`Case 1:11-cv-00797-RGA Document 83
`Filed 12/19/11 Page 1 of 14 Page|D #: 422
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`IN THE UNITED STATES DISTRICT COURT
`
`FOR THE DISTRICT OF DELAWARE
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`FASTVDO LLC,
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`Plaintiff,
`
`V.
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`APPLE INC., et al.
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` Defendants.
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`C.A. No. 1 1-797-RGA
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`JURY TRIAL DEMANDED
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`DEFENDANT DXG TECHNOLOGY (U.S.A.) INC.’S
`ANSWER, AFFIRNIATIVE DEFENSES, AND COUNTERCLAIMS
`TO PLAINTIFF’S FIRST AMENDED COMPLAINT
`
`Defendant DXG Technology (USA) Inc. (“DXG”) hereby answers the First Amended
`
`Complaint of Plaintiff FastVDO LLC (“FastVDO” or “Plaintiff’), dated October 31, 2011. DXG
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`denies each and every allegation set forth in the First Amended Complaint, except for those
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`allegations expressly and specifically admitted below. In particular, DXG specifically denies
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`Plaintiff’ s allegations of patent infiingement with respect to DXG. With respect to each of the
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`numbered paragraphs of the First Amended Complaint, DXG responds as follows:
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`PARTIES
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`1.
`
`With respect to Paragraph 1 of the First Amended Complaint, DXG is without sufficient
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`knowledge or information to form a belief as to the truth of these allegations and therefore denies
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`them.
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`2.
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`With respect to Paragraph 2 of the First Amended Complaint, DXG is without sufficient
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`knowledge or information to form a belief as to the truth of these allegations and therefore denies
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`them.
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`Case 1:11-cv—007975RGA Document 83
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`3.
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`With respect to Paragraph 3 of the First Amended Complaint, DXG is without sufficient
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`knowledge or information to form a belief as to the truth of these allegations and therefore denies
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`them.
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`4.
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`With respect to Paragraph 4 of the First Amended Complaint, DXG is without sufficient
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`knowledge or information to form a belief as to the truth of these allegations and therefore denies
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`them.
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`5.
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`With respect to Paragraph 5 of the First Amended Complaint, DXG is without sufficient
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`knowledge or information to form a belief as to the truth of these allegations and therefore denies
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`them.
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`6.
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`With respect to Paragraph 6 of the First Amended Complaint, DXG admits that DXG is a
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`California corporation with a principal place of business at 1001 Lawson Street, City of Industry,
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`CA 91748.
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`7.
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`With respect to Paragraph 7 of the First Amended Complaint, DXG is without sufficient
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`knowledge or information to form a belief as to the truth of these allegations and therefore denies
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`them.
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`8.
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`With respect to Paragraph 8 of the First Amended Complaint, DXG is without sufficient
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`knowledge or information to form a belief as to the truth of these allegations and therefore denies
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`them.
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`9.
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`With respect to Paragraph 9 of the First Amended Complaint, DXG is without sufficient
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`knowledge or information to form a belief as to the truth of these allegations and therefore denies
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`them.
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`Case 1:11-cv-00797-RGA Document 83
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`10. With respect to Paragraph 10 of the First Amended Complaint, DXG is without sufficient
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`knowledge or information to form a belief as to the truth of these allegations and therefore denies
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`them.
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`11. With respect to Paragraph 11 of the First Amended Complaint, DXG is without sufficient
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`knowledge or information to form a belief as to the truth of these allegations and therefore denies
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`them.
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`12. With respect to Paragraph 12 of the First Amended Complaint, DXG is without sufficient
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`knowledge or information to form a belief as to the truth of these allegations and therefore denies
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`them.
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`13. With respect to Paragraph 13 of the First Amended Complaint, DXG is without sufficient
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`knowledge or information to form a belief as to the truth of these allegations and therefore denies
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`them.
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`14. With respect to Paragraph 14 of the First Amended Complaint, DXG is without sufficient
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`knowledge or information to form a belief as to the truth of these allegations and therefore denies
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`them.
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`15. With respect to Paragraph 15 of the First Amended Complaint, DXG is without sufficient
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`knowledge or information to form a belief as to the truth of these allegations and therefore denies
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`them.
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`16. With respect to Paragraph 16 of the First Amended Complaint, DXG is without sufficient
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`knowledge or information to form a belief as to the truth of these allegations and therefore denies
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`them.
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`17. With respect to Paragraph 17 of the First Amended Complaint, DXG is without sufficient
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`knowledge or information to form a belief as to the truth of these allegations and therefore denies
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`them.
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`18. With respect to Paragraph 18 of the First Amended Complaint, DXG is without sufficient
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`knowledge or information to form a belief as to the truth of these allegations and therefore denies
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`them.
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`19. With respect to Paragraph 19 of the First Amended Complaint, DXG is without sufficient
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`knowledge or information to form a belief as to the truth of these allegations and therefore denies
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`them.
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`20. With respect to Paragraph 20 of the First Amended Complaint, DXG is without sufficient
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`knowledge or information to form a belief as to the truth of these allegations and therefore denies
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`them.
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`JURISDICTION AND VENUE
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`21. With respect to Paragraph 21 of the First Amended Complaint, DXG admits that the First
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`Amended Complaint alleges claims for patent infringement arising under the patent laws of the
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`United States of America, Title 35 of the United States Code. DXG admits that this Court has
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`subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1338(a).
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`22. With respect to Paragraph 22 of the First Amended Complaint, DXG admits that it has
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`sold or offered for sale certain digital cameras and/or camcorders in Delaware but denies all
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`other allegations of Paragraph 22 to the extent those allegations are directed to DXG. With
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`respect to the allegations directed to other Defendants, DXG is without sufficient knowledge or
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`information to form a belief as to the truth of those allegations and therefore denies them.
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`Case 1:11-cv-00797-RGA Document 83
`Filed 12/19/11 Page 5 of 14 Page|D #: 426
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`23. With respect to Paragraph 23 of the First Amended Complaint, DXG admits that Venue is
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`proper in this district under 28 U.S.C. §§ 139l(b)-(c) and l400(b); however, DXG maintains that
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`there are more convenient forums in which to proceed with this action. DXG further denies all
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`other allegations of Paragraph 23 to the extent those allegations are directed to DXG. With
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`respect to the allegations directed to other Defendants, DXG is without sufficient knowledge or
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`information to form a belief as to the truth of those allegations and therefore denies them.
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`COUNT I — INFRINGEMENT OF U.S. PATENT NO. RE 40,081
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`24. With respect to Paragraph 24 of the First Amended Complaint, DXG admits that a copy
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`of U.S. Patent No. RE 40,081 (“the ‘O81 patent”) is attached to the First Amended Complaint as
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`Exhibit A. DXG admits that, on its face, the ‘O81 patent indicates that it reissued on February 19,
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`2008 and is entitled “Fast Signal Transforms With Lifting Steps.” With respect to the other
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`allegations, DXG is without sufficient knowledge or information to form a belief as to the truth
`
`of those allegations and therefore denies them.
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`25. With respect to Paragraph 25 of the First Amended Complaint, DXG is without sufficient
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`knowledge or information to form a belief as to the truth of these allegations and therefore denies
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`them.
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`26. With respect to Paragraph 26 ofthe First Amended Complaint, DXG is without sufficient
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`knowledge or infonnation to fonn a belief as to the truth of these allegations and therefore denies
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`them.
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`27. With respect to Paragraph 27 of the First Amended Complaint, DXG is without sufficient
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`knowledge or information to form a belief as to the truth of these allegations and therefore denies
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`them.
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`Case 1:11-cv-00797-RGA Document 83 Filed 12/19/11 Page 6 of 14 PageID #: 427
`Case 1:11-cv-00797-RGA Document 83
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`28. With respect to Paragraph 28 of the First Amended Complaint, DXG is without sufficient
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`knowledge or information to form a belief as to the truth of these allegations and therefore denies
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`them.
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`29. With respect to Paragraph 29 of the First Amended Complaint, DXG admits that it sells,
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`offers for sale, or imports certain digital cameras and camcorders, but denies all allegations of
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`infringement or inducement of infringement of the ‘O81 patent. DXG admits that it received
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`actual notice of the ‘081 patent on September 21, 2011 — the date when DXG was served the
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`original Complaint.
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`30. With respect to Paragraph 30 of the First Amended Complaint, DXG is without sufficient
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`knowledge or information to form a belief as to the truth of these allegations and therefore denies
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`them.
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`31. With respect to Paragraph 31 of the First Amended Complaint, DXG is without sufficient
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`knowledge or information to form a belief as to the truth of these allegations and therefore denies
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`them.
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`32. With respect to Paragraph 32 of the First Amended Complaint, DXG is without sufficient
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`knowledge or information to form a belief as to the truth of these allegations and therefore denies
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`them.
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`33. With respect to Paragraph 33 of the First Amended Complaint, DXG is without sufficient
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`knowledge or information to form a belief as to the truth of these allegations and therefore denies
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`them.
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`34. With respect to Paragraph 34 of the First Amended Complaint, DXG is without sufficient
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`knowledge or information to form a belief as to the truth of these allegations and therefore denies
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`them.
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`{00584613;vl}
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`Case 1:11-cv-00797-RGA Document 83 Filed 12/19/11 Page 7 of 14 PageID #: 428
`Case 1:11-cv—00797-RGA Document 83
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`35. With respect to Paragraph 35 of the First Amended Complaint, DXG is without sufficient
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`knowledge or information to form a belief as to the truth of these allegations and therefore denies
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`them.
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`36. With respect to Paragraph 36 of the First Amended Complaint, DXG is without sufficient
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`knowledge or information to form a belief as to the truth of these allegations and therefore denies
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`them.
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`37. With respect to Paragraph 37 of the First Amended Complaint, DXG is without sufficient
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`knowledge or information to form a belief as to the truth of these allegations and therefore denies
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`them.
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`38. With respect to Paragraph 38 of the First Amended Complaint, DXG is without sufficient
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`knowledge or information to form a belief as to the truth of these allegations and therefore denies
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`them.
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`39. With respect to Paragraph 39 of the First Amended Complaint, DXG is without sufficient
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`knowledge or information to form a belief as to the truth of these allegations and therefore denies
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`them.
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`40. With respect to Paragraph 40 of the First Amended Complaint, DXG is without sufficient
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`knowledge or information to form a belief as to the truth of these allegations and therefore denies
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`them.
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`41. With respect to Paragraph 41 of the First Amended Complaint, DXG is without sufficient
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`knowledge or information to form a belief as to the truth of these allegations and therefore denies
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`them.
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`{005846l3;vl}
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`Case 1:11-cv-00797-RGA Document 83 Filed 12/19/11 Page 8 of 14 PageID #: 429
`Case 1:11-cv-00797-RGA Document 83
`Filed 12/19/11 Page 8 of 14 Page|D #: 429
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`AFFIRNIATIVE AND OTHER DEFENSES
`
`DXG asserts the following affirmative and other defenses to the allegations contained in
`
`the First Amended Complaint.
`
`FIRST AFFIRMATIVE DEFENSE
`
`(Failure to State a Claim)
`
`42.
`
`Plaintiff fails to state a claim against DXG upon which relief may be granted.
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`SECOND AFFIRMATIVE DEFENSE
`
`(Patent Invalidity)
`
`43.
`
`One or more claims of the ‘O81 patent are invalid for failing to comply with one or more
`
`provisions of the patent laws and regulations of the United States including without limitation,
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`35 U.S.C. §§ 101, 102, 103, 112, 121 and/or 251.
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`THIRD AFFIRMATIVE DEFENSE
`
`(Non-Infringement)
`
`44.
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`DXG has not infringed and does not infiinge, either directly, contributively, or by
`
`inducement, any claim of the ‘081 patent, either literally or under the doctrine of equivalents.
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`FOURTH AFF‘IRlVIATIVE DEFENSE
`
`(Prosecution History Estoppel)
`
`45.
`
`DXG avers that by reason of the proceedings in the United States Patent and Trademark
`
`Office during the prosecution of the original application and the reissue which resulted in the
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`‘O81 patent, and by reason of the admissions and representations therein made by or on behalf of
`
`the applicant for the ‘O81 patent, Plaintiff is estopped from construing the claims of the ‘O81
`
`patent, even if this were otherwise possible, to cover and include any acts of DXG.
`
`FIFTH AFFIRMATIVE DEFENSE
`
`(Limitation on Damages Based on Failure to Mark)
`
`46.
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`Plaintiffs claims for damages is barred, in whole or in part, by a failure to satisfy the
`
`requirements of 35 U.S.C. § 287.
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`Case 1:11-cv-00797-RGA Document 83 Filed 12/19/11 Page 9 of 14 PageID #: 430
`Case 1:11-cv-00797-RGA Document 83
`Filed 12/19/11 Page 9 of 14 Page|D #: 430
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`SIXTH AFFIRMATIVE DEFENSE
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`(Absolute and Equitable Intervening Rights)
`
`47.
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`Plaintiffs claims for recovery are barred, in whole or in part, by the doctrine of
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`intervening rights under 35 U.S.C. § 252.
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`SEVENTH AFFIRMATIVE DEFENSE
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`(Costs Barred)
`
`48.
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`Plaintiff is barred from recovering costs in connection with this action under 35 U.S.C. §
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`288.
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`EIGHT AFFIRMATIVE DEFENSE
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`(Unenforceability)
`
`49.
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`FastVDO is estopped from asserting the ‘081 patent against DXG.
`
`50.
`
`The Joint Video Team (“JVT”) is the standardization body for the ITU H.264 Standard
`
`and the ISO/IEC 14496-10 (MPEG-4 AVC) Standard (collectively, the “H.264/MPEG-4 AVC
`
`Standard”) for video compression.
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`51.
`
`The H.264 Standard and MPEG-4 AVC Standard are jointly maintained so that they have
`
`identical technical content.
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`52.
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`The H/264/MPEG-4 AVC Standard is a standard for video recording, compression and
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`distribution of high definition video.
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`53.
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`The consumer electronic industry has relied and continues to rely on the JVT to develop
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`and maintain a video compression standard for world-wide distribution of high definition video.
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`54.
`
`The JVT is operated and continues to operate through a committee of video coding
`
`industry representatives. In developing the H.264/MPEG-4 AVC Standard, proposals for
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`inclusion in the standard were made at JVT meetings primarily by its members. In the intervals
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`between the meetings, members would invest time and resources evaluating these proposals for
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`suitability. Over a series of meetings, input from industry participants would be considered.
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`Eventually, a consensus emerged on the specific set of features to be included in the standard.
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`55.
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`The JVT has rules and procedures that are designed to prevent its participants from using
`
`the JVT for anticompetitive or illegal purposes. One specific kind of anticompetitive effect that
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`the JVT guards against is the unintended inclusion ofpatented elements in the H.264/MPEG-4
`
`AVC Standard. The JVT requires that each proposal include a disclosure to indicate whether the
`
`proposal includes any technology from granted, pending or planned patents. Although the JVT
`
`does not prohibit the inclusion of patented technology, the JVT’s policy sets forth a preference
`
`for a baseline profile that is royalty-free.
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`56.
`
`FastVDO submitted several proposals to the JVT during the development of the
`
`H.264/MPG-4‘AVC Standard.
`
`57.
`
`These rules, among other things, required submitters, including FastVDO, to disclose to
`
`the JVT any patents, patent applications or intentions to file patents that might bear upon
`
`proposals being considered by the JVT.
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`58.
`
`On information and belief, FastVDO agreed, both explicitly and implicitly, that it would
`
`abide by the rules governing the JVT submissions as a result of its participation in the JVT.
`
`5 9.
`
`By participating in the JVT, FastVDO knew or should have known that companies would
`
`be reasonably induced to rely upon FastVDO’s promises and representations that it would
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`disclose any patents, patent applications, or intentions to file patents that may bear upon
`
`proposals being considered by the JVT.
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`60.
`
`The final draft of the first version of the H.264/MPEG-4 AVC Standard was completed in
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`May 2003.
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`Case 1:11-cv-00797-RGA Document 83 Filed 12/19/11 Page 11 of 14 PageID #: 432
`Case 1:11-cv—00797-RGA Document 83
`Filed 12/19/11 Page 11 of 14 Page|D #: 432
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`61.
`
`In May 2003, FastVDO submitted to the JVT a patent statement and licensing declaration
`
`for U.S. Patent No. 6,421,464 (“the ‘464 patent”) stating that it will provide a license for the ‘464
`
`patent on reasonable and non-discriminatory (“RAND”) terms.
`
`62.
`
`By being a participant in the JVT, FastVDO gained insight into the industry’s efforts to
`
`develop an advanced video compression standard.
`
`63.
`
`Two months after the completion of the final draft of the first version of the
`
`H.264/MPEG-4 AVC Standard, FastVDO filed a reissue application for the ‘464 patent in order
`
`to broaden the claims to cover the Standard. As a result, the ‘O81 patent (reissue of the ‘464
`
`patent) is issued.
`
`64.
`
`As a result of FastVDO’s interactions with JVT related to the H.264/MPEG-4 AVC
`
`Standard, the ‘081 patent is unenforceable due to waiver and/or equitable estoppel.
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`NINTH AFFIRMATIVE DEFENSE
`
`(Implied License)
`
`65.
`
`DXG incorporates by reference paragraphs 49-64 herein.
`
`66.
`
`Because of FastVDO’s conduct in the JVT, FastVDO is barred from asserting the ‘081
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`patent by the doctrine of implied license.
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`COUNTERCLAIMS
`
`Counterclaimant DXG alleges as follows for its Counterclaims against Plaintiff:
`
`l.
`
`DXG incorporates herein paragraphs 1-66 of DXG’s Answer.
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`PARTIES
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`2.
`
`DXG is a California corporation with a principal place of business at 1001 Lawson Street,
`
`City of Industry, CA 91748.
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`Case 1:11-cv-00797-RGA Document 83
`Filed 12/19/11 Page 12 of 14 Page|D #: 433
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`3.
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`Plaintiff pleads in its First Amended Complaint that it is a Florida limited liability
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`corporation with a principal place of business at 750 N. Atlantic AVe., Cocoa Beach, FL 32931.
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`Plaintiff further pleads that it is the assignee and owns the entire right, title, and interest in the
`
`‘O81 patent.
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`JURISDICTION
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`4.
`
`Plaintiff alleges that DXG’s cameras and/or camcorders infringe the ‘O81 patent and that,
`
`as owner of the patent, it is entitled to damages. DXG denies these allegations and contends that
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`the cameras and/or camcorders sold by DXG do not infringe any Valid claim of the ‘O81 patent.
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`5.
`
`A justiciable controversy exists between Plaintiff and Defendant DXG regarding the ‘O81
`
`patent and a judicial declaration is necessary to establish the rights and duties of the parties with
`
`respect to the ‘O81 patent.
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`6.
`
`The counterclaims arise under the Patent Laws, Title 35 of the United States Code.
`
`Therefore, the Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331, l338(a), and
`
`I § 2201 et esq. The Court has personal jurisdiction over Plaintiff.
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`VENUE
`
`7.
`
`Venue for these counterclaims is proper in this District pursuant to 28 U.S.C. §§ 1391 (b)
`
`and (c).
`
`8.
`
`9.
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`COUNT I — Declaratory Judgment of Non-Infringement
`
`Defendant DXG incorporates and realleges paragraphs 1-7 of these counterclaims.
`
`The cameras and/or camcorders imported, sold or offered for sale by DXG do not
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`infringe the claims of the ‘O81 patent.
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`10.
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`A judicial declaration of non-infringement is necessary to establish DXG’s right to
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`import, sell, and offer for sale its cameras and/or camcorders free of any claim of infringement.
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`COUNT II — Declaratog Judgment of Invalidity
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`11.
`
`Defendant DXG incorporates and realleges paragraphs 1-7 of these counterclaims.
`
`12.
`
`Upon information and belief, the claims of the ‘O81 patent are invalid under 35 U.S.C. §§
`
`101,102,103, and/or 112.
`
`13.
`
`A judicial declaration of invalidity is necessary to establish DXG’s right to import, sell,
`
`and offer for sale its cameras and/or camcorders free of any claim of infringement.
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`PRAYER FOR RELIEF
`
`WHEREFORE, Defendant DXG respectfully requests that the Court award the following
`
`relief:
`
`1.
`
`Enter judgment in favor of DXG and against Plaintiff on all claims in the First Amended
`
`Complaint;
`
`2.
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`3.
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`4.
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`Declare that DXG has not infringed the ‘081 patent or any valid asserted claim therein;
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`Declare that the ‘O81 patent, or some or all of the claims therein, is invalid;
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`Enj oin Plaintiff, its assigns, and all those in privity therewith from asserting the ‘O81
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`patent against DXG or any of its customers or suppliers;
`
`5.
`
`Find this case an exceptional case and award DXG attorneys’ fees and costs (including
`
`expert fees) under 35 U.S.C. § 285; and
`
`6.
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`Grant such other and further relief as the Court deems just and proper.
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`{00584613;vl}
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`Case 1:11-cv-00797-RGA Document 83
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`DEMAND FOR JURY TRIAL
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`Defendant DXG demands a trial by jury of any and all issues triable as of right by a jury
`
`in this action.
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`ASHBY & GEDDES
`
`/s/ Tzflany Geyer Lydon
`
`John G. Day (#2403)
`Tiffany Geyer Lydon (#3950)
`Andrew C. Mayo (#5207)
`500 Delaware Avenue, 8th Floor
`P.O. Box 1 150
`
`Wilmington, DE 19899
`(302) 654-1888
`jday@ashby-geddes.com
`tlydon@ashby-geddes.com
`amayo@ashby—geddes.com
`
`Attorneys for DXG Technology (U. S.A.) Inc.
`
`Of Counsel:
`
`Brian E. Mitchell
`
`Jigang Jin
`Mitchell + Company, Law Offices
`4 Embarcadero Center, Suite 1400
`San Francisco, CA 94111
`(415) 766-3514
`brian.mitchell@mcolawoffices.com
`jigang.jin@mcolawoffices.com
`
`Dated: December 19, 2011
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`{005846l3;v1}
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