Segin Systems Et. Al. v. Stewart Title Guaranty Company Et. Al.

Alan M. Grimaldi Qvo hac vice application anticipated)Ann Marie Duffy (VSB No. 48653)MAYER BROWN LLP

1999KSt.NW

Washington, DC 20006-1101Tel: 202-263-3000

Fax: 202-263-3300

[email protected]@mayerbrown.com

A. John P. Mancini Qvo hac vice application anticipated)Vanessa M. Biondo {pro hac vice application anticipated)Elizabeth M. Winokur {pro hac vice application anticipated)MAYER BROWN LLP

1675 BroadwayNew York, NY 10019-5820Tel: 212-506-2500

Fax: 212-262-1910

[email protected]@[email protected]

Counselfor Plaintiffs, Segin Systems, Inc. andSegin Software, LLC

FILED

2013 APR 12 P 4:2b

CLERK US DISTRICT COURTALEXANDRIA.VIRGINIA

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF VIRGINIA

SEGIN SYSTEMS, INC. and SEGINSOFTWARE, LLC (d/b/a RYNOHL/F£),

Plaintiffs,

vs.

STEWART TITLE GUARANTY

COMPANY; PROPERTYINFOCORPORATION; and FIRST BANKINGSERVICES, INC.,

Defendants.

COMPLAINT FOR PRELIMINARY

INJUNCTION AND OTHER RELIEF

AND DEMAND FOR JURY TRIAL

Plaintiffs Segin Systems, Inc. ("Segin Systems") and Segin Software, LLC (d/b/a

RynohLive) ("Segin Software") (collectively, "Segin" or "Plaintiffs"), by and through their

attorneys, Mayer Brown LLP, for their complaint against defendants Stewart Title Guaranty

Company ("STGC"); Propertylnfo Corporation ("PIC") (collectively, "Stewart"); and First

Banking Services, Inc. ("FBS") (collectively with Stewart, "Defendants"), allege as follows:

NATURE OF THE ACTION

1. Failing in its attempt to acquire the rights to Segin's Rynohi/ve real estate

settlement software, Stewart misappropriated highly confidential material that was only

disclosed to Stewart pursuant to nondisclosure agreements governed by Virginia law. The

material that was misappropriated consists of RynohLive algorithms, interfaces, connection

points, and other information developed by Segin's founders. Stewart and FBS used this

material to launch, injust a few short months, a copycat real estate settlement technology that,

according to FBS, works just like Rynoh. This action for breach ofcontract and patent

infringement seeks: (i) preliminary and permanent injunctive relief to prevent Defendants'

continued use of Segin's intellectual property; (ii) damages arising from the Defendants' patent

infringement and breach of contract; (iii) anorder directing Defendants to account for any

confidential material disclosed to third parties or otherwise used in violation of the nondisclosure

agreements; and (iv) an order directing Defendants to return all information furnished under the

nondisclosure agreements and reproductions of such information.

PARTIES

2. Plaintiff Segin Systems is a startup corporation organized under the laws of

Virginia and having its principal place of business at 397 Little Neck Road, 3300 South

Building, Suite 306, Virginia Beach, Virginia 23452. It was founded in January 2005 for the

purpose of developing software for the titleand real estate settlement industry, including

RynohLive.

3. PlaintiffSeginSoftware is a limited liability company, 94% owned by Segin

Systems, organized in 2008 under the laws ofVirginia, and having its principal place ofbusiness

at 397 Little Neck Road, 3300 South Building, Suite 306, Virginia Beach, Virginia 23452.

Segin Software is the owner of the patent in suit.

4. Defendant STGC is a corporation organized under the laws of Texas and having

its principal place ofbusiness at 1980 Post Oak Boulevard, Suite 800, Houston, Texas 77056.

STGC is one of the nation's largest title insurers.

5. Defendant PIC is a corporation organized under the laws of Texas and having its

principal place ofbusiness at 1980 Post Oak Boulevard, Suite 500, Houston, Texas 77056. PIC

is Stewart's real estate technology company, and the successor of former Stewart technology

divisions, Landata Systems, Inc. ("Landata") and First Data Systems, Inc. ("FDS").

6. Defendant FBS is a corporation organized under the lawsof Tennessee and

having its principal place ofbusiness at 315 Hickerson Drive, Murfreesboro, Tennessee 37129.

FBS develops banking, sub accounting, escrow accounting, and reconciliation products and

services that it offers to financial institutions and real estate title insurance companies.

JURISDICTION AND VENUE

7. This Court has federal subject matter jurisdiction over this action under 28 U.S.C.

§§1331 (federal question); 1338(a) (patent); and 1367 (supplemental jurisdiction).

8. This Court has personal jurisdictionover Defendants because they have engaged

in substantial business activities in the State of Virginia. Defendants transacted, solicited, and

conducted business in Virginia through their employees, agents, and/or sales representatives, and

derived substantial revenue from such business causing injuries to Segin in Virginia. In addition,

this Court has personal jurisdiction over Stewart because this is a patent infringement and breach

of contract action "arisingout of and "relating to" nondisclosure agreements that Landata and

FDS (PIC's predecessors and STGC's affiliates) entered into with Segin Systems, by which PIC

and STGC are bound. The consent provisions provide that "[t]he Virginia state courts of the

City of Norfolk (or, if there is exclusive federal jurisdiction, the United States District Courtfor

the Eastern District of Virginia, Norfolk Division) shall have exclusive jurisdiction and venue

over any dispute arisingout of or relating to this Agreement, and the Recipient hereby consents

to the jurisdiction and venue of such courts."

9. Venue is proper in this Court pursuant to 28 U.S.C. §§ 1391(a), 1391(b), and

1391(c), including, without limitation, because a substantial partof the eventsgiving rise to the

claims occurred in thisjudicialdistrict, Defendants are advertising, marketing, using, selling

and/oroffering to sell products in thisjudicial district, and Defendants are subject to this Court's

personal jurisdiction with respect to the present action.

FACTUAL ALLEGATIONS

I. Segin's Market-Leading Real Estate Settlement Software

10. In late 2004, Richard M. Reass ("Reass") and Kenneth A. Taylor ("Taylor")

began experimenting with the concept of a real estate settlement software that would combat the

pervasive escrow theft and mishandling of settlement funds resulting from the inability of the

title insurance industry to self police, which had been costing the industry hundreds of millions

of dollars in losses per year.

11. In January 2005, Reass founded Segin Systems for the purpose of developing

software that would provide the internal controls that the title insurance/settlement industry

lacked, by ensuring the integrity of financial transactions. Among other things, Segin Systems

invested substantial amountsof time, money, and intellectual capital researching this novel

concept and developing the technology to actualize it.

12. Segin Systems's significant expenditures of effort, years of trial-and-error, and

substantial financial commitment culminated in the successful launch of RynohLive nationally in

February 2009.

13. RynohZ./vc, originally known as TransactionAssurance Program &

eReconcile/Positive Pay (the "TAP Project"), automates the various transactions required to

complete a real estate settlement and provides real-time (ornear real-time) performance of

several of these transactions, thereby simplifying the settlement processand reducing, if not

eliminating, fraudulent transactions.

14. The RynohLive system is comprised of five interrelated modules working in

concert, described on the RynohLive website as follows:

RynohPay - a fully automated near real-time positive pay system that ensures that onlyvalidated checksare honored by the bank. RynohPay either provides automatic inputs totheclients' bank positive pay system, or is a standalone solution for those agents whosebank does not provide that service.

RynohTrax - verification and validation of user defined critical transactions, both receiptsand disbursements. Typical reconciliation systems reflect onlywhat hasoccurred.RynohTrax provides notification for those critical items that are not being posted to theaccount for either payment or credit.

RynohRccon - automatic daily three-way reconciliation with an embedded"Reconciliation Wizard" that identifies accounting and posting errors; timely alerts ofpotential issues mitigates or totally eliminates loss from fraud or error. A "ReconciliationAnalysis" feature further identifies transactions whose statusmay represent audit orregulatory issues.

RynohReport - a comprehensive set of daily reports that enable proactive managementand oversight of financial activities. One of those is the "Morning Report" - a dailyanalysis report of escrow account activity and integrity. Emailed to designated recipients,the report contains user defined alerts of critical transactions, reconciliation status, andavailable funds by file/subaccount. The "Morning Report" reflects those critical timesensitive items requiring immediate attention.

RynohSecure - enables the insurance underwriter or regulator to continuously monitorand fully audit account activity ona near real-time basis. Anti-fraud algorithms, fundsverification protocols, and other techniques generate alerts whenevera suspect orpotentially fraudulent event is detected.

http://www.rynoh.com/index.php/home/about-us (last accessed Apr. 9, 2013).

15. Since its introduction, RynohLive has"identified defalcation, wire and ACH

fraud; stopped employee embezzlements; eliminated check fraud and disbursing errors and saved

its clients millions of dollars within the settlement industry." Id.

16. RynohLive quickly became viewed as the salvation of the title insurance industry,

and its use has been mandated on numerous instances by title insurance underwriters to mitigate

the staggering losses caused by agent escrow theft and the mishandling of settlement funds.

17. As explained in detail below, Segin Systems attempted to protect its intellectual

property in RynohLive by executing strict nondisclosure agreements ("NDAs") that limited

Stewart's use of Segin Systems's confidential information, and by patenting its invention. The

patent rights are held by Segin Systems's subsidiary, Segin Software, formed in2008.

18. Segin Systems could not have anticipated that Stewart, which purportedly sought

to promote RynohLive and solidify Rynohl/w's position as a market leader, was, in actuality,

upon information and belief, funneling over four years of Rynoh£/ve development details to a

third party (FBS) to enable and facilitate the cloning of RynohZ./ve and the launch ofa directly

competing software, in violation of the NDAs and Segin's intellectual property rights.

19. Although the growth of RynohLive has continued, Defendants' unlawful conduct

has already caused Segin substantial and irreparable harm, and it will continue to do so if

Defendants are not stopped.

II. The Nondisclosure Agreements and Stewart's Access to the Confidential

Information

20. RynohLive was not Reass's first major contribution to the title insurance industry.

Before developing RynohZ./ve, Reass created and deployed several software applications that

streamlined title agency operations, including, for example, the industry's first transaction

management system, a document scanning and imaging system with an automatic filing

capability, electronic storage of files, automated underwriting, and productivity management.

21. These applications put Reass's pre-Segin company, Reliant Title Insurance

Agency, Inc. ("Reliant Title"), far ahead of its competitors and garnered the attention of Stewart,

which is one of the nation's largest title insurers.

22. In light of Reliant Title's success, when Reass first spoke to Stewart about the

TAP Project/RynohZ./w in late 2004, Stewart was interested in getting involved.

23. To protect Segin Systems's intellectual property, Segin Systems and certain

Stewart entitiesentered into nondisclosure agreements ("NDAs"). Landata and FDS, both

Stewart companies and predecessors of PIC, entered into the NDAs on their own behalf as well

as on behalfof their officers, directors, agents, employees, and affiliates. The Landata NDA was

executed on or around February 23, 2005. The FDS NDA wasexecuted on or around April 24,

2005. True and correct copies of the NDAs are attached hereto as Exhibit A and Exhibit B

respectively.

24. The NDAs provide in pertinent part:

The Recipient acknowledges that Segin claims its Confidential Information as a special,valuable and unique asset. For itself and on behalf of its officers, directors, agents,employees, and affiliates (each an "Affiliate"), the Recipient agrees that it shall:

a. Keep in confidence all Confidential Information, and that it will notdirectly or indirectly disclose to any third partyor use for its own benefit,or use for any purpose other thanan assessment of the TAP Project, anyConfidential Information it receives from Segin;

b. Restrict disclosure of the Confidential Information solely to the minimumnumber of Affiliates necessary in order to assess the TAP Project andonlyto those Affiliates who have executed binding and enforceableconfidentiality or nondisclosure agreements with Recipient;

c. Advise Affiliates who receive Confidential Information under Section 2(b)of their binding obligations with respect to such Confidential Informationand take all reasonable measures to protect the confidentiality of suchConfidential Information, including prohibiting such Affiliates fromreproducing any Confidential Information in any form;

d. Use the Confidential Information only as needed in conjunction with theTAP Project, and in particular, not use the Confidential Information incompetition with Segin noruse it in any unlawful manner; and

e. Use reasonable care to protect the Confidential Information, and in noevent use less than the same degree of care to protect the ConfidentialInformation as it would employ with respect to its own information of likeimportance which it does not desire to have published ordisseminated.

Id. H2 (emphasis added).

25. "Confidential Information" under the NDAs includes "any information related to

the TAP Project, whether provided in writing, orally or in any other medium." Exs. Aand B

(NDAs) 13.

26. The NDAs further provide that no patent or copyright license is granted by

Segin's disclosure of any information to the Recipient. Id. \ 7.

27. The NDAs also state that"[a]ll information furnished under thisAgreement shall

remain Segin's property and shall be returned to it at its request together with all copies, extracts,

plans, schematics, or other reproductions in whole or in part made of such information by the

Recipient." Id. H6.

28. Additionally, the NDAs provide that "[t]he Recipient acknowledges that its

breach of this Agreement will result in immediate and irreparable harm to Segin, for which there

will be noadequate remedy at law, and Segin shall be entitled to equitable reliefto compel the

Recipient to ceaseand desist all unauthorized use and disclosure of Segin's Confidential

Information." Id. ^ 9.

29. The NDAs are governed by Virginia law, and provide for the exclusive

jurisdiction and venue of this Court over any federal dispute arising out of or relating to the

NDAs. See id. ffll 16-17. Specifically, the NDAs provide that "[t]he Virginiastatecourtsof the

City of Norfolk (or, if there is exclusive federal jurisdiction, the United States District Court for

the Eastern District of Virginia, Norfolk Division) shall have exclusivejurisdictionand venue

overany dispute arising out of or relating to this Agreement, and the Recipient hereby consents

to the jurisdiction and venue of such courts." Id. f 16.

30. With the NDAs in placeand enforceable against the Stewart entities and their

successors {see id. ffi| 2, 14), the parties' discussions advanced. Over the course of the next

several years, while developing the TAP Project/RynohA/ve, Reass met on numerous occasions

with Stewart representatives in Houston, Nashville, and Virginia Beach to discuss the prospect of

forming a Stewart-RynohZ./ve relationship.

31. Under the arrangementdiscussed by the parties, Stewart would purchase from

Segin Systems the rights to utilize Segin Systems's RynohLive technology, Segin Systems would

integrate RynohLive with Stewart's settlement software (AIM/AIM+), and Stewart would use its

resources and strong industry presence to promote the use of RynohLive. Per the proposed

arrangement, Segin Systems's RynohLive technology would be launched as a joint initiative

between Segin Systems and Stewart.

32. In 2008, negotiations continued, reaching the point of finalizing the Stewart-

RynohLive relationship, and Stewart, through PIC, made its first official offer that December.

33. Stewart's offer was insufficient and was rejected by Segin Systems.

34. After being told that its offer was too low, Stewart continued to express interest in

utilizing RynohZive and made additional, targeted requests for information, under the pretext of

intending to finalize a deal.

35. With the NDAs in place, Segin Systems continued providing Stewart with

Confidential Information, including, among otherthings, the essential data elements for the

AIM+ interface along with the RynohZ,/ve infrastructure requirements.

36. OnAugust 21, 2009, Stewart made another targeted request for Confidential

Information (details regarding Ryno\\Secure, the latest of the five interrelated RynohL/ve

modules), offering no hint of Stewart's plan to launch a competing settlement software system.

After providing the requested information that day, Segin Systems heard nothing more from

Stewart. AgencySecure, Stewart's product, was launched just two months later.

HI. The Launch of AgencySecure

37. In October2009, two months after Stewart requested and received the last of the

Confidential Information, Stewart launched AgencySecure - a real estate settlement technology,

the primary component of which is a RynohLive clone that FBS allegedly "developed" for

Stewart.

38. When questioned by Segin Systems, Stewart indicated that it had chosen to utilize

a competing vendor's technology instead of Segin's RynohZ,/ve What Stewart did not explain,

however, is that, upon information and belief, Stewart had agreed to provide FBS with the

RynohLive algorithms, interfaces, connection points, and other information developed by Segin

that would (and did) enable FBS to "develop" a competing technology for AgencySecure almost

instantly and with minimal expenditures of itsown; in exchange, FBS had agreed toanexclusive

three-year contract with Stewart.

39. As a result, from 2009-2012, AgencySecure was used only by Stewart entities.

10

40. Now that the three-year exclusivity period has expired, FBS intends to expand

AgencySecure beyond Stewart and launch it across the market.

41. FBS likely would not have agreed to any period of exclusivity if it had

independently developed the AgencySecure technology.

42. Upon information and belief, the Stewart representatives - who, under the NDAs

in place, spent years studying the development of Segin's RynohLive, including several days and

weeks in face-to-face meetings in addition to communicating by email and telephone about

RynohLive - were instrumental in the launch of AgencySecure, providing FBS the Confidential

Information of Segin Systems that it needed in order to duplicate RynohLive.

43. The settlement software utilized in AgencySecure was and is identical to

Rynoh£/v<? in all material respects. Indeed, in "developing" AgencySecure, FBS- with

Stewart's help - copied each and every key feature and function of RynohZ,/ve: (1) its fully

automated near real-time positive pay system that ensures that only validated checks are honored

by the bank; (2) its verification and validation feature that provides notification forcertain user-

defined critical transactions; (3) its automatic daily three-way reconciliation service that

identifies accounting and postingerrors, alerts users of potential fraud and error, and identifies

transactions whose status may represent audit or regulatory issues; (4) its comprehensive daily

reportingsystem; and (5) its anti-fraud algorithms, funds verification protocols, and other

techniques that generate alerts whenevera suspect or potentiallyfraudulent event is detected,

thereby enabling the insurance underwriteror regulatorto continuouslymonitor and fully audit

account activity on a near real-time basis.

44. Segin did not discover until 2012 that FBS played a role in developing

AgencySecure.

11

45. At a product demonstration for AgencySecure, when questioned about the

similarities between AgencySecure and RynohLive, FBS itself announced that AgencySecure

works just like Rynoh.

46. Defendants have not only misappropriated Segin's technology, but they are

exploiting its goodwill and reputation to promote AgencySecure, and are unfairly benefiting

from the expense, time, effort, and labor that Segin expended in developing and promoting

RynohLive.

IV. The '939 Patent

47. In addition, Defendants are infringing one or more claims of Segin Software's

patent.

48. On April 23, 2007, Reass and Taylor filed U.S. Patent Application No.

11/788,876 to provide additional protection for the intellectual property in RynohLive.

49. On or around September 25, 2007, Reass and Taylor assigned and transferred to

eReconcile LLC the entire right, title, and interest in and to any and all patents that may issue

from Application No. 11/788,876. On March 13, 2008,eReconcile LLC assigned and

transferred to Segin Software the entire right, title, and interest in and to any and all patents that

may issue from Application No. 11/788,876.

50. The U.S. Patent and Trademark Office duly and legally issued U.S. Patent No.

8,165,939 ("the '939 patent") to Segin Software on April 24, 2012. Entitled "Method of Settling

a Real Estate Transaction and System Implementing the Method," the '939 patent teaches a

method for settling real estate transactions and outlines a web-based, automated, and integrated

system for ensuring the integrityof financial transactions. A true and correct copy of the '939

patent is attached hereto as Exhibit C.

51. The claims of the '939 patent are valid and enforceable.

12

52. Segin Software is the owner of all right, title, and interest in the '939 patent,

including the right to sue and recover damages and equitable relief for its infringement.

53. Segin Software has complied with the requirements of 35 U.S.C. § 287 and marks

its products by identifying the '939 patent on the"Registration" page of the RynohLive website.

54. At the latest, Stewart became aware of the '939 patent on or about June 15, 2012,

when Reass spoke with Stewart representatives at a Texas Land Title Association meeting.

During this conversation, Reass informed Stewart that Segin Software had received a patent on

the RynohLive invention in April 2012.

55. Among other things, Defendants have created settlement software virtually

identical to RynohLive, incorporated that identical software into theircompeting product,

AgencySecure, and actively produced, marketed, solicited sales for, and sold their AgencySecure

product, which infringes one or more claims of the '939 patent.

56. At least as of June 15, 2012, when Stewart became aware of the '939 patent, it has

known or should have known that its nearly-identical product likely infringes the '939 patent and

has been willfully and deliberately infringing one or more claims of the '939 patent.

57. Defendants continue to violate Segin's rights, and show no signsof terminating

their infringing conduct.

V. The Substantial and Irreparable Harm to Segin

58. Defendants' exploitation of Segin Systems'sConfidential Information in violation

of the NDAs and their infringement of the '939 patent have caused Segin substantial and

irreparable harm.

59. Defendants have unlawfully exploited, and are continuing to exploit and profit

from, Segin'sConfidential Information and the hard-earned goodwill and reputation of Segin's

13

RynohLive, and are unfairly benefiting from the expense, time, effort, and labor that Segin

expended in developing and promoting RynohZ./vtj.

60. Moreover, pursuant to the arrangement that Segin Systems and Stewart discussed

extensively and indetail from 2005 to 2009, Stewart should have launched RynohLive instead of

the cloned technology. The Stewart-Rynohl/ve relationship would likely have been finalized

absent the Defendants' unlawful conduct.

61. Underthe arrangement discussed by the parties, Segin Systems would have

profited from the substantial fees and royalties thatStewart and Stewart customers would have

paid Segin for the use of RynohZ,/ve; the product marketing and advertising that Stewart would

have contributed; the resources and global reach and presence that only Stewart could have

offered; theexpanded customer base thatSegin would have realized; the increased profitability

of each customer relationship; and the numerous other business opportunities that would have

presented themselves to Segin asa result of RynohZ,/ve's increased exposure, market dominance,

and prestige. But instead, Defendants' gain was, and continues to be, Segin's irreparable loss of,

inter alia, prestige, recognition, goodwill, profits, and customers.

62. Absent an injunction, the anticipated launch of AgencySecure across the market

will increase the irreparable harm to Segin.

COUNT I

(Patent Infringement)

Stewart's Infringement of the '939 Patent

63. Segin incorporates the foregoing allegations in Paragraphs 1 through 62 as if fully

set forth herein.

64. Segin Software is the owner of all right, title, and interest in the '939 patent.

14

65. Upon information and belief, Stewart is now and has been directly infringing the

'939 patent by making, using, offering to sell, and/or selling in the United States, and/or

importing into the United States, products and/orservices that are coveredby at leastclaim 1 of

the '939 patent, including, by way of example and not limitation, Defendants' AgencySecure.

66. On or around June 15, 2012, Stewart had full and actual knowledge of the '939

patent.

67. Upon information and belief, Stewart is now and has been, since at least June 15,

2012, contributingto infringement of the '939 patent by others by selling and/or offeringto sell

within the United States, and/or importing into the United States, materials and/or apparatuses

for use in practicingthe method described in at least claim 1 of the '939 patent, including, by

way of example and not limitation, Defendants' AgencySecure. Upon information and belief,

Stewart knewthat these materials and/or apparatuses were especially made or adapted for use in

an infringement of the '939 patent, are a material part of Segin's invention, and have no

substantial, non-infringing use; and Stewart's actions have in fact contributed to another's direct

infringement of at least claim 1 of the '939 patent.

68. Further, upon information and belief, Stewart is now and has been actively and

knowingly inducing the infringement of the '939 patent by others, with knowledge of Segin

Software's patent rights and without reasonable basis for believing that its conduct is lawful.

Upon information and belief, Stewart is now and has been, since at least June 15, 2012, with

specific intent and requisite knowledge, actively and knowingly inducing infringement of the

'939 patent by soliciting, assisting, and/or fostering customers' use of products and/or services

that are covered by at least claim 1 of the '939 patent, including, by way of example and not

limitation, Defendants' AgencySecure. Upon further information and belief, Stewart knew or

willfully blinded itself from knowing that such products and/or services infringe at least claim 1

of the '939 patent, and that the induced acts constitute infringement of at least claim 1of the

'939 patent.

69. Stewart, with full and actual knowledge of the '939 patent, nonetheless committed

and continues to commit at least the aforementioned infringing acts despite an objectively high

likelihood that these actions constitute infringement of a valid patent. Further, under the

circumstances, Stewart knew or should have known of this objectively high risk.

70. Thus, Stewart's infringing activities constitute willful and deliberate infringement

of the '939 patent, entitling Segin Software to enhanced damages under 35 U.S.C. § 284 and

reasonable attorneys' fees and costs.

71. Stewart's infringement of the '939 patent has been withoutexpress or implied

license from Segin Software, and will continue unless enjoined by this Court.

72. As a direct and proximate consequence of Stewart's infringement of the '939

patent, Segin Software has suffered and will continue to suffer irreparable injury and damages in

an amount not yet determined, for which Segin Software is entitled to relief.

FBS's Infringement of the '939 Patent

73. Segin incorporates the foregoing allegations in Paragraphs 1 through 72 as if fully

set forth herein.

74. Segin Software is the owner of all right, title, and interest in the '939 patent.

75. Uponinformation and belief, FBS is nowand has been directly infringing the

'939 patent by making, using, offering to sell, and/or selling in the United States, and/or

importing into the United States, products and/or services that are covered by at leastclaim 1of

the '939 patent, including, by way of example and not limitation, Defendants' AgencySecure.

16

76. FBS's infringement of the '939 patent has been without express or implied license

from Segin Software, and will continue unlessenjoined by this Court.

77. As a direct and proximate consequence of FBS's infringement of the '939 patent,

Segin Software hassuffered and will continue to suffer irreparable injury and damages in an

amount not yet determined, for which SeginSoftware is entitled to relief.

COUNT II

(Breach of Contract)

78. Segin incorporates the foregoing allegations in Paragraphs 1 through 77 as if fully

set forth herein.

79. On or about February 23, 2005, PIC's predecessors, Landata and FDS, entered

into the NDAs with Segin Systems.

80. The NDAs are valid contracts.

81. Among other things, theNDAs provide that Landata, FDS, their affiliates, and

their successors must not use the Confidential Information for their own benefit, in competition

with Segin Systems, or for any purpose other than to assess theTAP Project/RynohZ,/ve.

82. Because PIC is the successor of Landata and FDS, and STGC is and was an

affiliate of PIC and its predecessors, the confidentiality provisions of the NDAs are binding on

and enforceable against the Stewart entities.

83. Pursuant to the NDAs, Segin Systems furnished Confidential Information to

Stewart and its predecessors.

84. Upon information and belief, Stewart and its predecessors breached, and Stewart

continues to breach, the NDAs by using the Confidential Information for theirown benefit, in

competition with Segin, and/or for purposes other than assessing the TAP Project/RynohZ,/v<?. In

particular, upon information and belief, Stewart and its predecessors used the Confidential

17

Information to launch competing products and/orservices including, by way of example and not

limitation, Defendants' AgencySecure, launched in 2009, and Stewart continues to use the

Confidential Information for its own benefit.

85. In addition, in 2012, Segin Systemsdiscovered that FBS had played a role in

developing AgencySecure.

86. Upon information and belief, Stewart shared Segin Systems's Confidential

Information with FBS in violation of the NDAs.

87. As a direct and proximate consequence of Stewart's breach of theNDAs, Segin

Systems has suffered and will continue to suffer irreparable injury for which Segin Systems is

entitled to relief.

88. Segin Systems is thus entitled to preliminary and permanent injunctive relief to

prevent Stewart from using, promoting, or selling, competing products and/or services including,

by way of example and not limitation, Defendants' AgencySecure.

89. Segin Systems is also entitled to the return of all information furnished under the

NDAs with all copies,extracts, plans, schematics, or other reproductions.

90. Finally, Stewart's breach of the NDAshas caused Segin Systems substantial

damages inanamount not yet determined for which Segin Systems isentitled to relief.

PRAYER FOR RELIEF

WHEREFORE, Plaintiffs pray that this Court grant the following relief:

a) A judgment that Defendants are now and have been directly infringing the '939

patent by making, using, offering to sell, and/or selling in the United States,

and/or importing into the United States, products and/orservices thatare

covered by one or more claimsof the '939 patent, including, by way of example

and not limitation, Defendants' AgencySecure;

b) Ajudgment that Stewart is now and has been contributing to infringement of the

'939 patent by others by selling and/or offering to sell within the United States,

and/or importing into the United States, materials and/or apparatuses for use in

practicing the method described in one or more claims of the '939 patent,

including, by way of example andnot limitation, Defendants' AgencySecure;

c) Ajudgment that Stewart is now and has been, with specific intent and requisite

knowledge, actively and knowingly inducing infringement of the '939 patent by

soliciting, assisting, and/or fostering customers' use of products and/or services

that are covered byoneor more claims of the '939 patent, including, by way of

example and not limitation, Defendants' AgencySecure;

d) Ajudgment that Stewart's infringing activities constitute willful and deliberate

infringement of the '939 patent;

e) Ajudgment declaring thiscase exceptional under 35 U.S.C. § 285;

f) Ajudgment that Stewart is now and has been breaching the NDAs by using

Segin Systems's Confidential Information for its ownbenefit, in competition

with SeginSystems, and for purposes other than assessing the TAP

Project/RynohZ,/ve;

g) Anorder temporarily, preliminarily, and permanently enjoining Defendants and

their officers, directors, agents, employees, servants, attorneys, successors,

assigns, and all others controlling, controlled by, or affiliated with Defendants,

19

and all those in privity or active concert or participation with any of the

foregoing from:

i. Making, using, offering to sell, and/or selling in the United States,

and/or importing into the United States, products and/or services that are

covered by one or more claims of the '939 patent, including, by way of

example and not limitation, Defendants' AgencySecure;

ii. Selling and/or offering to sell within the United States, and/or importing

into the United States, materials and/or apparatuses for use in practicing

the method described in one or more claims of the '939 patent,

including, by way of example and not limitation, Defendants'

AgencySecure;

iii. Soliciting, assisting, and/or fostering customers' use of products and/or

services that are covered by one or more claims of the '939 patent,

including, by way of example and not limitation, Defendants'

AgencySecure;

iv. Directly or indirectly continuing to use or attempting to use Plaintiffs'

Confidential Information in violation of the NDAs, including, without

limitation, continuing to use or attempting to use Plaintiffs' Confidential

Information to launch, distribute, license, or contract with any third party

for the launch, distribution, or licensing of products and/or services that

compete with RynohLive, including, by way of example and not

limitation, Defendants' AgencySecure;

h) Compensatory and punitive damages in an amount to be determined at trial;

20

i) Prejudgment and post-judgment interest;

j) Trebledamages under 35 U.S.C. § 284 (willful infringement);

k) Reasonable attorneys' fees, costs, and expenses under 35 U.S.C. § 285;

1) An orderdirecting Defendants to account for any Confidential Information

disclosed to third parties or otherwise used in violation of the NDAs;

m) An order directing Stewart to return to Seginall information furnished by Segin

under the NDAs along with all copies, extracts, plans, schematics or other

reproductions in whole or in part made of such information by Stewart; and

n) Any and all other or further relief that the Court may deemjust and proper.

21

Dated: April 12,2013

Respectfully submitted.

By: t

22

SUUlllllllU, —

Alan M. Grimaldi

{pro hac vice application anticipated)Ann Marie Duffy (VSB No. 48653)MAYER BROWN LLP

1999 K St. NW

Washington, DC 20006-1101Tel: 202-263-3000

Fax: 202-263-3300

[email protected]@mayerbrown.com

A. John P. Mancini

{pro hac vice application anticipated)Vanessa M. Biondo

{pro hac vice application anticipated)Elizabeth M. Winokur

{prohac vice application anticipated)MAYER BROWN LLP

1675 BroadwayNew York, NY 10019-5820Tel: 212-506-2500

Fax: 212-262-1910

[email protected]@[email protected]

Counselfor Plaintiffs,Segin Systems, Inc. andSegin Software, LLC