Case Background

Multiplayer Network Innovations, LLC ("MNI) holds U.S. Patent No. 5,618,045 (the, "MNI patent" or the, "'045 patent"), a patent invented by Dr. Michael Kagan and Ian Solomon. Dr. Kagan is a noted scholar and inventor. He holds a PhD in chemistry from Hebrew University in Jerusalem and is the author of numerous books and journal articles relating to technology, chemistry, and religion. Dr. Kagan's articles have been published in the journals including Nature and the Journal of Medicinal Chemistry.

Dr. Kagan is the inventor of ten United States patents. Ian Solomon is an inventor and entrepreneur who is the co-founder of medical device makers SteadyMed Therapeutics, Inc. and Aespira Ltd.

During the mid-1990's, Dr. Kagan and Mr. Solomon conceived of a way for electronic devices to communicate with one another for the playing of computer games.

Dr. Kagan and Mr. Solomon's idea was conceived in part against the backdrop of the conflict in the Middle East. The idea was to use wirelessly connected gaming devices to open up channels of communication between people with divergent views.

Among Dr. Kagan and Mr. Solomon's inventions are inventions relating to the use of a device to enable two or more people to play a game over a wireless network.

Dr. Kagan and Mr. Solomon's inventions have useful applications to fields such as video gaming hardware and software, smartphone hardware and software, and casino gaming hardware and software, among others.

Leading technology companies including Microsoft Corporation, Intel Corporation, Google Corporation and Samsung Electronics Co. Ltd. have cited the MNI patent numerous times.

Over 325 issued United States patents cite the MNI patent. Apple has recognized Dr. Kagan and Mr. Solomon's inventions, including by citing the MNI patent as prior art in 59 United States patents.Three examples of Apple's patents include: 7,751,853, 7,526,588 and 7,441,062.

Plaintiff is the owner by assignment of the MNI patent. The MNI patent is entitled "Interactive Multiple Player Game System and Method of Playing a Game Between at Least Two Players." The MNI patent issued on April 8, 1997, based on a patent application filed on February 8, 1995. A true and correct copy of the MNI patent is attached hereto as Exhibit A.

The Alleged Patent Infringement

According to the formal complaint before the court, Plaintiff Multiplayer Network Innovations, LLC ("MNI") alleges that Apple has infringed and continue to infringe the MNI patent 5,618,045 by, among other things, making, using, offering for sale, and/or selling multiple player game systems and/or services covered by one or more claims of the MNI patent.

Such products and/or services include, by way of example and without limitation the iPhone lines of smartphones, the iPhone line of smartphones, the Apple TV Media player, and the iPad line of tablets, the use of which are covered by one or more claims of the MNI patent, including but not limited to claim 1. By making, using, offering for sale, and/or selling such products and services covered by one or more claims of the MNI patent, Defendant has injured MNI and is liable to MNI for infringement of the MNI patent.

Upon information and belief, Apple had knowledge of the '045 patent since at least as early as 2008.

The patent infringement case presented in today's report was filed in the Texas Eastern District Court, Marshall Office. The Presiding Judge in this case is noted as being Judge Rodney Gilstrap.

A Note about Patent Trolls and Action Being Taken

A 2011 study showed that Patent Trolls cost tech companies $29 Billion and a 2012 study made the case that patent trolling was out of control. In the first half 2013, Apple remained the #1 Target of Patent Trolls. In the second half of 2013 Apple remained in the top three.

On December 5, 2013, The US House of Representatives overwhelmingly passed the "Innovation Act" bill on Thursday aimed at discouraging frivolous lawsuits by patent holders. The move was backed by companies like Apple, IBM, Cisco and Google. House Judiciary Committee Chairman Bob Goodlatte (R., Va.) sponsored the bill, which won strong bipartisan support in passing by a 325-91 vote. Goodlatte said his bill "takes meaningful steps to address the abusive practices that have damaged our patent system and resulted in significant economic harm to our nation."

In Addition to the new act, the FTC is currently examining the practices of patent trolls or Patent Assertion Entities (PAEs) which are firms with a business model based primarily on purchasing patents and then attempting to generate revenue by asserting the intellectual property against persons who are already practicing the patented technologies. The FTC is conducting the study in order to further one of the agency's key missions—to examine cutting-edge competition and consumer protection topics that may have a significant effect on the U.S. economy.

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