UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION DENNEROLL HOLDINGS PTY LIMITED and DENNEROLL INDUSTRIES INTERNATIONAL PTY LIMITED, Plaintiffs, v. CHIRODESIGN GROUP, LLC and MARIE L. WEBSTER, INDIVIDUALLY AND DBA CHIRODESIGN GROUP, Defendants. § § § § § § Civil Action No. ____________ § § JURY § § § § § § § ORIGINAL COMPLAINT Plaintiffs Denneroll Holdings Pty Limited and Denneroll Industries International Pty Limited (collectively “Denneroll” or “Plaintiffs”), by and through their undersigned attorneys, file this Original Complaint for Patent Infringement and Unfair Competition against Defendants ChiroDesign Group, LLC and Marie L. Webster, individually and doing business as ChiroDesign Group (collectively “CDG” or “Defendants”), and allege and state as follows: I. THE PARTIES 1. Plaintiff Denneroll Holdings Pty Limited (“Denneroll Holdings”) is a company organized under the laws of Australia with a business address of 29 Woodward Street, Cromer NSW 2099, Australia. Denneroll Holdings is the owner of U.S. Patent No. 8,713,732. 2. Plaintiff Denneroll Industries International Pty Limited (“Denneroll Industries”) is a company organized under the laws of Australia with a business address of 29 Woodward Page 1 Street, Cromer NSW 2099, Australia. Denneroll Industries markets and sells a line of spinal orthotic devices and is the exclusive licensee of Denneroll Holdings for U.S. Patent No. 8,713,732. 3. Defendant ChiroDesign Group, LLC is a limited liability company organized under the laws of Texas with a principal place of business and registered agent address at 6550 Shady Brook Ln, Apt. 1420, Dallas, TX 75206. ChiroDesign Group, LLC markets and sells a line of spinal orthotic devices known as “LifeCurve Rolls,” which are the accused instrumentalities in this case, including via its website at www.chirodesigngroup.com. 4. Defendant Marie L. Webster (“Defendant Webster”) is an individual having a principal residence at 6550 Shady Brook Ln, Apt. 1420, Dallas, TX 75206. Defendant Webster is the owner, director and registered agent of ChiroDesign Group, LLC. Defendant Webster, individually and doing business as ChiroDesign Group, markets and sells the accused LifeCurve Rolls, including via her website at www.chirodesigngroup.com. 5. On or about August 1, 2014, the charter for ChiroDesign Group, LLC was forfeited by the Texas Secretary of State pursuant to Section 171.309 of the Texas Tax Code. Because Denneroll’s cause of action arose before the forfeiture, affirmative relief may not be granted to ChiroDesign Group, LLC unless its corporate privileges are revived. TEX. TAX CODE ANN. § 171.253 (2015). 6. Because the corporate privileges of ChiroDesign Group, LLC were forfeited under Subchapter F of Chapter 171 of the Texas Tax Code, ChiroDesign Group, LLC cannot sue or defend in this Court. TEX. TAX CODE ANN. § 171.252 (2015). 7. Because the corporate privileges of ChiroDesign Group, LLC were forfeited under Subchapter F of Chapter 171 of the Texas Tax Code, Ms. Webster and all other directors Page 2 and officers of ChiroDesign Group, LLC are liable for the debts of ChiroDesign Group, LLC as provided by Section 171.255 of the Texas Tax Code. TEX. TAX CODE ANN. § 171.252 (2015). II. JURISDICTION AND VENUE 8. This is an action for patent infringement arising under the patent laws of the United States, Title 35 of the United States Code (the “Patent Act”), and for false advertising arising under the unfair competition laws of the United States, § 43 of the Lanham Act, 15 U.S.C. § 1125(a). 9. This Court has subject matter jurisdiction over this action pursuant to 28 U.S.C. §§ 1331, 1338. 10. The Court has personal jurisdiction over the parties, and venue is proper in this District pursuant to 28 U.S.C. §§ 1391, 1400, because Defendants are residents of Texas and Defendants are conducting business on a systematic and continuous basis within this judicial District, and have committed acts of infringement and unfair competition in this judicial District, including by advertising and selling LifeCurve Rolls in and into this District. Defendants have committed acts of infringement in this judicial District by offering to sell and selling LifeCurve Rolls in this District, including via their website. Defendants have committed acts of unfair competition in this judicial District by advertising LifeCurve Rolls unlawfully in this District, including via their website. Thus, a substantial part of the events and omissions giving rise to Denneroll’s claims occurred in this District, and this Court’s assertion of personal jurisdiction over Defendants would not offend traditional notions of fair play and substantial justice. Page 3 11. Venue is proper in this District because the Defendants are subject to personal jurisdiction in this District. See, e.g., Versata Software, Inc. v. Internet Brands, Inc., No. 2:08cv-313, 2009 WL 3161370, at *2 (E.D. Tex. Sept. 30, 2009) (citing Trintec Indus., Inc. v. Pedre Promotional Prods., Inc., 395 F.3d 1275, 1280 (Fed. Cir. 2005)). III. FACTUAL BACKGROUND Plaintiffs Denneroll Holdings and Denneroll Industries 12. Denneroll is in the business of marketing and selling a line of products for effective spinal health care. Denneroll’s products are sold in numerous countries around the world, including the United States, Australia, New Zealand and the United Kingdom, and are purchased by chiropractors, patients and others for use in connection with the prevention and treatment of poor spinal health. 13. One of Denneroll’s products is known commercially as the Cervical Denneroll device, which is available in different sizes (large, medium and small) as shown in the below image: Plaintiffs’ Cervical Denneroll orthotic devices 14. The Cervical Denneroll products are cervical orthotic devices for relieving pain and muscle tension associated with abnormal curvature of a person’s neck, or abnormal Cervical Lordosis. Page 4 15. The Cervical Denneroll orthotic devices can be used for treating various portions of a person’s neck and are placed between the neck and an underlying surface during use, as demonstrated in the below image: Plaintiffs’ Cervical Denneroll orthotic devices during use 16. The Cervical Denneroll was invented by Dr. Adrian Dennewald and is the subject of U.S. Patent No. 8,713,732 entitled “Orthotic Device” (the “’732 patent”). 17. Denneroll Holdings is the owner by assignment of all rights, title, and interest in and to the ‘732 patent, which was duly and legally issued on May 6, 2014 by the United States Patent and Trademark Office. A true and correct copy of the ’732 patent is attached hereto as Exhibit A. The ‘732 patent is valid and subsisting. 18. Denneroll Industries is the exclusive licensee of Denneroll Holdings under the ‘732 patent and has the exclusive rights to make, use, offer to sell and sell within the United States, and to import into the United States, the patented invention of the ‘732 patent. 19. Denneroll has never granted any rights under the ‘732 patent to any of Defendants. Defendants and Their Willful Infringement of the ‘732 Patent 20. Defendants are in the business of selling products and services for chiropractors and their patients. Page 5 21. In January 2010, Defendant Webster attended a chiropractic conference in Las Vegas, Nevada known as Parker Seminars (the “Seminar”). 22. During the Seminar, Defendant Webster learned of Plaintiffs’ Cervical Denneroll orthotic devices and physically held a Cervical Denneroll device in her hand. Defendant Webster was told that a patent application for the Cervical Denneroll device had been filed and that the application was pending at that time. 23. Subsequently to the Seminar, Defendants copied the Cervical Denneroll device. 24. Subsequently to the Seminar, Defendants made or had made copies of the Cervical Denneroll device and began offering for sale and selling those copies in the United States and this judicial District, including by way of their website www.chirodesigngroup.com. A true and correct copy of Defendants’ catalogue currently available for download on their website, including from within this judicial District, is attached hereto as Exhibit B. 25. Defendants offer for sale and sell products they refer to as “LifeCurve Rolls” in this judicial District and elsewhere within the United States. Defendants’ LifeCurve Roll products are orthotic devices that directly compete with Denneroll’s Cervical Denneroll devices. 26. The image below shows an advertisement for Defendants’ LifeCurve Rolls from their catalogue (see Ex. B at 12) ; however, the device shown in the advertisement is not one of Defendants’ LifeCurve Rolls. Rather, the device shown in the advertisement is one of Denneroll’s Cervical Denneroll devices and was used without permission from Denneroll. [image follows] Page 6 Defendants’ catalogue advertisement that falsely represents one of Denneroll’s Cervical Denneroll devices as one of Defendants’ infringing LifeCurve Rolls 27. Defendants have used, and are using, an image of Denneroll’s product in commercial advertising and promotion for their LifeCurve Rolls. In doing so, Defendants have falsely held Denneroll’s product out as one of their own. Defendants’ use of Denneroll’s product in their advertising has been, and is, knowing and willful. 28. The image below shows an advertisement for Defendants’ LifeCurve Rolls on their website www.chirodesigngroup.com: Internet advertisement for Defendents’ infringing LifeCurve Rolls 29. Defendants’ LifeCurve Rolls are available in two sizes – “large” and “small.” Defendants’ large LifeCurve Roll has similar dimensions to Denneroll’s large Cervical Page 7 Denneroll and Defendants’ small LifeCurve Roll has similar dimensions to Denneroll’s medium Cervical Denneroll. 30. Defendants’ LifeCurve Rolls are made in the United States. 31. Defendants’ LifeCurve Rolls are imported into the United States. 32. Defendants have used, offered for sale and sold within the United States, and continue to use, offer for sale and sell within the United States, orthotic devices that infringe one or more claims of the ’732 patent, including Defendants’ large and small LifeCurve Roll products. 33. Defendants had actual notice of the ‘732 patent at least as early as August 18, 2014. Since that time, Defendants have offered for sale and sold within the United States orthotic devices that infringe one or more claims of the ’732 patent, including Defendants’ large and small LifeCurve Roll products. 34. Defendants had actual notice of their alleged infringement of the ‘732 patent at least as early as August 18, 2014. Since that time, Defendants have offered for sale and sold within the United States orthotic devices that infringe one or more claims of the ’732 patent, including Defendants’ large and small LifeCurve Roll products. IV. FIRST COUNT – DIRECT INFRINGEMENT OF THE ’732 PATENT 35. The allegations of all preceding Paragraphs are re-alleged and incorporated by reference as if set forth fully herein. 36. Defendants have infringed one or more claims of the ’732 patent by at least one of making, using, offering to sell, and selling within the United States Defendants’ large and small LifeCurve Roll products. Such conduct by Defendants is without Denneroll’s consent. Page 8 37. To the extent Defendants’ large and small LifeCurve Roll products are made outside of the United States, Defendants have infringed one or more claims of the ’732 patent by importing into the United States Defendants’ large and small LifeCurve Roll products. Such conduct by Defendants is without Denneroll’s consent. 38. Defendants’ conduct complained of herein constitutes direct patent infringement, such infringement being literal and/or under the doctrine of equivalents, in violation of 35 U.S.C. § 271(a). Defendants’ infringement is knowing and willful. 39. As a direct and proximate result of Defendants’ infringement of the ‘732 patent, Denneroll has been and continues to be irreparably harmed, and has suffered and continues to suffer damages. Denneroll is entitled to recover damages adequate to compensate it for Defendants’ infringement in an amount to be determined at trial. 40. Denneroll will continue to be harmed and damaged by Defendants’ infringement of the ‘732 patent until Defendants are enjoined from such infringement by the Court. V. SECOND COUNT – FEDERAL UNFAIR COMPETITION 41. The allegations of all preceding Paragraphs are re-alleged and incorporated by reference as if set forth fully herein. 42. Without permission from Denneroll, Defendants have used, and are using, an image of Denneroll’s product in interstate commercial advertising and promotion for their LifeCurve Rolls, including in their catalogue attached hereto as Exhibit B. In doing so, Defendants have falsely represented Denneroll’s product as a product of Defendants and have falsely represented to consumers that Defendants are selling Denneroll’s products. Page 9 43. Such representations by Defendants constitute statements of fact that are literally false and which are likely to mislead and confuse consumers. Defendants’ statements have the capacity to deceive, and have deceived, a substantial segment of consumers and potential consumers, and are material in that they are likely to influence a consumer’s purchasing decision based on the catalogue. 44. Defendants’ use of Denneroll’s product in their advertising has been, and is, knowing and willful. Since the time Defendants’ first included an image of Denneroll’s product in their catalogue, Defendants have known that such image is an image of Denneroll’s product and not an image of Defendants’ product. 45. Defendants’ conduct complained of herein constitutes false advertising in violation of 15 U.S.C. § 1125(a). 46. Defendants’ use of a photograph of Denneroll’s product to trade upon the reputation of Denneroll and to confuse potential consumers as to the source of origin of the product pictured in Defendants’ catalogue constitutes false advertising in violation of 15 U.S.C. § 1125(a). 47. As a direct and proximate result of Defendants’ false advertising, Denneroll has been and continues to be irreparably harmed, and has suffered and continues to suffer damages. Denneroll is entitled to recover its damages sustained because of, and Defendants’ profits attributable to, Defendants’ false advertising in amounts to be determined at trial. 48. Denneroll will continue to be harmed and damaged by Defendants’ false advertising until Defendants are enjoined from such behavior by the Court. Page 10 DEMAND FOR JURY 49. Denneroll demands a jury trial of all issues in this action so triable pursuant to Rule 38 of the Federal Rules of Civil Procedure. PRAYER 50. For these reasons, Denneroll prays for judgment against Defendants and requests that the Court: (a) Renders judgment that Defendants have infringed the ’732 patent; (b) Renders judgment that Defendants’ infringement of the ’732 patent is willful; (c) Renders judgment that Defendants have committed acts of unfair competition in violation of 15 U.S.C. § 1125(a). (d) Issues preliminary and permanent injunctions restraining Defendants, and those in active concert or participation with any of them, from further infringement of the ’732 patent and from further unfair competition; (e) Awards compensatory damages in an amount to be determined at trial; (f) Orders an accounting of Defendants’ sales of and profits from their LifeCurve Rolls; (g) Awards Defendants’ profits attributable to their unfair competition; (h) Awards treble damages pursuant to 35 U.S.C. § 284 and 15 U.S.C. § 1117(a); (i) Awards Denneroll’s full costs of this action; (j) Awards pre-judgment and post-judgment interest as allowed by law; (k) Declares this case exceptional and awards reasonable attorney fees to Denneroll pursuant to 35 U.S.C. § 285 and 15 U.S.C. § 1117(a); and (l) Awards all other relief, in law or in equity, to which Denneroll may be entitled. Page 11 DATED this 20th day of March, 2015. Respectfully submitted, /s/ D. Brit Nelson ________ D. Brit Nelson Attorney-in-Charge Texas State Bar No. 14888660 S.D. No. 23680 [email protected] Cole Mackey (of counsel) Texas State Bar No. 24062865 S.D. No. 963664 [email protected] LOCKE LORD LLP 600 Travis Street, Suite 2800 Houston, Texas 77002 Telephone: 713-226-1200 Facsimile: 713-223-3717 Attorneys for Plaintiffs Denneroll Holdings Pty Limited and Denneroll Industries International Pty Limited Page 12
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