Some of the reasons in it's counter claim why Cisco wanted Spherix
and its patents Joined (added)to the Bockstar V Cisco case in Delaware. Spherix still has an attorney assigned to that case...why? Why was our case against Cisco stalled with no official stay announced? Why has our case against Cisco not continued? Cisco tried to add all the parties to this case because it wants all of these outstanding issues resolved for the sake of the whole industry, of which Cisco is the hub. The judge still has not ruled on Cisco's counter claim to have Spherix included. If we are still part of Cisco's problem, then we would have to be part of the solution, one way or the other. Does anyone still believe that Spherix, in some way, was not part of the term sheet agreement to which the parties in that case agreed . I believe $188 million is not enough to resolve this massive infringement. I have more questions than answers. Sorry. The next week should be very revealing because if we are not included in the term sheet we should start to see activity in our case against Cisco.
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10. According to Spherix’s November 19, 2013, 8-K SEC filing, on July 10,
2013, Spherix entered into an agreement with Rockstar pursuant to which Spherix purchased
patents from Rockstar and promised, among other things, that “by August 2, 2013, [Spherix]
shall enter into a written engagement with outside litigation counsel to initiate a patent litigation
against at least one defendant within ninety (90) days of the Closing Date.” Exhibit 10.1 of
Spherix’s November 19, 2013, SEC filing is attached as Exhibit 24.
11. On January 6, 2014, Bloomberg BusinessWeek published an interview
with Spherix CEO, Anthony Hayes. Mr. Hayes stated that Rockstar owns Spherix voting
securities with a value of 60 million dollars plus an interest in licensing revenue generated by the
Spherix’s patents. He asserted that Spherix obtained from Rockstar “industry standard essential
patents on a 20 billion [dollar] space, and that’s just for 2012, that’s not counting years back and
not counting years forward, so the addressable market is exceptionally large” and that Rockstar
“took sixty million dollars’ worth of our stock for this deal.” He stated that he was “very
grateful to be partnering with Rockstar.”
12. According to Spherix’s January 2014 Investor Presentation, Rockstar is
Spherix’s biggest shareholder, owns 28.47% of Spherix, and has transferred over 100 patents to
Case 1:13-cv-02020-SLR Document 37 Filed 06/13/14 Page 10 of 226 PageID #: 395810
Spherix. A copy of Spherix’s January 2014 Investor Presentation is attached as Exhibit 25.
NATURE OF THE ACTION AND JURISDICTIONAL STATEMENT
13. This action arises under the Declaratory Judgment Act, 28 U.S.C. § 2201
et seq., and under the patent laws of the United States, 35 U.S.C. § 1 et seq.
14. Bockstar, Constellation, and Rockstar have accused Cisco and/or Cisco’s
customers of infringing at least the following 29 United States Patents:
220. These activities by or on behalf of Rockstar, Bockstar, Constellation, and
Spherix create an immediate, definite, concrete, and substantial dispute regarding the alleged
infringement by Cisco and Cisco’s customers of patents in the portfolios of Rockstar, Bockstar,
Constellation, and Spherix
234. In a recent press release, Spherix also claims to be the assignee of a
substantial number of patents that were originally part of the Rockstar portfolio. A copy of
Spherix’s press release is attached as Exhibit 132. For instance, Spherix alleges that it is now the
assignee of the ’990 and ’999 patents, and that it owns all rights, title, and interest in those
patents.
235. By engaging in negotiations to license not only its own patents but also
those it has apparently assigned to Spherix, Rockstar representatives were purporting to act not
only on behalf of itself, but also on behalf of Spherix.
236. Moreover, as described above, Spherix is Rockstar’s partner, with
Rockstar owning 60 million dollars in Spherix’s voting securities and an interest in revenue
generated by the licensing of Spherix’s patents. Rockstar is also Spherix’s biggest shareholder,
owning 28.47% of Spherix. Furthermore, pursuant to the Rockstar-Spherix patent purchase
agreement, Rockstar required Spherix to enter into a written engagement with outside litigation
counsel to initiate patent litigations within 90 days of the agreement. Rockstar maintains
substantial control over Spherix, including approval and veto rights over litigation, its funding,
and choice and terms of engagement of outside litigation counsel
ELEVENTH CLAIM FOR RELIEF
DECLARATORY JUDGMENT OF NON-INFRINGEMENT OF U.S. PATENT NO. 5,959,990
(AGAINST ROCKSTAR AND SPHERIX)
297. Cisco realleges and incorporates by reference the allegations set forth in
the other sections of its Counterclaims.
298. Rockstar, for itself and on behalf of its partner, Spherix, has accused the
Known Accused Customers of infringing the ‘990 Patent by using at least the following
technologies, products, and/or services:
a. Ethernet Services, and
b. VLAN Technology.
299. On information and belief, the Known Accused Customers use the
following Cisco products to implement the above products and services, and/or comply with the
above technologies:
a. Cisco Switches.
300. Absent a declaration that Cisco’s Accused Products do not infringe the
‘990 Patent, Rockstar and Spherix will continue to wrongfully assert the ‘990 Patent against
Cisco and/or its customers and thereby cause Cisco irreparable harm and injury.
301. A substantial, immediate, and real controversy therefore exists between
Cisco, and Rockstar and Spherix as to whether Cisco’s products infringe the ‘990 Patent.
302. Based on the foregoing, Cisco hereby requests a declaration from the
Court that at least the following Cisco products (and/or their use by Cisco and its customers) do
not directly or indirectly infringe any claim of the ‘990 Patent:
Case 1:13-cv-02020-SLR Document 37 Filed 06/13/14 Page 63 of 226 PageID #: 401163
a. Cisco switches.
300. Absent a declaration that Cisco’s Accused Products do not infringe the
‘990 Patent, Rockstar and Spherix will continue to wrongfully assert the ‘990 Patent against
Cisco and/or its customers and thereby cause Cisco irreparable harm and injury.
301. A substantial, immediate, and real controversy therefore exists between
Cisco, and Rockstar and Spherix as to whether Cisco’s products infringe the ‘990 Patent.
302. Based on the foregoing, Cisco hereby requests a declaration from the
Court that at least the following Cisco products (and/or their use by Cisco and its customers) do
not directly or indirectly infringe any claim of the ‘990 Patent
TWENTY-EIGHTH CLAIM FOR RELIEF
DECLARATORY JUDGMENT OF NON-INFRINGEMENT OF U.S. PATENT NO. RE40,999
(AGAINST ROCKSTAR AND SPHERIX)
401. Cisco realleges and incorporates by reference the allegations set forth in
the other sections of its Counterclaims.
402. Rockstar, for itself and on behalf of its partner, Spherix, has accused the
Known Accused Customers of infringing the ‘999 Patent by using at least the following
technologies, products, and/or services:
a. Ethernet services, and
b. b. VLAN technology.
403. On information and belief, the Known Accused Customers use the
following Cisco products to implement the above products and services, and/or
comply with the above technologies:
a. Cisco Switches, including Cisco ME 3600X Series Ethernet Access
Switches.
404. Absent a declaration that Cisco’s Accused Products do not infringe the
‘999 Patent, Rockstar and Spherix will continue to wrongfully assert the ‘999 Patent against
Cisco and/or its customers and thereby cause Cisco irreparable harm and injury.
405. A substantial, immediate, and real controversy therefore exists between
Cisco, and Rockstar and Spherix as to whether Cisco’s products infringe the ‘999 Patent.
406. Based on the foregoing, Cisco hereby requests a declaration from the
Court that at least the following Cisco products (and/or their use by Cisco and its customers) do
not directly or indirectly infringe any claim of the ‘999 Patent:
a. Cisco Switches, including Cisco ME 3600X Series Ethernet Access
FORTY-SECOND CLAIM FOR RELIEF
BREACH OF CONTRACT WITH THE IEEE TO LICENSE ‘990 PATENT ON F/RAND
TERMS
(AGAINST ROCKSTAR AND SPHERIX)
539. Cisco realleges and incorporates by reference the allegations set forth in
the other sections of its Counterclaims.
540. Nortel provided a letter of assurance to the IEEE agreeing to grant
F/RAND licenses to the ‘990 patent to the extent necessary to practice IEEE standards 802.3ac,
802.1ah, and 802.1q, which standardize technology for VLANs. (See Exhibits 76-77).
541. Nortel was contractually obligated to offer a license to its SEPs in a
manner consistent with the representations contained in the above LOAs submitted to the IEEE
and in accordance with the IEEE’s IPR policies.
542. IEEE’s policy, as amended over time, constitutes a contractual
commitment to offer SEPs in accordance with the terms of those policies. By participating in the
IEEE, Nortel and other entities whose patents Nortel acquired promised to adhere to the policies
and to offer SEPs on F/RAND or royalty-free terms.
543. As industry participants that would potentially implement the standards
Case 1:13-cv-02020-SLR Document 37 Filed 06/13/14 Page 103 of 226 PageID #: 4051103
established by the IEEE, Cisco and its customers are intended third-party beneficiaries of
Nortel’s and other entities’ contractual commitments to the IEEE.
544. RAND and royalty-free encumbrances are irrevocable and run with the
patents and, as successors in interest to the Nortel patent portfolio, Rockstar and Spherix are
obligated to honor Nortel’s F/RAND or royalty-free licensing commitments with respect to
SEPs. 545. As a result, Rockstar and Spherix are obligated to offer F/RAND or
royalty-free licenses to Cisco for the ‘990 patent to the extent necessary to practice the optical
networks standardized in IEEE standards 802.3ac, 802.1ah, and 802.1q.
546. On information and belief, Rockstar, of behalf of its partner, Spherix, has
accused Cisco’s customers of infringing the ‘990 patent based on Plaintiff’s use of VLANs, as
standardized by IEEE standards 802.3ac, 802.1ah, and 802.1q.
547. By accusing Cisco customers of infringing the ‘990 patent based solely on
the use of technologies standardized in IEEE standards 802.3ac, 802.1ah, and 802.1q, Rockstar
and Spherix have alleged that the ‘990 patent is essential to the use of IEEE standards 802.3ac,
802.1ah, and 802.1q.
548. Rockstar and Spherix have breached their express and implied F/RAND
and royalty-free licensing commitments to license the ‘990 patent on F/RAND or royalty-freeterms by engaging in at least the following acts:
a. Making or having made public statements to the effect that Nortel’s
F/RAND or royalty-free licensing commitments would not be honored;
b. Refusing to offer to license SEPs to Cisco and/or its customers on
F/RAND or royalty-free terms; c. Refusing to enter into licensing negotiations with Cisco and/or its
customers or their vendors in the absence of highly-restrictive non-disclosure agreements;
d. Requiring Cisco and/or its customers to execute non-disclosure
agreements intended to achieve licenses having non-uniform terms and obligations;
e. Using the protections afforded it under non-disclosure agreements to
conduct its campaign to extort industry participants, including Cisco and/or its customers, that
have adopted well-established digital telecommunication standards; and
f. Refusing to make the terms of existing license agreements and
commitments publicly available or to offer such arrangements to an unrestricted number of
applicants on nondiscriminatory terms and conditions.
549. Transferring the ‘990 patent to Spherix with the knowledge that Spherix
would not honor its F/RAND or royalty-free licensing obligations as a successor in interest. According to Spherix’s November 19, 2013 SEC filing, Rockstar warranted that “Seller has not
made any commitments to any standards or other organization (including any open source
organization) regarding licensing or not asserting the Patents, and Seller has not entered into any
agreement or other arrangement which would otherwise obligate it to license or refrain from
asserting the Patents.” (See Exhibit 24 at 8). Rockstar is in breach of the explicit language of the
IEEE bylaws, which state that “[t]he Submitter [of any assurances] and all Affiliates (other than
those Affiliates excluded in a Letter of Assurance) shall not assign or otherwise transfer any
rights in any Essential Patent Claims that are the subject of such Letter of Assurance that they
hold, control, or have the ability to license with the intent of circumventing or negating any of
the representations and commitments made in such Letter of Assurance.” (See Exhibit 39 at 16).
550. Spherix also breached its express and implied F/RAND licensingcommitments to license the ‘990 patent on F/RAND terms by engaging in at least the following
acts:
a. Spherix’s CEO publicly stated that he attributed 60 million dollars of
value to licenses to the SEP patents, reflecting a value far above F/RAND rates.
b. Spherix acquired F/RAND encumbered patents, including the ‘990 and
‘999 patents, under an agreement to promptly bring a patent infringement suit. This agreement
to sue, rather than offer licenses on F/RAND terms as required by the commitments given by
Nortel to the IEEE, is an attempt by Rockstar and Spherix to circumvent their obligations to
license the ‘990 and ‘999 patents on F/RAND or royalty-free terms. 551. Through the foregoing acts, Rockstar and Spherix breached the express
and implied commitments Nortel and other entities made to the IEEE to license the ‘990 patent
on F/RAND or royalty-free terms.
552. As a result of those breaches, Cisco has been injured in its business or
property, and is threatened by imminent loss of profits, loss of customers, and loss of goodwill.
553. As a remedy for those breaches, Cisco respectfully requests the equitable
remedy of specific performance by Rockstar and Spherix of their obligations to provide licenses
to the ‘990 patent on F/RAND or royalty-free licensing terms.
554. As an additional remedy for Rockstar’s and Spherix’s breaches, Cisco
respectfully requests restitution and/or expectancy damages in an amount to be proven at trial.
FORTY-THIRD CLAIM FOR RELIEF
BREACH OF CONTRACT WITH THE IEEE TO LICENSE ‘999 PATENT ON F/RAND TERMS (AGAINST ROCKSTAR AND SPHERIX)
555. Cisco realleges and incorporates by reference the allegations set forth in
the other sections of its Counterclaims.
556. Nortel provided a letter of assurance to the IEEE agreeing to grant
F/RAND licenses to the U.S. Patent No. 6,111,876 which reissued as the ‘999 patent to the
extent necessary to practice IEEE standards 802.1q and 802.1ah, which standardize technology
for VLANs. (See Exhibits 77-78).
557. Nortel was contractually obligated to offer a license to its SEPs in a
manner consistent with the representations contained in the above LOAs submitted to the IEEE
and in accordance with the IEEE’s IPR policies.
558. IEEE’s policy, as amended over time, constitutes a contractual
commitment to offer SEPs in accordance with the terms of those policies. By participating in the
IEEE, Nortel and other entities whose patents Nortel acquired promised to adhere to the policies
and to offer SEPs on F/RAND or royalty-free terms.
559. As industry participants that would potentially implement the standards
established by the IEEE, Cisco and its customers are intended third-party beneficiaries of
Nortel’s and other entities’ contractual commitments to the IEEE.
560. RAND and royalty-free encumbrances are irrevocable and run with the
patents and, as successors in interest to the Nortel patent portfolio, Rockstar and Spherix are
obligated to honor Nortel’s F/RAND or royalty-free licensing commitments with respect to
SEPs.
561. As a result, Rockstar and Spherix are obligated to offer F/RAND or
royalty-free licenses to Cisco for the ‘999 patent to the extent necessary to practice the optical
networks standardized in IEEE standards 802.1q and 802.1ah.
562. On information and belief, Rockstar, of behalf of its partner, Spherix, has
accused Cisco’s customers of infringing the ‘999 patent based on Plaintiff’s use of VLANs, as istandardized by IEEE standards 802.1ah, and 802.1q.
563. By accusing Cisco customers of infringing the ‘999 patent based solely on
the use of technologies standardized in IEEE standards 802.1ah and 802.1q, Rockstar and
Spherix have alleged that the ‘999 patent is essential to the use of IEEE standards 802.1ah and
802.1q.
564. Rockstar and Spherix have breached its express and implied F/RAND and
royalty-free licensing commitments to license the ‘999 patent on F/RAND or royalty-free terms
by engaging in at least the following acts:
a. Making or having made public statements to the effect that Nortel’s
F/RAND or royalty-free licensing commitments would not be honored;
b. Refusing to offer to license SEPs to Cisco and/or its customers on
F/RAND or royalty-free terms;
c. Refusing to enter into licensing negotiations with Cisco and/or its
customers or their vendors in the absence of highly-restrictive non-disclosure agreements;
d. Requiring Cisco and/or its customers to execute non-disclosureagreements intended to achieve licenses having non-uniform terms and obligations;
e. Using the protections afforded it under non-disclosure agreements to
conduct its campaign to extort industry participants, including Cisco and/or its customers, that
have adopted well-established digital telecommunication standards; and
f. Refusing to make the terms of existing license agreements and
commitments publicly available or to offer such arrangements to an unrestricted number of
applicants on nondiscriminatory terms and conditions.
g. Transferring the ‘999 patent to Spherix with the knowledge that Spherixwould not honor its F/RAND or royalty-free licensing obligations as a successor in interest.
According to Spherix’s November 19, 2013 SEC filing, Rockstar warranted that “Seller has not
made any commitments to any standards or other organization (including any open source
organization) regarding licensing or not asserting the Patents, and Seller has not entered into any
agreement or other arrangement which would otherwise obligate it to license or refrain from
asserting the Patents.” (See Exhibit 24 at 8). Rockstar is in breach of the explicit language of the
IEEE bylaws, which state that “[t]he Submitter [of any assurances] and all Affiliates (other than
those Affiliates excluded in a Letter of Assurance) shall not assign or otherwise transfer any
rights in any Essential Patent Claims that are the subject of such Letter of Assurance that they
hold, control, or have the ability to license with the intent of circumventing or negating any of
the representations and commitments made in such Letter of Assurance.” (See Exhibit 39 at 16).
565. Spherix also breached its express and implied F/RAND licensing
commitments to license the ‘999 patent on F/RAND terms by engaging in at least the following
acts:
a. Spherix’s CEO publicly stated that he attributted 60 million dollars of
value to licenses to the SEP patents, reflecting a value far above F/RAND rates.
b. Spherix acquired F/RAND encumbered patents, including the ‘990 and
‘999 patents, under an agreement to promptly bring a patent infringement suit. This agreement
to sue, rather than offer licenses on F/RAND terms as required by the commitments given by
Nortel to the IEEE, is an attempt by Rockstar and Spherix to circumvent their obligations to
license the ‘990 and ‘999 patent on F/RAND or royalty-free terms.
566. Through the foregoing acts, Rockstar and Spherix breached the expressand implied commitments Nortel and other entities made to the IEEE to license the ‘999 patent
Case 1:13-cv-02020-SLR Document 37 Filed 06/13/14 Page 109 of 226 PageID #: 4057109
on F/RAND or royalty-free terms.
567. As a result of those breaches, Cisco has been injured in its business or
property, and is threatened by imminent loss of profits, loss of customers, and loss of goodwill.
568. As a remedy for those breaches, Cisco respectfully requests the equitable
remedy of specific performance by Rockstar and Spherix of their obligations to provide licenses
to the ‘999 patent on F/RAND or royalty-free licensing terms.
569. As an additional remedy for those breaches, Cisco respectfully requests
restitution and/or expectancy damages in an amount to be proven at trial. a. Making or having made public statements to the effect that Nortel’s
F/RAND or royalty-free licensing commitments would not be honored;
b. Refusing to offer to license SEPs to Cisco or its customers on F/RAND or
royalty-free terms;
c. Refusing to enter into licensing negotiations with Cisco or its customers in
the absence of highly-restrictive non-disclosure agreements;
d. Requiring Cisco or its customers to execute non-disclosure agreements
intended to achieve licenses having non-uniform terms and obligations;
e. Using the protections afforded it under non-disclosure agreements toconduct its campaign to extort industry participants, including Cisco or its customers, that have
adopted well-established digital telecommunication standards; and
f. Refusing to make the terms of existing license agreements and
commitments publicly available or to offer such arrangements to an unrestricted number of
applicants on nondiscriminatory terms and conditions.
g. Transferring the ‘990 patent to Spherix with the knowledge that Spherix
would not honor its F/RAND or royalty-free licensing obligations as a successor in interest.
Rockstar warranted that “Seller has not made any commitments to any standards or other
organization (including any open source organization) regarding licensing or not asserting the
Patents, and Seller has not entered into any agreement or other arrangement which would
otherwise obligate it to license or refrain from asserting the Patents.” (See Exhibit 24 at 8).
Rockstar is in breach of the explicit language of the IEEE bylaws, which state that “[t]he
Submitter [of any assurances] and all Affiliates (other than those Affiliates excluded in a Letter of Assurance) shall not assign or otherwise transfer any rights in any Essential Patent Claims that
are the subject of such Letter of Assurance that they hold, control, or have the ability to license
with the intent of circumventing or negating any of the representations and commitments made
in such Letter of Assurance.” (See Exhibit 39 at 16).
724. Spherix also breached its express and implied F/RAND licensing
commitments to license the ‘990 patent on F/RAND terms by engaging in at least the following
acts:
a. Spherix’s CEO publicly stated that he attributed 60 million dollars of
value to licenses to the SEP patents, reflecting a value far above F/RAND rates.
b. Spherix acquired F/RAND encumbered patents, including the ‘990 and
Case 1:13-cv-02020-SLR Document 37 Filed 06/13/14 Page 142 of 226 PageID #: 4090142
‘999 patents, under an agreement to promptly bring a patent infringement suit. This agreement
to sue, rather than offer licenses on F/RAND terms as required by the commitments given by
Nortel to the IEEE, is an attempt by Rockstar and Spherix to circumvent their obligations to
license the ‘990 and ‘999 patents on F/RAND or royalty-free terms.
725. Through the foregoing acts, Rockstar and Spherix unfairly and in bad
faith, arbitrarily and unreasonably, with a motive to intentionally frustrate the right of Cisco and
b. Spherix acquired F/RAND encumbered patents, including the ‘990 and its customers under these F/RAND or royalty-free licensing commitments, prevented Cisco and
its customers from receiving the benefits they were entitled to receive under commitments to
license the ‘990 patent on F/RAND or royalty-free terms.
726. As a result of the foregoing breaches, Cisco has been injured in its
business or property, and is threatened by imminent loss of profits, loss of customers, and loss of
goodwill.
727. As a remedy for those breaches, Cisco respectfully requests the equitable
remedy of specific performance by Rockstar and Spherix of their obligations to provide licenses
to the ‘990 patent on F/RAND or royalty-free licensing terms.
728. As an additional remedy for Rockstar’s and Spherix’s breaches, Cisco
respectfully requests restitution and/or expectancy damages in an amount to be proven at trial.
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and there is much more way too much more to include.
Note: if you purchase something from someone it doesn't mean that you have to treat affected parties the same way. ie If I purchased a house in which the tenants were living rent free doesn't necessarily mean that I should be required to let them live rent free.Interesting case.
