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Glenn W. Peterson, Esq. (SBN 126173) MILLSTONE, PETERSON & WATTS, LLP 2267 Lava Ridge Court, Suite 210 Roseville, CA 95661 Telephone: (916) 780-8222 Fax No: (916) 780-8775 John P. Costello, Esq. (SBN 161511) COSTELLO LAW CORPORATION 331 J Street, Suite 200 Sacramento, California 95814 Telephone No.: (916) 441-2234 Fax No: (916) 441-4254 Attorneys for Plaintiffs SCOTT P. KAPLAN and NANCY SCHWARTZ

UNITED STATES DISTRICT COURT 12 NORTHERN DISTRICT OF CALIFORNIA SCOTT KAPLAN, an individual, and NANCY SCHWARTZ, an individual, Plaintiffs, vs. ONFORCE, INC., a Delaware Corporation, ONFORCE SERVICES, INC., a Delaware Corporation, and DOES 1 through 50, inclusively, Defendants. Case No.: COMPLAINT FOR INFRINGEMENT UTILITY PATENT OF

JURY DEMAND

Pursuant to the Federal Rules of Civil Procedure and this Court's Local Rules, SCOTT P. KAPLAN ("Kaplan") and NANCY SCHWARTZ ("Schwartz") (Individually "Plaintiff' and collectively ONFORCE "Defendants"). /II 28 III "Plaintiffs") file this complaint against ONFORCE, ("Onforce 2") (Individually INC. ("Onforce and 1") and

SERVICES,

INC.

"Defendant"

collectively

COMPLAINT FOR INFRINGEMENT

OF UTILITY PATENT

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NATURE OF THIS ACTION

1.

This Complaint asserts claims against Defendant arising from its infringement ofU.S.

Pat. No. 8,429,088, issued April 23, 2013, and entitled "On-Location Electronics Troubleshooting Services System", (the "088 Patent"). A true and correct copy of this 088 Patent is attached hereto as Exhibit A. THE PARTIES 2. Plaintiff Kaplan is an individual and owner of the 088 Patent. Plaintiff Kaplan

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resides at 11643 Aileron Court, Inver Grove Heights, MN 55077. 3. Plaintiff Schwartz is an individual and owner of the 088 Patent. Plaintiff Schwartz

resides at 11643 Aileron Court, Inver Grove Heights, MN 55077. 4. Plaintiffs allege on information and belief that Defendant Onforce 1 is a company

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organized and existing under the laws of the State of Delaware and is registered as a foreign corporation with the California Secretary of the State with its principal California business address being 818 W. Seventh Street, Los Angeles, CA 90017. 5. Plaintiffs allege on information and belief that Defendant Onforce 2 is a company

organized and existing under the laws of the State of Delaware and is headquartered at 10 Maguire Road, Building 2, Suite 232, Lexington, MA 02421.
JURISDICTION AND VENUE

6.

This Court has jurisdiction over the subject matter of this action pursuant to 28 U.S.C.

~~ 1331, 1338(a), and/or 1367(a). 7. This Court has jurisdiction over the Defendants and venue is proper in this judicial

District pursuant to 28 U.S.C. ~~ 1400(b) and 1391 (b)-(d) as Defendants conduct business andlor have committed acts of patent infringement within this judicial District and Defendant. Among other acts, Defendants Onforce 1 and Onforce 2 conduct business in this judicial District, by entering into agreements with "Service Buyers" in this District. Additionally, Defendant Onforce 1 owns and operates a software platform and system in this District which infringes the 088 Patent. Defendant Onforce 1 is registered to do business in California.
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COMPLAINT FOR INFRINGEMENT OF UTILITY PATENT

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INTRADISTRICT

ASSIGNMENT

8.

As the present action is an intellectual property action, pursuant to Civil Local Rule

3-2(c), this action may be assigned to any court within this judicial district.
FACTS

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9.

Plaintiffs own, through their own inventive contribution and by assignment, all right,

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title and interest in the 088 Patent. 10. The 088 Patent is in full force and effect, having been recently issued within the last

year by the United States Patent and Trademark Office. 11. Plaintiffs, along with Preston L. Palmer ("Palmer") were co-inventors of the matter

claimed in the 088 Patent. Mr. Palmer has assigned his interest in the 088 Patent to the Plaintiffs. 12. In 2002, Kaplan, along with Palmer, conceived of an invention that would

automatically match an electronics trouble-shooting and repair technician with a consumer or company that was in need of such services. These services might range from computer and

computer network trouble-shooting and repair to similar issues in dealing with consumer electronics, to name some examples. The increasing dependence on electronics by consumers and the business community required that qualified technicians be trained and available to maintain and repair these devices. Around 2002, the only viable options for a consumer or company in need of electronics trouble-shooting and repair services was to do an internet search for a technician, look in the phone book, or perhaps hire a friend or relative that was technically skilled. However, the shortcomings of these options from the standpoint of the customer were myriad, including: 1) lack of reliability with regard to the technician showing up on time to do the job, or showing up at all; 2) the technician being unqualified to perform a particular trouble-shooting and repair tasks; 3) the technician being unprofessional or discourteous; 4) the lack of a uniform pricing schedule among the technicians, which were qualified to perform the tasks; and 5) difficulty in finding the right technician within a customer's geographic area. From the standpoint of the technician, as of 2002, the following challenges existed in servicing customers in the electronics trouble-shooting and repair field: 1) variability of the work order type; 2) variability of the work order effort; 3) variability of the work order length; 4) variability of the work order urgency; 5) variability of distance of the work order
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from other customers needing work orders fulfilled; 6) variability in being dispatched to a sufficient customer base to earn a sufficient living and7) dependability of customers in paying their bills for fulfilled work orders. 13. The invention which Kaplan and Palmer conceived of in 2002 was intended to and the technician noted above in paragraph 12,

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address the concerns of both the consumer/customer

in forming a smooth and highly workable relationship with regard to the field of electronics troubleshooting and repair. The initial reduction to practice of this invention happened on January 13, Patent Application No. 60/439,998, ("998

2003, with the filing of United States Provisional

Application") entitled "On Location Electronics Trouble Shooting System." 14. A second provisional patent application was filed on August 11,2003, namely United entitled "On Location

States Provisional Patent Application No. 60/494,298, ("298 Application") Electronics Trouble Shooting System." Application. 15.

Kaplan and Palmer were the listed inventors on the 298

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Kaplan, Palmer and Schwartz filed a utility patent application which claimed priority

from the 998 Application and from the 298 Application entitled "On Location Electronics Trouble Shooting System" on January 13,2004. This utility patent application Serial No. 10/757,221 issued

as United States Patent No. 8,429,088 on April 23, 2013 ("088 Patent"). The nine-year pendency of the 088 Patent was due in part to two lengthy appeals filed by the inventors in which a number of prior art references cited by the Patent Office were overcome to result in the issuance of the 088 Patent. 16. In addition to filing the vanous patent applications noted in paragraphs 13-15,

Kaplan, Palmer and Schwartz developed a software platform which operated a computer system, which automatically dispatched electronics trouble-shooting and repair technicians to customers who were in need of such services. This software platform and system was developed and built from The software platform and system allowed a about himself indicating he was

approximately November 2002 until June of 2003.

technician to sign onto the system by providing information

available to take on work in the area of electronics trouble-shooting and repair. A customer needing electronics trouble-shooting and repair services could log into the software platform and system and

COMPLAINT FOR INFRINGEMENT

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submit a request to have electronics trouble-shooting

and repair services performed.

The software dispatch the

platform and system then sent a text message to the technician to automatically technician to the customer's performed automatically location to have the services performed.

These functions were

by the software platform and system created by Kaplan, Palmer and The various

Schwartz; that is, these functions were executed with little or no human involvement.

functions of the software platform and system are embodied in the 088 Patent, and many of the drawings in the 088 Patent were derived from screen shots created by the Plaintiffs' platform and system. 17. In 2003, the Plaintiffs attempted to monetize and exploit their creation comprising the The business model developed by the Plaintiffs involved matching and software

software platform and system. electronics trouble-shooting repair services.

and repair technicians with customers in need of trouble-shooting

Fees were to be collected by the software platform and system for automatically

matching the technicians with the customers, these fees being a basis of revenue for Plaintiffs' business. 18. At all times between 2003 and April 2013, Plaintiff diligently pursued issuance of

their 088 Patent. The 088 Patent issued on April 23, 2013. 19. On information and belief, Defendants can trace their origins back to 2003, to a In 2003, ComputerRepair.com was a fairly primitive website

website called ComputerRepair.com.

which was constructed to match electronics trouble-shooting

and repair technicians with customers User Agreement made it

in need of technician services. As of June 26, 2003, ComputerRepair.com's clear that it was merely a facilitator of the technician-customer

relationship, through its website, and

that any risk as to the technician's capabilities, quality or dependability were entirely put upon the customer in a type of "buyer beware" environment. June 26,2003, is available at: http://web.archive.org/web/20030626183911/http://computerrepair.com/useragreement.php. matching of the technician with a customer, as facilitated by ComputerRepair.com, have relied on significant human involvement The is believed to The ComputerRepair.com User Agreement as of

(i.e., the customer), once finding a technician's

information had to contact the technician and interview him to see if the technician could do the job.

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Subsequently, the customer then had to arrange a time for the technician to come over and come to terms on a rate of pay to compensate the technician. Thereafter, the risk was on the customer as to

whether the technician had the right training, would show up to do the work, and would competently execute the work task. Likewise, the technician, upon showing up and completing the work would take a risk on the customer paying the technician on the terms agreed and whether the customer's method of payment would require follow-up collection efforts. 20. On information and belief, it was clear that ComputerRepair.com relationship. had higher

aspirations than to be a mere facilitator of the technician-customer 2003, ComputerRepair.com

As of June 21,

saw high value in creating a "system" which would automatically relationship. In fact, as noted on its "F AQ" page, the

facilitate and manage the technician-customer mission statement of ComputerRepair.com

was: "to build a system that enables anyone in need of

computer services to find, deploy, manage and pay service providers." Furthermore, the FAQ page detailed a concept of the qualities such an automatic system would have, if it were to exist: "Everything is currently free! We are in the process of developing a far more comprehensive service offering. Here is how we think it will work: Anyone in need of computer service will deposit a minimum of $500.00 with our firm. They will then be able to generate service requests. Each time a service request is created ComputerRepair.com receives an $8.00 fee. The service request is then routed to one or more providers based on location, skill set, certifications, rate and availability. The first provider to accept the request earns the business. After the call is completed the provider updates the service request. The customer is prompted to close the service request and authorize the transfer of payment. When the payment is sent to the provider we take a 10% fee. So to summarize, we generate the business and get you paid almost immediately - pretty good deal for 10%. We have filed a patent on this entire process." The FAQ page containing the above quote can be found at:
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21. filed a patent on the process of matching a technician with a customer, it is believed by the Plaintiffs that this was not the case. On information and belief, as early as April 28, 2003

ComputerRepair.com

filed United States Provisional Patent Application

Serial No. 60/465,977,

which served as the basis for United States Utility Patent Application Serial No. 10/692, 181, filed on October 23, 2003, now abandoned, which in tum was incorporated into United States Utility

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Patent Application Serial No. 10/755,727 filed on January 12, 2004, and issued as United States Patent No. 7,856,406 (the "406 Patent") on December 21, 2010. The 406 Patent and the associated applications on which it was based covered a "System and Method For Managing Accounts Payable and Accounts Receivable" and not a system or method for automatically matching an electronics trouble-shooting and repair technician with a customer in need of such services. 22. On information and belief, ComputerRepair.com was clearly in the conception stage and repair system as of June 2003,

of inventing their own electronics technician trouble-shooting

which was after the Plaintiffs had already reduced their invention to practice in their 998 Application and had built the software platform and system. 23. On information and belief, it appears that it was not until April 2004 that service events and it was not until June 2007 that

ComputerRepair.com ComputerRepair.com matching services. electronics

started "transacting"

(now renamed "Onforce, Inc." by this time) developed its algorithm for trouble-shooting and repair technicians with customers in need of such

Therefore, it appeared that Defendants did not have a fully functioning system (of a type

created by Plaintiffs back in 2003) until about 2007. These milestones, as well as more information related to Defendants' accomplishments, are detailed at: http://en.wikipedia.org/wiki/OnForce. 24. Defendants' infringement of the 088 Patent has been profitable. On information and

belief, Peter Cannone, the CEO ofOnForce,

Inc. (Onforce 1) projected revenues in 2010 to be $200 It is believed that current yearly

million up from a figure of $150 million projected in 2009. revenues of On Force 1 exceed the 2010 figure. 25. trouble-shooting customers Defendants'

On information and belief, Defendants' business model is to facilitate an electronics and repair service relationship between appropriate electronics technicians and technical services; this facilitation being accomplished by

in need of electronics

software platform and system.

The technicians and customers register their personal

data on the Defendants' system and the customers input their electronics trouble-shooting and repair requirements, while the technicians input their various capabilities, qualifications and certifications. The technicians and customers can access the Defendants' software platform and system via internet interface which can be accessed by computers and smartphones located in this District.

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26.

On information and belief, with regard to Defendants' customers (hereafter "Service

Buyers"), Defendants enter into Service Buyer agreements which determine the terms and conditions under which the Service Buyers may use the Defendants' software platform and system. Service Buyers sign up on the Defendants' software platform and system through a computer interface sign up page which prompts a Service Buyer to register its customer data. This Service Buyer

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r,..

information is then stored on the Defendants' computers in a database of Service Buyers. 27. On information and belief, Defendants' Service Buyer relationships, through its

Service Buyer agreements are numerous in this District, as California is cited as being one of Defendants' most active states for doing business with its software platform and system. This belief is bolstered by the fact that San Francisco and the San Francisco Peninsula down to Silicon Valley is a hotbed of electronics technical activity requiring the type of services facilitated by Defendants' software platform and system. This belief is also bolstered by the fact that California is listed as being one of seven states in the United States where Defendants are doing business with greater than one-thousand technicians. See: http://www.onforce.com/?page=onboard landing&CMP=SEM-GGOnForce%20Brand-OnForce%20Brand&skw=onforce. 28. On information and belief, the electronics trouble-shooting and repair technicians

which register with Defendants' software platform and system are believed to be independent contractors by and large. However, a survey on Defendants' website as to the number of technicians available to work on projects in this District revealed that hundreds of technicians were doing business in this District with Defendants. In fact, one of Defendants' selling points is that the technicians are always paid in full for services because Defendants hold the technician's fees in escrow until the services rendered in this District are completed to the satisfaction of the Service Buyer. It is believed that this holding of the technician's fees in escrow makes Defendants' business model especially attractive to the technicians as they know that as long as their services were fully performed to the satisfaction of the Service Buyer, that they will be paid. 29. On information and belief, Defendants have forged significant relationships with

Apple Corporation in this District. Defendants have created on-site service relationships with Apple Corporation Stores in Berkeley, CA, Emeryville, CA, and Burlingame, CA, which are in this
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District. By tying its on-site trouble shooting and repair services to Apple Corporation's

"Apple

Stores" Defendants are believed to have generated a significant amount of business servicing Apple Corporation products in this District. 30. On information and belief, the electronics trouble-shooting and repair technicians software

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access a computer interface to register their technician information with the Defendants'

platform and system, this information including various technical abilities and certifications of the technicians. database. 31. On information and belief, Defendants' computers manage collecting of fees from the This technician information is then stored on Defendants' computers in a technician

Service Buyers, the fees relating to electronics trouble-shooting and repair services performed by the technicians. It is believed that the 406 Patent demonstrates one way which Defendants might software platform and

manage the collecting of fees from the Service Buyers using Defendants' system.

The 406 Patent involves the usage of computer processors on a computer network to

manage the collection of fees. Also, it is believed that the Defendants' software platform and system employs an electronic "work order" which is acted upon by the Defendants' capacity on its system to determine whether an electronics trouble-shooting computer processing and repair event has

begun, whether it was completed, and if completed whether it was completed to a Service Buyer's satisfaction before a technician is paid from the fees that were collected. 32. On information and belief, Defendants' software platform and system employs a and repair requests from Service

computer interface for receiving electronics trouble-shooting

Buyers, this computer interface being in the form of an electronic work order which is routed automatically to appropriate service technicians. The work order is stored on Defendants' computer

network and the work orders can be accessed by service technicians at any time using a software application provided by Defendants, which runs on the technicians' smart phones. technicians can access the Defendants' In this way, the

software "app" and can interface with the work order, by

accepting the job proposed by the Service Buyer, by making a counter-offer to the Service Buyer's conditions, or by declining the job proposed on the work order. The technicians can also interface with the work order by entering "tags" which relate to specific technical capabilities of a technician,
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so that a technician can be filtered out by the system according to the tags whenever a Service Buyer requests specific capabilities. The technicians are automatically notified on their smart phones by Defendants' software platform and system of the existence of a particular work order and the work

orders are accepted on a "first come" basis, so the technician, who accepts first, gets the job. However, work orders are sent from a Service Buyer to a technician only after Defendants' software platform and system verifies that the Service Buyer has sufficient fees in escrow to cover the work specified by the Service Buyer on the work order. automatically, supplying From these fees, the technician is paid

when the job is completed and the Defendants are paid a fee for the service of platform and system to the Service Buyer and technician which

their software facilitates

automatically technician. 33.

and completes the work relationship

between the Service Buyer and

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On information and belief Defendants'

software platform and system employs the

work order which is a computer interface, for purposes of recording information about an electronics trouble-shooting and/or repair event. For example, the technician can access the work order through Defendants' software app and enter "resolution notes" which describe how a technician solved a

Service Buyer's technical problem. This information is then stored in Defendants' computer system, thereby allowing it to be accessed at any time. 34. On information and belief, Defendants' software platform and system substantially The dispatching process is

fully automates the dispatching of the technician to the Service Buyer. regulated by Defendants'

software platform and system on one level by determining whether a

Service Buyer has deposited sufficient fees to complete an electronics trouble-shooting and/or repair task desired to be completed by a Service Buyer. If insufficient fees are deposited, the Defendants' software platform and system does not automatically route the work order to the technician until sufficient fees are deposited. automatically Once sufficient fees are deposited, the dispatching process is An

set in motion by routing the work order to the appropriate

technician.

"appropriate" technician may be automatically determined by the usage of "tags" associated with a technician, which has a set of skills or certifications appropriate for completing the particular type of job proposed by the Service Buyer. The Defendants' software platform and system automatically

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filters the tags to automatically route a work order to technicians matching the selected tags. Once the work order is routed, the technician can accept a job, wherein the acceptance is automatically transmitted to the Service Buyer. The technician accesses the work order interface to accept a job, using the Defendants' software app. The acceptance includes the technician inputting a time and

date where he will arrive at the Service Buyer's location to complete the electronics trouble-shooting and/or repair job. COUNT! INFRINGEMENT OF THE 088 PATENT

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35. 36.

Plaintiffs repeat the allegations as set forth above in paragraphs 1 through 34. Upon information and belief, for a period of time unknown to Plaintiffs, Defendants

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have manufactured, imported, used, sold, offered for sale, or distributed in this District and in this State a software platform and system which infringes at least claims 20,22 and 25 of the 088 Patent.

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37.

Plaintiffs have suffered damages as the direct and proximate result of Defendants'

infringement of the 088 Patent. COUNT 2 ACTIVE INDUCEMENT TO INFRINGE THE 088 PATENT 38. Plaintiffs repeat the allegations as set forth above in paragraphs 1 through 34 and 35

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through 37 as though set forth at length herein. 39. Upon information and belief, Defendants have sold, offered for sale or otherwise software platform and system to various Service Buyers and various

provided an infringing

electronics trouble-shooting and/or repair technicians in this District. 40. Upon information and belief, various Service Buyers and various electronics trouble-

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shooting and/or repair technicians in this District plan to use, have used and/or are currently using the infringing software platform and system.

41.

By providing the infringing software platform and system for use and encouraging

such use to Service Buyers and technicians, Defendants are actively inducing the infringement of the 088 Patent by others in violation of35

u.s.c. ~271(b).

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WHEREFORE, Plaintiffs pray that this Court: 1. Permanently enjoin Defendants from infringement of the 088 patent; During the pendency of this action, preliminarily enjoin Defendants from

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infringement of the 088 patent;

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088 Patent; 4.

Enter judgment in favor of Plaintiffs and against Defendants for infringement of the

Enter judgment in favor of Plaintiffs and against Defendants for active inducement of

infringement of the 088 Patent;

5.

Award damages for the infringement of the 088 Patent in an amount to be proven at

trial including an increase of damages three-fold together with interest and costs pursuant to 35 U.S.C. ~ 284;

6.
Defendants

Upon appropriate evidence, find this action to be an exceptional case and require to pay Plaintiffs' reasonable attorneys' fees under 35 U.S.C. ~ 285 in light of

Defendants' willful infringement of the 088 Patent; 7. and proper.

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Grant Plaintiffs' such other and further relief as the Court deems appropriate, just,

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Pursuant to Rule 38(b) of the Federal Rules of Civil Procedure, Plaintiffs hereby demand a jury trial on all claims and issues so triable. DATED: January 30, 2014 MILLSTONE, PETERSON & WATTS, LLP By:

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lsi Glenn W. Peterson

GLENN W. PETERSON

COSTELLO LAW CORPORATION

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By:

lsi John P. Costello

JOHN P. COSTELLO

Attorneys for Plaintiffs SCOTT KAPLAN and NANCY SCHWARTZ I hereby attest that I have on file all holograph signatures for any signatures indicated by a "conformed" signature (lsI) within this e-filed document. MILLSTONE PETERSON & WATTS, LLP Attorneys at Law lsi Glenn W. Peterson

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