sockeye timberframing complaint

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Page 1- COMPLAINT TRAVIS W. HALL, OSB No. 984513 Email: [email protected] AMANDA Guile-HINMAN, OSB No. 093706 Email: [email protected] BATEMAN SEIDEL MINER BLOMGREN CHELLIS & GRAM PC 888 SW 5 th Avenue, Suite 1250 Portland, OR 97204 Phone: 503-972-9920 Facsimile: 503-972-9921 Attorneys for Sockeye Timberframing, LLC IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF OREGON PORTLAND DIVISION SOCKEYE TIMBERFRAMING, LLC, an Oregon limited liability company, Plaintiff, v. SURFACE THEORY LLC, a Washington limited liability company; and Ross Burtness, an individual, Defendants. CASE NO. 3:14-cv-649 COMPLAINT FOR COPYRIGHT INFRINGEMENT, WORK MADE FOR HIRE, LANHAM ACT VIOLATIONS, BREACH OF DUTY OF LOYALTY, TRADE SECRET VIOLATIONS, TORTIOUS INTERFERENCE WITH ECONOMIC RELATIONS JURY TRIAL REQUESTED For its Complaint, Plaintiff Sockeye Timberframing, LLC (“Sockeye”) alleges against Defendants Surface Theory LLC (“Surface Theory”) and Ross Burtness as follows:

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Page 1: Sockeye Timberframing Complaint

Page 1- COMPLAINT

TRAVIS W. HALL, OSB No. 984513 Email: [email protected] AMANDA Guile-HINMAN, OSB No. 093706 Email: [email protected] BATEMAN SEIDEL MINER BLOMGREN CHELLIS & GRAM PC 888 SW 5th Avenue, Suite 1250 Portland, OR 97204 Phone: 503-972-9920 Facsimile: 503-972-9921 Attorneys for Sockeye Timberframing, LLC

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF OREGON

PORTLAND DIVISION

SOCKEYE TIMBERFRAMING, LLC, an Oregon limited liability company, Plaintiff, v. SURFACE THEORY LLC, a Washington limited liability company; and Ross Burtness, an individual, Defendants.

CASE NO. 3:14-cv-649

COMPLAINT FOR COPYRIGHT INFRINGEMENT, WORK

MADE FOR HIRE, LANHAM ACT VIOLATIONS, BREACH

OF DUTY OF LOYALTY, TRADE SECRET VIOLATIONS,

TORTIOUS INTERFERENCE WITH ECONOMIC RELATIONS

JURY TRIAL REQUESTED

For its Complaint, Plaintiff Sockeye Timberframing, LLC (“Sockeye”) alleges against

Defendants Surface Theory LLC (“Surface Theory”) and Ross Burtness as follows:

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THE PARTIES

1. Sockeye is an Oregon limited liability company having its principal place of

business in McMinnville, Oregon with a show room in Portland, Oregon.

2. Surface Theory is a Washington limited liability company having its principal

place of business at 1106 N Canterbury Drive, Ellensburg, Washington, 98926.

3. Mr. Burtness upon information and belief resides in Ellensburg, Washington.

JURISDICTION AND VENUE

4. Under the United States Copyright Act (17 U.S.C. § 101, et seq.) (the “Act”) or

the Lanham Act (15 U.S.C. § 1125, et seq), this court has subject matter jurisdiction pursuant to

28 U.S.C. §§ 1338(b) and 1367. This court has supplemental jurisdiction as to the pendant state

law claims under 28 U.S.C. § 1367(a) because these state claims are so related to the copyright

claim or Lanham Act claim as to form the same case or controversy. Alternatively, this court has

jurisdiction under 28 U.S.C. 1332 as the matter in controversy exceeds $75,000 and the

controversy is between citizens of different states.

5. This court has personal jurisdiction because, upon information and belief, Surface

Theory and Mr. Burtness committed copyright or Lanham Act violations within the state of

Oregon. Additionally, Surface Theory and Mr. Burtness upon information and belief solicits

business or has done business within the state of Oregon. Surface Theory also with the aid and

assistance of Mr. Burtness has committed some of the allegations alleged below within the state

of Oregon.

6. Venue is proper in this jurisdiction under 28 U.S.C. §§ 1391 because a substantial

part of the events on which Sockeye’s claims are based occurred in this district.

/ / /

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FACTUAL ALLEGATIONS

Sockeye’s Business Model

7. Sockeye generally operates under the assumed business names of Pioneer

Millworks and New Energy Works. Sockeye is a domestic supplier of recaptured antique wood.

Sockeye acquires recaptured antique wood from old barns, buildings, derelict warehouses and

similar structures that have outlived their useful life but were constructed with old growth or

aged lumber. Sockeye then resaws the antique wood and then repurposes the fresh milled

antique wood into flooring and similar building materials.

8. Unlike fabricated wood products from fresh harvest sources, Sockeye’s

recaptured antique wood products are unique to the source of the antique wood. Products vary

significantly in color, texture, and grain.

9. Residential and commercial clients of Sockeye purchase a varietal of wood based

upon the aesthetic properties and characteristics unique to the source of the recaptured antique

wood. Sockeye’s products are not only functional; Sockeye’s clients may display the recaptured

wood as a major design feature intended to communicate the clients’ historical roots to a specific

region or period, to blend the transition between the exterior and interior of a structure, or to

create an illusion of the structures’ integration with nature.

10. Because of the geographical and historical relationship to foresting and nature, a

sizable percentage of Sockeye’s clients are located in the Pacific Northwest; specifically, Oregon

and Washington.

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Sockeye Hires Mr. Burtness To Its Team

11. Sockeye employs approximately 20 people, located primarily in Oregon;

however, Sockeye employs regional sales staff to work outside of Oregon in order to develop a

relationship with a specific community or market.

12. On or about August 1, 2010, Sockeye hired Mr. Burtness as a member of its sales

staff as a west coast representative with his territory focused on Oregon, Washington and British

Columbia, Canada. Included within Mr. Burtness’ job duties was the responsibility to service

Sockeye’s clients in the Washington area and to develop Sockeye’s presence in that market.

13. Sockeye operates a highly ethical business that is socially and environmentally

responsible. Sockeye’s management philosophy is to trust its employees with the expectation

that in return its employees will be responsible and ethical. Sockeye provides its employees

direction and instruction but within that framework Employees are encouraged to use initiative

and creativity in performing their jobs.

14. As part of this philosophy, Sockeye granted Mr. Burtness discretion on how to

develop the market for Sockeye in Washington and Oregon. Sockeye supported Mr. Burtness by

encouraging his initiative and by providing him the resources necessary to carry out his

responsibilities.

15. The resources Sockeye provided to Mr. Burtness included access to confidential

business information and trade secrets. This confidential business information and trade secrets

included, but are not limited to: client lists that Sockeye spent considerable time and effort to

develop that otherwise could not be obtained through readily available sources; wholesale price

lists; contact information for suppliers of reclaimed antique wood; business marketing plans;

methods and means of resawing reclaimed antique wood; and, Sockeye’s financial information.

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16. Sockeye also trusted Mr. Burtness by allowing him to use his personal cell phone

as his contract number for Sockeye. A consequence of Sockeye allowing Mr. Burtness to use his

personal cell phone number is that design professionals and contractors listed Mr. Burtness’

personal phone number on contracts and plans instead of Sockeye’s business number.

17. Ultimately, Sockeye’s trust in Mr. Burtness was misplaced. As alleged more fully

below, Mr. Burtness while an employee of Sockeye started a competing enterprise and on

company time began marketing his newly formed enterprise. Upon information and belief, Mr.

Burtness diverted Sockeye business to his own enterprise while still employed by Sockeye

Mr. Burtness Competes With Sockeye While In Its Employ

18. Mr. Burtness while still employed by Sockeye and during company time launched

a social media presence and a website, all under the name “Surface Theory.” Mr. Burtness did

not inform Sockeye that he was competing against Sockeye under the name of Surface Theory.

Rather than supporting Sockeye’s internet presence with marketing materials and promotions for

his area of responsibility, Mr. Burtness instead used his Surface Theory accounts while

employed by Sockeye in order to secretly and directly compete against Sockeye.

19. For example, Mr. Burtness created a Houzz account under the user name Surface

Theory no later than July 2012. Mr. Burtness on January 28, 2013 responded to a post by a

prospective client inquiring about wood flooring by posting a reply saying “Send me an email at

[email protected].” Mr. Burtness also linked on his Houzz account the Surface Theory

website no later than April 8, 2013.

20. Mr. Burtness also created a Twitter account for Surface Theory in April 2013 and

“tweeted” a link to his Houzz account. Mr. Burtness also tweeted in April 2013 that he had over

200 followers on the Surface Theory Twitter account.

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21. On Houzz, users can link projects and give reviews about work done by other

Houzz users. H2D Architecture + Design (“H2D”) posted on Houzz a project called the “Seattle

Green Custom Home” and linked Surface Theory as the material supplier of its “salvaged

hardwood flooring.” H2D posted on Houzz its Seattle Green Custom Home project on or about

August 2013. H2D on its website further represents that the Seattle Green Custom Home was

completed in the summer of 2013 and posted a link to a featured article on MSN Real Estate’s

feature article “Amazing Indoor and Outdoor Spaces.” The MSN article was published on July

5, 2013. Mr. Burtness diverted the publicity for this project from Pioneer Millworks to his

competing personal enterprise.

22. In September 2013, Mr. Burtness also created a Facebook page under the user

name “Surface Theory” and represented that the business was founded in 2010. Mr. Burtness

established an Instagram account for Surface Theory in September 2013, which was linked to the

Surface Theory Facebook page. Mr. Burtness also created a Surface Theory Pintrest account.

23. Based upon the time and date stamps of posts to the Surface Theory social media

accounts, Mr. Burtness updated, posted to, and maintained these various social media accounts

during normal work days and during normal working hours while Sockeye was paying Mr.

Burtness a salary.

24. In addition to leveraging social media in the name of a competing enterprise, upon

information and belief Mr. Burtness used his personal cell phone and contact information to

divert business from Sockeye to his own enterprise.

25. At all times relevant, Sockeye was unaware that Mr. Burtness was directly

competing against it under the name Surface Theory while Mr. Burtness was in its employ.

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Sockeye did not give permission to Mr. Burtness to operate a competing business or to use

company time to establish and develop a competing enterprise.

26. Upon information and belief, Mr. Burtness diverted substantial business

opportunities from Sockeye causing Sockeye substantial financial losses as well as a loss to its

reputation in the community.

Mr. Burtness Violates Sockeye’s Copyrights And Unfairly Competes with Sockeye

27. Sockeye ultimately terminated Mr. Burtness on or about November 22, 2013 as a

consequence of Mr. Burtness not performing his job satisfactorily. As part of the termination

process, Sockeye demanded that Mr. Burtness return all company property (not including the cell

phone). This property included an Apple iPad and a company supplied laptop computer, which

Mr. Burtness refused to return. Upon information and belief, Mr. Burtness had in his possession

and control company confidential information and trade secrets including but not limited to:

copyrighted photographs (including work made for hire); contracts; bids; drawings; plans; client

contact information; email communications; product specifications; and supplier contact

information.

28. Mr. Burtness formally organized Surface Theory on December 9, 2013 with the

Washington Secretary of State. Mr. Burtness is a member or manager of Surface Theory.

Surface Theory began competing directly and openly against Sockeye in the same business of

selling reclaimed antique wood flooring and similar building products. On January 11, 2014,

Mr. Burtness tweeted on the Surface Theory Twitter account, “We just went live with our

updated website!”

29. Sockeye ultimately discovered the Surface Theory website. Sockeye learned that

Surface Theory is using approximately 35 of Sockeye’s photographs. Sockeye in searching

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through Surface Theory’s social media accounts linked on its website discovered that Surface

Theory posted approximately 25 additional photographs that are Sockeye’s photographs.

Sockeye also learned for the first time that Mr. Burtness had been maintaining Surface Theory’s

social media accounts while still employed by Sockeye.

30. Generally, Sockeye’s copyrighted photographs publically displayed on Surface

Theory’s website and social media accounts are photographs of Sockeye’s work for clients or of

materials supplied by Sockeye to its clients.

31. Sockeye is the exclusive rights holder with respect to the reproduction and

distribution of these copyrighted photographs. To the extent that Mr. Burtness claims to be the

original author of some of the photographs, the photographs remain the exclusive rights of

Sockeye through the doctrine of “work made for hire.”

32. Upon information and belief, two of the photographs published on Surface

Theory’s website are copyrighted photos by Andrew Buchanan of Subtle Light Photographs.

Sockeye purchased a license to use these photographs from Mr. Buchanan

33. Upon discovery of Surface Theory’s unlawful reproduction, distribution and

display of Sockeye’s published but unregistered photographs, Sockeye on April 17, 2014 and

April 18, 2014 filed for registration with the United States Copyright Office two photographs as

application numbers 1-1371042069 and 1-1368745871. Sockeye reserves the right to amend this

complaint to allege the registration number of these photographs upon acceptance by the United

States Copyright Office as well as the right to amend this complaint to include any additional

future registered photographs by Sockeye.

34. In addition to its infringement of Sockeye’s copyrighted photographs, Surface

Theory also published a list of clients and projects on its website. However, at least 25 of the

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represented clients and projects are in fact Sockeye clients and projects. Surface Theory in some

instances linked Sockeye’s copyrighted photographs to clients and projects Surface Theory

represents as its own clients and projects. After Sockeye demanded that Surface Theory cease

using its photographs and listing its clients and projects as the clients and projects of Surface

Theory, Surface Theory placed the list of represented clients and projects behind a password

protected link for “designer only.”

35. As alleged above, Sockeye had allowed Mr. Burtness to use his own cell phone

for Sockeye business; therefore, Sockeye clients that worked primarily through Mr. Burtness had

his personal cell phone as the contact number for Sockeye. Sockeye clients attempted to

communicate with Sockeye by calling Mr. Burtness unaware of Mr. Burtness’ termination.

Upon information and belief, Mr. Burtness offered bids to and negotiated contracts with Sockeye

clients without first disclosing that he no longer was employed by Sockeye. Sockeye clients

would only learn that Mr. Burtness was an employee of Surface Theory and not Sockeye upon

receiving a contract from Surface Theory.

36. In some situations, Sockeye clients upon discovering Mr. Burtness’ termination

would open bids to both Surface Theory and Sockeye. Because Mr. Burtness had

misappropriated Sockeye’s trade secrets, Mr. Burtness used these trade secrets to unfairly obtain

a competitive advantage by bidding under what he knew to be Sockeye’s price points.

37. As of the date of this Complaint, Surface Theory and Mr. Burtness refuse to cease

using Sockeye copyrighted photographs, refuse to cease misrepresenting Sockeye projects and

clients as its own, and refuse to return all property, including Sockeye’s copyrighted photographs

and trade secrets, to Sockeye.

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38. At all times relevant, Surface Theory and Mr. Burtness committed a civil

conspiracy by acting in concert or by providing substantial aid and assistance to the other in the

commission of the unlawful acts alleged below. Except as specifically alleged, Defendants are

jointly and severally liable to Sockeye for all damages to be proven at trial.

COUNT I COPYRIGHT INFRINGEMENT – REPRODUCTION (17 U.S.C. § 106(1))

39. Sockeye incorporates by reference the allegations contained in the preceding

paragraphs as though fully alleged herein.

40. Sockeye is the sole owner of all exclusive rights under the Act in the published

photographs that Sockeye filed for registration with the United States Copyright Office prior to

filing this Complaint. Further, Sockeye is the sole owner of all exclusive rights under the Act of

its unpublished and unregistered photographs.

41. Defendants without authorization unlawfully made and reproduced copies of

Sockeye’s copyrighted photographs. Mr. Burtness made digital copies of the photographs prior

to Sockeye terminating Mr. Burtness’ employment. Defendants then reproduced the

photographs by storing the images on a server hosting Surface Theory’s website or by uploading

the photographs to the servers hosting its social media accounts.

42. Defendants’ actions constitute infringement of Sockeye’s copyrighted

photographs.

43. Defendants knew or had constructive knowledge that their acts constitute

infringement of Sockeye’s copyrighted photographs; further, their conduct was willful in that

their conduct was intentional and with indifference to Sockeye’s rights.

44. Defendants’ conduct infringed on Sockeye’s exclusive rights of reproduction of

the photographs that are protected under the Act.

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45. Sockeye has suffered monetary damages and damages to its reputation and

continues to be damaged by Defendants’ conduct. There is no adequate remedy at law to

compensate Sockeye fully for all damages arising from Defendants’ conduct. As Defendants’

infringement was intentional and willful, Sockeye is entitled at its election to an award of actual

damages or statutory damages pursuant to 17 U.S.C. § 504(c), exemplary damages, injunctive

relief, attorney fees, and costs.

COUNT II COPYRIGHT INFRINGEMENT – DISTRIBUTION (17 U.S.C. § 106(3))

46. Sockeye incorporates by reference the allegations contained in the preceding

paragraphs as though fully alleged herein.

47. Sockeye holds the exclusive rights under the Act to distribute the photographs.

48. Mr. Burtness as the founder and as a member or manager of Surface Theory

unlawfully distributed Sockeye’s photographs to Surface Theory for its use on the Surface

Theory website.

49. Mr. Burtness did not have permission to distribute a reproduction of Sockeye’s

photographs to Surface Theory. Mr. Burtness’ actions infringe on Sockeye’s copyrights and

exclusive rights under 17 U.S.C. § 106(3).

50. Mr. Burtness knew or had constructive knowledge that his acts infringed on

Sockeye’s copyright. Because Surface Theory can only act through its agents, Mr. Burtness’

knowledge is imputed upon Surface Theory in receiving an unlawful reproduction of Sockeye’s

copyrighted photographs. Defendants’ conduct was willful in that their conduct was intentional

and with indifference to Sockeye’s rights.

51. Defendants’ conduct infringed on Sockeye’s exclusive rights of distribution of the

photographs that are protected under the Act.

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52. Sockeye has suffered monetary damages and damages to its reputation and

continues to be damaged by Defendants’ conduct. There is no adequate remedy at law to

compensate Sockeye fully for all damages arising from Defendants’ conduct. As Defendants’

infringement was intentional and willful, Sockeye is entitled at its election to an award of actual

damages or statutory damages pursuant to 17 U.S.C. § 504(c), exemplary damages, injunctive

relief, attorney fees, and costs.

COUNT III COPYRIGHT INFRINGEMENT – DISPLAY (17 U.S.C. § 106(5))

53. Sockeye incorporates by reference the allegations contained in the preceding

paragraphs as though fully alleged herein.

54. Sockeye holds the exclusive rights under the Act to publically display the

photographs.

55. Defendants unlawfully publically displayed Sockeye’s photographs by storing

unlawfully reproduced copies of Sockeye’s photographs on the server hosting Surface Theory’s

website and then transmitting over the internet images of the photographs to users viewing

Surface Theory’s website or social media accounts.

56. Defendants did not have and do not have permission to publically display

Sockeye’s photographs on Surface Theory’s website. Defendants’ actions infringe on Sockeye’s

copyrights and exclusive rights under 17 U.S.C. § 106(5).

57. Defendants knew or had constructive knowledge that his acts infringed on

Sockeye’s copyright. Defendants’ conduct was willful in that their conduct was intentional and

with indifference to Sockeye’s rights.

58. Defendants’ conduct infringed on Sockeye’s exclusive rights of public display of

the photographs that are protected under the United States Copyright Act.

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59. Sockeye has suffered monetary damages and damages to its reputation and

continues to be damaged by Defendants’ conduct. There is no adequate remedy at law to

compensate Sockeye fully for all damages arising from Defendants’ conduct. As Defendants’

infringement was intentional and willful, Sockeye is entitled at its election to an award of actual

damages or statutory damages pursuant to 17 U.S.C. § 504(c), exemplary damages, injunctive

relief, attorney fees, and costs.

COUNT IV WORK MADE FOR HIRE (17 U.S.C. § 201(b))

60. Sockeye incorporates by reference the allegations contained in the preceding

paragraphs as though fully alleged herein.

61. Sockeye employed Mr. Burtness to promote and sell its reclaimed antique wood

flooring and building products as well as develop Sockeye’s presence in the market, especially in

the states of Oregon and Washington. Mr. Burtness’ scope of employment included client and

end user relations.

62. Taking photographs of completed Sockeye projects or photographs of the use of

Sockeye’s materials in finished construction falls within Mr. Burtness’ scope of employment

with Sockeye.

63. Because any photographs taken by Mr. Burtness while employed by Sockeye fall

within the scope of his employment, Sockeye is deemed to be the author of the photographs

under 17 U.S.C. § 201(b). Therefore, Sockeye enjoys the exclusive rights of use of the

copyrighted work under the provisions of 17 U.S.C. § 106.

64. Further, since Mr. Burtness was tasked by Sockeye to develop and promote

Sockeye’s market presence, Mr. Burtness’ social media activities under the user name “Surface

Theory” through November 22, 2013 fall within the scope of his employment to the extent that

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these social media activities marketed Sockeye projects, displayed Sockeye copyrighted

photographs, referenced Sockeye clients, or promoted applications or use of reclaimed antique

wood as design elements.

65. A review of the publically available social media content Mr. Burtness posted

under the name Surface Theory shows that up to the date of his termination Mr. Burtness posted

or “tweeted” social media content during normal work days and during normal work hours.

Upon information and belief, Mr. Burtness used the company iPad or laptop to update Surface

Theory’s social media accounts.

66. The terms of usage of social media sites such as Instagram, Twitter, Facebook,

Pintrest, and Houzz are generally consistent as to the ownership of content and copyrighted

works. According to the terms of usage for these social media sites, the user owns all the content

posted to that social media site, including copyrighted works. The user of the social media

account grants the social media host through his or her use a non-exclusive license to the content

and copyrighted works.

67. Because the social media content posted by Mr. Burtness under the name Surface

Theory while employed by Sockeye falls within the scope of his employment, Sockeye is

deemed to be the author of the content. For that content that falls within the definition of

original works of authorship under 17 U.S.C. § 102(a), Sockeye enjoys the exclusive rights of

use of the copyrighted work under the provisions of 17 U.S.C. §§ 106, 201(b).

68. Sockeye has suffered monetary damages and damages to its reputation and

continues to be damaged by Defendants’ conduct to the extent Defendants claim any right of

ownership to Sockeye’s copyrighted works. There is no adequate remedy at law to compensate

Sockeye fully for all damages arising from Defendants’ conduct.

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69. Sockeye is entitled to a judgment for declaratory relief declaring that Sockeye

through the doctrine of work made for hire is the author of copyrighted works that may be

claimed by Burtness as his own copyrighted works, including but not limited to any photographs

taken by Mr. Burtness during the scope of his employment and that social media content posted

by Mr. Burtness during the scope of his employment to the extent the social media content is

original works of authorship under 17 U.S.C. § 102(a).

70. Sockeye also seeks injunctive relief pursuant to 17 U.S.C. §§ 502, 503 protecting

Sockeye from Defendants’ future infringement of Sockeye’s exclusive rights under 17 U.S.C. §

106 to any copyrighted works through the doctrine of work made for hire.

COUNT V LANHAM ACT VIOLATIONS – 15 U.S.C. § 1125

71. Sockeye incorporates by reference the allegations contained in the preceding

paragraphs as though fully alleged herein.

72. Defendants made false or misleading statements of fact in a commercial

advertisement about Surface Theory’s product by representing on its website a list of customers

and clients that were not clients or customers of Mr. Burtness but rather of Sockeye; further,

Defendants made false or misleading statements of fact by representing photographs of

Sockeye’s product and services as the product and services of Surface Theory.

73. Defendants’ false statements either deceived or had the capacity to deceive a

substantial segment of potential customers since the Surface Theory website is viewable to the

general public and fails to disclose the proper origin of the projects and photographs as being the

projects and photographs of its competitor, Sockeye.

74. Defendants’ deception is material as it is likely to influence a consumer’s decision

to use Surface Theory’s services or product rather than the services or product of Sockeye.

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75. Since Defendants’ website is available to customers on the internet regardless of

state residence and Surface Theory specifically markets its product anywhere in the United

States, the product is in interstate commerce.

76. Sockeye has been directly injured as a result of Defendants’ false or misleading

statements or is likely to be injured as a result.

77. Under 15 U.S.C. § 1117(a) Sockeye is entitled to recover Surface Theory’s profits

in an amount to be proved at trial as well as actual damages suffered by Sockeye, including

costs, disbursements, and post-judgment interest at the statutory rate.

78. Sockeye is also entitled under 15 U.S.C. § 1116 to injunctive relief ordering

Defendants to cease its false or misleading advertising and further ordering Defendants to

undertake corrective advertising to remedy its false or misleading statements.

79. Sockeye is entitled to its attorney fees under 15 U.S.C. § 1117(a).

COUNT VI

BREACH OF FIDUCIARY DUTY

80. Sockeye incorporates by reference the allegations contained in the preceding

paragraphs as though fully alleged herein.

81. During Mr. Burtness’ employment with Sockeye, Mr. Burtness owed Sockeye a

fiduciary duty of loyalty.

82. Mr. Burtness breached this duty of loyalty by diverting Sockeye business to

Surface Theory while employed by Sockeye. Mr. Burtness diverted business away from

Sockeye by maintaining social media accounts and a website in the name of Surface Theory

promoting substantially the same business as Sockeye, and by referencing Sockeye projects on

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social media accounts and its website as its work rather than properly attributing the work to his

employer.

83. Mr. Burtness knew or should have known that his conduct violated his duty of

loyalty to Sockeye.

84. As a result of Mr. Burtness’ breach of the duty of loyalty, Sockeye suffered

economic damages in wages paid to Mr. Burtness for work or services performed by Mr.

Burtness in the name Surface Theory, lost profits from work diverted by Mr. Burtness from

Sockeye to Surface Theory, and reputation losses as a consequence of Mr. Burtness promoting

Surface Theory rather than Sockeye in its social media accounts and on its website.

85. The amount of damages suffered by Sockeye will be proven at trial but Sockeye

estimates that its losses are no less than $150,000.

COUNT VII TRADE SECRET VIOLATIONS – ORS 646.461, et seq.

86. Sockeye incorporates by reference the allegations contained in the preceding

paragraphs as though fully alleged herein.

87. Sockeye along with its affiliated companies are the largest domestic supplier of

reclaimed antique wood and has been in business since 1988. As a pioneer in the reclaimed and

sustainable wood industry, Sockeye has acquired information over the years that is generally not

available to the public. This information includes, but is not limited to: sources of raw antique

wood; techniques and processes for repurposing antique wood into useable building materials

suitable for modern use and design; client lists not readily available to the public that Sockeye

developed over time and at substantial costs; cost data of its products; and its methods for

bidding contracts as a material supplier.

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88. As a consequence of the unique industry of reclaimed and sustainable wood

products and its rapid recent growth in the Pacific Northwest due to an increase in consumer

demand for recycled or reclaimed building materials that are sustainable and environmentally

responsible, Sockeye’s information derives actual and potential independent economic value.

89. Sockeye has taken reasonable efforts under the circumstances to maintain the

secrecy of its information.

90. Upon information and belief, Mr. Burtness misappropriated Sockeye’s trade

secrets through improper means by taking Sockeye’s trade secrets for the benefit of Surface

Theory in order to compete directly against Sockeye in the same industry. Upon information and

belief, Mr. Burtness copied electronic data containing Sockeye’s trade secrets to the company

issued iPad or laptop that he refused to return or alternatively copied electronic data of the trade

secrets to another storage device or the cloud. Mr. Burtness acquired Sockeye’s trade secrets

without Sockeye’s permission or consent and refused to return the iPad, laptop or the trade

secrets when demand was made by Sockeye for its return.

91. Since Surface Theory can only operate through its agents, Surface Theory

acquired the trade secrets from Mr. Burtness and Surface Theory is imputed to know through Mr.

Burtness that the trade secrets were acquired by improper means.

92. Sockeye has suffered losses caused by Defendants’ misappropriation and

continues to be damaged by Defendants’ conduct. Further, Sockeye is entitled to losses for the

unjust enrichment resulting from Defendants’ misappropriation equal to a reasonable royalty for

Defendants’ use of Sockeye’s trade secrets. There is no adequate remedy at law to compensate

Sockeye fully for all damages arising from Defendants’ conduct so Plaintiff is entitled to

injunctive relief under ORS 646.463(1).

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93. The amount of damages for Sockeye’s actual loss and the unjust enrichment will

be proven at trial but Sockeye estimates that its losses are no less than $150,000.

94. Defendants’ misappropriation of Sockeye’s trade secrets was willful and therefore

Sockeye is entitled to its attorney fees under ORS 646.467 and punitive damages under ORS

646.465(3).

COUNT VIII INTENTIONAL INTERFERENCE WITH ECONOMIC RELATIONS

95. Sockeye incorporates by reference the allegations contained in the preceding

paragraphs as though fully alleged herein.

96. Sockeye over a period of time has developed business relationships with its

clients by providing its clients unique and quality reclaimed antique wood and building

materials. Through these existing relationships, Sockeye has developed a prospective business

advantage.

97. Defendants intentionally interfered with Sockeye’s business relationships through

improper means by receiving calls from Sockeye’s business relations when these business

relations believed they were calling Mr. Burtness as an employee of Sockeye. Upon information

and belief, Mr. Burtness failed to disclose that he no longer was employed by Sockeye but

instead was operating a competing enterprise. Mr. Burtness then would do business with

Sockeye’s business relationships as though he was working on behalf of Sockeye by accepting

scopes of work, offering bids, and otherwise selling products substantially similar to Sockeye’s

products. Upon information and belief, Sockeye’s business relationships would work with Mr.

Burtness unaware he was doing so on behalf of Surface Theory until Mr. Burtness would present

a contract on behalf of Surface Theory rather than Sockeye. Because of the work and effort put

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into negotiating a contract, Sockeye’s business relationships would be reluctant to back out of

the prospective agreement at a late date and start the process over with Sockeye.

98. Defendants further used improper means by representing Sockeye clients as its

clients on the Surface Theory website and additionally by infringing on Sockeye’s copyrighted

photographs on Surface Theory’s website and social media. Defendants also took credit for

projects, such as the Seattle Green Custom Home, which project received an MSN review.

99. Defendants further used improper means by using misappropriated trade secrets to

obtain an unfair competitive advantage with Sockeye’s business relations.

100. Defendants’ improper means caused damage to Sockeye’s economic

relationships.

101. Sockeye has suffered losses caused by Defendants’ tortious interference with its

economic relations. There is no adequate remedy at law to compensate Sockeye fully for all

damages arising from Defendants’ conduct.

102. The amount of Sockeye’s damages will be proven at trial but Sockeye estimates

that its losses are no less than $150,000.

JURY DEMAND

103. Sockeye hereby demands a trial by jury of all issues triable by jury.

PRAYER FOR RELIEF

WHEREFORE, Sockeye Timberframing, LLC prays for judgment and relief as follows:

1) On Counts I, II, and III, a judgment in favor of Plaintiff and against Defendants

that:

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a. declares that Defendants willfully infringed upon Plaintiff’s rights in

federally registered copyrights pursuant to 17 U.S.C. § 501 and injured Plaintiff’s business and

its reputation;

b. enjoins and restrains Defendants permanently from infringing upon

Plaintiff’s exclusive rights of its copyrighted works, whether registered or unregistered, and

whether published or unpublished, including but not limited to, Plaintiff’s exclusive rights of

reproduction, distribution, and public display;

c. orders Defendants to file a report under oath with the Court within thirty

days of entry of the injunction issued above that explains in detail the manner in which

Defendants have complied with the injunction;

d. issues an order of impoundment under 17 U.S.C. §§ 503, 509(a)

impounding all infringing copies of Plaintiff’s copyrighted photographs in Defendant’s

possession and control; and,

e. orders that the injunction above extend to Defendants’ members,

managers, employees, agents, and all other persons acting for, with or through them.

2) On Counts I, II, and III, a judgment in favor of Plaintiff and against Defendants:

a. for statutory damages or actual damages in an amount to be proved at trial,

at the election of Plaintiff, for Defendants’ willful infringement of Plaintiff’s exclusive use of

copyrighted works registered before Defendants’ infringement; and,

b. actual damages in an amount to be proven at trial for Defendants’ willful

infringement of Plaintiff’s exclusive use of its copyrighted works registered after Defendants’

infringement.

3) On Count IV, a judgment in favor of Plaintiff and against Defendants:

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a. declaring under 17 U.S.C. § 201(b) that any claim by Defendants to

photographic works authored during Defendant Ross Burtness’ employment with Sockeye is

work made for hire and that Plaintiff enjoys the rights of authorship and is entitled to exclusive

use of the copyrighted works under 17 U.S.C. § 106;

b. declaring under 17 U.S.C. § 201(b) that Defendant Ross Burtness’ social

media content and Surface Theory website content published before November 22, 2013 is work

made for hire and that Plaintiff enjoys the rights of authorship to that content that the Court

determines to be original works of authorship under 17 U.S.C. § 102(a) and entitled to the

protections of the United States Copyright Act; and,

c. to the extent not enjoined under 1.b. above, an order enjoining and

restraining Defendants permanently from infringing upon Plaintiff’s exclusive rights of its

copyrighted works, whether registered or unregistered, whether published or unpublished,

including but not limited to, Plaintiff’s exclusive rights of reproduction, distribution, and public

display.

4) On Count V, a judgment in favor of Plaintiff and against Defendants for:

a. damages in an amount to proved at trial for recovery of Surface Theory’s

profits and Plaintiff’s actual damages;

b. an order enjoining and restraining Defendants and their members,

managers, employees, agents, and all other persons acting for, with or through them from making

false or misleading statements in advertising claiming Sockeye products, clients, projects,

through word or photograph, as Defendants’ products, clients or projects;

c. an order requiring Surface Theory to undertake corrective advertising to

remedy its false advertising; and,

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d. an order for Defendants to file a report under oath with the Court within

thirty days of entry of the injunction issued above that explains in detail the manner in which

Defendants have complied with the injunction.

5) On Count VI, a judgment in favor of Plaintiff and against Defendant Ross

Burtness for damages to be proven at trial.

6) On Count VII, a judgment in favor of Plaintiff and against Defendants for:

a. damages in an amount to be proven at trial for Plaintiff’s actual losses and

its losses as a consequence of Defendants’ unjust enrichment;

b. a declaration declaring Defendants willfully misappropriated Sockeye’s

trade secrets and awarding Plaintiff punitive damages under ORS 646.465(3);

c. an order enjoining and restraining Defendants and their members,

managers, employees, agents, and all other persons acting for, with or through them from using

and disclosing Plaintiff’s trade secrets;

d. an order for Defendants to file a report under oath with the Court within

thirty days of entry of the injunction issued above that explains in detail the manner in which

Defendants have complied with the injunction; and,

e. issuance of an order of impoundment impounding all of Sockeye’s trade

secrets in Defendant’s possession and control.

7) On Count VIII, a judgment in favor of Plaintiff and against Defendants for:

a. Plaintiff’s damages in an amount to be proven at trial; and,

b. an order enjoining and restraining Defendants and their members,

managers, employees, agents, and all other persons acting for, with or through them from

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publically displaying Plaintiff’s copyrighted works and misrepresenting Sockeye clients and

projects as the clients and projects of Surface Theory on its website and social media accounts.

8) For all monetary damages awarded above, Plaintiff prays for pre-judgment

interest and post-judgment interest as the law may allow.

9) An award for Plaintiff’s fees, costs, disbursements and its reasonable attorney fees

as the law may allow.

10) All other general equitable relief as the Court deems just and proper under the

circumstances.

DATED this 18th day of April, 2014.

BATEMAN SEIDEL MINER BLOMGREN CHELLIS & GRAM s/ Travis W. Hall Travis W. Hall, OSB 98451 Of Attorneys for Plaintiff Sockeye Timberframing, LLC

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