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`Robert F. Gazdzinski (Bar No. 182090)
`rob@gazpat.com
`Derek L. Midkiff (Bar No. 299594)
`derek.midkiff@gazpat.com
`GAZDZINSKI & ASSOCIATES, PC
`16644 West Bernardo Drive, Suite 201
`San Diego, CA 92127
`Telephone: (858) 675-1670
`Facsimile: (858) 675-1674
`Attorneys for Plaintiff
`PULSE ELECTRONICS, INC.
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`PULSE ELECTRONICS, INC., a
`Delaware corporation.
`Plaintiff,
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`v.
`U.D. Electronic Corp., a Taiwan
`corporation,
`
`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF CALIFORNIA
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`CASE NO. ________________
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`COMPLAINT FOR PATENT
`INFRINGEMENT
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`JURY TRIAL DEMANDED
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`Defendants.
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`'20
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`CV1676
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`AHG
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`AJB
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`Case 3:20-cv-01676-BEN-DEB Document 1 Filed 08/27/20 PageID.2 Page 2 of 32
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`This is an action for patent infringement in which Plaintiff Pulse Electronics,
`Inc. (“Pulse” or “Plaintiff”) makes the following allegations against Defendant U.D.
`Electronic Corp. (“UDE” or “Defendant”) as follows:
`THE PARTIES
`1.
`Pulse is a corporation organized and existing under the laws of the
`state of Delaware and maintains its principal place of business at 15255 Innovation
`Drive, Suite #100, San Diego, California, 92128.
`2.
`On information and belief, UDE is a corporation organized and
`existing under the laws of Taiwan and maintains its principal place of business at
`No. 13, Ln. 68, Neixi Rd., Luzhu Dist. Taoyuan City 33852, Taiwan.
`3.
`On information and belief, UDE maintains an office at 2430 Camino
`Ramon, Suite 355 San Ramon, CA 94583-4212.
`4.
`On information and belief, UDE does not have any affiliates or
`subsidiary companies within the United States.
`JURISDICTION AND VENUE
`5.
`This action arises under the patent laws of the United States, 35 U.S.C.
`§§ 1, et seq., including §§ 271 and 281.
`6.
`This Court has original and exclusive subject matter jurisdiction over
`the matters pleaded herein pursuant to 28 U.S.C. §§1331 and 1338(a).
`7.
`On information and belief, this Court has personal jurisdiction over
`Defendant because Defendant has purposely directed contacts with and within
`California and this judicial district, purposely avails itself of the privilege of
`conducting activities within California and this judicial district, has continuous and
`systematic contacts with and within California and this judicial district, transacts
`substantial business, including generally and specifically in relation to the causes of
`action and acts of infringement alleged herein, either directly or through agents, on
`an ongoing basis in California and this judicial district.
`8.
`On information and belief, Defendant sells its products directly into
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`COMPLAINT FOR PATENT INFRINGEMENT
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`the United States and this judicial district directly and/or through one or more
`distributors or other channels.
`9.
`Venue is proper in this judicial district pursuant to 28 U.S.C. §§
`1400(b) and 1391.
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`Case 3:20-cv-01676-BEN-DEB Document 1 Filed 08/27/20 PageID.3 Page 3 of 32
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`BACKGROUND
`10. Founded in 1947, and present within San Diego County for at least 50
`years, Pulse
`is a worldwide
`leader
`in electronic component design and
`manufacturing, including in the design and manufacture of RJ-45 Integrated
`Connector Modules (“ICM”). Pulse’s engineering design centers and manufacturing
`facilities supply products to a broad international customer base.
`11. An RJ-45 ICM is an electrical connector commonly used for Ethernet
`networking. It looks generally similar to a telephone jack, and may be embodied as
`either a single port (receptacle) or multi-port device. For example:
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`12. As a testament to Pulse’s innovation, it has been issued more than 100
`United States and international patents dealing generally with RJ-45 ICM
`technology.
`13. Upon information and belief, Defendant (founded in 2005) is a
`manufacturer and supplier data communications equipment, including RJ-45 ICMs.
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`THE ‘302 PATENT
`14. Pulse owns all right, title, and interest in U.S. Patent No. 6,773,302
`(the “’302 Patent”).
`15. The ’302 Patent, entitled “Advanced Microelectronic Connector
`Assembly and Method of Manufacturing” was duly and legally issued by the
`United States Patent and Trademark Office on August 10, 2004 after a full and fair
`examination. A copy of the ’302 Patent is attached hereto as Exhibit A.
`16. The ’302 Patent was first asserted against UDE on February 16, 2018
`in Case No. 3:18-CV-00373 (the “00373 case”) in the Southern District of
`California with three other patents (U.S. Patent No. 7,959,473, U.S. Patent No.
`9,178,318, and U.S. Patent No. 6,593,840). UDE filed inter partes reviews against
`all four patents in the previous suit, and the case was stayed. Of the four patents in
`the previous suit, only the ’302 was granted institution in IPR2019-00511, and the
`Court lifted the stay and set a “Status Conference regarding Dismissal ‘without
`prejudice’ of the ’302 Patent” on November 22, 2019. Case No. 3:18-CV-00373 at
`Dkt. 52. UDE and Pulse filed a Joint Stipulation to Dismiss the ’302 Patent on
`February 12, 2020, and the Court Ordered the dismissal of the ’302 Patent “without
`prejudice” on February 18, 2020. Case No. 3:18-CV-00373 at Dkts. 68 & 72.
`17. The Patent Trial and Appeal Board (the “PTAB”) issued a Final
`Written Decision in IPR2019-00511 on July 22, 2020, which cancelled all original
`claims of the ’302 Patent and granted substitute claims 18, 19, 22, and 23. A copy
`of the PTAB’s Final Written Decision of the ’302 Patent is attached hereto as
`Exhibit B.
`18. The Final Written Decision in IPR2019-00511 is currently being
`appealed by both parties at the United States Court of Appeal for the Federal
`Circuit (the “CAFC”) with Lead Case No. 2020-02129 and Cross-Appeal Case No.
`2020-2177. Given the statistics at the CAFC and in the interests of justice, this
`lawsuit should not be stayed during the pendency of the appeal.
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`19. The ’302 Patent is valid and enforceable.
`20. Pulse is in compliance with the marking requirements under 35 U.S.C.
`§ 287 for the ’302 Patent.
`UDE’S INFRINGING ACTIVITY
`21. On information and belief, Defendant makes, uses, offers to sell, sells
`and/or imports into the United States products that infringe the ’302 Patent,
`including, but not limited to, the following: (i) 1G multi-port ICM products,
`including, but not limited to, M1, M4, M6, MC, N1, N6, N8, RM, and RN series
`1G devices; (ii) “Multi-Gigabyte” (e.g., 2.5G/5G) single-port and multi-port ICM
`products, including, but not limited to, GM2, GM4, and GM6 series 2.5G devices
`(collectively, the “Accused Products”).
`22.
`In addition to Defendant’s making, using, offering to sell, selling,
`and/or importing into the United States the Accused Products, upon information
`and belief, the Accused Products underwent an extensive sales cycle that involved
`Defendant’s substantial U.S.-based use of the Accused Devices, including (a)
`providing samples and/or prototypes of the Accused Products to potential
`customers for evaluation, (b) securing “design wins” with potential customers
`resulting in orders of large volumes of sales of the Accused Products (and
`associated revenue and profit), and (c) negotiating and entering into sales contracts
`involving the Accused Products. But for this U.S.-based infringing activity by
`Defendant, such design wins would not have been achieved, and Defendant would
`not have benefited from the resulting sales and associated revenue and profit.
`23.
` On February 19, 2016, the Global Marketing Director of UDE, Greg
`Loudermilk, sent an email to Pulse stating UDE “hired Sunky [Shang] away from
`Pulse” and that “Sunky is extremely instrumental in the activities within the
`factory.” A copy of this email is attached hereto as Exhibit L.
`24.
` On February 24, 2016, the Global Marketing Director of UDE, Greg
`Loudermilk, sent an email to Pulse stating, inter alia: “UDE has no problem to
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`either INK Marking or Stamping Pulse name & P/N on the shielding per Pulse
`requirement”; “we can share design”; “Jointly working together to develop products
`or shared license to approach customers as dual source”; “My idea is work closely
`with Pulse to find the design problems for the 10Vrms requirement that UDE EE
`has not been able to solve.”; “UDE and Pulse(have licensed this product together)”;
`“moving together on future technology”; and “means for both parties to gain
`adequate market share together where it makes sense.” A copy of this email is
`attached hereto as Exhibit L.
`25. On October 14, 2016, Pulse sent a letter to Mr. Gary Chen, Chairman
`and CEO of UDE, putting UDE on notice that its ICM products infringe one or
`more claims of a number of U.S. patents, including the ’302 patent asserted in this
`litigation. Pulse demanded that UDE immediately cease and desist all infringement
`activity. A copy of this letter is attached hereto as Exhibit E.
`26. On October 27, 2016, UDE provided a one-page response which stated
`that it does not infringe the patents referenced in Pulse’s October 14 letter because
`UDE “verified that all the connectors [UDE] produced are based on the structure
`developed with related patents applied by UDE.” Further, UDE suggested that
`Pulse’s patents were invalid in light of the following prior art: “China Patent No.
`02234347.4 publication date Jul.30, 2003, US patent No. 2003/002553 A1
`Publication date: Jan.30, 2003, and US Patent No. 6,659,807 and etc.” A copy of
`this letter is attached hereto as Exhibit F.
`27. On February 3, 2017, Pulse sent another letter to UDE indicating that,
`based on UDE’s October 27, 2016 correspondence, Pulse conducted an additional
`investigation into UDE’s ICM product line. Pulse identified patents that it believed
`were infringed by UDE – including the ’302 patent. Further, Pulse attached detailed
`claim charts illustrating the applicability of selected claims of the referenced patents
`to a selection of UDE’s products. A copy of this letter is attached hereto as
`Exhibit G.
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`28. Additionally, in the February 3, 2017 letter, Pulse explained to UDE
`that the non-infringement and invalidity arguments it made in its October 27, 2016
`letter demonstrate a fundamental misunderstanding and/or misinterpretation of U.S.
`patent law. In particular, Pulse states that “the filing or existence of a patent
`application (or patent stemming therefrom) provides no right for UDE to make, use,
`sell, or have made its products within the U.S.; at best, it merely provides UDE
`with the ability to exclude others from such activity….” (Emphasis in original.)
`Further, Pulse explained that UDE’s claim that it “doesn’t infringe one or more
`claims” of Pulse’s patents is not exculpatory because “only one valid claim of a
`patent need be infringed for liability to exist”. (Emphasis in original.) Also, Pulse
`points out that the alleged prior art cited by UDE in its October 27, 2016 letter is “at
`best cumulative to that already cited in the relevant file histories) and states that the
`new patents identified in Pulse’s February 3, 2017 letter are highly distinguishable
`over the prior art cited by UDE.
`29. On March 6, 2017, UDE responded to Pulse’s March 4, 2017 letter
`stating the ’302 Patent is invalid and provided annotations to Pulse’s March 4, 2017
`claim charts in an effort to support its position. A copy of this letter is attached
`hereto as Exhibit H.
`30. On April 7, 2017, Pulse’s outside counsel sent a letter to UDE to
`address UDE’s perplexing failure to address the substantive issues identified in
`Pulse’s March 4, 2017 letter. In particular, Pulse’s counsel stated that, (1) UDE’s
`analysis of only a small percentage of the Pulse claims is not exculpatory of UDE’s
`behavior; (2) UDE makes no assertions regarding non-infringement of the
`identified Pulse patents; and (3) UDE’s response is confusing because it conflates
`public use, prior art, and non-infringement. Further, Pulse’s outside counsel pointed
`out that a number of the “prior art” references relied upon by UDE are not “prior
`art” because the references post-date the critical date of the patents. A copy of this
`letter is attached hereto as Exhibit I.
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`31. On April 25, 2017, UDE responded to Pulse’s outside counsel in a
`further, unavailing attempt to excuse its infringing activity. A copy of this letter is
`attached hereto as Exhibit J.
`32. UDE’s legally deficient and ill-reasoned responses to Pulse’s cease
`and desist letters and claim charts evidenced that it was not interested in addressing
`Pulse’s concerns of patent infringement, and had no intent of ceasing its
`infringement of the ’302 Patent. Accordingly, Pulse was left with no choice but to
`initiate the instant legal action.
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`COUNT 1
`INFRINGEMENT OF THE ’302 PATENT
`33. Pulse incorporates paragraphs 1 through 32 by reference as if fully
`stated herein.
`34. Defendant has directly infringed, and continues to directly infringe,
`either literally and/or under the doctrine of equivalents, in violation of 35 U.S.C.
`§ 271(a), by making, using, offering to sell, selling, and/or importing into the
`United States, without authority, Accused Products that infringe at least claims 18,
`19, 22 and 23 of the ’302 Patent.
`35. By way of example, Defendant’s 2x4 1G ICM Model Product Number
`MC-18322RUH4-1H as found in third party devices such as the Aruba 2530 8G
`Switch (Product No. J977A) directly infringe, literally and/or under the doctrine of
`equivalents, Claim 19 of the ’302 Patent.
`36. Pictures of the packaging from the Aruba 2530 8G Switch (Product
`No. J977A) purchased in the United States in August of 2020 are shown below.
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`37. Defendant’s 2x4 1G ICM is shown below as incorporated in the Aruba
`2530 8G Switch:
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`39. Defendant’s 1G ICM products (such as UDE’s Model Product Number
`MC-18322RUH4-1H) appear, from the front of the housing, as shown below:
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`40.
`Independent Claim 19 of the ’302 Patent is directed to “[a] multi-port
`connector assembly comprising: a connector housing comprising a plurality of
`connectors each having: a recess adapted to receive at least a portion of a modular
`plug, said modular plug having a plurality of terminals disposed thereon….” These
`claimed features are present in Defendant’s 2x4 1G ICM as follows:
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`38. Defendant’s 2x4 1G ICM is shown with the cover of the Aruba 2530
`8G Switch removed:
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`41. Claim 19 of the ’302 Patent further requires “at least one substrate
`having at least one electrically conductive pathway associated therewith….” These
`claimed features are present in Defendant’s 2x4 1G ICM as follows:
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`42. Claim 19 of the ’302 Patent further requires “said at least one substrate
`being disposed in substantially vertical orientation and substantially orthogonal
` COMPLAINT FOR PATENT INFRINGEMENT
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`orientation with respect to a front face of said housing….” These claimed features
`are present in Defendant’s 2x4 1G ICM as follows:
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`Case 3:20-cv-01676-BEN-DEB Document 1 Filed 08/27/20 PageID.13 Page 13 of 32
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`43. Claim 19 of the ’302 Patent further requires “a cavity adapted to
`receive at least a portion of said at least one substrate….” These claimed features
`are present in Defendant’s 2x4 1G ICM as follows:
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`Case 3:20-cv-01676-BEN-DEB Document 1 Filed 08/27/20 PageID.14 Page 14 of 32
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`44. Claim 19 of the ’302 Patent further requires “a plurality of first
`conductors disposed at least partly within said recess, said first conductors being
`configured to form an electrical contact with respective ones of said terminals when
`said modular plug is received within said recess, and form an electrical pathway
`between said first conductors and said at least one substrate….” These claimed
`features are present in Defendant’s 2x4 1G ICM as follows:
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`Case 3:20-cv-01676-BEN-DEB Document 1 Filed 08/27/20 PageID.15 Page 15 of 32
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`45. Claim 19 of the ’302 Patent further requires “a plurality of second
`conductors, at
`least one of said second conductors being
`in electrical
`communication with said at least one electrically conductive pathway of said at
`least one substrate….” These claimed features are present in Defendant’s 2x4 1G
`ICM as follows:
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`46. Claim 19 of the ’302 Patent further requires “wherein at least two of
`said connectors are disposed in a port pair, said first conductors of a first connector
`in said port pair being routed over at least a portion of their length to a
`corresponding one of said at least one substrate in a direction having an angular
`relationship to the corresponding portion of said first conductors associated with a
`second connector in said port pair” These claimed features are present in
`Defendant’s 2x4 1G ICM as follows:
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`Case 3:20-cv-01676-BEN-DEB Document 1 Filed 08/27/20 PageID.16 Page 16 of 32
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`47. Claim 19 of the ’302 Patent further requires “wherein said at least one
`substrate of said first connector is disposed adjacent to and parallel with a first
`sidewall of the connector housing, and the at least one substrate of the second
`connector is disposed adjacent to and parallel with a second sidewall of the
`connector housing, such that a space is created between the at least one substrate of
`the first connector and the at least one substrate of the second connector. These
`claimed features are present in Defendant’s 2x4 1G ICM as follows:
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`48.
` Claim 19 of the ’302 Patent further requires that “the space sufficient
`to contain: (i) a first plurality of signal conditioning electronic components
`mounted on said at least one substrate of the first connector, and (ii) a second
`plurality of signal conditioning electronic components mounted on said at least one
`substrate of the second connector.” These claimed features are present in
`Defendant’s 2x4 1G ICM as follows:
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`Case 3:20-cv-01676-BEN-DEB Document 1 Filed 08/27/20 PageID.17 Page 17 of 32
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`49. For at least the reasons stated in the preceding paragraphs, the Accused
`Products fall within the scope of at least independent Claim 19 of the ’302 Patent.
`50. Pulse has been irreparably harmed by Defendants’ acts of infringement
`of the ’302 Patent and will continue to be harmed unless Defendant’s further acts of
`infringement are enjoined by order of this Court.
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`Case 3:20-cv-01676-BEN-DEB Document 1 Filed 08/27/20 PageID.18 Page 18 of 32
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`51. Defendant UDE has and continues to induce infringement of one or
`more claims of the ’302 patent under 35 U.S.C § 271(b) by actively inducing
`related entities, retailers, and/or customers to make, use, sell, offer to sell, and/or
`import, products covered by one or more claims of the ’302 patent.
`52. For example, UDE actively induced (and continues to actively induce
`to the present) its customers with the knowledge and specific intent to encourage its
`customers to infringe the ’302 Patent by, inter alia: providing ICM components and
`ICM products to its customers and other third parties and intending them to make,
`use, sell and/or import ICM products in the United States that infringe the ’302
`Patent. Customers and third parties induced by UDE and included in a UDE
`presentation attached hereto as Exhibit M, include, inter alia: HP Inc., Dell
`Technologies Inc., Acer Inc., Lenovo Group Limited, AsusTek Computer Inc.,
`Gigabyte Technology, Elitegroup Computer Systems Co., Ltd., Micro-Star
`International Co., Ltd, Foxconn Technology Group, Juniper Networks, Inc., Arris
`International Limited, Accton Technology Corporation, ZTE Corporation, Pace,
`Cisco Systems, Inc., Samsung, EchoStar Corporation, Technicolor, International
`Business Machines Corporation, Quanta Computer
`Incorporated, Wistron
`Corporation, LG, Sony, Panasonic, Canon, Lexmark, and Epson. Other companies
`induced are included in an email attached hereto as Exhibit L from UDE’s Global
`Marketing Director, Greg Loudermilk. Specifically, the companies include:
`“Aruba-HPE”; “Arista”; “Arris/Pace”; “Brocade”; “Dell”; “Extreme Net”; “HPE”;
`“HP”; “Fortinet”; “F5”; “Oracle”; “NetApp”; and “Siemens.” Additionally, UDE
`stated the United States presence and/or domestic activity for many of the
`customers, including: “Sunnyvale”; “Santa Clara”; “TX, NH, MN”; “NH & NC”;
`“Roseville”; “Boise”; “San Diego”; “Washington”; and “CA.” See Exhibit L.
`53. Some ICM products were manufactured and sold abroad but were
`ultimately imported by UDE’s customers into the United States. Further, Mr. Sunky
`Shang was previously a mechanical design engineer for ICM products at Pulse in
` COMPLAINT FOR PATENT INFRINGEMENT
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`Case 3:20-cv-01676-BEN-DEB Document 1 Filed 08/27/20 PageID.19 Page 19 of 32
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`Pulse’s design center in Zhuhai. Mr. Sunky Shang was hired away from Pulse by
`UDE “to do what it takes, or guide any factory team member towards the direction I
`[Greg Loudermilk] require for my Global Market position.” Exhibit L.
`54. As explained above, UDE has had actual knowledge of the ’302 patent
`prior to this Complaint and at least as of the date of the Original Complaint in Case
`No. 3:18-CV-00373 filed on February 16, 2018. UDE was notified that its ICM
`products infringe the ’302 patent no later than October 14, 2016, and UDE provided
`further detail in the form of claim charts demonstrating that UDE infringes the ’302
`patent on February 3, 2017. Despite having actual knowledge of infringement, UDE
`has continued to induce infringement of one or more claims of the ’302 patent.
`55. UDE offers its infringing ICMs both to UDE end-customers within the
`U.S. and device manufacturers (e.g., “ECMs” or Electronic Component
`Manufacturers and Electronics Manufacturing Services “EMS” companies) acting
`on behalf of UDE’s end-customers, with the objective of promoting its ICMs to
`infringe the ’302 Patent, as shown by UDE’s affirmative steps taken to foster
`infringement via at least sale, importation, and use within the U.S. Specifically and
`without limitation: (i) UDE took and continues to undertake affirmative acts to
`induce third parties to import its products into the United States; (ii) UDE designed
`and continues to design its ICMs to meet certain standards applicable within,
`among other countries, the United States; (iii) UDE competed for and continues to
`compete for, business it knew was directed to and would involve infringing
`activities under the laws of the United States, including through UDE’s U.S. sales
`representative Mr. Greg Loudermilk; (iv) UDE worked directly and continues to
`work directly with its customers in the United States to test its ICMs; (v) UDE’s
`website has enabled and continues to enable customers to locate one or more United
`States-based distributors that sold and sell UDE’s infringing ICMs.; and (vi) UDE
`has attempted to purchase a direct U.S.-based competitor (Pulse) which it knows
`services large ICM accounts within the U.S.
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`56. In the 00373 case, Pulse subpoenaed EMS companies that UDE uses (as
`confirmed by production from customers that Pulse subpoenaed earlier this year).
`Request 5 of the subpoenas state: “Documents regarding the shipment of products
`that include 2xN UDE ICMs to locations within the United States from January
`2012 through May 2020.” On July 8, 2020, Pulse counsel spoke with the in-house
`counsel of one EMS company regarding Request 5 and the EMS company
`confirmed this information is within the custody and control of the EMS company.
`The EMS company further confirmed that they would be providing this information
`in compliance with the subpoena.
`57. UDE has desired to make use of Pulse’s patented ICM technology for
`its own purposes since at least January of 2015, when UDE’s Mr. Greg Loudermilk
`expressed interest in purchasing Pulse in an email to Pulse’s then CEO, Mark
`Twaalfhoven. See Exhibit C (“Is Pulse open for sale the ICM or all of Pulse?”). In
`February of 2016, UDE’s Mr. Greg Loudermilk emailed Pulse’s CEO Mark
`Twaalfhoven again to explain that “UDE is taking more footprint from our
`competitors” including “10% from Pulse” annually over the past three years in the
`North American Market. See Exhibit D {emphasis added}. UDE has actively
`induced UDE’s customers (many of which are also Pulse’s customers) with
`knowledge of the ’302 Patent, and the specific intent that UDE’s customer’s
`directly infringe by selling end-user products with UDE ICMs therein (such as
`Multi-gigabit Ethernet switches) within the U.S.
`58. Exhibit L is an email from UDE to Pulse showing specific intent to
`design and sell UDE ICM products in the United States. Mr. Greg Loudermilk, a
`UDE U.S. salesperson, states “UDE works closely…for the design in the US” and
`states sales in the tens of millions of dollars. See Exhibit L {emphasis added}. UDE
`by its own admission specifically designs its ICM products for the United States.
`See Exhibit L at Page 4 (“for the design in US”). Moreover, UDE claims to be
`“World No. 2 in ICM revenues” with approximately $150,000,000 USD in ICM
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`sales for 2016. See Exhibit M at Page 4. UDE sells about one hundred and fifty
`million dollars annually in ICMs alone – with substantial distribution of UDE’s
`infringing ICM products into the world’s largest economy (the U.S.) through
`indirect infringement. Moreover, UDE’s customers that are required to report to the
`SEC disclose a substantial amount of net revenue within the United States. See,
`e.g.,
`2019 Cisco FORM
`10-K
`accessed
`on
`July
`15,
`2020
`at
`http://d18rn0p25nwr6d.cloudfront.net/CIK-0000858877/d482eb08-abf3-42c0-b2ae-
`553eb8e2af37.pdf (showing $22.7 billion, or more than half Cisco’s product
`revenue is from the Americas); 2019 Juniper FORM 10-K accessed on July 15,
`2020 at http://d18rn0p25nwr6d.cloudfront.net/CIK-0001043604/aa36dfa9-56f2-
`4614-96cf-dc43b0333250.pdf