1 SEARS HOLDINGS CORPORATION, and SEARS ROEBUCK AND

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UNITED STATES DISTRICT COURT DISTRICT OF DELAWARE

VARIABLE LIGHTING LLC

Plaintiff. v. C.A. No. 15-cv-426-RGA

KMART CORPORATION, DEMAND FOR JURY TRIAL KMART.COM LLC, MYGOFER LLC, KMART HOLDING CORPORATION, SEARS HOLDINGS CORPORATION, and SEARS ROEBUCK AND CO. Defendants.

FIRST AMENDED COMPLAINT FOR PATENT INFRINGEMENT

Plaintiff Variable Lighting LLC (“Variable Lighting”) for its complaint against Defendants

Kmart Holding Corporation, Kmart Corporation, Kmart.com LLC, and MyGofer LLC

(collectively “Kmart”), and Sears Holdings Corporation and Sears Roebuck and Co. (collectively

“Sears”, and together with Kmart, “Defendants”) hereby alleges as follows:

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NATURE OF THE ACTION

1. This is an action under the patent laws of the United States, 35 U.S.C. § 1 et seq., for

infringement by Kmart and Sears of one or more claims of U.S. Patent Nos. 6,285,140;

8,203,275; and 8,390,206 (“the Patents-In-Suit”).

THE PARTIES

2. Variable Lighting LLC is a limited liability company duly organized under the laws

of Delaware, having its principal place of business at 303 Terry Fox Drive, Suite 300, Ottawa,

ON K2K3J1 Canada.

3. On information and belief, Defendant Sears Holdings Corporation is incorporated in

the State of Delaware, having its principal place of business at 3333 Beverly Road, Hoffman

Estates, IL 60179.

4. On information and belief, Defendant Kmart Holding Corporation is a wholly owned

subsidiary of Defendant Sears Holdings Corporation. On information and belief, Defendant

Kmart Holding Corporation is incorporated in the State of Delaware, having its principal place of business at 3333 Beverly Road, Hoffman Estates, IL 60179.

5. On information and belief, Defendant Kmart Corporation is incorporated in the State

of Michigan, having its principal place of business at 3333 Beverly Road, Hoffman Estates, IL

60179. On information and belief, Defendant Kmart Corporation is a wholly owned subsidiary

of Defendant Kmart Holding Corporation.

6. On information and belief, Defendant Kmart.com LLC is a wholly owned subsidiary

of Kmart Corporation. On information and belief, Kmart.com LLC is organized in the State of 2

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Delaware, having its principal place of business at 3333 Beverly Road, Hoffman Estates, IL

60179.

7. On information and belief, Defendant MyGofer LLC is a wholly owned subsidiary of

Kmart Corporation. On information and belief, MyGofer LLC is organized in the State of

Delaware, having its principal place of business at 3333 Beverly Road, Hoffman Estates, IL

60179.

8. On information and belief, Defendant Sears Roebuck & Co. is a wholly owned

subsidiary of Defendant Sears Holdings Corporation. On information and belief, Defendant

Sears Roebuck & Co. is incorporated in the State of New York, having its principal place of

business at 3333 Beverly Rd B-5 317A, Hoffman Estates, IL 60179.

JURISDICTION AND VENUE

9. This Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1338(a).

10. On information and belief, this Court has personal jurisdiction over Defendant Kmart

because of Kmart’s continuous and systematic contacts in this state, including, inter alia, their continuous contacts with, and sales to, customers in Delaware. On information and belief, Kmart has four retail stores in Delaware.

11. On information and belief, this Court has personal jurisdiction over Defendant Kmart

because Defendants Kmart Holding Corporation, Kmart Corporation, Kmart.com LLC, and

MyGofer LLC are registered in the State of Delaware.

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12. Kmart has sufficient contact with the District of Delaware to subject it to the personal

jurisdiction of this Court for purposes of this Complaint, including, without limitation, acts of

infringement of the Patents-in-Suit committed by Kmart within this District.

13. On information and belief, this Court has personal jurisdiction over Defendant Sears

because of Sears’ continuous and systematic contacts in this state, including, inter alia, their continuous contacts with, and sales to, customers in Delaware. On information and belief, Sears has fourteen retail stores in Delaware.

14. On information and belief, this Court has personal jurisdiction over Defendant Sears

because Defendants Sears Holdings Corporation and Sears Roebuck & Co. are registered in the

State of Delaware.

15. Sears has sufficient contact with the District of Delaware to subject it to the personal

jurisdiction of this Court for purposes of this Complaint, including, without limitation, acts of

infringement of the Patents-in-Suit committed by Sears within this District.

16. Venue is proper in this District pursuant to 28 U.S.C. §§ 1391(b), 1391(c), and

1400(b).

BACKGROUND

17. United States Patent No. 6,285,140 (“the ’140 patent”), entitled “Variable –Effect

Lighting System,” issued on September 4, 2001. The inventor is James Ruxton. A copy of the

’140 patent is attached as Exhibit A.

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18. Variable Lighting holds all right, title, and interest in the ’140 Patent by an

assignment recorded in the United States Patent and Trademark Office, and has the right to sue

and recover damages for infringement thereof.

19. The ’140 patent is generally directed to a variable effect lighting system having a

lamp assembly comprising a plurality of multi-colored lamps where each multi-colored lamp

produces a first and second color of light, and a programmable lamp controller for setting an illuminating element according to at least one predetermined pattern, each predetermined pattern being stored in a memory of the controller.

20. United States Patent No. 8,203,275 (“the ’275 patent”), entitled “Variable –Effect

Lighting System,” issued on June 19, 2012. The inventor is James Ruxton. A copy of the ’275

patent is attached as Exhibit B.

21. Variable Lighting holds all right, title, and interest in the ’275 patent by an

assignment recorded in the United States Patent and Trademark Office, and has the right to sue

and recover damages for infringement thereof.

22. The ’275 patent is generally directed to a variable effect lighting system having a

lamp assembly comprising a plurality of multi-colored lamps where each multi-colored lamp

produces a first and second color of light, and a lamp controller coupled to the lamp assembly for

varying the color produced by the lamps by varying a conduction interval of an illuminating

element.

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23. United States Patent No. 8,390,206 (“the ’206 patent”), entitled “Variable –Effect

Lighting System,” issued on March 5, 2013. The inventor is James Ruxton. A copy of the ’206 patent is attached as Exhibit C.

24. Variable Lighting holds all right, title, and interest in the ’206 patent by an

assignment recorded in the United States Patent and Trademark Office, and has the right to sue

and recover damages for infringement thereof.

25. The ’206 patent is generally directed to a variable effect lighting system having a

lamp assembly comprising a plurality of multi-colored lamps where each multi-colored lamp

produces a first and second color of light, and a lamp controller coupled to the lamp assembly for

controlling a current draw of each said illuminating element, the controller being configured to

adjust the current draw in accordance with the voltage frequency.

FACTUAL ALLEGATIONS

26. On information and belief, Defendant Kmart makes, uses, offers to sell, sells or

imports into the United States lighting systems with features within the scope of the Patents-In-

Suit, and that infringe the claims of the Patents-In-Suit.

27. On information and belief, Defendant Kmart makes, uses, offers to sell, sells, or

imports into the United States at least the following products that incorporate each and every

element of at least one claim of at least one of the Patents-In-Suit: The “Color Switch Plus 100 ct

LED Dual Color M5 Lights,” the “Color Switch Plus 100 ct LED Dual Color Net Lights,” the

“Color Switch Plus 4.5’ Aurora Pine,” the “Color Switch Plus 20ct LED Dual Color 6in Icicle

Lights,” the “Color Switch Plus 12’ Christmas Sonoma Spruce (PE/PVC) Pine,” the “Color

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Switch Plus Vancouver Fir Tree Family,” and the “Color Switch Plus Christmas LED Dual

Color Changing with 8 Functions – C9 Lights, 36 ct” (hereinafter, the “Kmart infringing

products”). This list is representative and is not intended to be inclusive of all products which

Defendant Kmart makes, uses, offers to sell, sells, or imports into the United States which

infringe at least one claim of the Patents-In-Suit.

28. On information and belief, each of the Kmart infringing products includes a plurality

of LED lights in various configurations, an electronics module containing a circuit board with a

microcontroller and other electronic components, and a user operable switch. The switch is used

in each infringing product to control the color of the lights, which may be all white or

multicolored, and may be set to varying patterns of colors, in accordance with the claims of the

Patents-in-Suit.

29. On information and belief, Defendant Sears makes, uses, offers to sell, sells or

imports into the United States lighting systems with features within the scope of the Patents-In-

Suit, and that infringe the claims of the Patents-In-Suit.

30. On information and belief, Defendant Sears makes, uses, offers to sell, sells, or

imports into the United States at least the following products that incorporate each and every

element of at least one claim of at least one of the Patents-In-Suit: The “National Tree Company

10 ft. Dunhill Fir Tree with Dual Color LEDs,” the “National Tree Company 70 Bulb Dual Color

LED Light String Starter Set, 5 Function,” the “Color Switch Plus 9’ Cortland Quick Set Pine w/800 Color Switch Plus LED,” the “General Electric Christmas Light Diamond 36 LED Color

Changing Light Show,” the “Color Switch Plus 100 ct Dual Color C3 LED Christmas Lights,” the “Brite Star Choose Your Color Light Show AC 15L Faceted C9,” the “National Tree

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Company 9” Red Bow with Dual Color LED Lights,” and the “Color Switch Plus 9” Christmas

Fraser Fir Pre-Lit Tree with 49 Lighting Functions” (hereinafter, the “Sears infringing products”). This list is representative and is not intended to be inclusive of all products which

Defendant Sears makes, uses, offers to sell, sells, or imports into the United States which infringe at least one claim of the Patents-In-Suit.

31. On information and belief, each of the Sears infringing products includes a plurality of LED lights in various configurations, an electronics module containing a circuit board with a microcontroller and other electronic components, and a user operable switch. The switch is used in each infringing product to control the color of the lights, which may be all white or multicolored, and may be set to varying patterns of colors, in accordance with the claims of the

Patents-in-Suit.

COUNT I

Infringement of the ’140 Patent

32. The allegations of paragraphs 1–31 are restated and incorporated by reference as though fully set forth herein.

33. On information and belief, the Kmart infringing products and the Sears infringing products each comprise a variable effect lighting system having a lamp assembly comprising a plurality of multi-colored lamps where each multi-colored lamp produces a first and second color of light, and a programmable lamp controller for setting an illuminating element according to at least one predetermined pattern, each predetermined pattern being stored in a memory of the controller, in accordance with at least claims 1 or 18 or both of the ’140 patent.

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34. On information and belief, Defendants Kmart and Sears have been and continue to

infringe at least claims 1 or 18 or both of the ’140 patent literally or under the doctrine of

equivalents by making, using, offering to sell, or selling lighting systems that operate in

accordance with the ’140 patent claims.

35. Variable Lighting has been damaged by the infringement by Defendants Kmart and

Sears and is suffering and will continue to suffer harm and damage as a result of this

infringement.

COUNT II

Infringement of the ’275 Patent

36. The allegations of paragraphs 1–31 are restated and incorporated by reference as

though fully set forth herein.

37. On information and belief, the Kmart infringing products and the Sears infringing

products each comprise a variable effect lighting system having a lamp assembly comprising a

plurality of multi-colored lamps where each multi-colored lamp produces a first and second color

of light, and a lamp controller coupled to the lamp assembly for varying the color produced by the lamps by varying a conduction interval of an illuminating element, in accordance with at least claims 1 or 11 or both of the ’275 patent.

38. On information and belief, Defendants Kmart and Sears have been and continue to

infringe at least claims 1 or 11 or both of the ’275 patent literally or under the doctrine of

equivalents by making, using, offering to sell, selling, or importing lighting systems that operate

in accordance with the ’275 patent claims.

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39. Variable Lighting has been damaged by the infringement by Defendants Kmart and

Sears and is suffering and will continue to suffer harm and damage as a result of this infringement.

COUNT III

Infringement of the ’206 Patent

40. The allegations of paragraphs 1–31 are restated and incorporated by reference as though fully set forth herein.

41. On information and belief, the Kmart infringing products and the Sears infringing products each comprise a variable effect lighting system having a lamp assembly comprising a plurality of multi-colored lamps where each multi-colored lamp produces a first and second color of light, and a lamp controller coupled to the lamp assembly for controlling a current draw of each said illuminating element, the controller being configured to adjust the current draw in accordance with the voltage frequency, in accordance with at least claim 1 of the ’206 patent.

42. On information and belief, Defendants Kmart and Sears have been and continue to infringe at least claim 1 of the ’206 patent literally or under the doctrine of equivalents by making, using, offering to sell, selling, or importing lighting systems that operate in accordance with the ’206 patent claims.

43. Variable Lighting has been damaged by the infringement by Defendants Kmart and

Sears and is suffering and will continue to suffer harm and damage as a result of this infringement.

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REQUEST FOR RELIEF

Variable Lighting respectfully requests this Court to enter judgment as follows:

A. Finding that each of the Patents-in-Suit are valid and enforceable;

B. Finding that Defendants have infringed at least one of the Patents-In-Suit;

C. Awarding Variable Lighting its actual damages based upon a reasonable royalty, to be assessed by or under the Court’s discretion, adequate to compensate Variable Lighting for

Defendants’ infringement of the Patents-in-Suit;

D. Awarding Variable Lighting pre-judgment interest and post-judgment interest at the

maximum rate allowable by law;

E. Ordering an accounting for damages;

F. Awarding Variable Lighting its costs; and

G. Such other and further relief as this Court may deem just and proper.

JURY DEMAND

Pursuant to Fed. R. Civ. P. 38(b), Variable Lighting hereby demands a jury trial on all issues

so triable raised in this action.

Date : July 20, 2015 Respectfully submitted,

FARNAN LLP

/s/ Brian E. Farnan Brian E. Farnan (Bar No. 4089) Michael J. Farnan (Bar No. 5165) 919 N. Market St., 12th Floor Wilmington, DE 19801 11

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(302) 777-0300 [email protected] [email protected]

Andrew Berks (admitted pro hac vice) Henry Cittone (admitted pro hac vice) Padmaja Chinta (admitted pro hac vice) Peter Fratangelo (admitted pro hac vice) CITTONE & CHINTA LLP 11 Broadway Suite 615 New York, NY 10004 Tel. 212-710-5619 [email protected] [email protected] [email protected] [email protected]

Attorneys for Plaintiff Variable Lighting LLC