DEFENDANTS’ MOTION FOR LEAVE TO AMEND THEIR ANSWER …

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE

SONOS, INC.,

Plaintiff,

v.

D&M HOLDINGS INC. d/b/a THE D+M GROUP, D&M HOLDINGS U.S. INC., and DENON ELECTRONICS (USA), LLC,

Defendants.

)))))))))))

C.A. No. 14-1330 (RGA)

DEFENDANTS’ MOTION FOR LEAVE TO AMEND THEIR ANSWER TO ASSERT COUNTERCLAIMS

Defendants D&M Holdings Inc. d/b/a The D&M Group (“The D&M Group”), D&M

Holdings U.S. Inc. (D&M Holdings) and Denon Electronics (USA), LLC (“Denon USA”)

(collectively, “Defendants”) pursuant to Federal Rule of Civil Procedure 15(a)(2), D. Del. LR

15.1, and the Scheduling Order in this case (D.I. 65), move for leave to amend their Answer to

assert counterclaims for patent infringement against Plaintiff Sonos, Inc. (“Sonos”)1. A proposed

order is attached as Ex. 3.

I. NATURE AND STAGE OF PROCEEDINGS

Sonos filed its original Complaint for Patent Infringement against Defendants on October

21, 2014 asserting four patents. D.I. 1. Sonos filed an Amended Complaint on December 17,

2014 further alleging infringement of two additional patents. D.I. 6. On February 27, 2015 Sonos

moved for leave to file a Second Amended Complaint asserting six additional patents, for a total

of twelve asserted patents. D.I. 29. Defendants stipulated to Sonos’s Motion for Leave on

March 9, 2015 (D.I. 30), and the Court granted the motion on the same day based on the

1 Pursuant to D. Del. L.R. 15.1, a redline version of Defendants’ amended answer and counterclaims is attached as Ex. 1. A clean copy of the amended answer and counterclaims, along with its corresponding exhibits and appendices, is attached as Ex. 2.

Case 1:14-cv-01330-RGA Document 83 Filed 12/08/15 Page 1 of 6 PageID #: 3264

SONOS 1006 - Page 1

rhoy

Typewritten Text

REDACTED - PUBLIC VERSION Original Filing Date: November 30, 2015 Redacted Filing Date: December 8, 2015

2

stipulation (D.I. 31). Defendants filed their answer to the Second Amended Complaint on April

30, 2015. D.I. 48.

In its complaints, Sonos alleges that Denon’s HEOS brand of wireless speakers and its

mobile controller application infringe Sonos’s asserted patents. Sonos further alleges that its

own line of “PLAY” speakers and mobile controller application are covered by its asserted

patents and that Defendants should have been aware of its patents because it publishes a chart on

its website correlating its patents to its products.

The parties negotiated and filed a proposed scheduling order on August 18, 2015. See

D.I. 60. The Court held a scheduling conference on August 18, 2015 and a Scheduling Order

was entered on August 25, 2015. D.I. 65. Pursuant to the Scheduling Order, the deadline to file

“[a]ll motions to join other parties, and to amend or supplement the pleadings (including

amendments to add patents)” is scheduled for January 29, 2016. Plaintiff’s initial infringement

contentions are due the same day. The litigation is in the early stages of discovery, with

Defendants’ production of core technical documents due on December 11, 2015. Fact discovery

is scheduled to close on November 18, 2016.

Further, as the Court may recall from the scheduling conference, Sonos advised

Defendants and the Court that it intends to assert an additional 6-8 patents against Defendants in

this case. In response, the Court advised Sonos that for each patent it added in this lawsuit, it

would need to drop one of the currently-asserted patents so that there are no more than 12 patents

asserted by Sonos should it seek leave to amend its Complaint for a third time.

Pursuant to Local Rule 7.1.1, counsel for Defendants contacted counsel for Sonos on

November 30, 2015 to request whether Sonos would agree to Defendant’s filing of their

Amended Answer, Defenses and Counterclaims. However, after some back and forth between


SONOS 1006 - Page 2

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the parties on November 30, 2015 (including Defendants providing Sonos the numbers of the

patents subject to the counterclaims, a summary of the accused instrumentalities, and a summary

of the bases for their motion for leave to amend), Sonos has not responded with its position as to

whether it opposes the filing of the Defendants’ Answer, Defenses and Counterclaims.

II. SUMMARY OF THE ARGUMENT

Under the liberal standard for amending pleadings, this Court should grant this motion.

The counterclaims are timely, coming two months before the deadline to file amended pleadings

in the Scheduling Order. The nine patents asserted in the counterclaims relate to the same

category of products already at issue in this lawsuit. In particular, the counterclaims allege that

the Sonos’s system of configurable home audio products, including the “PLAY” wireless

speakers and/or controlling mobile applications infringe the asserted patents. Given the overlap,

it would serve judicial economy to allow Defendants’ affirmative claims to proceed alongside

Sonos’s claims. This case is in its early stages and there is no unfair prejudice to Sonos.

Furthermore, there has been no undue delay, bad faith, or dilatory motive on the part of

Defendants, and their amendments are not futile.

III. SUMMARY OF THE FACTS

Defendants’ amended pleading asserts affirmative counterclaims for Sonos’s

infringement of nine patents: U.S. Patent Nos. 7,343,435 (“the ‘435 Patent”); 6,539,210 (“the

‘210 Patent”); 7,305,694 (“the ‘694 Patent”); 6,469,633 (“the ‘633 Patent”); 7,987,294 (“the ‘294

Patent”); 8,755,667 (“the ‘667 Patent”); 6,473,441 (“the ‘441 Patent”); 7,734,850 (“the ‘850

Patent”); and 7,995,899 (“the ‘899 Patent”) (collectively the “D&M Patents”).

As alleged in the Counterclaims, Sonos directly and/or indirectly infringes the D&M

Patents through, for example, the manufacture, sale, and use of its line of its “PLAY” wireless


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speakers, its “SUB” and “PLAYBAR” speakers, its “CONNECT” pre-amplifier and

“CONNECT:AMP,” and its mobile controller application (the “Sonos Audio Products”). Sonos

claims that these products are the commercial embodiments of its asserted patents. See

http://www.sonos.com/legal/~/media/PDFs/Sonos/patents/patent_information_en. Yet, as is

made apparent by the D&M counterclaims, the technology underlying these products are covered

by a variety of patents owned by D&M Holdings and The D&M Group.

The counterclaims are not likely to significantly increase discovery in this case because

the Sonos Audio Products are already at issue in the current litigation as alleged embodiments of

Sonos’s currently-asserted patents. Furthermore, there is significant time left within the

discovery period (nearly a year) to exchange and complete required discovery.

IV. THE REQUIREMENTS FOR AMENDMENT HAVE BEEN SATISFIED

“A pleading may state as a counterclaim against an opposing party any claim that is not

compulsory.” Fed. R. Civ. P. 13(b). The Federal Rules of Civil Procedure endorse a liberal

policy of amendments and supplemental pleadings. Fed. R. Civ. P. 15(a) provides that “leave [to

amend a pleading] shall be freely given when justice so requires.” Ferguson v. E.I. du Pont de

Nemours & Co., C.A. No. 76-407, 1981 WL 178, at *1 (D. Del. May 20, 1981). “The Third

Circuit has adopted a liberal policy favoring the amendment of pleadings to ensure that claims

are decided on the merits rather than on technicalities.” Leader Technologies, Inc. v. Facebook,

Inc., C.A. No. 08-862-LPS, 2010 WL 2545959, at *3 (D. Del. June 24, 2010) (internal citation

omitted). Amendment should ordinarily be permitted absent a showing of “undue delay, bad

faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by

amendment previously allowed, undue prejudice to the opposing party by virtue of the allowance

of the amendment, futility of the amendment.” Foman v. Davis, 371 U.S. 178, 182 (1962);


SONOS 1006 - Page 4

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Lorenz v. CSX Corp., 1 F.3d 1406, 1414 (3d Cir. 1993) (“In the absence of substantial or undue

prejudice, denial instead must be based on bad faith or dilatory motives, truly undue or

unexplained delay, repeated failures to cure the deficiency by amendments previously allowed,

or futility of amendment.”). As demonstrated below, Defendants should be permitted to amend

their pleading for a number of reasons.

First and foremost, the deadline to file motions to amend pleadings is January 29, 2015

(D.I. 65), which is still two months away. Thus, this motion is timely filed. Moreover,

discovery is still in its very early stages and the fact discovery deadline is nearly a year away.

Given the factual overlap discussed above, the proposed amendment is also warranted in the

name of judicial economy. More importantly, however, as demonstrated in the appendices and

exhibits attached and referenced throughout the proposed counterclaims, Defendants were

diligent in conducting an investigation prior to asserting their infringement allegations. Exhibit J

to the Counterclaims is comprised of claim charts demonstrating how the Sonos products

infringe various representative claims of the D&M Patents. Any alleged delay in asserting

counterclaims was due to the time necessary to conduct the due diligence evidenced by the claim

charts and not any dilatory motive or bad faith. Consequently, under the liberal standards for

amendment, this motion should be granted.

V. CONCLUSION

Defendants respectfully request that the Court grant this timely-filed motion to amend

pleadings to assert counterclaims for patent infringement.


SONOS 1006 - Page 5

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OF COUNSEL:

John M. Jackson Kurt A. Schwarz Nathaniel (Nate) St. Clair II Matthew C. Acosta Blake T. Dietrich JACKSON WALKER L.L.P. 2323 Ross Avenue, Suite 600 Dallas, TX 75201 (214) 953-6000

David Folsom JACKSON WALKER L.L.P. 6002 Summerfield, Suite B Texarkana, TX 75503 (903) 255-3250

MORRIS, NICHOLS, ARSHT & TUNNELL LLP

/s/ Michael J. Flynn _______________________________________ Jack B. Blumenfeld (#1014) Michael J. Flynn (#5333) 1201 North Market Street P.O. Box 1347 Wilmington, DE 19899 (302) [email protected] [email protected]

Attorneys for D&M Holdings Inc. d/b/a The D+M Group, D&M Holdings U.S. Inc. and Denon Electronics (USA), LLC

November 30, 2015

CERTIFICATION PURSUANT TO D. DEL. LR 7.1.1

Counsel for Defendants has attempted to reach agreement with counsel for Plaintiff on

the subject of this motion, but has been unable to do so prior to filing.

/s/ Michael J. Flynn Michael J. Flynn (#5333)


SONOS 1006 - Page 6

EXHIBIT 1

Case 1:14-cv-01330-RGA Document 83-1 Filed 12/08/15 Page 1 of 42 PageID #: 3270

SONOS 1006 - Page 7

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE

SONOS, INC. §

§

§ Plaintiff, § § C.A. No. 14-1330 (RGA) v. § § JURY TRIAL DEMANDED D&M HOLDINGS INC. d/b/a THE D+M GROUP, D&M HOLDINGS U.S. INC., and DENON ELECTRONICS (USA), LLC,

§ § § §

§ Defendants. §

DEFENDANTS’ ANSWER TO PLAINTIFFS’ SECOND AMENDED COMPLAINT

DEFENDANTS’ AMENDED ANSWER, DEFENSES, AND COUNTERCLAIMS FOR

PATENT INFRINGEMENT

Pursuant to the Federal Rules of Civil Procedure 7 and 1213, Defendants D&M

Holdings Inc. d/b/a The D+&M Group, (“The D&M Group”), D&M Holdings U.S. Inc.,. (D&M

Holdings US) and Denon Electronics (USA), LLC, (“ (“Denon USA”) (collectively,

“Defendants”), by and through the undersigned counsel, hereby file this the following Amended

Answer to the Second Amended Complaint , Defenses, and Counterclaims For Patent

Infringement (“Complaint”) (D.I. 31) filed by(collectively, the “Counterclaims”) against Plaintiff

Sonos, Inc. (“Plaintiff” or “Sonos”). Except as expressly admitted herein, Defendants deny all

allegations in theSonos’s Second Amended Complaint. (“Complaint”).

ANSWER AND DEFENSES TO SECOND AMENDED COMPLAINT


SONOS 1006 - Page 8

I. I. THE PARTIES

1. Defendants are without knowledge or information sufficient to form a belief as to

the allegations contained in Paragraph 1 of the Complaint, and therefore deny the same.

2. Defendants admit the allegations contained in Paragraph 2 of the Complaint,

except that theThe D+&M Group is no longer a wholly owned subsidiary of Bain Capital and

therefore is not a Bain Capital portfolio company.

3. Defendants admit the allegations contained in Paragraph 3 of the Complaint.

4. Defendants admit the allegations contained in Paragraph 4 of the Complaint.

II. II. JURISDICTION AND VENUE

5. Defendants admit that this is a patent infringement action and that the Court has

subject matter jurisdiction over the subject matter of the Complaint. Except as expressly

admitted, Defendants deny the allegations in Paragraph 5 of the Complaint.

6. Defendants admit that D&M Holdings U.S. Inc. and Denon Electronics (USA),

LLC are subject to personal jurisdiction in this Court. However, Defendants deny that Defendant

D&M Holdings Inc. d/b/a The D+M Group is subject to this Court’s personal jurisdiction.

Except as expressly admitted, Defendants deny the allegations in Paragraph 6 of the Complaint.

7. Defendants admit that D&M Holdings U.S. Inc. is organized under Delaware law.

Except as expressly admitted, Defendants deny the allegations in Paragraph 7 of the Complaint.

8. Defendants admit that Denon Electronics (USA), LLC is organized under

Delaware law. Except as expressly admitted, Defendants deny the allegations in Paragraph 8 of

the Complaint.

9. Defendants deny the allegations contained in Paragraph 9 of the Complaint.


SONOS 1006 - Page 9

10. Defendants D&M Holdings U.S. Inc. and Denon Electronics (USA), LLC admit

that they transact business in the State of Delaware. Except as expressly admitted, Defendants

deny the allegations contained in Paragraph 10 of the Complaint.

11. For purposes of this lawsuit only, Defendants D&M Holdings U.S. Inc. and

Denon Electronics (USA), LLC do not contest that venue is proper in this Court, although

Defendants D&M Holdings U.S. Inc. and Denon Electronics (USA), LLC maintain that there are

more convenient fora in which to proceed with this action. Except as expressly admitted,

Defendants deny the allegations in Paragraph 11 of the Complaint.

III. III. FACTUAL BACKGROUND

12. Defendants are without sufficient knowledge or information to form a belief as to

the truth of the allegations in Paragraph 12 of the Complaint, and therefore denies them.





15. Defendants admit that the HEOS system was launched in June 2014. In addition,

Defendants admit that the HEOS system is made up of a line of HEOS wireless audio products,

including the “HEOS 7” speaker, the “HEOS 5” speaker, the “HEOS 3” speaker, the “HEOS

LINK” pre-amplifier, and the “HEOS AMP” amplifier. Except as expressly admitted,

Defendants deny the allegations in Paragraph 15 of the Complaint.

16. Defendants deny each and every allegation of Paragraph 16 of the Complaint.





SONOS 1006 - Page 10






COUNT ONE [ALLEGED] INFRINGEMENT OF U.S. PATENT NO. 8,788,080



25. To the extent that Paragraph 25 of the Complaint incorporates allegations in

previous paragraphs, Defendants incorporate by reference all of their responses to those

paragraphs, as if fully set forth herein.

26. Defendants admit that U.S. Patent No. 8,788,080 (the “’080 Patent”) is entitled

“Multi-Channel Pairing in a Media System” and was issued by the United States Patent and

Trademark Office. Defendants admit that what appears to be a copy of the ’080 Patent was

attached as Exhibit K to the Complaint. Defendants deny the remaining allegations contained in

Paragraph 26 of the Complaint.





30. Paragraph 30 of the Complaint contains Plaintiff’s characterization of the ’080

Patent’s disclosure to which no response is required. To the extent that a response is required to

the allegations in Paragraph 30 of the Complaint, Defendants deny the allegations in Paragraph

30 of the Complaint and state that the content of the ’080 Patent speaks for itself.







COUNT TWO [ALLEGED] INFRINGEMENT OF U.S. PATENT NO. 7,571,014



37. To the extent that Paragraph 37 incorporates allegations in previous paragraphs,

Defendants incorporate by reference all of their responses to those paragraphs, as if set forth

herein.


“Method and Apparatus for Controlling Multimedia Players in a Multi-Zone system” and was

issued by the United States Patent and Trademark Office. Defendants admit that what appears to

be a copy of the ’014 Patent was attached as Exhibit N to the Complaint. Defendants deny the

remaining allegations contained in Paragraph 38 of the Complaint.















COUNT THREE [ALLEGED] INFRINGEMENT OF U.S. PATENT NO. 8,588,949




Defendants incorporate by reference all of their responses to those paragraphs, as if fully set

forth herein.


“Method and Apparatus for Adjusting Volume Levels in a Multi-Zone System” and was issued

by the United States Patent and Trademark Office. Defendants admit that what appears to be a

copy of the ’949 Patent was attached as Exhibit Q to the Complaint. Defendants deny the

remaining allegations contained in Paragraph 50 of the Complaint.















COUNT FOUR [ALLEGED] INFRINGEMENT OF U.S. PATENT NO. D559,197





forth herein.

62. Defendants admit that U.S. Patent No. D559,197 (“the ’197 design patent”) is

entitled “Control Strip for Electronic Appliances” and was issued by the United States Patent and

Trademark Office. Defendants admit that what appears to be a copy of the ’197 design patent

was attached as Exhibit R to the Complaint. Defendants deny the remaining allegations

contained in Paragraph 62 of the Complaint.






design patent’s disclosure to which no response is required. To the extent that a response is

required to the allegations in Paragraph 66 of the Complaint, Defendants deny the allegations in

Paragraph 66 of the Complaint and state that the content of the ’197 design patent speaks for

itself.






COUNT FIVE [ALLEGED] INFRINGEMENT OF U.S. PATENT NO. 7,792,311





forth herein.


“Method and Apparatus for Automatically Enabling Subwoofer Channel Audio Based on

Detection of Subwoofer Device” and was issued by the United States Patent and Trademark

Office. Defendants admit that what appears to be a copy of the ’311 Patent was attached as

Exhibit S to the Complaint. Defendants deny the remaining allegations contained in Paragraph

73 of the Complaint.

















COUNT SIX [ALLEGED] INFRINGEMENT OF U.S. PATENT NO. 7,805,682





forth herein.


“Method and Apparatus for Editing a Playlist” and was issued by the United States Patent and


attached as Exhibit T to the Complaint. Defendants deny the remaining allegations contained in
















COUNT SEVEN [ALLEGED] INFRINGEMENT OF U.S. PATENT NO. 8,024,055





forth herein.


“Method and System for Controlling Amplifiers” and was issued by the United States Patent and


attached as Exhibit U to the Complaint. Defendants deny the remaining allegations contained in















COUNT EIGHT [ALLEGED] INFRINGEMENT OF U.S. PATENT NO. 8,843,224





forth herein.


“Method and System for Controlling Amplifiers” and was issued by the United States Patent and


attached as Exhibit V to the Complaint. Defendants deny the remaining allegations contained in















COUNT NINE [ALLEGED] INFRINGEMENT OF U.S. PATENT NO. 8,923,997





forth herein.


“Method and Apparatus for Adjusting a Speaker System” and was issued by the United States

Patent and Trademark Office. Defendants admit that what appears to be a copy of the ’997

Patent was attached as Exhibit W to the Complaint. Defendants deny the remaining allegations

contained in Paragraph 119 of the Complaint.













COUNT TEN [ALLEGED] INFRINGEMENT OF U.S. PATENT NO. 8,370,678





forth herein.


“Systems and Methods for Synchronizing Operations Among a Plurality of Independently

Clocked Digital Data Processing Devices Without a Voltage Controlled Crystal Oscillator” and

was issued by the United States Patent and Trademark Office. Defendants admit that what

appears to be a copy of the ’678 Patent was attached as Exhibit X to the Complaint. Defendants

deny the remaining allegations contained in Paragraph 129 of the Complaint.














COUNT ELEVEN [ALLEGED] INFRINGEMENT OF U.S. PATENT NO. 8,689,036





forth herein.





appears to be a copy of the ’036 Patent was attached as Exhibit Y to the Complaint. Defendants















COUNT TWELVE [ALLEGED] INFRINGEMENT OF U.S. PATENT NO. 8,938,637





forth herein.





appears to be a copy of the ’637 Patent was attached as Exhibit Z to the Complaint. Defendants














IV. IV. JURY DEMAND

Because Plaintiff’s demand for jury trial does not state any allegation, no response by

Defendants is required.



V. V. [PLAINTIFF’S] PRAYER FOR RELIEF

Defendants deny that Plaintiff is entitled to any relief whatsoever, including any relief requested

in the Prayer for Relief portion of the Complaint that follows Paragraph 159, including

subparagraphs A-F thereto.

VI. AFFIRMATIVEaffirmative DEFENSES

Without prejudice to the denials hereinabove set forth in the Answer, without admitting

any of Sonos’s allegations not otherwise admitted, and without undertaking any of the burdens

imposed by law on Sonos, Defendants assert the following defenses to Sonos’s Complaint, and

expressly reserves the right to allege additional Affirmative Defenses as they become known

during this litigation:

FAILURE TO STATE A CLAIM

1. The Complaint fails to state a claim upon which relief may be granted.

NON-INFRINGEMENT OF THE PATENTS-IN-SUIT

2. Defendants do not infringe, and hashave not infringed, either directly, contributorily, by

inducement, jointly, literally, or under the doctrine of equivalents, any valid and enforceable

claim of the Patents-in-Suit.

INVALIDITY OF THE PATENTS-IN-SUIT

3. One or more claims of the Patents-in-Suit are invalid or void for failing to comply with

one or more of the conditions for patentability set forth in Part II of Title 35 of the United States

Code, including, but not limited to, §§ 101, 102, 103, and 112.

LIMITATION ON DAMAGES AND COSTS

4. Sonos’s claim for relief and prayer for damages are limited by 35 U.S.C. §§ 286, 287.



Sonos’s recovery of costs is limited under 35 U.S.C. § 288.

UNENFORCEABILITY – ESTOPPEL, ACQUIESCENCE, AND WAIVER

5. Sonos is barred in whole or in part by the doctrines of estoppel, acquiescence, unclean

hands and waiver from enforcing the Patents-in-Suit against Defendants.

PATENT EXHAUSTION, PATENT MISUSE, AND FIRST SALE DOCTRINE

6. Upon information and belief, Sonos is barred in whole or in part by the doctrines of

patent exhaustion, patent misuse, and/or the first sale doctrine from enforcing the patents-in-suit

against Defendants.

ADEQUATE REMEDY OTHER THAN INJUNCTIVE RELIEF

7. Sonos is not entitled to injunctive relief because any alleged injury to Sonos is not

immediate and irreparable, Sonos cannot show likelihood of success on the merits, and/or Sonos

has an adequate remedy at law.

INTERVENING RIGHTS

8. Based on information and belief, one or more of Sonos’s claims for relief are

limited and/or barred by intervening rights.

PERSONAL JURISDICTION

9. Sonos’s claims for relief with respect to COUNTERCLAIMS FOR PATENT INFRINGEMENT

I. THE PARTIES



1. Counterplaintiff D&M Holdings, Inc. d/b/a The D+&M Group is a Japanese corporation with its principal place of business at 2-1 Nisshin-cho, Kawasaki-ku,

Kawasaki-shi, Kanagawa 210-8569, Japan.

2. Counterplaintiff D&M Holdings U.S. Inc. is a Delaware corporation with its principal place of business at 100 Corporate Drive, Mahwah, NJ 07430.

II. JURISDICTION AND VENUE 3. These Counterclaims are barred as this for patent infringement and arise under the patent laws of the United States, Title 35, United States Code, specifically §§ 271 and 281-285. This Court does not have has subject matter jurisdiction under 28 U.S.C. §§ 1331,

1338, 1367.

4. Upon information and belief, and by virtue of Sonos filing this lawsuit, this Court

has personal jurisdiction over D&M Holdings Inc. d/b/a The D+M GroupSonos.

5. Venue for the purposes of these Counterclaims is proper under 28 U.S.C. §§ 1391 and 1400.

III. FACTUAL BACKGROUND

6. The D&M Group, including D&M Holdings US, is an international leader in the consumer audio market, holding brands such as Denon®, Marantz®, and Boston

Acoustics®, that are known throughout the world for their quality and technological innovation. Accordingly, The D&M Group holds more than 50 U.S. Patents.

7. The Denon® brand traces its history back to 1910 with the production of Japan’s first gramophone. It celebrated its 100th Year Anniversary in 2010. Home audio systems have been marketed in the United States under the Denon® brand for many decades. For example, Denon released its DHT-682XP home theater system in Nov. 2001 and the DHT-

700DV home theater system in 2002:



DHT-682XP from Nov. 2001 DHT-700DV from 2002



8. More recently, in 2014, Denon introduced its HEOS line of home audio products.

9. On information and belief, Sonos was founded in 2002 and entered the home audio market in late 2004 with a line of wireless home speakers.

10. On information and belief, Sonos commenced an investigation into Defendants no later than the date that D&M launched its HEOS products. On information and belief, the

investigation included a review of The D&M Group’s and D&M Holdings US’s issued patents, and Sonos’s potential infringement of the same.

11. Sonos currently designs, manufactures, and sells products for use in various configurable wireless home audio systems (collectively, the “Accused Home Audio System”). These systems include Sonos’s line of “PLAY” speakers, including the

“PLAY:1,” “PLAY:3,” and “PLAY:5” speakers, the “SUB” speaker and the “PLAYBAR” speaker (the “Sonos Speaker Products”). In various exemplary configurations Sonos’s

wireless speakers receive and processes wireless data signals from Sonos’s “CONNECT” pre-amplifier and “CONNECT:AMP” ( the “Sonos Component Products”). The systems

also include Sonos’s controller application (the “Sonos Controller App”) available for iOS, Android, PC, or Mac, which remotely controls Sonos’s Speaker and Component Products.

12. Sonos advertises that its Accused Home Audio System can stream audio to and from multiple devices. For example, Sonos advertises that it can “[p]lay music stored on up to 16 PCs, Macs or NAS (Network Attached Storage) devices on your home network, supporting

the most popular audio formats, from iTunes® to MP3,” and “wirelessly plays your iTunes® music, direct from your iPhone®, iPad® or iPod touch®, to any room in your

home.” See, e.g., http://www.sonos.com/shop/play1.

13. Sonos also advertises its Accused Home Audio System’s ability to “[g]et over 100,000 free radio stations, shows and podcasts, all for free. And [users] can tune in

without turning on [their] computer: browse for stations, or type in specific call letters or a radio host [they] love.” See, e.g., http://www.sonos.com/shop/play1.

14. Sonos specifies that its system supports “compressed MP3, iTunes Plus, WMA (including purchased Windows Media downloads), AAC (MPEG4), AAC+, Ogg Vorbis, Audible (format 4), Apple Lossless, Flac (lossless) music files, as well as uncompressed WAV and AIFF files. Native support for 44.1kHz sample rates. Additional support for

48kHz, 32kHz, 24kHz, 22kHz, 16kHz, 11kHz, and 8kHz sample rates.” See, e.g., http://www.sonos.com/shop/play1.

15. The Sonos Accused Home Audio System is specially adapted to operate on a pre-existing wireless network, or using Sonos’s SonosNet encrypted peer-to-peer wireless mesh network, which is “dedicated for [] Sonos systems to reduce WiFi interference.” See, e.g.,

http://www.sonos.com/shop/play1.

16. The Accused Home Audio System is also advertised to allow users to “control [their] Sonos players, music on the Internet and [their] computer right from the palm of [their] hand.” “If you have multiple music players, you can control what's playing in any room

from anywhere in your house. Sonos Controllers aren't tied to a specific player, so you can



http://www.sonos.com/shop/play1




use any Controller to control the music and the volume in all your rooms.” See, e.g., http://www.sonos.com/shop/play1. Users of the Accused Home Audio System can “[p]lay a

different song in every room, at the same time.” Id.

17. On information and belief, Sonos releases regular updates for its Controller App for automatic or prompted download by its customers. See, e.g.,

http://www.sonos.com/software/release/5-5.

18. As further alleged and described below, these and other technologies utilized by Sonos’s Accused Home Audio System infringe one or more claims of The D&M Group’s

and D&M Holding’s patents.

IV. COUNTERCLAIMS

D&M HOLDINGS US’S FIRST COUNTERCLAIM FOR INFRINGEMENT (“THE ‘435 PATENT”)

19. D&M Holdings US incorporates by reference paragraphs 1 through 18 of these

Counterclaims and realleges them as though fully set forth herein.

20. On March 11, 2008, the United States Patent and Trademark Office issued U.S. Patent No. 7,343,435, entitled “Stream based compressed file download with interruption

recovery” (“the ‘435 Patent”). A true and correct copy of the ‘435 Patent is attached hereto as Exhibit A.

21. D&M Holdings US is the owner of all rights title and interest in and to the ‘435 Patent.

22. On information and belief, Sonos has been and is now infringing, contributorily infringing and/or actively inducing infringement of the ‘435 Patent in violation of 35 U.S.C. § 271 by making, using, offering to sell, selling causing to be sold, causing to be imported and/or importing in the United States of America its Accused Home Audio System that

practices method that fall within the scope of one or more claims of the ‘435 Patent. For example, Sonos’s Accused Home Audio System utilizes an infringing a method of

determining a recovery state in a data stream as demonstrated, for example, in the claim charts attached as Exhibit J. Sonos’s infringement is literal and/or under the doctrine of

equivalents.

23. On information and belief, and for at least the reasons stated in Paragraph 10 above, Sonos’s infringement of the ‘435 Patent has been and continues to be willful.

24. Additionally, and/or alternatively, Sonos has indirectly infringed and continues to indirectly infringe one or more of the claims of the ‘435 Patent, in violation of 35 U.S.C.

§ 271(b), by actively inducing users of the Accused Home Audio System to directly infringe the one or more claims of the ‘435 Patent. In particular, on information and belief, (a)

Sonos had actual knowledge of the ‘435 Patent or were willfully blind to its existence prior to, and no later than, the filing of these Counterclaims (See ¶ 10; Exhibit J), (b) Sonos

intentionally caused, urged, or encouraged users of the Accused Home Audio System to




directly infringe one or more claims of the ‘435 Patent by promoting, advertising, and instructing customers and potential customers about the Accused Home Audio System and uses of the system, including infringing uses (See ¶¶ 11-17; Exhibit J), (c) Sonos knew (or

should have known) that its actions would induce users of the Accused Home Audio System to directly infringe one or more claims of the ‘435 Patent, and (d) users of the Accused

Home Audio System directly infringe one or more claims of the ‘435 Patent. For instance, at a minimum, Sonos has supplied and continues to supply its Speaker Products,

Component Products, the Sonos Controller App, and its SonosNet product to customers while knowing that use of these products will infringe one or more claims of the ‘435

Patent, and that Sonos’s customers then directly infringe one or more claims of the ‘435 Patent by using the Accused Home Audio Products in accordance with Sonos’s literature

(See ¶¶ 11-17; Exhibit J).

25. Additionally, and/or alternatively, Sonos has indirectly infringed and continues to indirectly infringe one or more of the claims of the ‘435 Patent, in violation of 35 U.S.C. § 271(c), by offering to sell or selling within the United States, and or importing into the

United States, components in connection with the Accused Home Audio System that contribute to the direct infringement of the ‘435 Patent by users of the Accused Home

Audio System. In particular, on information and belief, (a) Sonos had actual knowledge of the ‘435 Patent or were willfully blind to its existence prior to, and no later than, the filing

of these counterclaims (See ¶ 10), (b) Sonos offers for sale, sells, and/or imports, in connection with its Accused Home Audio System, one or more material components of the

invention of the ‘435 Patent that are not staple articles of commerce suitable for substantial noninfringing use, (c) Sonos knows (or should have known) that such component(s) were

especially made or especially adapted for use in an infringement of the ‘435 Patent, and (d) users of the Accused Home Audio Products that comprise such material components directly infringe one or more claims of the ‘435 Patent. (See ¶¶ 11-17; Exhibit J) For

instance, at a minimum, Defendants offer for sale, sell, and/or import software updates for the Accused Home Audio System that meet the one or more claims of the ‘435 Patent. (See

¶ 17; Exhibit J) These software updates are material components of the Accused Home Audio System especially made and/or adapted for use in the Accused Home Audio System, and these software updates are not staple articles of commerce suitable for substantial non-infringing use. Sonos’s customers then directly infringe the one or more claims of the ‘435 Patent by installing and using the software updates with the Accused Home Audio System.

26. As a consequence of the infringement by Sonos, D&M Holdings US is entitled to recover damages adequate to compensate it for the infringement complained of herein,

including lost profits, but in no event less than a reasonable royalty.

27. D&M Holdings US has been, and continues to be, irreparably injured by Sonos’s infringement, unless and until such infringement is enjoined by this Court.

D&M HOLDINGS US’S SECOND COUNTERCLAIM FOR INFRINGEMENT (THE ‘210 PATENT)



28. D&M Holdings US incorporates by reference paragraphs 1 through 27 of these Counterclaims and realleges them as though fully set forth herein.

29. On March 25, 2003, the United States Patent and Trademark Office issued U.S. Patent No. 6,539,210, entitled “Automatic assignment and tuning of radio call letters to

radio presets” (“the ‘210 Patent”). A true and correct copy of the ‘210 Patent is attached hereto as Exhibit B.



practices methods that fall within the scope of one or more claims of the ‘210 Patent. For example, the Sonos App utilizes an infringing method of identifying signal sources as

demonstrated, for example, in the claim charts attached as Exhibit J. Sonos’s infringement is literal and/or under the doctrine of equivalents.




Sonos had actual knowledge of the ‘210 Patent or were willfully blind to its existence prior to, and no later than, the filing of these Counterclaims (See ¶ 10), (b) Sonos intentionally

caused, urged, or encouraged users of the Accused Home Audio System to directly infringe one or more claims of the ‘210 Patent by promoting, advertising, and instructing customers

and potential customers about the Accused Home Audio System and uses of the system, including infringing uses (See ¶¶ 11-17; Exhibit J), (c) Sonos knew (or should have known) that its actions would induce users of the Accused Home Audio System to directly infringe one or more claims of the ‘210 Patent, and (d) users of the Accused Home Audio System

directly infringe one or more claims of the ‘210 Patent. For instance, at a minimum, Sonos has supplied and continues to supply its Speaker Products, Component Products, the Sonos

Controller App, and its SonosNet product to customers while knowing that use of these products will infringe one or more claims of the ‘210 Patent, and that Sonos’s customers then directly infringe one or more claims of the ‘210 Patent by using the Accused Home

Audio Products in accordance with Sonos’s literature (See ¶¶ 11-17; Exhibit J).














D&M HOLDINGS US’S THIRD COUNTERCLAIM FOR INFRINGEMENT THE ‘694 PATENT)




38. On December 4, 2007, the United States Patent and Trademark Office issued U.S. Patent No. 7,305,694, entitled “Method and apparatus for remotely controlling a receiver according to content and user selection” (“the ‘694 Patent”). A true and correct copy of

the ‘694 Patent is attached hereto as Exhibit C.


40. On information and belief, Sonos has been and is now infringing, contributorily infringing and/or actively inducing infringement of the ‘694 Patent in violation of 35 U.S.C. § 271 by making, using, offering to sell, selling causing to be sold, causing to be imported

and/or importing in the United States of America its Accused Home Audio System that fall within the scope of one or more claims of the ‘694 Patent. For example, the Accused Home Audio System comprises an infringing method for controlling a receiver having a plurality

of receiver connections as demonstrated, for example, in the claim charts attached as Exhibit J. Sonos’s infringement is literal and/or under the doctrine of equivalents.























D&M HOLDINGS US’S FOURTH COUNTERCLAIM FOR INFRINGEMENT (THE ‘633 PATENT)



47. On October 22, 2002, the United States Patent and Trademark Office issued U.S. Patent No. 6,469,633, entitled “Remote control of electronic devices” (“the ‘633 Patent”). A

true and correct copy of the ‘633 Patent is attached hereto as Exhibit D.



and/or importing in the United States of America its Accused Home Audio System that falls within the scope of one or more claims of the ‘633 Patent. For example, the Sonos App utilizes an infringing method and apparatus for interfacing with remotely controllable

devices as demonstrated, for example, in the claim charts attached as Exhibit J. Sonos’s infringement is literal and/or under the doctrine of equivalents.

50. On information and belief, and for at least the reasons stated in Paragraph 10



above, Sonos’s infringement of the ‘633 Patent has been and continues to be willful.






















D&M HOLDINGS US’S FIFTH COUNTERCLAIM FOR INFRINGEMENT (THE ‘667 PATENT)




56. On June 17, 2014, the United States Patent and Trademark Office issued U.S. Patent No. 8,755,667, entitled “Data entry via on-screen display” (“the ‘667 Patent”). A

true and correct copy of the ‘667 Patent is attached hereto as Exhibit F.



and/or importing in the United States of America its Accused Home Audio System that fall within the scope of one or more claims of the ‘667 Patent. For example, the Sonos App in conjunction with the Sonos Speaker and Component Products utilizes infringing methods for inputting text associated with a recording as demonstrated, for example, in the claim charts attached as Exhibit J. Sonos’s infringement is literal and/or under the doctrine of

equivalents.























D&M HOLDINGS US’S SIXTH COUNTERCLAIM FOR INFRINGEMENT (THE ‘441 PATENT)




65. On October 29, 2002, the United States Patent and Trademark Office issued U.S. Patent No. 6,473,441, entitled “Multi-channel video pump” (“the ‘441 Patent”). A true and

correct copy of the ‘441 Patent is attached hereto as Exhibit G.



and/or importing in the United States of America its Accused Home Audio System that falls within the scope of one or more claims of the ‘441 Patent. For example, the Accused Home Audio System comprise an apparatus for simultaneously reproducing multiple recordings from storage devices for transport on a network recordings as demonstrated, for example, in the claim charts attached as Exhibit J. Sonos’s infringement is literal and/or under the

doctrine of equivalents.























D&M HOLDINGS US’S SEVENTH COUNTERCLAIM FOR INFRINGEMENT (THE ‘850 PATENT)



74. On June 8, 2010, the United States Patent and Trademark Office issued U.S. Patent No. 7,734,850, entitled “Method for stream based compressed file download with

interruption recovery and further decompressing and de-archiving data in filesystem” (“the ‘850 Patent”). A true and correct copy of the ‘850 Patent is attached hereto as

Exhibit H.



practices method that fall within the scope of one or more claims of the ‘850 Patent. For example, Sonos’s Accused Home Audio System utilizes an infringing method of resuming

an interrupted data stream transfer as demonstrated, for example, in the claim charts attached as Exhibit J. Sonos’s infringement is literal and/or under the doctrine of



equivalents.


















80. As a consequence of the infringement by Sonos, D&M Holdings US is entitled to



recover damages adequate to compensate it for the infringement complained of herein, including lost profits, but in no event less than a reasonable royalty.


D&M HOLDINGS US’S EIGHTH COUNTERCLAIM FOR INFRINGEMENT (THE ‘899 PATENT)

82. D&M Holdings US incorporates by reference paragraphs 1 through 81 and

realleges them as though fully set forth herein.

83. On August 9, 2011, the United States Patent and Trademark Office issued U.S. Patent No. 7,995,899, entitled “Apparatus, method and database for control of audio/video

equipment” (“the ‘899 Patent”). A true and correct copy of the ‘899 Patent is attached hereto as Exhibit I.



and/or importing in the United States of America its Accused Home Audio System that fall within the scope of one or more claims of the ‘899 Patent. For example, the Sonos App

operated in conjunction with the Sonos Speaker and Component Products utilizes infringing methods for of playing back a recorded signal as demonstrated, for example, in the claim charts attached as Exhibit J. Sonos’s infringement is literal and/or under the
























THE D&M GROUP’S FIRST COUNTERCLAIM FOR INFRINGEMENT (THE ‘294 PATENT)



91. The D&M Group incorporates by reference paragraphs 1 through 90 of these Counterclaims and realleges them as though fully set forth herein.

92. On July 26, 2011, the United States Patent and Trademark Office issued U.S. Patent No. 7,987,294, entitled “Unification of Multimedia Devices” (“the ‘294 Patent”). A true and

correct copy of the ‘294 Patent is attached hereto as Exhibit E.

93. The D&M Group is the owner of all rights title and interest in and to the ‘294 Patent.


and/or importing in the United States of America its Accused Home Audio System that fall within the scope of one or more claims of the ‘294 Patent. For example, the Accused Home Audio System utilizes infringing methods and systems for providing a multimedia system

including a plurality of networked multimedia devices as demonstrated, for example, in the claim charts attached as Exhibit J. Sonos’s infringement is literal and/or under the





















98. As a consequence of the infringement by Sonos, The D&M Group is entitled to recover damages adequate to compensate it for the infringement complained of herein,


99. The D&M Group has been, and continues to be, irreparably injured by Sonos’s infringement, unless and until such infringement is enjoined by this Court.

V. REQUEST FOR JURY TRIAL

Pursuant to Federal Rule of Civil Procedure 38, Defendants demand a trial by jury of any

triable issues within the counterclaims enumerated above.

VII. VI. PRAYER FOR RELIEF

WHEREFORE, Defendants pray that the Court enter judgment in their favor and D&M

Holdings US and The D&M Group pray for relief against Sonos as follows:

a. a declaration that Defendants have not infringed any valid claim of the

Patents-in-Suit;

b. a declaration that the claims of the Patents-in-Suit are invalid and/or

unenforceable;

c A. a dismissal, with prejudice, of Sonos’s claims against Defendants;

dB. a denial of all relief sought by Sonos in its Complaint;



eC. an award of Defendants’ costs and reasonable attorney fees; and

f. such D. A judgment that Sonos has infringed and continues to infringe one

or more of U.S. Patent Nos. 7,343,435; 6,539,210; 7,305,694; 6,469,633; 7,987,294; 8,755,667;

6,473,441; 7,734,850; 7,995,899 (collectively the “D&M Patents”) in violation of 35 U.S.C. §

271(a), (b), and (c), and that such infringement is willful;

E. A preliminary and permanent injunction enjoining Sonos, its officers, agents,

servants, employees and attorneys, and other persons in active concert or participation with

Sonos, and its parents, subsidiaries, divisions, successors and assigns, from further infringement

of the D&M Patents;

F. A judgment awarding D&M Holdings US and The D&M Group all damages

adequate to compensate for Sonos’s infringement of the D&M Patents, and in no event less than

a reasonable royalty for Sonos’s acts of infringement, including damages for provisional rights

(where applicable) and all pre-judgment and post-judgment interest at the maximum rate

permitted by law;

G. A judgment awarding D&M Holdings US and The D&M Group all damages,

including treble damages based on any infringement found to be willful, pursuant to 35 U.S.C.

§§ 284 and/or 289, together with prejudgment interest;

H. Such other and further relief that theas this Court deemsmay deem just and

proper.



OF COUNSEL:

John M. Jackson Nathaniel (Nate) St. Clair II Matthew C. Acosta Blake T. Dietrich JACKSON WALKER L.L.P. 2323 Ross Ave,., Suite 600 Dallas, TX 75201 (214) 953-6000

David Folsom JACKSON WALKER L.L.P. 6002 Summerfield, Suite B Texarkana, TX 75503 (903) 255-3250

MORRIS, NICHOLS, ARSHT & TUNNELL LLP

Jack B. Blumenfeld (#1014) Julia Heaney (#3052) Michael J. Flynn (#5333) 1201 N. Market Street P.O. Box 1347 Wilmington, DE 19899-1347 (302) [email protected]@[email protected]

Attorneys for D&M Holdings Inc. d/b/a The D+M Group, D&M Holdings U.S. Inc. and Denon Electronics (USA), LLC



Documents

DEFENDANTS’ MOTION FOR LEAVE TO AMEND THEIR ANSWER …