best energy reduction technologies v. boss controls et. al
TRANSCRIPT
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UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA
BEST ENERGY REDUCTION TECHNOLOGIES, LLC,
Plaintiff, v.
BOSS CONTROLS, LLC, GREGORY PUSCHNIGG, and MICHAEL KRUMMEY
Defendants.
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Civil Action No. _________
JURY TRIAL DEMANDED
COMPLAINT
Plaintiff, Best Energy Reduction Technologies, LLC (“BERT”), brings this Complaint
against Defendants Boss Controls, LLC (“Boss”), Gregory Puschnigg, and Michael Krummey,
as outlined below.
THE PARTIES
1. Plaintiff BERT is a Delaware Limited Liability Company having a principal place
of business located at 840 First Ave, Suite 300, King of Prussia, PA 19406. Plaintiff BERT was
formerly known as Green Power Technologies, LLC (“Green Power”) until a certificate of
amendment was filed with the State of Delaware on May 10, 2013.
2. Upon information and belief, Defendant Boss is a Pennsylvania Limited Liability
Company having a principal place of business located at 215 East Main Street, Ligonier, PA
15658.
3. Upon information and belief, Defendant Gregory Puschnigg resides at 1700 Piper
Rd., Ligonier, PA 15658.
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4. Upon information and belief, Defendant Michael Krummey resides at 108 Stoney
Creek Ln., Harrison City, PA 15636.
JURISDICTION AND VENUE
5. This Court has subject matter jurisdiction over the claims for patent infringement
under 35 U.S.C. § 271 et seq. pursuant to 28 U.S.C. §§ 1331 and 1338(a) as they arise under the
patent laws of the United States.
6. This is also an action for misappropriation of trade secrets and breach of contract,
over which this Court has subject matter jurisdiction under 28 U.S.C. § 1367 as the claims are
related to the claims for patent infringement so as to form part of the same case or controversy.
7. Upon information and belief, Defendant Boss is subject to the jurisdiction of this
Court because Defendant Boss is a Pennsylvania Limited Liability Company and has its
principal place of business in the Commonwealth of Pennsylvania. Upon information and belief,
Defendant Boss further makes, imports, distributes, uses, sells, and/or offers to sell the infringing
devices (defined hereinafter) in the Commonwealth of Pennsylvania.
8. Upon information and belief, Defendant Puschnigg is subject to the jurisdiction of
this Court because Defendant Puschnigg resides in the Commonwealth of Pennsylvania.
9. Upon information and belief, Defendant Krummey is subject to the jurisdiction of
this Court because Defendant Krummey resides in the Commonwealth of Pennsylvania.
10. Upon information and belief, venue is proper in this judicial district pursuant to
28 U.S.C. §§ 1391 because a substantial amount of the events giving rise to the causes of action
occurred in this district. In addition, Defendant Boss transacts business selling the accused
devices in this district through QVC, Inc. (“QVC”).
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FACTS
11. Defendants Puschnigg and Krummey invented a device for remotely controlling
power to an electrically powered apparatus, which was subsequently marketed as the “Bert”
smart plug (“Bert Plug”).
12. Defendant Puschnigg founded Green Power and, along with Defendant
Krummey, executed an Assignment and Agreement (“Assignment Agreement”, attached hereto
as Exhibit A) assigning certain rights related to a product by the name of “WattPatrol,” which
later became the Bert Plug, to Green Power..
13. The Assignment Agreement contained a clause restricting Defendants Puschnigg
and Krummey’s use of “Confidential Information,” as defined in the Assignment Agreement.
14. On September 9, 2010, Defendants Puschnigg and Krummey caused a patent
application directed to the Bert Plug to be filed at the United States Patent & Trademark Office
(“USPTO”), which ultimately issued as U.S. Patent No. 7,964,989 (“the ‘989 Patent”), and the
rights to which Defendants Puschnigg and Krummey assigned to Green Power.
15. On June 16, 2011, a continuation application of the ‘989 Patent was filed at the
USPTO, which ultimately issued as U.S. Patent No. 8,093,751 (“the ‘751 Patent”) and was also
assigned to Green Power. A true and correct copy of the ‘751 Patent is attached as Exhibit B
hereto.
16. Defendant Krummey, as a member of Green Power and eventually the Chief
Technology Officer (CTO), wrote software that is installed in the Bert Plug to facilitate its
operation. At least a portion of this software was considered to be confidential and a trade secret
by Green Power, and was accessible to both Defendants Puschnigg and Krummey during their
respective affiliations with Green Power.
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17. Defendant Puschnigg was originally a member, manager, and Chief Executive
Officer (CEO) of Green Power, although by February 2012 he was still a member and a manager
but no longer the CEO.
18. In or about February 2012, Green Power had engaged in discussions with QVC to
sell Green Power’s Bert Plug through QVC to the consumer market.
19. On or about February 27, 2012, a decision was made not to pursue the sales
opportunity with QVC.
20. Upon information and belief, on or about March 6, 2012, Defendant Puschnigg,
while still a manager of Green Power, formed Defendant Boss.
21. Shortly thereafter, Defendant Puschnigg presented a proposed agreement to Green
Power involving, inter alia, the licensing of the ‘989 and ‘751 patents to Defendant Boss for the
purpose of developing a consumer market for the Bert Plug.
22. Defendant Puschnigg did not inform Green Power that he was the founder of
Defendant Boss.
23. Green Power declined to enter into the proposed license agreement, and in or
about May 2012, Defendant Puschnigg left Green Power.
24. Some time after the departure of Defendant Puschnigg, Defendant Krummey also
resigned from Green Power. In order to facilitate an orderly transition, Defendant Krummey
agreed to temporarily act as a consultant to Green Power through an entity called “Giant Oak
Engineering LLC,” and on November 3, 2012, Defendant Krummey executed a consulting
agreement (“Consulting Agreement”, attached hereto as Exhibit C).
25. The Consulting Agreement contained a clause restricting Defendant Krummey’s
use of “Confidential Information,” as defined in the Consulting Agreement.
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26. During Defendant Krummey’s consultation with Green Power, Defendant
Krummey had access to certain confidential information, including the software utilized in the
Bert Plug. In particular, Defendant Krummey was permitted to keep copies of the software,
including source code, in case support help was required.
27. Upon information and belief, and unbeknownst to Green Power at the time,
Defendant Krummey was an ownership member and the CTO of Defendant Boss while
Defendant Krummey was consulting for Green Power.
28. Defendant Boss has made, used, sold, offered for sale, and/or imported at least a
device called the “Smart Plug” (see e.g., Exhibit D), which is a device for controlling power to
an electrically powered apparatus.
29. Upon information and belief, Defendant Boss has sourced hardware for the Smart
Plug from a company known as “PowerTech” in Taiwan.
30. Upon information and belief, the hardware from PowerTech does not include
software necessary for the Smart Plug to operate as described by Defendant Boss.
31. Upon information and belief, Defendant Boss loads its own software into the
sourced hardware from PowerTech to render the Smart Plug operable.
32. Upon information and belief, at least a portion of the software in the Smart Plug is
a substantial copy and/or a derivative work of the software utilized by Plaintiff BERT in its Bert
Plug.
33. The ‘751 Patent is valid and enforceable. The term of the ‘751 Patent is set to
expire on September 9, 2030.
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34. Plaintiff BERT is the assignee of all right, title, and interest in and to the ‘751
Patent and possesses all rights of recovery under the ‘751 Patent, including the right to sue for
infringement and recourse for damages.
35. Defendant Boss has not obtained a license under the ‘751 Patent and is not
authorized or permitted to market, manufacture, use, offer for sale, or sell the invention claimed
in the ‘751 Patent.
COUNT I DIRECT INFRINGEMENT OF THE ‘751 PATENT
against Defendant Boss
36. Plaintiff BERT realleges and incorporates by reference paragraphs 1 through 35
of this Complaint as though fully set forth herein.
37. The claims of the ‘751 Patent are presumed valid pursuant to 35 U.S.C. § 282.
38. Defendant Boss, in violation of 35 U.S.C. § 271, has been and is currently directly
infringing one or more claims of the ‘751 Patent, either literally or under the doctrine of
equivalents, by making, causing to be made, using, offering for sale, selling, and/or importing
into the United States, without license or authority, at least the Smart Plug.
39. Defendant Boss has willfully infringed and, upon information and belief, will
continue to willfully infringe upon claims of the ‘751 Patent by the use, manufacture, offer for
sale, sale, and/or importation of the Smart Plug unless this Court enjoins Defendant Boss’
infringing activities.
40. As a result of Defendant Boss’ willful infringement of the ‘751 Patent, Plaintiff
BERT has been damaged to an extent not yet determined.
41. Plaintiff BERT is entitled to monetary damages adequate to compensate Plaintiff
BERT for the infringement by Defendant Boss and is entitled to increased damages under 35
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U.S.C. § 284, together with interest, costs, and attorneys fees, and is entitled to enjoin Defendant
Boss from further infringement of the ‘751 Patent.
COUNT II INDIRECT INFRINGEMENT OF THE ‘751 PATENT
against Defendants Boss and Puschnigg
42. Plaintiff BERT realleges and incorporates by reference paragraphs 1 through 41
of this Complaint as though fully set forth herein.
43. Defendants Boss and Puschnigg, in violation of 35 U.S.C. § 271, have been and
are currently engaging in acts which constitute inducement of infringement of one or more
claims of the ‘751 Patent, either literally or under the doctrine of equivalents.
44. As the first named inventor, Defendant Puschnigg had knowledge of the ‘751
Patent at all relevant times.
45. Defendant Puschnigg, as CEO of Defendant Boss, nevertheless directed
Defendant Boss to use, manufacture, offer for sale, sell, and/or import the Smart Plug, knowing
the same to be infringing at least one claim of the ‘751 Patent, as evidenced by his previous
attempt to obtain a license to the ‘751 Patent on Defendant Boss’ behalf.
46. As CEO, Defendant Puschnigg’s knowledge of the ‘751 Patent is imputed to
Defendant Boss.
47. Defendant Boss subsequently engaged and instructed its customers to use the
Smart Plug, knowing that the use by its customers would infringe one or more claims of the ‘751
Patent.
48. Defendants Boss and Puschnigg have willfully infringed via inducement and,
upon information and belief, will continue to willfully infringe via inducement claims of the ‘751
Patent by the use, manufacture, offer for sale, sale, and/or importation of the Smart Plug unless
this Court enjoins Defendants Boss and Puschnigg’s infringing activities.
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49. As a result of Defendants Boss and Puschnigg’s willful infringement of the ‘751
Patent, Plaintiff BERT has been damaged to an extent not yet determined.
50. Plaintiff BERT is entitled to monetary damages adequate to compensate Plaintiff
BERT for the infringement by Defendants Boss and Puschnigg and is entitled to increased
damages under 35 U.S.C. § 284, together with interest, costs, and attorneys fees, and is entitled
to enjoin Defendants Boss and Puschnigg from further infringement of the ‘751 Patent.
COUNT III MISAPPROPRIATION OF TRADE SECRETS
against Defendants Boss, Puschnigg, and Krummey
51. Plaintiff BERT realleges and incorporates by reference paragraphs 1 through 50
of this Complaint as though fully set forth herein.
52. Plaintiff BERT maintains at least a portion of the software used in its Bert Plug in
confidence, and considers same to be a trade secret.
53. Defendants Puschnigg and Krummey had access to the confidential software
during their respective tenures as members, managers, and/or officers of Green Power.
Defendant Krummey further had access to the confidential software under the terms of the
Consulting Agreement.
54. Upon information and belief, Defendants Puschnigg and Krummey have utilized
at least portions of Plaintiff BERT’s confidential software at Defendant Boss for the
manufacturing and selling of the Smart Plug product to compete with Plaintiff BERT’s Bert
Plug.
55. Plaintiff BERT has been harmed by Defendants’ actions in that sales have been
lost to Defendant Boss’ competing product, which makes use of Plaintiff BERT’s proprietary
information.
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COUNT IV BREACH OF CONTRACT
against Defendants Puschnigg and Krummey
56. Plaintiff BERT realleges and incorporates by reference paragraphs 1 through 55
of this Complaint as though fully set forth herein.
57. The Assignment Agreement is a valid and enforceable contract as between
Plaintiff BERT, previously known as Green Power, and Defendants Puschnigg and Krummey.
58. As part of the Assignment Agreement, Defendants Puschnigg and Krummey were
obligated to hold “Confidential Information” in the strictest confidence, and to only use the
Confidential Information for the benefit of Green Power.
59. At least a portion of the software utilized in Plaintiff BERT’s Bert Plug was
considered by Plaintiff BERT to be Confidential Information within the definition provided by
the Assignment Agreement.
60. Upon information and belief, Defendants Puschnigg and Krummey breached their
respective duties with respect to the Confidential Information by creating and/or directing the
creation of software for the Boss Smart Plug using at least a portion of the software from
Plaintiff BERT’s Bert Plug.
61. Plaintiff BERT has been damaged by Defendant Puschnigg and Defendant
Krummey’s breach in that Defendant Boss has sold its Smart Plug to current and potential
customers of Plaintiff BERT using at least a portion of the previously confidential software.
Thus, Plaintiff BERT has lost sales as a direct result of the breach by Defendants Puschnigg and
Krummey.
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COUNT V BREACH OF CONTRACT against Defendant Krummey
62. Plaintiff BERT realleges and incorporates by reference paragraphs 1 through 61
of this Complaint as though fully set forth herein.
63. The Consulting Agreement is a valid and enforceable contract as between
Plaintiff BERT, previously known as Green Power, and Defendant Krummey.
64. As part of the Consulting Agreement, Defendant Krummey was obligated to hold
“Confidential Information” in the strictest confidence, and to only use the Confidential
Information for the benefit of Green Power.
65. At least a portion of the software utilized in Plaintiff BERT’s Bert Plug was, at
least during the term of the Consulting Agreement, considered to be Confidential Information
within the definition provided by the Consulting Agreement.
66. Upon information and belief, Defendant Krummey was employed by Defendant
Boss during the term of the Consulting Agreement.
67. Upon information and belief, Defendant Krummey breached his duty with respect
to the Confidential Information by creating software for the Boss Smart Plug using at least a
portion of the software from Plaintiff BERT’s Bert Plug during and/or shortly after the term of
the Consulting Agreement.
68. Plaintiff BERT has been damaged by Defendant Krummey’s breach in that
Defendant Boss has sold its Smart Plug to current and potential customers of Plaintiff BERT
using at least a portion of the previously confidential software. Thus, Plaintiff BERT has lost
sales as a direct result of the breach by Defendant Krummey.
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PRAYER FOR RELIEF
WHEREFORE, Plaintiff BERT respectfully requests all legal and equitable relief as may
be recoverable for the foregoing offenses, including:
(a) a judgment that Defendant Boss directly infringes the claims of the ‘751 Patent;
(b) a judgment that Defendants Boss and Puschnigg have induced others to infringe
the claims of the ‘751 Patent;
(c) a permanent injunction enjoining Defendants Boss and Puschnigg and those in
active concert or participation therewith, from infringing the ‘751 Patent;
(d) an accounting for damages arising from the infringement of the ‘751 Patent by
Defendants Boss and Puschnigg and those in privity therewith;
(e) an award of damages adequate to compensate for the infringement of the ‘751
Patent, together with prejudgment and post-judgment interest thereon, and costs
fixed by the Court, as provided by 35 U.S.C. § 284;
(f) a judgment that the infringement of the ‘751 Patent by Defendants Boss and
Puschnigg was and is willful, and an award to Plaintiff BERT of increased
damages in accordance with 35 U.S.C. § 284;
(g) a judgment that Defendants Boss, Puschnigg, and Krummey misappropriated the
trade secrets of Plaintiff BERT;
(h) an award of damages adequate to compensate for the misappropriation by
Defendants Boss, Puschnigg, and Krummey;
(i) a judgment that Defendants Puschnigg and Krummey breached one or more
provisions of the Assignment Agreement;
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(j) an award of damages adequate to compensate Plaintiff BERT for the breach by
Defendants Puschnigg and Krummey;
(k) a judgment that Defendant Krummey breached one or more provisions of the
Consulting Agreement;
(l) an award of damages adequate to compensate Plaintiff BERT for the breach by
Defendant Krummey; and
(m) a grant to Plaintiff BERT of any such other relief as the Court may deem just,
equitable, or proper.
DEMAND FOR JURY TRIAL
Pursuant to Fed. R. Civ. P. 38, Plaintiff BERT hereby demands a trial by jury on all
issues so triable.
Dated: April 3, 2014 PANITCH SCHWARZE BELISARIO & NADEL, LLP
By:/s/ John D. Simmons_____________________________
John D. Simmons (PA Bar No: 202,405) Martin G. Belisario (PA Bar No. 62,641) Stephen E. Murray (PA Bar No. 203,683) One Commerce Square 2005 Market Street, Suite 2200 Philadelphia, PA 19103 Telephone: (215) 965-1330 Facsimile: (215) 965-1331 Email: [email protected] Email: [email protected] Email: [email protected]
Attorneys for Plaintiff, Best Energy Reduction Technologies, LLC