Bayco Products v. Coleman Cable

8/2/2019 Bayco Products v. Coleman Cable

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IN THE UNITED STATES DISTRICT COURTFOR THE NORTHERN DISTRICT OF TEXASDALLAS DIVISIONBAYCO PRODUCTS, INC.,

Plaintiff, CIVIL ACTION NO.V.

- - - ~ - - -

COLEMAN CABLE, INC.

A JURY IS DEMANDEDDefendant.

COMPLAINT FOR DECLARATORY JUDGMENTPlaintiff, 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 actionwould show:

I.PARTIES

1. Plaintiff Bayco Products, Inc. is a corporation organized and existing under thelaws 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 corporationorganized and existing under the laws of the State of Delaware, having its principal offices at1530 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 Texasrepresentatives based in Dallas, Texas and Irving, Texas. CCI may be served by delivering acopy 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 ih Street, Suite 620, Austin, Texas 78701, underRule 4(h), Fed. R. Civ. P.

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 forthhereinbelow, an actual and justiciable controversy exits between Plaintiff Bayco and DefendantCCI 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 theamount 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 under28 U.S.C. 1367.

5. Venue is proper in this court under 28 U.S.C. 1391.III.

BACKGROUND TO THIS CONTROVERSY6. 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 aresold 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 currentlywith Model Number BA-1005 [formerly HL-1005]) as shown in Pleading Exhibit A. Thesehalogen lighting products include an externally mounted lamp storage box. The formed plasticstorage box was designed solely to satisfy functional considerations relating to convenientlystoring 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-shellfashion "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 thetop half of the storage box on the opposing elongate edge for engaging compatibly formed lipson the lower half of the storage box for securing the halves together. Arcuately shaped feet areformed with the lower half of the storage box for affixing the cylindrical storage box to the like-shaped cylindrical metallic frame member of the light.

8. On or about March 27, 2012, Plaintiff Bayco received a demand from DefendantCCI 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 asPleading Exhibit B] and claiming that Bayco's Halogen Work Light (identified as part numberBA-1005) infringes Defendant CCI's '694 Patent, and demanding, inter alia, that Bayco ceaseand desist all marketing and all sales of such products, destroy its inventory of such products andprovide a full accounting of all sales revenues to Defendant CCI. Failure of Plaintiff Bayco tocomply 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 andjusticiable controversy currently between Plaintiff Bayco and Defendant CCI concerning thevalidity and infringement of the '694 Patent.

IV.BACKGROUND TO THE '694 PATENT

10. Plaintiff Bayco repeats and alleges the allegations contained in paragraphs 1through 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 Productsbeing displayed at various trade shows. Plaintiff Bayco had sales of Bayco's Product beginningas early as June 2002-and by the year end of 2002, Bayco had sold in excess of 2600 of itsBayco Product to stores such as Wal-Mart, Tractor Supply, Wallace Hardware and OrgillBrothers (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 anexternally 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 inventorof the '694 Patent (by Declaration dated on or about March 13, 2003), when in fact he was not-while 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 '764Application"), ultimately matured into the '694 Patent.

14. On or about May 21, 2003, while the '764 Application was pending before theU.S. Patent and Trademark Office, Mr. Leen's attorneys filed an Information DisclosureStatement disclosing a number of prior patents to the Patent Examiner, drawing particularattention to two prior patents of Mr. Leen, and concluding with the representation that suchpatents "are cited only as constituting the closest prior art of which Applicant and his attorneyare 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 timeperiod, and was involved in several trademark disputes with Plaintiff Bayco relating to lightingproducts, 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 ofthis prior history, Mr. Leen and DEI never took affirmative action against Plaintiff Bayco basedupon the '694 Patent. Upon information and belief, Mr. Leen assigned the '694 Patent to DEI onor about December 201 0.

16. Upon information and belief, on or about April 1, 2011, Defendant CCI purchasedthe assets of DEI, including the '694 Patent. Upon information and belief, since that timeDefendant CCI made no serious detailed investigation into the allegations raised on its letterdated March 27, 2012, nor into the circumstances surrounding the prosecution of the '694 Patentby Mr. Leen. Defendant CCI' s actions in this regard are willful and in reckless disregard ofPlaintiff Bay co's rights.

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17. Upon information and belief, neither Mr. Leen, DEI nor Defendant CCI have evermarked 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 INFRINGED18. 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 inventorwithholding from the U.S. Patent Office the prior existence of Bayco's Product having anexternally mounted lamp storage box, knowing of its materiality, and thereafter making aconscious decision to conceal and withhold such information from the U.S. Patent Office inorder to deceive the U.S. Patent Office, the '694 Patent would not have issued. Uponinformation and belief, the inventor knew that the Patent Examiner would have rejected the '764Application that resulted in the '694 Patent had the Patent Examiner been informed of the priorBayco Product having an externally mounted lamp storage box.

21. Upon information and belief, Plaintiff Bayco's Product does not infringe anyvalid claim ofDefendant CCI's '694 Patent.

VI.UNFAIR COMPETITION

22. Plaintiff Bayco repeats and realleges the allegations contained in paragraphs 1through 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 withPlaintiff Bayco by charging Plaintiff Bayco with unfounded claims of infringement of the '694Patent, with the purpose of unfairly and illegally attempting to exercise a patent right that itknows is not valid, in efforts to coerce Plaintiff Bayco to not manufacture and sell its Producthaving a storage box for replacement bulbs.

24. Upon information and belief, Plaintiff Bayco believes that Defendant CCI'sunfounded claims of infringement of the '694 Patent may be used by Defendant CCI withPlaintiff 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 ofDefendant CCI constitute

acts of unfair competition.VII.

INJUNCTIVE RELIEF26. 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 claimingthat its '694 Patent is valid and/or infringed by any Bayco Product or engaging in any conductdesigned 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 anyaction 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 conductdesigned 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 1through 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 Baycoand 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 adetermination that this is an exceptional case and an award of its reasonable attorney's fees as theprevailing party in this action.

32. Plaintiff Bayco further seeks to recover its costs, expenses, and reasonableattorney's fees under the common law, the laws of the State ofTexas, and otherwise.

IX.PRAYER FOR RELIEF

WHEREFORE, PlaintiffBayco prays for a declaration from this Court determining:(a) That the '694 Patent ofDefendant CCI is invalid under 35 U.S.C. 102 and/or 35

U.S.C 103;(b) That the '694 Patent of Defendant CCI is invalid for inequitable conduct by Mr.

Leen;



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(c) That Plaintiff Bayco's Products infringe no valid claim of the '694 Patent ofDefendant CCI;

(d) That if the '694 Patent is valid and infringed, no damages be awarded prior to thedate of this suit per 35 U.S.C. 287;

(e) That Defendant CCI, and all who are in active concert or participation withDefendant CCI, be enjoined from claiming infringement of the '694 Patent and/or claiming thatany 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 rightsto 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 Productsinfringe 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 reasonableattorney's fees pursuant to 35 U.S.C. 285 and 28 U.S.C. 1927, under the common law, Texaslaw, and otherwise; and,

(h) That such other and further relief as the Court deems just , equitable, and proper beawarded to Plaintiff Bay co.



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X.JURY DEMAND

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

COMPLAINT FOR DECLARATORY JUDGMENT67542vl

Richard L. SchwartzTexas Bar No. 17869500Thomas F. Harkins, Jr.Texas Bar No. 09000990WHITAKER CHALK SWINDLE & SCHWARTZ PLLC301 Commerce Street, Suite 3500Fort Worth, Texas 76102-4186(817) 878-0500 -Telephone(817) 878-0501- FacsimileATTORNEYS FO R PLAINTIFF,BAYCO PRODUCTS, INC.

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Bayco Products v. Coleman Cable