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`Case 2:22-cv-00942 Document 1 Filed 07/07/22 Page 1 of 79
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`UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF WASHINGTON
`AT SEATTLE
`
`
`REALD SPARK, LLC,
`
`Plaintiff,
`
`v.
`
`MICROSOFT CORPORATION,
`
`
`
`Defendant.
`
`NO.
`
`COMPLAINT FOR BREACH OF
`CONTRACT, THEFT OF TRADE
`SECRETS, AND PATENT
`INFRINGEMENT
`
`JURY DEMANDED
`
`Plaintiff RealD Spark, LLC (“RealD” or “Plaintiff”) files this Original Complaint against
`
`Defendant Microsoft Corporation (“Microsoft” or “Defendant”) and hereby alleges as follows:
`I. SUMMARY OF THE ACTION
`This is a breach of contract, theft of trade secrets, and patent infringement suit
`
`1.
`
`relating to Microsoft’s unauthorized and unlicensed use of patented and/or proprietary RealD
`
`technology in its products. Microsoft’s accused devices (“the Accused Products”) include the
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`Microsoft Surface product line, including the Microsoft Surface Pro X, certain Windows 10
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`(Build 20175 and later) and Windows 11 products, and any other Microsoft products that
`
`incorporate its “Eye contact” correction feature.
`
`
`
`COMPLAINT FOR BREACH OF CONTRACT, THEFT OF TRADE
`SECRETS, AND PATENT INFRINGEMENT - 1
`Case No.
`
`TOUSLEY BRAIN STEPHENS PLLC
`1200 Fifth Avenue, Suite 1700
`Seattle, Washington 98101
`TEL. 206.682.5600 • FAX 206.682.2992
`
`

`

`Case 2:22-cv-00942 Document 1 Filed 07/07/22 Page 2 of 79
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`II. PARTIES
`Plaintiff RealD Spark, LLC
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`2.
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`Plaintiff RealD Spark, LLC (“RealD”) is a private company incorporated in
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`Delaware with its principal place of business at 1930 Central Avenue, Suite A-2, Boulder,
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`Colorado 80301.
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`3.
`
`In October 2016, RealD spun out of RealD Inc. to focus on consumer display
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`technology. For almost two decades, RealD Inc. has been the creator of three-dimensional
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`(“3D”) imaging technologies for premium theater experiences. These technologies include both
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`new equipment—3D glasses, projectors, and screens necessary for optimum 3D viewing—as
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`well as new software that helps filmmakers create the immersive, 3D storytelling watched by
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`moviegoers around the world. See https://www.reald.com/realdcinema (last visited July 5,
`
`2022); https://variety.com/2019/film/news/reald-premium-cinema-options-1203372287/ (last
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`visited July 5, 2022). RealD Inc.’s partnerships with AMC Theatres and Cinemark have made
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`its technology a staple of 3D cinema, with more than 30,000 installed screens in 75 countries.
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`https://www.reald.com/news/reald-and-cinemark-renew-3d-agreement-through-2022 (last
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`visited July 5, 2022). Over two billion people have watched a RealD Inc. 3D movie.
`
`4.
`
`RealD Inc.’s efforts to create revolutionary visual experiences are not limited to
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`its cinematic origins. For instance, NASA used RealD Inc.’s 3D technologies to pilot the Mars
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`Rover. https://www.businesswire.com/news/home/20110215005554/en/Oakley-3D-Glasses-
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`Gain-RealD%C2%AE-Certification (last visited July 5, 2022). RealD took this imaging
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`expertise and expanded into the fields of advanced directional displays and gaze correction.
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`RealD’s developments in these fields are used in laptops, computers, and mobile phones, as
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`well as in the automotive/infotainment and point-of-sale sectors. For example, RealD’s display
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`technology is incorporated into many Hewlett Packard laptop computers. See
`
`COMPLAINT FOR BREACH OF CONTRACT, THEFT OF TRADE
`SECRETS, AND PATENT INFRINGEMENT - 2
`Case No.
`
`TOUSLEY BRAIN STEPHENS PLLC
`1200 Fifth Avenue, Suite 1700
`Seattle, Washington 98101
`TEL. 206.682.5600 • FAX 206.682.2992
`
`

`

`Case 2:22-cv-00942 Document 1 Filed 07/07/22 Page 3 of 79
`
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`https://www.prnewswire.com/news-releases/reald-me-and-hp-partner-to-launch-reflective-
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`privacy-technology-on-notebooks-with-sure-view-reflect-300982045.html (last visited July 5,
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`2022). With years of experience, RealD continues to shape the digital world today.
`
`Defendant Microsoft
`
`5.
`
`On information and belief, Defendant Microsoft is a Washington corporation
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`with its principal place of business at One Microsoft Way, Redmond, Washington 98052.
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`Microsoft is a multinational technology company that produces computer software and
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`consumer electronics. Microsoft also owns and operates social media and video conferencing
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`applications such as LinkedIn and Skype.
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`6.
`
`On information and belief, Microsoft (including its subsidiaries) directly and/or
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`indirectly develops, designs, manufactures, uses, distributes, markets, offers to sell, and/or sells
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`the Accused Products in the United States, including in this District, and otherwise
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`purposefully directs infringing activities to this District in connection with its software and
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`devices.
`
`III. JURISDICTION AND VENUE
`This is an action containing claims for patent infringement arising under the
`
`7.
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`patent laws of the United States, Title 35, U.S.C. § 271. This Court has exclusive subject matter
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`jurisdiction over those claims pursuant to 28 U.S.C. §§ 1331, 1367, and/or 1338.
`
`8.
`
`This action further arises under the laws of the United States, namely the Defend
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`Trade Secrets Act (“DTSA”) codified at 18 U.S.C. § 1836 et seq. This Court therefore has
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`subject matter jurisdiction of those claims pursuant to 28 U.S.C. § 1331.
`
`9.
`
`This action also arises under the laws of the State of Washington, namely the
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`Washington Uniform Trade Secrets Act. This Court has subject matter jurisdiction pursuant to
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`28 U.S.C. § 1367 because the actions giving rise to those claims under applicable state law are
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`the same and/or related to the actions giving rise to the asserted claims under federal law. As
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`COMPLAINT FOR BREACH OF CONTRACT, THEFT OF TRADE
`SECRETS, AND PATENT INFRINGEMENT - 3
`Case No.
`
`TOUSLEY BRAIN STEPHENS PLLC
`1200 Fifth Avenue, Suite 1700
`Seattle, Washington 98101
`TEL. 206.682.5600 • FAX 206.682.2992
`
`

`

`Case 2:22-cv-00942 Document 1 Filed 07/07/22 Page 4 of 79
`
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`such, the claims are so related that they form part of the same case or controversy under Article
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`III of the United States Constitution.
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`10.
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`The Court has personal jurisdiction over Defendant because it either currently
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`resides in the State of Washington, has a regular and established place of business within the
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`State of Washington, has had minimum contacts with the State of Washington sufficient to
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`confer the Court with general personal jurisdiction, or has committed acts within the State of
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`Washington giving rise to the claims asserted herein. Defendant, in a Non-Disclosure
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`Agreement entered into with RealD Inc. and its affiliates, agreed that jurisdiction and venue are
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`proper in the state of Washington.
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`11.
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`Venue is proper in the Western District of Washington under 28 U.S.C.
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`§ 1400(b) as Microsoft resides and has a regular and established place of business in this
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`judicial district, and this judicial district is where Microsoft has committed acts of
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`infringement.
`
`IV. FACTUAL ALLEGATIONS
`REALD’S HISTORY OF INNOVATION
`
`12.
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`RealD Inc. has spent almost twenty years developing cutting-edge imaging and
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`visual experiences for the digital age. From revolutionary light-efficient laser projectors and
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`filmmaking software to transformational privacy displays, RealD Inc. and RealD have been,
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`and remain, at the forefront of imaging industry.
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`13.
`
`In 2003, RealD Inc. developed its core polarization management technologies
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`that permeate both its cinematic and display product offerings. Over the coming years, RealD
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`Inc. implemented its new technologies on the big screens of theaters and the small screens of
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`computers, laptops, and mobile devices. RealD also adapted the technology to provide privacy
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`on these small screens by adjusting luminance, polarization, backlighting, and reflectivity to
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`prevent others from viewing the screens of other computer users. In 2018, RealD unveiled its
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`COMPLAINT FOR BREACH OF CONTRACT, THEFT OF TRADE
`SECRETS, AND PATENT INFRINGEMENT - 4
`Case No.
`
`TOUSLEY BRAIN STEPHENS PLLC
`1200 Fifth Avenue, Suite 1700
`Seattle, Washington 98101
`TEL. 206.682.5600 • FAX 206.682.2992
`
`

`

`Case 2:22-cv-00942 Document 1 Filed 07/07/22 Page 5 of 79
`
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`“Privacy Guard” product in Lenovo laptops. And in 2020, RealD provided an enhanced privacy
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`product called “SureView Reflect” in HP’s Dragonfly laptops, which later expanded to
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`multiple HP PCs, laptops, and chromebooks in multiple screen sizes. Currently, RealD is
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`exploring the application of these ideas into vehicle infotainment systems and point-of-sale
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`kiosks.
`
`REALD AND MICROSOFT
`
`14.
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`As part of RealD’s mission to create the ultimate visual experience across all
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`consumer electronics, RealD set its sights on video conferencing. More specifically, RealD set
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`out to develop imaging technology that adjusts the gaze of video conference participants so that
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`it appears the participants are looking directly into the camera instead of at the device screen.
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`RealD refers to this innovative technology as “SocialEyes” (a play on words of “Socialize”).
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`15.
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`RealD worked tirelessly to research, develop, and refine SocialEyes. During the
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`development process, RealD invested significant time and resources into creating the
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`proprietary formulas, algorithms, methodologies, and products that underlie SocialEyes. For
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`example, RealD collected and analyzed large quantities of data through costly and time-
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`consuming in-person tests focused on image recognition. These development efforts were led
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`by Eric Sommerlade, Vice President of Software & Computer Vision at RealD, who oversaw
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`the team of employees that designed, developed, and deployed SocialEyes.
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`16.
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`After developing SocialEyes, RealD contacted Microsoft to see if it was
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`interested in including SocialEyes in its products. Microsoft was enthusiastic about the prospect
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`and sought to learn more about the technology. Before engaging in any detailed discussions
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`about SocialEyes, RealD Inc. and its affiliates and Microsoft and its affiliates entered into a
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`Non-Disclosure Agreement (“NDA”) (attached as Exhibit A), which was executed on July 20,
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`2016.
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`COMPLAINT FOR BREACH OF CONTRACT, THEFT OF TRADE
`SECRETS, AND PATENT INFRINGEMENT - 5
`Case No.
`
`TOUSLEY BRAIN STEPHENS PLLC
`1200 Fifth Avenue, Suite 1700
`Seattle, Washington 98101
`TEL. 206.682.5600 • FAX 206.682.2992
`
`

`

`Case 2:22-cv-00942 Document 1 Filed 07/07/22 Page 6 of 79
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`17.
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`The NDA offers protections for both parties’ confidential information. In
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`particular, the NDA specifies that the parties can “use and disclose the other’s confidential
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`information only for purposes of our business relationship with each other.” Ex. A at 2.
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`“Confidential Information” is defined in the NDA as “non-public information, know-how and
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`trade secrets in any form that: [(1)] Are designated as ‘confidential’; or [(2)] A reasonable
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`person knows or reasonably should understand to be confidential.” Id. at 1–2.
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`18.
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`Relying on the protections of the NDA and the parties’ mutual understanding
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`that each party’s confidential information was protected from unauthorized use or disclosure,
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`RealD shared confidential information about SocialEyes with Microsoft including, without
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`limitation, the following high-level groups of trade secrets:
`
`•
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`Image recognition algorithms for different types of faces, lighting, eye color,
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`and eyeglasses;
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`• Datasets to support SocialEyes’ image recognition methods;
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`• Know-how resulting from RealD’s lengthy and costly R&D process used to
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`develop SocialEyes and its corresponding datasets;
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`• Negative know-how that resulted from RealD’s lengthy and costly R&D process
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`that was used to develop SocialEyes and its corresponding datasets; and
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`• Source code that contained and implemented the aforementioned trade secrets.
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`19.
`
`RealD’s trade secrets and intellectual property made its vision to improve the
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`video conferencing experience a reality. SocialEyes adjusts the apparent gaze of video
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`conference participants, so that it appears they are looking directly into the camera instead of at
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`the device screen. Since eye contact can be realistically maintained with this innovative
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`technology, the technology makes the video conference experience more vivid, engaging, and
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`personal for all parties concerned. In addition, the technology substantially mitigates various
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`psychological issues that often accompany prolonged or repeated video conferences. For
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`COMPLAINT FOR BREACH OF CONTRACT, THEFT OF TRADE
`SECRETS, AND PATENT INFRINGEMENT - 6
`Case No.
`
`TOUSLEY BRAIN STEPHENS PLLC
`1200 Fifth Avenue, Suite 1700
`Seattle, Washington 98101
`TEL. 206.682.5600 • FAX 206.682.2992
`
`

`

`Case 2:22-cv-00942 Document 1 Filed 07/07/22 Page 7 of 79
`
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`example, studies show that “Zoom Fatigue” results from video participants having to pay closer
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`attention to non-verbal cues as compared to an in-person conversation. This fatigue results in
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`participants expending increased mental and cognitive energy, which exhausts the participant
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`more quickly and can cause headaches, migraines, eye strain, and other physical and emotional
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`symptoms.
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`20.
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`Recognizing the potential for SocialEyes, RealD took steps to keep its
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`proprietary technology confidential. For example, RealD team members were under obligations
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`not to disclose RealD’s trade secrets or other confidential information. In addition, RealD
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`limited access to its trade secrets and disclosed its confidential information only to those
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`employees working on development of the technology. RealD also employed secure
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`information-management and both physical and digital security protocols. Lastly, RealD
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`required its employees, contractors, clients, and vendors to enter into confidentiality
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`agreements, and RealD did not disclose confidential information to third parties except under
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`the protections of confidentiality agreements.
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`21.
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`Beginning in late 2016, RealD began demonstrating SocialEyes to Microsoft
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`under the protection of the NDA and with the hope that Microsoft would ultimately license or
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`acquire RealD’s technology. Over the next several months, RealD spoke with Microsoft
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`personnel about SocialEyes and shared confidential information with them related to the
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`technology. RealD shared this information with Microsoft so that Microsoft could evaluate
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`RealD’s technology. At all times, RealD’s disclosure of confidential information was protected
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`by the executed NDA.
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`22.
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`During the parties’ discussions, Microsoft repeatedly voiced its interest in
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`SocialEyes. After several months of communicating about the technology and its benefits,
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`Microsoft asked RealD to install SocialEyes on one of its products. Encouraged by the promise
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`COMPLAINT FOR BREACH OF CONTRACT, THEFT OF TRADE
`SECRETS, AND PATENT INFRINGEMENT - 7
`Case No.
`
`TOUSLEY BRAIN STEPHENS PLLC
`1200 Fifth Avenue, Suite 1700
`Seattle, Washington 98101
`TEL. 206.682.5600 • FAX 206.682.2992
`
`

`

`Case 2:22-cv-00942 Document 1 Filed 07/07/22 Page 8 of 79
`
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`of securing a license with such a large and important business partner, RealD obliged, and
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`SocialEyes demonstration software was installed on a Surface Pro 4 tablet.
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`23.
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`In March 2019, despite all of the interest Microsoft previously voiced about
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`SocialEyes, Microsoft cut off talks with RealD.
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`24.
`
`RealD eventually became aware that Microsoft had hired several former RealD
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`employees that worked on SocialEyes, including the SocialEyes team leader, former Vice
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`President of Software & Computer Vision, Eric Sommerlade.
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`25.
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`Upon learning that Dr. Sommerlade was employed by Microsoft, RealD
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`contacted Microsoft to (i) ask about resuming licensing negotiations, and (ii) to alert Microsoft
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`that it risked misappropriating RealD’s intellectual property. Microsoft declined to resume
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`negotiations and instead told RealD that it “ha[d] instead opted to evaluate a different
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`technology altogether.” Microsoft also informed RealD that it was taking “steps to protect
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`[RealD’s] IP[.]” For example, Microsoft reassured RealD that it “made clear to Dr.
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`Sommerlade that he [was] not permitted to use any RealD intellectual property in the course of
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`his work, absent an express license from RealD.” Microsoft also told RealD that it instructed
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`the employees on Dr. Sommerlade’s team “not to solicit any advice or information regarding
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`RealD's SocialEyes product.” In light of Microsoft’s representations, RealD reasonably
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`understood that Microsoft was proactively taking steps to ensure that RealD’s trade secrets
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`remained confidential and were not used or disclosed absent an express license from RealD.
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`26.
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`However, upon information and belief, it now appears that Microsoft did not
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`follow through with its promises. Microsoft’s patent applications indicate that its “competing”
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`product is actually an unauthorized implementation of both RealD’s patented technology and
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`its underlying trade secrets and confidential information.
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`27. More specifically, on information and belief, in or around October 2019,
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`Microsoft misappropriated RealD’s confidential information by incorporating SocialEyes into
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`COMPLAINT FOR BREACH OF CONTRACT, THEFT OF TRADE
`SECRETS, AND PATENT INFRINGEMENT - 8
`Case No.
`
`TOUSLEY BRAIN STEPHENS PLLC
`1200 Fifth Avenue, Suite 1700
`Seattle, Washington 98101
`TEL. 206.682.5600 • FAX 206.682.2992
`
`

`

`Case 2:22-cv-00942 Document 1 Filed 07/07/22 Page 9 of 79
`
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`Microsoft’s Surface product line, including the Surface Pro X—a product within the same
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`family of products as the Surface Pro 4 in which the SocialEyes demonstration software was
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`installed months earlier. See, e.g., https://www.youtube.com/watch?v=dmaioTs0NH8 (at
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`50:00–53:25, Microsoft Surface Pro X Launch Event, Oct. 2, 2019) (demonstrating the Surface
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`Pro X’s “Eye Contact” gaze correction feature) (last visited July 5, 2022). Around this time,
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`Microsoft also filed a patent application directed to RealD’s SocialEyes technology, and it
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`listed ex-RealD employees Eric Sommerlade and Alexandros Neophytou as inventors.
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`28.
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`Since October 2019, Microsoft has expanded its unauthorized and unlicensed
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`use of RealD’s patented and/or proprietary technology. See, e.g.,
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`https://www.youtube.com/watch?v=0vsh1KZ1yws (at 1:05–1:18, Microsoft Windows powers
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`the future of hybrid work, April 5, 2022) (demonstrating the Windows 11 “Eye Contact” gaze
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`correction feature) (last visited July 5, 2022); https://www.microsoft.com/en-us/microsoft-
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`365/blog/2022/04/05/new-experiences-in-windows-11-and-windows-365-empower-new-ways-
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`of-working/ (last visited July 5, 2022);
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`https://blogs.windows.com/windowsexperience/2022/04/05/windows-powers-the-future-of-
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`hybrid-work/ (last visited July 5, 2022).
`V. MICROSOFT HARMED REALD
`29. Microsoft’s theft of RealD’s trade secrets have damaged RealD’s ongoing
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`business and its ability to win new customers going forward. On information and belief, at the
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`most basic level, Microsoft’s misappropriation of SocialEyes has deprived RealD of the
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`licensing fees that Microsoft or others would have paid to license the SocialEyes technology.
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`On information and belief, RealD was the only company that developed a marketable version
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`of SocialEyes and thus it should have enjoyed a competitive advantage for licensing its
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`technology in the marketplace. On information and belief, Microsoft’s misappropriation of
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`COMPLAINT FOR BREACH OF CONTRACT, THEFT OF TRADE
`SECRETS, AND PATENT INFRINGEMENT - 9
`Case No.
`
`TOUSLEY BRAIN STEPHENS PLLC
`1200 Fifth Avenue, Suite 1700
`Seattle, Washington 98101
`TEL. 206.682.5600 • FAX 206.682.2992
`
`

`

`Case 2:22-cv-00942 Document 1 Filed 07/07/22 Page 10 of 79
`
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`SocialEyes has vastly reduced RealD’s competitive advantage for licensing the SocialEyes
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`technology to Microsoft and others.
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`30. Microsoft’s further dissemination of RealD’s trade secrets has caused and will
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`continue to cause irreparable harm to RealD. As a result of its misappropriation, Microsoft has
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`been able to release products, including the Accused Products, that incorporate RealD’s
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`proprietary SocialEyes technology. Microsoft will continue to benefit from the sale of these
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`products, including the Accused Products that incorporate RealD’s technology. Microsoft
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`cannot be allowed to continue to use RealD’s trade secrets to sell its products and services in a
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`global market without compensating RealD.
`
`COUNT ONE: BREACH OF CONTRACT
`
`31.
`
`Plaintiff realleges and incorporates by reference the allegations of paragraphs 1–
`
`30 of this Complaint.
`
`32.
`
`The NDA was a valid and binding contract between Microsoft and RealD Inc.
`
`and its affiliates. RealD is an affiliate of RealD Inc.
`
`33.
`
`RealD has performed in accordance with all material obligations, terms, and
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`conditions of the NDA.
`
`34.
`
`In section 3 of the NDA, Microsoft represented that it would use and disclose
`
`RealD’s confidential information only for purposes of the parties’ “business relationship with
`
`each other.” Ex. A at 2. Microsoft also represented that it would not disclose RealD’s
`
`confidential information to any third parties.
`
`35.
`
`The confidential information that RealD disclosed to Microsoft over the course
`
`of their relationship constitutes “Confidential Information” under the NDA.
`
`36. Microsoft breached the NDA by using or disclosing RealD’s confidential
`
`information, including, without limitation, RealD’s trade secrets related to SocialEyes. For
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`COMPLAINT FOR BREACH OF CONTRACT, THEFT OF TRADE
`SECRETS, AND PATENT INFRINGEMENT - 10
`Case No.
`
`TOUSLEY BRAIN STEPHENS PLLC
`1200 Fifth Avenue, Suite 1700
`Seattle, Washington 98101
`TEL. 206.682.5600 • FAX 206.682.2992
`
`

`

`Case 2:22-cv-00942 Document 1 Filed 07/07/22 Page 11 of 79
`
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`example, upon information and belief, Microsoft used or disclosed RealD’s confidential
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`information in order to develop its own products, including the Microsoft Surface Pro X.
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`37. Microsoft’s breach of the NDA has damaged RealD in an amount in excess of
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`$1,000,000.
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`COUNT TWO: VIOLATION OF THE DEFEND TRADE
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`SECRETS ACT (DTSA) 18 U.S.C. §§ 1836, ET SEQ.
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`38.
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`Plaintiff realleges and incorporates by reference the allegations of paragraphs 1–
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`37 of this Complaint.
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`39.
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`Before entering into discussions with Microsoft, RealD developed several
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`categories of trade secrets (“RealD Trade Secrets”) related to its SocialEyes technology,
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`including but not limited to: (1) image recognition algorithms for different types of faces,
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`lighting, eye color, and eyeglasses; (2) datasets to support SocialEyes’ image recognition
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`methods; (3) know-how resulting from RealD’s lengthy and costly R&D process used to
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`develop SocialEyes and its corresponding datasets; (4) negative know-how that resulted from
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`RealD’s lengthy and costly R&D process that was used to develop SocialEyes and its
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`corresponding datasets; and (5) source code that contained and implemented the
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`aforementioned trade secrets.
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`40.
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`The RealD Trade Secrets were used for the design, development, testing,
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`evaluation, and refinement of RealD’s SocialEyes technology. This information constitutes
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`financial, business, scientific, technical, economic, and/or engineering information.
`
`41.
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`The RealD Trade Secrets relate to products and services used, sold, shipped and
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`ordered in, or intended to be used, sold, shipped and/or ordered in, interstate and foreign
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`commerce.
`
`42.
`
`RealD took reasonable measures to keep the RealD Trade Secrets secret as
`
`described above and including, without limitation, subjecting all employees to confidentiality
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`COMPLAINT FOR BREACH OF CONTRACT, THEFT OF TRADE
`SECRETS, AND PATENT INFRINGEMENT - 11
`Case No.
`
`TOUSLEY BRAIN STEPHENS PLLC
`1200 Fifth Avenue, Suite 1700
`Seattle, Washington 98101
`TEL. 206.682.5600 • FAX 206.682.2992
`
`

`

`Case 2:22-cv-00942 Document 1 Filed 07/07/22 Page 12 of 79
`
`
`agreements in conjunction with RealD’s corporate policies and practices that instruct personnel
`
`to safeguard RealD’s proprietary information. RealD also took steps to ensure that the RealD
`
`Trade Secrets were clearly marked as proprietary and confidential, and were subject to
`
`restrictions on further use and dissemination. Moreover, RealD physically restricted access in
`
`its facilities to properly-credentialed individuals, and virtually restricted electronic access to the
`
`RealD Trade Secrets to properly-credentialed personnel. RealD shared the RealD Trade Secrets
`
`with Microsoft only after the parties signed a NDA that also required the parties to keep that
`
`information confidential.
`
`43.
`
`The RealD Trade Secrets derive independent economic value from not being
`
`generally known, and not being readily ascertainable through proper means to another person
`
`who is able to obtain economic value from the disclosure or use of the information. For
`
`example, RealD expended years of time and substantial resources (including employee time
`
`and salaries; the collection, analysis, and storage of the datasets noted above; and the creation
`
`of algorithms, know-how, and factors considered for realistic gaze correction) to creating the
`
`RealD Trade Secrets. They underlie the basis of RealD’s SocialEyes product, which it
`
`attempted to bring to market through, among others, Microsoft. For Microsoft to create a
`
`competing product without the RealD Trade Secrets would have taken many man hours and
`
`years of research and development. Microsoft incorporated the SocialEyes technology into the
`
`Accused Products in record time and, as such, the RealD Trade Secrets have been of immense
`
`value to Microsoft in its efforts to quickly commercialize the Accused Products. On
`
`information and belief, Microsoft misappropriated the RealD Trade Secrets for that reason and
`
`have also obtained economic value through the sale of the Accused Products. For these same
`
`reasons, the RealD Trade Secrets are novel, i.e., they are not readily ascertainable from another
`
`source.
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`COMPLAINT FOR BREACH OF CONTRACT, THEFT OF TRADE
`SECRETS, AND PATENT INFRINGEMENT - 12
`Case No.
`
`TOUSLEY BRAIN STEPHENS PLLC
`1200 Fifth Avenue, Suite 1700
`Seattle, Washington 98101
`TEL. 206.682.5600 • FAX 206.682.2992
`
`

`

`Case 2:22-cv-00942 Document 1 Filed 07/07/22 Page 13 of 79
`
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`44.
`
`In violation of RealD’s rights under the Defend Trade Secrets Act, 18 U.S.C.
`
`§ 1836, on or after the execution of the NDA on July 20, 2016, Microsoft misappropriated the
`
`RealD Trade Secrets in an improper and unlawful manner as alleged above and herein. In
`
`addition to the foregoing, and upon further information and belief as detailed below, Microsoft
`
`has misappropriated the RealD Trade Secrets under federal law because it acquired them
`
`knowing or having reason to know that they were acquired by improper means. Additionally,
`
`Microsoft misappropriated the RealD Trade Secrets because at the time it obtained and/or used
`
`them without RealD’s permission, Microsoft knew or had reason to know its knowledge of the
`
`RealD Trade Secrets was derived from or through a person who had utilized improper means to
`
`acquire them, acquired them under circumstances giving rise to a duty to maintain their secrecy
`
`or limit their use, or derived them from or through a person who owed a duty to RealD to
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`maintain their secrecy or limit their use. Alternatively, Microsoft misappropriated the RealD
`
`Trade Secrets by using them without permission, knowing or having reason to know that the
`
`information constituted trade secrets acquired by accident or mistake.
`
`45. Microsoft engaged in talks with RealD to discuss licensing or acquiring RealD’s
`
`SocialEyes technology. During those discussions, Microsoft asked RealD to install SocialEyes
`
`in one of its products, RealD obliged, and thus SocialEyes demonstration software was
`
`installed on a Surface Pro 4. That product included RealD Trade Secrets. The licensing
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`discussions between the parties also resulted in disclosure of the RealD Trade Secrets to
`
`Microsoft under circumstances that made it clear that RealD was sharing them solely for the
`
`purpose of Microsoft evaluating taking a license to or acquiring the SocialEyes technology,
`
`which incorporates the RealD Trade Secrets. In turn, Microsoft knew it lacked permission to
`
`incorporate the RealD Trade Secrets into its commercial products.
`
`46.
`
`On information and belief, after initial discussions with RealD, Microsoft began
`
`the targeted recruiting of former RealD personnel who had experience in designing,
`
`COMPLAINT FOR BREACH OF CONTRACT, THEFT OF TRADE
`SECRETS, AND PATENT INFRINGEMENT - 13
`Case No.
`
`TOUSLEY BRAIN STEPHENS PLLC
`1200 Fifth Avenue, Suite 1700
`Seattle, Washington 98101
`TEL. 206.682.5600 • FAX 206.682.2992
`
`

`

`Case 2:22-cv-00942 Document 1 Filed 07/07/22 Page 14 of 79
`
`
`developing, testing, and refining RealD’s SocialEyes technology. This personnel also had
`
`information regarding the RealD Trade Secrets. On information and belief, Microsoft recruited
`
`these individuals to assist in the design, development, and implementation of SocialEyes and
`
`the RealD Trade Secrets in Microsoft’s products. Upon further information and belief,
`
`Microsoft sought to hire former RealD personnel with the intention of using the new recruits to
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`solicit and incorporate the RealD Trade Secrets in Microsoft’s products.
`
`47.
`
`On information and belief, Microsoft’s misappropriation of the RealD Trade
`
`Secrets is also evidenced by the fact that shortly after former RealD personnel began working
`
`for Microsoft, Microsoft brought a Surface Pro X to market that incorporated the SocialEyes
`
`technology, which is based on or incorporates the RealD Trade Secrets.
`
`48.
`
`On information and belief, the SocialEyes technology in Microsoft’s Surface
`
`Pro X, and the other Accused Products, was and is based in whole or in part on the Microsoft
`
`product that was installed with the SocialEyes demonstration software, which contained RealD
`
`Trade Secrets.
`
`49.
`
`On information and belief, the SocialEyes technology in the Microsoft Surface
`
`Pro X, and the other Accused Products, is based in whole or in part on the RealD Trade Secrets
`
`that Eric Sommerlade and his team developed at RealD and later brought to Microsoft.
`
`50.
`
`On further information and belief, Microsoft knew or should have known that
`
`the Accused Products, including the Surface Pro X, incorporate the RealD Trade Secrets
`
`because of the aforementioned circumstances leading up to and surrounding Microsoft’s
`
`introduction of products that include RealD’s SocialEyes technology.
`
`51.
`
`In addition to Microsoft misappropriating the RealD Trade Secrets in a
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`corporate capacity, Microsoft is liable for trade secret misappropriation due to the conduct of
`
`its employees within the scope of their employment with and for the benefit of Microsoft.
`
`Specifically, upon information and belief, Microsoft employees, including RealD’s former
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`COMPLAINT FOR BREACH OF CONTRACT, THEFT OF TRADE
`SECRETS, AND PATENT INFRINGEMENT - 14
`Case No.
`
`TOUSLEY BRAIN STEPHENS PLLC
`1200 Fifth Avenue, Suite 1700
`Seattle, Washington 98101
`TEL. 206.682.5600 • FAX 206.682.2992
`
`

`

`Case 2:22-cv-00942 Documen

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