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Ex. rel. Palmer v. Trimedica, Purquality - False Marking

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Ex. rel. Palmer v. Trimedica, Purquality - False Marking Powered By Docstoc
					1    NEWPORT TRIAL GROUP
     A Professional Corporation
2    Ryan M. Ferrell, Bar No. 28429
3    rferrell@trialnewport.com
     895 Dove Street, Suite 425
4    Newport Beach, CA 92660
5    Tel: (949) 706-6464
     Fax: (949) 706-6469
6

7    Attorneys for Plaintiff
8
                               UNITED STATES DISTRICT COURT
9
                                   DISTRICT OF ARIZONA
10

11
   UNITED STATES OF AMERICA, Ex.                 Case No.
12 Rel., AMBER PALMER,

13                                               COMPLAINT FOR FALSE PATENT
                  Plaintiff,                     MARKING
14

15                vs.

16 TRIMEDICA INTERNATIONAL, INC.;
17 PURQUALITY,         LLC; MARTHA
   CHRISTY; JOSEPH CHRISTY;     and
18 DOES 1-10, Inclusive,
19
                  Defendants.
20

21

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                                    I.    INTRODUCTION
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           1.     This lawsuit is brought to stop repeat-offending defendants from
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     continuing to lure unwary consumers into paying an inflated price for a product,
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     “DeepDreams”, that Defendants claim is patented. Specifically, Defendants advertise
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     that DeepDreams is a “Patented Formula! Doctor Recommended!”
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                                                 -1-
                                COMPLAINT FOR FALSE PATENT MARKING
1           2.    Defendants’ claims are false – DeepDreams is not now, and has never
2    been, patented.     Further, DeepDreams has never even been subject to a patent
3    application. Moreover, the misleading nature of Defendants’ advertising, paired with
4    Defendants’ marketing sophistication, and Defendants’ repeat violations of 35 U.S.C.
5    §292 show that Defendant’s false marking was intentional.
6

7                         II. JURISDICTION, VENUE, AND STANDING
8           3.     This Court has subject matter jurisdiction pursuant to 35 U.S.C. (b) and 28
9    U.S.C. § 1338(a).
10          4.     Defendants are subject to personal jurisdiction in this District because
11   Defendants conduct business in this district and have their corporate offices in this
12   district and the exercise of jurisdiction over them would not offend traditional notions
13   of fair play and substantial justice.
14          5.     Venue is proper in this District under 28 U.S.C. §§1391(c) and 1395(a),
15   because Defendants’ product that is the subject of this Complaint is advertised for sale,
16   offered for sale, and sold within this judicial district. Further, Defendants have their
17   corporate offices in this district
18         6.     Plaintiff possesses the requisite standing required by Article III of the
19   United States Constitution pursuant to 35 U.S.C. §292(b), which confers upon “any
20   person” the right to sue for civil monetary penalties, restitution, and injunctive relief for
21   false patent marking.
22

23                                           III. THE PARTIES
24          A.     Plaintiff
25          7.     Plaintiff is an Arizona resident who believes in the patent system and in the
26   importance of a fair and competitive market for the manufacture, marketing, sale, and
27   distribution of consumer products.
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                                                  -2-
                                 COMPLAINT FOR FALSE PATENT MARKING
1          B.    Defendants
2          8.    Defendant TriMedica, Inc. is a company of unknown origin that
3    manufactures, advertises, distributes, and sells dietary supplements, including
4    DeepDreams, in this District.
5          9.    Defendant PurQuality, LLC. is a company of unknown origin that
6    manufactures, advertises, distributes, and sells dietary supplements, including
7    DeepDreams, in this District.
8          10.   Defendant Martha Christy is an individual residing in the state of Arizona.
9          11.   Defendant Joseph Christy is an individual residing in the state of Arizona.
10

11         C.    DOE Defendants
12         12.   Plaintiff does not know the true names or capacities of the persons or
13   entities sued herein as DOES 1-10, and therefore sues such defendants by such fictitious
14   names. Plaintiff is informed and believes and thereon alleges that each of the DOE
15   defendants is in some manner legally responsible for the actions herein alleged.
16   Plaintiff will amend this Complaint to set forth the true names and capacities of the
17   defendants when they have been ascertained, along with appropriate charging
18   allegations, as may be necessary.
19
20                              IV.      BACKGROUND FACTS
21         A.    The Purpose of this Action
22         13.   The purpose of this lawsuit is to act in the public interest to enforce the
23   policy underlying the false marking statute, 35 U.S.C. §292.
24   ///
25   ///
26   ///
27   ///
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                                               -3-
                              COMPLAINT FOR FALSE PATENT MARKING
1            B.      The Policy of the Patent Marking Statute
2            14.     The patent marking statute (35 U.S.C. §287(a)) and the false patent
3    marking statute (35 U.S.C. §292) exist to ensure that the public has accurate
4    information on the existence of patents and patent rights.
5            15.     The purposes of the patent marking statute were explained by the Federal
6    Circuit in Nike, Inc. v. Wal-Mart Stores, Inc., 138 F.3d 1437, 1443 (Fed. Cir. 1998), as:
7    (1) helping to avoid innocent infringement, (2) encouraging patentees to give notice to
8    the public that the article is patented, and (3) aiding the public to identify whether an
9    article is patented.
10           16.     Over half a century ago, the Supreme Court stated in Precision Instrument
11   Mfg. Co. v. Automotive Maintenance Machinery, 324 U.S. 806, 816 (1945), that patents
12   by their very nature are affected with a public interest:
13           The possession and assertion of patent rights are 'issues of great moment to the
14           public.'    A patent by its very nature is affected with a public interest. As
15           recognized by the Constitution, it is a special privilege designed to serve the
16           public purpose of promoting the 'Progress of Science and useful Arts.' At the
17           same time, a patent is an exception to the general rule against monopolies and to
18           the right to access to a free and open market.
19           17.     The Patent Act of 1952 provides a qui tam cause of action on behalf of the
20   public to fine the offender in an amount of up to $500 for each offense, with half going
21   to the use of the United States, and the other half going to the person bringing the
22   action.
23           18.     False marking of unpatented articles as “patented” is injurious to the public
24   interest, as explained by the United States Court of Appeals, in at least the following
25   ways:
26           • Acts of false marking deter innovation and stifle competition in the
27                 marketplace;
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                                                   -4-
                                  COMPLAINT FOR FALSE PATENT MARKING
1          • False marks deter scientific research when an inventor sees a mark and
2                decides to forgo continued research to avoid possible infringement;
3          • False marking can cause unnecessary investment in design around or costs
4                incurred to analyze the validity or enforceability of a patent whose number
5                has been marked upon a product with which a competitor would like to
6                compete; and
7          • Consumers who see a product as “patented” are likely to infer the product
8                possesses design or utilitarian features that are unique to such article, and not
9                available in substitute articles from other producers, thus inducing consumer
10               demand for the marked article and causing consumers to pay an artificial
11               premium for the product.
12

13         C.       Defendants’ False Marking in Violation of the Patent Act
14         19.      Defendants manufacture, advertise, license, and sell DeepDreams.
15   Defendants advertise DeepDreams as a “Patented Formula!” (Emphasis added.)
16   ///
17   ///
18   ///
19   ///
20   ///
21   ///
22   ///
23   ///
24   ///
25   ///
26   ///
27   ///
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                                                  -5-
                                 COMPLAINT FOR FALSE PATENT MARKING
 1             20.       he       ng
                        Th followin picture o the fron cover of a box of D
                                            of       nt       f                  ms       e
                                                                         DeepDream with the
 2         patent marking (show in the lo
     false p                  wn        ower right corner “PA     D     ULA”).1
                                                            ATENTED FORMU
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13             21.      Th followin picture o the back cover of a box of D
                         he       ng        of       k        f                  ms,     n
                                                                         DeepDream as seen
14        e,       ditional fal patent m
     before with add          lse      marking. On the ba of DeepDreams, not only is
                                                        ack
15       Dreams pa
     DeepD                DeepDream “is the best natu
                 atented, D       ms,     e         ural sleep aid ever developed
                                                                                d
16       use        es       e,       d
     becau it utilize a unique patented process. . .”1
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2
     1        ackage of Deep
         The pa                        n            ed           011.
                           pDreams shown was purchase April 19, 20
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2

                                                        -6-
                                       COMPLAINT FOR FALSE P
                                       C                            RKING
                                                           PATENT MAR
1          22.        In addition to falsely marking each box of DeepDreams as patented, every
2    retailer who sells DeepDreams via the internet falsely claims that DeepDreams is
3    patented.    In reality, DeepDreams is not patented.           Counsel for Plaintiff has
4    exhaustively researched public records, including the records of the United States
5    Patent & Trademark office (found at www.uspto.gov) that are presumed to be
6    conclusively accurate, and have confirmed that DeepDreams is not patented.
7
           D.         Defendant’s Violation of the Patent Act Was Intentional
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           23.        This case is “exceptional” for purposes of 35 U.S.C. § 285 because
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     Defendants have no reasonable basis upon which to genuinely believe DeepDreams is
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     patented. Furthermore, Defendants have a history of false patent marking.
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           24.        Defendants engaged in this false marking scheme to deceive the public and
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     to stifle legitimate competition, and to gain a competitive advantage in the market.
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     There are numerous indicia that Defendants’ false marking was intentional and
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     committed with the specific design to profit from misleading and confusing unwary
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     consumers.
16

17
                 V.      FIRST CAUSE OF ACTION: FALSE PATENT MARKING
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           25.        Plaintiff re-alleges the preceding paragraphs and incorporates them herein
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     by reference.
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           26.        Defendants know that they can charge a premium for products that the
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     public perceives to be unique and protected by a patent.
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           27.        Defendants have marked, or caused or allowed to be advertised,
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     DeepDreams as being patented when, in reality, it is not.
24
     ///
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     ///
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                                                   -7-
                                  COMPLAINT FOR FALSE PATENT MARKING
1

2
3            28.   Defendants have violated 35 U.S.C. § 292(a), which provides in relevant
4    part:
5
             Whoever without the consent of the patentee, marks upon, or affixes to, or uses in
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             advertising in connection with anything made, used, offered for sale, or sold by
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             such person within the United States, or imported by the person into the United
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             States, the name or any imitation of the name of the patentee, the patent number,
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             or the words "patent," "patentee," or the like, with the intent of counterfeiting or
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             imitating the mark of the patentee, or of deceiving the public and inducing them
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             to believe that the thing was made, offered for sale, sold, or imported into the
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             United States by or with the consent of the patentee; or Whoever marks upon, or
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             affixes to, or uses in advertising in connection with any unpatented article the
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             word "patent" or any word or number importing the same is patented, for the
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             purpose of deceiving the public; or Whoever marks upon, or affixes to, or uses in
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             advertising in connection with any article the words "patent applied for," "patent
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             pending," or any word importing that an application for patent has been made,
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             when no application for patent has been made, or if made, is not pending, for the
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             purpose of deceiving the public - Shall be fined not more than $500 for every
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             such offense.
21

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             29.   Each false marking on DeepDreams is likely to discourage or deter persons
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     and companies from commercializing competing products.
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             30.   Defendants’ false marking of DeepDreams has wrongfully stifled
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     competition with respect to similar and potentially competing products, thereby causing
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     harm to plaintiff, the United States, and the general public.
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                                                 -8-
                                COMPLAINT FOR FALSE PATENT MARKING
1             31.   Defendants have wrongfully and illegally advertised a patent monopoly
2    that they do not possess and, as a result, have benefited commercially and financially by
3    maintaining false statements of patent rights.
4             32.   Defendants are therefore liable to Plaintiff and to the United States under
5    35 U.S.C. §292(b). The public interest requires that Defendants be enjoined from
6    further acts of false marking, pay civil penalties, and make restitution for its ill-gotten
7    gains.
8

9                                   VI.    PRAYER FOR RELIEF
10            Plaintiff seeks entry of judgment against Defendants as follows:
11            1.    A judicial determination that Defendants have violated 35 U.S.C. §292 by
12   falsely advertising and marking DeepDreams as “patented” for the purpose of deceiving
13   the public;
14            2.    An order fining Defendants for false marking in an amount that is
15   reasonable in light of the total revenue and gross profit derived from the sale of falsely
16   marked DeepDreams and the degree of intent to falsely mark which is proven, with half
17   of the fine paid to the United States Government and the other half to Plaintiff;
18            3.    An order preliminarily and permanently enjoining Defendants and its
19   affiliates from committing new acts of false patent marking and to cease all existing acts
20   of false patent marking;
21            4.    An award of attorneys’ fees and costs incurred in bringing and maintaining
22   this action, in part because it is “exceptional” for purposes of the Patent Act; and
23   ///
24   ///
25   ///
26   ///
27   ///
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                                                  -9-
                                 COMPLAINT FOR FALSE PATENT MARKING
1          5.    Any such other relief to which Plaintiff, the United States, or the general
2    public may be entitled.
3

4    Dated: May 3, 2011                   NEWPORT TRIAL GROUP
                                          A Professional Corporation
5                                         Ryan M. Ferrell
6

7                                         By: /s/ Ryan M. Ferrell
                                             Ryan M. Ferrell
8
                                          Attorneys for Plaintiff
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                                                - 10 -
                               COMPLAINT FOR FALSE PATENT MARKING

				
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