. Patent No. 5,778,372 by Windows
Phone 7

Exhibit 17.

Claim Chart Demonstrating Practice of U.S. Patent No. 5,889,522 by Windows
Phone 7

Exhibit 18.

Claim Chart Demonstrating Practice of U.S. Patent No. 6,339,780 by Windows
Phone 7

Exhibit 19.

Claim Chart Demonstrating Practice of U.S. Patent No. 6,891,551 by Windows
Phone 7 with March 2011 Update

111

Exhibit 20.

Claim Chart Demonstrating Practice of U.S. Patent No. 6,957,233 by
Amazon. com

Exhibit 21.

Sales Receipts for Exemplary Barnes & Noble Products

Exhibit 22.

Photographs of Exemplary Infringing Products and Their Packaging, and Excerpts
from the Barnes & Noble Website

Exhibit 23.

Claim Chart Demonstrating Infringement of U.S. Patent No. 5,778,372 by Barnes
& Noble Nook

Exhibit 24.

Claim Chart Demonstrating Infringement of U.S. Patent No. 5,778,372 by Barnes
& Noble Nook Color

Exhibit 25.

Claim Chart Demonstrating Infringement of U.S. Patent No. 5,889,522 by Barnes
& Noble Nook Color

Exhibit 26.

Claim Chart Demonstrating Infringement of U.S. Patent No. 6,339,780 by Barnes
& Noble Nook

Exhibit 27.

Claim Chart Demonstrating Infringement of U.S. Patent No. 6,891,551 by Barnes
& Noble Nook

Exhibit 28.

Claim Chart Demonstrating Infringement of U.S. Patent No. 6,891,551 by Barnes
& Noble Nook Color

Exhibit 29.

Claim Chart Demonstrating Infringement of U.S. Patent No. 6,957,233 by Barnes
& Noble Nook Color

Exhibit 30.

User Manual for Barnes & Noble Nook

Exhibit 31.

User Manual for Barnes & Noble Nook Color

Exhibit 32.

Printed excerpts from TechRepublic.com showing teardown of a Nook Color
device

Exhibit 33.

Photographs of a Nook Color device disassembled on April 6, 2011

Exhibit 34.

News article identifying "Foxconn" as original design manufacturer of the Nook
device (TechCrunch.com, Dec. 23, 2009)

Exhibit 35.

News article identifying Inventec as producer of Barnes & Noble e-book reader
devices (Taiwan Economic News, Feb. 8,2011)

IV

Exhibit 36.

News article identifying Inventec as producer of Bames & Noble's e-book reader
devices (Taiwan Economic News, Dec. 23,2010)

Exhibit 37.

News article identifying Inventec as producer of the Nook Color device
(TechEye.net, Dec. 3,2010)

Exhibit 38C. Licensees of Microsoft Patents (Confidential)

v

APPENDICES

A.

Certified Copy of Prosecution History for u.S. Patent No. 5,778,372

B.

Technical References for u.S. Patent No. 5,778,372

C.

Certified Copy of Prosecution History for u.s. Patent No. 5,889,522

D.

Technical References for

E.

Certified Copy of Prosecution History for u.s. Patent No. 6,339,780

F.

Technical References for

G.

Certified Copy of Prosecution History for u.s. Patent No. 6,891,551

H.

Technical References for

I.

Certified Copy of Prosecution History for u.s. Patent No. 6,957,233

J.

Technical References for

u.s. Patent No. 5,889,522
u.s. Patent No. 6,339,780
u.s. Patent No. 6,891,551
u.s. Patent No. 6,957,233

vi

I.

INTRODUCTION
1.

Complainant Microsoft Corporation ("Microsoft" or "Complainant") requests that

the United States International Trade Commission ("the Commission") institute an investigation
into violations of Section 337 of the Tariff Act of 1930, as amended, 19 U.S.C. § 1337, by
Barnes & Noble, Inc., barnesandnoble.com LLC, Hon Hai Precision Industry Co., Ltd., Foxconn
Electronics, Inc., Foxconn Precision Component (Shenzhen) Co. Ltd., Foxconn International
Holdings Ltd., and Inventec Corporation (collectively, the "Proposed Respondents").
2.

This Complaint is based on the Proposed Respondents' unlawful and unauthorized

importation into the United States, sale for importation, and/or sale within the United States after
importation of certain handheld electronic computing devices, related software, and components
thereof. Proposed Respondents' products infringe at least one or more claims of U.S. Patent No.
5,778,372 ("the '372 patent"); U.S. Patent No. 5,889,522 ("the '522 patent"); U.S. Patent No.
6,339,780 ("the '780 patent"); U.S. Patent No. 6,891,551 ("the '551 patent"); and U.S. Patent No.
6,957,233 ("the '233 patent") (collectively, "the Microsoft Patents"). The Microsoft Patents are
valid and enforceable United States Patents, the entire right, title, and interest to which Microsoft
owns by assignment.
3.
devices.

The Microsoft Patents all generally relate to functions performed by electronic
The '372 patent describes displaying a portion of a document's content prior to

receiving a background image. The Proposed Respondents infringe at least claims 1 and 5 of the
'372 patent. The '522 patent provides an application window and an associated control window
that includes a tabbed display of application parameters. The Proposed Respondents infringe at
least claims 1, 2 and 12 of the '522 patent. The '780 patent describes a graphic element that is
displayed to indicate loading of content in a hypermedia browser with a content display area.
The Proposed Respondents infringe at least claims 1-6, 9-14, 17-26 and 29-42 of the '780 patent.
1

The '551 patent is directed to selecting text within an electronic document.

The Proposed

Respondents infringe at least claims 1-3,5 and 7-11 of the '551 patent. The '233 patent provides
for capturing annotations made in an electronic document, such as an electronic book, without
changing the electronic document. The Proposed Respondents infringe at least claims 21 and 22
of the '233 patent.
4.

In summary, the Proposed Respondents infringe at least the patents and claims

listed in the chart below.

u.s. Patent No.

Asserted Claims
1 and 5
1,2 and 12
1-6,9-14, 17-26 and 29-42
1-3,5 and 7-11
21 and 22

5,778,372
5,889,522
6,339,780
6,891,551
6,957,233
5.

The Proposed Respondents' activities with respect to the importation into the

United States, the sale for importation into the United States, and/or the sale within the United
States after importation of certain handheld electronic computing devices, related software, and
components thereof, described more fully infra, are unlawful under 19 U.S.C. § 1337(a)(l)(B)(i)
in that they constitute infringement of the valid and enforceable Microsoft Patents.
6.

Microsoft seeks relief from the Commission in the form of an order permanently

excluding from entry into the United States Proposed Respondents' infringing handheld
electronic computing devices, related software, and components thereof. Microsoft further seeks
a cease and desist order halting the importation, sale, offer for sale, marketing, advertising, or
soliciting of handheld electronic computing devices, related software, and components thereof,
and other products owned, held, or stored by the Proposed Respondents and their related
companies that infringe Microsoft's valid and enforceable United States patents.

2

II.

THE PARTIES
A.

Complainant

7.

Complainant Microsoft Corporation is a Washington corporation having its

headquarters at One Microsoft Way, Redmond, Washington 98052.
8.

Founded in 1975, Microsoft is a worldwide leader in computer software, services,

and solutions for businesses and consumers. Microsoft does business throughout the world and
has offices in more than 100 countries.
9.

Microsoft generates revenue by, inter alia, developing and licensing a wide range

of software products for many computing devices. These software products include operating
systems for servers, personal computers, mobile phones, and other intelligent devices; server
applications for distributed computing environments; information worker productivity
applications such as word processor, spreadsheet, and email and personal productivity software;
business solution applications; high-performance computing applications; software development
tools; and cloud based computing applications.
10.

Windows Mobile is among the operating systems developed, licensed, and

supported by Microsoft. Windows Mobile combines an advanced, real-time embedded operating
system with powerful tools for rapidly creating smart, connected, small footprint devices,
particularly cellular telephones and other handheld electronic computing devices.

Windows

Phone 7 was released to manufacture on September 1, 2010.
11.

A copy of Microsoft Corporation's Form 10-K for FY201 0 is attached hereto as

Exhibit 1. Microsoft had substantial sales in the United States over the past three years, totaling
over $150 billion.
12.

In fiscal year 2010 (July 1, 2009 through June 30, 2010), Microsoft sold or

licensed more than $62 billion worth of products and services, including Windows Mobile. Over

3

the last three fiscal years, Microsoft has invested fifteen percent, or approximately $8-9 billion,
of its yearly revenue in product research and development, including substantial amounts for
engineering and research and development on the Windows Phone 7 operating system, which
practices Microsoft Patents as set forth elsewhere herein. A portion of Microsoft's prior research
and development effort resulted in the Microsoft Patents. As of the end of fiscal year 2010,
Microsoft's research and development had resulted in a patent portfolio of more than 56,000
issued and pending patents worldwide (over 26,000 issued

u.s.

patents and pending

applications).
13.

Microsoft's continued success depends in substantial part on its ability to

establish, maintain, and protect its proprietary technology through, inter alia, enforcement of its
patent rights. Exhibit 38C (Confidential) identifies each licensee that is a party to an agreement
that may cover one or more of the asserted patents.

B.

Proposed Respondents

14.

On information and belief, Barnes & Noble, Inc. is a Delaware corporation with

its principal place of business at 122 Fifth Avenue, New York, New York, 10011.
15.

On information and belief, barnesandnoble.com LLC is a Delaware limited

liability company with its principal place of business at 76 9th Avenue, 9th Floor, New York,
New York 10011.
16.

Proposed Respondents Barnes & Noble, Inc. and barnesandnoble.com LLC, will

be collectively referred to herein as "Barnes & Noble" or "the Barnes & Noble Respondents."
On information and belief, Barnes & Noble is in the business of developing, manufacturing and
selling handheld electronic computing devices, related software, and components thereof. On
information and belief, the Barnes & Noble Respondents import into the United States, sell for

4

importation, or sell within the United States after importation certain handheld electronic
computing devices, related software, and components thereof that infringe the Microsoft Patents.
17.

On information and belief, Hon Hai Precision Industry Co., Ltd, operating under

the registered trade name "Foxconn," exists under the laws of the Republic of China, with its
principal place of business at 2 Zihyou Street, Tucheng City, Taipei County, 236 Taiwan, ROC.
18.

On information and belief, Foxconn Electronics, Inc. is a subsidiary of Hon Hai

Precision Industry Co., Ltd, and exists under the laws of the Republic of China, with its principal
place of business at 2 Zihyou Street, Tucheng City, Taipei County, 236 Taiwan, ROC.
19.

On information and belief, Foxconn Precision Component (Shenzhen) Co. Ltd. is

a wholly owned subsidiary of Foxconn Electronics, Inc., and exists under the laws of the
People's Republic of China, with a principal place of business at No.2, East Ring Road, No. 10
Industrial Zone, Yousong, Longhua, Shenzhen, Guandong 518109, PRC.
20.

On information and belief, Foxconn International Holdings Ltd. is a subsidiary of

Hon Hai Precision Industry Co., Ltd., and exists under the laws of the People's Republic of
China in the Special Administrative Region of Hong Kong, with its principal place of business at
8F Peninsula Tower, 538 Castle Peak Road, Cheung Sha Wan Kowloon, New Territories, Hong
Kong S.A.R., PRC.
21.

Proposed Respondents Hon Hai Precision Industry Co., Ltd, Foxconn Electronics,

Inc., Foxconn Precision Component (Shenzhen) Co. Ltd., and Foxconn International Holdings
Ltd. will be collectively referred to herein as "Foxconn" or "the Foxconn Respondents." On
information and belief, Foxconn is in the business of developing, manufacturing and selling
handheld electronic computing devices, related software, and components thereof

On

information and belief, the Foxconn Respondents manufacture, import into the United States, sell

5

for importation, or sell within the United States after importation certain handheld electronic
computing devices, related software, and components thereof, including the Barnes & Noble
Nook and Nook Color products, that infringe the Microsoft Patents. See Exhibits 32, 33 and 34.
22.

On information and belief, Inventec Corporation ("Inventec") exists under the

laws of the Republic of China, with its principal place of business at Inventec Building, No. 66
Hou-Kang Street, Shin-Lin District, Taipei County, 111 Taiwan, ROC.
23.

On information and belief, Inventec is in the business of developing,

manufacturing, processing and trading of computers and related products, including handheld
electronic computing devices, related software, and components thereof. On information and
belief, Inventec manufactures, imports into the United States, sells for importation, or sells
within the United States after importation certain handheld electronic computing devices, related
software, and components thereof, including the Barnes & Noble Nook and/or Nook Color
products, that infringe the Microsoft Patents. See Exhibits 35, 36, and 37.
24.

On information and belief, Barnes & Noble is a supplier of handheld electronic

computing devices programmed with various software applications. On information and belief,
Barnes & Noble markets and sells these products worldwide through various channels, including
business partners and various retail companies including retail stores and through company
websites.
25.

On information and belief, certain handheld electronic computing devices, related

software, and components thereof that infringe the Microsoft Patents are manufactured by or for
Barnes & Noble, Foxconn, and Inventec in China and/or elsewhere in Asia. On information and
belief, these infringing products are imported, sold for importation, or sold after importation into
the United States by the Proposed Respondents.

6

26.

III.

The company profiles of the Proposed Respondents are attached as Exhibit 2.

THE PRODUCTS AT ISSUE
27.

Barnes & Noble's infringing products include handheld electronic computing

devices, related software, and components thereof, including operating systems (such as the
Android operating system), user interfaces, and other application software designed for use on,
and loaded onto, such devices. Upon information and belief, these products are imported into
and sold within the United States by or on behalf of the Proposed Respondents. These products
include, but are not limited to, the Barnes & Noble Nook and the Barnes & Noble Nook Color l ,
and the related software loaded onto these handheld electronic computing devices by or on
behalf of the Proposed Respondents.

IV.

THE PATENTS AT ISSUE
A.

U.S. Patent No. 5,778,372
1.

28.

Identification of the Patent and Ownership by Microsoft

Microsoft owns by assignment the entire right, title, and interest in the '372 patent

entitled "Remote Retrieval and Display Management of Electronic Document with Incorporated
Images," which issued on July 7, 1998. A certified copy of the '372 patent is attached as Exhibit
3. A certified copy of the recorded assignment of the '372 patent is attached as Exhibit 4.
29.

Pursuant to Commission Rule 21O.12(c), a certified copy and three additional

copies of the prosecution histories of the '372 patent, as well as four copies of the applicable
pages from each technical reference cited in the prosecution history, are attached as Appendices
A and B, respectively.
I The Nook is sometimes marketed as, sold as, and/or otherwise referred to as the
"NOOK" or "nook." The Nook Color is sometimes marketed as, sold as, and/or otherwise
referred to as the "color nook," the "nook color," and/or the "NOOKcolor."

7

2.
30.

Non-Technical Description of the Patented Inventions2

The '372 patent relates to retrieving an electronic document that includes an

embedded background image.
31.

Electronic documents such as web pages typically include numerous graphics or

images to be displayed along with other types of content, such as text or links.
32.

A typical website may be stored as a particular type of document (e.g., an HTML

document) having a predefined format.

This format may specify the location and form of

interactive elements to be displayed on the page.
33.

Images or pictures to be displayed, such as a background image, may be larger

than the total size of the particular document. Therefore, large background images can delay the
rendering of the entire document.
34.

The '372 patent describes displaying a portion of the document's content prior to

receiving a background image. This provides an enhanced perception of responsiveness because
content is loaded before receiving the background image, allowing the user to see a partial
rendering of the electronic document prior to receiving all of its parts.
35.

Once the background image has been received, the document

IS

redrawn to

include the background image.

3.
36.

Foreign Counterparts to the '372 Patent

Pursuant to Commission Rule 210. 12(a)(9)(v), Microsoft submits that there are no

foreign counterpart applications corresponding to the '372 patent that have been issued,
abandoned, denied, or that remain pending.
2 The text in this and all subsequent sections entitled "Non-technical Description of the
Patented Inventions" does not, and is not intended to, construe either the specification or the
claims of any Microsoft Patents.

8

B.

u.s. Patent No. 5,889,522
1.

37.

Identification of the Patent and Ownership by Microsoft

Microsoft owns by assignment the entire right, title, and interest in the '522 patent

entitled "System Provided Child Window Controls," which issued on March 30, 1999.

A

certified copy of the '522 patent is attached as Exhibit 5. A certified copy of the recorded
assignment of the '522 patent is attached as Exhibit 6.
38.

Pursuant to Commission Rule 210.l2(c), a certified copy and three additional

copies of the prosecution history of the '522 patent, as well as four copies of the applicable pages
from each technical reference cited in the prosecution history, are attached as Appendices C and
D, respectively.
2.

39.

Non-Technical Description of the Patented Inventions

The '522 patent provides an application window and an associated control

window that includes a tabbed display of application parameters.
40.

For example, an Internet browser may have an associated application window that

displays a current webpage and an associated control window with history and favorites tabs.
The tab functionality is implemented via a pre-defined tab control class that provides information
to application programs. The tab control class includes tab control images each defining a page
having a tab.
3.

41.

Foreign Counterparts to the '522 Patent

Pursuant to Commission Rule 210.12(a)(9)(v), Microsoft submits that there are no

foreign counterpart applications corresponding to the '522 patent that have been issued,
abandoned, denied, or that remain pending.

9

C.

U.S. Patent No. 6,339,780
1.

42.

Identification of the Patent and Ownership by Microsoft

Microsoft owns by assignment the entire right, title, and interest in the '780 patent

entitled "Loading Status in a Hypermedia Browser Having a Limited Available Display Area,"
which issued on January 15,2002. A certified copy of the '780 patent is attached as Exhibit 7. A
certified copy of the recorded assignment ofthe '780 patent is attached as Exhibit 8.
43.

Pursuant to Commission Rule 210.12(c), a certified copy and three additional

copies of the prosecution history of the '780 patent as well as four copies of the applicable pages
from each technical reference cited in the prosecution history, are attached as Appendices E and
F, respectively.
2.

44.

Non-Technical Description of the Patented Inventions

The '780 patent is generally directed to a graphic element that is displayed to

indicate loading of content in a hypermedia browser with a content display area.
45.

Maximization of the browser's content display area may be desirable

Ill,

for

example, smaller, portable computer systems with limited display size.
46.

To maximize the browser's content display area, the graphic element is displayed

inside the content display area as opposed to, for example, permanently reserving a separate
display area for the graphic element. However, so as not to permanently obstruct content in the
content display area, the graphic element is displayed only temporarily while content is actually
being loaded.
3.

47.

Foreign Counterparts to the '780 Patent

Pursuant to Commission Rule 210.12(a)(9)(v), Microsoft submits that there are no

foreign counterpart applications corresponding to the '780 patent that have been issued,
abandoned, denied, or that remain pending.

10

D.

U.S. Patent No. 6,891,551
1.

48.

Identification of the Patent and Ownership by Microsoft

Microsoft owns by assignment the entire right, title, and interest in the '551 patent

entitled "Selection Handles in Editing Electronic Documents," which issued on May 10, 2005. A
certified copy of the '551 patent is attached as Exhibit 9.

Certified copies of the recorded

assignments of the '551 patent are attached as Exhibit 10.
49.

Pursuant to Commission Rule 210.l2(c), a certified copy and three additional

copies of the prosecution history of the '551 patent as well as four copies of the applicable pages
from each technical reference cited in the prosecution history, are attached as Appendices G and
H, respectively.
2.

Non-Technical Description ofthe Patented Inventions

50.

The '551 patent generally relates to selecting text within an electronic document.

51.

The user selects a word or phrase by, for example, tapping on a touch screen

display. Such a selection may be shown by highlighting the selected word or phrase. The user is
presented with selection handles on one or both ends of the selected area. By moving one or
both of the handles, the user can change the selection area to include more or less text.
3.

52.

Foreign Counterparts to the '551 Patent

Pursuant to Commission Rule 21 O.l2(a)(9)(v), Microsoft submits that there are no

foreign counterpart applications corresponding to the '551 patent that have been issued,
abandoned, denied, or that remain pending.
E.

U.S. Patent No. 6,957,233
1.

53.

Identification of the Patent and Ownership by Microsoft

Microsoft owns by assignment the entire right, title, and interest in the '233 patent

entitled "Method and Apparatus for Capturing and Rendering Annotations for Non-Modifiable

11

Electronic Content," which issued on October 18, 2005. A certified copy of the '233 patent is
attached as Exhibit 11. Certified copies of the recorded assignments of the '233 patent are
attached as Exhibit 12.
54.

Pursuant to Commission Rule 2l0.l2(c), a certified copy and three additional

copies of the prosecution history of the '233 patent as well as four copies of the applicable pages
from each technical reference cited in the prosecution history, are attached as Appendices I and
J, respectively.
2.
55.

Non-Technical Description of the Patented Inventions

The '233 patent provides for capturing annotations made in an electronic

document, such as an electronic book, without changing the electronic document.
56.

For example, the user selects placement of an annotation on a page of an

electronic book. Then the user enters the annotation. The annotation and its location are stored
separately from the electronic book. The user is able to review all annotations for the electronic
book and is also able to select each of the annotations. Upon selection of one of the annotations,
the user is navigated to the page of the electronic book on which the annotation was originally
placed.
3.
57.

Foreign Counterparts to the '233 Patent

Pursuant to Commission Rule 21O.l2(a)(9)(v), lists of all foreign patents and

patent applications corresponding to the '233 patent, including an indication of status, are
attached as Exhibit 13.

There are no other foreign counterpart applications that have been

issued, abandoned, denied, or that remain pending.

12

V.

THE DOMESTIC INDUSTRY
A.

Microsoft's Domestic Industry

58.

Microsoft's investment with respect to Microsoft Patents in the United States

constitutes a domestic industry under 19 U.S.C. § 1337(a)(2).
59.

Microsoft has engaged in a broad range of qualifying domestic industry activities

in the United States directed to articles protected by patents asserted in this Complaint.
60.

Those activities include significant investment in plant and equipment and labor

and capital in the development and production of the Windows Phone 7 operating system and
software products (the "domestic industry products").

Those activities relate directly to the

practice of one or more claims of each of the Microsoft Patents.
61.

Microsoft's investments and activities are substantial both in absolute terms and

relative to Microsoft's overall operations, taking into account the nature of such expenditures in
the software industry in general, the Complainant's relative size, and the relative importance of
Microsoft's domestic operations compared to its activities overseas.
62.

Microsoft's domestic industry activities are important to the protected articles and

represent significant domestic added value. Moreover, Microsoft's domestic industry activities
are significant in the context of comparable products, the company's overall investments, and the
relevant marketplace.
63.

These activities include, inter alia, labor and capital tied to creating the software

code and functionalities implementing claimed technology, as well as testing and debugging
directed to implementing claimed technology. These activities have occurred in the past and are
ongoing with respect to future versions of Microsoft operating system and software products
currently under development.

13

64.

Microsoft's foreign product-related investment and employment activities related

to the domestic industry products are relatively small compared to the domestic activities.
65.

Microsoft also engages in substantial domestic investment in engineering and

research and development activities directed to products that directly exploit the technology
protected by asserted patents.

These activities include, inter alia, engineering, research and

development, and design tied to claimed technology implemented in software code, as well as
other software features that allow claimed technology to function in articles protected by
Microsoft Patents. These activities have occurred in the past and are ongoing with respect to
future versions of Microsoft operating systems and software currently under development.
66.

Microsoft's investments are substantial in the context of the company's own

operations, comparable products, the relevant marketplace, and the software industry.
addition, Microsoft's investments bear directly on the practice of asserted patents.

In

These

domestic activities are also substantial in comparison to the company's worldwide activities.
67.

Microsoft's foreign engineering and research and development activities directed

to the exploitation of the asserted intellectual property are relatively small compared to the
substantial level of its domestic activities.
68.

The investments described above are set forth in the Declaration of Glen Copping,

attached as Exhibit l5C (Confidential). Claim charts showing at least one representative claim
practiced by at least one domestic industry product are attached as Exhibits 16 through 19.
B.

Amazon.com's Domestic Industry

69.

On

information

and

belief,

Microsoft's

licensee

Amazon.com,

Inc.

("Amazon. corn") practices at least one claim of the '233 patent in the United States. The relevant
patent license is attached as Exhibit 14C (Confidential). Amazon.com, a major online retailer in
the United States, holds a license to the '233 patent. On information and belief, Amazon.com
14

exploits the technology protected by the '233 patent in its Kindle handheld electronic computing
device ("Kindle"). On information and belief, the Kindle practices at least one claim of the '233
patent in the United States. On information and belief, Amazon.com's investment with respect to
the '233 patent in the United States constitutes a domestic industry under 19 U.S.C. § 1337(a)(2).
A chart comparing a representative claim of the '233 patent to the Kindle is submitted as Exhibit
20.
70.

On information and belief, Amazon.com has engaged in qualifYing domestic

industry activities in the United States directed to the Kindle. On information and belief, those
activities include significant investment in plant and equipment and labor and capital in the
development and production of the Kindle. On information and belief, those activities relate
directly to the practice of one or more claims of the '233 patent.
71.

On information and belief, Amazon. com's investments and activities are

substantial both in absolute terms and relative to Amazon.com's overall operations, taking into
account the nature of such expenditures in the handheld electronic computing device industry in
general, and the relative importance of Amazon.com's domestic operations compared to its
activities overseas.
72.

On information and belief, Amazon.com's domestic industry activities with

respect to the Kindle are important and represent significant domestic added value.

On

information and belief, Amazon.com's domestic industry activities are also significant in the
context of comparable products, Amazon. com's overall investments, and the relevant
marketplace.
73.

On information and belief, Amazon.com makes investments in plant and

equipment related to the functionalities implementing the claimed technology, has employment

15

and labor and capital related to the claimed technology, as well as testing and debugging directed
to implementing the claimed technology.

On information and belief, these activities have

occurred in the past and are ongoing with respect to future versions of the Kindle.
74.

On information and belief, Amazon.com also engages in substantial domestic

investment in engineering and research and development activities directed to the Kindle product
that directly exploits the technology protected by the '233 patent. On information and belief,
these activities include, inter alia, engineering, research and development, and design tied to the
articles protected by the patent, as well as other software features that allow the claimed
technology to function on the Kindle. On information and belief, these activities have occurred
in the past and are ongoing with respect to future versions of the Kindle product.
75.

On information and belief, Amazon.com's investments in exploiting the '233

patent are substantial in the context of the company's own operations, comparable products, the
relevant marketplace, and the handheld electronic computing device industry. On information
and belief, Amazon.com's investments bear directly on the practice of the '233 patent.

On

information and belief, these domestic activities are also substantial in comparison to the
company's worldwide activities.

VI.

SPECIFIC INSTANCES OF IMPORTATION AND SALE
76.

On information and belief, the Proposed Respondents import, sell for importation,

and/or sell within the United States after importation infringing handheld electronic computing
devices, related software, and components thereof.

Specific instances of importation of

infringing handheld electronic computing devices, related software, and components thereof, set
forth below, are representative examples of the Proposed Respondents' unlawful importation of
infringing products.

16

77.

On infonnation and belief, the Barnes & Noble Nook and the Barnes & Noble

Nook Color are imported into the United States by or on behalf of the Proposed Respondents.
78.

Sales receipts for exemplary Barnes & Noble products, purchased from retailers

in the United States, are attached as Exhibit 21.
79.

These products are marked as a product of China. Photographs of exemplary

infringing products and their packaging, and excerpts from Barnes & Noble's website are
attached as Exhibit 22.
80.

Microsoft believes that Barnes & Noble's infringing products fall under one or

more of the following classifications of the Hannonized Tariff Schedule ("HTS If) of the United
States: Heading Nos. 8470.10.0060 (related to "pocket-size data recording, reproducing and
displaying machines with calculating functions"); 8471.30.01, 8471.41.01, or 8471.49.00
(related to handheld computers); 8543.70.92 or 8543.70.96 (related to electrical machines and
apparatus having individual functions); and/or 8523 ("Discs, tapes, solid-state non-volatile
storage devices, 'smart cards' and other media for the recording of sound or of other phenomena,
whether or not recorded, including matrices and masters for the production of discs, but
excluding products of Chapter 37"), et seq. These HTS identifications are illustrative and not
exhaustive. The identifications are not intended to limit the scope of the Investigation, nor are
they intended to restrict the scope of any exclusion order or other remedy ordered by the
Commission.
VII.

UNLAWFUL AND UNFAIR ACTS
COMMITTED BY THE PROPOSED RESPONDENTS
81.

On infonnation and belief, the Proposed Respondents unlawfully sell for

importation, import, and/or sell after importation into the United States certain handheld
electronic computing devices, related software, and components thereof that infringe the

17

Microsoft Patents.

Based on information discovered through investigation, the infringing

products infringe at least: claims 1 and 5 of the '372 patent; claims 1,2 and 12 of the '522 patent;
claims 1-6,9-14,17-26 and 29-42 of the '780 patent; claims 1-3,5 and 7-11 of the '551 patent;
and claims 21 and 22 of the '233 patent. Attached as Exhibits 23 through 29 are claim charts that
provide examples of how the asserted independent claims of the Microsoft Patents read on the
Exemplary Barnes & Noble Products.
82.

The infringement allegations contained in this Complaint include direct and

indirect infringement.

The Proposed Respondents have been given actual notice of their

infringement of the Microsoft Patents by Microsoft's service of this Complaint, which is being
served on the Proposed Respondents at the time of filing with the Commission. On information
and belief, the Proposed Respondents directly infringe the Microsoft Patents through the
operation, development, and testing of their products in the United States.
83.

The Proposed Respondents also directly infringe the apparatus claims of the

Microsoft Patents by offering for sale and/or selling their infringing products in the United
States.
84.

The Proposed Respondents knowingly induce others in the United States to use

products covered by the Microsoft Patents and to perform methods covered by certain claims of
the Microsoft Patents. The Proposed Respondents' inducement of infringement includes, but is
not limited to: (i) knowledge of the Microsoft Patents; (ii) intent to induce direct infringement of
the Microsoft Patents; (iii) knowingly aiding and abetting infringement by providing instruction
manuals and other directions that instruct the purchaser or user of an accused device to use that
device in a manner that infringes certain claims of the Microsoft Patents; and (iv) actual or
constructive knowledge that their actions induce infringement. Attached as Exhibits 30 and 31

18

are instruction manuals for two of the Proposed Respondents' handheld electronic computing
devices, i.e., the Barnes & Noble Nook and the Barnes & Noble Nook Color.

VIII. RELATED LITIGATION
85.

On March 21, 2011, the '372, '522, '780, '551, and '233 patents were asserted

against the Proposed Respondents in Microsoft Corp. v. Barnes & Noble, Inc., No.2: 11-cv00485-RAJ (W.D. Wa.). No motions had been filed and no orders had issued in this case as of
the filing of this Amended Complaint. Additionally, the '780 patent was asserted by Microsoft
by way of a patent infringement counterclaim against Motorola Mobility, Inc., in Motorola

Mobility, Inc. v. Microsoft Corporation, Western District of Washington (2:11-cv-00343-JLR).
That case was originally filed in the Western District of Wisconsin on November 11, 2010,
where it was assigned case number 2:11-cv-00343-MJP. This case was in discovery as of the
filing of this Amended Complaint.
86.

Other than the instance listed above, no other domestic or foreign court or agency

is or has been involved with the Microsoft Patents (or their foreign counterparts).

IX.

RELIEF REQUESTED
WHEREFORE, by reason of the foregoing, Complainant Microsoft respectfully requests

that the United States International Trade Commission:
(a)

institute an immediate investigation pursuant to Section 337 of the Tariff Act of
1930, as amended, 19 U.S.C. § 1337, with respect to the Proposed Respondents'
violations of that section based on the importation into the United States, sale for
importation, and/or the sale within the United States after importation of Proposed
Respondents' infringing products;

(b)

set a target date of no more than fifteen months;

19

(c)

schedule and conduct a hearing on permanent relief pursuant to

19

U.S.c. § 1337(c) for the purposes of receiving evidence and hearing argument
concerning whether there has been a violation of Section 337, and following the
hearing, to determine that there has been a violation of Section 337;
(d)

issue a permanent exclusion order, pursuant to 19 U.S.C. § 1337(d) forbidding
entry into the United States of Proposed Respondents' products that infringe one
or more claims of U.S. Patent Nos. 5,778,372; 5,889,522; 6,339,780; 6,891,551;
and 6,957,233; and

(e)

issue a permanent cease and desist order, pursuant to 19 U.S.C. § 1337(1),
prohibiting the Proposed Respondents and their related companies from engaging
in the importation, sale for importation, marketing, distribution, offering for sale,
the sale after importation of, or otherwise transferring within the United States
products that infringe United States Patents Nos. 5,778,372; 5,889,522;
6,339,780; 6,891,551; and 6,957,233; and

(1)

issue such other and further relief as the Commission deems just and proper under
the law, based upon the facts determined by the investigation and the authority of
the Commission.

20

Dated: April 8,2011

Respectfully submitted,

V.
Andrew Pratt
Jonathan J. Engler
ADDUCI, MASTRIANI & SCHAUMBERG, LLP
1200 Seventeenth Street, NW, Fifth Floor
Washington, D.C. 20036
Telephone: [phone]
Facsimile: [phone]
Dale M. Heist
Daniel J. Goettle
Aleksander J. Goranin
WOODCOCK WASHBURN LLP
Cira Centre, 12th Floor
2929 Arch Street
Philadelphia, PA 19104
Telephone: [phone]
Facsimile: [phone]
Brian R. Nester
Kevin C. Wheeler
SIDLEY AUSTIN LLP
1501 K Street, NW
Washington, D.C. 20005
Telephone: [phone]
Facsimile: [phone]
Richard A. Cederoth
John W. McBride
SIDLEY AUSTIN LLP
One South Dearborn
Chicago, IL 60603
Telephone: [phone]
Facsimile: [phone]

Counsel for Microsoft Corporation

MSFT700511-2

21

VERIFIC{~,TION

OF AMENDED COMPLAINT

I, David M. Howard, declare, in accordance with 19 C.F.R. § 210.4 and 2IO.I2(a), under
penalty of perjury, that the following statements are true:
1. I am Corporate Vice President for complainant Microsoft Corporation and am duly
authorized by Microsoft to verify this amended complaint of Complainant.
2. I have read the foregoing Amended Complaint of Microsoft Corporation and am aware of the
Amended Complaint's conte} ,:" exhibits, declarations, and appendices.
3. To the best of my knowledge, information, and belief, founded upon reasonable inquiry, the
Amended Complaint and all of its supporting materials (exhibits, declarations, and
appendices) are not being presented for any improper purpose, such as to harass or to cause
unnecessary delay or needless increase in the cost of litigation.
4. To the best of my knowledge, information, and belief, founded upon reasonable inquiry, the
claims and legal contentions of this Amended Complaint are warranted by existing law or a
good faith argument for the

f

,r

~nsion,

modification, or reversal of existing law.

5. To the best of my knowled~;~, information, and belief founded upon reasonable inquiry, any
allegations or factual contentions in this Amended Complaint have evidentiary support or are
likely to have evidentiary support after a reasonable opportunity for further investigation or
discovery.
I declare under penalty of perjury under the laws of the United States of America that the
foregoing is true and correct.
Executed on AprilL, 2011
David M. Howard
Corporate Vice President