american covers v okusa - complaint

8/13/2019 American Covers v OKUSA - Complaint

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Peter M. de Jonge, UT 7185Jed H. Hansen, UT 10679

Eric E. Westerberg, UT 12712

THORPE, NORTH & WESTERN, LLP

8180 South 700 East, Suite 350

Sandy, Utah 84070Telephone: (801) 566-6633Facsimile: (801) 566-0750

Attorneys for PlaintiffAmerican Covers, Inc.

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF UTAH, CENTRAL DISTRICT

AMERICAN COVERS, INC., a Utahcorporation,

Plaintiff,

v.

OK/USA DISTRIBUTION, INC., aWashington corporation and GLOBALEYES

DISTRIBUTION PTY LTD., an Australianbusiness entity.

Defendants.

Case No.: 2:13-cv-01099

COMPLAINT

WITH JURY DEMAND

Judge Paul M. Warner

Plaintiff American Covers, Inc. (hereinafter Plaintiff or American Covers) by and

through its counsel hereby files this Complaint with Jury Demand against Defendant OK/USA

Distribution, Inc., (hereinafter OK/USA) and Defendant Globaleyes Distribution Pty Ltd.

(hereinafter GLOBAL).

Case 2:13-cv-01099-PMW Document 2 Filed 12/13/13 Page 1 of 26


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COMPLAINT

American Covers complains and alleges as follows:

PARTIES, JURISDICTION AND VENUE

1. American Covers, Inc. is a Utah corporation having a principal place of business

at 102 West 12200 South, Draper Utah 84020.

2. Upon information and belief, Defendant OK/USA is a Washington corporation

having a business address of 1465 Slater Road, Ferndale, Washington 98248.

3. Upon information and belief, Defendant GLOBAL is an Australian business

entity having a principal place of business at Unit 1 No. 153 Beauchamp Rd. Matraville, Sydney

Australia 2036 and a business address of 623 Underwood Avenue Botany, New South WalesAustralia 2019.

4. Upon information and belief, Defendant OK/USA imports, markets, promotes,

sells, and offers to sell Defendant GLOBALs products.

5. Plaintiffs bring this action under U.S. patent laws, 35 U.S.C. 1 et seq., 15

U.S.C. 1051 et seq., and under various other Utah state law and common law provisions.

6. This Court has subject matter jurisdiction over this action under 28 U.S.C.

1331 and 1338.

7. This Court has supplemental jurisdiction over any state law statutory and common

law claims pursuant to 28 U.S.C. 1367.

8. Upon information and belief, this Court has specific personal jurisdiction over

Defendants as they have purposefully directed their activities toward the state of Utah and have

distributed the products at issue in this case into the state of Utah or to retailers/sub-distributors

that sell and/or distribute the products at issue in this case into the state of Utah and/or have

marketed and promoted this product to persons and/or businesses that reside in the state of Utah.

9. Upon information and belief, this Court has general personal jurisdiction over

Defendant OK/USA since its contacts with Utah are substantial, continuous, and systematic and

this action is based upon activities that arise out of or are related to those contacts.



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10. Venue is proper in this judicial district pursuant to 28 U.S.C. 1391 at least

because Plaintiff resides in this judicial district and Defendants acts harm Plaintiff in this

judicial district.

GENERAL ALLEGATIONSPLAINTIFFS PRODUCTS AND INTELLECTUAL PROPERTY

11. American Covers is in the business of inventing, developing, manufacturing,

distributing, and selling various products used in the air freshener automotive accessories market.

12. One of its air freshener automotive accessory products is designed to be placed

within the vents of an automobile and is commonly referred to as a vent stick. An image of one

of American Covers vent stick products is provided below.

13. American Covers is the owner of several United States patent protecting its vent

stick product from copying and other acts of patent infringement and has invested significantsums of money and time in the development and protection of its innovative products.

14. American Covers owns all right, title and interest in and to a valid and

enforceable United States patent, U.S. Patent No. 7,687,037 (the 037 Patent), entitled Air



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Freshener and Method. The 037 Patent issued on March 30, 2010. A copy of the 037 Patent

is attached as Exhibit A.

15. American Covers also owns all right, title, and interest in and to another valid and

enforceable United States Patent, U.S. Patent No. 8,480,960 (the 960 Patent), entitled Air

Freshener Clip With Head. The 960 patent issued on July 9, 2013. A copy of the 960 patent

is attached as Exhibit B.

16. American Covers also owns all right, title, and interest in and to another valid and

enforceable United States Patent, U.S. Patent No. 8,147,761 (the 761 Patent), entitled Air

Freshener Clip With Domed Head. The 761 patent issued on April 3, 2012. A copy of the

761 Patent is attached as Exhibit C.

17. The 761 Patent, 960 Patent, and 037 Patent are collectively referred to herein as

the Vent Stick Patents.

18. American Covers also manufactures and sells a line of air freshening devices

referred to as a dual scent air diffuser. An image of one of American Covers dual scent air

diffuser products is pictured below.

19. American Covers is the owner of all right, title, and interest in and to United

States design patent D664,246 (the 246 Patent) protecting its dual scent air diffuser products



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from copying and other acts of patent infringement. A copy of the 246 Patent is attached hereto

as Exhibit D.

20. In addition to the products described by the Vent Stick Patents and the 246

Patent, American Covers also has a line of air freshener products marketed under the trade name

Bahama Bag Co., including the Bahama Bag Co. Scent Pouch (Scent Pouch). The Scent

Pouch is a burlap-style sack enclosing an air freshener/odor eliminator composition inside with a

hemp-style cord or string as an attachment member (Scent Pouch Trade Dress). The Scent

Pouch can include tropical designs or images on its external surfaces and is marketed for use in

automobiles.

21. Upon information and belief, the design and configuration of the Scent Pouch is

inherently distinctive and has acquired secondary meaning in the marketplace. As such, the

Scent Pouch configuration and design have become a trademark and trade dress indicating

Bahama Bag Co as the source of the air freshener. As noted above, Bahama Bag Co. is a product

line of plaintiff American Covers. One example of American Covers Scent Pouch is shown

below.



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THE DEFENDANTS MISCONDUCT

22. Upon information and belief, OK/USA and GLOBAL make, use, sell, offer for

sale, and/or import into the United States a vent stick that infringes one or more claims of the

Vent Stick Patents (the Infringing Vent Stick Products). An image of one example of the

Infringing Vent Stick Products is shown below. Photographs of the product in American

Covers possession are attached hereto as Exhibit E.

23. Upon information and belief, OK/USA and GLOBAL make, use, sell, offer for

sale, and/or import into the United States a dual scent diffuser that infringes the claim of the 246

Patent (the Infringing Diffuser Scent Products). An image of one example of the Infringing

Dual Scent Diffuser Products is shown below. Photographs of the product in American Covers

possession are attached hereto as Exhibit F.



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24. Upon information and belief, the Defendants are in direct competition with

American Covers in the automotive air freshener accessories market.

25. Upon information and belief, the Defendants make, use, sell, import, or offer for

sale, and distribute the Infringing Vent Stick Products and Infringer Dual Scent Diffuser

Products in the United States.

26. Upon information and belief, the Infringing Vent Stick Products and Infringing

Dual Scent Diffuser Products are copies of American Covers products.

27. Upon information and belief, Defendant GLOBAL has purposefully copied

American Covers products to unlawfully benefit from American Covers goodwill in the

marketplace.

28. Upon information and belief, the Defendants continued manufacture, use, sale,

importing, and offering for sale and distribution of the Infringing Vent Stick Products and



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Infringing Dual Scent Diffuser Products has injured, is injuring, and will continue to cause

irreparable injury to American Covers.

29. Additionally, upon information and belief, Defendants acted in an objectively

reckless manner with respect to American Covers patent rights. Upon information and belief,

Defendants made, used, sold, offered for sale, and imported into the United States their

infringing products knowing that it was highly likely that their acts would constitute

infringement of a valid patent. Upon information and belief, the Defendants knew or should

have known that their actions were highly likely to result in the infringement of a valid patent.

As a consequence, Defendants have engaged in willful infringement of the Vent Stick Patents

and/or the 246 Patent and American Covers is therefore entitled to treble damages and

attorneys fees as well as costs incurred in this action along with prejudgment interest under 35

U.S.C. 284 and 285.

30. Upon information and belief, OK/USA and GLOBAL market, promote, and/or

distribute, or cause to be distributed the scent pouch air freshener product pictured below

(hereinafter Infringing Scent Pouch).



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31. Upon information and belief, Defendants introduced the Infringing Scent Pouch

after the Bahama Bag Co. Scent Pouch acquired secondary meaning.

32. Like the Bahama Bag Co. Scent Pouch, the Infringing Scent Pouch air fresheners

are burlap-style sacks that use a natural hemp-type hanging cord or string.

33. Upon information and belief, Defendants are in direct competition with American

Covers and Defendants products are identical to American Covers product. Defendants and

American Covers products are marketed through identical channels of trade and to identical

consumers.

34. In view of the above, it is clear that Defendants use of its confusingly similar

product design is likely to cause confusion, or to cause mistake, or to deceive consumers as to

the affiliation, connection, or association of Defendants with American Covers in the

marketplace.



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35. Upon information and belief, Defendant GLOBAL has purposefully copied

American Covers Bahama Bag Co. Scent Pouch configuration and design to unlawfully benefit

from American Covers distinctiveness and goodwill in the marketplace.

36. American Covers has been, and continues to be, significantly damaged by

Defendants actions. So long as Defendants continue performing the unlawful and improper

actions described in this complaint, American Covers will continue to suffer irreparable harm

that will not be fully compensable by money damages.

FIRST CAUSE OF ACTION

(PATENT INFRINGEMENT OF THE 037 PATENT UNDER 35 U.S.C. 271)

37. American Covers hereby incorporates by reference each and every preceding

allegation of this complaint as if set forth fully herein.

38. American Covers owns the 037 Patent.

39. The Defendants make, use, sell, offer for sale, and/or import into the United

States a product that infringes the 037 Patent literally as well as under the doctrine of

equivalents.

40. At no time has American Covers granted the Defendants permission, license, or

authorization to market or sell the Infringing Vent Stick Products.

41. Upon information and belief, the Defendants infringing activities have damaged

American Covers in an amount to be proven at trial. Among other remedies, American Covers is

entitled to its lost profits or, in the alternative a reasonable royalty to adequately compensate

American Covers for Defendants infringing activities under 35 U.S.C. 284. Additionally, the

harm to American Covers arising from these acts by Defendants is not fully compensable by

money damages. American Covers has suffered and continues to suffer irreparable harm that has



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no adequate remedy at law and that will continue unless this infringing conduct by Defendants is

preliminarily and permanently enjoined.

42. Upon information and belief, Defendants acted in an objectively reckless manner

with respect to American Covers patent rights. Upon information and belief, Defendants knew,

or should have known, that their actions were highly likely to result in the infringement of a valid

patent. As a consequence, the Defendants have engaged in willful infringement of the 037

Patent and American Covers is therefore entitled to treble damages and attorneys fees as well as

costs incurred in this action along with prejudgment interest under 35 U.S.C. 284 and 285.

SECOND CAUSE OF ACTION

(CONTRIBUTORYPATENT INFRINGEMENT OF THE 037 PATENT UNDER 35 U.S.C. 271)




45. Upon information and belief, Defendants make, use, sell, offer for sale, and/or

import into the United States a product that is material to practicing claims of the 037 Patent.

46. Upon information and belief, the Infringing Vent Stick Product marketed and sold

by the Defendants has no substantial non-infringing uses.

47. Moreover, upon information and belief, the Infringing Vent Stick Product is

known by Defendants to be especially made or especially adapted for use in an infringement of

the 037 Patent.





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THIRD CAUSE OF ACTION

(INDUCEDPATENT INFRINGEMENT OF THE 037 PATENT UNDER 35 U.S.C. 271)




53. Upon information and belief, Defendants actively induce their customers to make

use of the Infringing Vent Stick Products in a manner that infringes the 037 Patent.

54. Upon information and belief, Defendants possessed specific intent to encourage

their customers to make use of the Infringing Vent Stick Product in a manner that the Defendants

knew, or should have known, would infringe the 037 Patent.



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authorization to market or sell the Infringing Product.















FOURTH CAUSE OF ACTION






States a product that infringes the 761 Patent literally as well as under the doctrine of

equivalents.



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FIFTH CAUSE OF ACTION





66. Upon information and belief, the Defendants make, use, sell, offer for sale, and/or

import into the United States a product that is material to practicing claims of 761 Patent.



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67. Upon information and belief, the Infringing Vent Stick Products marketed and

sold by the Defendants have no substantial non-infringing uses.

68. Moreover, upon information and belief, the Infringing Vent Stick Products are


the 761 Patent.

















SIXTH CAUSE OF ACTION

(INDUCEDPATENT INFRINGEMENT OF THE 761 PATENT UNDER 35 U.S.C. 271)



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EIGHTH CAUSE OF ACTION(CONTRIBUTORYPATENT INFRINGEMENT OF THE 960 PATENT UNDER 35 U.S.C. 271)






88. Upon information and belief, the Infringing Vent Stick Products marketed and

sold by the Defendants have no substantial non-infringing uses.

89. Moreover, upon information and belief, the Infringing Vent Stick Products are


the 960 Patent.











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TENTH CAUSE OF ACTION






States a product that infringes the 246 Patent, literally as well as under the doctrine of

equivalents.


authorization to market or sell the Infringing Dual Scent Air Diffuser Products.




American Covers for Defendants infringing activities under 35 U.S.C. 284 and 289.



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Additionally, the harm to American Covers arising from these acts by Defendants is not fully

compensable by money damages. American Covers has suffered and continues to suffer

irreparable harm that has no adequate remedy at law and that will continue unless this infringing

conduct by Defendants is preliminarily and permanently enjoined.






costs incurred in this action along with prejudgment interest under 35 U.S.C. 284 and 285 as

well as any other damages available to American Covers pursuant to 35 U.S.C. 289.

ELEVENTH CAUSE OF ACTION







109. Upon information and belief, the Infringing Dual Scent Air Diffuser Products

marketed and sold by the Defendants have no substantial non-infringing uses.

110. Moreover, upon information and belief, the Infringing Dual Scent Air Diffuser

Products are known by Defendants to be especially made or especially adapted for use in an

infringement of the 246 Patent.



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authorization to market or sell the Infringing Dual Scent Air Diffuser Product.














costs incurred in this action along with prejudgment interest under 35 U.S.C. 284 and 285 as

well as any other damages available to American Covers pursuant to 35 U.S.C. 289.

TWELFTH CAUSE OF ACTION

(TRADEMARK INFRINGEMENT AND UNFAIR COMPETITION,

15 U.S.C. 1125AND COMMON LAW)

114. American Covers hereby incorporates by this reference each and every preceding

allegation as if set forth fully herein.

115. American Covers has used the trademark and trade dress design features

associated with its Bahama Bag Scent Pouch since at least as early as December 15, 2006. Said



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trademark and trade dress are indicative of its air fresheners, are inherently distinctive, and have

acquired secondary meaning with the consuming public.

116. Defendants have used design features in connection with its Infringing Scent

Pouch line of air freshener products that are likely to cause confusion, or to cause mistake, or to

deceive as to the affiliation, connection, association, origin, sponsorship, or approval of its goods

and commercial activities in light of American Covers trademark and trade dress.

117. By engaging in these activities, Defendants have engaged in trademark

infringement and unfair competition under 15 U.S.C. 1125(a)(1)(A) and under the common

law.

118. American Covers has suffered actual damages as a result of Defendants

trademark infringement and unfair competition in an amount to be proven at trial. Additionally,

the harm to American Covers arising from Defendants acts is not fully compensable by money

damages. American Covers has suffered, and continues to suffer, irreparable harm that has no

adequate remedy at law and that will continue unless Defendants conduct is preliminarily and

permanently enjoined.

119. Defendants continued use of a confusingly similar trademark and trade dress is

willful and intentional. As a result, American Covers is further entitled to treble damages and an

award of costs and attorneys fees.

THIRTEENTH CAUSE OF ACTION

(UNFAIR COMPETITION, UTAH CODE ANN. 13-5A-102, 103AND/OR 13-5-14AND

UTAH COMMON LAW)



121. American Covers owns the Vent Stick Patents, the 246 Patent, and common law

rights associated with the Scent Pouch Trade Dress.

122. Defendants make, use, sell, offer for sale, and/or import into the United States a

product that infringes the Vent Stick Patents and/or the 246 Patent.



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123. The Defendants have engaged in unfair methods of competition by infringing the

Vent Stick Patents and the 246 Patent either directly, indirectly, under the doctrine of

equivalents, contributorily, or induced infringement.

124. Defendants also make, use, sell, offer for sale, and/or import into the United

States a product that infringes American Covers Scent Pouch Trade Dress and have engaged in

unfair methods as a result.

125. Upon information and belief, American Covers has been injured by the

Defendants infringing acts and unfair competition.

126. By engaging in the above-described activities, the Defendants have engaged in

unfair competition under Utah Code Ann. 13-5a-102, 103 and/or 13-5-14 and under Utah

common law.

127. American Covers has suffered actual damages as a result of unfair business

practices by the Defendants in an amount to be proven at trial. Additionally, the harm to

American Covers arising from these acts by Defendants is not fully compensable by money

damages. American Covers has suffered, and continues to suffer irreparable harm that has no

adequate remedy at law and that will continue unless this unfair conduct by the Defendants is

preliminarily and permanently enjoined. Furthermore, American Covers is entitled to its

attorneys fees and costs.

FOURTEENTH CAUSE OF ACTION

(UNJUST ENRICHMENT UNDER UTAH COMMON LAW)



129. The Defendants have benefited from the improper, unfair, and unauthorized use

of the Vent Stick Patents, the 246 Patent, and the Scent Pouch Trade Dress as alleged herein.



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130. The Defendants knew, or should have known, that its actions were improper and

fully appreciated the benefits received as a result of its improper actions.

131. The Defendants would be unjustly enriched if it were permitted to retain the

benefits obtained from such actions.

132. Equity and good conscience require that Defendants be required to account for

and pay to American Covers an amount equal to value of the benefits conferred upon it.

WHEREFORE, it is respectfully requested that the Court enter judgment in favor of

Plaintiff as follows:

A. That the Court enter judgment that the Defendants have infringed the Vent Stick

Patents literally and under the doctrine of equivalents.

B. That the Court enter judgment that Defendants are liable to American Covers for

contributory infringement of the Vent Stick Patents.

C. That the Court enter judgment that Defendants are liable to American Covers for

inducement to infringe the Vent Stick Patents.

D. That the Court enter judgment that the Defendants have infringed the 246 Patent

literally and under the doctrine of equivalents.

E. That the Court enter judgment that Defendants are liable to American Covers for

contributory infringement of the Dual Scent Air Diffuser Products.

F. That the Court enter judgment that the Defendants have competed unfairly

pursuant to 15 U.S.C. 1125 and infringed American Covers common law trademark and trade

dress.

G. That the Court enter judgment that the Defendants have competed unfairly

pursuant to Utah Code. Ann. 13-5a-102 and 13-5-14 and Utah common law.

H. That the Court enter judgment that the Defendants have been unjustly enriched

through its misconduct.



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I. That the Defendants be ordered to pay damages to American Covers, together

with interest, in an amount to be determined by this Court including, but without limitation, those

set forth in 35 U.S.C. 289.

J. That the Court award American Covers treble damages pursuant to 35 U.S.C.

284.

K. That the Court award American Covers costs and attorneys fees related to this

action.

L. That the Court levy punitive damages against the Defendants.

M. That the Court award American Covers prejudgment interest.

N. That American Covers have such other and further relief as shall seem just and

proper to the Court.

O. That the Court grant preliminary and permanent injunctive relief enjoining the

Defendants, their officers, directors, principals, agents, servants, employees, successors and

assigns, and all other aiding, abetting, or acting in concert or active participation therewith, from

directly or indirectly infringing the Vent Stick Patents, the 246 Patent, or the Scent Pouch Trade

Dress including with limitation, precluding the Defendants from making, using, selling, offering

for sale, or importing into the United States the Infringing Vent Stick Products, the Infringing

Air Diffuser Product, and/or the Infringing Scent Pouch.

DATED: December 13, 2013 THORPE NORTH & WESTERN, LLP

/Jed H. Hansen/

Peter M. de Jonge

Jed H. HansenEric E. Westerberg

Attorneys for American Covers, Inc.



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Exhibit B



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Exhibit C



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Exhibit D



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Exhibit E



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Exhibit F



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american covers v okusa - complaint

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