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KA~PER~I(Y~
Te/,lFax: +7 (495) 797-87-00
E-mail: patentr2iJkaslJerskv.com
www: htto://www.kaspersky.com
Dear Sir/Madam:
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SUMMARY OF THE FACTS
I. PATENT LITIGATION
IPAT, a Florida foreign limited liability Company formed on December 31, 2008,
initially filed in Texas on July 22, 2008, is a non-practicing entity ("NPE") owned and
managed by Mr. Fischer.
On or about December 30, 2008, IPAT filed a civil suit in the United States
District Court for Eastern District of Texas against 23 major protection software
companies, including Kaspersky. The complaint alleged infringement of two patens,
5311591 and 5412717 issued by the USPTO, respectively, on May 10,1994, and May 2,
1995, to Addison M. Fischer. Kaspersky filed a counterclaim demanding invalidation of
these patents. Prior to this litigation, Kaspersky never received any notices claiming
violation of these patents, or any other patents owned by or assigned to said plaintiff or
any other entity.
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On or about January IS, 2009, IPAT and Global, as plaintiffs, filed a civil suit
against 17 hardware manufacturing companies claiming infringement of the same
patents. This action was originally brought in the United States District Court for the
Southern District of Florida. Venue was later changed to the United States District Court
for the Eastern District of Texas, where the two cases were consolidated. All hardware
manufacturing companies named as defendants, signed confidential settlement
agreements and were released from the suit. Kaspersky does not have information of
RPX's involvement in these settlements.
RPX refuses to disclose any details of its contractual or other relationships with
the abovementioned plaintiffs. All relevant information, if any, is protected from the
disclosure by a protective court order issued upon IPA T' s request.
Prior to this litigation, RPX was involved in another NPE patent lawsuit, Netcraft
v. AT&T Mobility, et ai, case No. 1:07-cv-0065I, under similar circumstances.
Attorneys of Ward & Olivo, a New-York City based law firm, appear on the
record representing the plaintiffs in all three cases.
Between January 14, 2010, and February 9, 2010, Kaspersky ZAO received
several electronic messages sent form Geoffery Nudd's e-mail address
(gnudd@rpxcorp.com) representing that RPX has acquired a license to the patents in
dispute and had a right to release Kaspersky from the lawsuit. In exchange, Kaspersky
had to join RPX membership for a minimum term of three years and pay annual fees of
$160,000.00. Kaspersky was also offered the benefit of "not [being] sued in connection
with all patents RPX has already acquired or will purchase in the future," with emphasis
on the significant cost of such litigation. See attached.
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On or about March 5, 20 I 0, the CEO of Kaspersky Lab ZAO, Eugene Kaspersky,
received an unsolicited electronic message from Geoffery Nudd's e-mail address
(gnudd@rpxcorp.com) informing him that eight defendants have joined RPX and,
therefore, obtained releases from the IPAT suit. The message also suggested that by
joining RPX, Kaspersky would not only obtain a release from the pending IPAT
litigation, but also "[would] be supporting a shared resource pool with Kaspersky's
industry peers to prevent future patent litigation". The message also indicated that RPX
had the right to dismiss its members from the suit only through March, 20 I O. See
attached.
B. Title 18, U.S.C., §1341 and 1343. Mail and Wire Fraud.
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C. Title 18, U.S.C., §1951. Interference with Commerce by Extortion. Hobbs Act.
Section 875(d) provides: "whoever, with intent to extort from any person, firm,
association, or corporation, any money or other thing of value, transmits in interstate or
foreign commerce any communication containing any threat to injure the property or
reputation of the addressee or of another or the reputation of a deceased person or any
threat to accuse the addressee or any other person of a crime, shall be fined under this
title or imprisoned not more than two years, or both."
B. Title 18, U.S.C., §1341 and 1343. Mail and Wire Fraud.
Section 1341, in its relevant part, provides: "whoever, having devised or intending
to devise any scheme or artifice to defraud, or for obtaining money or property by means
of false or fraudulent pretenses, representations, or promises... for the purpose of
executing such scheme or artifice or attempting so to do, places in any post office or
authorized depository for mail matter, any matter or thing whatever to be sent or
delivered by the Postal Service, or deposits or causes to be deposited any matter or thing
whatever to be sent or delivered by any private or commercial interstate carrier, or takes
or receives therefrom, any such matter or thing, or knowingly causes to be delivered by
mail or such carrier according to the direction thereon, or at the place at which it is
directed to be delivered by the person to whom it is addressed, any such matter or thing,
shall be fined under this title or imprisoned not more than 20 years, or both."
The main elements of the offense of mail fraud under §1341 are (I) a scheme to
defraud, and (2) the mailing of a letter, etc., for the purpose of executing the scheme.
The elements of wire fraud under Section 1343 directly parallel those of the mail fraud
statute, but require the use of an interstate telephone call or electronic communication
made in furtherance of the scheme.
The mail fraud and wire fraud statutes do not define the terms "scheme" or
"artifice" and the courts have traditionally been reluctant to offer definitions of either
term except in the broadest and most general terms. The words "to defraud" in the mail
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fraud statute have the common understanding of "wrongdoing one in his property rights
by dishonest methods or schemes," and "usually signify the deprivation of something of
value by trick, chicane, or overreaching." McNally v. United States, 483 U.S. 350, 358
(1987).
However, the gist of the offenses is not the scheme to defraud, but the use of the
mails or interstate wire communications. Accordingly, each use of the mails (in the case
of mail fraud) and each separate wire communication (in the case of wire fraud)
constitutes a separate offense. United States v. Pazos, 24 F.3d 660,665 (5th Cir. 1994).
The requisite intent under the federal mail and wire fraud statutes may be inferred
from the totality of the circumstances and need not be proven by direct evidence. United
States v. Alston, 609 F.2d 531, 538 (D.C. Cir. 1979).
Facts indicate that RPX has used mail and interstate wire communications on
numerous occasions in furtherance of a scheme to extort from Kaspersky "membership
fees". RPX's communications solicited from Kaspersky membership fee under false
pretenses of membership benefits, and threatened Kaspersky with detrimental
consequences of not joining.
The Hobbs Act regulates extortion and robbery, which Congress has determined
to have a substantial effect on interstate and foreign commerce by reason of their
repetition and aggregate effect on the economy.
As used in this section- the term "extortion" means obtaining of property from
another, with his consent, induced by wrongful use of actual or threatened force,
violence, or fear, or under color of official right. Extortion by the use of fear includes
fear of economic harm. In the case of fear of economic harm the defendant must intend to
take advantage of the victim's fear.
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D. Racketeer Influenced and Corrupt Organizations Act (18 U.S.C. §§ 1961-1968).
(B) a pattern of criminal activity, or related and continuous criminal actions involving the
same victims, the same participants, have the same methods of commission, or related in
some other fashion. A pattern may be sufficiently continuous if the criminal actions
occurred over a substantial period of time or posed a threat of indefinite duration;
Beginning no later than December 8, 2009, and continuing through the present
day, employees, officers, and agents of RPX were involved in a course of conduct in
violation of sections 1341, 1343 and 1951 of Title 18 of the United States Code, using a
legally formed entity, RPX, as a vehicle for receiving financial gain from their wrongful
activities. Their actions pose a threat of indefinite duration to non-members, including
Kaspersky, of incurring significant economic harm from frivolous patent litigation.
Furthermore, the actions ofRPX significantly affect interstate and foreign commerce.
Euge Ka persky
CEO Kaspersky Lab ZA 0 .
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Nadezhda Kashchenko
ChiefIntellectual Property Counsel
Kaspersky Lab ZA 0