SATA v. Central Purchasing - Complaint

Case 2:20-cv-02131 Document 1 Filed 03/04/20 Page 1 of 14 Page ID #:1
1 DICKINSON WRIGHT PLLC

STEVEN A. CALOIARO
2 California Bar No. 284410
scaloiaro@dickinsonwright.com
3 100 W. Liberty Street, Suite 940
Reno, Nevada 89501
4 Tel.: (775) 343-7500
Fax: (844) 670-6009
5
Attorneys for Plaintiff
6 SATA GmbH & Co. KG
7
8 UNITED STATES DISTRICT COURT
9 CENTRAL DISTRICT OF CALIFORNIA
10 SATA GmbH & Co. KG, a German CASE NO.: 2:20-cv-2131
Corporation,
11
Plaintiff, COMPLAINT FOR BREACH OF
12 CONTRACT AND PATENT
v. INFRINGEMENT
13
CENTRAL PURCHASING, LLC
14 d.b.a. HARBOR FREIGHT TOOLS
Defendant.
15
16 Plaintiff SATA GmbH & Co. KG (“SATA”) hereby states its complaint
17 against Defendant Central Purchasing, LLC d.b.a Harbor Freight Tools (“Harbor
18 Freight”) as follows:
19 INTRODUCTION
20 SATA is a world leader in the production of paint spray guns, airbrushes,
21 workplace safety and security equipment, and other related products. SATA and
22 Harbor Freight entered into a Settlement Agreement dated April 28, 2000 (the
23 “Agreement”) to resolve then-ongoing litigation between the parties. SATA
24 continues to honor the obligations under the Agreement, but Harbor Freight has not.
25 Specifically, SATA has recently become aware that Harbor Freight has committed
26 and failed to cure material breaches of the Agreement.
27 Additionally, it has also recently come to SATA’s attention that Harbor
28 Freight offers for sale and sells two versions of Harbor Freight’s Black Widow Spray
1
1 Gun which infringe on SATA’s federally registered patent.

2 JURISDICTION AND VENUE
3 1. This is an action for damages and injunctive relief against Harbor
4 Freight for patent infringement in violation of the Patent Act of the United States,
5 35 U.S.C. §§ 1 et seq. This Court has original jurisdiction under 28 U.S.C. § 1338(a)
6 and (b) and 28 U.S.C. § 1331 over SATA’s federal-law claims for relief. This Court
7 has supplemental jurisdiction under 28 U.S.C. § 1367(a) over SATA’s state-law
8 claim for relief.
9 2. This Court has personal jurisdiction over Harbor Freight based upon its
10 infringing acts of advertising, displaying, and offering for sale infringing goods in
11 this District. This Court also has personal jurisdiction over Harbor Freight, as Harbor
12 Freight is headquartered in Calabasas, California.
13 3. Venue is proper in this judicial district pursuant to 28 U.S.C. §§
14 1391(b), (c), (d), and 1400(b) because Harbor Freight does business in this District,
15 has committed acts of infringement in this District, and is subject to personal
16 jurisdiction in this District.
17 THE PARTIES
18 4. SATA is a German corporation established in 1907 and organized
19 under the laws of Germany.
20 5. Upon information and belief, Harbor Freight is a California company
21 located at 26541 Agoura Road, Calabasas, California.
22 GENERAL ALLEGATIONS
23 Background on SATA
24 6. SATA is a leading manufacturer of high quality, high performance
25 paint spray guns, paint spray gun reservoirs, and related equipment.
26 7. SATA’s products are designed and manufactured in Germany and are
27 sold to distributors worldwide.
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1 8. Over the past century, SATA has been a leader in the production of
2 paint spray guns, paint spray gun reservoirs, and related equipment. SATA’s paint
3 spray guns are highly valued, well known for their quality, performance, and
4 durability, and are used by professional car repair businesses, automobile
5 manufacturers, yacht and boat builders, carpenters, painters, airbrush/design
6 creators, and hobbyists worldwide.
7 9. SATA offers a wide variety of paint spray guns, including handheld
8 spray guns and spray guns for automatic painting systems.
9 10. SATA’s strong reputation and goodwill in the industry are further
10 bolstered by its strong commitment to aiding users of SATA products through a
11 training center for in person trainings, free online and telephone services, such as
12 tips for painting, a forum for discussion, useful measurement calculators, video
13 tutorials, and even an encyclopedia of terms.
14 11. Due to the quality of its products and its international reputation for
15 technological innovation, SATA has achieved extensive sales throughout the United
16 States and the world. In the United States, SATA annually sells in excess of 100,000
17 paint spray guns and paint spray gun reservoirs annually. Over the last five years,
18 on average, SATA enjoyed annual sales in the United States in excess of $16 million
19 dollars. Internationally, SATA has annual sales in excess of $96 million dollars.
20 12. SATA also has prominently and extensively advertised and promoted
21 products and services throughout the United States and the world, through such
22 varied media as the internet, newspapers and magazines, and point-of-sale displays.
23 SATA also operates websites at the <sata.com> and <satausa.com> domain names.
24 13. For many years, SATA has expended millions of dollars annually in
25 advertising, promoting, and marketing the SATA products in the United States.
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1 The April 28, 2000 Settlement Agreement

2 14. On April 28, 2000, the Parties entered into the Agreement to settle then-
3 ongoing litigation in the United States District Court for the Central District of
4 California, Case No. CV 99-12077DDP (Mcx), wherein SATA alleged that Harbor
5 Freight’s offering for sale, and sale of, paint spray guns incorporating certain trade
6 dress, and Harbor Freight’s use of certain packaging, infringed SATA’s trade dress,
7 and constituted unfair competition and deceptive trade practices. A true and correct
8 copy of the Agreement is attached hereto as Exhibit A.
9 Advertising Agreement
10 15. Pursuant to Paragraph 14 of the Agreement, “[Harbor Freight] agree[d]
11 that it shall make no reference to SATA, SATA trademarks, or SATA products, in
12 any advertisements, product descriptions, or any other materials generated in
13 connection with the sale or promotion of [Harbor Freight’s] paint spray guns or parts
14 therefor.”
15 16. Notwithstanding the terms of the Agreement, the exemplar images
16 reproduced below and taken directly from Harbor Freight’s flyers and website,
17 clearly illustrate that Harbor Freight is blatantly using SATA’s name, trademarks,
18 and products in advertising Harbor Freight’s products.
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21 17. Each instance of Harbor Freight’s use of the SATA name, exemplified
22 in the representative advertisements reproduced above, is a clear violation of
23 Paragraph 14 of the Agreement.
24 18. To date, SATA has uncovered evidence of continued breaches across
25 several different advertisements each containing independent instances of violations
26 of the Agreement, similar to the ones included above. True and correct screenshots
27 of these advertisements are attached hereto as Exhibit B.
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1 19. The obligations set forth in Paragraph 14 of this Agreement are in all
2 respects material provisions of this Settlement Agreement and that in the event of a
3 breach of any obligation imposed upon Harbor Freight by virtue of said paragraphs
4 Harbor Freight agrees to pay to SATA, forthwith, upon receiving written notice of
5 such breach, the sum of $75,000 for such breach, such sum representing liquidated
6 damages and compensation for the harm done to the rights and business reputation
7 of SATA.
8 20. Paragraph 1 of the Agreement provides that Harbor Freight,
9 Agrees to cease, desist, and refrain, completely and
permanently, from manufacturing, offering for sale, or
10 selling any paint spray gun substantially similar to SATA
paint spray guns, photographs of which are attached hereto
11 as Exhibit A, or which are closer in appearance to the
SATA guns than to the redesigns of [Harbor Freight] guns,
12 photographs of which are attached hereto as Exhibit B.
13 21. Harbor Freight manufactures, distributes, and sells spray guns that
14 breach this provision. Specifically, Harbor Freight manufactures what could
15 reasonably be grouped into two separate categories of breaching guns: Model
16 numbers 46719 and 61473, which appear to be identical or nearly identical versions
17 of Model 1093 addressed in the Agreement, and Models 47016, 67181, 62381, and
18 62300, which appear to be identical or nearly identical versions of Model 34944
19 addressed in the Agreement. Because the new models appear to be either
20 indistinguishable or substantially indistinguishable to Models 1093 and 34944,
21 Paragraph 1 of the Agreement binds the new models.
22 / / /
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1 Previous Central Models Current Central Model

2 identified in the Agreement
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Model 1093
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Model Nos. 46719 and 61473
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18 Model No. 34944
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27 Model Nos. 47016, 62381, 67181, 62300
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1 22. Pursuant to Paragraph 16 of the Agreement, Harbor Freight shall be

2 afforded a period of 20 days, to be calculated from Harbor Freight’s receipt of
3 written notice from SATA specifying the breach, to cure the breach and to inform
4 SATA of the remedial efforts made.
5 23. On December 20, 2019, SATA served Harbor Freight’s registered
6 agent via United States Postal Service Mail (the “December 20 Letter”). SATA also
7 provided notices to Harbor Freight’s general counsel, Mr. Marc M. Friedman, and
8 the CEO of Harbor Freight.
9 24. On information and belief, Harbor Freight has failed to design these
10 new guns under the Agreement or has used the previous accused models again,
11 instead of the redesigned models. Once it was notified of the breaches, Harbor
12 Freight failed to modify its guns as contemplated pursuant to the Agreement, and
13 has failed to cure any breaches to the Agreement.
14 SATA’s Patent Rights
15 25. SATA possesses substantial patent rights including, without limitation,
16 seventy-nine (79) patents (both utility and design) registered with the United States
17 Patent and Trademark Office. In this case, there is one (1) design patent at issue:
18 U.S. D552,213 (hereinafter the “SATA Patent”). Attached hereto as Exhibit C is a
19 true and correct copy of the SATA Patent.
20 / / /
21 / / /
22 / / /
23 / / /
24 / / /
25 / / /
26 / / /
27 / / /
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1  U.S. D 552,213 (“‘213 Patent”)

2 Claim: The ornamental design for a paint spray gun, as shown and described.
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13 Relevant Description
14 Ornamental design of the SATAjet 1000 B SATA paint spray gun.
15 26. Harbor Freight offers for sale and sells two versions of the Black
16 Widow Spray Gun (HTE and HVLP) which each infringe the SATA Patent (the
17 “Infringing Products”).
18 27. For purposes of example only, and without limitation, below is a side-
19 by-side comparison of Harbor Freight’s Black Widow HTE Spray Gun and the
20 SATA Patent.
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D’213 Patent Black Widow HTE Spray Gun
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1 28. In the December 20 Letter, SATA notified Harbor Freight that the
2 Black Widow Spray Gun Harbor Freight is offering for sale and selling infringes on
3 the SATA Patent.
4 29. In response to the December 20 Letter, Harbor Freight espoused its
5 position that no valid patent claim had been infringed, and that Harbor Freight had
6 not violated any terms of the Agreement.
7 COUNT I – BREACH OF CONTRACT
8 30. SATA hereby realleges and incorporates by reference each and every
9 allegation set forth in the preceding paragraphs.
10 31. SATA and Harbor Freight entered into a written contract, the
11 Agreement, on May 5, 2000.
12 32. Pursuant to Paragraph 14 of the Agreement, “[Harbor Freight] agree[d]
13 that it shall make no reference to SATA, SATA trademarks, or SATA products, in
14 any advertisements, product descriptions, or any other materials generated in
15 connection with the sale or promotion of [Harbor Freight’s] paint spray guns or parts
16 therefor.”
17 33. Paragraph 1 of the Agreement provides that Harbor Freight,
18 …agrees to cease, desist, and refrain, completely and
permanently, from manufacturing, offering for sale, or
19 selling any paint spray gun substantially similar to SATA
paint spray guns, photographs of which are attached hereto
20 as Exhibit A, or which are closer in appearance to the
SATA guns than to the redesigns of [Harbor Freight] guns,
21 photographs of which are attached hereto as Exhibit B.
22 34. As noted above, Harbor Freight’s use of the SATA name, exemplified
23 in the representative advertisements reproduced above, is a clear violation of
24 Paragraph 14.
25 35. In a separate and completely independent breach of the Agreement,
26 Harbor Freight manufactures what could reasonably be grouped into two separate
27 categories of paint spray guns that breach Paragraph 1 of the Agreement: Model
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1 numbers 46719 and 61473, which appear to be identical or nearly identical versions
2 of its previous Model 1093, and Models 47016, 67181, 62381, 62300, which appear
3 to be identical or nearly identical versions of its previous Model 34944. Because the
4 new models appear to be either indistinguishable or substantially indistinguishable
5 to Models 1093 and 34944, Paragraph 1 of the Agreement binds the new models.
6 36. Harbor Freight’s breach of the Agreement was without justification,
7 and without any action or inaction on the part of SATA to provoke such a breach.
8 37. Harbor Freight caused direct and consequential damages from their
9 breach. As a result of Harbor Freight’s conduct, actions, and omissions, SATA
10 suffered loss of profits, damage to goodwill, reputation, operations and business
11 identity, and diminution in value of its intellectual property. Further, SATA incurred
12 expenses in reasonable reliance on its contract with Harbor Freight and other
13 damages in an amount to be determined, which will be provided at the time of trial.
14 COUNT II – DESIGN PATENT INFRINGEMENT
35 U.S.C. §§ 271 AND 289
15
16 38. SATA hereby realleges and incorporates by reference each and every
17 allegation set forth in the preceding paragraphs.
18 39. Without SATA’s authorization, license, or consent, Harbor Freight has
19 and is continuing to make, use, offer to sell, sell, and/or import into the United States
20 its counterfeit paint spray guns, which infringe the SATA Patents.
21 40. Harbor Freight infringes on the SATA Patent because, inter alia, in the
22 eye of an ordinary observer, giving such attention as a purchaser usually gives, the
23 design of paint spray guns and packaging claimed and disclosed in the SATA Patent
24 are substantially the same as Harbor Freight’s counterfeit paint spray gun. The
25 resemblance is as such that an ordinary observer would likely purchase Harbor
26 Freight’s counterfeit paint spray gun, believing it to be SATA’s product and have
27 the known quality and performance.
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1 41. Harbor Freight’s acts of infringement of the SATA Patents were

2 undertaken without authority, permission, or license from SATA. Harbor Freight’s
3 activities violate 35 U.S.C. § 271.
4 42. SATA has been and continues to be irreparably harmed by Harbor
5 Freight’s past and ongoing infringement of the SATA Patent.
6 43. Harbor Freight’s infringement of the SATA Patent has caused SATA
7 to suffer damages in an amount to be determined at trial.
8 PRAYER FOR RELIEF
9 WHEREFORE, SATA respectfully prays for:
10 A. Judgment that Harbor Freight has: (i) breached the Settlement
11 Agreement and (ii) willfully infringed the SATA Patent in violation of 35 U.S.C. §§
12 171 and 289;
13 B. A permanent injunction against further infringement or breaches of the
14 Agreement, directed against the SATA Patent, by Harbor Freight, its agents,
15 servants, employees, attorneys, and all others in active concert or participation with
16 any of them;
17 C. A finding that this is an exceptional case within the meaning of 15 §
18 U.S.C. 1117(a);
19 D. An award of damages adequate to compensate SATA for the breaches
20 of the Agreement;
21 E. An award of damages adequate to compensate SATA for the patent
22 infringements that have occurred, which amount shall include Harbor Freight’s
23 profits, SATA’s damages, and the costs of the action;
24 F. An award of damages adequate to compensate SATA for the patent
25 infringements that have occurred pursuant to 35 U.S.C. § 284, or an award of Harbor
26 Freight’s profits from its infringements pursuant to 35 U.S.C. § 289, whichever is
27 greater, together with prejudgment interest and costs; and
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1 G. Such other and further relief as this Court deems just and proper.
2 DATED this 4th day of March 2020.
3 DICKINSON WRIGHT PLLC
4
5 /s/ Steven A. Caloiaro
STEVEN A. CALOIARO
6 California Bar No. 284410
scaloiaro@dickinsonwright.com
7 100 W. Liberty Street, Suite 940
Reno, Nevada 89501
8 Tel.: (775) 343-7500
Fax: (844) 670-6009
9
Attorneys for Plaintiff SATA GmbH &
10 Co. KG
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Case 2:20-cv-02131 Document 1-1 Filed 03/04/20 Page 1 of 19 Page ID #:15
EXHIBIT A
EXHIBIT A
EXHIBIT B
EXHIBIT B
July Flyer
http://flyer.harborfreight.com/july-2019-ad/page/4
(Also available here: https://weekly-ads.us/harbor-freight-ads/flyer-69175-3)
August Flyer
http://flyer.harborfreight.com/august-2019-ad/page/15
(Also available here: https://www.weeklyadpro.com/harbor-freight-ad/15/)
September Flyer
http://flyer.harborfreight.com/september-2019-ad/page/5
October Flyer
http://flyer.harborfreight.com/october-2019-ad/page/2
(Also available here: https://www.weeklyadpro.com/harbor-freight-flyer-sale-oct-1-oct-31-2019/)
November Flyer
http://flyer.harborfreight.com/november-2019-ad/page/8
Flyer December
http://flyer.harborfreight.com/december-2019-ad/page/34
http://flyer.harborfreight.com/december-2019-ad/product/3681558
Second image from result when clicking “More info” on Black Widow HVLP in December Flyer
(image address: https://view.publitas.com/images?src=https%3A%2F%2Fshop.harborfreight.com%2Fmedia
%2Fcatalog%2Fproduct%2F5%2F6%2F56152_W1.jpg&s=052ea1127c14ad10b46e9d1609d2f788791c773c6
a191d7fea6338bde4a2d814)
http://flyer.harborfreight.com/december-2019-ad/product/3681557
Second image from result when clicking “More info” on Black Widow HVLP in December Flyer
(image address: https://view.publitas.com/images?src=https%3A%2F%2Fshop.harborfreight.com%2Fmedia
%2Fcatalog%2Fproduct%2F5%2F6%2F56153_W1.jpg&s=3eb748f99af595b950c21de6c1987ebadde40c6da
2a6bc80627f0cafc9280b04)
https://www.harborfreight.com/20-oz-professional-hte-compliant-gravity-feed-air-spray-gun-56153.html
https://www.harborfreight.com/20-oz-Professional-HVLP-Gravity-Feed-Air-Spray-Gun-56152.htm
http://www.hfcoupondb.com/coupons/3597_ITEM_BLACK_WIDOW_20_OZ._PROFESSIONAL_HVLP_
BASE_CLEAR_COAT_AIR_SPRAY_GUN__20_OZ._PROFESSIONAL_HTE_COMPLIANT_TOP_COA
T_AIR_SPRAY_GUN_1567126452.2122.png
T_AIR_SPRAY_GUN_1561646840.8249.jpg
https://milled.com/harbor-freight/high-power-discounts-5XzjnFGIL5C93qTq
https://www.hfqpdb.com/coupons/3597_ITEM_BLACK_WIDOW_20_OZ._PROFESSIONAL_HVLP_BAS
E_CLEAR_COAT_AIR_SPRAY_GUN__20_OZ._PROFESSIONAL_HTE_COMPLIANT_TOP_COAT_AI
R_SPRAY_GUN_1566939074.3796.png
R_SPRAY_GUN_1565355290.976.png
R_SPRAY_GUN_1571989404.258.png
R_SPRAY_GUN_1572963682.4671.png
R_SPRAY_GUN_1574038146.2736.jpg
R_SPRAY_GUN_1574038168.7867.jpg
EXHIBIT C
EXHIBIT C
USOOD552213S
(12) United States Design Patent (10) Patent No.: US D552,213 S

Schmon et al. (45) Date of Patent: Oct. 2, 2007
(54) PAINT SPRAY GUN 6,585,173 B2 * 7/2003 Schmon et al. ............ D23/526
6,626,382 B1 9/2003 Liu ............................ 239,569
(75) Inventors: Ewald Schmon, Grafenberg (DE): 7,017,838 B2 ck 3/2006 Schmon ...................... 239,526
Albrecht Kruse, Fichtestrasse (DE)
* cited by examiner
(73) Assignee: St. Gill KG, Primary Examiner Robin V. Webster
ornwestheim (DE) (74) Attorney, Agent, or Firm—Martin Fleit; Paul D.
(**) Term: 14 Years Bianco; Fleit Kain Gibbons Gutman Bongini & Bianco P.L.
(21) Appl. No.: 29/252,716 (57) CLAM
(22) Filed: Jan. 26, 2006 The ornamental design for a paint spray gun, as shown and
described.
30 Foreign Application PrioritV Data
(30) gn App ty DESCRIPTION
Jul. 28, 2005 (EM) ................................ OOO378815
FIG. 1 is a first front perspective view of a paint spray gun
(51) LOC (8) Cl. ................................................. 23-01 of the Subject invention;
(52) U.S. Cl. ..................................................... D23A226 FIG. 2 is a second front perspective view of thereof;
(58) Field of Classification Search ..... ... D23/223, FIG. 3 is a first side view thereof
D23/226; 239/525–6, 690-1, DIG. 14 FIG. 4 is a front view thereof
See application file for complete search history.
FIG. 5 is a rear view thereof;
(56) References Cited FIG. 6 is a bottom view thereof, and,
U.S. PATENT DOCUMENTS FIG. 7 is a top view thereof.
D314.421 S * 2/1991 Tajima et al. .............. D23,226
D405,503 S * 2/1999 Endo ......................... D23,226 1 Claim, 7 Drawing Sheets
U.S. Patent Oct. 2, 2007 Sheet 1 of 7 US D552,213 S
FIG. 1
FIG 2
FIG 3

U.S. Patent Oct. 2, 2007 Sheet S of 7 US D552,213 S


U.S. Patent Oct. 2, 2007 Sheet 7 Of 7 US D552,213 S

UNITED STATES PATENT AND TRADEMARK OFFICE
CERTIFICATE OF CORRECTION
PATENT NO. : Des. 552,213 S Page 1 of 1

APPLICATION NO. : 29/252,716
DATED : October 2, 2007
INVENTOR(S) : Ewald Schmon and Albrecht Kruse
It is certified that error appears in the above-identified patent and that said Letters Patent is
hereby corrected as shown below:
Title Page
Item (75) under Grafenberg (DE), change the inventor's city of residence from
“FichtStraSSe to --STUTTGART--.
Signed and Sealed this

Twenty-fifth Day of December, 2007
WDJ
JON. W. DUDAS
Director of the United States Patent and Trademark Office

SATA v. Central Purchasing - Complaint

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Case 2:20-cv-02131 Document 1 Filed 03/04/20 Page 1 of 14 Page ID #:1

1 DICKINSON WRIGHT PLLC

1 Gun which infringe on SATA’s federally registered patent.

1 The April 28, 2000 Settlement Agreement

1 Previous Central Models Current Central Model

1 22. Pursuant to Paragraph 16 of the Agreement, Harbor Freight shall be

1  U.S. D 552,213 (“‘213 Patent”)

1 41. Harbor Freight’s acts of infringement of the SATA Patents were

(12) United States Design Patent (10) Patent No.: US D552,213 S

U.S. Patent Oct. 2, 2007 Sheet 1 of 7 US D552,213 S

U.S. Patent Oct. 2, 2007 Sheet 2 of 7 US D552,213 S

U.S. Patent Oct. 2, 2007 Sheet 3 of 7 US D552,213 S

U.S. Patent Oct. 2, 2007 Sheet 4 of 7 US D552,213 S

U.S. Patent Oct. 2, 2007 Sheet S of 7 US D552,213 S

U.S. Patent Oct. 2, 2007 Sheet 6 of 7 US D552,213 S

U.S. Patent Oct. 2, 2007 Sheet 7 Of 7 US D552,213 S

PATENT NO. : Des. 552,213 S Page 1 of 1

Signed and Sealed this

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