180s et. al. v. Costco Wholesale et. al..pdf

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UNITED STATES DISTRICT COURT DISTRICT OF MARYLAND (BALTIMORE DIVISION) ) ) ) ) ) ) and ) ) 180s, LLC, ) 700 South Caroline Street ) Baltimore, Maryland 21231, ) ) a Maryland Limited Liability Company, Plaintiff, ) v. ) ) ) Costco Wholesale Corporation ) 999 Lake Dr. ) Issaquah, Washington 98027, ) ) a Delaware Corporation, Defendant, ) ) SM Global, LLC ) 924 N. Beverly Dr. ) Beverly Hills, California 90210 ) ) a California Limited Liability Company, Defendant. ) __________________________________________ ) 180s, Inc., 700 South Caroline Street Baltimore, Maryland 21231, a Delaware Corporation, Plaintiff,

Civil Action No. 13-cv-3239

COMPLAINT

DEMAND FOR JURY TRIAL

Plaintiffs 180s, Inc. and 180s, LLC (collectively “180s” or “Plaintiffs”) allege as follows: THE PARTIES 1. 180s, Inc. is a corporation organized under the laws of the State of Delaware, having its

principal place of business at 700 South Caroline Street, Baltimore, Maryland 21231. 180s, Inc. owns

all right, title, and interest in the intellectual property that is the subject matter of this suit. 180s, LLC is a limited liability company organized under the laws of the State of Maryland, having its principal place of business at 700 South Caroline Street, Baltimore, Maryland 21231. 180s, LLC is a wholly-owned subsidiary of 180s, Inc. and the exclusive licensee of the intellectual property that is the subject matter of this suit. 2. Defendant Costco Wholesale Corporation (“Costco”), on information and belief, is a

corporation organized under the laws of the State of Delaware having its principal place of business at 999 Lake Dr., Issaquah, Washington 98027. Costco is a national membership-only warehouse chain with hundreds of Costco store locations throughout the country. 3. Defendant SM Global, LLC (“SM Global”), on information and belief, is a limited

liability company organized under the laws of the State of California having its principal place of business at 924 N. Beverly Dr., Beverly Hills, California 90210. On information and belief, SM Global is in the business of purchasing, importing, and distributing miscellaneous, low-cost retail goods. JURISDICTION AND VENUE 4. This is a civil action for patent infringement arising under the United States patent

statutes, Title 35, United States Code, §§ 1 et seq. 5. This Court has jurisdiction of the subject matter of this action under Title 28, United

States Code, §§ 1331 and 1338(a). 6. This Court has personal jurisdiction over Costco because Costco is doing and has done

substantial business in this judicial district and has committed acts of infringement, and other acts complained of herein, in this judicial district. According to its website (www.costco.com), Costco operates at least ten stores in the State of Maryland.

2.

7.

This Court has personal jurisdiction over SM Global at least because, on information and

belief: (i) SM Global placed or caused to be placed infringing ear warmer products into the stream of commerce through an established distribution channel, specifically, by distributing infringing products to Costco for re-sale at Costco’s retail stores, which products have subsequently been offered for sale, sold, and/or used within the District of Maryland; and (ii) SM Global has contracted to supply infringing products and/or transacted business related to those products in the District of Maryland within the meaning of Section 6-103 of the Maryland Code. 8. Venue is proper in this District pursuant to 28 U.S.C. §§ 1391(b)-(c) and 1400(b) because

Defendants have committed acts of infringement and do business in this District. BACKGROUND 9. 180s designs, manufactures and sells innovative performance wear, including ear

warmers, gloves, and glasses. 180s was founded in 1994 by Brian E. Le Gette and Ronald L. Wilson, II, two University of Pennsylvania Wharton Business School students, who invented and patented the first of its kind wrap-behind-the-head ear warmer. After its introduction into the marketplace in 1995, the 180s ear warmer achieved significant commercial success. 10. 180s’ success has been driven largely by its innovative ear warmer products, which are

protected by a significant portfolio of patents, including the patents asserted in this action. True and correct reproductions of photographs of a “180s” brand ear warmer are attached as Exhibits A and B. 11. On November 10, 1998, United States Patent No. 5,835,609 (“the ‘609 Patent”), entitled

“Ear Protection Device,” was duly and legally issued to Le Gette, et al. The ‘609 Patent has been assigned to 180s, Inc. A true and correct copy of the ‘609 Patent is attached as Exhibit C. 12. On April 19, 2005, United States Patent No. 6,880,174 (“the ‘174 Patent”), entitled “Ear

3.

Protection Device,” was duly and legally issued to Prokop. The ‘174 Patent has been assigned to 180s, Inc. A true and correct copy of the ‘174 Patent is attached as Exhibit D. 13. 180s, Inc. is the sole owner of the entire right, title, and interest in the ‘609 Patent, and

180s, LLC is an exclusive licensee under the ‘609 Patent. 14. 180s, Inc. is the sole owner of the entire right, title, and interest in the ‘174 Patent, and

180s, LLC is an exclusive licensee under the ‘174 Patent. 15. 16. In 2012, Costco was a major customer of 180s for ear warmer products. In April 2013, however, Costco informed 180s that Costco had decided not to purchase

180s ear warmers for the fall 2013/winter 2014 selling season. In explaining its decision, Costco asserted that “we feel we have a more compelling offering from a competitive supplier that meets our needs and that we feel is a better overall value to the Costco consumer.” 17. Upon learning that Costco intended to sell ear warmer products from another supplier,

180s specifically informed Costco in writing of its intellectual property rights directed to ear warmers, and of 180s’ history of aggressively protecting those rights through litigation. 180s also noted that if Costco provided to 180s a sample of the product from the “competitive supplier”, 180s would quickly identify for Costco the particular 180s intellectual property rights, if any, that cover the product. 18. Although Costco acknowledged receipt of 180s’ correspondence, Costco failed to

substantively respond and did not provide a sample of the competitive ear warmer product that it had decided to purchase in lieu of 180s ear warmers. 19. 180s has recently discovered that Costco is selling and offering to sell to consumers,

including at Costco stores in Maryland, an ear warmer product with an adjustable headband (the “Accused Product”). A true and correct reproduction of a photograph of the Accused Product is

4.

attached as Exhibit E. 20. Thus, Costco is offering for sale and selling ear warmer products that compete with

products manufactured and sold by 180s. 21. On information and belief, and according to its packaging, Defendant SM Global

imported the Accused Product into the United States and distributed it to Costco. 22. Before offering for sale and selling the Accused Product in the United States, Costco had

actual and constructive knowledge of 180s brand ear warmers and 180s’ intellectual property rights directed to behind-the-head ear warmers, including 180s’ rights in the ‘609 and the ‘174 Patents. COUNT ONE—INFRINGEMENT OF THE ‘609 PATENT 23. Plaintiffs reallege and incorporate herein by this reference paragraphs 1 through 22 of

this Complaint as though fully set forth herein. 24. 180s, Inc. is the sole owner of the entire right, title, and interest in the ‘609 Patent, and

180s, LLC is an exclusive licensee under the ‘609 Patent. 25. Costco and SM Global have infringed the ‘609 Patent under Section 271 of Title 35 of

the United States Code by using, selling and/or offering to sell in, and/or importing into, the United States the Accused Product. 26. been willful. 27. On information and belief, Costco and SM Global will continue to infringe the ‘609 On information and belief, Costco’s and SM Global’s infringement of the ‘609 Patent has

Patent unless enjoined by this Court.

5.

28.

Plaintiffs have been, and will continue to be, damaged and irreparably harmed by the

actions of Costco and SM Global, which will continue unless Costco and SM Global are enjoined by this Court. COUNT TWO—INFRINGEMENT OF THE ‘174 PATENT 29. Plaintiffs reallege and incorporate herein by this reference paragraphs 1 through 28 of

this Complaint as though fully set forth herein. 30. 180s, Inc. is the sole owner of the entire right, title, and interest in the ‘174 Patent, and

180s, LLC is an exclusive licensee under the ‘174 Patent. 31. Costco and SM Global have infringed the ‘174 Patent under Section 271 of Title 35 of

the United States Code by using, selling and/or offering to sell in, and/or importing into, the United States the Accused Product, which embodies inventions claimed in the ‘174 Patent. 32. been willful. 33. On information and belief, Costco and SM Global will continue to infringe the ‘174 On information and belief, Costco’s and SM Global’s infringement of the ‘174 Patent has

Patent unless enjoined by this Court. 34. Plaintiffs have been, and will continue to be, damaged and irreparably harmed by the

actions of Costco and SM Global, which will continue unless Costco and SM Global are enjoined by this Court.

REQUEST FOR RELIEF WHEREFORE, Plaintiffs request the following relief:

6.

A.

a preliminary and permanent injunction against Costco and SM Global, as well as their respective officers, agents, servants, employees, parent and subsidiary corporations, assigns and successors in interest, and those persons in active concert or participation with them, enjoining them from continued acts of infringement of the ‘609 Patent;

B.

a preliminary and permanent injunction against Costco and SM Global, as well as their respective officers, agents, servants, employees, parent and subsidiary corporations, assigns and successors in interest, and those persons in active concert or participation with them, enjoining them from continued acts of infringement of the ‘174 Patent;

C. D. E.

a judgment holding Costco and SM Global liable for infringement of the ‘609 Patent; a judgment holding Costco and SM Global liable for infringement of the ‘174 Patent; an accounting of damages resulting from the infringement by Costco and SM Global of the ‘609 Patent, together with prejudgment and postjudgment interest;

F.

an accounting of damages resulting from the infringement by Costco and SM Global of the ‘174 Patent, together with prejudgment and postjudgment interest;

G.

that the infringement by Costco and SM Global of the ‘609 Patent be adjudged willful and Plaintiffs’ damages be trebled pursuant to Title 35, U.S.C. § 284;

H.

that the infringement by Costco and SM Global of the ‘174 Patent be adjudged willful and Plaintiffs’ damages be trebled pursuant to Title 35, U.S.C. § 284;

I.

that this be adjudged an exceptional case and that the Plaintiffs be awarded their attorneys’ fees pursuant to Title 35, U.S.C. § 285; and

J.

that the Court grant the Plaintiffs such other relief as it deems just and equitable.

7.

Dated: October 31, 2013

Respectfully submitted by: /s/ Brendan J. Hughes COOLEY LLP Brendan J. Hughes (Bar No. 17042) 1299 Pennsylvania Avenue, Suite 700 Washington, D.C. 20004-2400 Tel: (202) 842-7826 Fax: (202) 842-7899 [email protected] Jonathan G. Graves One Freedom Square Reston Town Center 11951 Freedom Drive Reston, Virginia 20190 Tel: (703) 456-8000 Fax: (703) 456-8100 [email protected] Attorneys for Plaintiffs 180s, Inc. and 180s, LLC

8.

DEMAND FOR JURY TRIAL Pursuant to Rule 38 of the Federal Rules of Civil Procedure, Plaintiffs 180s, Inc. and 180s, LLC, hereby demand a trial by jury of all issues triable of right by a jury.

Dated: October 31, 2013 /s/ Brendan J. Hughes COOLEY LLP Brendan J. Hughes (Bar No. 17042) 1299 Pennsylvania Avenue, Suite 700 Washington, D.C. 20004-2400 Tel: (202) 842-7826 Fax: (202) 842-7899 [email protected] Jonathan G. Graves One Freedom Square Reston Town Center 11951 Freedom Drive Reston, Virginia 20190 Tel: (703) 456-8000 Fax: (703) 456-8100 [email protected] Attorneys for Plaintiffs 180s, Inc. and 180s, LLC

9.

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