Case 4:18-cv-00469-ALM Document 76 Filed 08/20/19 Page 1 of 32 PageID #: 2253
`
`UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`SHERMAN DIVISION
`
`Civil Action No.: 4:18-cv-469
`
`JURY TRIAL DEMANDED
`
`
`
`
`
`WAPP TECH LIMITED
`PARTNERSHIP and
`WAPP TECH CORP.,
`
`
`
`Plaintiffs,
`v.
`
`SEATTLE SPINCO INC., ENTIT
`SOFTWARE LLC, ENTCO
`INTERACTIVE (ISRAEL) LTD,
`ENTCO GOVERNMENT
`SOFTWARE LLC, and MICRO
`FOCUS (US) INC.,
`
`
`
`
`
`Defendants.
`
`
`
`
`
`
`PLAINTIFFS’ SECOND AMENDED COMPLAINT
`
`Plaintiffs Wapp Tech Limited Partnership and Wapp Tech Corp. (“Plaintiffs”) file this
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`Complaint against Defendants, Seattle SpinCo Inc., EntIT Software LLC, EntCo Interactive
`
`(Israel) Ltd, Entco Government Software LLC, and Micro Focus (US) Inc. (collectively
`
`“Defendants” or “Micro Focus”) seeking damages and other relief for patent infringement, and
`
`allege with knowledge of their own acts, and on information and belief as to all other matters, as
`
`follows:
`
`NATURE OF THE ACTION
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`1.
`
`This is an action for patent infringement arising under the Patent Laws of the United
`
`States, 35 U.S.C. §§ 1, et seq.
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`

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`Case 4:18-cv-00469-ALM Document 76 Filed 08/20/19 Page 2 of 32 PageID #: 2254
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`2.
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`Plaintiffs seek damages and prejudgment and post-judgment interest for
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`Defendants’ infringement of the Patents-in-Suit, as defined below.
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`3.
`
`The Patents-in-Suit and their underlying patent applications have been cited by over
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`30 issued United States patents and published patent applications.
`
`PARTIES
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`4.
`
`Plaintiff Wapp Tech Limited Partnership is a Delaware limited partnership
`
`organized and existing under the laws of the State of Delaware, and its registered agent for service
`
`of process in Delaware is Corporations & Companies, Inc. (CorpCo), 910 Foulk Road, Suite 201
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`Wilmington, Delaware 19803.
`
`5.
`
`Plaintiff Wapp Tech Corp. (“WTC”) is a body corporate organized and existing
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`under the laws of the Province of Alberta, Canada, and its registered agent for service of process
`
`in Delaware is Corporations & Companies, Inc. (CorpCo), 910 Foulk Road, Suite 201 Wilmington,
`
`Delaware 19803.
`
`6.
`
`Defendant Seattle SpinCo, Inc. (“Seattle SpinCo”) is a Delaware corporation with
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`its principal place of business at 1209 Orange St., Wilmington New Castle, DE 19801. Seattle
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`SpinCo is a direct wholly-owned sub of Seattle Holdings, Inc.
`
`7.
`
`Defendant EntIT Software LLC is a Delaware corporation with its principal place
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`of business at 1209 Orange St., Wilmington New Castle, DE 19801. EntIT Software LLC is a
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`direct wholly-owned subsidiary of Seattle SpinCo and has approximately 298 employees located
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`in Texas with 137 employees in Plano, Texas.
`
`8.
`
`Defendant EntCo Interactive (Israel) Ltd is incorporated in Israel and, on
`
`information and belief, has offices at Rehov Avraham Atalef 5, 5621600 Yahud Monoson, Israel.
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`
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`2
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`9.
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`Defendant Entco Government Software LLC is a Delaware corporation with its
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`principal place of business at 1209 Orange St., Wilmington New Castle, DE 19801. Entco
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`Government Software LLC is a direct subsidiary of Seattle SpinCo and has about 13 employees
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`located in Texas with 4 employees in Plano, Texas.
`
`10.
`
`Defendant Micro Focus (US) Inc. is a Delaware corporation with its principal place
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`of business at One Irvington Center, 700 King Farm Boulevard, Suite 400, Rockville, Maryland
`
`20850. Micro Focus (US) Inc. has about 34 employees located in Texas with 12 employees in
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`Plano, Texas.
`
`11.
`
`On information and belief, an agreement dated September 7, 2016, was entered into
`
`by Hewlett Packard Enterprise Company (“HPE”), Micro Focus International plc (“Micro Focus
`
`Int’l”), Seattle SpinCo, Seattle Holdings, Inc., and Seattle MergerSub, Inc. (“Agreement and Plan
`
`of Merger”). As part of that agreement, effective September 1, 2017, Seattle Mergersub, Inc.
`
`merged with and into Seattle SpinCo with Seattle SpinCo surviving as a direct, wholly owned
`
`subsidiary of Seattle Holdings, Inc. (and as an indirect, wholly owned subsidiary of Micro Focus
`
`Int’l). Upon completion of the September 1 merger, HPE shareholders owned 50.1% of the
`
`surviving entity, Seattle SpinCo.
`
`12.
`
`On information and belief, a series of transactions—defined at least in part by the
`
`Agreement and Plan of Merger dated Sept. 7, 2016 and/or the Separation and Distribution
`
`Agreement dated Sept. 7, 2016—resulted in a merger between Seattle SpinCo and Micro Focus
`
`Int’l, as well as Micro Focus Int’l’s acquisition of various software products, including
`
`LoadRunner, StormRunner, Performance Center, and Mobile Center Software.
`
`13.
`
`Defendants conduct business in Texas, directly or through intermediaries, and offer
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`products or services, including those accused herein of infringement (e.g., LoadRunner,
`
`
`
`3
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`Case 4:18-cv-00469-ALM Document 76 Filed 08/20/19 Page 4 of 32 PageID #: 2256
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`StormRunner, Performance Center, and Mobile Center Software), to customers, and potential
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`customers located in Texas, including in the Eastern District of Texas.
`
`
`
`JURISDICTION AND VENUE
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`14.
`
`On information and belief, Defendants are registered to do business in the State of
`
`Texas.
`
`15.
`
`On information and belief, Defendants conduct business operations throughout the
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`State of Texas, and within the Eastern District of Texas in facilities in Plano, Texas.
`
`16.
`
`This Court has subject matter jurisdiction over this action pursuant to 28 U.S.C. §§
`
`1331 and 1338(a). Venue is proper under 28 U.S.C. §§ 1391(a) & (c), and 1400(b).
`
`INTRODUCTION
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`17.
`
`The inspiration for the pioneering patented innovations described herein originates
`
`from Plaintiffs’ application development work associated with the 2006 FIFA World Cup
`
`sponsored by Adobe and Nokia. The FIFA World Cup is the largest single-event sporting
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`competition in the world with fans simultaneously accessing the World Cup app from millions of
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`mobile devices around the globe. Through its development work associated with this international
`
`sporting event, the principal inventor of the Patents-in-Suit developed and created its patented
`
`performance engineering platform. Application performance engineering enables software design
`
`and testing before it is published to a consumer by simulating real-world conditions for app
`
`developers while in the development phase, including device and network virtualization, virtual
`
`user modeling and the ability to virtually perform stress and load tests based on modeling human
`
`interaction (hereafter “Performance Engineering Innovations”).
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`4
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`18.
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`Licensed products incorporating the Performance Engineering Innovations have
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`won numerous industry awards for mobile application development, including multiple JOLT
`
`Awards and other industry leading awards for market breakout products.
`
`19.
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`Patents related to the Performance Engineering Innovations have been licensed by
`
`a Fortune 500 leader in enterprise software in a multi-million dollar license.
`
`20.
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`In addition, patents in the Plaintiffs’ Patent Portfolio, defined below, have been
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`cited against a number of industry-leading companies as prior art by the United States Patent and
`
`Trademark Office (hereafter “USPTO”) and WIPO. These companies include:
`
` Hewlett-Packard
` Apple
` Samsung
` Microsoft
` Google
` Vodafone
`
`Intuit
` Avaya
`
`Intel
` Amazon
` HTC
` Nextbit Systems
` CA
` Facebook
` Barco
` Razor
` Adobe
`
`
`
`MICRO FOCUS & HPE
`
`21.
`
`Certain software products of Defendants are alleged herein to infringe the Patents-
`
`in-Suit.
`
`22.
`
`On information and belief, HPE and Seattle SpinCo entered into a Separation and
`
`Distribution Agreement on September 7, 2016. Per this agreement, Seattle SpinCo acquired certain
`
`
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`5
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`software business segments that had been owned by HPE, including HPE’s software business
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`segment responsible for the Accused Products.
`
`23.
`
`On information and belief, as part of the Separation and Distribution Agreement of
`
`September 7, 2016, Seattle SpinCo separated from HPE such that it was no longer an HPE
`
`subsidiary and no longer had any affiliation with HPE.
`
`24.
`
`On information and belief, Seattle SpinCo subsequently entered into a separate
`
`“Agreement and Plan of Merger” dated September 7, 2016 with Micro Focus International plc. As
`
`a result of this Agreement and Plan of Merger, Seattle SpinCo survived the merger as a wholly
`
`owned subsidiary of Micro Focus International plc.
`
`25.
`
`On information and belief, EntIT Software is one such subsidiary of Seattle SpinCo.
`
`EntIT Software develops, markets, and sells software products including a line of business that
`
`Micro Focus refers to as Application Delivery.
`
`26.
`
`On information and belief, following the conclusion of all of the above-discussed
`
`individual mergers and separations (collectively, the “spin-out merger”), the term “Micro Focus”
`
`replaced the term “HPE” in the names of various software products. For example, HPE
`
`LoadRunner became Micro Focus LoadRunner, HPE Performance Center became Micro Focus
`
`Performance Center, etc.
`
`27.
`
`On information and belief, HPE had actual notice of Plaintiffs’ Patent Portfolio and
`
`continued to offer, use and sell the Mobile Product Offerings despite an objectively high likelihood
`
`that its actions constituted infringement of Plaintiffs’ patent rights.
`
`28.
`
`On information and belief, functionality of relevant software products remained
`
`consistent following the spin-out merger. Consequently, where HPE documentation is cited
`
`
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`6
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`Case 4:18-cv-00469-ALM Document 76 Filed 08/20/19 Page 7 of 32 PageID #: 2259
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`below, it is to be understood that, on information and belief, the referenced functionality also exists
`
`in the corresponding Micro Focus software products.
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`TECHNOLOGY BACKGROUND
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`NETWORK VIRTUALIZATION
`
`29.
`
`On information and belief, to simulate mobile networks from any geographic
`
`location worldwide for mobile application testing (hereafter “Network Virtualization”),
`
`Defendants enable performance engineers “to virtualize real-world network conditions, analyze
`
`test results to detect and remediate performance bottlenecks before deployment and gain custom
`
`performance optimization recommendations.”1 Regarding predecessor versions of Defendants’
`
`software product(s), HPE stated that “integrating [Network Virtualization] with your continuous
`
`integration testing process takes your automated CI [continuous integration] tests way beyond
`
`traditional functional testing and load testing, delivering to your developers timely actionable
`
`analytics and optimization recommendations.”2 Additionally, HPE stated that “[Network
`
`Virtualization] is a vital tool for performance engineers…[and] is fully integrated with HPE
`
`LoadRunner, HPE Performance Center and HPE StormRunner Load…[and] HPE Mobile
`
`Center.”3
`
`NETWORK PROFILES
`
`30.
`
`On information and belief, as part of a Micro Focus Software Suite, Defendants
`
`provide a library of real-world mobile and broadband network conditions (hereafter “Network
`
`Profiles”), enabling its customers to have access to a library of real-world data points of point-to-
`
`point network conditions recorded around the world. Defendants “provides a library of real-world
`
`
`1 https://www.youtube.com/watch?v=lUznCBjocYw (accessed June 25, 2018).
`2 Id.
`3 Id.
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`7
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`Case 4:18-cv-00469-ALM Document 76 Filed 08/20/19 Page 8 of 32 PageID #: 2260
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`mobile and broadband network conditions.”4 Further, “Network Virtualization for Mobile allows
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`tests to be managed and results analyzed from any laptop or Wi-Fi-connected mobile device. The
`
`software can import real-world mobile network profiles captured by Micro Focus Network Capture
`
`or provided by the Micro Focus Network Virtualization Library of mobile and broadband network
`
`conditions.”5 Network Profiles and cloud-enabled technology has been described as bridging “the
`
`gap between development and deployment by enabling your mobile application development team
`
`to fully and accurately assess the behavior and impact of the network on mobile apps before they
`
`are introduced to end users. By virtualizing real-world mobile network conditions within testing
`
`environments, your test results are more reliably predictive of how an application will behave for
`
`end users.”6
`
`VuGEN AND THE VIRTUAL EVENT GENERATOR
`
`31.
`
`On information and belief, to simulate virtual users to load test mobile applications
`
`(hereafter “Virtual Users” or “Vuser”) within the Micro Focus Software Suite, Defendants have
`
`offered and continue to offer a virtual event generator (hereafter “Virtual Event Generator”). The
`
`Virtual Event Generator is the “primary tool for creating testing scripts that emulate the behavior
`
`of real users on your system.”7 A Virtual User is defined as scripts that replace “real users with
`
`virtual users…to emulate the actions of a human user”8 for load testing. On information and belief,
`
`from a single workstation, Defendants have offered and continue to offer a controller to distribute
`
`“each Vuser in the scenario to a load generator. The load generator is the machine that executes
`
`
`4 Micro Focus Network Virtualization for Mobile Data Sheet, Page 1 https://www.microfocus.com/media/data-
`sheet/network_virtualization_for_mobile_ds.pdf (accessed June 27, 2018).
`5 Id.
`6 Id.
`7 Micro Focus LoadRunner Help Center, https://admhelp.microfocus.com/lr/en/12.56-
`12.57/help/WebHelp/Content/VuGen/tocs/toc_MainVuGen.htm (accessed June 27, 2018)
`8 Micro Focus LoadRunner Help Center, https://admhelp.microfocus.com/lr/en/12.56-
`12.57/help/WebHelp/Content/Controller/c_terms_lr.htm (accessed June 27, 2018)
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`
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`8
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`the Vuser script, enabling the Vuser to emulate the actions of a human user.”9 The Vuser operates
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`as a single thread process, enabling a single server or computer to emulate the actions of several
`
`100 users to create load against a mobile application.
`
`32.
`
`In March of 2014, HPE migrated its long-standing license model from a standard
`
`license to a cloud-based monetization model10 wherein customers of an HPE Software Suite (and,
`
`subsequently, the Micro Focus Software Suite) would be charged on a per Virtual User basis over
`
`a 24-hour time period.11 The Micro Focus Software Suite has been offered for sale and is offered
`
`for sale based on a cloud-based monetization model.
`
`TRUCLIENT AND SCRIPTED USER EVENT MODELING
`
`33.
`
`On information and belief, to create Virtual Users to interact with scripted events
`
`to model human interaction with a native mobile application (hereafter “Scripted User Event
`
`Modeling”) within the Micro Focus Software Suite, Defendants have offered and continue to offer
`
`TruClient as a native mobile protocol that provided a way “to record and replay native mobile
`
`applications on both Android and iOS devices” to enable “the developer or DevOps engineer to
`
`record user interactions on the mobile application and create a TruClient script”12 (hereafter
`
`“Scripted User Event Modeling”) to simulate “multiple virtual users (Vusers)” during the load
`
`test’s execution.13 Additionally, “the script can be enhanced using standard TruClient
`
`functionality including parameterization, transactions and JavaScript coding.”14 Together with the
`
`
`9 Micro Focus LoadRunner Help Center, Id.
`10 http://www8.hp.com/us/en/hp-news/press-release.html?id=1601722#.WzQUBdVKguV (accessed June 27, 2018)
`11 https://software.microfocus.com/en-us/products/loadrunner-load-testing/pricing;
`https://software.microfocus.com/en-us/products/performance-center/pricing; https://software.microfocus.com/en-
`us/products/stormrunner-load-agile-cloud-testing/pricing (accessed June 27, 2018)
`12 https://community.softwaregrp.com/t5/LoadRunner-and-Performance/Introduction-to-LoadRunner-s-new-
`TruClient-Native-Mobile/ba-p/269441#Wyg06FVKguV
`13 Id.
`14 Id.
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`9
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`[Micro Focus] Virtual User Suite of Products, this “protocol is meant for end-user performance
`
`testing…[and] completes the LoadRunner mobile performance testing suite.”15
`
`STORMRUNNER LOAD
`
`34.
`
`On information and belief, Defendants’ StormRunner product provides the ability
`
`to create a “real-world scenario by generating load from global cloud regions to emulate real
`
`networks during load tests.”16 “StormRunner Load initializes on demand load generation
`
`machines in the private or public cloud”17 to dynamically “Scale from 1 tester to 2,000,000 or
`
`more geographically distributed”18 Virtual Users (hereafter “Cloud-based Load Server
`
`Modeling”). StormRunner provides a cloud-based performance testing solution that enables Agile
`
`development teams to ensure app scalability up to millions of distributed mobile users.19
`
`MICRO FOCUS MOBILE CENTER AND DEVELOPMENT SERVER
`
`35.
`
`On information and belief, Defendants have offered and continue to offer Micro
`
`Focus Mobile Center as “a standalone server that provides mobile device access to different test
`
`applications. [Micro Focus] Mobile Center supports a distributed architecture where different test
`
`clients can all interact with the same Mobile Center server instance.”20 Defendants have enabled
`
`and continue to enable performance engineers to gain an “accurate picture of the end-to-end mobile
`
`performance” by combining “virtual users and real devices” to run “elastic, and realistic tests from
`
`multiple geographies across various real-world network conditions”21 and “mediates between the
`
`
`
`15 Id.
`16 https://software.microfocus.com/en-us/products/stormrunner-load-agile-cloud-testing/overview (accessed June 27,
`2018)
`17 Id.
`18 Id.
`19 Id.
`20 http://mobilecenterhelp.saas.hpe.com/docs/en/2.20/mobilecenter_help/Content/HPMC_architecture.htm (accessed
`June 27, 2018)
`21 https://software.microfocus.com/en-us/products/mobile-testing/overview (accessed June 27, 2018)
`
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`10
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`testing-tool client calls to mobile devices” by providing “a user interface within the testing tool for
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`recording and running tests on real mobile devices”22 (hereafter “Cloud-based Mobile Center”).
`
`36.
`
`On information and belief, Defendants’ “Mobile Center is a core component of
`
`[the] mobile app development lifecycle” and is integrated with “Application Lifecycle
`
`Management (ALM), AppPulse Mobile, Business Process Monitoring, Business Process Testing,
`
`Fortify On Demand, LoadRunner, Network Virtualization (NV), Performance Center, Sprinter,
`
`StormRunner Load, UFT and UFT Pro”23 (hereafter “Micro Focus Mobile Center Suite of
`
`Products”).24
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`FACTUAL ALLEGATIONS
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`PATENTS-IN-SUIT
`
`37.
`
`Plaintiffs are the owner of all right, title and interest in and to U.S. Patent No.
`
`9,971,678 (the “’678 Patent”, attached as Exhibit 1), entitled “Systems including device and
`
`network simulation for mobile application development,” issued on May 15, 2018.
`
`38.
`
`Plaintiffs are the owner of all right, title and interest in and to U.S. Patent No.
`
`9,298,864 (the “’864 Patent”, attached as Exhibit 2), entitled “System Including Network
`
`Simulation for Mobile Application Development,” issued on March 29, 2016.
`
`39.
`
`Plaintiffs are the owner of all right, title and interest in and to U.S. Patent No.
`
`8,924,192 (the “’192 Patent”, attached as Exhibit 3), entitled “Systems including network
`
`simulation for mobile application development and online marketplaces for mobile application
`
`
`22 http://mobilecenterhelp.saas.hpe.com/docs/en/2.20/mobilecenter_help/Content/HPMC_architecture.htm (accessed
`June 27, 2018)
`23 https://community.softwaregrp.com/t5/Quality-and-Testing-Blog/Introducing-Mobile-Center-2-5-improve-your-
`mobile-testing/ba-p/1593254#.Wyg_71VKguU (accessed June 27, 2018)
`24 https://www.youtube.com/watch?v=6QyrWGSGq-c (accessed June 27, 2018) and
`https://www.youtube.com/watch?v=FkJkIe1H_rM (accessed June 27, 2018)
`
`
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`11
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`distribution, revenue sharing, content distribution, or combinations thereof,” issued on December
`
`30, 2014.
`
`40.
`
`Together, the foregoing patents are referred to as the “Patents-in-Suit”. Plaintiffs
`
`are the assignee of the Patents-in-Suit and have all substantial rights to sue for infringement and
`
`collect past and future damages for the infringement thereof.
`
`41.
`
`The foregoing patents, and any related patents in the family, are herein referred to
`
`collectively and individually as the “Plaintiffs’ Patent Portfolio” respectively.
`
`NON-NOTICE INVITATION
`
`AND WRITTEN COMMUNICATION
`
`42.
`
` In light of Defendants’ and Micro Focus Int’l’s long-standing stature in the
`
`software industry, in August of 2017, Plaintiffs, through a personal representative, reached out in
`
`a written communication to Jane Smithard, Group General Counsel and Company Secretary of
`
`Micro Focus, with a courtesy copy to John Schultz, General Counsel of HPE, seeking to enter a
`
`non-notice agreement to engage in open and transparent discussions about Defendant’s
`
`infringement of the Patents-in-Suit. Although Ms. Smithard apparently instructed her outside
`
`counsel at the Aspen Tech Law firm to contact Plaintiffs’ representative, outside counsel did not
`
`return follow-up communications to arrange a meeting with Plaintiffs’ representative.
`
`DAMAGES, PLAINTIFFS’ PORTFOLIO AND THE APP ECONOMY
`
`43. Mobile apps and the tools to develop and test mobile apps have become paramount
`
`to the U.S. economy. According to a 2012 white paper released by renowned Dr. Michael Mandel
`
`titled the ‘App Economy’, the App Developer community represented the second largest IT
`
`segment in the United States in 2012 with over 466,000 jobs created in the U.S. economy alone,
`
`
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`12
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`up from nearly zero in 2008 when the App Store was initially launched (hereafter “App
`
`Economy”).25
`
`44.
`
`Plaintiffs’ goal has been to democratize app development for a new generation of
`
`developers by mitigating performance risks and reducing application development cycles from
`
`months down to minutes by virtue of new performance engineering modeling. At the time of
`
`Plaintiffs’ provisional patent filing in June of 2005, Apple had not launched the iPhone (June of
`
`2007), there was no App Store (July of 2008), Google’s Android platform had not been released
`
`(September of 2008), the Samsung Galaxy family of devices had not been released (June of 2009)
`
`and the mobile app ecosystem that we know today was still in its infancy.
`
`45.
`
`In Dr. Mandel’s App Economy white paper, the renowned economist contributes
`
`two driving innovations behind the App Economy: (a) the ease of app development; and (b) the
`
`ease of app delivery. With respect to the former, Plaintiffs’ Patent Portfolio describes many of the
`
`core innovations in modern application development that accelerate the development of
`
`applications and enhances the mobile device consumer experience on the client side.
`
`46.
`
`In alignment with Dr. Mandel’s thesis concerning the importance of facilitating
`
`application development, the Plaintiffs’ patented technologies, with a focus on accelerating
`
`application development for performance engineers, helped to enable a new generation of app
`
`developers to lay the foundation for the emerging App Economy (hereafter “App Developers”).
`
`47.
`
`App Developers play an integral role in the app ecosystem, and Plaintiffs’ patented
`
`innovations, with a focus on accelerating application development for performance engineers, have
`
`ushered in a new generation of smart developer tools and contributed significantly to the growth
`
`of the App Economy.
`
`
`25 http://business.time.com/2012/02/08/the-app-economy-estimated-to-contribute-nearly-half-a-million-jobs-to-the-
`u-s/ (accessed June 27, 2018)
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`13
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`48.
`
`Application performance and access to data in the cloud are paramount to the user
`
`experience for a new generation of data hungry applications. If a mobile application fails, 48% of
`
`users are less likely to ever use the app again. 34% of users will simply switch to a competitor's
`
`application and 31% of users will tell friends about their poor experience, which eliminates future
`
`customers.26 A change in latency from 2ms (broadband) to 400ms (3G network) can cause a
`
`mobile page load to go from 1 second to 30 seconds.27 Google reported that a mere 0.5 to 1.0-
`
`second increase in page load time resulted in a 20% decrease in traffic and revenue. The average
`
`U.S. retail mobile site loaded in 6.9 seconds in July of 2016, and according to the most recent data
`
`presented by Google, 40% of consumers will leave a page that takes longer than three seconds to
`
`load.28
`
`49.
`
`According to HPE’s own studies, “over 70% of the performance of a mobile app is
`
`dependent on the network,”29 and in another study HPE further stated that “80% of the costs
`
`associated with application development occur in remediating failed or underperforming
`
`applications after deployment, when the ineffective application has already had a negative impact
`
`on the end user or customer experience.”30
`
`50.
`
`In 2018, 52.2 percent of all website traffic worldwide was generated through a
`
`mobile device.31 In the United States, not even Black Friday was immune from the influence of
`
`mobile as nearly 40% of sales on the traditional brick and mortar shopping day came from a mobile
`
`device. With 30% of all online shopping happening on mobile phones and with 89% of executives
`
`
`26 https://www.marketingcharts.com/digital-27846 (accessed June 27, 2018)
`27 https://www.slideshare.net/xbosoft/mobile-network-performance-testing (accessed June 27, 2018)
`28 https://www.thinkwithgoogle.com/marketing-resources/experience-design/mobile-page-speed-load-time/
`(accessed June 27, 2018)
`29 Exhibit A
`30 http://media.shunra.com/datasheets/Shunra-NetworkCatcher.pdf (accessed June 27, 2018)
`31 https://www.statista.com/statistics/241462/global-mobile-phone-website-traffic-share/ (accessed June 27, 2018)
`
`
`
`14
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`Case 4:18-cv-00469-ALM Document 76 Filed 08/20/19 Page 15 of 32 PageID #: 2267
`
`believing that customer experience will be their primary mode of competition, the consumer
`
`experience via a company’s mobile app has never been so prevalent.32
`
`51.
`
`In a recent study released by Micro Focus International plc, over 50 percent of
`
`respondents indicated the need to remediate at least four application production incidents per
`
`month and the average days required to resolve a production incident was six. 33 Defendants’
`
`parent company further stated that the average remediation cost per incident was $88,000 USD
`
`and the highest reported cost was $500,000 USD per incident. 34 Micro Focus International plc
`
`stated that “it is important to note that this is the remediation cost alone; it is not an accounting of
`
`the total impact on the business.”35 A single security breach of a customer’s financial banking
`
`information via a mobile app can cause a massive client exodus.
`
`52. Millennials, in particular, are much less forgiving concerning their application
`
`experience and will unapologetically delete an app just because the logo is not appealing.36 This
`
`fact suggests a shrinking margin of error for performance issues especially when it is considered
`
`that “67% of Millennials now use mobile banking as their primary engagement with their bank
`
`compared to 18% for those consumers aged 60 or over. In a recent study in the UK, Millennials
`
`now trust their App more than a teller at a brick and mortar bank, and 27% of Millennials are now
`
`completely reliant on a mobile Banking App.37 In the next 3-4 years, 33% of Millennials may
`
`choose to completely abandon traditional brick and mortar Banking in lieu of a mobile app.38 With
`
`
`32 https://www.outerboxdesign.com/web-design-articles/mobile-ecommerce-statistics (accessed June 27, 2018)
`33 Micro Focus The Value of Proactive Application Performance, http://files.asset.microfocus.com/4aa6-
`6409/en/4aa6-6409.pdf (accessed June 27, 2018)
`34 Id.
`35 Id.
`36 https://www.comscore.com/Insights/Blog/5-Interesting-Facts-About-Millennials-Mobile-App-Usage-from-The-
`2017-US-Mobile-App-Report (accessed June 27, 2018)
`37 https://www.salesforce.com/blog/2016/03/stats-about-millennials-mobile-banking.html (accessed June 27, 2018)
`38 https://www.temenos.com/en/market-insight/universal-insight/33-of-millennials-believe-they-wont-need-a-bank-
`at-all-in-5-years-we-think-different/ (accessed June 27, 2018)
`
`
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`15
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`Case 4:18-cv-00469-ALM Document 76 Filed 08/20/19 Page 16 of 32 PageID #: 2268
`
`over 50% of the United States workforce projected to be made up of 'App First Millennials' by
`
`2020,39 it is clear why Micro Focus International plc entered into the spin-out merger with HPE to
`
`move into the Mobile-first product model. Upon information and belief, Defendants were the
`
`primary agents for this move, as the vast majority of Defendants’ downstream clients have also
`
`initiated a ‘Mobile-First’ strategy to ‘mobilize’ their customer base to engage a new era of app
`
`users and as a result, have relied on the mobile testing products offered by Defendants.
`
`53.
`
`As the mobility wave continues to expand, mobile app development is expected to
`
`outpace native PC projects by at least 400% in the next several years,40 and according to
`
`TechCrunch, in 2017 over 20,000 petabytes (that's over 20 million gigabytes) were sent using
`
`mobile devices.41
`
`ROYALTY DEMAND BY PLAINTIFFS
`
`54.
`
`App Developers play an integral role in the app ecosystem and Plaintiffs’
`
`cornerstone patented innovations have helped to contribute to the foundational growth of the App
`
`Economy.42 With mobile phone sales expected to reach 2.1 billion units by 2019, or approximately
`
`one-third of the world’s population, the pace of this unprecedented mobile demand will likely
`
`continue.43
`
`55.
`
`Having recognized the explosive growth of the mobile application ecosystem,
`
`Defendants’ parent company publicly stated that its combined spin-out merger with HPE creates
`
`“One of the World’s Largest Pure-play Software Companies.”44 Underpinning the growth of the
`
`
`39 https://www.forbes.com/workforce-2020/ (accessed June 27, 2018)
`40 http://2014.vertic.com/blog/year_of_the_enterprise_tablet_infographic/ (accessed June 27, 2018)
`41 https://techcrunch.com/2013/07/03/mobile-data-use-to-grow-300-globally-by-2017-led-by-video-web-traffic-
`says-strategy-analytics/ (accessed June 27, 2018)
`42 According to Gartner, by the end of 2017 the market demand for mobile app development services will grow five
`times faster than internal IT organizations' capacity to deliver them.
`https://www.gartner.com/newsroom/id/3076817 (accessed June 27, 2018)
`43 Id.
`44 https://www.microfocus.com/about/press-room/article/2017/micro-focus-completes-merger-with-hpe-software/
`
`16
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`Case 4:18-cv-00469-ALM Document 76 Filed 08/20/19 Page 17 of 32 PageID #: 2269
`
`App Economy, as Dr. Mandel noted, is facilitating application development which is a core value
`
`proposition of Plaintiffs’ inventions. In light of the collective facts herein, and using a reasonable
`
`royalty rate, the patent royalties owed by Defendants to Plaintiffs are significant. Plaintiffs have
`
`notified HPE that HPE’s damages owed to Plaintiffs (using a reasonable royalty rate) exceed $400
`
`million45.
`
`WILLFUL INFRINGEMENT
`
`56.
`
`Plaintiffs allege that Defendants and/or their predecessors-in-interest and/or their
`
`affiliates have been made aware of the Plaintiffs’ Patent Portfolio at least as of the date of service
`
`of this Complaint.
`
`57.
`
`Defendants, at least as of the date of service of the original Complaint in this action,
`
`have had actual notice of Plaintiffs’ Patent Portfolio and continue to make, use, sell, and offer to
`
`sell Micro Focus LoadRunner, Micro Focus Performance Center, Micro Focus Stor