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In the United States District Court for the Eastern District of North Carolina Western Division

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In the United States District Court for the Eastern District of North Carolina Western Division IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NORTH CAROLINA WESTERN DIVISION INFERNAL TECHNOLOGY, LLC, and § TERMINAL REALITY, INC., § § Plaintiffs, § § Case No. ________________ v. § § Jury Trial Demanded UBISOFT, INC., a California Corporation, § and UBISOFT ENTERTAINMENT SA, a § French Company, § § Defendants. § PLAINTIFFS’ COMPLAINT FOR PATENT INFRINGEMENT Plaintiff Infernal Technology, LLC and Terminal Reality, Inc. file this Complaint against Ubisoft, Inc. and Ubisoft Entertainment SA (collectively “Ubisoft”), and allege as follows. THE PARTIES 1. Plaintiff Infernal Technology, LLC (“Infernal Technology”) is a Texas Limited Liability Company with its principal place of business at 18333 Preston Road, Suite 220, Dallas, Texas 75252. 2. Plaintiff Terminal Reality, Inc. (“Terminal Reality”) is a Texas Corporation with its address at P.O. Box 271721, Flower Mound, Texas, 75027-1721. Terminal Reality, a video game development and production company, was formed in 1994 in Lewisville, Texas. Terminal Reality developed a number of video games, such as Nocturne, Bloodrayne, Ghostbusters: The Video Game, Kinect Star Wars, The Walking Dead: Survival Instinct, and many others. Terminal Reality also developed a video game graphics engine, called the “Infernal Engine,” used in many of Terminal Reality’s games. In addition to using the “Infernal Engine” in its own games, Terminal Reality successfully licensed the “Infernal Engine” to other video game developers for use in their COMPLAINT FOR PATENT INFRINGEMENT PAGE 1 Case 5:20-cv-00223-D Document 1 Filed 05/27/20 Page 1 of 18 video games. On June 3, 2014, Terminal Reality granted Infernal Technology an exclusive license to a number of patents, including the Asserted Patents as defined below, and the exclusive right to enforce same. On June 12, 2015, Terminal Reality and Infernal Technology entered into another Exclusive License Agreement and Exclusive Right to Enforce (the “2015 Exclusive License Agreement”). The 2015 Exclusive License Agreement also granted Infernal Technology an exclusive license to the Asserted Patents and the exclusive right to enforce those patents. The 2015 Exclusive License Agreement, however, did not grant Infernal Technology the right to practice in inventions of the Asserted Patents. On May 20, 2020, Terminal Reality and Infernal Technology entered into an agreement entitled “Clarification of Exclusive License Agreement and Exclusive Right to Enforce” clarifying that the 2015 Exclusive License Agreement did not grant Infernal Technology the right to practice in inventions of the Asserted Patents. Infernal Technology and Terminal Reality are collectively referred to herein as “Plaintiffs.” 3. Defendant Ubisoft, Inc. is a corporation organized and existing under the laws of the State of California, with its principal place of business located at 625 3rd Street, San Francisco, California 94107. Ubisoft, Inc. may be served with process through its registered agent Stephen Smith at the Law Office of Stephen S. Smith, PC, 30700 Russell Rand Road, Suite 250, Westlake Village, California 94107. 4. Defendant Ubisoft Entertainment SA is a company organized and existing under the laws of the Country of France, with its principal place of business located at 28, rue Armand Carrel 93108 Montreuil-sous-Bois Cedex, France. Ubisoft Entertainment SA may be served with process through its registered office 107, avenue Henri Fréville 35207 Rennes Cedex 2, France. JURISDICTION AND VENUE 5. This is an action for patent infringement arising under the patent laws of the United States of America, Title 35, United States Code. This Court has original jurisdiction over the subject matter of this action pursuant to 28 U.S.C. §§ 1331 and 1338(a). 6. Defendant Ubisoft, Inc, is subject to this Court’s specific personal jurisdiction because of its continuous business contacts in the State of North Carolina and in this District, COMPLAINT FOR PATENT INFRINGEMENT PAGE 2 Case 5:20-cv-00223-D Document 1 Filed 05/27/20 Page 2 of 18 including committing acts of patent infringement within the State of North Carolina and this District, as alleged below. 7. North Carolina’s long-arm statute states, in pertinent part, that a court may exercise jurisdiction over a party if it “[i]s engaged in substantial activity within this State, whether such activity is wholly interstate, intrastate, or otherwise.” N.C.G.S. § 1-75.4(1)(d) (2017). This statute is intended to make available to the North Carolina courts the full jurisdictional powers permissible under federal due process. 8. Defendant Ubisoft, Inc., has purposefully directed its business activities to this State and this District. Ubisoft, Inc., has directly or through intermediaries (including distributors, retailers, and others) shipped, distributed, offered for sale, sold, and advertised its products infringing the asserted patents, as described below, in the United States, the State of North Carolina and this District. In addition, Ubisoft, Inc., has designated an agent for service of process in the State of North Carolina. Therefore, this Court has personal jurisdiction over the Defendant. 9. As alleged above, defendant Ubisoft Entertainment SA is a company organized and existing under the laws of the Country of France. The Court has personal jurisdiction over Ubisoft Entertainment SA under Federal Rules of Civil Procedure 4(k)(2). Rule 4(k)(2) states, in relevant part: “For a claim that arises under federal law, serving a summons ... establishes personal jurisdiction over a defendant if: (A) the defendant is not subject to jurisdiction in any state’s courts of general jurisdiction; and (B) exercising jurisdiction is consistent with the United States Constitution and laws.” FED. R. CIV. P. 4(k)(2). Thus, for a court to exercise personal jurisdiction over a defendant under Rule4(k)(2): (1) the plaintiff's claim must arise under federal law; (2) the defendant must not be subject to jurisdiction in any state’s courts of general jurisdiction; and (3) exercise of jurisdiction must comport with due process.” 10. Defendant Ubisoft Entertainment SA has been selling, offering to sell and using the Accused Instrumentalities in the United States, constituting infringement of the patents asserted in this case. Ubisoft Entertainment SA has also been importing into the United States the Accused Games, also constituting infringement of the patents asserted in this case. Ubisoft Entertainment COMPLAINT FOR PATENT INFRINGEMENT PAGE 3 Case 5:20-cv-00223-D Document 1 Filed 05/27/20 Page 3 of 18 SA has made its Accused Games available for sale in the United States through established distribution channels by placing Accused Games into the stream of commerce with the expectation that they would be purchased in the United States through retail outlets. Ubisoft Entertainment SA has imported the Accused Games into the Unites States so that they could be sold in the United States through these distribution channels. Ubisoft Entertainment SA has directed substantial marketing and promotion efforts and activities to persons in the United States to induce them to purchase and use the Accused Games. Ubisoft Entertainment SA has demonstrated the Accused Games in the United States. Ubisoft Entertainment SA, therefore, consistently directed substantial infringing business activities at the United States. 11. Upon information and belief, Ubisoft Entertainment SA has annual revenues in over a billion of dollars. Thus, the burden on Ubisoft Entertainment SA to defend this lawsuit in this district is not significant. Indeed, Ubisoft Entertainment SA has prosecuted substantial litigation in federal court in North Carolina and California for the last several years. Any burden on Ubisoft Entertainment SA is substantially outweighed by the interest of the United States in adjudicating the dispute and the interest of Terminal Reality and Infernal Technology, United States companies enforcing United States patent rights, in obtaining effective and convenient relief. Terminal Reality and Infernal Technology have a paramount interest in obtaining convenient and effective relief in a United States court. 12. Therefore, Rule 4(k)(2) of the Federal Rules of Civil Procedure, Ubisoft Entertainment SA is subject to this Court’s specific personal jurisdiction. 13. Plaintiff Ubisoft Entertainment SA is a French company with its principal place of business in France. Ubisoft Entertainment SA, as a foreign corporation, is subject to suit in any judicial district. THE PATENTS-IN-SUIT 14. On March 26, 2002 the United States Patent and Trademark Office issued United States Patent No. 6,362,822 (the “’822 Patent”) entitled “Lighting and Shadowing Methods and COMPLAINT FOR PATENT INFRINGEMENT PAGE 4 Case 5:20-cv-00223-D Document 1 Filed 05/27/20 Page 4 of 18 Arrangements for use in Computer Graphic Simulations,” a true copy of which is attached as Exhibit 1. 15. On June 13, 2006, the United States Patent and Trademark Office issued United States Patent No. 7,061,488 (the “’488 Patent”) entitled “Lighting and Shadowing Methods and Arrangements for use in Computer Graphic Simulations,” a true copy of which is attached as Exhibit 2. The ’488 Patent is a continuation-in-part of the ’822 Patent. The ’822 and ’488 Patents are collectively referred to as the “Asserted Patents.” 16. Infernal Technology is the exclusive licensee of the ’822 and ’488 Patents, and has the exclusive right to sue for and recover all past, present and future damages for infringement of the Asserted Patents. THE ESTABLISHED VALIDITY OF THE PATENTS-IN-SUIT 17. On April 21, 2016, Electronic Arts Inc. (“EA”) petitioned the U.S. Patent Trial and Appeal Board (“PTAB”) for inter partes review of the ’822 and ’488 Patents (IPR2016-00928, IPR2016-00929, IPR2016-00930Z). In the IPR petitions, EA relied upon the following prior art references: (1) Segal, et al., “Fast Shadows and Lighting Effects Using Texture Mapping,” Computer Graphics Proceedings, Volume 26, Number 2, July, 1992 (“Segal”); and (2) McReynolds, “Programming with OpenGL: Advanced Rendering,” SIGGRAPH ’96 Course, August, 1996 (“McReynolds”). With respect to the ’822 Patent, EA asserted that Claims 1-10 and 39-48 were unpatentable under 35 U.S.C.
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