Boxx Answer

8/10/2019 Boxx Answer

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Page 1 – DEFENDANT’S ANSWER, COUNTERCLAIMS, AND

DEMAND FOR JURY TRIAL

Margaret E. Schroeder, OSB No. 025748Matthew D. Colley, OSB No. [email protected]; [email protected] HELTERLINE LLP805 SW Broadway, Ste. 1900

Portland, OR 97205Telephone: (503) 224-5560Facsimile: (503) 224-6148Of Attorneys for Plaintiff

Mark D. Downey, Pro Hac Vice [email protected] HARDT KOPF & HARR, P.C.500 N. Akard Street, Suite 3800Dallas, TX 75201-6659Telephone: (214) 855-7500

Facsimile: (214) 855-7584Of Attorneys for Plaintiff

UNITED STATES DISTRICT COURT

DISTRICT OF OREGON

WORKS ELECTRIC, LLC, an Oregonlimited liability company, and BRAD

BAKER , an individual,

Plaintiffs,

v.

BOXX CORPORATION,an Oregon corporation,

Defendant.

Case No. 3:14-cv-01773-ST

DEFENDANT’S ANSWER,

COUNTERCLAIMS, AND


For its answer to Plaintiffs’ Complaint, Defendant BOXX Corp. admits, denies,

and alleges as follows:

* * *





1.

Defendant is without sufficient information to either admit or deny the allegations

of material fact in paragraph 1 of the Complaint.

2.

Defendant admits the allegations of material fact in paragraph 2 of the Complaint.

3.

Defendant denies the allegations of material fact in the paragraph numbered as 4

in the Complaint.

4.

Defendant admits that Eric Vaughn Meyers (“Vaughn”) is the founder of a

company called BOXX Corp. and that he created the concept for a motorized moped that is

unlike any other similar product in the market. Defendant further admits that BOXX Corp.

engaged Plaintiff Brad Baker (“Baker”) for $600 per month and a small equity interest in BOXX

Corp., along with other individuals, to assist in building its motorized moped. Defendant further

admits that the terms of Baker’s engagement were memorialized in a written agreement that both

parties signed on March 7, 2010. Defendant denies, however, all other allegations of material

fact asserted in the paragraph numbered as 5 in the Complaint.

5.

Defendant admits that Baker assisted in the creation of its motorized moped, but

contends this relationship lasted through the Spring 2013. Defendant, however, denies all

remaining allegations of material fact asserted in the paragraph numbered as 6 in the Complaint.

* * *





6.

Defendant admits that Baker did in fact continue to work in the electric motorized

vehicle industry. Defendant denies that the “BOXX project” was completed as asserted in the

paragraph numbered as 7 in the Complaint. Defendant further denies that Baker created the

concept for the Rover independent of the work Baker performed for Defendant and denies all

remaining allegations of material fact asserted in the paragraph numbered as 7 in the Complaint.

7.

Defendant admits the allegations of material fact asserted in the paragraph

numbered as 8 in the Complaint regarding the June 2014 demand letter, except that, contrary to

the assertion therein, the Defendant’s claims as asserted in the demand letter are each true and

correct. Defendant further denies the allegations that the “Rover” product is completely unique

and distinct from the Defendant’s product and is only similar in a very broad sense.

8.

Defendant admits that its product is operated in a seated position and the

Plaintiffs’ product is ridden standing up. Defendant, however, denies all remaining allegations

of material fact asserted in the paragraph numbered as 9 in the Complaint.

9.

Defendant admits that its product, as currently offered, is a dual-wheel, all-wheel

drive system that is operated in a seated position while the Plaintiffs’ product can be ridden

standing up. However, Defendant denies all remaining allegations of material fact asserted in the

paragraph numbered as 10 in the Complaint.

* * *





10.

Defendant denies the allegations of material fact asserted in the paragraph

numbered as 11 of the Complaint.

11.

Defendant admits the allegations of material fact asserted in the paragraph

numbered as 12 of the Complaint.

12.

Defendant denies that Plaintiffs are entitled to any of the relief requested in their

First Claim for Relief. Defendant further denies that Plaintiffs are entitled to the declarations

requested of the Court.

13.

Defendant denies that Plaintiffs are entitled to the recovery of attorneys’ fees or

any relief whatsoever based on the claims asserted in the Complaint.

COUNTERCLAIMS

14.

Defendant BOXX Corp. (“BOXX”) was founded in 2009 by Vaughn.

BOXX Corp. is a small start-up, industrial engineering firm, primarily focused on the two-

wheeled vehicle market.

15.

BOXX-branded product solutions utilize the most advanced technology in the

personal portable transportation industry. BOXX incorporates its proprietary, advanced design

engineering into new technology and offers industry firsts and performance solutions not

otherwise available in the personal vehicle market.

* * *





16.

BOXX Corp. has designed and engineered industry-leading, proprietary

technology products and components.

17.

Among the many innovations created by BOXX is a patented motor design,

weighing just 10.2 pounds, yet yielding the same performance as an industry standard 25 pound

motor.

18.

BOXX has incorporated its innovative motor design into its “1 Meter Vehicle

BOXX” personal compact electric scooter.

19.

Every conceptual element and part of the BOXX personal compact electric

scooter and its market and engineering approach and business plan was designed and developed

by Vaughn prior to March 2010.

20.

In late 2009, Vaughn approached Baker with several CAD model renderings of a

compact electric scooter that BOXX had designed and was looking to produce and market.

BOXX’s unique electric scooter design incorporated proprietary technology and engineering

approach that had also been designed and developed by BOXX.

21.

Vaughn knew Baker had previously built a chopper bike that had an electric

motor, a custom personal endeavor Baker referred to as his Neuromancer bike.

* * *





22.

When Vaughn approached Baker to discuss the possibility of Baker providing

assistance to BOXX in the assembly of its compact electric scooter, Vaughn had already

prepared a complete rendering of BOXX’s personalized scooter as memorialized in detail in the

original contract with Baker.

23.

BOXX retained Baker in March 2010, to assist BOXX in the assembly of the

engineering assembly and design renderings made by Vaughn for the “1 Meter Vehicle BOXX.”

BOXX and Baker memorialized the relationship in a series of written agreements that set out the

terms under which Baker would provide certain production services to BOXX.

24.

For clarity, the rendering prepared by BOXX for its compact electric scooter was

included in the written agreements by and between Baker and BOXX. This was done to serve as

a reference to the scooter product for which Baker was being retained to assist in fabricating for

BOXX.

25.

Pursuant to the written agreements, Baker was to receive $600.00 a month for a

minimum of 6 months for his work on the BOXX compact electric scooter. Ultimately, due to

business needs, these payments to Baker continued for over 2.5 years, through February of 2013.

26.

BOXX also paid Baker an additional $100.00 a month to compensate Baker for

the storage of certain parts and components owned by BOXX at Baker’s shop since Baker’s

facility was largely unused and available.

* * *





27.

The written contract further gave Baker the opportunity for a 2% equity award in

BOXX Corp.

28.

Pursuant to the contract, 2% was to be given to Baker at the completion of Phase I

of the project, completion of Phase I being defined as the delivery of 4 functional BOXX units.

29.

As a start-up company, BOXX’s proprietary knowledge, know-how, and

techniques were central to its value and future prospects. Because of this, the written agreements

by and between BOXX and Baker included strict confidentiality provisions. The agreements,

attached as Exhibit A, further included terms that: (1) prohibited Baker from using BOXX’s

resources and know-how to further Baker’s own efforts; and (2) competing with BOXX during

the relationship and for four years or 48 months after the termination of Baker and BOXX’s

relationship, which would be marked by BOXX’s receipt of a signed Termination Certification

included in Baker’s contract.

30.

More specifically, the executed Confidentiality Agreement provided that BOXX

was to solely maintain all rights, title and ownership to any and all “inventions, process, designs,

technology, information, software, documentation, illustrations, artwork, photographs,

trademarks, materials, original works of authorship or trade secrets that [Baker may] conceive,

develop or reduce to practice, during the Relationship, whether alone or jointly with others, and

which relate to the business of [BOXX].”

* * *





31.

The terms of the written agreement between the parties established that all the

work performed by Baker from the inception of the relationship with BOXX in March 2010 were

to be deemed “works-made-for-hire” as defined under the U.S. Copyright Act of 1976, as

amended (the “Act”), and as a result, vested solely with BOXX.

32.

BOXX awarded Baker the equity in the Summer of 2012 despite the fact that:

(1) Phase I was not complete because all four units had not been delivered; and (2) Baker caused

a fire destroying one of the four units.

33.

Baker demanded that he receive an additional $4,000 and .25% of BOXX stock to

complete the Phase I prototypes. Because BOXX had already paid Baker’s monthly salary,

given Baker 2% equity, and had to figure out how to pay for the replacements of the assets

destroyed in the fire caused by Baker, BOXX decided that a suspension of the project was

necessary in order to evaluate the situation. In June 2012, BOXX made the strategic

determination to refocus the remaining project assets to fundraising efforts, despite not being in

proper position with its four deliverable units for funding. While this evaluation occurred and

new money was raised, BOXX requested that Baker temporarily stop his work on the project

while BOXX determined how it would pay for the replacement assets.

34.

Baker represented that during this interim period he was going to school. Baker

further represented that the only work he was performing had nothing to do with vehicles and/or

any competitive markets, or even starting a new company.

* * *





35.

Specifically, Baker represented that he was working for Wyden + Kennedy to

build “props” for their advertising clients and that he would be ready to get back to work when

BOXX was ready to move forward with the next stage of production.

36.

BOXX had planned to resume the project as soon as the evaluation was complete

and Baker’s work schedule would allow, factoring in Baker’s contractual obligations to Wyden +

Kennedy. BOXX had planned on this occurring by September of 2012.

37.

However, BOXX was forced to postpone that next stage of work until February

2013 because of Baker. It took BOXX until January 2013 to raise enough capital to replace the

assets that Baker burned down and the additional $4,000 Baker claimed to need to complete the

job. When BOXX prepared to resume the project, Baker raised his demand from $4,000 to

$6,000 and indicated an unwillingness to complete the project without this additional fee, despite

having already been paid fully under the original contract. This demand left BOXX once more

scrambling to re-arrange its budget to pay Baker more than the original contract price.

38.

In February 2013, BOXX agreed to pay Baker $6,000 in order to get the project

moving once more. Despite its normal business practice of paying half down and half upon

delivery, BOXX paid the $6,000 as a lump sum. It was BOXX’s understanding that Baker

would resume work after receiving the payment.

* * *





39.

As of February 2013, neither party had taken any action to terminate the written

contract or any terms of the confidentiality agreement. Baker was never released from his

contract, which required his confidentiality and obligated him not to use BOXX’s resources to

further his own efforts or the efforts of BOXX’s competitors.

40.

Neither party took any action to terminate the contractual agreement, even at the

point that the BOXX prototype was rebuilt.

41.

In the Spring of 2013, BOXX wanted an update on the project’s progress. BOXX

requested the opportunity to review the components and materials that Baker was holding for

BOXX and supposedly using in his work for BOXX. Baker, however, refused to allow BOXX

access to his facilities. Baker claimed his contractual obligations with Wyden + Kennedy

required his work on advertising props to remain confidential and that BOXX could not be

allowed on his premises.

42.

BOXX’s skepticism of Baker grew as time passed and Baker never delivered the

completed units. Although BOXX did its best to maintain communications with Baker during

this time, Baker evaded BOXX’s attempts to view the progress of Baker’s work, check in on

their assets, to secure delivery of the units Baker was supposed to deliver, and to reclaim

BOXX’s proprietary information. Baker stated that he needed just 30 days with the support of

BOXX to complete the rebuild.

* * *





43.

During this time, Baker was actually using BOXX’s design and engineering

know-how and other assets to build the “Rover,” which he and his previously undisclosed

company released in June 2013.

44.

Baker did not deliver to BOXX the units they had paid him to build until he had

stolen what he needed from BOXX to complete his Rover in late Spring or early Summer 2013.

45.

Although Baker claims the Rover was inspired by his Neuromancer bike, the

Rover shares important features with the BOXX product. Like BOXX’s prototype, the Rover

relies on a low voltage DC system developed by BOXX. The Neuromancer utilized a high

voltage AC system. In fact, the only similarity between the Neuromancer and the Rover is that

both fall within the general category of electric vehicles. This is particularly ironic, given that

one tactic Baker used to evade BOXX’s requests for the completed units was to claim that the

low voltage system was ineffective and demand BOXX consider using a higher 72 voltage

system.

46.

Additionally, Baker’s Rover utilizes similar component technologies as BOXX’s

prototype. For example, BOXX created custom controllers to be used in its products. Baker was

given access to these controllers’ use profiles and firmwares and the proprietary materials behind

their design implementation so that he could build BOXX’s units. The Rover’s controllers’

custom use profiles and specs are inexplicably and strikingly similar to BOXX’s components

developed and/or employed by BOXX in designing its control systems. Unlike the BOXX and

* * *





Rover DC systems, these components and controller systems are not part of the Neuromancer

bike’s design and operation.

47.

Given the substantial similarities between the two products, it is clear that Baker

used his knowledge of BOXX’s proprietary materials, techniques, know-how, engineering

approaches, business plan, marketing approach, product market space and BOXX’s technology

in the Rover.

48.

Moreover, while Baker was developing his Rover, he used a method of

prototyping that was virtually identical to BOXX’s method of prototyping. While supposedly

working for BOXX, Baker had been provided BOXX’s proprietary engineering practices and

prototyping approach. This approach involves using all aluminum grade construction, producing

multiple units at a time to demonstrate a level of product manufacturability, and implementing a

full CAD assembly design. This is particularly odd, not only because Baker had no previous

experience in similar systems, but because Baker had stalled building BOXX’s units by initially

arguing against continuing to use all aluminum builds and prototyping multiple units at the same

time he was using these methods in building the Rover.

49.

Given the complexity of designing electric vehicles like the Rover and BOXX’s

prototype, it is clear that Baker was conceptualizing, developing, and producing the Rover while

being paid by BOXX and retaining complete control over BOXX’s prototypes and assets.

* * *





50.

Not only did Baker develop his new competing company while “working” for

BOXX, Baker added insult to injury by strategically timing the Rover’s release based on his

knowledge of BOXX’s confidential business plans, including its time frame for development,

to gain a competitive edge and market timing pursuant to the forecasts prepared by BOXX.

Baker even continued accessing BOXX materials through his email without BOXX’s permission

after the Rover was released.

51.

BOXX did not learn of Baker’s involvement with the Rover until March 2014,

when a potential BOXX investor found a public press article about Baker where he mentioned

BOXX. In the article, attached as Exhibit B, Baker admits he learned about designing and

manufacturing electric vehicles through his relationship with BOXX. The article states:

But an opportunity at another Portland company showed Brad the practicality of thinking small. He landed an engineering gig at Boxx Corp,a tiny company developing a tiny product: the “1-meter vehicle,” anelectric scooter that basically looks like a computer case with wheels.Unlike at GM, Brad loved the product. Like at GM, business prospectslooked dismal. Enamored with the idea of pint-sized electrictransportation, but disillusioned with the financial ledgers at Boxx,Brad decided to break out on his own.

This article not only disparaged BOXX, it damaged BOXX’s investor prospects while increasing

Baker’s prospects.

52.

When BOXX learned of Baker’s deception, BOXX sent a cease and desist letter

to Baker in an attempt to avoid litigation, protect its interests, and uphold its contract. Rather

than upholding his contract with BOXX or engaging in meaningful settlement negotiations,

* * *





Baker raced to the courthouse to be the first to file suit to circumvent BOXX’s goals and attempt

to gain a strategic advantage over BOXX once again by being plaintiff.

FIRST COUNTERCLAIM

(Breach of Contract)

53.

BOXX incorporates by reference the factual allegations contained in the

preceding paragraphs.

54.

BOXX and Baker memorialized their contract on March 7, 2010 by signing

written instruments to reflect their agreement, which attached to this Answer as Exhibit A. All

conditions precedent have occurred or been performed.

55.

The agreement provides that Baker’s fee and equity in BOXX would be paid

subject to the completion of program milestones.

56.

The written agreement by and between BOXX and Baker specifically provided

that Baker was to hold in the strictest confidence and was further not to disclose to any third

party:

…any information disclosed during the Relationship, by or relating to theCompany or any Third Party, whether of a technical, engineering, patents,marketing, business methods, programs or other nature (including, withoutlimitation, trade secrets, know-how, and information relating to thetechnology, clients, customer base, business plans, marketing activities,finances, product development and designs present and forthcoming…),that generally is not know[n] to the public.

* * *





57.

The confidentiality and non-disclosure of BOXX’s information was a condition to

BOXX’s engagement of Baker, and was at the core of the written agreements by and between

Baker and BOXX.

58.

Similarly, the agreement states that BOXX would provide Baker an email account

for the purposes of facilitating correspondence regarding its business and prototype and keeping

all digital materials within BOXX’s control. The agreement limits the use of the email account

to these purposes.

59.

The agreement also includes non-compete and non-solicit covenants that

restricted Baker from competing with the business of BOXX, diverting business from BOXX or

disparaging BOXX, its products or personnel of BOXX, for 48 months after the termination of

Baker’s relationship with BOXX. Although Baker was supposed to send BOXX a signed

termination letter to end their relationship, Baker has yet to deliver BOXX a signed letter.

60.

Baker first breached the agreement after he had been fully compensated under the

contract when he refused to perform until he had received an additional $6,000 and .25% interest

in BOXX.

61.

Baker committed his second breach when, at the same time as he was providing

services as a primary contractor for BOXX, Baker surreptitiously created a head-to-head

competing product now known as “Rover” (a term which originated at BOXX), an electric

* * *





scooter that is substantially similar to BOXX’s product in that the products share: (1) virtually

the same features including a drive train, controllers, electronics, and programming; (2) a

manufacturing procedure using all aluminum builds and multiple unit engineering and

prototyping; and (3) a business-model including the same marketing approach, use, product

specs, target market, and cost.

62.

Baker additionally breached the agreement when he accessed BOXX’s system

through the email account BOXX provided him for his own purposes as developer of the Rover

rather than to represent and disclose all his actions to BOXX.

63.

Finally, Baker breached the written agreement when he disparaged BOXX in a

public press article.

64.

As a result of Baker’s breach, BOXX has suffered significant actual damages

including: (1) paying Baker the contracted price for work he failed to fully perform; (2) paying

Baker $6,000 more than the awarded contract price; (3) damage to investor prospects; (4) a loss

of BOXX’s potential profits; (5) damage to the value of BOXX’s proprietary information and

invested in and developed techniques; and (6) damage to assets.

SECOND COUNTERCLAIM

(Violation of U.S. Copyright Act of 1976)

65.



* * *





66.

Baker’s efforts were part of a contribution to a collective work, were specifically

ordered or commissioned by BOXX, and were made under the terms of the Confidentiality

Agreement. This arrangement complies with the elevated works-made-for-hire standards for

independent contractors under the Act.

67.

All the work performed by Baker from the inception of the relationship with

BOXX in March 2010 were deemed “works-made-for-hire” as defined under the U.S. Copyright

Act of 1976, as amended (the “Act”), and thus vested solely with BOXX (see Ex. A, Section 3 of

the Confidentiality Agreement).

68.

As a result, all intellectual property stemming from the inventions, creations,

developments and progress Baker made on any competing products, including but not limited to

the Rover electric scooter now being marketed and sold by Plaintiff Works Electric, LLC

(“Works”), are the sole property of BOXX.

69.

However, even if the Rover was not a work-made-for-hire, the Rover infringes on

BOXX’s copyright on its prototype and component designs, business product model and market

segment, which are original works of authorship fixed in a tangible mean of expression and

provided to Baker, by using Rover’s substantially similar design with virtually identical

components that could only have been derived from BOXX’s copyrighted design and business

model.

* * *





70.

Baker knew and intended to infringe on BOXX’s copyright, as evidenced by the

fact that, at the same time Baker was providing services as a primary contractor with BOXX,

Baker was also creating a head-to-head competing product now known as “Rover” (a term which

originated at BOXX), an electric scooter whose drive train, controllers, electronics,

programming, use, target market, cost, business-model, and marketing approach are substantially

the same as those of the BOXX product.

71.

As a result of Baker’s breach, BOXX has suffered significant actual damages

including: (1) a loss in value of potential licensing agreements for its technologies; (2) damage

to investor prospects; (3) a loss of BOXX’s potential profits; (4) loss of market position; and

(5) damage to the value of BOXX’s proprietary information.

72.

Because Works infringed on BOXX’s copyright by marketing and selling the

infringing Rover, BOXX is entitled to recover its actual damages as well as any profits of Works

under 17 U.S. Code § 504(a).

73.

Because Baker knowingly and intentionally infringed on BOXX’s copyright,

BOXX is entitled to recover statutory damages of $750 to $150,000 per infringement under 17

U.S. Code § 504(c).

* * *





THIRD COUNTERCLAIM

(Oregon Trade Secrets Act)

74.



75.

BOXX’s designs, devices, manufacturing techniques, prototyping methods and

other proprietary information constitute trade secrets as defined by ORS 646.461(4) because

their value was, in large part, due to: (1) the fact that they were not generally known to the

public or to competitors; and (2) BOXX took reasonable efforts under the circumstances to

maintain their secrecy, including having employees and independent contractors sign contracts

imposing a duty not to disclose such secrets and limiting digital access to work-related activities.

76.

Baker’s use of BOXX’s trade secrets and disclosure of those trade secrets to

Works without BOXX’s consent constitutes a misappropriation under ORS 646.461(2) because

Baker knew that he had a duty to maintain BOXX’s trade secrets and limit their use.

77.

Works’s use of BOXX’s trade secrets without BOXX’s consent constitutes a

misappropriation under ORS 636.461(2) because: (1) Works’s knowledge of BOXX’s trade

secrets were derived through Baker; and (2) Works knew that Baker owed a duty to BOXX.

78.

Baker’s misappropriation and use of BOXX’s trade secrets for his own benefit

* * *





directly violate the Oregon Trade Secrets Act, which provides further remedies for companies

whose trade secrets have been misappropriated.

79.

Works and Baker continue to misappropriate BOXX’s trade secrets and refuse to

comply with BOXX’s requests that they cease and desist this misappropriation. BOXX has and

will continue to suffer irreparable harm if this is not stopped.

80.

In Section 9 of Exhibit A attached hereto, Baker admitted that BOXX would

suffer irreparable harm and is entitled to an immediate injunction to restrain a breach or prevent a

potential breach of confidentiality from occurring as a part of his contract with BOXX.

81.

ORS 646.463 authorizes the Court to enter a temporary, preliminary, and/or

permanent injunction to protect a trade secret and eliminate the commercial advantage that

would otherwise be derived from the misappropriation.

82.

Because BOXX has demonstrated a likelihood of success on the merits, that it

will suffer irreparable harm in the absence of immediate injunctive relief, and that equitable

considerations weigh in favor of imposing an injunction, BOXX requests that the Court impose

an injunction preventing Works and Baker from continuing to misappropriate BOXX’s trade

secrets, order that Works and Baker turn over all of BOXX’s proprietary materials, including any

materials that utilize or reflect BOXX’s proprietary materials, and make any other orders this

Court finds necessary to protect BOXX’s trade secrets.

* * *







87.

Baker and Works have and continue to intentionally exercise control over this

information in a manner inconsistent with BOXX’s rights as owner of this information.

88.

Additionally, Baker intentionally exercised exclusive dominion and control over

BOXX’s materials and prototypes to the exclusion of BOXX when Baker refused BOXX access

to this property in the Spring and Summer of 2013.

89.

BOXX did and does not consent to this significant interference.

90.

As such, BOXX is entitled to recover the full value of its property prior to

Plaintiffs’ conversion.

FIFTH COUNTERCLAIM

(Trespass to Chattels)

91.



92.

In the alternative, the interference described in the Fourth Counterclaim above is a

trespass to chattels.

93.

Baker and Works’ interference is and was a substantial factor in causing BOXX’s

harm.

* * *





94.

As such, BOXX is entitled to damages based on the actual impairment to and lost

use of its property.

SIXTH COUNTERCLAIM

(Negligence)

95.



96.

Baker had a contractual duty to provide certain services to BOXX. As part of

these services, Baker received temporary possession of BOXX’s assets for his use in completing

the services.

97.

While in possession of these assets, a fire destroyed some of BOXX’s assets.

98.

Baker had a duty to reasonably protect these assets while they were in his

possession and to use reasonable care in performing his services.

99.

Baker breached that duty when he caused a fire that destroyed these assets.

100.

As a proximate cause of this breach, BOXX suffered damages from losing these

assets and having to replace them.

* * *





SEVENTH COUNTERCLAIM

(Computer Fraud and Abuse Act)

101.



102.

BOXX’s computer, including its data storage facility and communications

facility, is a “protected computer” as defined by 18 U.S.C. §§ 1030(e)(1) and (e)(2) because it is

used in and/or affects interstate commerce and/or communications.

103.

Baker exceeded his authorized access to BOXX’s computer when he accessed it

after releasing the Rover and obtained information from it.

104.

This action was intentional, constituting a violation of 18 U.S.C. § 1030(a)(2).

105.

By exceeding his authorized access and obtaining valuable information and data,

Baker furthered a fraud on BOXX.

106.

Because Baker exceeded his authorization knowingly and with the intent to

defraud, Baker’s actions also constitute a violation of 18 U.S.C. § 1030(a)(4).

* * *





107.

These actions caused significant loss, as defined in 18 U.S.C. § 1030(a)(2)

including the cost of responding to Baker’s violations of this statute, conducting a damage

assessment, lost revenue, and lost proprietary information.

108.

Baker’s conduct has caused a loss to BOXX during a one-year period aggregating

at least $5,000.

109.

As a result, BOXX seeks to recover all relief to which it may be entitled under

18 U.S.C. § 1030(g) including compensatory and punitive damages.

EIGHTH COUNTERCLAIM

(Electronic Communications Privacy Act – 18 U.S.C. §§ 2701 - 2712)

110.



111.

BOXX’s computers, servers, and operating system are facilities through which

electronic communication services are provided to its users and customers.

112.

Baker knowingly and intentionally accessed these facilities in excess of any

authorization granted by BOXX.

* * *







119.

Plaintiffs had an appreciation and knowledge of the benefits they derived from

their actions and the fact that they were diminishing BOXX’s ability to derive similar benefits.

120.

It would be inequitable for Plaintiffs to retain the profits they derived from their

unauthorized and damaging use of BOXX’s assets.

121.

Therefore, Plaintiffs should disgorge their ill-gotten profits.

122.

Additionally, it would be inequitable for Baker to keep the money and equity he

received from BOXX, in advance, for work that was never completed and, in reality, was used to

benefit himself and Works rather than BOXX.

123.

As a result, Baker should be forced to return the stock and the amount paid.

124.

As a result of Plaintiffs’ actions, BOXX has suffered and continues to suffer

irreparable harm for which BOXX has no adequate remedy at law, and which will continue

unless Plaintiffs’ actions are enjoined.

TENTH COUNTERCLAIM

(Fraud)

125.



* * *





126.

Baker represented to BOXX that: (1) he was performing his contractual

obligations when, in fact, he was working to benefit himself and Works; and (2) Baker could not

allow BOXX access to his facilities where BOXX assets were being stored because of

contractual obligations to Wyden + Kennedy, when no such contractual obligation was

implicated.

127.

Baker knew these statements were false when he made them.

128.

Baker promised to continue working when: (1) he received $4,000 and .25%

more equity; and (2) he received $6,000. Baker also repeatedly promised he would deliver

finished work product to BOXX in an expedient manner.

129.

Baker made those promises with no intention of fulfilling them and the

knowledge that he would not do so.

130.

Baker intended that BOXX would: (1) continue to trust him with proprietary

information; (2) continue providing him property necessary for his contractual service; and

(3) delay its development and business plan.

131.

BOXX justifiably relied on the truth of these representations and promises in this

manner.

* * *





132.

This proximately caused BOXX’s injuries.

133.

BOXX is entitled to recover compensatory damages and punitive damages as a

result.

ELEVENTH COUNTERCLAIM

(Defamation)

134.



135.

Baker’s statements published in the public access article that BOXX’s “business

prospects looked dismal” and that BOXX’s financial ledgers were in a poor state were and are

false.

136.

These statements ascribe characteristics that are incompatible with the proper

conduct of BOXX’s business.

137.

These statements are defamatory per se because they are likely to lead people to

question BOXX’s fitness to perform its job.

138.

These statements harmed the overall value of the business and diminished its

investor prospects.

* * *





139.

Baker knew of the statements falsity or acted in knowing disregard of the

statements falsity.

140.

BOXX is entitled to actual and punitive damages based on these statements.

141.

BOXX demands a jury trial.

PRAYER

WHEREFORE, having fully answered Plaintiffs’ Complaint, Defendant BOXX

prays for judgment in its favor on Plaintiffs’ Complaint in its entirety. BOXX further requests

that the Court:

(1) order Plaintiffs to return and relinquish all ownership rights in BOXX,

including but not limited to the 2.0% common stock in BOXX;

(2) order Plaintiffs to return and cease use of all BOXX trade secrets and

Confidential Information including any customer, pricing, technology or market data specifically

generated or licensed by BOXX;

(3) order Plaintiffs to deliver any Confidential Information and other

proprietary assets of BOXX, including all technology, know-how, prototypes, production version

and other assets relating to the “Rover” product which are based on BOXX’s confidential

information;

(4) order Plaintiffs to cease all efforts to market and sell ANY COMPETING

PRODUCT, INCLUDING the “Rover” scooter product;

(5) disgorge the Plaintiffs of their profits;

* * *





(6) award BOXX all damages, both at law and equity, to which BOXX can

show itself entitled to, including compensatory, statutory, and punitive damages;

(7) award BOXX all attorneys’ fees and costs incurred in defending and

pursuing the claims asserted herein; and

(8) such other relief as the Court deems just and equitable.

DATED this 7th day of November, 2014.

BLACK HELTERLINE LLP

By: s/Margaret E. SchroederMargaret E. SchroederOSB No. 025748(503) 224-5560Of Attorneys for Defendant

MUNSCH HARDT KOPF & HARR, P.C.

By: s/Mark D. DowneyMark D. DowneyPro Hac Vice(214) 855-7500Of Attorneys for Defendant

* * *



CERTIFICATE OF SERVICE

I hereby certify that I served a true and correct copy of the foregoing

DEFENDANT’S ANSWER, COUNTERCLAIMS, AND DEMAND FOR JURY TRIAL

upon:

Phil Nelson, Esq.Darian A. Stanford, Esq.E-mail: [email protected]; [email protected] SLINDE NELSON STANFORD 111 S.W. 5th Avenue, Suite 1740Portland, OR 97209

Of Attorneys for Plaintiffs

by mailing a true copy thereof in a sealed, first-class postage prepaid envelope,addressed to said attorneys’ addresses as shown above and deposited in the United States Mail atPortland, Oregon on the date set forth below.

by causing a true copy thereof to be hand-delivered to said attorneys’addresses as shown above on the date set forth below.

by sending a true copy thereof via overnight courier in a sealed, prepaidenvelope, addressed to said attorneys’ address as shown above on the date set forth below.

by faxing a true copy thereof to said attorneys’ facsimile numbers as shownabove on the date set forth below.

by sending a true copy thereof via electronic mail to said attorneys’ addressesas shown above on the date set forth below.

electronically via USDC CM/ECF system on the date set forth below.

DATED this 7th day of November, 2014.

BLACK HELTERLINE LLP

By: s/Margaret E. SchroederMargaret E. SchroederOSB No. 025748(503) 224-5560Of Attorneys for Plaintiff

* * *

Documents

Boxx Answer