1 Lewis Roca Rothgerber LLP 2 3 4 5 6 7 8 9 10

201 E. Washington St., Suite 1200 Phoenix, AZ 85004-2595

201 E. Washington St., Suite 1200 Phoenix, AZ 85004-2595 Shane E. Olafson (State Bar No. 024605) Direct Dial: 602.262.5327 Direct Fax: 602.734.3756 E-mail: solafson@lrrlaw.com Brent Rasmussen (State Bar No. 028033) Direct Dial: 602.262.5790 Direct Fax: 602.734.3905 E-mail: brasmussen@lrrlaw.com Of Counsel: Thomas I. Ross (pro hac vice forthcoming) Richard M. LaBarge (pro hac vice forthcoming) Gregory J. Chinlund (pro hac vice forthcoming) MARSHALL, GERSTEIN & BORUN LLP 233 South Wacker Drive 6300 Willis Tower Chicago, IL 60606-6357 Telephone: 312.474.6300 Attorneys for Plaintiff Armpocket Enterprises, LLC

11 12

UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA Case No. VERIFIED COMPLAINT FOR PATENT INFRINGEMENT (Jury Trial Demanded)

13 Armpocket Enterprises, LLC, 14 15 v. 16 Portable Device Outfitters, LLC d/b/a PDO, Inc. 17 Defendant. 18 19 20 21 22 23 24 25 26 27 28 Plaintiff,

4458939_1

The plaintiff Armpocket Enterprises, LLC (Armpocket) complains against

2 defendant PDO, Inc. (PDO), as follows. 3 4 1. SUMMARY OF THE CASE This is an action to enforce plaintiffs design patent rights so that plaintiff

5 can protect its product standing as unique and its reputation as an industry leading 6 innovator in the field of armband holders. The defendants sales of unlicensed copies 7 of the plaintiffs patented design at discounted prices and use of lower grade materials 8 has hurt plaintiffs distribution and sales of its patented product, and does irreparable 9 harm to the plaintiffs future sales, pricing, reputation, and clarity of title to its 10 protected design.
201 E. Washington St., Suite 1200 Phoenix, AZ 85004-2595

11 12 2.

JURISDICTION AND VENUE This action arises under the patent laws of the United States, Title 35 of

13 the United States Code. This Court has subject matter jurisdiction pursuant to 28 14 U.S.C. 1338(a). Venue is proper in this Court pursuant to 28 U.S.C. 1391(b) and 15 1400(b). 16 17 3. THE PARTIES Plaintiff Armpocket is a Florida limited liability company with its place

18 of business in Miramar, Florida. 19 4. Defendant PDO is an Arizona corporation with its principal place of

20 business in Scottsdale, Arizona, and field offices located in Hong Kong and Shenzhen, 21 China. 22 23 5. BACKGROUND OF THE CASE In the early 1980s, personal electronics became portable with

24 introduction of the Walkman cassette player. 25 26 27 28 1

4458939_1

1 2 3 4 5 6 7 8 9 10 The Walkman player had a clip that enabled users to clip the device onto a belt or
201 E. Washington St., Suite 1200 Phoenix, AZ 85004-2595

11 pocket. Smaller hard-drive based MP3 players were introduced in 1999. The first iPod 12 was introduced in 2001. Touchscreens were introduced in 2002. Smaller i-Pods were 13 introduced in 2004. These personal electronics products were commonly carried in the 14 users purse or pocket. 15 6. Also while exercising, people wish to have access to their personal

16 electronic devices. But, during exercise, it is problematic to carry such devices, 17 whether in a clothes pocket, purse, fanny pack, or holding it in the hand. The 18 devices are prone to bounce against the users body while exercising which results in 19 user discomfort and bruising, and can damage the device when other items like keys 20 are also carried. The devices are also subject to falling out of the wearers pocket, 21 purse, pack, or hand when performing various movements associated with exercising. 22 Such device placement is inconvenient and difficult to access when changing device 23 settings or referencing screen information. The device is also subject to dropping and 24 damage when removing or returning it to the pocket, purse, or pack. If hand-held, the 25 device can easily slip as a result of accumulated sweat and is subject to further internal 26 damage from exposure to sweat, rain, snow, dust, and dirt. 27 7. In 2006, Armpocket revolutionized the fitness accessories market by

28 developing armband holders that enabled athletes to comfortably, conveniently, and 2

4458939_1

1 securely carry a their electronic devices such as music players and cellphones, as well 2 as keys, ID, and other small items, when exercising. The armband holders introduced 3 by Ampocket were generally rounded pockets secured to a high-quality adjustable 4 5 6 7 8 9 10
201 E. Washington St., Suite 1200 Phoenix, AZ 85004-2595

11 armband provided with comfort wings that protected the wearers arm from the 12 sizing loop. Other innovations included touch-sensitive windows, easy-access double13 pull zippers, no-slip memory foam padding, moisture wicking mesh, and high 14 visibility reflective piping. The products were lauded in the industry. 15 8. As the miniaturization and diversification of electronics continued, smart

16 phones with built-in cellphones, MP3 players, Global Positioning, and internal fitness, 17 calorie burn and heart-rate monitoring applications began to replace stand-alone MP3 18 players, cellphones and similar stand-alone portable electronic devices. 19 9. PDO entered the market with a simple line of armband holders labeled

20 Sporteer in 2009. 21 10. In November 2012, Armpocket launched its i-25 model armband holder

22 for smartphones, which featured a rectangular pocket, front face piping, and an 23 oversized protective pad. Its unique design was submitted as an entry for a 2012 New 24 Product of the Year award at the Consumer Electronics Show, Las Vegas, Nevada. The 25 i-25 product is shown in the photograph below. 26 27 28 3
4458939_1

1 2 3 4 5 6 7 8 9 10
201 E. Washington St., Suite 1200 Phoenix, AZ 85004-2595

11.

Thereafter, in August 2013, PDO launched its Velocity model of

armband holder for smartphones. The Velocity product is a copy of Armpockets i25 product. The Velocity product is shown in the photograph below.

11 12 13 14 15 16 17 12. On March 11, 2014, U.S. Patent D700,774 issued, assigned to

18 Armpocket. The 774 patent is a design patent directed to protect the fundamental 19 design of the i-25 against counterfeiters like PDO. 20 13. The scope of protection afforded by a design patent, like the 774 patent,

21 is represented by its drawings. Illustrative drawings of the 774 patent are presented 22 below, next to photographs of the PDO Velocity product. 23 24 25 26 27 28 4
4458939_1

1 2 3 4 5 6 7 8 9 10
201 E. Washington St., Suite 1200 Phoenix, AZ 85004-2595

14.

The test for infringement of a design patent is derived from that set forth

by the Supreme Court in Gorham Co. v. White, 14 U.S. 511, 528 (1871), in which the design of the silverware on the left was determined to be substantially the same as the design on the right that the plaintiff had patented, as viewed by the ordinary observer, and thus infringing. The Court concluded: [W]hatever differences there may be between the plaintiffs design and those of the defendant in details of ornament, they are still the same in general appearance and effect, so much that in the market and with purchasers they would pass for the same thing . Id. at 531.

11 12 13 14 15 16 17 18 19 20 21 22 23

15.

The PDO Velocity product design is substantially the same as the

24 design covered by Armpockets 774 patent, as viewed by the ordinary observer, and 25 infringes the 774 patent. 26 16. PDO has known since 2013 that Armpocket intended to patent its i-25

27 product design. PDO received notice of the issuance of the 774 patent shortly after 28 issuance. 5
4458939_1

17.

Armpocket has not licensed its patented design to PDO or any other

2 competitor. 3 18. A large portion of sales in this market are made through internet

4 channels. Over the internet, PDO sells its Velocity product at discount prices 5 compared to the Armpocket i-25. For example, the Velocity model seen above can 6 be purchased for $29.99 (www.sporteer.com), whereas the genuine Armpocket i-25 7 internet sale price is $34.95 (www.armpocket.com). The Armpocket products are of 8 significantly higher quality than PDOs competing Velocity products; yet the quality 9 difference is difficult to discern from photographs alone. Accordingly, customers 10 purchasing the products over the Internet have difficulty appreciating the superior
201 E. Washington St., Suite 1200 Phoenix, AZ 85004-2595

11 quality of the Armpocket product. 12 19. Other sales in this category are made at brick-and-mortar retailers. While

13 display of products at such retailers give purchasers a better opportunity to recognize 14 the superior value of Armpockets products, many such retailers stock only one brand 15 of armband holder. Likewise, distributors typically only carry one brand of armband 16 holder when presenting to the retailers. Again, Armpocket is at a significant 17 disadvantage as its higher priced products make it difficult to dislodge the similar 18 looking PDO product from the retailers or distributors line. Consequently, 19 distributors, retailers, and end-using customers are unlikely to be able to compare 20 Armpockets product side-by-side with PDOs competing version. All involved in the 21 sales process that sell PDOs Velocity product are unlikely to even consider stocking 22 Armpockets product given the availability of the look-alike PDO product at a lower 23 price. 24 20. As the result of how PDO markets and sells its Velocity product,

25 customers seeking premium armband holders can obtain the same design as the 26 genuine Armpocket i-25 product at a discounted price. However, those customers do 27 not obtain the higher Armpocket quality of product. The result is that Armpocket is 28 6
4458939_1

1 losing potential sales and the profits from those sales, but also having its growing 2 reputation and its future sales threatened by PDOs inferior knock-off. 3 21. Since the companys inception in January 2006, Armpocket has invested

4 thousands of hours and nearly a million dollars in research, development, marketing, 5 and selling efforts to deliver the most versatile, most comfortable, and most secure 6 armband solution for carrying electronic devices. By copying Armpockets design, 7 PDO has helped itself to the quick and easy road to success at the expense of 8 Armpocket. 9 10
201 E. Washington St., Suite 1200 Phoenix, AZ 85004-2595

CAUSE OF ACTION 22. Armpocket re-alleges and incorporates by reference the allegations in

11 paragraphs 1 through 21 above. 12 23. PDOs importation, sale, and offer for sale of its Velocity line of

13 armband holders constitute infringement of the 774 patent under 35 U.S.C. 271(a), 14 entitling Armpocket to remedies by civil action pursuant to 35 U.S.C. 281 in the form 15 of injunctive relief and actual damages under 35 U.S.C. 283, 284, and 289. 16 17 24. 25. PDOs infringement has been willful and deliberate. PDOs infringement has injured Armpocket. Also, PDOs continued

18 infringement will cause irreparable harm to Armpocket, which has no adequate remedy 19 at law, unless and until this Court enters an injunction prohibiting further infringement 20 and, specifically, enjoining further importation, offer for sale, and/or sale of PDO 21 armband holders within the scope of the 774 patent. 22 23 PRAYER FOR RELIEF WHEREFORE, plaintiff Armpocket asks this Court to enter judgment against

24 defendant PDO granting the following relief: 25 A. A preliminary and permanent injunction prohibiting PDO and all persons

26 in active concert or participation with it from infringing the 774 patent; 27 B. An award of all money damages available under the law, and at least an

28 award sufficient to compensate Armpocket for lost sales and for price erosion caused 7
4458939_1

1 by or exacerbated by the infringement, but in no event less than a reasonable royalty 2 permitted by 35 U.S.C. 284; 3 4 C. D. Increased damages as permitted under 35 U.S.C. 284; Additional damages for design patent infringement as permitted under 35

5 U.S.C. 289; 6 E. A recall of all infringing products in the possession, custody, or control

7 of PDO or its US distributors and/or retailers that have not yet been sold to consumers; 8 F. Destruction of all infringing products that were shipped to the United

9 States and have not yet been sold to consumers; 10

201 E. Washington St., Suite 1200 Phoenix, AZ 85004-2595

G.

A finding that this case is exceptional and an award for plaintiff

11 Armpocket of its attorneys fees and costs as provided by 35 U.S.C. 285; and 12 13 just. 14 15 JURY DEMAND Pursuant to Fed.R.Civ.P. 38, plaintiff Armpocket demands a trial by jury on all H. Such other and further relief as this Court or jury may deem proper and

16 issues triable of right by a jury. 17 18 19 20 21 22 23 24 25 26 27 28 8 DATED this 17th day of April 2014. LEWIS ROCA ROTHGERBER LLP By: /s/Shane E. Olafson Shane E. Olafson Brent Rasmussen LEWIS ROCA ROTHGERBER LLP 201 E. Washington St., Suite 1200 Phoenix, AZ 85004 Telephone: 602-262-5311 Of Counsel: Thomas I. Ross Richard M. LaBarge Gregory J. Chinlund MARSHALL, GERSTEIN & BORUN LLP 233 South Wacker Drive, 6300 Willis Tower Chicago, IL 60606-6357 Telephone: 312-474-6300 Attorneys for Plaintiff Armpocket Enterprises LLC
4458939_1