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					            Case 5:14-cv-00162-DAE Document 1 Filed 02/24/14 Page 1 of 11



                          UNITED STATES DISTRICT COURT
                        FOR THE WESTERN DISTRICT OF TEXAS
                                 San Antonio Division

                                                        )
LWRC INTERNATIONAL, INC.,                               )
                                                        )
                       Plaintiff,                       )
                                                        )
       v.                                               )   No. 5:14-cv-162
                                                        )
F&D DEFENSE LLC and CORBY HALL,                         )   JURY TRIAL DEMANDED
                                                        )
                       Defendants.                      )
                                                        )

                                          COMPLAINT

       Plaintiff, LWRC International, Inc. (“LWRCI”), by counsel, files this complaint against

defendants, F&D Defense LLC (“F&D”) and Corby Hall (“Hall”) (collectively referred to as

“defendants”), and alleges as follows:

                                            PARTIES

       1.       Plaintiff LWRCI is a Maryland corporation with its principal place of business in

Cambridge, Maryland.

       2.       Defendant F&D is a Texas limited liability company with its principal place of

business in New Braunfels, Texas.

       3.       Defendant Hall is a citizen of Texas.

                                    JURISDICTION AND VENUE

       4.       The Court has subject matter jurisdiction over the underlying action pursuant to

28 U.S.C. §§ 1331, 1338, 1367, and 15 U.S.C. § 1121(a) because the action is a violation of the

Lanham Act, 15 U.S.C. § 1051 et seq., and the common law. LWRCI also seeks a declaratory

judgment pursuant to the Declaratory Judgment Act, 28 U.S.C. § 2201, et seq., and the patent

laws of the United States, 35 U.S.C. § 100, et seq.
            Case 5:14-cv-00162-DAE Document 1 Filed 02/24/14 Page 2 of 11



       5.       Subject matter jurisdiction exists pursuant to 28 U.S.C. § 1332 in that LWRCI and

defendants are citizens of different states and the matter in dispute exceeds the sum or value of

$75,000, exclusive of interests and costs.

       6.       This Court has supplemental jurisdiction over the claims pursuant to 28 U.S.C.

§ 1367 because these claims are related to the underlying Lanham Act and the state law claims in

this action and form part of the same case or controversy under Article III of the United States

Constitution.

       7.       Personal jurisdiction over the defendants is proper in this District. The defendants

are citizens of Texas and are doing business in this state.

       8.       Venue exists in this District pursuant to 28 U.S.C. § 1391.

                                              FACTS

A.     LWRCI

       9.       LWRCI is headquartered in Cambridge, Maryland, utilizing three facilities

totaling over 250,000 square feet. Its manufacturing capability includes over 50 state-of-the-art

CNC machine centers, laser cutting machines, screw machines, robotic welding, and mil-spec

painting. LWRCI is registered with Lloyd’s Quality Registrar for ISO-9001 International

Standards compliance for Configuration Management. LWRCI’s management team is a group of

proven executives who collectively have more than 100 years experience in managing high

performance defense companies. Its engineering team consists of dedicated professionals who

have been nationally recognized in both the firearms and defense communities for the

development of LWRCI’s patented self-regulating short-stroke, gas-piston system.

       10.      Among other products that LWRCI manufactures and sells is the Rapid

Engagement Precision Rifle (“R.E.P.R.”), a full spectrum weapon system designed to put

7.62mm NATO rounds on target in a variety of roles. The R.E.P.R. rifle allows a marksman to

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         Case 5:14-cv-00162-DAE Document 1 Filed 02/24/14 Page 3 of 11



perform assaulter duty with the 16” barreled upper installed, and quickly switch to a sniper role

simply by changing to the 20” barreled upper. The extra upper receiver assembly can be carried

in a backpack and takes up less room and weighs less than carrying a separate rifle. The R.E.P.R.

rifle utilizes LWRCI’ patented self-regulating, short-stroke gas-piston operating system, ensuring

unparalleled reliability in the harshest theaters of operation. A side-mounted charging handle

allows the shooter to perform reloads without removing their eyes from the target, and prevents

any gas blowback to the face when using a suppressor. The ARM-R rails are easily removable

and reinstalled with a hex key and provide a 100% return to zero for optics and lasers. A review

in Shotgun News stated that “[t]hese Maryland-made rifles have established an excellent

reputation for quality….”

       11.     LWRCI sells its products, including the R.E.P.R., in interstate and foreign

commerce.

       12.     LWRCI is the owner by assignment of several U.S. patents, including the

following:``

               (a)    U.S. Patent No. 8,342,075, entitled “Receiver For An Autoloading

Firearm”, with the named inventor being Jesus S. Gomez, issued on January 1, 2013 (“the ‘075

patent”) (a true and correct copy of which is annexed as Exhibit 1);

               (b)    U.S. Patent No. D641,451, entitled “Bolt Carrier”, with the named

inventors being Jesus S. Gomez, Jason Lee Miller, Robert S. Schilling, Michael R. Llewellyn,

issued on July 12, 2011;

               (c)    U.S. Patent No. 8,375,616, entitled “Automatic Rifle Bolt Carrier With

Fluted Boss”, with the named inventors being Jesus S. Gomez and Jason Miller, issued on

February 19, 2013; and



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              (d)     U.S. Patent No. 8,387,513, entitled “Self Loading Firearm Bolt Carrier

With Integral Carrier Key And Angled Strike Face”, with the named inventors being Jesus S.

Gomez, Jason Lee Miller, Robert S. Schilling, and Michael R. Llewellyn, issued on March 5,

2013.

        13.   LWRCI’s patents, which correctly list the actual inventors, are a valuable asset of

the company and any attempt to disparage those assets would injure LWRCI.

B.      F&D and Hall

        14.   F&D manufactures and sells tactical rifles for intermediate to advanced shooters

in interstate commerce. F&D appears to be a company with a single employee, Hall.

        15.   Hall is the sole member of F&D and owns and controls the company.

        16.   As part of its business, F&D advertises, markets, and provides information to its

customers, potential customers, and the market regarding its products and the products of its

purported competitor, LWRCI, including through use of a website, http://www.fd-defense.com.

        17.   F&D purports to be a competitor of LWRCI. See,                     e.g., http://fd-

defense.com/index.php/design/fd-separation.

        18.   On or about July 17, 2013, Hall filed an action in the District Court for the 20th

Judicial District of Comal County, captioned Corby Hall v. LWRC International, LLC, Cause

No. 2013-0902B (“State Court Action”). Hall’s Original Petition included a cause of action for

defamation against LWRCI allegedly based on blog posts in which certain individuals

commented that Hall did not design the R.E.P.R. rifle. LWRCI’s answer denied the substance of

Hall’s allegations. Hall has since filed two amended petitions. LWRCI’s motion for summary

judgment in the State Court Action is pending.




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          Case 5:14-cv-00162-DAE Document 1 Filed 02/24/14 Page 5 of 11



C.     False and Misleading Statements

       19.     On or about February 18, 2014, defendants posted the following statement and

advertising material on F&D’s website:

               F&D Forces the Hand of LWRCI Ownership: Feb 18, 2014

               F&D has provided a convenient time for the owners and
               shareholders of LWRCI to move on and out of the industry.
               LWRCI has moved to sale ownership of its company on the heels
               of revelations that F&D is the actual inventor of its flagship
               Intellectual Property/Patent. Additionally, Defamation and
               Business Disparagement claims filed by F&D hit critical mass for
               LWRCI’s defense strategy and market-place integrity. F&D has
               asserted a liability owed to it by LWRCI in the amount of $12.4
               million. See Court filings below. (Developing...)

(Exhibit 2).

       20.     The February 18 post was made to advertise and market F&D and is materially

false and misleading. There have been no “revelations” that Hall or F&D is the actual inventor of

any LWRCI intellectual property or patents. No such evidence exists. Hall is not an inventor of

any patents assigned to LWRCI. The records of the U.S. Patent and Trademark Office do not list

Hall as an inventor on any patent, let alone any LWRCI patents. Also, the statement that LWRCI

is attempting to sell the company based on the allegations that Hall may have made in the State

Court Action is false and lacks any factual basis.

       21.     Defendants’ post indicates that their allegations are intended to “hit critical mass”

and adversely affect LWRCI’s “defense strategy and market-place integrity.” This evidences not

only defendants’ negligence and reckless disregard for the truth, but also actual malice intended

to cause harm and injury to LWRCI.

       22.      On February 21, 2014, LWRCI’s counsel wrote a letter to F&D and Hall. The

letter stated, among other things, that Hall and F&D have made defamatory and disparaging false

statement of facts concerning LWRCI and its IP portfolio to third persons. LWRCI demanded

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          Case 5:14-cv-00162-DAE Document 1 Filed 02/24/14 Page 6 of 11



that both Hall and F&D immediately remove the defaming and disparaging post and to cease and

desist in making false statements about LWRCI and its intellectual property rights. (Exhibit 2).

       23.     Later that day, Hall responded to the letter in an email to LWRCI’s counsel,

which stated, in pertinent part:

               Bwaaaahahaha!

               Go pound sand (isn’t that the way opposing lawyers talk to each
               other?) There will not be any ceasing or desisting of my or F&D’s
               actions or statements.


(Exhibit 3). The email confirms that defendants’ statements were willfully false, defaming and

disparaging and were made with the intent to injure LWRCI.

       24.     On or about February 23, 2014, defendants caused to be posted on the F&D

website a slightly revised statement and advertising, which read:

               F&D has provided a convenient time for the owners and
               shareholders of LWRCI to move on and out of the industry.
               LWRCI has moved to sale ownership of its company on the heels
               of revelations that F&D is the actual inventor of its flagship
               Intellectual Property which is incorporated into its M6-IC, M6-IC-
               SPR, M6A2, M6A2 SPR, M6-SL, PSD, M6.8-A2, M6.8-SPR,
               M6.8-UCIW, and REPR rifles, enabling its piston system to
               function properly. Additionally, Defamation and Business
               Disparagement claims filed by F&D have hit critical mass for
               LWRCI’s defense strategy and market-place integrity. F&D has
               asserted a liability owed to it by LWRCI in the amount of $12.4
               million.

(Exhibit 4). This revised statement republished the willfully false, defamatory and disparaging

statements about LWRCI.

       25.     On February 23, 2014, Hall sent an email to counsel for LWRCI in which, among

other things, he disputed the inventorship of LWRCI’s ‘075 patent and indicated that he would

be instituting an action to “correct” the inventorship of that patent. Hall’s email also stated that

he would attempt to inject himself into effort by LWRCI to sell the company.

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         Case 5:14-cv-00162-DAE Document 1 Filed 02/24/14 Page 7 of 11



D.     Results of Defendants’ Wrongful Conduct

       26.     Defendants’ public statements have disparaged and diminished the business of

LWRCI and caused confusion in the market in the United States.

       27.     LWRCI has received and had to respond to inquiries from customers and others

about defendants’ false and misleading statements.

       28.     The false and misleading statements adversely affected the ability of LWRCI to

compete and detracted from their reputation or goodwill in a fashion that improperly benefitted

defendants.

       29.     Defendants’ deceptions were material and likely to influence purchasing

decisions.    Defendants certainly made their statements to the market for the purpose of

influencing purchasing decisions and injuring the reputation of LWRCI and its products.

Defendants’ statements are confusing to LWRCI’s customers and potential customers and

discourage them from purchasing products from LWRCI. The amount of such lost sales and

opportunities will be an amount to be proven at trial.

       30.     The documents referred to herein are incorporated by reference.

                                           COUNT I
                                      (Lanham Act § 43(a))

       31.     The foregoing allegations of this complaint are incorporated by reference.

       32.     F&D’s products are used, sold, and/or offered for sale in interstate and foreign

commerce.

       33.     In connection with its goods or services, defendants used one or more words,

terms, names, symbols, or devices, alone or in combination, as well as false designations of

origin, false or misleading descriptions or representations of fact, which are in commercial

advertising or promotion (including without limitation its website), defendants misrepresent the


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          Case 5:14-cv-00162-DAE Document 1 Filed 02/24/14 Page 8 of 11



nature, characteristics, qualities, or geographic origin of its or LWRCI’s goods, services, or

commercial activities.

        34.     Defendants knowingly and willfully misrepresented to the public, inter alia, the

facts alleged above.

        35.     Defendants’ commercial messages and statements are either literally false or

literally true but ambiguous and have the tendency to deceive the market, the public, consumers,

potential consumers and competitors of LWRCI. Moreover, defendants’ advertising claims were

unsubstantiated and false.

        36.     Defendants’ misrepresentations were material and made in bad faith for the

purpose of deceiving the market, the public, consumers, potential consumers and competitors of

LWRCI and harming its competition, including LWRCI.

        37.     The misrepresentations deceive or are likely to deceive the market, the public,

consumers, potential consumers and competitors of LWRCI’s and defendants’ products. Further,

the misrepresentations are likely to influence the purchasing decisions of others and have caused

injury or are likely to do so.

        38.     By reason of their statements and conduct, defendants have willfully violated

section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), and LWRCI has suffered, and will

continue to suffer damage to its business, reputation, and good will and have lost sales and

profits that LWRCI would have made but for defendants’ acts.

        39.     LWRCI has been irreparably harmed by defendants’ acts in violation of the

Lanham Act and have suffered damages in an amount to be determined at trial.

                                          COUNT II
                                   (Business Disparagement)

        40.     The foregoing allegations of this complaint are incorporated by reference.


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         Case 5:14-cv-00162-DAE Document 1 Filed 02/24/14 Page 9 of 11



       41.     Defendants have knowingly made multiple and continuing false and misleading

statements and has omitted statements of material fact to the public.

       42.     Such statements have been made and are continuing to be made in the State of

Texas and elsewhere.

       43.     Defendants’ misrepresentations were made in bad faith for the purpose of

deceiving the market, the public, consumers, potential consumers and competitors and harming

LWRCI as their competition.

       44.     Defendants have disparaged the business and intangible personal property (e.g.,

patents) of LWRCI.

       45.     As a direct and proximate result of defendants’ conduct, LWRCI has suffered, and

will continue to suffer, damage to their business, reputation, and goodwill, in an amount to be

proven at trial in excess of $75,000. Further, defendants should be preliminarily and permanently

enjoined from making further disparaging statements.

                                           COUNT III
                                          (Defamation)

       46.     The foregoing allegations of this complaint are incorporated by reference.

       47.     Defendants have knowingly published multiple and continuing false and

misleading statements about LWRCI and were so understood by those reading the defamatory

statements. The defamatory statements are not true.

       48.     Such statements have been made and are continuing to be made to the public in

the State of Texas and elsewhere.

       49.     The defamatory statements were made and published by defendants negligently,

with reckless disregard for the truth, and/or with actual malice. The defamatory statements were




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         Case 5:14-cv-00162-DAE Document 1 Filed 02/24/14 Page 10 of 11



excessive, intemperate, unreasonable and abusive. They were made with the desire to injure the

business and reputation of LWRCI and its officers and employees.

        50.     As a direct and proximate result of defendants’ conduct, LWRCI has suffered, and

will continue to suffer, damage to their business, reputation, and goodwill, in an amount to be

proven at trial in excess of $75,000. Further, defendants should be preliminarily and permanently

enjoined from making further defamatory statements. In the event that defendants are found to

have made such statements with malice, LWRCI is entitled to an award of punitive damages in

an amount to be determined at trial.

                                           COUNT IV
                                   (Declaration of Inventorship)

        51.     The foregoing allegations of this complaint are incorporated by reference.

        52.     There is an actual and justiciable case or controversy between LWRCI and

defendants as to the inventorship of the ‘075 patent. Hall has claimed that he is the inventor of

that patent and will institute an action to allegedly “correct” inventorship. LWRCI seeks a

declaration of its rights.

        53.     Hall is not an inventor of the ‘075 patent or any other patent owned by LWRCI.

LWRCI is entitled to a declaratory judgment to that effect.

                                    REQUEST FOR RELIEF

        Plaintiffs respectfully request that this Court enter judgment against defendants and that

the following relief be granted:

        a.      judgment that defendants have violated the Lanham Act section 43(a);

        b.      treble damages and statutory damages;

        c.      a preliminary and permanent injunction against continued violation of the Lanham

                Act, including enjoining further false and misleading statements and corrective

                disclosures;
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               Case 5:14-cv-00162-DAE Document 1 Filed 02/24/14 Page 11 of 11



          d.       damages for business disparagement and libel;

          e.       punitive damages allowed by law;

          f.       declaratory judgment that Hall is not an inventor of any LWRCI patent, including

                   the ‘075 patent.

          g.       attorneys’ fees as allowed by law, including without limitation, 15 U.S.C.

                   § 1117(a);

          h.       costs pursuant to Fed. R. Civ. P. 54(d) or otherwise provided by law; and

          i.       such other relief as the Court deems just and appropriate under the circumstances.

                                           JURY DEMAND

          LWRCI hereby demands a jury trial on all issues so triable.

                                                    Respectfully submitted,

                                                    /s/ Caroline Cook Maxwell
OF COUNSEL:                                         Caroline Cook Maxwell
                                                    State Bar No. 24055341
Richard J. Oparil                                   PATTON BOGGS LLP
Kevin M. Bell                                       2000 McKinney Avenue
PATTON BOGGS LLP                                    Suite 1700
2550 M Street, NW                                   Dallas, TX 75201
Washington, DC 20037                                (214) 758-1500
(202) 457-6000
                                                    Richard G. Garza
Dated: February 24, 2014                            State Bar No. 07737200
                                                    Melodee L. Gruber
                                                    State Bar No. 24004680
                                                    JACKSON WALKER L.L.P.
                                                    112 E. Pecan, Suite 2400
                                                    San Antonio, TX 78205
                                                    (210) 978-7734

                                                    Attorneys for Plaintiff
                                                    LWRC International, Inc.




                                                  - 11 -
4829-6662-9400.

				
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