IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS

AMERICAN TRAFFIC SOLUTIONS, INC. Plaintiff, v. B&W SENSORS LLC, Defendant.

No. _________________ Jury Trial Demanded

COMPLAINT AND DEMAND FOR JURY TRIAL Plaintiff American Traffic Solutions, Inc. files this complaint against Defendant B&W Sensors LLC and alleges as follows: NATURE OF THE ACTION 1. 2. This action is based on the Patent Laws of the United States, 35 U.S.C. 1, et seq. This action arises out of Defendant making, using, selling, and offering to sell, as

well as Defendants inducement of and contribution to the use and purchase by others, of video speed detection systems, which infringe valid and enforceable patents owned by ATS. THE PARTIES 3. Plaintiff American Traffic Solutions, Inc. (ATS) is a corporation incorporated

under the laws of the State of Kansas with its principal place of business in Tempe, Arizona. 4. Defendant B&W Sensors LLC (B&W) is a limited liability company organized

and existing under the laws of the State of Missouri and has a place of business at 3668 Geyser Road, Suite 200, St Louis, Missouri 63127. B&W is in the video speed detection system business and regularly conducts business in this Judicial District.

JURISDICTION AND VENUE 5. This action arises under the Patent Act, 35 U.S.C. 1, et seq. The Court has

subject matter jurisdiction over the claims pursuant to 28 U.S.C. 1331, 1338(a), and 1367. 6. The Court has personal jurisdiction over the parties, and venue in this Judicial

District is proper under 28 U.S.C. 139 1(b) and (c), and/or 1400(b). 7. B&W conducts significant business activities in the State of Texas with Texas

entities, including activities purposefully directed to Texas that relate and give rise to ATSs claims in this case. B&W markets for sale, including through false advertising, the patent infringing products that are the subject of this action as well as other related speed camera systems in Texas with input from, and for the benefit of, Texas authorities and residents. B&W has commissioned a traffic and speed research study by the Texas Transportation Institute (TTI) to evaluate B&Ws patent infringing system. B&W has cooperated with the TTI and also with Texas A&M University to compare B&Ws infringing systems against the TTI Verified Speed Baseline System (VSBS) used in the State of Texas. In connection with that study, B&W has worked with and directed interested parties to contact Texas residents about B&Ws infringing technology, including Dr. Danny R. Middleton, P.E., Ph.D. (a TTI research engineer and program manager) in Texas. In addition, B&W committed acts of patent infringement in Texas by using its patent infringing system in the State of Texas in connection with this study. B&W has also marketed its patent infringing systems by touting the alleged endorsement of Texas residents and organizations, including transportation safety research scientist David Willis of the Texas Transportation Institute. B&W operates a website <http://BandWllc.com> that advertises its products and services to users, law enforcement authorities, and state and local governments in Texas. On information and belief, B&W has knowingly and intentionally commercialized and introduced the patent infringing system and related speed camera system into the Texas stream of commerce, and the services B&W provides impact Texas residents and Texas commercial routes. B&W has purposely availed

itself of the benefits of Texas laws with respect to the patent infringement complained of herein. PLAINTIFF AND ITS RIGHTS 8. Since 1992, ATS has developed, made, used, and marketed innovative automated

traffic safety camera equipment and services for use by municipalities across the United States. 9. ATS has become an industry leader in the red light camera and speed detection

system industry. ATS currently has 26 active contracts with Texas cities and schools districts to provide automated traffic safety cameras including, inter alia, Cedar Hill, Texas; Diboll, Texas; Frisco, Texas; Lufkin, Texas; Arlington Independent School District, Texas; Denton, Independent School District, Texas; Elgin, Texas; Bastrop, Texas; Amarillo, Texas; Balcones Heights, Texas; Conroe, Texas; Fort Worth, Texas; Humble, Texas; Hutto, Texas; Irving, Texas; Jersey Village, Texas; Little Elm, Texas; Magnolia, Texas; South Houston, Texas; Splendora, Texas; Sugar Land, Texas; Willis, Texas; Cleveland, Texas; Arlington, Texas; Burleson, Texas; and Watauga, Texas. 10. ATSs traffic safety photo enforcement technologies are valuable as public safety

measures to enforce traffic safety laws (including those governing speeding in school zones and stopping at red lights) and to conserve valuable public resources (including police officer staffing) and allow them to be used for other purposes. 11. The United States Patent and Trademark Office (PTO) has recognized ATSs

innovations by awarding multiple issued United States patents covering ATSs video speed detection technology. 12. On May 22, 2012, the PTO duly and lawfully issued United States Patent No.

8,184,863 (the 863 patent), entitled Video Speed Detection System. ATS is the assignee and sole owner of the 863 patent, a true and correct copy of which is attached hereto as Exhibit 1. 13. On July 3, 2012, the PTO duly and lawfully issued United States Patent No.

8,213,685 (the 685 patent), entitled Video Speed Detection System. ATS is the assignee and

sole owner of the 685 patent, a true and correct copy of which is attached hereto as Exhibit 2. DEFENDANT AND ITS UNLAWFUL ACTIVITIES 14. B&W Sensors LLC has been making, using, selling, and offering to sell Video

Speed Detection Systems including but not limited to B&Ws Multiple Vehicle Speed Tracking System (MVSTS) shown below covered by, at least, claims 1, 16, and 21 of the 863 patent and claims 1, 25, 52, 54, 81, 85, and 110 of ATSs 685 patent.

15.

B&Ws infringing systems include, inter alia, the following patent elements: a

camera, a mount, a computer system, and a calibration process that determine the speed of multiple tracked objects. B&Ws infringing systems generate and provide data about the tracked objects speed when the rate of travel exceeds a certain value.

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On information and belief, B&W has also been actively and knowingly selling

and offering to sell to Defendants customers services and components for video speed detection systems constituting material parts of the invention of one or more claims of ATSs 863 and 685 patents. On information and belief, Defendant has done so with knowledge of ATSs 863 and 685 patents and with knowledge that such services and components are specifically for use with products that infringe at least claims 1, 16, and 21 of the 863 patent and claims 1, 25, 52, 54, 81, 85, and 110 of ATSs 685 patent. Defendant was also aware that such services and components are not staple articles of commerce suitable for a substantial noninfringing use. Thus, Defendant has been contributing to others direct infringement of ATSs patents. 17. On information and belief, Defendant has been actively and knowingly aiding and

abetting the direct infringement of ATSs patent with knowledge thereof by designing, encouraging, and instructing others, including Defendants customers, to make, use, and purchase video speed detection systems that infringe ATSs patent rights. At the time Defendant engaged in these acts, Defendant had actual knowledge of ATSs 863 and 685 patents. Defendant further knew that its acts of designing, promoting, and instructing others how to use the infringing technology would result in direct infringement of the patents-in-suit. Thus, Defendant has been inducing the direct infringement by others of, at least, claims 1, 16, and 21 of the 863 patent and claims 1, 25, 52, 54, 81, 85, and 110 of ATSs 685 patent. 18. Defendant has had actual knowledge of ATSs 863 patent and 685 patent but

has persisted in making, using, selling, and offering to sell video speed detection systems that infringe, at least, claims 1, 16, and 21 of the 863 patent and claims 1, 25, 52, 54, 81, 85, and 110 of ATSs 685 patent. Defendants patent infringement has been willful. 19. At no time has Plaintiff granted Defendant authorization, license, or permission

to practice the inventions claimed in any ATS patent. 20. In addition to Defendants acts of willful patent infringement, Defendant has

engaged in deliberate tortious interference and unfair competition by marketing B&Ws patent

infringing technology to ATSs actual customers and customer prospects and by promoting the alleged advantages of the infringing products as a substitute for Plaintiffs products, including ATSs AutoPatrol speed camera system. 21. Defendant has been interfering with ATSs actual and prospective customer

relationships by falsely claiming that Defendant (not ATS) developed the patented technology; by promoting Defendant as a superior source of video speed detection technology; by using the marketing of the infringing technology as a means to disrupt ATSs negotiations with its customers; and by touting the alleged endorsement of Defendants infringing technology by the Texas Transportation Institute and Texas A&M University. COUNT I: PATENT INFRINGEMENT UNITED STATES PATENT NO. 8,184,863 22. 23. ATS repeats and realleges each of the allegations above as if fully set forth herein. Defendant has been, and is, infringingdirectly, contributorily, and by

inducementat least, claims 1, 16, and 21 of the 863 patent in the United States and in this Judicial District. 24. By infringing, at least, claims 1, 16, and 21 of the 863 patent, Defendant has

unfairly reaped a substantial commercial and competitive advantage and savings in research, development, operational time, and cost, all to ATSs detriment. 25. Defendants activities with respect to its video speed detection systems constitute

willful infringement of ATSs 863 patent. 26. ATS has been, and will continue to be, damaged by such direct, contributory, and

induced infringement in an amount to be proven at trial, in a manner and amount that cannot be fully measured or compensated in economic terms, and for which there is no adequate remedy at law. The actions of Defendant have damaged, and will continue to damage, ATSs business, market, reputation, and goodwill, and such irreparable damage will continue unless Defendants acts are enjoined during the pendency of this action and thereafter. ATS is entitled to the remedies provided by 35 U.S.C. 283-285. 6

COUNT II: PATENT INFRINGEMENT UNITED STATES PATENT NO. 8,213,685 27. 28. ATS repeats and realleges each of the allegations above as if fully set forth herein. Defendant has been, and is, infringingdirectly, contributorily, and by

inducementat least, claims 1, 25, 52, 54, 81, 85, and 110 of ATSs 685 patent in the United States and in this Judicial District. 29. By infringing, at least, claims 1, 25, 52, 54, 81, 85, and 110 of ATSs 685 patent,

Defendant has unfairly reaped a substantial commercial and competitive advantage and savings in research, development, operational time, and cost, all to ATSs detriment. 30. Defendants activities with respect to its video speed detection systems constitute

willful infringement of ATSs 685 patent. 31. ATS has been, and will continue to be, damaged by such direct, contributory, and

induced infringement in an amount to be proven at trial, in a manner and amount that cannot be fully measured or compensated in economic terms, and for which there is no adequate remedy at law. The actions of Defendant have damaged, and will continue to damage, ATSs business, market, reputation, and goodwill, and such irreparable damage will continue unless Defendants acts are enjoined during the pendency of this action and thereafter. ATS is entitled to the remedies provided by 35 U.S.C. 283-285. COUNT III: TORTIOUS INTERFERENCE 32. 33. ATS repeats and realleges each of the allegations above as if fully set forth herein. ATS has had on-going business relationships with, and has invested significant

and valuable time and resources in cultivating the business relationship with, inter alia, Memphis, TN, St. Ann, MO, Country Club Hills, MO, Sugar Creek, MO, and Moline Acres, MO (collectively the ATS Customers). Pursuant to those relationships, these entities have become established ATS customers for red light camera systems. Pursuant to those relationships, ATS also entrusted the ATS Customers with confidential and sensitive competitive information about

ATSs research, development, and business for the purpose of pursuing agreements whereby ATS would supply the ATS Customers with speed detection systems and services. As a result, there was a reasonable probability that ATS Customers would have contracted with ATS for speed detection systems based on their existing relationship with ATS but-for Defendants interference described herein. 34. When Defendant learned about ATSs relationships with the ATS Customers,

Defendant actively recruited the ATS Customers away from ATS by: (A) falsely stating that ATS does not own video speed detection technology; (B) falsely stating that ATS could not offer or support speed detection systems and services; and (C) falsely stating that ATS is only an expert in red light cameras and not speed cameras. At all relevant times, Defendant knew that its statements to the ATS Customers were false or misleading and were motivated by Defendants desire for improper financial gain. Defendant intentionally and maliciously interfered with ATSs relationships with the ATS Customers, which caused those entities to break off their dealings with ATS. 35. Defendants interference with ATSs existing relationships and prospective

contracts with the ATS Customers were neither privileged, nor justified, as Defendants actions were (A) based on false or misleading information Defendant had provided to the ATS

Customers; (B) were designed to wrongfully effect, induce, and contribute to the infringement of ATSs 863 and 685 patents; and (C) motivated by the improper purpose of supplying knock-off products that infringe ATSs patented technology into the market. 36. Defendants acts of interference complained of herein have proximately caused

harm to ATS in an amount to be proven at trial, in a manner and amount that cannot be fully measured or compensated in economic terms, and for which there is no adequate remedy at law. The actions of Defendant have damaged, and will continue to damage, ATSs business, market, reputation, and goodwill, and such irreparable damage will continue unless Defendants acts are enjoined during the pendency of this action and thereafter.

COUNT IV: UNFAIR COMPETITION 37. 38. ATS repeats and realleges each of the allegations above as if fully set forth herein. Defendants acts complained of herein constitute an unfair trade practice that

causes harm to ATS and the public interest, including without limitation the publics interest in protecting against the insertion of inferior knock-off goods into commerce, the use of less reliable and less accurate traffic safety and enforcement equipment, the solicitation of sensitive competitive information from others customers, the public procurement of infringing and inferior products based on false and misleading information, and the reduction in incentives for innovation and invention. 39. Defendants unfair competition has caused harm to ATS in an amount to be

proven at trial, in a manner and amount that cannot be fully measured or compensated in economic terms, and for which there is no adequate remedy at law. The actions of Defendant have damaged, and will continue to damage, ATSs business, market, reputation, and goodwill, and such irreparable damage will continue unless Defendants acts are enjoined during the pendency of this action and thereafter. PRAYER FOR RELIEF WHEREFORE, ATS, prays for judgment as follows 1. That Defendant and its officers, agents, servants, employees, attorneys, and all

other persons and entities acting in concert or participation with any of them, be preliminarily and permanently enjoined and restrained during the pendency of this action and thereafter from infringing any claim of ATSs 863 and 685 patents. 2. That Defendant be ordered to pay ATS such damages as ATS has sustained, as

adequate to compensate for the patent infringement, including ATSs lost profits, but in no event less than a reasonable royalty, as provided by 35 U.S.C. 284. 3. That Defendants infringement of the 863 and 685 patents be found to have been

willfully committed and that the damages be increased three-fold, as provided by 35 U.S.C. 284. 4. That Defendant be ordered to pay to ATS actual and punitive damages arising 9

from Defendants tortious interference and unfair competition pursuant to Texas law. 5. That Defendant be ordered to pay ATS the costs of this action and its reasonable

attorneys fees and interest as provided by inter alia 35 U.S.C. 284 and 285. 6. 7. That Defendant be ordered to pay ATS's pre-judgment interest. That ATS recover such other and further relief as the Court deems just and proper. DEMAND FOR JURY TRIAL Plaintiff demands a trial by jury as to all issues so triable. DATED this 18th day of October, 2012. Respectfully submitted, ANDY TAYLOR AND ASSOCIATES, P.C. /s/ Andy Taylor Andy Taylor Texas Bar No. 19727600 Andy Taylor & Associates, PC 2668 Highway 36S, #288 Brenham TX 77833 Telephone: (713) 222-1817 Facsimile: (713) 222-1855 ATaylor@AndyTaylorLaw.com George J. Hittner Texas Bar No. 24038959 American Traffic Solutions, Inc. 1330 West Southern Avenue Tempe, AZ 85282 Telephone: (480) 596 4704 Facsimile: (480) 967 7131 George.Hittner@atsol.com Brian C. Park (Pro Hac Vice pending) Washington Bar No. 25584 Stoel Rives LLP 600 University Street, Suite 3600 Seattle, Washington 98101-4109 Telephone: (206) 386-7542 Facsimile: (206) 386-7500 BCPark@stoel.com

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Steven E. Klein (Pro Hac Vice pending) Oregon Bar No. 051165 Nathan C. Brunette (Pro Hac Vice pending) Oregon Bar No. 090913 900 S.W. Fifth Avenue, Suite 2600 Portland, OR 97204 Telephone: (503) 224-3380 Facsimile: (503) 220-2480 seklein@stoel.com ncbrunette@stoel.com Attorneys for Plaintiff AMERICAN TRAFFIC SOLUTIONS, INC.

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