Source: https://www.scribd.com/document/187119352/Neonatal-Product-Group-v-Shields-et-al
Timestamp: 2018-03-18 00:49:19
Document Index: 281884686

Matched Legal Cases: ['§1338', '§2201', '§1367', '§1391', '§2201', '§102', '§112', '§ 1125', '§ 285', '§ 1117']

Neonatal Product Group v. Shields et. al. | Declaratory Judgment | Tortious Interference
Description: Official Complaint for Declaratory Judgement in Civil Action No. 2:13-cv-02601: Neonatal Product Group, Inc. v. Shields et. al. Filed in U.S. District Court for the District of Kansas, no judge yet...
Official Complaint for Declaratory Judgement in Civil Action No. 2:13-cv-02601: Neonatal Product Group, Inc. v. Shields et. al. Filed in U.S. District Court for the District of Kansas, no judge yet assigned. See http://news.priorsmart.com/-l9z5 for more info.
IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF KANSAS KANSAS CITY DIVISION
Neonatal Product Group, Inc. Plaintiff, v. Janice M. Shields and Paul W. Shields, individually and as trustees of the Shields Family Trust Dated August 19, 2010
Civil Action No. 2:13-cv-2601
COMPLAINT Plaintiff Neonatal Product Group, Inc., for its complaint against Defendants Janice M. Shields and Paul W. Shields, individually and as trustees of the Shields Family Trust Dated August 19, 2010, alleges as follows: I. THE PARTIES 1. Plaintiff Neonatal Product Group, Inc. is a Nevada corporation doing business as Creche
Innovations and having offices and a principal place of business at 17745 Metcalf, One Penguin Plaza, Stilwell, Kansas. 2. Defendants Janice M. Shields and Paul W. Shields are individuals residing, upon
information and belief, at 1069 Crimson Dr., San Marcos, California and, upon further information and belief, are trustees of the Shields Family Trust Dated August 19, 2010. II. JURISDICTION AND VENUE 3. This lawsuit involves subject matter arising under the patent laws of the United States,
Title 35, United States Code, and this Court has subject matter jurisdiction under 28 U.S.C. 1
§1338(a) as well as the Federal Declaratory Judgments Act, 28 U.S.C. §2201 and 2202. This Court has supplemental jurisdiction over the claims for tortious interference under 28 U.S.C. §1367(a). 4. As alleged more fully below, there is a substantial controversy of sufficient immediacy
and reality between Plaintiff and Defendants as to U.S. Patent No. 6,417,498, entitled “Neonatal Substrate Warmer.” A copy of U.S. Patent No. 6,417,498 is attached hereto as Exhibit A. 5. This Court has personal jurisdiction over Defendants because they have entered into
contracts with Plaintiff in Kansas involving U.S. Patent No. 6,417,498 and they are doing business within this state. 6. Venue properly lies in the District of Kansas pursuant to 28 U.S.C. §1391(b)(2) in that a
substantial part of the events giving rise to the claims brought herein occurred in this state. III. BACKGROUND TO THE CONTROVERSY 7. Plaintiff is in the business of providing products for the care of high-risk newborn infants
in hospital neonatal intensive care units. 8. Plaintiff and Defendants, together with Millennium Marketing Group Ltd. (“MMG”), a
Kansas corporation, entered into an Exclusive License Agreement having an effective date of June 1, 2006. 9. In the Exclusive License Agreement, MMG as agent for Defendants, conveyed to
Plaintiff an exclusive license under U.S. Patent No. 6,417,498. 10. The terms of the Exclusive License Agreement specify that it was made under the laws of
the State of Kansas, was performable in part in Johnson County, Kansas, and personal jurisdiction and venue are proper in the state and federal courts situated in Johnson County [sic], Kansas.
From the time of entering into the Exclusive License Agreement until early 2013,
Plaintiff paid royalties to Defendants under the Exclusive License Agreement for sales made by Plaintiff of its PENGUIN® milk warming machines used in neonatal intensive care units, as well as for sales of its disposable THERMA-LINERTM bags that are used in its PENGUIN® machines to isolate the milk bottles from the warming fluid. 12. In early 2013, Plaintiff discovered that its PENGUIN® machines and its THERMA-
LINERTM bags were not covered by U.S. Patent No. 6,417,498, and that its years of payment of royalties to Defendants had been unnecessary and not properly required by any license of rights under that patent. As a result, Plaintiff ceased making royalty payments to Defendants under the Exclusive License Agreement. 13. Defendants nonetheless continued to assert that U.S. Patent No. 6,417,498 covered
Plaintiff’s PENGUIN® machines and provided notice of termination of the Exclusive License Agreement on May 23, 2013. 14. Shortly prior to the termination of the Exclusive License Agreement, Defendant Janice
M. Shields, on May 7, 2013, filed U.S. Trademark Application Serial No. 85/924,858 in which she sought to register the mark PENGUIN NUTRITIONAL WARMER for electric beverage warmer and electric warmers for infants. A copy of U.S. Trademark Application Serial No. 85/924,858 is attached hereto as Exhibit B. 15. Defendant Janice M. Shields’s actions in seeking to register the PENGUIN
NUTRITIONAL WARMER were undertaken with notice of Plaintiff’s prior-existing rights in its PENGUIN® mark, including, upon information and belief, knowledge of Plaintiff’s U.S. Trademark Registration No. 3,771,248 for its PENGUIN® mark. A copy of U.S. Trademark Registration No. 3,771,248 is attached hereto as Exhibit C.
On June 14, 2013, Defendant Janice M. Shields, sent an e-mail in which she sought to
force Plaintiff to pay contested royalties under the Exclusive License Agreement by threatening to contact an agency that was to provide grant funding to Plaintiff. 17. Specifically, the e-mail read: “I have not received my royalties. Therefore, in two hours,
I will be calling Kansas Bioscience Authority. I told you I would do this, and gave you the opportunity to correct your now extremely overdue royalties. You choose to ignore me. So at 11:45 a.m. my time, 1:45 p.m. Kansas time, I am calling.” A copy of the e-mail is attached hereto as Exhibit D. 18. Following termination of the Exclusive License Agreement, Plaintiff has rightfully
continued to market its PENGUIN® machines and has continued to market and sell its THERMA-LINERTM bags to hospitals that use Plaintiff’s Penguin® machines. 19. On September 27, 2013, Plaintiff and Defendants entered into a Letter of Intent in which
they resolved their dispute over contested royalties under the terminated Exclusive License Agreement and agreed to negotiate in good faith in an attempt to enter into a new license agreement that would include pending patent applications of Defendants. 20. 21. Plaintiff and Defendants were unable to agree on the terms of a new license agreement. Following the failure to enter into a new license agreement, Defendant Janice M. Shields
sent an e-mail on November 20, 2013 seeking to stop a supplier from continuing to provide THERMA-LINERTM bags to Plaintiff. A copy of the e-mail is attached hereto as Exhibit E. 22. In the e-mail, Defendant Janice M. Shields stated, “I wanted to warn you that there will
more than likely be a ‘Cease and Desist’ letter to you from my lawyers to not supply bags to [Plaintiff]. They are still selling my warmer and refusing to pay me royalties on it. That means all suppliers will have to stop selling to [Plaintiff] until the case is adjudicated.”
Defendant Janice M. Shields further stated in the e-mail that, “I have the only patent on
the bags you supply.” 24. Upon information and belief, no such patent exists on the bags that the supplier provides
to Plaintiff. 25. In the e-mail, Defendant Janice M. Shields further stated, “The company who provides
the hardware [for the PENGUIN® machine] will also not be able to supply materials and parts to [Plaintiff].” 26. Defendant Janice M. Shields has also convinced a potential partner of Plaintiff to not
work with Plaintiff to make and sell breast pumps until Plaintiff is licensed under U.S. Patent No. 6,417,498. 27. As a result of the ongoing dispute, Plaintiff has filed this lawsuit seeking a declaratory
judgment that U.S. Patent No. 6,417,498 is not infringed and is invalid. 28. Upon information and belief, U.S. Patent No. 6,417,498 has been transferred from
Defendants to the Shields Family Trust Dated August 19, 2010. 29. Upon information and belief, Defendants are trustees of the Shields Family Trust Dated
August 19, 2010. IV. THE CONTROVERSY 30. An actual controversy of a justiciable nature exists between Plaintiff and Defendants
regarding whether Plaintiff is infringing U.S. Patent No. 6,417,498. Plaintiff is entitled to a declaratory judgment of its rights under 28 U.S.C. §§2201 and 2202 to afford relief from the uncertainty and controversy that Defendants’ assertions have precipitated. V. COUNT ONE: NONINFRINGEMENT 31. Paragraphs 1 – 30 above are incorporated herein by reference.
Plaintiff has not and does not infringe U.S. Patent No. 6,417,498 by any actions involving
Plaintiff’s PENGUIN® machines and/or its THERMA-LINERTM bags. 33. Plaintiff is entitled to a declaration that it has not and does not infringe U.S. Patent No.
6,427,498. VI. COUNT TWO: INVALIDITY 34. 35. Paragraphs 1 – 30, 32, and 33 above are incorporated herein by reference. U.S. Patent No. 6,417,498 is invalid for failure to meet the conditions of patentability set
forth in 35 U.S.C. §§102, 103, and/or for failure to comply with the provisions of 35 U.S.C. §112. 36. Plaintiff is entitled to a declaration that U.S. Patent No. 6,417,498 is invalid. VIII. COUNT THREE: FALSE ADVERTISING 37. 38. Paragraphs 1 – 30, 32, 33, 35, and 36 above are incorporated herein by reference. The actions of Defendant Janice M. Shields described above constitute false advertising
under 15 U.S.C. § 1125(a)(1)(B) that has caused and continues to cause harm to Plaintiff. 39. Unless Defendant Janice M. Shields is restrained and enjoined, Plaintiff will continue to
suffer further and irreparable damages for which Plaintiff has no full and adequate remedy at law. VII. COUNT FOUR: TORTIOUS INTERFERENCE 40. 41. Paragraphs 1 – 30, 32, 33, 35, 36, 38, and 39 above are incorporated herein by reference. The actions of Defendant Janice M. Shields described above constitute tortious
interference with Plaintiff’s existing and prospective business and contractual relationships that has caused and continues to cause harm to Plaintiff.
Unless Defendant Janice M. Shields is restrained and enjoined, Plaintiff will continue to
suffer further and irreparable damages for which Plaintiff has no full and adequate remedy at law. VIII. RELIEF REQUESTED WHEREFORE, Plaintiff respectfully requests declaratory judgment and relief against Defendants, including: (A) A declaration that Plaintiff does not infringe any valid claim of U.S. Patent No.
6,427,498; (B) (C) A declaration that U.S. Patent No. 6,417,498 is invalid; An injunction, preliminarily and permanently preventing Defendants, their agents,
representatives, successors, assigns, and any and all persons in active concert or participation with or under authority from Defendants, either separately or jointly, from asserting or enforcing United States Patent No. 6,417,498 against Plaintiff, its related companies, successor or assigns, and/or suppliers, purchasers or users of Plaintiff’s products; (D) An injunction, preliminarily and permanently preventing Defendants, their agents,
representatives, successors, assigns, and any and all persons in active concert or participation with or under authority from Defendants, either separately or jointly, from further acts of false advertising, tortious interference, and from interfering with, or threatening to interfere with, the manufacture, use, sale or offer of sale of Plaintiff’s products by Plaintiff, its related companies, successor or assigns, and/or suppliers, purchasers or customers of Plaintiff’s products (E) Awarding Plaintiff its damages for the false advertising and tortious interference of
Defendant Janice M. Shields;
Awarding Plaintiff its costs and attorneys’ fees, pursuant to 35 U.S.C. § 285 and 15
U.S.C. § 1117; and (G) Awarding such other and further relief as this Court may deem just and proper. JURY DEMAND Plaintiff hereby demands a trial by jury on all the issues so triable in this matter.
/s/ Michael B. Hurd Michael B. Hurd KS, Bar #12,521 Matthew B. Walters, KS Bar #23,514 HOVEY WILLIAMS LLP 10801 Mastin Boulevard, Suite 1000 Overland Park, Kansas 66210 T: (913) 647 – 9050 F: (913) 647 – 9057 mbh@hoveywilliams.com mbw@hoveywilliams.com Attorneys for Plaintiff Neonatal Product Group, Inc.
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