EDWARD BREKHUS VS. ASUS COMPUTER INTERNATIONAL

This case concerns laptop computers that were marketed and sold by

ASUS as including Universal Serial Bus (“USB”) 3.0 “Gen 1” ports (hereinafter

referred to as the “Purported USB 3.0 Laptops.”) ASUS specifically marketed,

advertised and represented to consumers that the USB ports of the Purported USB

3.0 Laptops were capable of transferring data at rates of 5 gigabits (Gb) per

second.

| ASUS’s representations are false. As Plaintiff discovered after

purchasing a Purported USB 3.0 Laptop advertised with a data transfer rate of

5Gb/s, the USB ports are incapable of transferring data at anywhere near the

speeds advertised. Rather, the USB ports are capable of transferring data at a rate

of only about 2,160 megabits/second—less than half as fast as advertised.

In fact, the USB ports on the Purported USB 3.0 Laptops are not really

USB 3.0 ports. The USB 3.0 specification states that Gen 1 USB 3.0 hosts must

be capable of transferring data at a “SuperSpeed” rate of 5 gigabits/second. As

stated above, the USB ports of the Purported USB 3.0 Laptops—even when

operating at their highest speeds—only transfer data at less than half of the

required 5 gigabits/second rate.

First Amended Class Action Complaint, p. 16

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Parties

4, Edward Brekhus is, and at all times alleged in this Class Action

Complaint was, an individual and a resident of California. Mr. Brekhus currently

resides in San Francisco, California.

| Defendant ASUS Computer International is a corporation incorporated

under the laws of the state of California, having its principal place of business in

Fremont, California.

Defendant ASUSTeK Computer Inc. (“ASUSTek”) is a Taiwanese

corporation with its headquarters at No. 15, Li-Te Road, Peitou, Taipei 112,

Taiwan. ASUSTeK is the parent of ASUS Computer International.

The Parties identified in paragraphs 5-6 of this Class Action Complaint

are collectively referred to hereafter as “Defendant” or “ASUS”.

At all times herein mentioned, each Defendant was the agent, servant,

representative, officer, director, partner or employee of the other Defendant and,

in doing the things herein alleged, was acting within the scope and course of

his/her/its authority as such agent, servant, representative, officer, director, partner

or employee, and with the permission and consent of each of the other Defendant.

At all times herein mentioned, each Defendant was a member of, and

engaged in, a joint venture, partnership and common enterprise, and acting within

the course and scope of, and in pursuance of, said joint venture, partnership and

common enterprise.

Atall times herein mentioned, the acts and omissions of each

Defendant concurred and contributed to the various acts and omissions of each

and all of the other Defendant in proximately causing the injuries and damages as

herein alleged.

Atall times herein mentioned, each Defendant ratified each and every

act or omission complained of herein.

First Amended Class Action Complaint, p. 26

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Atall times herein mentioned, each Defendant aided and abetted the

acts and omissions of the other Defendant in proximately causing the damages,

and other injuries, as herein alleged.

Jurisdiction and Venue

This action is brought by Plaintiff pursuant, inter alia, to the California

Business and Professions Code, section 17200, et seq. Plaintiff and Defendant are

“persons” within the meaning of the California Business and Professions Code,

section 17201.

The injuries, damages and/or harm upon which this action is based,

occurred or arose out of activities engaged in by Defendants within, affecting, and

emanating from, the State of California.

Defendants have engaged, and continue to engage, in substantial and

continuous business practices in the State of California, including in the City of

San Francisco and County of San Francisco.

In accordance with California Civil Code Section 1780(d), Plaintiff

files herewith a declaration establishing that he purchased an ASUS laptop X

Series XSSSUB-NHS5 1 computer on Newegg.com, while residing in San

Francisco, California.

Plaintiff is further informed and believes that the damages and

restitution at issue in this action exceed, in the aggregated, $5 million.

Plaintiff accordingly alleges that jurisdiction and venue are proper in

this Court.

Substantive Allegations

The market for laptop computers is fiercely competitive. Laptop

manufacturers continually attempt to gain market share by introducing the latest

cutting-edge features that are attractive to consumers. One such feature is the

First Amended Class Action Complaint, p. 321

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inclusion of one or more “USB 3.0” ports—data ports (otherwise known as

“hosts”)—that comply with Revision 3.0 of the USB specification.

A. The USB Specification and its Data Transfer Rate Requirements

The USB specification was developed by a number of companies that

collectively formed the USB Implementers Forum, Inc. (“Implementers Forum”),

anon-profit corporation organized for the purposes of developing and distributing

specifications and other documents that augment, enhance, or extend the USB

specification.

The Implementers Forum released the USB 1.0 specification in 1996.

The USB 1.0 specification specified two data transmission modes: (i) “Low-

Bandwidth” (providing 1.5 megabits/s); and (ii) “Full-Bandwidth” (providing 12

megabits/s).

In April 2000, the Implementers Forum released the USB 2.0

specification, which added a third data transmission mode: “Hi-Speed” (providing

480 megabits/s).

On November 12, 2008, the Implementers Forum released the USB 3.0

specification, which added a fourth data transmission mode: “SuperSpeed”

(providing 5 gigabits/s). As described in the most recent version of the USB

specification, “USB 3.0 was the USB community’s response and provided users

with the ability to move data at rates up to 450MB/s while retaining backward

compatibility with USB 2.0.” The term “SuperSpeed” is expressly defined by the

USB 3.0 specification as being “USB operation at 5 Gbps”:!

TernvAbbreviation Definition

SuperSpeed USE operation at § Gbps.

' “Mbit/s” refers to Megabits per second. A Megabit (which is different from a

“Megabyte’) is equivalent to 125 kilobytes.

First Amended Class Action Complaint, p. 421

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3.1.4 USB 3.0 Architecture Summary

USB 3.0 is a dual-bus architecture that incorporates USB 2.0 and a SuperSpeed bus. Table 3-1

summarizes the key architectural differences between SuperSpeed USB and USB 2.0.

Table 34. Comparing SuperSpeed to USB 2.0

Characteristic | SuperSpeed USB USB 20

Data Rate ‘SuperSpeed (5.0 Gbps) low-speed (1.5 Mbps). full-speed (12 Mbps},

and high-speed (480 Mbps)

The USB 3.0 Specification refers to the USB ports of personal

computers—like the laptop computers at issue here—as “hosts.” Like all USB

3.0-compliant devices, hosts must be capable of transferring data at rates

corresponding to all four data transfer modes, including SuperSpeed:

Non-SuperSpeed

Super H

jigh- Ful- Low -

Speed Speed || Speed || Speed USB 3.0 Host

The Implementers Forum owns the trademarks to a number of logos

corresponding to USB. One such logo is the “SuperSpeed USB Trident” logo:

SS.

The USB Logo Usage Guidelines state: “The SuperSpeed USB Trident Logo is

for use with product that signals at 5 Gbps” (i.e., 5 gigabits/second) (/d.) The

Guidelines further state that the logo can be used only with a product “based on

and compliant with the USB 3.0 and USB 3.0 Gen1 specifications.” (/d.)

B. ASUS’s Purported USB 3.0 Laptops

ASUS has marketed and sold dozens of laptop computers that

purportedly have USB 3.0 ports.

ASUS repeatedly represents on its website that the Purported USB 3.0

Laptops’ USB 3.0 ports are ten times faster than USB 2.0 ports. That

First Amended Class Action Complaint, p. 521

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representation, which Mr. Brekhus saw before purchasing the laptop and relied on

in making his purchasing decision, is false. The USB 2.0 specification requires a

transfer rate of 480 Mbit/s. Ten times that rate—4,800 Mbit/s—is not achievable

by the ASUS USB 3.0 Laptops under any circumstances.

ASUS also included various versions of the USB Trident Logo next to

the USB ports of the Purported USB 3.0 Laptops. The following photograph is of

the model plaintiff purchased:

Although the photograph above does not show it as clearly as would be seen by a

consumer viewing an actual laptop, the SuperSpeed Trident Logo appears on the

left side of each USB port above.

As set forth below (inter alia, see supra, {§ 34-46), Plaintiff saw these

representations prior to making his purchase, and relied on them in making his

purchase.

ASUS sells the Purported USB 3.0 Laptops through various retailers,

including both brick-and-mortar retailers and online retailers.

To promote the sale of the Purported USB 3.0 Laptops, ASUS provides

to all such retailers information relating to the laptops. ASUS represents to all its

retailers that the Purported USB 3.0 Laptops have USB 3.0 ports that are ten times

faster than USB 2.0 ports.

ASUS makes these statements and representations to retailers with the

knowledge and intent that the retailers will present this information to consumers.

First Amended Class Action Complaint, p. 621

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Atno time did ASUS inform consumers or its retailers that the

Purported USB 3.0 Laptops do not have USB 3.0 ports.

Atno time did ASUS inform consumers or its retailers that the USB

ports of the Purported USB 3.0 Laptops are incapable of transferring data at the 5

gigabits/second rate required by the USB 3.0 specification, let alone the faster

rates advertised by ASUS for some models of the Purported USB 3.0 Laptops.

C. Plaintiff’s Purchase of a Purported USB 3.0 Laptop and Discovery

That It Lacks USB 3.0 Ports

In late 2015, Plaintiff was shopping for a new laptop. He was

specifically looking for a highly portable laptop that could transfer data to and

from external USB 3.0 storage devices. Plaintiff researched his options using a

variety of resources available on the Internet, including ASUS’s website.

One of the laptops advertised on ASUS’s website was the ASUS X

Series XSSSUB-NHS1. Plaintiff saw the representation on ASUS’s website that

the X Series had USB 3.0 ports, capable of transferring data ten times faster than

USB 2.0 ports. Plaintiff also saw the product specifications on the website, stating

that the laptop had two USB 3.0 ports.

The inclusion of USB 3.0 ports, along with the advertised rapid transfer

rate of these ports, was important to Plaintiff because he intended to access and

transfer large files from external USB 3.0 storage devices.

In reliance on Defendant’s representations, Plaintiff purchased the X

Series, in November 29, 2015, from Newegg.com.

After purchasing and using the X Series, Plaintiff discovered that the

laptop’s purported USB 3.0 ports are incapable of achieving the 5.0

gigabits/second data transfer rates required by the USB 3.0 specification and

advertised by ASUS.

First Amended Class Action Complaint, p. 721

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Plaintiff’s investigator independently verified Plaintiff's discovery that

the X Series’ purported USB 3.0 ports transfer files at rates far below the USB 3.0

specification.

In 2018, Plaintiff’s investigator obtained the same model of laptop that

plaintiff had purchased (i.¢., the ASUS X Series X555UB-NH51), for the

purposes of testing the transfer speed of the laptop’s USB ports. The tests revealed

that the transfer rate was, at best, only 2,160 megabits (i.c., 2.16 gigabits) per

second. That rate is only about 43% as fast as the 5 gigabit/second speed required

by the USB 3.0 specification and advertised by ASUS for the X Series.

All tests described above were performed on the X Series as it existed

after being taken out of the box. No other applications were running on the X

Series when the tests were performed. No other hardware devices were connected

to the X Series. Accordingly, the investigator’s tests show how the X Series’

purported USB 3.0 ports operate in the best-case scenario under normal use.

Had Plaintiff known that the X Series’ USB data transfer rates were so

slow, or that they were not in compliance with the USB 3.0 specification, he

would not have paid as much for the X Series.

Asa result of ASUS’s misrepresentations, Plaintiff has sustained an out

of pocket loss in, at a minimum, the difference in price between an X Series with

the USB 3.0 specification and one with a USB 2.0 specification, which could be

established using regression techniques such as hedonic regression to analyze

market prices of various laptop computers with USB 3.0 and/or USB 2.0 ports

and/or survey techniques such as conjoint analysis.

Plaintiff intends to purchase ASUS products in the future and

specifically wishes to purchase an ASUS computer with a USB 3.0 complaint port

so that he can benefit from the higher transfer speeds. He therefore is likely to be

deceived again by any misrepresentations with respect to the USB capabilities of

First Amended Class Action Complaint, p. 821

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such ASUS products. Plaintiff will be unable to determine whether such

representations are false without purchasing and testing such ASUS products.

Before ASUS released its Purported USB 3.0 Laptops, it tested the

speed of their USB ports, and was aware of the transfer rates of which they were

capable. ASUS—one of the world’s largest manufacturers of consumer

electronics—would not release a product without first testing each of its

components,

In addition, the USB Implementers Forum, of which ASUS is a board

member, requires manufacturers to ensure that their devices actually conform with

the USB 3.0 specification, which includes testing the speed of those devices. (See,

e.g., Ex. B at 1-2 (“Adopters [of the USB 3.0 specification] can demonstrate

compliance with the specification through the testing program as defined by the

USB Implementers Forum.”) Accordingly, ASUS knew that the purported USB

3.0 ports were incapable of achieving speeds anywhere near the 5 gigabits/second

speed that it advertised and that was required by the USB 3.0 specification.

Class Allegations

In addition to his individual claims, Plaintiff brings this action as a

class action pursuant to section 382 of the California Code of Civil Procedure and

section 1781 of the California Civil Code on behalf of a Class consisting of all

persons, natural or otherwise, who, while residing in the United States, purchased

a Purported USB 3.0 Laptop between November 21, 2014 and the present.

Excluded from the Class are ASUS, its affiliates, successors and

assigns, officers and directors, and members of their immediate families.

The proposed Class is so numerous that joinder of all members is

impracticable. The precise number of members in the Class is not yet known to

Plaintiff, but he estimates that it is well in excess of 500,000 people.

First Amended Class Action Complaint, p. 921

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Sl.

There are questions of law and fact that are common to the Class,

including, but not limited to, the following:

52.

whether the USB ports of the Purported USB 3.0 Laptops are

capable of transferring data at the rates advertised by ASUS;

whether the USB ports of the Purported USB 3.0 Laptops are

capable of the data transfer speeds required by the USB 3.0

specification;

whether ASUS misled class members by representing that the USB

ports of the Purported USB 3.0 Laptops are capable of the data

transfer speeds required by the USB 3.0 specification;

whether ASUS misled class members by representing that the USB

ports of the Purported USB 3.0 Laptops are capable of transferring

data up to 10 times faster than the rates called for by the USB 2.0

specification;

whether the USB Ports of the Purported USB 3.0 Laptops are

actually USB 3.0 ports, as defined by the Implementers Forum’s

USB 3.0 Specification;

whether ASUS breached its obligations to the class;

whether ASUS engaged in the alleged conduct knowingly,

recklessly, or negligently;

the amount of revenues and profits ASUS received and/or the

amount of monies or other obligations lost by class members as a

result of such wrongdoing;

whether class members are entitled to injunctive relief and other

equitable relief and, if so, what is the nature of such relief; and

whether class members are entitled to payment of actual, incidental,

consequential, exemplary, and/or statutory damages plus interest,

and if so, what is the nature of such relief.

Plaintiff’s claims against ASUS are typical of the claims of the Class

because Plaintiff and all other members of the class purchased a Purported USB

3.0 Laptop with the same attendant advertising, warranties, and web-based

representations and documentation. With respect to the class allegations, Plaintiff

was subject to the exact same business practices and written representations.

First Amended Class Action Complaint, p. 106

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Plaintiff will fairly and adequately protect the interests of the Class.

Plaintiff has demonstrated his commitment to the case, has diligently

educated himself as to the issues involved, and to the best of his knowledge does

not have any interests adverse to the proposed class.

The questions of law and fact common to the members of the class

predominate over any questions affecting only individual members.

Acclass action is superior to other available methods for a fair and

efficient adjudication of this controversy as many members of the proposed class

have damages arising from ASUS’s wrongful course of conduct which would not

be susceptible to individualized litigation of this kind, including, but not limited

to, the costs of experts and resources that may be required to examine the business

practices in question.

Given the relative size of damages sustained by the individual members

of the Class, the diffuse impact of the damages, and homogeneity of the issues,

the interests of members of the Class individually controlling the prosecution of

separate actions is minimal.

There is no litigation already commenced, nor is there anticipated to be

subsequent litigation commenced by other members of the Class concerning

ASUS’s alleged conduct. Consequently, concerns with respect to the maintenance

of a class action regarding the extent and nature of any litigation already

commenced by members of the Class are non-existent.

Plaintiff is unaware of any difficulties that are likely to be encountered

in the management of this Class Action Complaint that would preclude its

maintenance as a class action.

First Amended Class Action Complaint, p. 1121

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Causes of Action

CAUSES OF ACTION

Plaintiff’s First Cause of Action Fraud, Deceit and/or Misrepresentation

Plaintiff’s Second Cause of Action Violation of the Consumers Legal Remedies Act, California Civil Code § 1750, et seq.

Plaintiff’s Third Cause of Action False Advertising, Business and Professions Code § 17500, et seq. (““FAL”

Plaintiff’s Fourth Cause of Action Negligent Misrepresentation

Plaintiff’s Fifth Cause of Action Unfair, Unlawful and Deceptive Trade Practices, Business and Professions Code § 17200, et seq.

Plaintiff’s Sixth Cause of Action Breach of Express Warranty

Plaintiff’s Seventh Cause of Action Violation of the Song-Beverly Consumer Warranty Act, Civil Code §§ 1790, et seq.