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2012-08-15 Nonend v Spotify - Complaint

2012-08-15 Nonend v Spotify - Complaint

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UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE

NONEND INVENTIONS N.V. Plaintiff, Case No. _______________ vs. JURY TRIAL DEMANDED SPOTIFY USA INC., a Delaware Corporation; SPOTIFY LIMITED, a United Kingdom Corporation; SPOTIFY TECHNOLOGY SARL, a Luxembourg Corporation; and SPOTIFY AB, a Swedish Corporation Defendants.

COMPLAINT FOR PATENT INFRINGEMENT This is an action for patent infringement in which Nonend Inventions N.V. (“Nonend”) complains against Defendants Spotify USA Inc., Spotify Limited, Spotify Technology SARL, and Spotify AB (together “Spotify”) as follows: BACKGROUND 1. Nonend is a Dutch based company that, at the beginning of this millennium,

pioneered multiple inventions related to efficient and reliable streaming of media content, including improved streaming of media content over a distributed peer-to-peer network. For its early work in streaming media content between peers, Nonend has been issued a number of U.S. and foreign patents. These patents include, but are not limited to, U.S. Patent No. 7,587,508 (“Multiple Source Receiver-Driven Streaming of Content Between Peers”), U.S. Patent No. 7,590,752 (“Playing Media Content on a Media Player while Streaming the Retrieved Parts of the Media Content to Other Devices”), U.S. Patent No. 7,779,138 (“Streaming Content Between Media Players Configured to Locate Each Other”), U.S. Patent No. 8,090,862 (“Initiating an

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Alternative Communication Channel for Receiving Streaming Content”), and U.S. Patent No. 8,099,513 (“Streaming Content from One or More Production Nodes or Media Player Systems”)(collectively, the “Nonend Patents”). The Nonend Patents have been recognized as state-of-the-art, cited as prior art in at least twelve (12) U.S. patents issued to the likes of IBM, Samsung, and Sony. 2. Spotify is a digital music streaming service. Spotify’s service is different than

other well-known digital music streaming services (such as Pandora) in that Spotify’s subscribers receive streaming music not only from Spotify’s servers, but also from other subscribers. This feature makes the Spotify service faster, more efficient, and less costly to operate, and uses the technology at the heart of the Nonend Patents. Indeed, Spotify touts this important feature as a key distinguishing technology over its competitors, who only offer “pure client-server applications,” whereas Spotify exploits a peer-to-peer “overlay” to substantially reduce costs and improve the robustness of the service. Spotify’s internal analysis shows that less than 10% of its streaming content is delivered from Spotify’s servers, while as much as 35% is delivered from Spotify’s peer-to-peer subscribers. 3. Spotify was originally launched in Europe in 2008, and was introduced to the U.S.

market approximately one-year ago, on July 14, 2011. In one year, Spotify claims to have signed up over three million U.S. subscribers. In celebration of its one-year anniversary in the U.S., Spotify announced that its U.S. subscribers had shared over 27 million songs, and listened to over 13 billion songs. PARTIES 4. Plaintiff Nonend is a limited liability company formed under the laws of the

Dutch Antilles, having its principal place of business at Bilthoven, The Netherlands. 5. On information and belief, Spotify AB is a Swedish corporation, having its

principal place of business at BirgerJarlsgatan 6, 114 34 Stockholm, Sweden. On information and belief, Spotify AB developed the streaming music services at issue in this complaint.

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6.

On information and belief, Defendant Spotify Technology SARL is a business

entity incorporated in Luxembourg, having its principal place of business at Avenue MarieTherese 22, 2132 Luxembourg, Luxembourg. 7. On information and belief, Defendant Spotify Limited is a Private Limited

Company organized under the laws of the United Kingdom, having its principal place of business at Golden House, 30 Great Pulteney Street, London W1F 9NN, United Kingdom. On information and belief, Spotify Limited is a wholly owned subsidiary of Spotify Technology SARL. 8. On information and belief, Defendant Spotify USA Inc. is a Delaware

Corporation having its principal place of business at 76 9th Avenue, Suite 1110, 11th Floor, New York, NY 10011, USA. On information and belief, Spotify USA Inc. is a wholly owned subsidiary of Spotify Limited. JURISDICTION AND VENUE 9. This action arises under the patent laws of the United States, Title 35 of the

United States Code. This Court has original subject matter jurisdiction over this action pursuant to 28 U.S.C. §§ 1331 and 1338. 10. Venue is proper in the district under 28 U.S.C. §§ 1391 and 1400(b). On

information and belief, Spotify USA Inc. is a Delaware corporation and all four Defendants have transacted business in this district and have committed and induced acts of patent infringement in this district either directly, or through intermediaries. 11. On information and belief, Defendants are subject to the Court’s personal

jurisdiction due, at least, to Spotify USA Inc.’s incorporation in the state and Spotify Limited’s, Spotify Technology SARL’s, and Spotify AB’s substantial business in the district, directly, or through intermediaries, including Spotify USA Inc., their wholly owned subsidiary. GENERAL ALLEGATIONS 12. Paragraphs 1-11 are incorporated by reference as if stated fully herein.

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13.

Nonend is the owner by assignment of all rights, title, and interest in U.S. Patent

No. 7,587,508 (“the ’508 Patent”), entitled “Multiple Source Receiver-Driven Streaming of Content Between Peers.” The ’508 Patent was duly and legally issued on September 8, 2009 by the United States Patent and Trademark Office. A true and correct copy of the ’508 Patent is attached hereto as Exhibit A. 14. Nonend is the owner by assignment of all rights, title, and interest in U.S. Patent

No. 7,590,752 (“the ’752 Patent”), entitled “Playing Media Content on a Media Player while Streaming the Retrieved Parts of the Media Content to Other Devices.” The ’752 Patent was duly and legally issued on September 15, 2009 by the United States Patent and Trademark Office. A true and correct copy of the ’752 Patent is attached hereto as Exhibit B. 15. Nonend is the owner by assignment of all rights, title, and interest in U.S. Patent

No. 7,779,138 (“the ’138 Patent”), entitled “Streaming Content Between Media Players Configured to Locate Each Other.” The ’138 Patent was duly and legally issued on August 17, 2010 by the United States Patent and Trademark Office. A true and correct copy of the ’138 Patent is attached hereto as Exhibit C. 16. Nonend is the owner by assignment of all rights, title, and interest in U.S. Patent

No. 8,090,862 (“the ’862 Patent”), entitled “Initiating an Alternative Communication Channel for Receiving Streaming Content.” The ’862 Patent was duly and legally issued on January 3, 2012 by the United States Patent and Trademark Office. A true and correct copy of the ’862 Patent is attached hereto as Exhibit D. 17. Nonend is the owner by assignment of all rights, title, and interest in U.S. Patent

No. 8,099,513 (“the ’513 Patent”), entitled “Streaming Content from One or More Production Nodes or Media Player Systems.” The ’513 Patent was duly and legally issued on January 17, 2012 by the United States Patent and Trademark Office. A true and correct copy of the ’513 Patent is attached hereto as Exhibit E. COUNT 1 – INFRINGEMENT OF THE ’508 PATENT 18. Paragraphs 1-17 are incorporated by reference as if stated fully herein.

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19.

On information and belief, Spotify has been and is directly infringing, either by

literal infringement or under the doctrine of equivalents, the ’508 patent in this judicial district and elsewhere in the United States by making, using, offering to sell, and selling streaming music services to users which incorporate methodologies that infringe one or more claims of the ’508 patent. Spotify is thus liable for infringement of the ’508 patent pursuant to 35 U.S.C. § 271(a). 20. Individual users of the Spotify software client (“Spotify Subscribers”) directly

infringe, either by literal infringement or under the doctrine of equivalents, the ’508 patent in this judicial district and elsewhere in the United States by using the streaming music services which incorporate methodologies that infringe one or more claims of the ’508 patent. Upon service of this Complaint, Spotify has learned about the Nonend Patents. As a result of Spotify’s knowledge, Spotify is knowingly inducing and contributing to Spotify Subscribers’ infringement of the ’508 patent in this judicial district and elsewhere in the United States. Spotify’s inducement and contributory infringement of the patent includes, but is not limited to, actively encouraging and instructing Spotify Subscribers to use those services in ways that infringe the ’508 patent. Spotify should know that its encouragement and instructions to Spotify Subscribers results in infringement of the ’508 patent. Spotify is thus liable for inducing and contributing to the infringement of the ’508 patent pursuant to 35 U.S.C. §§ 271(b) and (c) after service of this complaint. COUNT 2 – INFRINGEMENT OF THE ’752 PATENT 21. 22. Paragraphs 1-20 are incorporated by reference as if stated fully herein. On information and belief, Spotify has been and is directly infringing, either by

literal infringement or under the doctrine of equivalents, the ’752 patent in this judicial district and elsewhere in the United States by making, using, offering to sell, and selling streaming music services to users which incorporate methodologies that infringe one or more claims of the ’752 patent. Spotify is thus liable for infringement of the ’752 patent pursuant to 35 U.S.C. § 271(a).

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23.

Spotify Subscribers directly infringe, either by literal infringement or under the

doctrine of equivalents, the ’752 patent in this judicial district and elsewhere in the United States by using the streaming music services which incorporate methodologies that infringe one or more claims of the ’752 patent. Upon service of this Complaint, Spotify learned about the Nonend Patents. As a result of Spotify’s knowledge, Spotify is knowingly inducing and contributing to Spotify Subscribers’ infringement of the ’752 patent in this judicial district and elsewhere in the United States. Spotify’s inducement and contributory infringement of the patent includes, but is not limited to, actively encouraging and instructing Spotify Subscribers to use those services in ways that infringe the ’752 patent. Spotify should know that its encouragement and instructions to Spotify Subscribers result in infringement of the ’752 patent. Spotify is thus liable for inducing and contributing to the infringement of the ’752 patent pursuant to 35 U.S.C. §§ 271(b) and (c) after service of this complaint. COUNT 3 – INFRINGEMENT OF THE ’138 PATENT 24. 25. Paragraphs 1-23 are incorporated by reference as if stated fully herein. On information and belief, Spotify has been and is directly infringing, either by

literal infringement or under the doctrine of equivalents, the ’138 patent in this judicial district and elsewhere in the United States by making, using, offering to sell, and selling streaming music services to users which incorporate methodologies that infringe one or more claims of the ’138 patent. Spotify is thus liable for infringement of the ’138 patent pursuant to 35 U.S.C. § 271(a). 26. Spotify Subscribers directly infringe, either by literal infringement or under the

doctrine of equivalents, the ’138 patent in this judicial district and elsewhere in the United States by using the streaming music services which incorporate methodologies that infringe one or more claims of the ’138 patent. Upon service of this Complaint, Spotify learned about the Nonend Patents. As a result of Spotify’s knowledge, Spotify is knowingly inducing and contributing to Spotify Subscribers’ infringement of the’138 patent in this judicial district and elsewhere in the United States. Spotify’s inducement and contributory infringement of the patent

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includes, but is not limited to, actively encouraging and instructing Spotify Subscribers to use those services in ways that infringe the ’138 patent. Spotify should know, that its encouragement and instructions to Spotify Subscribers result in infringement of the ’138 patent. Spotify is thus liable for inducing and contributing to the infringement of the ’138 patent pursuant to 35 U.S.C. §§ 271(b) and (c) after service of this complaint. COUNT 4 – INFRINGEMENT OF THE’862 PATENT 27. 28. Paragraphs 1-26 are incorporated by reference as if stated fully herein. On information and belief, Spotify has been and is directly infringing, either by

literal infringement or under the doctrine of equivalents, the ’862 patent in this judicial district and elsewhere in the United States by making, using, offering to sell, and selling streaming music services to users which incorporate methodologies that infringe one or more claims of the ’862patent. Spotify is thus liable for infringement of the ’862 patent pursuant to 35 U.S.C. § 271(a). 29. Spotify Subscribers directly infringe, either by literal infringement or under the

doctrine of equivalents, the ’862 patent in this judicial district and elsewhere in the United States by using the streaming music services which incorporate methodologies that infringe one or more claims of the ’862 patent. Upon service of this Complaint, Spotify learned about the Nonend Patents. As a result of Spotify’s knowledge, Spotify is knowingly inducing and contributing to Spotify Subscribers’ infringement of the ’862 patent in this judicial district and elsewhere in the United States. Spotify’s inducement and contributory infringement of the patent includes, but is not limited to, actively encouraging and instructing Spotify Subscribers to use those services in ways that infringe the ’862patent. Spotify should know that its encouragement and instructions to Spotify Subscribers result in infringement of the ’862 patent. Spotify is thus liable for inducing and contributing to the infringement of the ’862 patent pursuant to 35 U.S.C. §§ 271(b) and (c) after service of this complaint. COUNT 5 – INFRINGEMENT OF THE ’513 PATENT 30. Paragraphs 1-29 are incorporated by reference as if stated fully herein.

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31.

On information and belief, Spotify has been and is directly infringing, either by

literal infringement or under the doctrine of equivalents, the ’513 patent in this judicial district and elsewhere in the United States by making, using, offering to sell, and selling streaming music services to users which incorporate methodologies that infringe one or more claims of the ’513 patent. Spotify is thus liable for infringement of the ’513 patent pursuant to 35 U.S.C. § 271(a). 32. Spotify Subscribers directly infringe, either by literal infringement or under the

doctrine of equivalents, the ’513 patent in this judicial district and elsewhere in the United States by using the streaming music services which incorporate methodologies that infringe one or more claims of the ’513 patent. Upon service of this Complaint, Spotify learned about the Nonend Patents. As a result of Spotify’s knowledge, Spotify is knowingly inducing and contributing to Spotify Subscribers’ infringement of the ’513 patent in this judicial district and elsewhere in the United States. Spotify’s inducement and contributory infringement of the patent includes, but is not limited to, actively encouraging and instructing Spotify Subscribers to use those services in ways that infringe the ’513 patent. Spotify should know that its encouragement and instructions Spotify Subscribers result in infringement of the ’513 patent. Spotify is thus liable for inducing and contributing to the infringement of the ’513 patent pursuant to 35 U.S.C. §§ 271(b) and (c) after service of this complaint. PRAYER FOR RELIEF Wherefore, Plaintiff Nonend requests that this Court enter: A. A judgment in favor of Plaintiff that Defendants have directly infringed and

induced and contributed to others’ infringement of the ’508, ’752, ’138, ’862 and ’513 patents; B. A judgment and order requiring Defendants to pay Plaintiff its damages resulting

from the infringement of the Nonend Patents, along with costs, expenses, pre-judgment and post-judgment interest;

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C.

A judgment holding that this action is an exceptional case, and awarding Plaintiff

its attorneys’ fees and costs pursuant to 35 U.S.C. §285; D. E. An accounting; Any and all additional relief which the Court may deem just and proper. JURY DEMAND Pursuant to Federal Rule of Civil Procedure 38, Nonend requests a trial by jury of any issues so triable as of right. Dated: August 15, 2012 STAMOULIS & WEINBLATT LLC /s/ Richard C. Weinblatt Stamatios Stamoulis #4606 stamoulis@swdelaw.com Richard C. Weinblatt #5080 weinblatt@swdelaw.com Two Fox Point Centre 6 Denny Road, Suite 307 Wilmington, DE 19809 Telephone: (302) 999-1540 OF COUNSEL: (pro hac vice to be filed) Richard C. Vasquez rvasquez@vbllaw.com Jeffrey T. Lindgren jlindgren@vbllaw.com Eric W. Benisek ebenisek@vbllaw.com Robert S. McArthur mcarthur@vbllaw.com Stephen C. Steinberg ssteinberg@vbllaw.com VASQUEZ BENISEK & LINDGREN LLP 3685 Mt. Diablo Blvd., Suite 300 Lafayette, CA 94549 Telephone: (925) 627-4250 Attorneys for Nonend Inventions N.V.

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