Entities and Individuals Sued by Philips for DVD Patent Infringement and RICO Violations

U.S. Philips Corporation v. Shanghai Hongsheng Technology Co. Ltd., et al.,

Case No. SACV08-795AG(ANX) (C.D. Cal. 2008)

Philips filed a Complaint in the United States District Court for the Central District of California, suing Shanghai Hongsheng Technology Co. Ltd, International Reliance Corporation, Shanghai Hongpu Industry Investment Co. Ltd., Kevin Long, Shu Zhi Ju, and Jennifer Long, in addition to a list of other affiliated China and U.S entitles and individuals for DVD Patent Infringement and RICO Violations.

Philips' complaint sets out facts to show that certain defendants are infringers in the business of making, having made, offering for sale, selling, or importing DVD products, including DVD players and are liable for willful patent infringement. In addition, the complaint lays out the relationship between Kevin Long, Shu Zhi Ju, Jennifer Long and their affiliates and their formation of a RICO enterprise engaging in a scheme to defraud Philips from collecting its patent judgment for damages in excess of $45 million.

Philips is requesting compensatory damages along with enhanced damages, pre-judgment and post-judgment interest, and attorney's fees, the imposition of a constructive trust and injunctive relief.

Defendants Factual Background:

Patent Infringement Liability

Patent RICO Complaint:

Ongoing Scheme to Defraud

Prayer For Relief:

Philips Judgment Requested

 

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Lawsuit Case Filed
Lawsuit Case Filed Date
Lawsuit Case Number

Jeffrey K. Joyner (Bar No. 180485)
E-mail: jjoyner@kmwlaw.com
Jai H. Rho (Bar No. 123248)
E-mail: jrho@kmwlaw.com
Samuel L. Alberstadt (Bar No. 186402)
E-mail: salberstadt@kmwlaw.com
KEATS McFARLAND & WILSON LLP
9720 Wilshire Boulevard
Beverly Hills, California 90212
Telephone: (310) 248-3830
Facsimile: (310) 860-0363

Attorneys for Plaintiff
U.S. PHILIPS CORPORATION

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA, WESTERN DIVISION

U.S. PHILIPS CORPORATION, a Delaware
Corporation,

Plaintiff,

v.

SHANGHAI HONGSHENG TECHNOLOGY
CO. LTD.; INTERNATIONAL RELIANCE
CORPORATION; SHANGHAI HONGPU
INDUSTRY INVESTMENT CO. LTD.;
HONGPU INTERNATIONAL
DEVELOPMENT CO. LTD.; ANMAN
ELECTRONICS CO. LTD.; IRCC
HOLDING, INC., XIAS TECHNOLOGY,
INC.; ORIGON INTERNATIONAL
HOLDINGS LTD.; IRC ELECTRONICS,
INC.; INT TRADING, INC.; SHU ZHI JU,
also known as SHU ZHI LONG; KEVIN
LONG, also known as CHANG SHENG
LONG; JENNIFER LONG, also known as
CHANG HONG LONG; DENNIS
ROBINSON; and DOES 1-10,

Defendants.

Case No.:

COMPLAINT FOR PATENT
INFRINGEMENT AND RICO
VIOLATIONS

DEMAND FOR JURY TRIAL

 
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Nature of the Action

  1. 1. This is a civil action for patent infringement arising under the laws of the
    United States relating to patents, including, but not limited to, 35 U.S.C. § 281.
  2. 2. In addition, this action includes claims arising under other federal statutes,
    specifically claims for violation of the Racketeering Influenced and Corrupt
    Organizations Act, 18 U.S.C. § 1961 et seq. (“RICO”).

Subject Matter Jurisdiction

  1. 3. This Court has subject matter jurisdiction over this action pursuant to 28
    U.S.C. §§ 1331 and 1338(a), because this civil action arises under the laws of the
    United States and under Acts of Congress relating to patents and RICO violations. To
    the extent any state claims may be asserted, the court also has supplemental
    jurisdiction under 28 U.S.C. § 1367.

Parties

  1. 4. Plaintiff U.S. Philips Corporation (“Philips”) is a corporation organized
    and existing under the laws of Delaware, with a place of business at 3000 Minuteman
    Road, Andover, Massachusetts 01810.
  2. 5. Defendant Shanghai Hongsheng Technology Co., Ltd. (“Shanghai
    Hongsheng”) is a business entity of unknown form, with an office and principal place
    of business at 13/F, Liangyou Mansion, No. 618, Shangcheng Road, Shanghai Pudong,
    China 200120.
  3. 6. Defendant International Reliance Corporation (“IRC”) is registered as a
    California corporation and has a place of business at 1201 West Foothill Boulevard,
    Azusa, California 91702.
  4. 7. Defendant Shanghai Hongpu Industry Investment Co. Ltd. (“Shanghai
    Hongpu”) is a business entity of unknown form, with an office and principal place of
    business at Room 1509, Liangyou Mansion, No. 618, Shangcheng Road, Shanghai
    Pudong, China 200120. Shanghai Hongsheng discloses that Shanghai Hongpu holds
    31.65% of the shares of Shanghai Hongsheng, so that Shanghai Hongpu is thus the
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largest shareholder of Shanghai Hongsheng. Shanghai Hongsheng's second largest
shareholder holds 1.47% of the shares. Shanghai Hongpu is controlled by Jennifer
Long and Shu Zhi Ju, her mother.

  1. 8. Upon information and belief, Defendant Hongpu International
    Development Co., Ltd. (“Hongpu International”) is a business entity of unknown form,
    with an office and principal place of business at 13/F, Liangyou Building No. 618,
    Shangcheng Road, Shanghai, China 200120. Hongpu International is a subsidiary of
    Shanghai Hongsheng.
  2. 9. Defendant Anman Electronics Co. Ltd. (“Anman”) is a business entity of
    unknown form, with an office and principal place of business at Second Floor, Plant
    25, No. 30 Fute Dong San Road, Waigaoqiao Free Trade Zone, Shanghai, China.
    Anman is a subsidiary of Shanghai Hongsheng.
  3. 10. Defendant Origon International Holdings Ltd. (“Origon”) is a business
    entity of unknown form, with an office and principal place of business at Room 1001,
    10/F, Far East Financial Centre, 16 Harcourt Road, Admiralty, Hong Kong. Upon
    information and belief, Origon is a supplier of at least Shanghai Hongsheng and IRC.
  4. 11. Defendant IRCC Holding, Inc. (“IRCC”) is registered as a California
    corporation with an address at 324 S. Diamond Bar Boulevard, #628, Diamond Bar,
    California 91765.
  5. 12. Defendant Xias Technology, Inc. (“Xias”) is registered as a California
    corporation with an address at 324 S. Diamond Bar Boulevard, #628, Diamond Bar,
    California 91765.
  6. 13. Defendant IRC Electronics, Inc. (“IRCE”) is registered as a California
    corporation with an address at 324 S. Diamond Bar Boulevard, #628, Diamond Bar,
    California 91765.
  7. 14. Defendant INT Trading, Inc. (“INTT”) is registered as a California
    corporation with an address at 324 S. Diamond Bar Boulevard, #628, Diamond Bar,
    California 91765.
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  1. 15. Defendant Shu Zhi Ju, also known as Shu Zhi Long (“Ju”), is an
    individual having a residence in Arcadia, California. Ju is: a director of Shanghai
    Hongsheng; a director and 50 percent owner of Norcent Holdings, Inc. (“NHI”), which
    owns 100 percent of International Norcent Technology (“INT”) and IRC; a director of
    IRCC, IRCE, and INTT; the Chief Executive Officer, Chief Financial Officer, and
    Secretary of IRCE and INTT; the former Chief Executive Officer, Chief Financial
    Officer, and Secretary of IRCC; and the mother of Kevin Long and Jennifer Long.
  2. 16. Defendant Kevin Long, also known as Chang Sheng Long (“Kevin
    Long”), is an individual having a residence in Arcadia, California. Kevin Long is, or
    was during the relevant time period, a Director of Shanghai Hongsheng and Chairman
    of the Board of Directors. He is or was also the equivalent of a chief executive officer.
  3. 17. Defendant Jennifer Long, also known as Chang Hong Long (“Jennifer
    Long”), is an individual having a residence in Arcadia, California. Jennifer Long is: a
    past director of Shanghai Hongsheng; the Chief Executive Officer and a director of
    INT, IRC, NHI; a 50 percent owner of NHI; and was President of IRCC. Ju, Jennifer
    Long, and Kevin Long either directly or indirectly, control Shanghai Hongsheng. Ju
    and Jennifer Long are the controlling persons of Shanghai Hongpu, the largest
    shareholder of Shanghai Hongsheng.
  4. 18. Defendant Dennis Robinson (“Robinson”) is an individual having a
    regular place of business at 1201 West Foothill Boulevard, Azusa, California 91702.
    Robinson is Chief Financial Officer of NHI, INT, and IRC. Robinson is, or at least for
    a period of time was, President of Xias. Robinson is the incorporator of INTT and
    IRCE.
  5. 19. As described in more detail below, Jennifer Long, INT and NHI were
    found liable for willful infringement in a judgment entered September 18, 2007. INT
    and NHI filed Chapter 11 bankruptcy petitions on October 11, 2007. INT and NHI are
    not named defendants in this Complaint. Nothing herein is intended to be, nor shall be
    construed as, a commencement or continuation of any action or proceeding against
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INT, NHI or their respective Bankruptcy estates. Further, nothing herein is intended to
be, nor shall be construed as, an act with respect to the creation, perfection, or
enforcement against INT, NHI or their respective Bankruptcy estates of any judgment,
claim or lien, or an act to obtain possession of any property of INT, NHI or their
respective Bankruptcy estates.

  1. 20. The true names and capacities, whether individual, corporate, or otherwise
    of the Defendants named herein as DOES 1 through 10 are unknown to Plaintiff, who,
    therefore, sues them by such fictitious names. Based on information and belief,
    Plaintiff alleges that each of DOES 1 through 10 was the agent, representative, or
    employee of each of the other Defendants and was acting at all times within the scope
    of his or her agency or representative capacity, with the knowledge and consent of each
    of the other Defendants, and that each of DOES 1 through 10 are liable to Plaintiff in
    connection with the claims sued upon here and are responsible in some manner for the
    wrongful acts and conduct alleged here, including, but not limited to violating RICO,
    and that each were doing substantial business in the State of California and within this
    District. At such time as their true names and capacities have been ascertained,
    Plaintiff will seek leave of the Court to amend this Complaint accordingly. The named
    defendants and DOES 1 through 10 are hereinafter collectively referred to
    “Defendants.”

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  1. 21 Defendants are part of a larger enterprise of individuals and companies,
    some of which are depicted on the following chart:1

1 Individual and entity names marked in bold-face, underline are named defendants in
this Complaint. The named defendants in this case are Shanghai Hongsheng, IRC,
Shanghai Hongpu, Hongpu International, Anman, IRCC, Xias, Origon, IRCE, INTT,
Ju, Kevin Long, Jennifer Long, and Robinson.

Lawsuit Scanned
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The relationships of the parties depicted in the preceding chart have been determined
from information publically available in the United States and the People's Republic of
China.

Personal Jurisdiction and Venue

  1. 22. Shanghai Hongsheng, IRC, Hongpu International, and/or Kevin Long, or
    their alter ego, acting in concert, voluntarily placed patented, unlicensed, infringing
    digital versatile disc (also known as digital video disc) (“DVD”) products, including
    DVD players, that can suitably read information from a DVD disc into the stream of
    U.S. commerce, conscious that California and this judicial district were the likely
    destination of a substantial quantity of those unlicensed infringing DVD products.
  2. 23. Venue for the claim of RICO violations is proper under 18 U.S.C. §1965
    because, among other things, Defendants Ju, Jennifer Long, Robinson and IRC reside
    in this judicial district, are found in this district, have agents in this district, and
    transact their affairs in this district.
  3. 24. A substantial part of the events giving rise to this claim for patent
    infringement and RICO violations occurred in California and this judicial district.
  4. 25. Shanghai Hongsheng is an alien for purposes of 28 U.S.C. § 1391(d).
  5. 26. Shanghai Hongpu is an alien for purposes of 28 U.S.C. § 1391(d).
  6. 27. Hongpu International is an alien for purposes of 28 U.S.C. § 1391(d).
  7. 28. Anman is an alien for purposes of 28 U.S.C. § 1391(d).
  8. 29. Origon is an alien for purposes of 28 U.S.C. § 1391(d).
  9. 30. Kevin Long maintains or has maintained continuous and systematic
    contacts with California and this judicial district.
  10. 31. Kevin Long resides in this judicial district for purposes of 28 U.S.C. §
    1400(b).
  11. 32. Kevin Long has committed acts of infringement and has a regular and
    established place of business in this judicial district for purposes of 28 U.S.C. §
    1400(b).
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  1. 33. IRC, Shanghai Hongsheng, Hongpu International, and Kevin Long are
    subject to personal jurisdiction in this judicial district because they purposefully
    engaged in activities that gave rise to this claim for patent infringement and which
    were directed at residents of California and this judicial district.
  2. 34. IRC, Shanghai Hongsheng, Shanghai Hongpu, Hongpu International,
    Anman, Origon, IRCC, Xias, and INTT reside in this judicial district for purposes of
    28 U.S.C. §§ 1391(c) and 1400(b) because they are subject to personal jurisdiction in
    this district.
  3. 35. Venue for this civil action in this judicial district is proper under 28
    U.S.C. §§ 1391(b)(2), 1391(c), 1391(d), 1400(b), and 18 U.S.C. § 1965.

Factual Background

DEFENDANTS IRC, KEVIN LONG, SHANGHAI HONGSHENG, AND
HONGPU INTERNATIONAL ARE LIABLE FOR PATENT
INFRINGEMENT

  1. 36. IRC, Shanghai Hongsheng, and Hongpu International are in the business
    of making, having made, offering for sale, selling, or importing DVD products,
    including DVD players, that can suitably read information from a DVD disc.
  2. 37. IRC, Shanghai Hongsheng, and Hongpu International have made, offered
    for sale, sold, or imported DVD products, including DVD players, for sale or use in the
    United States. Therefore, these products infringe U.S. Patent No. 5,677,903 (“the '903
    patent”) and U.S. Patent No. 5,463,607 (“the '607 patent”).
  3. 38. DVD products of IRC, Shanghai Hongsheng, and Hongpu International,
    including DVD players, have been made, used, offered for sale, sold, or imported
    within the United States without authority or license from Philips.
  4. 39. Kevin Long has been involved in the control and active management of
    IRC, Shanghai Hongsheng, and Hongpu International.
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  1. 40. Kevin Long has been in active concert or participation with IRC,
    Shanghai Hongsheng, and Hongpu International in the manufacture, use, sale, offer for
    sale, and/or importation of unlicensed DVD products within the United States.
  2. 41. IRC, Shanghai Hongsheng, Hongpu International, and/or Kevin Long
    have entered into agreements, arrangements, or understandings with each other for the
    manufacture or distribution of DVD products, including the distribution of unlicensed
    DVD products within the United States.
  3. 42. In May 2002, Philips entered into a DVD license agreement (“License
    Agreement”) with Shanghai Hongsheng and Shanghai Hongsheng listed INT as its
    associated entity. The License Agreement was terminated in January 2003 for
    nonpayment of royalties.
  4. 43. On March 3, 2006, Philips filed a patent infringement action against INT,
    NHI, and Jennifer Long ( U.S. Philips v. International Norcent Technology, Inc. et al.
    , Case No. 06-cv-01366-R-PLA, Central District of California (D.I. 1)). On September
    5, 2007, a jury found that INT, NHI, and Jennifer Long willfully infringed the '903 and
    '607 patents. (D.I. 308.) The Court entered final judgment in the amount of
    $12,853,793 on September 18, 2007 (“Judgment,” D.I. 328). The Court granted
    Philips' post-trial motions seeking enhanced damages, attorneys' fees, and pre- and
    post-judgment interest and an accounting.

DEFENDANTS IRC, SHANGHAI HONGSHENG, HONGPU
INTERNATIONAL, ANMAN, IRCC, KEVIN LONG AND JENNIFER
LONG ARE ALTER EGOS

  1. 44. IRC, Shanghai Hongsheng, Anman, and Hongpu International are, and at
    all times herein mentioned were, the alter ego of Kevin Long. INT and NHI are, and at
    all times herein mentioned were, the alter ego of Kevin Long, Jennifer Long, and IRC.
    Jennifer Long is, and at all times herein mentioned was, the alter ego of IRC. Upon
    information and belief, Plaintiff alleges that there exists, and at all times herein
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mentioned has existed, a unity of interest and ownership between such entities and
individual such that any separateness has ceased to exist.

  1. 45. Kevin Long conducts his enterprise of patent infringement under the guise
    of numerous corporations and/or fictitious business names including, but not limited to,
    IRC, Shanghai Hongsheng, Anman, Hongpu International, INT, NHI, and IRCC
    ("Norcent Related Companies"). Ju, Kevin Long, and/or Jennifer Long are the only
    officers and/or directors of several Norcent Related Companies, and personally
    authorize, direct and control the operations conducted under each corporate name.
  2. 46. The Norcent Related Companies are, and at all times herein mentioned
    were, controlled, dominated, and operated by Defendants Kevin Long and Jennifer
    Long.
  3. 47. Upon information and belief, the activities and business of the Norcent
    Related Companies were carried out without the appropriate corporate formalities
    including without limitation the appointment of a non-employee of a corporation as an
    authorized signer to the corporation's bank accounts; and that Kevin Long entered into
    personal transactions with the Norcent Related Companies without the approval of
    other directors or shareholders.
  4. 48. Upon information and belief, the Norcent Related Companies were, and at
    all times herein mentioned were, mere shells, instrumentalities and conduits through
    which Kevin Long conducted his own personal business, both individually and through
    said entities.
  5. 49. Upon information and belief, Kevin Long and Jennifer Long direct,
    control, authorize and are completely involved in the infringing businesses of
    numerous legal (and fictitious) entities in every way on a regular basis.
  6. 50. Kevin Long, Jennifer Long, and IRC are alter egos of INT and NHI, and
    are jointly liable for the infringing acts of INT and NHI as alleged in Paragraphs 42-43.
    Upon information and belief, Kevin Long, Jennifer Long, INT, NHI, and IRC, in
    concert with Shanghai Hongsheng and its subsidiaries and related companies, entered
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into agreements, formal or informal, to manipulate the assets and liabilities of INT,
NHI, IRC, and Shanghai Hongsheng and its subsidiaries and related companies. Upon
information and belief, Kevin Long has been detained in China for his participation in
and inducement of these agreements. Upon information and belief, additional
information will be made available through discovery in this action and in the
bankruptcy proceeding involving NHI and INT that further supports Philips' alter ego
allegations.

THE RICO ENTERPRISE'S ONGOING SCHEME TO DEFRAUD
PHILIPS
The RICO Enterprise

  1. 51. In or about 2002, INT, NHI, and Jennifer Long started importing and
    selling DVD products, including DVD players, that infringe the '903 patent and the
    '607 patent, both of which are owned by Philips.
  2. 52. Upon information and belief, in order to avoid paying royalty, and
    potential or actual damages to Philips, Shanghai Hongsheng, IRC, Hongpu
    International, Origon, INT, NHI, Kevin Long and Jennifer Long have been shifting
    importation of products from INT to IRC. This activity started as early as on or about
    2004 or 2005 so that if INT were to be sued by Philips, INT would have essentially no
    assets and thereby preventing Philips from collecting damages awarded by the
    Judgment, which proximately caused injury to Philips.
  3. 53. One or more Defendants has falsified and concealed relevant documents
    and records and engaged in, among other things, mail and/or wire fraud as defined by
    18 U.S.C. §§ 1341, 1343. Upon information and belief, this activity constituted an
    effort to prevent Philips from collecting damages awarded by the Judgment.
  4. 54. Each of Defendants, namely Shanghai Hongsheng, IRC, Shanghai
    Hongpu, Hongpu International, Anman, IRCC, Xias, Origon, IRCE, INTT, Ju, Kevin
    Long, Jennifer Long, and Robinson, act in concert as an association-in-fact enterprise
    (the "RICO Enterprise"). Upon information and belief, the RICO Enterprise has
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continued to defraud Philips since as early as 2004 by preventing Philips from
collecting damages awarded by the Judgment through, inter alia, depleting,
encumbering, or concealing assets, through fraudulently transferring and/or concealing
business and assets, which proximately caused injury to Philips.

  1. 55. The extent of Defendants' scheme to defraud Philips has been revealed to
    date in, inter alia, Shanghai Hongsheng's publicly filed notices and reports and INT's
    and NHI's publicly filed bankruptcy records.
  2. 56. Both INT and IRC are under the direction and control of Ju, Kevin Long,
    and Jennifer Long.
  3. 57. Upon information and belief, INT has been making systematic and
    continuous asset transfers to IRC by either: (1) U.S. Mail or other private or
    commercial interstate carrier; or by (2) wire transfer in interstate or foreign commerce.

Shifting Importation to Another Entity

  1. 58. INT has disclosed that it shifted importation of products from itself to IRC
    because of IRC's stronger purchasing power. Yet, INT disclosed that it had made a
    substantial amount of cash transfers to IRC to facilitate IRC purchasing products
    through a series of wire transfers. Upon information and belief, the "cash transfers"
    were contrived transactions to encumber or deplete INT's assets, thereby advancing
    Defendants' scheme of preventing Philips from collecting damages awarded by the
    Judgment; deriving income by IRC's receipt of the cash transfers; and using, investing,
    directly or indirectly, all or part of the income or proceeds thereof to establish and
    operate the RICO Enterprise to further facilitate the scheme to defraud Philips, all of
    which acts proximately caused injury to Philips.

The $13.7 Million Transfer

  1. 59. On August 31, 2007, only a few days prior to the jury verdict that became
    the Judgment, transfers in the amounts of $2,784,000, $2,224,000, 1,334,000,
    $2,784,000, $2,287,000, and $2,287,000, approximately $13.7 million in total ($13.7
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Million Transfer), were redirected, at the direction of INT which is under the control of
Jennifer Long, from INT's customers to Hongpu International.

  1. 60. Upon information and belief, the $13.7 Million Transfer was redirected to
    Hongpu International to benefit Kevin Long, Jennifer Long, and Ju who directly or
    indirectly control Hongpu International.
  2. 61. Upon information and belief, the $13.7 Million Transfer was initiated by
    INT for the purpose of avoiding the disclosure of that transfer in NHI, INT, and IRC's
    bank accounts and preventing Philips' discovery of that transfer in the enforcement of
    the Judgment.
  3. 62. Upon information and belief, INT, under the control of Jennifer Long,
    redirected the $13.7 Million Transfer to an entity in China so that the assets would no
    longer be located in this United States to prevent attachment of those funds in the
    United States.
  4. 63. Upon information and belief, the $13.7 Million Transfer was made for the
    purpose of dissipating INT's assets, thereby advancing Defendants' scheme of
    preventing Philips from collecting damages awarded by the Judgment; deriving income
    by Hongpu International's receipt of the $13.7 Million Transfer; and using, investing,
    directly or indirectly, all or part of the income or proceeds thereof to establish and
    operate the RICO Enterprise to further facilitate the scheme to defraud Philips, all of
    which acts proximately caused injury to Philips.

Tri-Lateral Agreements

  1. 64. INT, Hongpu International, Anman, and Origon entered into a series of
    agreements ("Tri-Lateral Agreements") from April through June 2007, including
    Agreement Numbers 2007AM001, 002, 003, 004, 005, 2007HP001, 002, 003, 004,
    005, 006, 007, and 008 as disclosed in Shanghai Hongsheng's public notice files with
    the Shanghai Stock Exchange ("SSE") on November 28, 2007, No. 2007-016 ("2007-
    016 Notice").
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  1. 65. The 2007-016 Notice incorrectly claims INT, Origon, and Shanghai
    Hongsheng do not have any affiliation. As alleged in Paragraphs 5-21, 44-50, INT and
    Shanghai Hongsheng are commonly owned and/or controlled. Upon information and
    belief, Origon is or was controlled or owned by Kevin Long and/or Jennifer Long.
    Upon information and belief, INT, Origon, and Shanghai Hongsheng intentionally
    withheld information regarding their affiliation from the Tri-Lateral Agreements.
  2. 66. The Tri-Lateral Agreements provide that, among other things, INT
    assumes debts owed by Hongpu International and Anman to Origon. The Tri-Lateral
    Agreements caused INT to owe Origon US$255,740,100, and owe Hongpu
    International and Anman US$14,403,620.
  3. 67. INT's historical sales revenue, as disclosed in the bankruptcy proceedings
    resulting from the October 11, 2007 petitions of INT and NHI, does not support the
    amount of outstanding debt owed by INT.
  4. 68. INT claimed in its Disclosure Statement filed with the United States
    Bankruptcy Court that it does not owe US$255,740,100 to Origon despite the
    information disclosed in the 2007-016 Notice.
  5. 69. Upon information and belief, the Tri-Lateral Agreements were
    instruments designed to heavily encumber or deplete INT's assets, thereby advancing
    Defendants' scheme of preventing Philips from collecting damages awarded by the
    Judgment; deriving income by INT's assumption of the debt and Shanghai Hongsheng,
    Hongpu International, Anman, and Origon's receipt of all or part of the benefits from
    the Tri-Lateral Agreements; and using, investing, directly or indirectly, all or part of
    the income or proceeds thereof to establish and operate the RICO Enterprise to further
    facilitate the scheme to defraud Philips, all of which acts proximately caused injury to
    Philips.
  6. 70. Upon information and belief, Shanghai Hongsheng, Hongpu International,
    Anman, INT, and Origon conspired and agreed with each other to prevent Philips from
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collecting damages awarded by the Judgment through, inter alia, the Tri-Lateral
Agreements.

CECIC Agreements

  1. 71. IRC, IRCE, Hongpu International, Anman, Shanghai Hongpu and China
    Export Credit Insurance Company ("CECIC") entered into agreements ("CECIC
    Agreements") that were disclosed in Shanghai Hongsheng's public notice filed with
    the SSE on January 3, 2008, No. 2008-002 ("2008-002 Notice").
  2. 72. As alleged in Paragraphs 5-21, 44-50, IRC, IRCE, Hongpu International,
    Anman, and Shanghai Hongpu are commonly owned and/or controlled.
  3. 73. The CECIC Agreements provide, among other things, that Shanghai
    Hongpu unconditionally assumes debt owed to CECIC by Hongpu International and
    Anman in the amount of US$101,387,475.86.
  4. 74. The CECIC Agreements required Hongpu International and Anman to
    assign their account receivables against IRC and IRCE to Shanghai Hongpu.
  5. 75. Upon information and belief, INT has been making continuous and
    systematic money transfers to IRC, including but not limited to those disclosed in the
    bankruptcy proceeding resulting from the chapter 11 petitions filed October 11, 2008
    by INT and NHI.
  6. 76. Publicly available news reports from China have disclosed that Chinese
    authorities are investigating CECIC officers in relation to the CECIC Agreements.
  7. 77. Upon information and belief, the CECIC Agreements and the 2007-016
    Notice are instruments designed to heavily encumber or deplete IRC's, INT's and
    IRCE's assets, thereby advancing Defendants' scheme of preventing Philips from
    collecting damages awarded by the Judgment; deriving income by Shanghai Hongpu's
    assumption of debt and Hongpu International and Anman's assignment of account
    receivables; and using, investing, directly or indirectly, all or part of the income or
    proceeds thereof to establish and operate the RICO Enterprise to further facilitate the
    scheme to defraud Philips, all of which acts proximately caused injury to Philips.
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  1. 78. Upon information and belief, Shanghai Hongsheng, Shanghai Hongpu,
    Jennifer Long and Ju (as the controlling persons of Shanghai Hongpu), Hongpu
    International, Anman, IRC, and IRCE conspired and agreed with each other to prevent
    Philips from collecting damages awarded by the Judgment through, inter alia, the
    CECIC Agreements.

Anman/Hongpu Transfer Agreements

  1. 79. Shanghai Hongsheng, Hongpu International, Anman, Shanghai Hongpu,
    INT, and Origon entered into agreements ("Anman/Hongpu Transfer Agreements")
    that were disclosed in Shanghai Hongsheng's public notice filed with the SSE on
    January 3, 2008, No. 2008-003 ("2008-003 Notice").
  2. 80. As alleged in Paragraphs 5-21 and 44-50, Shanghai Hongsheng, Hongpu
    International, Anman, Shanghai Hongpu, and INT are commonly owned and/or
    controlled. Upon information and belief, Origon is or was controlled or owned by
    Kevin Long and/or Jennifer Long.
  3. 81. The Anman/Hongpu Transfer Agreements provide, among other things,
    that Anman transferred to Shanghai Hongpu its credit of US$88,746,995 against INT
    and debt of the same amount owed to Origon.
  4. 82. The Anman/Hongpu Transfer Agreements provide, among other things,
    that Hongpu International transferred to Shanghai Hongpu its credit of US$56,530,870
    against INT and debt of the same amount owed to Origon.
  5. 83. INT claimed in its Disclosure Statement filed with the United States
    Bankruptcy Court that it has no knowledge of the agreements disclosed in the 2008-
    003 Notice despite such public disclosure.
  6. 84. Upon information and belief, the 2007-016 Notice and the agreements
    disclosed therein are instruments designed to heavily encumber or deplete INT's
    assets, thereby advancing Defendants' scheme of preventing Philips from collecting
    damages awarded by the Judgment; deriving income by Shanghai Hongpu's receipt of
    a credit and assumption of debt; and using, investing, directly or indirectly, all or part
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of the income or proceeds thereof to establish and operate the RICO Enterprise to
further facilitate the scheme to defraud Philips, all of which acts proximately caused
injury to Philips.

  1. 85. Upon information and belief, Shanghai Hongsheng, Shanghai Hongpu,
    Jennifer Long and Ju (as the controlling persons of Shanghai Hongpu), Hongpu
    International, Anman, IRC, and IRCE conspired and agreed with each other to prevent
    Philips from collecting damages awarded by the Judgment through, inter alia, the
    Anman/Hongpu Transfer Agreements.

Sale of 10,452,006 Shares of Shanghai Hongsheng

  1. 86. Ju, Jennifer Long and Shanghai Hongpu sold 10,452,006 shares of
    Shanghai Hongsheng stock from on or about February 13 to 14, 2008. This sale of
    10,452,006 shares of Shanghai Hongsheng stock is disclosed in Shanghai Hongsheng's
    public notice filed with the SSE on February 16, 2008, No. 2008-005.
  2. 87. According to publicly available information, the sale of 10,452,006 shares
    was valued at approximately US$18 million.
  3. 88. Upon information and belief, the sale of 10,452,006 shares of Shanghai
    Hongsheng stock was designed to liquidate Ju's, Jennifer Long's and Shanghai
    Hongpu's assets, thereby advancing Defendants' scheme of preventing Philips from
    collecting damages awarded by the Judgment; deriving income by Shanghai Hongpu's
    sale of shares; and using, investing, directly or indirectly, all or part of the income or
    proceeds thereof to establish and operate the RICO Enterprise to further facilitate the
    scheme to defraud Philips, all of which acts proximately caused injury to Philips.
  4. 89. Upon information and belief, Shanghai Hongpu, Jennifer Long, and Ju
    conspired and agreed with each other to prevent Philips from collecting damages
    awarded by the Judgment through, inter alia, the Sale of 10,452.006 shares of
    Shanghai Hongsheng.
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Criminal Fraud Charges in China

  1. 90. Upon information and belief, Kevin Long is incarcerated in China on
    fraud charges relating to events as alleged in Paragraphs 64-89.
  2. 91. According to public notices filed with the SSE by Shanghai Hongsheng,
    Shanghai Hongsheng and Shanghai Hongpu are currently under investigation by China
    authorities for violation of securities laws. Upon information and belief, such
    investigation is related to events as alleged in Paragraphs 64-89.

Continuous and Systematic Money Transfers

  1. 92. INT discloses in its Disclosure Statement filed with the United States
    Bankruptcy Court that IRCC is in the business of accepting money for customers of
    Hongpu International and Shanghai Hongsheng. Upon information and belief, IRC
    and INT have been making continuous and systematic money transfers to IRCC.
  2. 93. Shanghai Hongsheng discloses in its 2007 Annual Report that IRCC is
    one of its top debtors, along with IRC, IRCE, and INT.
  3. 94. INT discloses in its Disclosure Statement filed with the United States
    Bankruptcy Court that INT and IRC have transferred over US$80 million to IRCC in
    2007.
  4. 95. IRCC's address at 324 S. Diamond Bar Boulevard, #628, Diamond Bar,
    California 91765 is only a commercial postal box.
  5. 96. Upon information and belief, transfers made from INT and IRC to IRCC
    are for the purpose of advancing Defendants' scheme of by preventing Philips from
    collecting damages awarded by the Judgment, which proximately caused injury to
    Philips.
  6. 97. Upon information and belief, IRC and INT have been making continuous
    and systematic money transfers to Hongpu International and Anman in advancement of
    Defendants' scheme of preventing Philips from collecting damages awarded by the
    Judgment, which proximately caused injury to Philips.
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  1. 98. Upon information and belief, income was derived from the money
    transfers as alleged in Paragraphs 92-97 and used, invested, directly or indirectly, all or
    part of the income or proceeds thereof to establish and operate the RICO Enterprise to
    further facilitate the scheme to defraud Philips, all of which acts proximately caused
    injury to Philips.
  2. 99. Upon information and belief, Shanghai Hongsheng, Shanghai Hongpu,
    Jennifer Long and Ju (as the controlling persons of Shanghai Hongpu), Anman, INT,
    IRC, and IRCC conspired and agreed with each other to prevent Philips from
    collecting damages awarded by the Judgment through, inter alia, continuous and
    systematic money transfers.

Diverting Business to Xias, INTT and IRCE

  1. 100. Upon information and belief, Ju, an INT insider, established Xias with
    INT's and IRC's resources and has been diverting business from NHI, INT and IRC to
    Xias.
  2. 101. Xias' address at 324 S. Diamond Bar Boulevard, #628, Diamond Bar,
    California 91765 is only a commercial postal box. As indicated by publicly available
    documents, Ju and Xias are conducting business with NHI's, INT's, and IRC's
    employees, facilities, and resources.
  3. 102. Upon information and belief, Ju and Xias are promoting Xias with NHI's,
    INT's, and IRC's customers.
  4. 103. Upon information and belief, Ju and Xias are co-opting NHI's, INT's, and
    IRC's reputations and good will, thereby advancing Defendants' scheme of preventing
    Philips from collecting damages awarded by the Judgment; deriving income by Xias'
    receipt of diverted assets; and using, investing, directly or indirectly, all or part of the
    income or proceeds thereof to establish and operate the RICO Enterprise to further
    facilitate the scheme to defraud Philips, all of which acts proximately caused injury to
    Philips.
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  1. 104. Upon information and belief, Ju, an INT insider, is the former Chief
    Executive Officer, Chief Financial Officer, Secretary, and sole Director of both INTT
    and IRCE who receive continuous shipments containing Norcent products at INT's and
    IRC's facilities.
  2. 105. INTT's and IRCE's address at 324 S. Diamond Bar Boulevard, #628,
    Diamond Bar, California 91765 is only a commercial postal box.
  3. 106. Upon information and belief, Ju, INTT and IRCE are utilizing INT's and
    IRC's resources for the purpose of receiving Norcent products.
  4. 107. Upon information and belief, Ju, INTT and IRCE have been diverting
    business from NHI, INT and IRC to INTT and IRCE, thereby co-opting NHI's, INT's
    and IRC's assets, reputations and good will, in advancement of Defendants' scheme of
    preventing Philips from collecting damages awarded by the Judgment; deriving income
    by INTT and IRCE's receipt of diverted assets; and using, investing, directly or
    indirectly, all or part of the income or proceeds thereof to establish and operate the
    RICO Enterprise to further facilitate the scheme to defraud Philips, all of which acts
    proximately caused injury to Philips.

Incorporation of Entities to Make Certain Defendants Judgment Proof

  1. 108. Upon information and belief, Robinson, Chief Financial Officer and
    Director of INT, NHI, and IRC, knows or should have known documents or records of
    INT, NHI, and IRC are or may be false and recklessly disregards such falsity.
  2. 109. Upon information and belief, Robinson, as CFO and Director of INT,
    NHI, and IRC, maintains or caused to be maintained documents or records of NHI,
    INT and IRC.
  3. 110. Robinson has produced untrue information, records and documents to
    Philips, including without limitation providing a declaration in support of INT's
    Disclosure Statement where INT refuses to acknowledge any corporate information of
    INTT and IRCE, yet Robinson is the incorporator of INTT and IRCE.
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  1. 111. Upon information and belief, Robinson assisted Ju in incorporating INTT
    and IRCE for the purpose of diverting business away from INT and IRC to INTT and
    IRCE.
  2. 112. Upon information and belief, Robinson served as President of Xias for the
    purpose of using INT resources to conduct Xias' business.
  3. 113. Robinson has entered into agreements on behalf of Xias with INT without
    adequate consideration, including without limitation the tradename agreement between
    INT and Xias.
  4. 114. Upon information and belief, Robinson has assisted one or more
    Defendants in concealing and/or transferring property and assets, and/or diverting
    business good will, thereby advancing Defendants' scheme of preventing Philips from
    collecting damages awarded by the Judgment; deriving income by Xias', INTT's and
    IRCE's receipt of diverted assets; and using, investing, directly or indirectly, all or part
    of the income or proceeds thereof to establish and operate the RICO Enterprise to
    further facilitate the scheme to defraud Philips, all of which acts proximately caused
    injury to Philips.
  5. 115. Upon information and belief, Robinson aids, abets, and advances
    Defendants' scheme to prevent Philips from collecting damages awarded by the
    Judgment.

FIRST COUNT
(Patent Infringement)
[Applicable to Defendants IRC, Shanghai Hongsheng,
Hongpu International and Kevin Long]

  1. 116. The '903 patent issued on October 14, 1997, to Antonius H. M. Holtslag,
    Derk Visser, Peter Coops, and Jacobus P. J. Heemskerk. A copy of the '903 patent,
    entitled "Multi-Layer Information Storage System with Improved Aberration
    Correction," is attached hereto as Exhibit A.
  2. 117. Philips is the owner by assignment of the '903 patent
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  1. 118. Shanghai Hongsheng had knowledge of the '903 patent before the filing
    of this suit. Upon information and belief, IRC, Hongpu International, and/or Kevin
    Long had knowledge of the '903 patent before the filing of this suit
  2. 119. Shanghai Hongsheng had notice of infringement of the '903 patent before
    the filing of this suit. Upon information and belief, IRC, Hongpu International, and/or
    Kevin Long had notice of infringement of the '903 patent before the filing of this suit.
  3. 120. Upon information and belief, IRC, Shanghai Hongsheng, Hongpu
    International, and/or Kevin Long (collectively "the Patent Defendants") have directly
    infringed, induced infringement of, and/or contributed to infringement of one or more
    claims of the '903 patent, both literally and under the doctrine of equivalents, by
    making, using, offering for sale, selling, and/or importing unlicensed DVD products
    within the United States, including DVD products, such as DVD players, that can
    suitably read information from a DVD disc.
  4. 121. Upon information and belief, IRC, Shanghai Hongsheng, Hongpu
    International, and/or Kevin Long have directly infringed, induced infringement of,
    and/or contributed to infringement of one or more claims of the '903 patent, both
    literally and under the doctrine of equivalents, by selling, offering for sale, and/or
    importing unlicensed DVD products within the United States, including DVD players,
    through International Norcent Technology ("INT") and IRC.
  5. 122. On September 5, 2007, a jury found that INT, NHI, and Jennifer Long
    willfully infringed the '903 patent. (U.S. Philips v. International Norcent Technology
    Inc et al.,
    Case No. 06-cv-01366-R-PLA, Central District of California (D.I. 308).)
    The Court entered final judgment of $12,853,793 on September 18, 2007. (D.I. 328.)
    The Court granted Philips' post-trial motions seeking enhanced damages, attorneys'
    fees, and pre- and post-judgment interest and an accounting.
  6. 123. Upon information and belief, Kevin Long personally, actively, and
    knowingly assisted with the infringement of the '903 patent by INT, NHI, Jennifer
    Long, IRC, Shanghai Hongsheng, and/or Hongpu International by inducing and
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directing others to engage in acts of infringement and by aiding, abetting, participating
in, approving, and ratifying the infringement of the '903 patent by INT, NHI, Jennifer
Long, IRC, Shanghai Hongsheng, and/or Hongpu International.

  1. 124. Upon information and belief, Kevin Long, INT, NHI, and IRC
    disregarded the corporate formality of each other, including, among other things,
    comingling of assets, sharing the same employees, officers, facilities, ownerships,
    customers, and suppliers; and held themselves out as one and the same entity. Upon
    information and belief, the business purpose or function of Kevin Long, INT, NHI, and
    IRC was not separate and distinct from each other. Kevin Long, INT, NHI, and/or IRC
    were not operated as entities separate and apart from each other. Upon information
    and belief, Kevin Long and IRC are alter egos of INT and NHI, and are jointly liable
    for the infringing act of INT and NHI as identified in Paragraph 50. Publicly available
    information also demonstrates that Kevin Long, INT, NHI, and IRC, in concert with
    Shanghai Hongsheng and its subsidiaries and related companies, entered into contracts
    to manipulate the assets and liabilities of INT, NHI, IRC, and Shanghai Hongsheng
    and its subsidiaries and related companies. Upon information and belief, Kevin Long
    has been incarcerated in China for his participation in and inducement of these
    contracts. Upon information and belief, additional information is available from the
    bankruptcy proceeding involving NHI and INT that further supports Philips' alter ego
    allegations.
  2. 125. Upon information and belief, the infringement by IRC, Shanghai
    Hongsheng, Hongpu International, and/or Kevin Long, has been deliberate and willful.
  3. 126. Upon information and belief, infringement of the '903 patent is ongoing
    and will continue unless the Defendants are enjoined from further infringement by the
    Court.
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SECOND COUNT
(Patent Infringement)
[Applicable to Defendants IRC, Shanghai Hongsheng,
Hongpu International and Kevin Long]

  1. 127. The '607 patent issued on October 31, 1995, to Rudolf Roth and Johannes
    C. Van Offenbeek. A copy of the '607 patent, entitled "System for Recording and
    Reading Information on a Record Carrier at a Constant Scanning Speed Independent of
    the Bit Rate of Such Information," is attached hereto as Exhibit B.
  2. 128. Philips is the owner by assignment of the '607 patent.
  3. 129. Shanghai Hongsheng had knowledge of the '607 patent before the filing
    of this suit. Upon information and belief, IRC, Hongpu International, and/or Kevin
    Long had knowledge of the '607 patent before the filing of this suit.
  4. 130. Shanghai Hongsheng had notice of infringement of the '607 patent before
    the filing of this suit. Upon information and belief, IRC, Hongpu International, and/or
    Kevin Long had notice of infringement of the '607 patent before the filing of this suit.
  5. 131. Upon information and belief, IRC, Shanghai Hongsheng, Hongpu
    International, and/or Kevin Long have directly infringed, induced infringement of,
    and/or contributed to infringement of one or more claims of the '607 patent, both
    literally and under the doctrine of equivalents, by making, using, offering for sale,
    selling, and/or importing unlicensed DVD products within the United States, including
    DVD products, such as DVD players, that can suitably read information from a DVD
    disc.
  6. 132. Upon information and belief, IRC, Shanghai Hongsheng, Hongpu
    International, and Kevin Long have directly infringed, induced infringement of, and/or
    contributed to infringement of one or more claims of the '607 patent, both literally and
    under the doctrine of equivalents, by selling, offering for sale, and/or importing
    unlicensed DVD products within the United States, including DVD players, through
    INT and IRC.
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  1. 133. On September 5, 2007, a jury found that INT, NHI, and Jennifer Long
    willfully infringed the ' 607 patent. (U.S. Philips v. International Norcent Technology
    Inc.,
    Case No. 06-cv-01366-R-PLA, Central District of California (D.I. 308).) The
    Court entered final judgment of $12,853,793 on September 18, 2007. (D.I. 328.) The
    Court granted Philips' post-trial motions seeking enhanced damages, attorneys' fees,
    and pre- and post-judgment interest and an accounting.
  2. 134. Upon information and belief, Kevin Long personally, actively, and
    knowingly assisted with the infringement of the 骷 patent by INT, NHI, Jennifer
    Long, IRC, Shanghai Hongsheng, and Hongpu International by inducing and directing
    others to engage in acts of infringement and by aiding, abetting, participating in,
    approving, and ratifying the infringement of the 骷 patent by INT, NHI, Jennifer
    Long, IRC, Shanghai Hongsheng, and Hongpu International
  3. 135. Upon information and belief, Kevin Long, INT, NHI, and IRC
    disregarded the corporate formality of each other, including, among other things,
    comingling of assets, sharing the same employees, officers, facilities, ownerships,
    customers, and suppliers; and held themselves out as one and the same entity. Upon
    information and belief, the business purpose or function of Kevin Long, INT, NHI, and
    IRC was not separate and distinct from each other. Upon information and belief,
    Kevin Long, INT, NHI, and/or IRC were not operated as entities separate and apart
    from each other. Kevin Long and IRC are alter egos of INT and NHI, and are jointly
    liable for the infringing act of INT and NHI as identified in Paragraph 50. Publicly
    available information also demonstrates that Kevin Long, INT, NHI, and IRC, in
    concert with Shanghai Hongsheng and its subsidiaries and related companies, entered
    into contracts to manipulate the assets and liabilities of INT, NHI, IRC, and Shanghai
    Hongsheng and its subsidiaries and related companies. Upon information and belief,
    Kevin Long has been incarcerated in China for his participation in and inducement of
    these contracts. Upon information and belief, additional information is available from
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the bankruptcy proceeding involving NHI and INT that further supports Philips' alter
ego allegations.

  1. 136. Upon information and belief, the infringement by IRC, Shanghai
    Hongsheng, Hongpu International, and Kevin Long has been deliberate and willful.
  2. 137. Upon information and belief, infringement of the '607 patent is ongoing
    and will continue unless the Defendants are enjoined from further infringement by the
    Court.

THIRD COUNT
(RICO Violations of 18 U.S.C. § 1962(a))
[Applicable to Shanghai Hongsheng, IRC, Hongpu International, Anman, Origon,
IRCE, INTT, Xias, Kevin Long, Jennifer Long, Ju, and Robinson]

  1. 138. Philips realleges Paragraphs 1-115 as if fully set forth herein.
  2. 139. As natural persons capable of holding a legal or beneficial interest in
    property, Kevin Long, Jennifer Long, Ju, and Robinson are "persons" for purposes of
    18 U.S.C. §1961(3).
  3. 140. As a corporation or other legal entity, Shanghai Hongsheng, IRC, Hongpu
    International, Anman, Xias, Origon, IRCE, and INTT are "enterprises" for purposes of
    18 U.S.C. §1961(4).
  4. 141. Shanghai Hongsheng, IRC, Hongpu International, Anman, Origon, IRCE,
    INTT, Xias, Kevin Long, Jennifer Long, Ju, and Robinson's asset transfers and/or
    encumbrances, and business diversion have been part of a deliberately orchestrated
    scheme to enrich the RICO Enterprise by interfering with Philips' right to collect
    damages awarded by the Judgment. Defendants have intended to prevent Philips from
    collecting the damages awarded by the Judgment by fraudulently transferring and/or
    encumbering property and assets of the judgment debtors beyond the reach of Philips.
    The RICO Enterprise has carried out its scheme in interstate and foreign commerce,
    making extensive use of the United States mail and wire to fraudulently transfer or
    encumber property and assets of the judgment debtors in the United States and abroad.
  5. 142. Each of the above fraudulent transfers by IRC, Shanghai Hongsheng,
    Shanghai Hongpu, Hongpu International, Anman, IRCC, Xias, Origon, IRCE, INTT,
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Kevin Long, Jennifer Long, Ju, and Robinson alleged in Paragraphs 51-109 constitutes
an act of mail fraud in violation of 18 U.S.C. § 1341, or, in the alternative, an act of
wire fraud in violation of 18 U.S.C. § 1343.

  1. 143. All of these acts of mail and/or wire fraud by Defendants consisted of the
    intentional transfers and/or encumbrances, and business diversion either: (1) by U.S.
    Mail or other private or commercial interstate carrier; or (2) by wire or radio
    communication in interstate or foreign commerce, and hence all such acts had a
    common method of commission. All of the above acts of mail fraud, or in the
    alternative, wire fraud, by the RICO Enterprise furthered the common purpose of
    preventing Philips from collecting damages awarded by the Judgment. These acts
    therefore constitute a pattern of racketeering activity for purposes of 18 U.S.C. §
    1961(5). There has been and remains a danger that the RICO Enterprise' racketeering
    activity will continue.
  2. 144. Shanghai Hongsheng, IRC, Hongpu International, Anman, Origon, IRCE,
    INTT, Xias, Kevin Long, Jennifer Long, Ju, and Robinson have received income
    derived, directly or indirectly from the pattern of racketeering activity described herein.
    Shanghai Hongsheng, IRC, Hongpu International, Anman, Origon, IRCE, INTT, Xias,
    Kevin Long, Jennifer Long, Ju, and Robinson have used and invested that racketeering
    income or the proceeds thereof, directly or indirectly, in the investment, establishment
    or operation of the RICO Enterprise, an enterprise engaging in interstate or foreign
    commerce in violation of 18 U.S.C. §1962(a).
  3. 145. Philips suffered financial harm, as Philips is prevented from collecting the
    damaged awarded by the Judgment, as a proximate result of Defendants' violation of
    18 U.S.C. §1962(a).
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FOURTH COUNT
(RICO Violations of 18 U.S.C. § 1962(c))
[Applicable to All Defendants

  1. 146. Philips realleges Paragraphs 1-115, and 138-145 as if fully set forth
    herein.
  2. 147. All Defendants have conducted and participated, directly or indirectly, in
    the conduct of the affairs of the RICO Enterprise, an enterprise engaging in interstate
    or foreign commerce, through a pattern of racketeering activity in violation of 18
    U.S.C. §1962(c). All Defendants used their position of management and/or control
    over the RICO Enterprise, and its resources, to engage in their pattern of racketeering
    activity. For reasons stated above, all Defendants' direct or indirect conduct and
    participation of the conduct of the RICO Enterprise through a pattern of racketeering
    activity proximately caused Philips financial harm. All Defendants have engaged in its
    racketeering activity with the purpose of defrauding Philips by preventing Philips from
    collecting damages awarded by the Judgment through, inter alia, depleting,
    encumbering, or concealing assets, through fraudulently transferring and/or concealing
    businesses and assets.
  3. 148. Philips suffered financial harm, as Philips is prevented from collecting the
    damaged awarded by the Judgment, as a proximate result of Defendants' violation of
    18 U.S.C. §1962(c).

FIFTH COUNT
(RICO Violations of 18 U.S.C. § 1962(d): Conspiracy to Violate 18 U.S.C. §
1962(a) and (c))
[Applicable to Shanghai Hongsheng, Shanghai Hongpu, IRC, IRCE, IRCC,
Origon, Hongpu International, Anman, Jennifer Long, and Ju]

  1. 149. Philips realleges Paragraphs 1-115, and 138-148 as if fully set forth
    herein.
  2. 150. Shanghai Hongsheng, Shanghai Hongpu, IRC, IRCE, IRCC, Origon,
    Hongpu International, Anman, Jennifer Long, and Ju have unlawfully, knowingly, and
    intentionally combined, conspired and agreed together with each other and with others
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whose names are known and unknown, to: (1) conduct and participate, directly or
indirectly, in the conduct of the affairs of the RICO Enterprise, an enterprise engaged
in interstate or foreign commerce, through a pattern of racketeering activity, as
described in the Fourth Count of this Complaint, consisting of multiple acts in
violation of 18 U.S.C. §§ 1341 or 1343, in violation of 18 U.S.C. §1962(d); and (2) use
and investment of income or the proceeds thereof derived, directly or indirectly, from
the pattern of racketeering activity described in the Third Count of this Complaint, in
operation of the RICO Enterprise, an enterprise engaged in interstate or foreign
commerce, in the manner described in the Third Count of this Complaint in violation
of 18 U.S.C. §1962(d) .

  1. 151. Philips suffered financial harm, as Philips is prevented from collecting the
    damaged awarded by the Judgment, as a proximate result of Defendants' violation of
    18 U.S.C. §1962(a) and (c).

 

PRAYER FOR RELIEF

WHEREFORE, Philips respectfully requests that judgment be entered:

A. declaring that the Patent Defendants have infringed the '903 and
'607 patents;
B. declaring that Patent Defendants' infringement of the '903 and
'607 patents has been deliberate and willful;
C. preliminarily and permanently enjoining the Patent Defendants,
their officers, agents, servants, employees, and attorneys, and those
persons in active concert or participation with them, from
infringement of the '903 and '607 patents, including, but
not limited, to any making, using, offering for sale, selling, or
importing of unlicensed DVD products in the United States;
D. compensating Philips for all damages caused by the Patent
Defendants' infringement of the '903 and '607 patents;
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E. enhancing Philips' damages up to three times their amount
pursuant to 35 U.S.C. § 284;
F. granting Philips pre- and post-judgment interest on its damages,
together with all costs and expenses, and accounting;
G. granting Philips reasonable attorney fees pursuant to 35 U.S.C.
§ 285;
H. declaring that IRC is an alter ego of INT and NHI;
I. declaring that Kevin Long is an alter ego of IRC, INT, NHI,
Shanghai Hongsheng, Hongpu International, and Anman;
J. awarding Philips damages for IRC's and Kevin Long's roles as
alter egos responsible for the patent infringement damages
awarded to Philips and against INT and NHI, including the current
$12,853,793 judgment and all enhanced damages, pre- and post-
judgment interest, and attorneys fees awarded as a result of
Philips' post-trial motions;
K. imposing a constructive trust over all Defendants' property and
assets pursuant to 18 U.S.C. §1964(a);
L. granting a writ of attachment against all Defendants' property and
assets; and a temporary protective order enjoining all Defendants
from transferring, encumbering or otherwise dissipating their
property and assets pursuant to 18 U.S.C. § 1964(a);
M. granting a temporary restraining order against all Defendants
temporarily freezing their property and assets until further order of
this Court pursuant to 18 U.S.C. § 1964(a);
N. granting an order dissolving IRCC, IRCE, and INTT pursuant to
18 U.S.C. §1964(a);
O. granting an order enjoining Kevin Long, Shu Zhi Ju, Jennifer
Long, and Dennis Robinson from forming any form of legal entity
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Lawsuit Case Filed Date
  engaging in the same type of endeavor as the RICO Enterprise has
been engaging in pursuant to 18 U.S.C. § 1964(a);
P. awarding Philips any and all uncollected portions of the current
$12,853,793 judgment, including the enhanced damages, pre- and
post-judgment interest, and attorneys' fees awarded, pursuant to 18
U.S.C. §1964(c);
Q. awarding Philips threefold the damages as identified in Paragraph
Q hereinabove pursuant to 18 U.S.C. § 1964(c);
R. awarding Philips reasonable attorneys' fees and cost of the suit
pursuant to 18 U.S.C. § 1964(c); and
S. awarding such other relief as this Court may deem just and proper
Respectfully submitted,
KEATS McFARLAND & WILSON LLP


By: Jeffrey K. Joyner
Jai H. Rho
Samuel L. Alberstadt
Attorneys for Plaintiff
U.S. PHILIPS CORPORATION

Dated: July ___, 2008

Of Counsel:

Frank A. Decosta, III
Steven M. Anzalone
Joyce Craig
FINNEGAN, HENDERSON, FARABOW,
GARRETT & DUNNER, L.L.P.
901 New York Avenue, N.W.
Washington, D.C. 20001-4413
Telephone: (202) 408-4000
Facsimile: (202) 408-4400

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Lawsuit Case Filed Date

Demand for Jury Trial

Philips demands a jury trial for all issues that can be so tried.

KEATS McFARLAND & WILSON LLP


By: Jeffrey K. Joyner
Jai H. Rho
Samuel L. Alberstadt
Attorneys for Plaintiff
U.S. PHILIPS CORPORATION

Dated: July ___, 2008
31
 

Exhibit A

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Exhibit B

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