Nevin v. Colorado Altitude Training
Official Complaint for Patent Infringement in Civil Action No. 1:11-cv-03085-MSK: Nevin v. Colorado Altitude Training, LLC. Filed in U.S. District Court for the District of Colorado, the Hon. Marcia S. Krieger presiding. See http://news.priorsmart.com/-l4L4 for more info.
Content
Case 1:11-cv-03085-MSK Document 2
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DISTRICT COURT, BOULDER COUNTY, COLORADO Court Address: 1776 6th Street P.O. Box 4249 Boulder, CO 80306-4249 Phone#: 303-441-3750 &2857 86( 21/< _____________________________ Case No.: Defendants: COLORADO ALTITUDE TRAINING, LLC, d/b/a PREVENEX, a Colorado limited liability company. Attorney for Plaintiff STEVENS, LITTMAN, BIDDISON, THARP & WEINBERG, LLC Craig A. Weinberg, #19030 250 Arapahoe Ave., Ste. 300 Boulder, CO 80302 (303) 443-6690 [email protected] Div.: Ctrm.:
Plaintiff: STEPHEN C. NEVIN v.
COMPLAINT
Plaintiff Stephen C. Nevin (“Nevin”), through his attorneys Stevens, Littman, Biddison, Weinberg, and Tharp, LLC, alleges and avers the following as his Complaint: 1. Plaintiff is an individual and a resident of the County of Douglas.
2. Colorado Altitude Training, LLC (“CAT”) is a Colorado limited liability company with its principal place of business in the County of Boulder. CAT also transacts business under the trade name of Prevenex. 3. Venue is proper in the County of Boulder pursuant to C.R.C.P. 98 as it is the situs of the tort or torts more fully described hereinafter. 4. On or about June 2, 2006, CAT signed and delivered a Promissory Note to Plaintiff, whereby CAT agreed to pay Nevin $500,000 after June 2, 2007. 5. Contemporaneously, CAT secured the Promissory Note with a security
EXHIBIT A (Pt 2) EXHIBIT A (Pt 1)
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interest pursuant to a certain Security Agreement. The security agreement covered CAT’s inventory, equipment, receivables, contract rights, general intangibles, investment property, other property as defined in the security agreement, and proceeds. 6. On or about June 13, 2006, Plaintiff perfected his security interest in the collateral by filing a UCC Financing Statement with the Colorado Secretary of State. 7. Plaintiff subsequently filed a lawsuit in Boulder District Court against CAT. On August 10, 2009, the Boulder District Court entered judgment in favor of Plaintiff and against CAT on the Promissory Note. The judgment was in the amount of $541,750. 8. On October 9, 2009, CAT and Plaintiff entered into a Settlement Agreement. Among other things, under the Settlement Agreement, the parties agreed that the judgment was final and that the then outstanding principal and interest owed under the Promissory Note/Judgment was $536,983.82. They also agreed that “Nevin shall remain a secured creditor of CAT, and the Security Agreement and Sublicense Agreement shall remain in full force and effect. It is the Parties’ mutual intent that nothing in this Agreement shall impair or affect Nevin’s collateral or the timing of perfection of his security interests…[T]he Judgment is deemed to be secured by the same collateral that previously secured the $500,000 Note.” 9. On May 14, 2010, CAT filed a voluntary Petition under Chapter 11 of the United States Bankruptcy Code. 10. On July 23, 2010, the Bankruptcy Court entered an order granting Plaintiff relief from the automatic stay. Thereafter, Plaintiff returned to the Boulder District Court for orders pertinent to enforcing its security interest. On October 19, 2010, the Boulder District Court entered an Order Under C.R.C.P. 70. The Order divested CAT of all right, title, and interest of certain intellectual and/or proprietary property, and it further directed the Clerk to execute an Assignment of intellectual property to the Plaintiff. 11. On October 22, 2010, pursuant to the Boulder District Court’s Order Under C.R.C.P. 70, the Clerk executed an Assignment of intellectual and/or proprietary property to Plaintiff. The Assignment included the following intellectual and/or proprietary property: a. United States patent 6,565,624, titled Altitude Simulation Method and System, issued May 30, 2003; United States patent 6,827,760, titled Method and System for Providing a Desired Atmosphere with in an Enclosure, issued December 7, 2004; United States patent 7,018,443, titled Method and System for Reducing Body Weight in an Enclosed Atmospheric Environment, issued March 28, 2006 but now lapsed;
b.
c.
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d.
PCT patent application number PCT/US01/28145, published as international patent application number WO 02/20136, titled Altitude Simulation Method and System, now concluded but from which European patent application EP 1 318 866 was filed on September 6, 2001, claiming the benefit of and priority to said PCT application, European patent application EP 131 886 having now lapsed; All rights to claims for past, present and future infringement of any of the above-identified US and foreign patents and patent applications, arising on or after (Date of Default); All technical data, information, materials, expertise which is related to hypoxic environments, products or methods including without limitation, physiological, chemical and physical data and techniques, engineering drawings and specifications related to products and/or processes which have been, are or could be used to develop products and methods for conditioning human response in hypoxic environments; All rights of CAT, but not the obligations, under certain licensing and sublicensing agreements pertaining to any or all of the foregoing Intellectual Property, including, but not limited to, a Patent Sublicense Agreement having an effective date of June 2, 2006 between CAT and Stephen C. Nevin, a License Agreement having an effective date of April 1, 2003 between Foundation for Research and development in Olympic Sports and CAT, a Letter Agreement dated January 1, 2007 between Kilpaja huippu-urheilun tutkimus-ja kehittämissäätiö KIHU and CAT; and a License Agreement dated January 1, 2007 between Kilpa-ja huippuurheilun tutkimus-ja kehittämissäätiö KIHU and CAT;
e.
f.
g.
12. On November 3, 2010, the Bankruptcy Court observed that the Boulder District Court had divested CAT of the intellectual property. As part of its November 3, 2010 Order, Bankruptcy Court also ratified and confirmed the State Court’s Assignment of the intellectual property to Plaintiff. 13. Since the Assignment, CAT has continued to use the intellectual and/or proprietary property that is now owned by Plaintiff under the Assignment, in contravention of the Order and Assignment. 14. On September 22, 2011, the Bankruptcy Court entered an Order allowing Plaintiff to pursue claims for post-petition patent infringement and for “infringement” of the Technology and Know How and may reduce those claims to judgment but may not collect any monetary judgment without further Order from the Bankruptcy Court. 15. The systems being sold by CAT following the Assignment are either identical or similar to those sold prior to the Assignment but for modifications (i.e.,
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software modifications, modifications to the oxygen generators, and new oxygen sensors). As such, CAT made use of Nevin’s proprietary information and intellectual property including, but not necessarily limited to a Navy SBIR II contract, fire protection systems, advertising and promotion, products and processes to simulate actual pressure altitude, software for product configurations, specifications, and modeling. More specifically: a. The Navy SBIR II contract awarded to CAT in April of 2011 is a direct follow-on and continuation of the Navy SBIR I contract awarded in 2008/2009. This system is a derivative of the system built for Embry Riddle Academy in 2008. Fire prevention systems utilize the same oxygen generator and control system but for some modifications. Comparison of (1) websites (prior to and after Assignment, (2) price/component lists, and (3) existing discovery documents reflect CAT is using the same Technology and Know How covered by the Assignment. The CAT systems continue to use the same basic technology of pressure swing absorption to create the simulated altitude environment. This technology is based on creating a change in the oxygen/nitrogen mixture of gas in a closed environment to simulate actual pressure altitude. This can be accomplished with an oxygen generator that can filter or reduce or increase the amount of oxygen molecules in a given volume of air. CAT continues to use the same software for system configuration and for their control device, but for on-going modifications. Website materials promote their “proprietary software” for system modeling, and their Controller. CAT utilizes the same basic design, configuration, materials and components in its systems, but for some modifications. They utilize the same oxygen generators, the same Controller and the same components.
b.
c.
d.
e.
f.
16. Since the Order and Assignment to Plaintiff, CAT has been undertaking actions and engaging in business which violates the intellectual and/or proprietary property rights that now belong to Plaintiff. FIRST CLAIM FOR RELIEF (Declaratory Judgment) 17. Plaintiff incorporates paragraphs 1 through 16 above as if the same were set forth fully below. 18. The Court has the power to hear and declare the rights, status, and other
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legal relations whether or not other or further relief is or could be claimed. C.R.C.P. 57(a). 19. CAT’s business operations are in direct violation of the Assignment of intellectual property to Plaintiff, including, but not limited to, the assignment of the Technology and Know How. 20. Plaintiff requests a declaratory judgment that the systems being advertised and promoted and/or sold by CAT following the date of the Assignment have been, or are, either identical or similar to those sold or undertaken prior to the Assignment and that such practices are in violation of the Assignment and Order. 21. Plaintiff further requests that the declaratory judgment be advanced on the Court’s docket in accordance with C.R.C.P. 57(m). SECOND CLAIM FOR RELIEF (Injunctive Relief) 22. Plaintiff incorporates paragraphs 1 through 21 above by reference as if the same were set forth fully below. 23. CAT’s use of Plaintiff’s intellectual and/or proprietary property is a violation of the State Court Assignment. 24. The standard for a preliminary injunction is essentially the same as for a permanent injunction with the exception that the plaintiff must show a likelihood of success on the merits rather than actual success. Dallman v. Ritter, 225 P.3d 610, 621 (Colo. 2010). Plaintiff has separately filed a Motion for Preliminary Injunction but also seeks, through this Complaint, a Permanent Injunction. 25. There is a danger of real, immediate, and irreparable injury which may be prevented by injunctive relief. 26. There is no plain, speedy, and adequate remedy at law. In this regard, the Bankruptcy Court has ruled that Plaintiff cannot collect any monetary judgment he may obtain without further order from the Bankruptcy Court. 27. 28. Granting of an injunction will not disserve the public interest. The balance of equities favors the injunction.
29. Plaintiff therefore seeks a permanent injunction preventing CAT and its members and agents from manufacturing, marketing, selling, distributing, or using the intellectual property owned by Plaintiff under the Assignment, which property includes the Technology and Know How.
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THIRD CLAIM FOR RELIEF (Misappropriation of Trade Secret) 30. Plaintiff incorporates paragraphs 1 through 29 by reference as if the same were set forth fully below. 31. “Trade secret” means the whole or any portion or phase of any scientific or technical information, design, process, procedure, formula, improvement, confidential business or financial information, listing of names, addresses, or telephone numbers, or other information relating to any business or profession which is secret and of value. §774-102, C.R.S. 32. The Technology and Know How reflected in the State Court Assignment constitute a “trade secret.” 33. A “misappropriation” of a trade secret under §7-74-102 includes the disclosure or use of a trade secret of another without express or implied consent by a person who: (I) (II) Used improper means to acquire knowledge of the trade secret; or At the time of disclosure or use, knew or had reason to know that such person’s knowledge of the trade secret was: (A) Derived from or through a person who had utilized improper means to acquire it; Acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use; or Derived from or through a person who owed a duty to the person seeking relief to maintain its secrecy or limit its use; or
(B)
(C)
(III) Before a material change of such person’s position, knew or had reason to know that it was a trade secret and that knowledge of it had been acquired by accident or mistake. 34. CAT’s use of the trade secrets without Plaintiff’s consent constitutes a misappropriation because, among perhaps other reasons, at the time of its use, CAT knew or had reason to know that its knowledge of the trade secret was derived from or through people who owed a duty to Plaintiff to maintain its secrecy or limit its use. 35. CAT’s misappropriations are willful and malicious, entitling Plaintiff to reasonable attorney fees. §7-74-105, C.R.S.
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36. Plaintiff is entitled to injunctive relief and/or damages as a result of CAT’s misappropriation of trade secrets. FOURTH CLAIM FOR RELIEF (Conversion) 37. Plaintiff incorporates paragraphs 1 through 36 by reference herein as if the same were set forth fully below. 38. CAT’s use of Plaintiff’s proprietary property and/or intellectual property constitutes a distinct, unauthorized act of dominion or ownership over property belonging to Plaintiff. 39. Plaintiff has been stayed under U.S. Bankruptcy laws from making demands against CAT to return the property after the assignment. Notwithstanding the foregoing, Plaintiff had asserted in the Bankruptcy Court that CAT was improperly using its intellectual property post-petition and post-assignment. CAT has failed and refused to cease using Plaintiff’s property. Any all conditions precedent to Plaintiff’s claim of conversion have been satisfied, are excused, or are waived. 40. Plaintiff. CAT’s conversion is the cause in fact and proximate cause of damages to FIFTH CLAIM FOR RELIEF (Unjust Enrichment) 41. Plaintiff incorporates paragraphs 1 through 40 by reference herein as if the same were set forth fully below. 42. At the expense of a Plaintiff, CAT received a benefit under circumstances making it unjust for CAT to retain the benefit without paying for it. 43. CAT has continued to manufacture, distribute, and/or sell products that rely upon the intellectual and/or proprietary property owned by Plaintiff. CAT has received money from third party customers in exchange for its products. CAT has never received authorization from Plaintiff to use its intellectual or proprietary property nor has CAT ever paid or offered to pay Plaintiff any royalty for use of the same. 44. It would be unjust to allow CAT to retain the benefits of the money it received since the date of the Assignment for all revenues resulting from the sale or use of Plaintiff’s intellectual and/or proprietary property. SIXTH CLAIM FOR RELIEF (Common Law Misappropriation) 45. Plaintiff incorporates paragraphs 1 through 44 by reference as if the same were set forth fully below.
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46. CAT appropriated and used, and continues to use, Plaintiff’s proprietary property. This property was the result of money, labor, skill, and is saleable by Plaintiff. 47. Under the common law, CAT’s conduct constitutes a misappropriation of Plaintiff’s property, business value, or competitive advantage. See, e.g., Smith v. TCI Communications, Inc., 981 P.2d 690 (Colo. App. 1999); Heller v. Lexton-Ancira Real Estate Fund, Ltd.1972, 809 P.2d 1016 (Colo.App.1990), rev'd on other grounds, 826 P.2d 819 (Colo.1992); International News Service v. Associated Press, 248 U.S. 215, 39 S.Ct. 68, 63 L.Ed. 211 (1918). 48. CAT’s misappropriation is the cause in fact and proximate cause of damages to Plaintiff. WHEREFORE Plaintiff respectfully requests a declaratory judgment, injunctive relief, damages, expert witness fees, costs, prejudgment and post-judgment interest, reasonable attorney fees, and such other and further equitable or legal relief as may be just and proper. DATED: November 7, 2011 STEVENS, LITTMAN, BIDDISON, THARP & WEINBERG, LLC
[Original Signature in File] Craig A. Weinberg, #19030 Attorney for Plaintiff
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DISTRICT COURT, BOULDER COUNTY, COLORADO Court Address: 1776 6th Street P.O. Box 4249 Boulder, CO 80306-4249 Phone#: 303-441-3750 &2857 86( 21/< _____________________________ Case No.: Defendants: COLORADO ALTITUDE TRAINING, LLC, d/b/a PREVENEX, a Colorado limited liability company. Attorney for Plaintiff STEVENS, LITTMAN, BIDDISON, THARP & WEINBERG, LLC Craig A. Weinberg, #19030 250 Arapahoe Ave., Ste. 300 Boulder, CO 80302 (303) 443-6690 [email protected] Div.: Ctrm.:
Plaintiff: STEPHEN C. NEVIN v.
COMPLAINT
Plaintiff Stephen C. Nevin (“Nevin”), through his attorneys Stevens, Littman, Biddison, Weinberg, and Tharp, LLC, alleges and avers the following as his Complaint: 1. Plaintiff is an individual and a resident of the County of Douglas.
2. Colorado Altitude Training, LLC (“CAT”) is a Colorado limited liability company with its principal place of business in the County of Boulder. CAT also transacts business under the trade name of Prevenex. 3. Venue is proper in the County of Boulder pursuant to C.R.C.P. 98 as it is the situs of the tort or torts more fully described hereinafter. 4. On or about June 2, 2006, CAT signed and delivered a Promissory Note to Plaintiff, whereby CAT agreed to pay Nevin $500,000 after June 2, 2007. 5. Contemporaneously, CAT secured the Promissory Note with a security
EXHIBIT A (Pt 2) EXHIBIT A (Pt 1)
Case 1:11-cv-03085-MSK Document 2
Filed 11/28/11 USDC Colorado Page 2 of 8
interest pursuant to a certain Security Agreement. The security agreement covered CAT’s inventory, equipment, receivables, contract rights, general intangibles, investment property, other property as defined in the security agreement, and proceeds. 6. On or about June 13, 2006, Plaintiff perfected his security interest in the collateral by filing a UCC Financing Statement with the Colorado Secretary of State. 7. Plaintiff subsequently filed a lawsuit in Boulder District Court against CAT. On August 10, 2009, the Boulder District Court entered judgment in favor of Plaintiff and against CAT on the Promissory Note. The judgment was in the amount of $541,750. 8. On October 9, 2009, CAT and Plaintiff entered into a Settlement Agreement. Among other things, under the Settlement Agreement, the parties agreed that the judgment was final and that the then outstanding principal and interest owed under the Promissory Note/Judgment was $536,983.82. They also agreed that “Nevin shall remain a secured creditor of CAT, and the Security Agreement and Sublicense Agreement shall remain in full force and effect. It is the Parties’ mutual intent that nothing in this Agreement shall impair or affect Nevin’s collateral or the timing of perfection of his security interests…[T]he Judgment is deemed to be secured by the same collateral that previously secured the $500,000 Note.” 9. On May 14, 2010, CAT filed a voluntary Petition under Chapter 11 of the United States Bankruptcy Code. 10. On July 23, 2010, the Bankruptcy Court entered an order granting Plaintiff relief from the automatic stay. Thereafter, Plaintiff returned to the Boulder District Court for orders pertinent to enforcing its security interest. On October 19, 2010, the Boulder District Court entered an Order Under C.R.C.P. 70. The Order divested CAT of all right, title, and interest of certain intellectual and/or proprietary property, and it further directed the Clerk to execute an Assignment of intellectual property to the Plaintiff. 11. On October 22, 2010, pursuant to the Boulder District Court’s Order Under C.R.C.P. 70, the Clerk executed an Assignment of intellectual and/or proprietary property to Plaintiff. The Assignment included the following intellectual and/or proprietary property: a. United States patent 6,565,624, titled Altitude Simulation Method and System, issued May 30, 2003; United States patent 6,827,760, titled Method and System for Providing a Desired Atmosphere with in an Enclosure, issued December 7, 2004; United States patent 7,018,443, titled Method and System for Reducing Body Weight in an Enclosed Atmospheric Environment, issued March 28, 2006 but now lapsed;
b.
c.
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d.
PCT patent application number PCT/US01/28145, published as international patent application number WO 02/20136, titled Altitude Simulation Method and System, now concluded but from which European patent application EP 1 318 866 was filed on September 6, 2001, claiming the benefit of and priority to said PCT application, European patent application EP 131 886 having now lapsed; All rights to claims for past, present and future infringement of any of the above-identified US and foreign patents and patent applications, arising on or after (Date of Default); All technical data, information, materials, expertise which is related to hypoxic environments, products or methods including without limitation, physiological, chemical and physical data and techniques, engineering drawings and specifications related to products and/or processes which have been, are or could be used to develop products and methods for conditioning human response in hypoxic environments; All rights of CAT, but not the obligations, under certain licensing and sublicensing agreements pertaining to any or all of the foregoing Intellectual Property, including, but not limited to, a Patent Sublicense Agreement having an effective date of June 2, 2006 between CAT and Stephen C. Nevin, a License Agreement having an effective date of April 1, 2003 between Foundation for Research and development in Olympic Sports and CAT, a Letter Agreement dated January 1, 2007 between Kilpaja huippu-urheilun tutkimus-ja kehittämissäätiö KIHU and CAT; and a License Agreement dated January 1, 2007 between Kilpa-ja huippuurheilun tutkimus-ja kehittämissäätiö KIHU and CAT;
e.
f.
g.
12. On November 3, 2010, the Bankruptcy Court observed that the Boulder District Court had divested CAT of the intellectual property. As part of its November 3, 2010 Order, Bankruptcy Court also ratified and confirmed the State Court’s Assignment of the intellectual property to Plaintiff. 13. Since the Assignment, CAT has continued to use the intellectual and/or proprietary property that is now owned by Plaintiff under the Assignment, in contravention of the Order and Assignment. 14. On September 22, 2011, the Bankruptcy Court entered an Order allowing Plaintiff to pursue claims for post-petition patent infringement and for “infringement” of the Technology and Know How and may reduce those claims to judgment but may not collect any monetary judgment without further Order from the Bankruptcy Court. 15. The systems being sold by CAT following the Assignment are either identical or similar to those sold prior to the Assignment but for modifications (i.e.,
Case 1:11-cv-03085-MSK Document 2
Filed 11/28/11 USDC Colorado Page 4 of 8
software modifications, modifications to the oxygen generators, and new oxygen sensors). As such, CAT made use of Nevin’s proprietary information and intellectual property including, but not necessarily limited to a Navy SBIR II contract, fire protection systems, advertising and promotion, products and processes to simulate actual pressure altitude, software for product configurations, specifications, and modeling. More specifically: a. The Navy SBIR II contract awarded to CAT in April of 2011 is a direct follow-on and continuation of the Navy SBIR I contract awarded in 2008/2009. This system is a derivative of the system built for Embry Riddle Academy in 2008. Fire prevention systems utilize the same oxygen generator and control system but for some modifications. Comparison of (1) websites (prior to and after Assignment, (2) price/component lists, and (3) existing discovery documents reflect CAT is using the same Technology and Know How covered by the Assignment. The CAT systems continue to use the same basic technology of pressure swing absorption to create the simulated altitude environment. This technology is based on creating a change in the oxygen/nitrogen mixture of gas in a closed environment to simulate actual pressure altitude. This can be accomplished with an oxygen generator that can filter or reduce or increase the amount of oxygen molecules in a given volume of air. CAT continues to use the same software for system configuration and for their control device, but for on-going modifications. Website materials promote their “proprietary software” for system modeling, and their Controller. CAT utilizes the same basic design, configuration, materials and components in its systems, but for some modifications. They utilize the same oxygen generators, the same Controller and the same components.
b.
c.
d.
e.
f.
16. Since the Order and Assignment to Plaintiff, CAT has been undertaking actions and engaging in business which violates the intellectual and/or proprietary property rights that now belong to Plaintiff. FIRST CLAIM FOR RELIEF (Declaratory Judgment) 17. Plaintiff incorporates paragraphs 1 through 16 above as if the same were set forth fully below. 18. The Court has the power to hear and declare the rights, status, and other
Case 1:11-cv-03085-MSK Document 2
Filed 11/28/11 USDC Colorado Page 5 of 8
legal relations whether or not other or further relief is or could be claimed. C.R.C.P. 57(a). 19. CAT’s business operations are in direct violation of the Assignment of intellectual property to Plaintiff, including, but not limited to, the assignment of the Technology and Know How. 20. Plaintiff requests a declaratory judgment that the systems being advertised and promoted and/or sold by CAT following the date of the Assignment have been, or are, either identical or similar to those sold or undertaken prior to the Assignment and that such practices are in violation of the Assignment and Order. 21. Plaintiff further requests that the declaratory judgment be advanced on the Court’s docket in accordance with C.R.C.P. 57(m). SECOND CLAIM FOR RELIEF (Injunctive Relief) 22. Plaintiff incorporates paragraphs 1 through 21 above by reference as if the same were set forth fully below. 23. CAT’s use of Plaintiff’s intellectual and/or proprietary property is a violation of the State Court Assignment. 24. The standard for a preliminary injunction is essentially the same as for a permanent injunction with the exception that the plaintiff must show a likelihood of success on the merits rather than actual success. Dallman v. Ritter, 225 P.3d 610, 621 (Colo. 2010). Plaintiff has separately filed a Motion for Preliminary Injunction but also seeks, through this Complaint, a Permanent Injunction. 25. There is a danger of real, immediate, and irreparable injury which may be prevented by injunctive relief. 26. There is no plain, speedy, and adequate remedy at law. In this regard, the Bankruptcy Court has ruled that Plaintiff cannot collect any monetary judgment he may obtain without further order from the Bankruptcy Court. 27. 28. Granting of an injunction will not disserve the public interest. The balance of equities favors the injunction.
29. Plaintiff therefore seeks a permanent injunction preventing CAT and its members and agents from manufacturing, marketing, selling, distributing, or using the intellectual property owned by Plaintiff under the Assignment, which property includes the Technology and Know How.
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THIRD CLAIM FOR RELIEF (Misappropriation of Trade Secret) 30. Plaintiff incorporates paragraphs 1 through 29 by reference as if the same were set forth fully below. 31. “Trade secret” means the whole or any portion or phase of any scientific or technical information, design, process, procedure, formula, improvement, confidential business or financial information, listing of names, addresses, or telephone numbers, or other information relating to any business or profession which is secret and of value. §774-102, C.R.S. 32. The Technology and Know How reflected in the State Court Assignment constitute a “trade secret.” 33. A “misappropriation” of a trade secret under §7-74-102 includes the disclosure or use of a trade secret of another without express or implied consent by a person who: (I) (II) Used improper means to acquire knowledge of the trade secret; or At the time of disclosure or use, knew or had reason to know that such person’s knowledge of the trade secret was: (A) Derived from or through a person who had utilized improper means to acquire it; Acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use; or Derived from or through a person who owed a duty to the person seeking relief to maintain its secrecy or limit its use; or
(B)
(C)
(III) Before a material change of such person’s position, knew or had reason to know that it was a trade secret and that knowledge of it had been acquired by accident or mistake. 34. CAT’s use of the trade secrets without Plaintiff’s consent constitutes a misappropriation because, among perhaps other reasons, at the time of its use, CAT knew or had reason to know that its knowledge of the trade secret was derived from or through people who owed a duty to Plaintiff to maintain its secrecy or limit its use. 35. CAT’s misappropriations are willful and malicious, entitling Plaintiff to reasonable attorney fees. §7-74-105, C.R.S.
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36. Plaintiff is entitled to injunctive relief and/or damages as a result of CAT’s misappropriation of trade secrets. FOURTH CLAIM FOR RELIEF (Conversion) 37. Plaintiff incorporates paragraphs 1 through 36 by reference herein as if the same were set forth fully below. 38. CAT’s use of Plaintiff’s proprietary property and/or intellectual property constitutes a distinct, unauthorized act of dominion or ownership over property belonging to Plaintiff. 39. Plaintiff has been stayed under U.S. Bankruptcy laws from making demands against CAT to return the property after the assignment. Notwithstanding the foregoing, Plaintiff had asserted in the Bankruptcy Court that CAT was improperly using its intellectual property post-petition and post-assignment. CAT has failed and refused to cease using Plaintiff’s property. Any all conditions precedent to Plaintiff’s claim of conversion have been satisfied, are excused, or are waived. 40. Plaintiff. CAT’s conversion is the cause in fact and proximate cause of damages to FIFTH CLAIM FOR RELIEF (Unjust Enrichment) 41. Plaintiff incorporates paragraphs 1 through 40 by reference herein as if the same were set forth fully below. 42. At the expense of a Plaintiff, CAT received a benefit under circumstances making it unjust for CAT to retain the benefit without paying for it. 43. CAT has continued to manufacture, distribute, and/or sell products that rely upon the intellectual and/or proprietary property owned by Plaintiff. CAT has received money from third party customers in exchange for its products. CAT has never received authorization from Plaintiff to use its intellectual or proprietary property nor has CAT ever paid or offered to pay Plaintiff any royalty for use of the same. 44. It would be unjust to allow CAT to retain the benefits of the money it received since the date of the Assignment for all revenues resulting from the sale or use of Plaintiff’s intellectual and/or proprietary property. SIXTH CLAIM FOR RELIEF (Common Law Misappropriation) 45. Plaintiff incorporates paragraphs 1 through 44 by reference as if the same were set forth fully below.
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46. CAT appropriated and used, and continues to use, Plaintiff’s proprietary property. This property was the result of money, labor, skill, and is saleable by Plaintiff. 47. Under the common law, CAT’s conduct constitutes a misappropriation of Plaintiff’s property, business value, or competitive advantage. See, e.g., Smith v. TCI Communications, Inc., 981 P.2d 690 (Colo. App. 1999); Heller v. Lexton-Ancira Real Estate Fund, Ltd.1972, 809 P.2d 1016 (Colo.App.1990), rev'd on other grounds, 826 P.2d 819 (Colo.1992); International News Service v. Associated Press, 248 U.S. 215, 39 S.Ct. 68, 63 L.Ed. 211 (1918). 48. CAT’s misappropriation is the cause in fact and proximate cause of damages to Plaintiff. WHEREFORE Plaintiff respectfully requests a declaratory judgment, injunctive relief, damages, expert witness fees, costs, prejudgment and post-judgment interest, reasonable attorney fees, and such other and further equitable or legal relief as may be just and proper. DATED: November 7, 2011 STEVENS, LITTMAN, BIDDISON, THARP & WEINBERG, LLC
[Original Signature in File] Craig A. Weinberg, #19030 Attorney for Plaintiff
