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Case 2:17-cv-06224 Document 1 Filed 08/22/17 Page 1 of 13 Page ID #:1

1 Alan E. Engle (SBN 224779)


2
alan.engle@meenlegal.com
MEADOR & ENGLE
3 5151 California Ave., Suite 100
4
Irvine, CA 92617
Telephone: (310) 428-6985
5 Facsimile: (714) 386-5368
6
Attorneys for Plaintiff,
7 BLM PRODUCTS, LTD.
8

9
UNITED STATES DISTRICT COURT FOR THE
10
CENTRAL DISTRICT OF CALIFORNIA
11

12
BLM PRODUCTS, LTD., Case No.: 2:17-CV-6224
13

14 Plaintiff, COMPLAINT FOR DECLARATORY


v. JUDGMENT OF PATENT
15
NONINFRINGEMENT,
16 COVVES, LLC, INVALIDITY, AND
UNENFORCEABILITY OF U.S.
17
DESIGN PATENT NO. D787,617
Defendant.
18 AND RELATED CLAIMS
19
DEMAND FOR JURY TRIAL
20

21

22

23

24

25

26
27

28
1
COMPLAINT FOR DECLARATORY JUDGMENT
Case 2:17-cv-06224 Document 1 Filed 08/22/17 Page 2 of 13 Page ID #:2

1 Plaintiff BLM Products, Ltd. (BLM") seeks a declaration that it does not
2 infringe United States Design Patent No. D787,617 ("the 'D617 patent"), that the
3 'D617 patent is invalid, and that the 'D617 patent is unenforceable due to
4 inequitable conduct before the Patent and Trademark Office, as well as damages
5 and injunctive relief for these and related claims:
6 JURISDICTION AND VENUE
7 1. This action arises under the Declaratory Judgment Act, 28 U.S.C.
8 2201, under the patent laws of the United States, 35 U.S.C. 1-390, and under
9 the Lanham Act, 15 U.S.C. 1051 et seq.
10 2. This Court has subject matter jurisdiction over this action under 28
11 U.S.C. 1331 (federal question), 1338 (patent and unfair competiton), 2201(a)
12 (declaratory judgment), and 1367 (supplemental jurisdiction).
13 3. This Court has personal jurisdiction over Covves, LLC. On
14 information and belief, Covves maintains its principal place of business within
15 this district and has extensive and systematic contacts with this district.
16 4. Venue is proper in this district under 28 U.S.C. 1391(b)(1) and
17 (2), because Covves' allegations were made from this district, and because
18 Covves resides within this district and subject to personal jurisdiction here.
19 5. An immediate, real, and justiciable controversy exists between BLM
20 and Covves as to whether BLM is infringing or has infringed the 'D617 patent
21 and whether the 'D617 patent is valid and enforceable.
22 THE PARTIES
23 6. Plaintiff BLM Products, Ltd. is a corporation organized and existing
24 under the laws of British Columbia, Canada, with its principal place of business
25 at 1105-689 Abbott St., Vancouver, British Columbia, Canada, V6B 0J2. BLM
26 sells recreational flotation devices through Amazon.com and other on-line
27 channels under its Captain Floaty brand.
28 7. On information and belief, Defendant Covves, LLC is a competing
2
COMPLAINT FOR DECLARATORY JUDGMENT
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1 seller of recreation flotation devices though Amazon.com and other on-line


2 channels, including its getfloaty.com website. On information and belief, Covves,
3 LLC is a California limited liability company located at 23145 Kashiwa Court,
4 Torrance, CA 90505. Covves, LLC is the recorded assignee of U.S. Design
5 Patent Application No. 29/537,216, which issued as U.S. Design Patent
6 D787,617 on May 23, 2017.
7 NATURE OF THE ACTION
8 8. This is an action for a declaratory judgment of noninfringement,
9 invalidity, and unenforceability arising under the patent laws of the United States,
10 Title 35 of the United States Code, and for unfair competition, misrepresentation,
11 and business interference under the Lanham Act, 15 U.S.C. 1125(a)(1)(B), and
12 related state and common law claims.
13 9. BLM requests this relief because Defendant Covves, LLC, the
14 assignee of record of the 'D617 patent, has asserted in clear terms that it believes
15 BLM is infringing the 'D617 patent by making, using, selling, offering for sale,
16 supplying, or distributing its giant unicorn-style recreational flotation device. A
17 true and correct copy of the 'D617 patent is attached hereto as Exhibit 1. Covves'
18 allegations are misplaced because, among other things, the 'D617 patent is invalid
19 and unenforceable for failure to name the correct inventor or inventors. A
20 photograph of BLM's giant unicorn pool float is attached as Exhibit 2.
21 10. Specifically, in June 2017, Covves wrote to Amazon.com that
22 BLM's product infringes the 'D617 patent, causing Amazon to remove BLM's
23 listing from its website. Covves has agreed to withdraw its allegation only if
24 BLM pays a substantial licensing fee. Covves has made these demands on the
25 basis of the 'D617 design patent, which was procured through inequitable conduct
26 before the Patent and Trademark Office because the patent fails to name the true
27 inventor, an in-house designer at a Chinese inflatable products manufacturer.
28 Additionally, BLM's product does not infringe the 'D617 patent, which is also is
3
COMPLAINT FOR DECLARATORY JUDGMENT
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1 invalid in light of prior art.


2 11. Covves has been able to obtain the equivalent of a permanent
3 injunction against BLM by "litigating" its claims through Amazon.com, BLM's
4 primary sales channel, instead of sending a cease & desist letter or filing an
5 action for infringement. Amazon.com is hardly competent to adjudicate questions
6 of patent infringement or even to evaluate allegations of such, particularly ones
7 made in bad faith by a competitor with a patent procured through fraud on the
8 Patent Office. Covves' unsupported infringement allegations have substantially
9 damaged BLM's business and its relationships with Amazon.com, its customers,
10 and its suppliers, creating a justiciable controversy between BLM and Covves.
11 THE 'D617 PATENT AND COVVES' INFRINGEMENT ALLEGATIONS
12 12. Plaintiff BLM and Defendant Covves compete in the market for
13 recreational flotation devices. BLM's primary channel for sales and distribution is
14 Amazon.com.
15 13. On or around June 14, 2017, Covves submitted an infringement
16 report to Amazon.com by filling out its intellectual property infringement form at
17 www.amazon.com/gp/help/reports/infringement. Covves alleged that BLM's
18 Amazon listing for its Captain Floaty Giant Unicorn Pool Float was infringing its
19 'D617 design patent and demanded that Amazon remove the listing.
20 14. Mark Brown, president of BLM, received notification from Amazon
21 that an infringement report had been made, including the identity of the
22 complaining party, attorney Stephen McArthur acting on behalf of Covves,
23 though not the basis or details of the allegation.
24 15. Mr. Brown contacted Mr. McArthur and was informed that the
25 infringement notice was based on Covves ownership of the 'D617 design patent.
26 Mr. McArthur informed Mr. Brown that Covves would withdraw its complaint if
27 BLM agreed to license the patent for $10/unit.
28 16. Mr. Brown has sold inflatable products sourced from China via
4
COMPLAINT FOR DECLARATORY JUDGMENT
Case 2:17-cv-06224 Document 1 Filed 08/22/17 Page 5 of 13 Page ID #:5

1 Amazon and other channels for a number of years and, in his experience, Chinese
2 manufacturers typically have in-house staff who design products based on a
3 customer's general description and requirements. Manufacturers know how to
4 design floatation devices so they are compatible with manufacturing equipment,
5 can be made from standard materials (e.g., PVC), and so they meet required
6 specifications for durability and other metrics.
7 17. Mr. Brown reviewed the 'D617 patent and immediately suspected
8 the claimed design was not from a U.S. inventor based on his experience
9 sourcing similar inflatables from Chinese manufacturers. Mr. Brown believed it
10 highly likely the actual inventor was an in-house designer at a Chinese company.
11 18. He researched the alleged inventor, Adam Krepack, and determined
12 Mr. Krepack was a corporate attorney in Los Angeles who does not appear to
13 have a background in the design of recreational flotation devices.
14 19. Mr. Brown pulled the importation records for Covves, which on
15 information and belief is in the business of importing various goods from China
16 for resale, and identified the factory that originally manufactured the giant
17 unicorn flotation device sold by Covves, FTF Zhenhan Inflatable Co., Ltd.
18 ("FTF") (www.inflatable-manufacturers.com).
19 20. Mr. Brown contacted FTF to request information about their
20 products, particularly their inflatable unicorn pool floats. FTF's customer
21 representative, Allen Guo, informed Mr. Brown that, "the Original [sic] edition
22 inflatable unicorn pool float was designed and produced in our factory."
23 (Emphasis added.)
24 21. Over a series of emails, Mr. Guo noted that, "We prouduced [sic]
25 many styles pool float before, see enclosed, and we also make new design every
26 year, of course, our designer did the [unicorn] design and make the sample and
27 mass production." And further, "For the unicorn Float [sic], it was designed by
28 Lisa from our factory." In a later email, Mr. Guo noted that, "Lisa have [sic] been
5
COMPLAINT FOR DECLARATORY JUDGMENT
Case 2:17-cv-06224 Document 1 Filed 08/22/17 Page 6 of 13 Page ID #:6

1 doing the inflatable products as designer more than 18 years expenerice [sic], so
2 very professional."
3 22. Over the course of the correspondence, Mr. Brown was able to
4 obtain photos depicting the development of FTF's design for the unicorn
5 allegedly designed by Mr. Krepack, true and correct copies of which are attached
6 hereto as Exhibit 3. Though FTF had worked with Covves, Mr. Guo was unaware
7 of any patent rights that would limit FTF's sale and export of its giant unicorn
8 floats to the U.S.
9 23. FTF's role in the design process is essential, because design patents,
10 unlike utility patents, simply claim the specific design depicted in the drawings.
11 While utility patents can be broad or narrow depending on the language of the
12 claims and the disclosure of the specification, the claims of design patents merely
13 reference drawings of the claimed design.
14 24. The sole claim of the 'D617 patent states, "The ornamental design
15 for an inflatable toy, as shown and described." The drawings of the design patent
16 purport to depict the design Mr. Krepack invented. However, if an alleged
17 inventor merely requests a third-party make a design, such as for a flotation
18 device in the shape of a unicorn, they are not the legal inventor of that design and
19 are not entitled to a patent. Even if the alleged inventor gave a detailed verbal
20 description to a designer, they would be at most a co-inventor.
21 25. Upon filing the application that matured into the 'D617 design
22 patent, Mr. Krepack executed a declaration that, "I believe that I am the original
23 inventor or an original joint inventor of a claimed invention in the application."
24 'D617 Inventor Declaration, attached hereto as Exhibit 4. The declaration notes,
25 "I hereby acknowledge that any willful false statement made in this declaration is
26 punishable under 18 U.S.C. 1001 by fine or imprisonment of not more than five
27 (5) years, or both." Id.
28 26. Based on the character of the design; the design documents from
6
COMPLAINT FOR DECLARATORY JUDGMENT
Case 2:17-cv-06224 Document 1 Filed 08/22/17 Page 7 of 13 Page ID #:7

1 FTF; FTF's statements about the identity of the actual designer of the unicorn
2 float; and Covves' lack of notice to FTF that it had exclusive rights to FTF's
3 unicorn float design, which FTF would be in a strong position to contest, Mr.
4 Krepack is either not the inventor or not the sole inventor of the 'D617 patent, and
5 his declaration of inventorship is false, rendering the 'D617 patent invalid,
6 unenforceable, or both.
7 27. Additionally, to the extent Covves or its agents, employees, or
8 owners knowingly directed Amazon.com to remove BLM's product on the basis
9 of a fraudulently procured patent, Covves is liable for damages BLM has
10 sustained and continues to sustain to its business.
11 28. Covves demanded that Amazon remove BLM's product from its
12 marketplace, effectively acting as the judge of its own case and enjoining the
13 sales of its competitor. On information and belief, Amazon lacks the capacity,
14 inclination, and incentive to assess allegations of patent infringementits
15 customary response is simply to remove the listing and thereby avoid potential
16 liability for contributory or induced infringement.
17 29. While the unicorn float is an important part of BLM's business, it is
18 merely one of approximately 400 million of products sold via Amazon. Covves
19 has knowingly exploited Amazon's procedures to have BLM's listing removed
20 without prior notice based on a patent produced through inequitable conduct. In
21 doing so, Covves has forced BLM to seek declaratory judgment from a
22 competent tribunal to remedy the damage caused by Covves' bad faith
23 allegations.
24 30. For all these reasons, an actual controversy exists between BLM and
25 Covves regarding the validity, enforceability, and infringement of the 'D617
26 patent and Covves' false and misleading allegations against BLM to
27 Amazon.com.
28
7
COMPLAINT FOR DECLARATORY JUDGMENT
Case 2:17-cv-06224 Document 1 Filed 08/22/17 Page 8 of 13 Page ID #:8

1 COUNT I
2 (Declaration of Non-Infringement of the D617 Patent)
3 31. BLM restates and incorporates by reference the allegations in
4 paragraphs 1 through 30 of this Complaint as if fully set forth herein.
5 32. Covves, LLC claims to own all right title and interest in US Design
6 Patent No. D787,617.
7 33. Covves has alleged to Amazon.com and to BLM directly that BLM's
8 Captain Floaty Giant Unicorn Pool Float infringes the 'D617 patent.
9 34. A substantial, immediate, and real controversy therefore exists
10 between BLM and Covves whether BLM's Captain Floaty Giant Unicorn Pool
11 Float infringes the 'D617 patent. A judicial declaration is necessary to determine
12 the parties respective rights regarding infringement of the 'D617 patent.
13 35. BLM seeks a judgment declaring that BLM's Captain Floaty Giant
14 Unicorn Pool Float does not directly or indirectly infringe the 'D617 patent.
15 COUNT II
16 (Declaration of Invalidity of the 'D617 Patent)
17 36. BLM restates and incorporates by reference the allegations in
18 paragraphs 1 through 35 of this Complaint as if fully set forth herein.
19 37. Covves, LLC claims to own all right title and interest in US Design
20 Patent No. D787,617.
21 38. Covves has alleged to Amazon.com and to BLM directly that BLM's
22 Captain Floaty Giant Unicorn Pool Float infringes the 'D617 patent.
23 39. A substantial, immediate, and real controversy therefore exists
24 between BLM and Covves whether the 'D617 patent is invalid under the
25 provisions of 35 U.S.C. 101 et seq, including as a result of anticipation,
26 obviousness, and failure to name the correct inventive entity. A judicial
27 declaration is necessary to determine the validity of the 'D617 patent.
28 40. BLM seeks a judgment declaring that the 'D617 patent is invalid and
8
COMPLAINT FOR DECLARATORY JUDGMENT
Case 2:17-cv-06224 Document 1 Filed 08/22/17 Page 9 of 13 Page ID #:9

1 for the court to correct the inventorship of the patent pursuant to 35 U.S.C. 256.
2 COUNT III
3 (Declaration of Unenforceability of the 'D617 Patent)
4 41. BLM restates and incorporates by reference the allegations in
5 paragraphs 1 through 40 of this Complaint as if fully set forth herein.
6 42. Covves, LLC claims to own all right title and interest in US Design
7 Patent No. D787,617.
8 43. Covves has alleged to Amazon.com and to BLM directly that BLM's
9 Captain Floaty Giant Unicorn Pool Float infringes the 'D617 patent.
10 44. Adam Krepack is the sole named inventor of the 'D617 patent, to
11 which he assigned his rights to Covves in May 2017, shortly before the patent
12 issued.
13 45. Mr. Krepack executed a declaration in association with the
14 application that issued as the 'D617 patent stating that he "is the original
15 inventor" of the claimed invention. Mr. Krepack is not the inventor of the
16 invention claimed in the 'D617 patent and executed his declaration knowing it
17 was false, and he did so with intent to deceive the PTO.
18 46. BLM has information and evidence that the actual inventor of the
19 design claimed in the 'D617 patent is a designer at FTF Zhenhan Inflatable Co.,
20 Ltd. who goes by the English name Lisa. On information and belief, FTF was the
21 designer and original manufacturer of the giant unicorn pool float marketed by
22 Covves.
23 47. The true inventor or inventors of an invention that is the subject of a
24 patent is material to that patent.
25 48. A substantial, immediate, and real controversy therefore exists
26 whether the 'D617 patent is unenforceable due to inequitable conduct for failure
27 to name the correct inventor or inventors. A judicial declaration is necessary to
28 determine the parties respective rights regarding the enforceability of the 'D617
9
COMPLAINT FOR DECLARATORY JUDGMENT
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1 patent.
2 COUNT IV
3 (Unfair Competition; Lanham Act 43(a))
4 49. BLM restates and incorporates by reference the allegations in
5 paragraphs 1 through 48 of this Complaint as if fully set forth herein.
6 50. Covves has engaged in unfair competition under 15 U.S.C.
7 1125(a)(1)(B) by misrepresenting to Amazon.com that the 'D617 patent is valid
8 and enforceable, that BLM's Captain Floaty Giant Unicorn Pool Float infringes
9 the 'D617 patent, and by demanding that Amazon.com remove BLM's Amazon
10 listing.
11 51. On information and belief, Covves' misrepresentations to
12 Amazon.com were made with knowledge that the 'D617 patent is invalid and
13 unenforceable due to willful failure to name the correct inventor(s).
14 52. On information and belief, Covves' misrepresentations to
15 Amazon.com were made in bad faith in order to injure BLM or force it to license
16 the 'D617 patent, which Covves knew to be invalid and unenforceable due to
17 failure to name the correct inventor or inventors.
18 53. Covves' unlawful activities caused Amazon.com to remove BLM's
19 listing for its Captain Floaty Giant Unicorn Pool Float, resulting in the loss of
20 goodwill and sales and causing BLM irreparable harm.
21 54. As a direct and proximate result of Covves' above-described actions,
22 BLM has suffered and will continue to suffer damages in an amount to be
23 determined at trial.
24 COUNT V
25 (Trade Libel)
26 55. BLM restates and incorporates by reference the allegations in
27 paragraphs 1 through 54 of this Complaint as if fully set forth herein.
28 56. Covves, LLC claims to own all right title and interest in US Design
10
COMPLAINT FOR DECLARATORY JUDGMENT
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1 Patent No. D787,617.


2 57. Covves has falsely published to Amazon.com that BLM's Captain
3 Floaty Giant Unicorn Pool Float infringes the 'D617 patent.
4 58. Covves' false representations to Amazon.com were made willfully
5 and with malice, knowing that the 'D617 patent is invalid and/or unenforceable as
6 a result of Covves' intentional failure to name the correct inventive entity.
7 59. Covves' wrongful conduct was the direct and proximate cause of
8 Amazon.com removing BLM's listing for its Captain Floaty Giant Unicorn Pool
9 Float at Amazon.com, causing BLM lost sales and damage to its reputation.
10 60. As a direct and proximate result of Covves' above-described actions,
11 BLM has suffered and will continue to suffer damages in an amount to be
12 determined at trial.
13 COUNT VI
14 (Interference with Economic Advantage)
15 61. BLM restates and incorporates by reference the allegations in
16 paragraphs 1 through 60 of this Complaint as if fully set forth herein.
17 62. Covves, LLC claims to own all right title and interest in US Design
18 Patent No. D787,617.
19 63. Covves has interfered with BLM's economic relationship with
20 Amazon.com by misrepresenting to Amazon.com that the 'D617 patent is valid
21 and enforceable, that BLM's Captain Floaty Giant Unicorn Pool Float infringes
22 the 'D617 patent, and by demanding that Amazon.com remove BLM's Amazon
23 listing.
24 64. Covves' misrepresentations to Amazon.com were made in bad faith
25 and with malice, knowing that the 'D617 deceptively fails to name the correct
26 inventive entity and is therefore invalid and/or unenforceable.
27 65. Covves' wrongful conduct was the direct and proximate cause of
28 Amazon.com removing BLM's listing for its Captain Floaty Giant Unicorn Pool
11
COMPLAINT FOR DECLARATORY JUDGMENT
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1 Float.
2 66. Covves' misrepresentations to Amazon.com were intended to
3 interfere with BLM's relationship with Amazon.com and to remove BLM as a
4 competitor in the market for giant unicorn pool floats and/or force BLM to
5 license the 'D617 patent.
6 67. As a direct and proximate result of Covves' above-described actions,
7 BLM has suffered and will continue to suffer damages in an amount to be
8 determined at trial.
9 COUNT VII
10 (Unfair Business Practices; CA Bus. and Prof. Code 17200 et seq.)
11 68. BLM repeats and re-alleges paragraphs 1 through 67 of its
12 Complaint, as if fully set forth herein.
13 69. Covves has committed unfair and deceptive acts and practices, in
14 violation of common law and the California Unfair Competition Law, B & P
15 Code 17200, et seq., by misrepresenting to Amazon.com that 'D617 patent is
16 valid and enforceable, that BLM's Captain Floaty Giant Unicorn Pool Float
17 infringes the 'D617 patent, and by demanding that Amazon.com remove BLM's
18 Amazon listing.
19 70. On information and belief, Covves misrepresentations to
20 Amazon.com were made in bad faith in order to injure BLM or force it to license
21 the 'D617 patent, which Covves knew to be invalid and unenforceable due to
22 willful failure to name the correct inventor or inventors.
23 71. Covves' deceptive and unfair trade practices caused Amazon.com to
24 remove BLM's listing for its Captain Floaty Giant Unicorn Pool Float, resulting
25 in the loss of goodwill and sales, damaging BLM and causing irreparable harm.
26 72. As a direct and proximate result of Covves' deceptive and unfair
27 business practices, BLM has suffered and will continue to suffer damages in an
28 amount to be determined at trial.
12
COMPLAINT FOR DECLARATORY JUDGMENT
Case 2:17-cv-06224 Document 1 Filed 08/22/17 Page 13 of 13 Page ID #:13

1 PRAYER FOR RELIEF


2 WHEREFORE, BLM Products, Ltd. prays for the Court to enter judgment
3 and provide relief as follows:
4 (a) declare that BLM's Captain Floaty Giant Unicorn Pool Float does not
5 infringe the 'D617 patent;
6 (b) declare that the 'D617 patent is invalid;
7 (c) declare that the 'D617 patent is unenforceable
8 (d) declare that Adam Krepack is not a true and/or sole inventor of the
9 'D617 patent pursuant to 35 U.S.C. 256;
10 (e) enter judgment in favor of BLM and against Covves on each of BLM's
11 claims;
12 (f) award BLM its lost profits and Covves' profits;
13 (g) award BLM punitive damages;
14 (h) declare this case exceptional under 35 U.S.C. 285 and 15 U.S. Code
15 1117(a);
16 (i) award BLM its costs and attorneys fees in connection with this action;
17 and
18 (e) such further and additional relief as the Court deems just and proper.
19 JURY DEMAND
20 Plaintiff demands a trial by jury.
21

22 Dated: August 22, 2017 MEADOR & ENGLE


23
/s/ Alan E. Engle
24
Alan E. Engle
25 Attorneys for Plaintiff
26 BLM Products, Ltd.
27

28
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