Bayco Products v. Coleman Cable

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS DALLAS DIVISION BAYCO PRODUCTS, INC., Plaintiff,
V.

COLEMAN CABLE, INC. Defendant.

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CIVIL ACTION NO.

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A JURY IS DEMANDED

COMPLAINT FOR DECLARATORY JUDGMENT Plaintiff, Bayco Products, Inc., by and through its undersigned counsel, files this its "Complaint for Declaratory Judgment" against Coleman Cable, Inc. and for its cause of action would show:

I.
PARTIES 1. Plaintiff Bayco Products, Inc. is a corporation organized and existing under the

laws of the State of Texas, having offices at 640 S. Sanden Boulevard, Wylie, Texas 75098. PlaintiffBayco Products, Inc. is sometimes hereinafter referred to as "Bayco." 2. Upon information and belief, Defendant Coleman Cable, Inc. is a corporation

organized and existing under the laws of the State of Delaware, having its principal offices at 1530 Shields Drive, Waukegan, IL 60085, and is sometimes hereinafter referred to as "CCI." Defendant CCI has offices in El Paso, Texas and Texarkana, Texas as well as Texas representatives based in Dallas, Texas and Irving, Texas. CCI may be served by delivering a copy of the Summons and the Complaint to is Registered Agent for service of process, Lexis

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Nexis Document Solutions, Inc. at 211 East Rule 4(h), Fed. R. Civ. P.

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Street, Suite 620, Austin, Texas 78701, under

II.
JURISDICTION AND VENUE 3. This is an action for a declaratory judgment under 28 U.S.C. § 2201 and§ 2202,

and arising under the Patent Laws of the United States, 35 U.S.C. § 101 et seq. As set forth hereinbelow, an actual and justiciable controversy exits between Plaintiff Bayco and Defendant CCI regarding the validity and infringement of a certain United States Design Patent. 4. Jurisdiction is based upon 28 U.S.C. § 1331 and § 1338(a). Furthermore,

jurisdiction is proper under 28 U.S.C. § 1332 as there is full diversity as to all parties and the amount in controversy exceeds the sum or value of $100,000, exclusive of interests and costs. Jurisdiction over related claims of unfair competition is based upon 28 U.S.C. § 1338(b). Jurisdiction over the state law claims is based upon the court's supplemental jurisdiction under 28 U.S.C. § 1367. 5. Venue is proper in this court under 28 U.S.C. § 1391.

III.
BACKGROUND TO THIS CONTROVERSY 6. Plaintiff Bayco has long been a manufacturer, seller, and distributor of a wide

variety of consumer and professional products relating to work lighting. Some of its goods are sold specifically to consumer, automotive and industrial markets via national chain stores (i.e. Wal-Mart and Tractor Supply) and hardware store distributors (such as Orgill Brothers) throughout the United States.

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7.

Among such various lighting products, Plaintiff Bayco has marketed,

manufactured and sold a line of Halogen Lighting Products (such as those identified currently with Model Number BA-1005 [formerly HL-1005]) as shown in Pleading Exhibit A. These halogen lighting products include an externally mounted lamp storage box. The formed plastic storage box was designed solely to satisfy functional considerations relating to conveniently storing a replacement halogen bulb. The storage box has an elongated cylindrical cross section (being of sufficient length to store a replacement cylindrical halogen lamp), that in clam-shell fashion "butterflies" open along it's length as a result of exterior elongate hinges joining the top half and bottom half of the storage box along an elongate edge. Side tabs are formed with the top half of the storage box on the opposing elongate edge for engaging compatibly formed lips on the lower half of the storage box for securing the halves together. Arcuately shaped feet are formed with the lower half of the storage box for affixing the cylindrical storage box to the likeshaped cylindrical metallic frame member of the light. 8. On or about March 27, 2012, Plaintiff Bayco received a demand from Defendant

CCI claiming that Defendant CCI is the owner of United States Design Patent No. D484,694 (the '694 Patent) entitled "Rounded Edge Lamp Storage Box" [the '694 Patent is attached as Pleading Exhibit B] and claiming that Bayco's Halogen Work Light (identified as part number BA-1005) infringes Defendant CCI's '694 Patent, and demanding, inter alia, that Bayco cease and desist all marketing and all sales of such products, destroy its inventory of such products and provide a full accounting of all sales revenues to Defendant CCI. Failure of Plaintiff Bayco to comply with Defendant CCI's demands will result in "all action necessary to preserve its [CCI's] intellectual property rights."

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9.

This March 27, 2012 demand letter of Defendant CCI creates an actual and

justiciable controversy currently between Plaintiff Bayco and Defendant CCI concerning the validity and infringement of the '694 Patent. IV.
BACKGROUND TO THE '694 PATENT

10.

Plaintiff Bayco repeats and alleges the allegations contained in paragraphs 1

through 9 set forth hereinabove, which are incorporated herein by reference. 11. Prior to 2002, Plaintiff Bayco began the development of its HL-1 005 Halogen

Lighting Products that included an externally mounted lamp storage box for a replacement bulb (hereafter "Bayco's Product). 12. Prior to 2002, Bayco had designed and began the manufacture of such Products.

By early 2002, Plaintiff Bayco began marketing and selling such Products, with such Products being displayed at various trade shows. Plaintiff Bayco had sales of Bayco's Product beginning as early as June 2002-and by the year end of 2002, Bayco had sold in excess of 2600 of its Bayco Product to stores such as Wal-Mart, Tractor Supply, Wallace Hardware and Orgill Brothers (a distributor to some 3000 hardware stores). 13. Upon information and belief, the claimed inventor of the '694 Patent, Monte Leen

(then a principal of the Designers Edge, Inc. ["DEI"]) saw this Bayco Product that had an externally mounted lamp storage box for a replacement bulb at a trade show, was intrigued by the Bayco design and thereafter illegally and falsely claimed to be the sole and original inventor of the '694 Patent (by Declaration dated on or about March 13, 2003), when in fact he was notwhile knowingly copying Bayco's design-claiming it to be his own. This U.S. Design Patent

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Application, filed on March 13, 2003 as application serial number 291177764 ("the '764 Application"), ultimately matured into the '694 Patent. 14. On or about May 21, 2003, while the '764 Application was pending before the

U.S. Patent and Trademark Office, Mr. Leen's attorneys filed an Information Disclosure Statement disclosing a number of prior patents to the Patent Examiner, drawing particular attention to two prior patents of Mr. Leen, and concluding with the representation that such patents "are cited only as constituting the closest prior art of which Applicant and his attorney are aware." Upon information and belief, this statement is a material misrepresentation upon which the Patent Examiner relied in allowing the issuance of the '694 Patent. 15. The '694 Patent issued on January 6, 2004, some 8 years ago. Though DEI was a

head to head competitor with Plaintiff Bayco relating to lighting products during this entire time period, and was involved in several trademark disputes with Plaintiff Bayco relating to lighting products, neither Mr. Leen nor DEI ever claimed that Plaintiff Bayco infringed the '694 Patent. Upon information and belief, Bayco is of the opinion that because Mr. Leen and DEI knew of this prior history, Mr. Leen and DEI never took affirmative action against Plaintiff Bayco based upon the '694 Patent. Upon information and belief, Mr. Leen assigned the '694 Patent to DEI on or about December 201 0. 16. Upon information and belief, on or about April 1, 2011, Defendant CCI purchased

the assets of DEI, including the '694 Patent. Upon information and belief, since that time Defendant CCI made no serious detailed investigation into the allegations raised on its letter dated March 27, 2012, nor into the circumstances surrounding the prosecution of the '694 Patent by Mr. Leen. Defendant CCI' s actions in this regard are willful and in reckless disregard of Plaintiff Bayco's rights.

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17.

Upon information and belief, neither Mr. Leen, DEI nor Defendant CCI have ever

marked any product of theirs with the '694 Patent number, as required by 35 U.S.C. § 287.

v.
DECLARATORY JUDGMENT THAT THE '694 PATENT OF DEFENDANT CCI IS INVALID AND IS NOT INFRINGED 18. Plaintiff Bayco repeats and realleges the allegations contained in paragraphs 1

through 17 set forth hereinabove, which are incorporated herein by reference. 19. Upon information and belief, Defendant CCI's '694 Patent is invalid under

35 U.S.C. § 102 and/or 35 U.S.C. § 103. 20. Upon information and belief, Defendant CCI's '694 Patent is invalid based upon

the inequitable conduct of the inventor of the '694 Patent, to wit, "but for" the inventor withholding from the U.S. Patent Office the prior existence of Bayco's Product having an externally mounted lamp storage box, knowing of its materiality, and thereafter making a conscious decision to conceal and withhold such information from the U.S. Patent Office in order to deceive the U.S. Patent Office, the '694 Patent would not have issued. Upon

information and belief, the inventor knew that the Patent Examiner would have rejected the '764 Application that resulted in the '694 Patent had the Patent Examiner been informed of the prior Bayco Product having an externally mounted lamp storage box. 21. Upon information and belief, Plaintiff Bayco's Product does not infringe any

valid claim of Defendant CCI's '694 Patent. VI. UNFAIR COMPETITION 22. Plaintiff Bayco repeats and realleges the allegations contained in paragraphs 1

through 21 set forth hereinabove, which are incorporated herein by reference.

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23.

Upon information and belief, Defendant CCI has sought to unfairly compete with

Plaintiff Bayco by charging Plaintiff Bayco with unfounded claims of infringement of the '694 Patent, with the purpose of unfairly and illegally attempting to exercise a patent right that it knows is not valid, in efforts to coerce Plaintiff Bayco to not manufacture and sell its Product having a storage box for replacement bulbs. 24. Upon information and belief, Plaintiff Bayco believes that Defendant CCI's

unfounded claims of infringement of the '694 Patent may be used by Defendant CCI with Plaintiff Bayco's customers in efforts to dissuade Plaintiff Bayco's customers from purchasing products from Plaintiff Bayco and purchasing products from Defendant CCI instead. 25. Upon information and belief, all ofthe foregoing acts of Defendant CCI constitute

acts of unfair competition.
VII.

INJUNCTIVE RELIEF 26. Plaintiff Bayco repeats and realleges the allegations contained in paragraphs 1

through 25 set forth hereinabove which are incorporated herein by reference. 27. Based upon the demands of Defendant CCI as set out in paragraph 8, supra,

Plaintiff Bayco further seeks an order from this court to enjoin Defendant CCI from claiming that its '694 Patent is valid and/or infringed by any Bayco Product or engaging in any conduct designed to unfairly compete with Plaintiff Bayco based upon Defendant CCI's claim that the '694 Patent is valid and/or infringed. 28. Based upon the demands of Defendant CCI as set out in paragraph 8, supra,

Plaintiff Bayco further seeks an order from this court to enjoin Defendant CCI from taking any action to interfere with Plaintiff Bayco's rights to advertise, market, and sell its Products having

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an externally mounted lamp storage box for a replacement bulb or engaging in any conduct designed to unfairly compete with Plaintiff Bayco based upon Defendant CCI's claims that the '694 Patent is valid and/or infringed.

VIII.
ATTORNEY'S FEES 29. Plaintiff Bayco repeats and realleges the allegations contained in paragraphs 1

through 28 as set forth hereinabove and which are incorporated herein by reference. 30. Upon information and belief, the claims of Defendant CCI are without merit,

frivolous, and brought with the intent to unduly multiply proceedings as between Plaintiff Bayco and Defendant CCI, and PlaintiffBayco seeks its attorney's fees pursuant to 28 U.S.C. § 1927. 31. In accordance with the provisions of 35 U.S.C. § 285, Plaintiff Bayco seeks a

determination that this is an exceptional case and an award of its reasonable attorney's fees as the prevailing party in this action. 32. Plaintiff Bayco further seeks to recover its costs, expenses, and reasonable

attorney's fees under the common law, the laws of the State of Texas, and otherwise. IX. PRAYER FOR RELIEF WHEREFORE, PlaintiffBayco prays for a declaration from this Court determining: (a) U.S.C § 103; (b) Leen; That the '694 Patent of Defendant CCI is invalid for inequitable conduct by Mr. That the '694 Patent ofDefendant CCI is invalid under 35 U.S.C. § 102 and/or 35

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(c)

That Plaintiff Bayco's Products infringe no valid claim of the '694 Patent of

Defendant CCI; (d) That if the '694 Patent is valid and infringed, no damages be awarded prior to the

date of this suit per 35 U.S.C. § 287; (e) That Defendant CCI, and all who are in active concert or participation with

Defendant CCI, be enjoined from claiming infringement of the '694 Patent and/or claiming that any Product ofPlaintiffBayco infringes the '694 Patent; (f) That Defendant CCI and all who are in active concert or participation with

Defendant CCI, be enjoined from taking any action to (i) interfere with Plaintiff Bayco's rights to advertise, market, and sell its Products having an externally mounted lamp a storage box; (ii) to contact any of Plaintiff Bayco's customers claiming that Plaintiff Bayco's Products infringe Defendant CCI's '694 Patent; or (iii) in any fashion to unfairly complete with Bayco; (g) That Plaintiff Bayco be entitled to recover its costs, expenses, and reasonable

attorney's fees pursuant to 35 U.S.C. § 285 and 28 U.S.C. § 1927, under the common law, Texas law, and otherwise; and, (h) That such other and further relief as the Court deems just, equitable, and proper be

awarded to Plaintiff Bay co.

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X.
JURY DEMAND
Pursuant Rule 38(b) of the Federal Rules of Civil Procedure, Plaintiff Bayco hereby demands a trial by jury in the above-identified action.

Richard L. Schwartz Texas Bar No. 17869500 Thomas F. Harkins, Jr. Texas Bar No. 09000990 WHITAKER CHALK SWINDLE & SCHWARTZ PLLC 301 Commerce Street, Suite 3500 Fort Worth, Texas 76102-4186 (817) 878-0500 -Telephone (817) 878-0501- Facsimile

ATTORNEYS FOR PLAINTIFF, BAYCO PRODUCTS, INC.

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