One-E-Way v. Apple

Case 2:20-cv-06339 Document 1 Filed 07/16/20 Page 1 of 17 Page ID #:1
1 Douglas G. Muehlhauser (SBN 179495)

doug.muehlhauser@knobbe.com
2 Payson LeMeilleur (SBN 205690)
payson.lemeilleur@knobbe.com
3 KNOBBE, MARTENS, OLSON & BEAR, LLP
2040 Main Street, Fourteenth Floor
4 Irvine, CA 92614
Telephone: 949-760-0404
5 Facsimile: 949-760-9502
6 Attorneys for Plaintiff
ONE-E-WAY, INC.
7
8
9
10 IN THE UNITED STATES DISTRICT COURT
11 FOR THE CENTRAL DISTRICT OF CALIFORNIA
12
13 ONE-E-WAY, INC., a California Case No. 2:20-CV-06339
corporation,
14 COMPLAINT FOR PATENT
15 Plaintiff, INFRINGMENT
16 v. DEMAND FOR JURY TRIAL
17 APPLE INC., a California corporation,
18
Defendant.
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1 Plaintiff One-E-Way, Inc. (“One-E-Way”) hereby complains of Defendant

2 Apple Inc. (“Apple”), including infringement of One-E-Way’s rights in U.S. Patent
3 Nos. 8,131,391 and 10,468,047 (collectively, the “Asserted Patents”), and alleges as
4 follows:
5 I. THE PARTIES
6 1. Plaintiff One-E-Way is a California corporation that, as of the date of
7 this Complaint, has its principal place of business at 3016 E. Colorado Blvd.,
8 #70848, Pasadena, California 91107.
9 2. Upon information and belief, Defendant Apple is a California
10 corporation having a principal place of business at One Apple Park Way, Cupertino,
11 California, 95014.
12 II. JURISDICTION AND VENUE
13 3. This Court has subject-matter jurisdiction under 28 U.S.C. §§ 1331 and
14 1338(a).
15 4. This civil action includes claims for patent infringement arising under
16 the patent laws of the United States, 35 U.S.C. § 100 et seq., and, more particularly,
17 35 U.S.C. §§ 271 and 281.
18 5. Defendant Apple is subject to personal jurisdiction in this Judicial
19 District.
20 6. Defendant Apple conducts business throughout the United States,
21 including in this Judicial District, and operates Apple Stores in this Judicial District.
22 7. For example, through its websites and Apple Stores in this Judicial
23 District, Defendant Apple has advertised, offered to sell, sold, and/or distributed
24 infringing products, and/or induced and/or contributed to the sale and use of
25 infringing products in the United States, including in this Judicial District.
26 Defendant Apple has, directly or through its distribution network, purposefully
27 placed infringing products into the stream of commerce knowing and expecting them
28 to be purchased and used by consumers in the United States, including in this Judicial
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1 District, and such infringing products actually have been purchased and used in the
2 United States and in this Judicial District.
3 8. Venue is proper in the Central District of California pursuant to 28
4 U.S.C. § 1391 and 28 U.S.C. § 1400(b).
5 9. One-E-Way resides in this Juridical District.
6 10. Defendant Apple has regular and established places of business in this
7 Judicial District, including its operation of Apple Stores throughout this Judicial
8 District.
9 11. Defendant Apple has committed acts of infringement within this
10 Judicial District.
11 III. STATEMENT OF THE CASE
12 12. This action seeks relief for the infringement of One-E-Way’s patents
13 by Defendant Apple.
14 IV. STATEMENT OF FACTS
15 13. One-E-Way is a minority-owned small business founded in Pasadena,
16 California, by C. Earl Woolfork, the named inventor on the patents asserted herein.
17 Mr. Woolfork obtained his electrical engineering degree from the University of
18 Southern California in Los Angeles.
19 14. Mr. Woolfork first conceived of the wireless audio inventions at issue
20 in the late 1990s while exercising outdoors at the popular Santa Monica Steps in Los
21 Angeles. Mr. Woolfork noticed that many people were having trouble with the wires
22 connecting their audio players to their headsets, which interrupted their exercise
23 routines. Mr. Woolfork set out to create a solution that allowed people to exercise
24 free of wires, while still enjoying high quality music. Mr. Woolfork conceived of
25 an audio system that could wirelessly communicate high quality audio data. Mr.
26 Woolfork filed a patent application to protect his high quality wireless audio
27 inventions, and later founded One-E-Way to commercialize those inventions.
28
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1 Today, One-E-Way sells its patented wireless audio products through at least its
2 online retail outlet, available at https://shop.wayvz.com/.
3 15. Mr. Woolfork obtained and assigned to One-E-Way the Asserted
4 Patents. The inventions address several problems, including reducing interference
5 so that each wireless user can enjoy high quality private listening, even in the
6 proximity of other such wireless users. The common specification of the Asserted
7 Patents explains the use of code division multiple access technology (CDMA) with
8 unique coding to provide private listening despite other wireless audio systems
9 operating nearby in the same frequency band. The patented inventions address
10 interference from other device transmissions in the wireless audio spectrum by
11 using, for example, differential phase shift keying and processing for reduction of
12 intersymbol interference. Techniques in the patented inventions for achieving
13 private listening and for addressing interference are, among other techniques and for
14 example, used by devices compliant with the Bluetooth wireless communication
15 standard, from version 2.0 and all subsequent versions up through and including the
16 current version, version 5.2.
17 16. In August 2014, Apple received written notice from One-E-Way
18 regarding One-E-Way’s U.S. Patent Nos. 7,865,258 and 8,131,391 (respectively, the
19 “’258 and ’391 patents”), as well as One-E-Way’s U.S. Patent Nos. 7,412,294 and
20 7,684,885. In particular, One-E-Way identified certain wireless headphone,
21 earphone and speaker products by Beats Electronics, LLC that infringed at least
22 One-E-Way’s ’258 and ’391 patents. In August and November, 2014, Apple
23 responded to One-E-Way’s written notice.
24 17. In its November 2014 letter responding to One-E-Way, Apple
25 represented that “Apple acquired Beats Electronics earlier this year,” and
26 acknowledged Apple’s “investigation” and “careful review of the ’258 and ’391
27 patents” for the purpose of Beats or Apple potentially licensing One-E-Way’s
28 patents.
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1 18. On information and belief, Defendant Apple is a provider of Bluetooth-

2 compatible wireless audio products. Specifically, Defendant Apple offers for sale
3 and sells in the United States wireless earbud products including, at least, its AirPods
4 and AirPods Pro, which were commercially released in the United States in 2016
5 and 2019, respectively. Defendant Apple also offers for sale and sells in the United
6 States a wireless speaker product called the HomePod.
7 19. Apple has advertised its AirPods, AirPods Pro and HomePod (the
8 “Apple Accused Products”) as having Bluetooth connectivity, and has advertised the
9 benefits of their Bluetooth connectivity, for example, at
10 https://www.apple.com/airpods/, https://www.apple.com/airpods-2nd-generation/,
11 https://www.apple.com/airpods-pro/, https://www.apple.com/homepod/ and
12 https://www.apple.com/shop/buy-homepod/homepod/white.
13 20. Apple has advertised the Apple Accused Products as having
14 connectivity using Bluetooth version 4.0 or later.
15 21. Apple offers for sale and sells in the United States the Apple Accused
16 Products, including in this Judicial District.
17 22. On information and belief, Apple advertises and sells Beats wireless
18 audio products, including Powerbeats Wireless Earphones, Powerbeats Pro Wireless
19 Earphones, Powerbeats3 Wireless Earphones, Beats Solo Pro Wireless Noise
20 Cancelling Headphones, Beats Solo3 Wireless Headphones, Beats Studio3 Wireless
21 Headphones, BeatsX Wireless Earphones, and Beats Pill+ Portable Speaker
22 (collectively, the “Beats Accused Products”).
23 23. Apple has advertised the Beats Accused Products as having Bluetooth
24 connectivity, and has advertised the benefits of their Bluetooth connectivity, for
25 example, at
26  https://www.apple.com/shop/product/MWNV2LL/A/powerbeats-
27 high-performance-wireless-earphones-black,
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1  https://www.apple.com/shop/product/MRJA2LL/A/beats-solo-pro-
2 wireless-noise-cancelling-headphones-more-matte-collection-dark-
3 blue,
4  https://www.apple.com/shop/product/MX452LL/A/beats-solo3-
5 wireless-headphones-the-beats-icon-collection-satin-silver,
6  https://www.apple.com/shop/product/MV702LL/A/powerbeats-pro-
7 totally-wireless-earphones-navy,
8  https://www.apple.com/shop/product/MXJA2LL/A/beats-studio3-
9 wireless-headphones-the-beats-skyline-collection-midnight-black,
10  https://www.apple.com/shop/product/MX7X2LL/A/beatsx-earphones-
11 the-beats-decade-collection-defiant-black-red, and
12  https://www.apple.com/shop/product/ML4M2LL/A/beats-pill-
13 portable-speaker-black.
14 24. Apple has advertised the Beats Accused Products as having
15 connectivity for Bluetooth version 4.0 or later.
16 25. Apple offers for sale and sells in the United States the Beats Accused
17 Products, including in this Judicial District.
18 26. The Apple and Beats Accused Products are compatible with prior
19 versions of Bluetooth, including back to Bluetooth version 2.0.
20 V. THE PATENTS-IN-SUIT
21 27. One-E-Way is the owner by assignment of the ’391 patent, titled
22 “Wireless Digital Audio Music System,” which the United States Patent and
23 Trademark Office duly issued on March 6, 2012. A true and correct copy of the ’391
24 patent is attached hereto as Exhibit 1.
25 28. One-E-Way is the owner by assignment of the ’047 patent, titled
26 “Wireless Digital Audio Music System,” which the United States Patent and
27 Trademark Office duly issued on November 5, 2019. A true and correct copy of the
28 ’047 patent is attached hereto as Exhibit 2.
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1 29. The ’391 and ’047 patents are family members in the same chain of
2 patents, and both claim priority back to the original patent application in the chain,
3 U.S. Patent Application No. 10/027,391, filed on December 21, 2001.
4 30. One-E-Way manufactures and sells wireless audio devices covered by
5 the Asserted Patents.
6 VI. COUNT I:
7 INFRINGEMENT OF U.S. PATENT NO. 8,131,391
8 31. Plaintiff hereby realleges and incorporates by reference the allegations
9 set forth in paragraphs 1 through 30.
10 32. Defendant Apple’s products, including at least the Apple and Beats
11 Accused Products, infringe at least Claim 5 of the ’391 patent under 35 U.S.C.
12 § 271(a), (b) and (c).
13 33. Defendant Apple has directly infringed one or more claims of the ’391
14 patent through its making, using, importing, offering for sale and/or selling in the
15 United States its Apple and Beats Accused Products.
16 34. For example, on information and belief, Defendant’s Apple and Beats
17 Accused Products include all of the limitations of Claim 5 of the ’391 patent. More
18 particularly, the Apple and Beats Accused Products are Bluetooth compatible
19 products that comprise a wireless audio receiver. They receive a unique user code
20 and original audio signal representation from a mobile digital audio transmitter, for
21 example as indicated in the Bluetooth specification, by receiving and using a
22 Bluetooth access code and device address in frequency-hopping communication to
23 receive packets that include data representing audio information. They also have a
24 direct conversion module that receives the packets, as generally indicated by the low
25 power consumption characteristics that Apple advertises for its Apple and Beats
26 Accused Products. They decode reduced intersymbol interference coding, for
27 example and again as indicated in the Bluetooth specification, by applying pulse
28 shaping. They also have independent code division multiple access communication,
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1 for example, by using piconet-based, frequency-hopping spread spectrum

2 communication as indicated in the Bluetooth specification. And they use digital-to-
3 analog conversion and generate audio output, for example, by creating an analog
4 audio signal from received digital representation of the audio signal where the
5 representation is communicated wirelessly in access-coded packets, again as
6 indicated by the Bluetooth specification. They also generate audio output that does
7 not include audible audio content originating from other device transmissions
8 operating in the digital wireless audio receiver spectrum, for example as indicated
9 in the Bluetooth specification, by using unique addressing to receive the access-
10 coded packets transmitted by the digital audio transmitter.
11 35. Upon information and belief, Defendant Apple has knowledge of One-
12 E-Way’s patents, including the ’391 patent, at least based on receiving actual notice
13 of the ’391 patent.
14 36. For example, Defendant Apple had knowledge of the ’391 patent prior
15 to the filing of this Complaint. In 2014, Apple represented that it had conducted a
16 “careful review” of the ’391 patent for the purpose of Beats or Apple potentially
17 licensing One-E-Way’s patents.
18 37. Upon information and belief, Defendant Apple has indirectly infringed
19 the ’391 patent under 35 U.S.C. § 271(b) by actively inducing the use of, offering
20 for sale, selling, or importing the above-mentioned Apple and Beats Accused
21 Products in the United States, knowing and intending that such products would be
22 used by customers and end users in a manner that infringes the ’391 patent.
23 38. For example, Defendant Apple provides instructions and manuals to its
24 customers and end users on how to pair the Apple and Beats Accused Products with
25 audio transmission devices using a Bluetooth connection.
26 39. By way of example only, the following excerpt from Apple’s website
27 (https://support.apple.com/en-us/HT208718) provides the following instructions
28 regarding Apple’s AirPods devices:
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1
2
3
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8 40. Apple provides similar instructions in its customer manuals on how to
9 pair the Apple Accused Products with audio transmission devices using a Bluetooth
10 connection, as shown at the following websites:
11  https://manuals.info.apple.com/MANUALS/1000/MA1852/en_US/air
12 pods-2gen-qsg.pdf,
14 pods-pro-qsg.pdf, and
15  https://manuals.info.apple.com/MANUALS/1000/MA1821/en_US/ho
16 mepod-ios13-qsg.pdf.
17 41. By way of additional example, the following instructions are provided
18 for Apple’s BeatsX product (https://www.beatsbydre.com/support/how-to/set-up-
19 and-use-beatsx-earphones):
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1 42. Defendant Apple’s customers and end users who use the Apple and
2 Beats Accused Products in accordance with Apple’s instructions directly infringe
3 one or more claims of the ’391 patent.
4 43. Upon information and belief, Defendant Apple knew and intended that
5 these activities, including providing instructions to users of the Apple and Beats
6 Accused Products to pair those products with a Bluetooth transmitter, would cause
7 direct infringement. Upon information and belief, Defendant Apple knew and
8 intended that these activities, including providing instructions to users of the Apple
9 and Beats Accused Products to pair those products with a Bluetooth transmitter,
10 would cause direct infringement. For example, Defendant Apple knew that
11 engaging in these activities would cause users of the Apple and Beats Accused
12 Products to establish independent code division multiple access communication with
13 a transmitter device, to establish a unique user code for wireless packet-based
14 communications, to process the packet-based communications for reduction of
15 intersymbol interference, to use digital-to-analog conversion to generate audio
16 output, and to reproduce the audio output without content originating from other
17 device transmitted signals operating in the digital wireless audio receiver spectrum.
18 Defendant Apple’s acts therefore constitute infringement of the ’391 patent under
19 35 U.S.C. § 271(b).
20 44. Defendant Apple has also indirectly infringed the ’391 patent under 35
21 U.S.C. § 271(c) by contributing to the direct infringement of Apple’s customers and
22 end users by making, using, importing, offering for sale and/or selling in the United
23 States its Apple and Beats Accused Products. For example, the Apple and Beats
24 Accused Products are not staple articles of commerce and are not suitable for any
25 substantial non-infringing use. To the contrary, their sole substantial use is to be
26 used in an infringing manner by receiving wireless audio from a transmission device
27 through a Bluetooth connection. Furthermore, as Apple’s instructions and manuals
28 referenced above demonstrate, the Apple and Beats Accused Products constitute a
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1 material part of the invention that Defendant Apple knows to be especially made
2 and/or adapted for use in infringing the ’391 patent.
3 45. Having been on notice of the ’391 patent since at least August 2014,
4 Apple has known and intended that its continued actions actively induce and
5 contribute to actual direct infringement of the ’391 patent.
6 46. Because of Defendant Apple’s infringement of the ’391 patent, One-E-
7 Way has suffered and will continue to suffer harm and injury, including monetary
8 damages in an amount to be determined at trial.
9 VII. COUNT II:
10 INFRINGEMENT OF U.S. PATENT NO. 10,468,047
11 47. Plaintiff hereby realleges and incorporates by reference the allegations
12 set forth in paragraphs 1 through 46.
13 48. Defendant Apple’s products, including at least the Apple and Beats
14 Accused Products, infringe at least Claim 1 of the ’047 patent under 35 U.S.C.
15 § 271(a), (b) and (c).
16 49. Defendant Apple has directly infringed one or more claims of the ’047
17 patent through its making, using, importing, offering for sale and/or selling in the
18 United States its Apple and Beats Accused Products.
19 50. For example, on information and belief, Defendant’s Apple and Beats
20 Accused Products include all of the limitations of Claim 1 of the ’047 patent. More
21 particularly, the Apple and Beats Accused Products are Bluetooth compatible
22 products that comprise a portable spread spectrum audio receiver. They receive and
23 store a unique user code and receive wireless modulation transmissions from a
24 spread spectrum transmitter, for example as indicated in the Bluetooth specification,
25 by receiving and using a Bluetooth access code and device address in frequency-
26 hopping communication to receive packets that include data representing audio
27 information. They have a direct conversion module that receives wireless
28 modulation transmissions, as generally indicated by the low power consumption
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1 characteristics that Apple advertises for its Apple and Beats Accused Products. They
2 receive wireless modulation transmissions that have been processed to reduce
3 intersymbol interference and also further process the transmissions for intersymbol
4 interference reduction, for example as indicated in the Bluetooth specification, by
5 applying pulse shaping. As also indicated in the Bluetooth specification, they use a
6 digital-to-analog converter to provide an analog audio output that corresponds to a
7 digital audio representation, for example, by creating an analog audio signal from
8 received digital representation of the audio signal where the representation is
9 communicated wirelessly in access-coded packets. They also use a speaker to
10 generate an audio signal where the audio signal does not include audible audio
11 content originating from any audio signals transmitted in a spectrum used by the
12 spread spectrum transmitter that do not originate from the spread spectrum
13 transmitter, for example as indicated in the Bluetooth specification, by using unique
14 addressing to receive the access-coded packets transmitted by the spread spectrum
15 transmitter. They also use independent code division multiple access
16 communication, for example, by using piconet-based, frequency-hopping
17 communication as indicated in the Bluetooth specification, which likewise indicates
18 the use of unique addressing to communicate with only the spread spectrum
19 transmitter during a wireless connection. They also perform at least one of a
20 plurality of demodulations, for example as indicated in the Bluetooth specification,
21 by using differential phase shift keying.
22 51. Upon information and belief, Defendant Apple has knowledge the ’047
23 patent, at least based on receiving actual notice through this Complaint.
24 52. Upon information and belief, Defendant Apple has indirectly infringed
25 the ’047 patent under 35 U.S.C. § 271(b) by actively inducing the use of, offering
26 for sale, selling, or importing the above-mentioned Apple and Beats Accused
27 Products in the United States, knowing and intending that such products would be
28 used by customers and end users in a manner that infringes the ’047 patent.
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1 53. For example, Defendant Apple provides instructions and manuals to its
2 customers and end users on how to pair the Apple and Beats Accused Products with
3 audio transmission devices using a Bluetooth connection.
4 54. By way of example only, the following excerpt from Apple’s website
5 (https://support.apple.com/en-us/HT208718) provides the following instructions
6 regarding Apple’s AirPods devices:
7
8
9
10
11
12
13
14 55. Apple provides similar instructions in its customer manuals on how to
15 pair the Apple Accused Products with audio transmission devices using a Bluetooth
16 connection, as shown at the following websites:
18 pods-2gen-qsg.pdf,
20 pods-pro-qsg.pdf, and
21  https://manuals.info.apple.com/MANUALS/1000/MA1821/en_US/ho
22 mepod-ios13-qsg.pdf.
23 56. By way of additional example, the following instructions are provided
24 for Apple’s BeatsX product (https://www.beatsbydre.com/support/how-to/set-up-
25 and-use-beatsx-earphones):
26 ///
27 ///
28 ///
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10 57. Defendant Apple’s customers and end users who use the Apple and
11 Beats Accused Products in accordance with Apple’s instructions directly infringe
12 one or more claims of the ’047 patent.
13 58. Upon information and belief, Defendant Apple knew and intended that
14 these activities, including providing instructions to users of the Apple and Beats
15 Accused Products to pair those products with a Bluetooth transmitter, would cause
16 direct infringement. For example, Defendant Apple knew that engaging in these
17 activities would cause users of the Apple and Beats Accused Products to establish
18 independent code division multiple access communication with a spread spectrum
19 transmitter device, to receive and store a unique user code for wireless packet-based
20 communications, to process received wireless modulation transmissions for
21 reduction of intersymbol interference, to use digital-to-analog conversion to provide
22 an analog audio output, to use a speaker to generate an audio signal that does not
23 include audible audio content originating from any audio signals transmitted in a
24 spectrum used by the spread spectrum transmitter that do not originate from the
25 spread spectrum transmitter, and to perform at least one of a plurality of
26 demodulations. Defendant Apple’s acts therefore constitute infringement of the
27 ’047 patent under 35 U.S.C. § 271(b).
28 ///
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1 59. Defendant Apple has also indirectly infringed the ’047 patent under 35
2 U.S.C. § 271(c) by contributing to the direct infringement of Apple’s customers and
3 end users by making, using, importing, offering for sale and/or selling in the United
4 States its Apple and Beats Accused Products. For example, the Apple and Beats
5 Accused Products are not staple articles of commerce and are not suitable for any
6 substantial non-infringing use. To the contrary, their sole substantial use is to be
7 used in an infringing manner by receiving wireless audio from a transmission device
8 through a Bluetooth connection. Furthermore, as Apple’s instructions and manuals
9 referenced above demonstrate, the Apple and Beats Accused Products constitute a
10 material part of the invention that Defendant Apple knows to be especially made
11 and/or adapted for use in practicing the inventions of the ’047 patent.
12 60. By at least the time of trial, Apple will have known and intended that
13 its continued actions would actively induce and contribute to actual direct
14 infringement of the ’047 patent.
15 61. Because of Defendant Apple’s infringement of the ’047 patent, One-E-
16 Way has suffered and will continue to suffer harm and injury, including monetary
17 damages in an amount to be determined at trial.
18 PRAYER FOR RELIEF
19 WHEREFORE, Plaintiff prays for judgment in its favor against Defendant
20 Apple for the following relief:
21 A. Pursuant to 35 U.S.C. § 271, a determination that Defendant Apple and
22 their officers, agents, servants, employees, attorneys and all others in active concert
23 and/or participation with them have infringed the ’391 and ’047 patents through the
24 manufacture, use, importation, offer for sale, and/or sale of infringing products
25 and/or any of the other acts prohibited by 35 U.S.C. § 271;
26 B. Pursuant to 35 U.S.C. § 284, an award compensating Plaintiff for
27 Defendant Apple’s infringement of the ’391 and ’047 patents through payment of
28 not less than a reasonable royalty on Defendant Apple’s sales of infringing products;
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1 C. Pursuant to 35 U.S.C. § 285, a finding that this is an exceptional case,

2 and an award of reasonable attorneys’ fees and non-taxable costs;
3 D. An assessment of prejudgment and post-judgment interest and costs
4 against Defendant, together with an award of such interest and costs, pursuant to 35
5 U.S.C. § 284; and
6 E. Such other and further relief as this Court may deem just.
7
8 Respectfully submitted,
10
11 Dated: July 16, 2020 /s/ Douglas G. Muehlhauser
Douglas G. Muehlhauser
12 Payson LeMeilleur
Attorneys for Plaintiff
13 ONE-E-WAY, INC.
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1 DEMAND FOR JURY TRIAL

2 Pursuant to Rule 38(b) of the Federal Rules of Civil Procedure, Plaintiff One-
3 E-Way hereby demands a trial by jury on all issues so triable.
4
5 Respectfully submitted,
7
8 Dated: July 16, 2020 /s/ Douglas G. Muehlhauser
Douglas G. Muehlhauser
9 Payson LeMeilleur
Attorneys for Plaintiff
10 ONE-E-WAY, INC.
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Case 2:20-cv-06339 Document 1 Filed 07/16/20 Page 1 of 17 Page ID #:1

1 Douglas G. Muehlhauser (SBN 179495)

1 Plaintiff One-E-Way, Inc. (“One-E-Way”) hereby complains of Defendant

1 18. On information and belief, Defendant Apple is a provider of Bluetooth-

1 for example, by using piconet-based, frequency-hopping spread spectrum

1 C. Pursuant to 35 U.S.C. § 285, a finding that this is an exceptional case,

1 DEMAND FOR JURY TRIAL

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