Marshall Bei] Kristina M. Allen McGIAREWOODS LLP
1345 Avenue of the Americas New York, New York 10105-0106 (212) 548-2100
Attorneys for Plaintiff Sprint United Management Company
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK
- - - x
SPRINT UNITED MANAGEMENT COMPANY, ECF Case
Plaintiff, 11 Civ.
- against - COMPLAINT
BLACKBOARD, INC.,
Defendant.
Plaintiff Sprint United Management .Company ("Sprint"), by its attorneys McGuireWoods LLP, hereby alleges as follows for its Complaint:
Parties
1. Sprint is a Kansas corporation with its principal place of business at 6200 Sprint Parkway, Overland Park, Kansas 66251.
2. Blackboard, Inc. ("Blackboard") is a Delaware corporation with its principal place of business at 650 Massachusetts Ave., NW, Washington, D.C. 20001.
Jurisdiction and Venue
3. Sprint's claims arise under, inter alia, the Declaratory Judgment Act, 28 U.S.C. §§ 2201(a) and 2202.
(collectively the "Parties") and the amount in controversy, exclusive of interest and costs, exceeds the sum of $75,000.
5. Venue is proper in this District pursuant to 28 U.S.C. § 1391(a)(2). 6. The Parties have agreed to a forum selection clause and submitted themselves to the personal jurisdiction of this Court.
Factual Background
7. Sprint, together with its various subsidiaries and affiliated companies, owns and/or operates systems to provide wireless telecommunications utilizing various technologies and frequencies, such as IDEN and/or CDMA (the "Systems"), and provides access to such systems to its customers ("Sprint User") over devices including phones, personal data assistants, Blackberries, data cards,
tablets,
and other devices ("Devices").8. Blackboard is a software company which develops and licenses applications for use in educational institutions. Numerous schools and universities use Blackboard products and technologies as the primary online portal for students and teachers to exchange class-specific updates, assignments, and information.
9. On or about January 11, 2010, Sprint and Blackboard entered into the Sprint Master Application Distribution Agreement (the "Agreement").
10. The Agreement required that Blackboard develop a software
application for use on mobile devices known as the Mobile Learn application ("the "Application" or "Mobile Learn"). Mobile Learn allows students to access Blackboard technologies and products on their smartphones and mobile devices.
Devices (the "Exclusive Sprint Version"), and one "carrier agnostic" version which would operate with any wireless carrier (the "Carrier Agnostic Version").
12. Colleges and universities were offered a choice between using the Exclusive Sprint Version at no cost or licensing the Carrier Agnostic Version for a fee. Offering the Exclusive Sprint Version free-of-charge was intended to incentivize colleges and universities to adopt the Exclusive Sprint Version.
13. For each college or university which chose the Exclusive Sprint Version, Sprint made a payment to Blackboard.
14. For each college or university which purchased the Carrier Agnostic Version, Blackboard is to remit a percentage of the license fee to Sprint pursuant to paragraph 34 of the Agreement.
15. Unless a school chose to purchase the Carrier Agnostic Version, the Agreement grants Sprint exclusive rights to Mobile Learn when the Application is used in conjunction with colleges and universities. Specifically, the Agreement states Sprint shall be the "sole network" on which Mobile Learn operates for those schools that have not purchased the Carrier Agnostic Version.
16. The Agreement also specifically prohibits the development of "Unauthorized Application[s]" for use with non-Sprint wireless carriers.
and provided a WiFi version of Mobile Learn to numerous colleges and universities for use with their student's wireless devices.
18. The WiFi version of Mobile Learn functions for non-Sprint wireless customers.
19. Blackboard has provided a WiFi version of Mobile Learn to post-secondary educational institutions that have not purchased or licensed the Carrier Agnostic Version.
20. In fact, Blackboard has provided a WiFi version of Mobile Learn to the same colleges and universities that agreed to use the Exclusive Sprint Version.
21. Because Sprint pays Blackboard for each school which uses the Exclusive Sprint Version, Sprint is now paying Blackboard for Mobile Learn in the same colleges and universities where Blackboard is actively competing with Sprint and undercutting its exclusivity rights by providing an alternative WiFi version of Mobile
Learn.
22. Blackboard's WiFi version of Mobile Learn competes with Sprints authorized version of the Application and violates the exclusivity provisions of the Agreement.
23. Sprint has notified Blackboard that Blackboard is violating the exclusivity provisions of the Agreement.
24. In response, Blackboard contended that the exclusivity provisions of the Agreement do not include WiFi networks.
25. On June 9, 2011, Sprint and Blackboard met in person in a good faith
26. Blackboard's distribution of a WiFi version of Mobile Learn violates the Agreement, and it has prejudiced Sprint's rights and caused significant monetary damages.
Count I
(Declaratory Judgment that WiFi Applications Violate the Agreement) 27. Sprint realleges and reincorporates the allegations in paragraphs 1 through 26.
28. There exists between the parties an actual, justiciable controversy with respect to the right of Blackboard to continue to provide a WiFi version of Mobile Learn to colleges and universities which have not purchased the Carrier Agnostic Version.
29. Although Sprint possesses the right to be "the sole network" on which Mobile Learn operates for those schools that have not purchased the Carrier Agnostic Version, Blackboard contends that it is not prohibited from distributing a WiFi version of Mobile Learn under any circumstances. In other words, Blackboard argues that WiFi is not a "network" for purposes of the Agreement.
30. In both common usage and technical terminology, however, WiFi is a network. In fact, "WiFi" is a trade name developed in the communications industry to describe a specific type of wireless local area network. Thus, based on its ordinary usage and historical and technical definition, WiFi meets the definition of "network."
32. Accordingly, the parties intended Sprint's exclusivity to broadly extend to all networks, including WiFi.
33. Blackboard's distribution of a WiFi version of Mobile Learn to colleges and universities that have not licensed the Carrier Agnostic Version violates Sprint's rights under the Agreement.
34. Sprint requests entry of a judgment declaring: (i) the Agreement bars Blackboard from providing or distributing a WiFi version of Mobile Learn to post-secondary educational institutions which have not licensed the Carrier Agnostic Version, and (ii) Blackboard is in breach of the Agreement.
Count II (Injunctive Relief)
35. Sprint realleges and reincorporates the allegations in paragraphs I through 34.
36. Sprint will suffer irreparable injury unless Blackboard is enjoined from providing and distributing a WiFi version of Mobile Learn to colleges and universities which have not purchased the Carrier Agnostic Version.
37. In the Agreement, the parties acknowledge that a violation of Sprint's exclusivity rights would result in Sprint suffering irreparable harm sufficient to sustain a permanent injunction.
38. Sprint lacks an adequate remedy at law for this irreparable harm.
providing or distributing a WiFi version of Mobile Learn to post-secondary educational institutions which have not licensed the Carrier Agnostic Version.
Count HI
(Alternatively, Declaratory Judgment that Agreement is Unenforceable)
40. Sprint realleges and reincorporates the allegations in paragraphs through 39.
41. Even if the Agreement permits Blackboard to distribute and provide a
WiFi version of Mobile Learn to post-secondary educational institutions which have not purchased the Carrier Agnostic Version, an actual justiciable controversy exists regarding the enforceability of the Agreement.
42. Both parties possess differing beliefs as to the meaning of the term "network" as used in the Agreement.
43. The term "network" is an essential and material term of the Agreement.
44. Without mutual assent to this essential and material term, the parties failed to reach a meeting of the minds as to the fundamental subject matter of the Agreement. Therefore, no binding contract exists.
45. Thus, in the alternative to Counts I and II, Sprint requests entry of a judgment declaring that the Agreement is unenforceable.
WHEREFORE, Sprint respectfully requests entry of a judgment against
Blackboard:
2.
declaring Blackboard is in breach of the Agreement;
3.
preliminarily and permanently enjoining Blackboard, until the
termination or expiration of the Agreement, from providing or distributing a WiFi version
of Mobile Learn to post-secondary educational institutions which have not licensed the
Carrier Agnostic Version;
4.
alternatively, declaring that the Agreement is unenforceable;
5.
for Sprint's costs and disbursements of this action, including
reasonable attorneys fees; and
6.
such other relief as this Court deems appropriate and proper.
Dated: New York, New York
July 1, 2011
Respectfully submitted,
Marshall B eil
Kristina M. Allen
MCGUEREWOODS
LLP
1345 Avenue of the Americas
Seventh Floor
New York, NY 10105-0106
(212) 548-2100
Attorneys for Plaintiff,
Sprint United Management Company