Design Furnishings v Zen Path Complaint

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    Exhibit 1

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    BRIAN CRONE, State Bar No. 191731 p jj py^ERICK C. TURNER, State Bar No. 236186 r j u ^ M ^ ^ ^ . . , BERRY & BLOCK LLP Ssy pen or C o yr t Qf Calntomi2150 River Plaza Drive, Suite 415 S s e ra m e n toSacramento, CA 95833 M i2 S /2 { l l Q(916)564-2000 ,(916) 564-2024 FAX ^\ m m

    C a s e MumbiBS"Attom eys for Plaintiff ^ A ^5f4s\ mDESIGN FURNISHINGS, INC. . S ^ - ^ y I M-Ot

    SUPERIOR COURT OF THE STATE OF CALIFORNIA

    DESIGN FURNISHINGS, INC.Plaintiff,

    COUNTY OF SACRAMENTO D e p a r t m e n tAssignmentsCase M anagemenp XT Law and Motion v^ db c i N u . ^i^Q^g Compromise

    V .ZEN PATH, LLC , and DOES 1 through 20,inclusive.

    Defendants.

    C O M P L A I N T F O R D A M A G E S1. Misrepresentat ion of copyrightinfringement und er the DMCA, 17U.S.C. 512(F);2. Tort ious interference with contract ;3. Tortious interference with prospectiveeconomic advantage;4. Unfair, deceptive, and fraudulen tbusiness practices; and5. Declaratory and injuntive relief.

    18 NATURE OF TH E ACT ION19 1. Plaintiff Design Furnishings, Inc. ("DF I" or "P lai nti ff) sells furniture, includi20 wicker patio fumiture, on eBay, an Intemet auction site. Defendant Zen Path LL21 ("Defendant") falsely and maliciously represented to eBay that Plaintiffs sale of certain piec22 of wicker fumiture infringed upo n its copyright, trademark, and other intellectual proper23 rights. De fend ant's m isrepresentations caused Plaintiff to be unable to sell any of 24 merch andise on eBay and has, thus, resulted in lost sales and profits to Plaintiff. Plaintiff see25 dam ages, injunctive relief, and declaratory relief to prevent Defendant from engaging in furth26 interference with its business2 7 / / /2 8 / / /

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    1 PARTIES2 2. Plaintiff is now, and at all times relevant herein was, a corporation du3 organized and existing under the laws of the State of Califomia and authorized to do business 4 the State ofC alifo m ia with its principal place of business in the County of Sacramento5 3. Plaintiff is informed and believes, and based thereon alleges, that at all tim6 herein men tioned Defendant was a limited liability com pany organized in Nev ada with 7 principal place of business in Las Veg as, Nevad a.8 4. Plaintiff is ignorant of the true names and capac ities of the Defendants su9 herein as Do es 1 through 20, inclusive, and therefore sues these Defendants by such fictitio

    10 nam es. Plaintiff will amend the Com plaint to allege the true names and capacities of sa11 Defendants when the same is ascertained. Plain tiffis informed and believes, and based thereo12 alleges, that each of these fictitiously-nam ed Defendants is jointly responsible in some man n13 for the acts and/or occurrences herein alleged, and that Pla intiff s injuries as alleged we14 proxima tely caused by such Defendants.15 5. Plaintiff is informed and believes, and based thereon alleges, that at all tim16 herein men tioned each of the Defendants was the agent of each of the remaining Defendant17 and in doing the things hereinafter alleged, was acting in the course and scope of such agenc18 with the perm ission and consent of his/her/its co-Defendants.19 6. Plaintiff is informed and believes, and based thereon alleges, that Defend ant20 and each of them, are principals, agents, partners, joint venturers, members, owner21 shareholders, directors, corporate officers, and/or alter egos of one and another, as the case ma22 be, and are, therefore, responsible for the acts, debts, obligations, and duties of the other, as th23 case may be. Plaintiff is informed and believes, and based thereon alleges, that, at all tim24 relevant hereto, a unity of interest existed between Defendants such that any separatene25 between the Defendants has ceased and that, if the acts are treated as those of any single one 26 the Defendants alone , it would sanction a fraud or prom ote an injustice.2 7 / / /2 8 / / /

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    1 JURISD ICTION AND VENUE2 7. This Court has jurisdiction over this lawsuit pursuant to California Code of Ci3 Procedure section 410.10 as Defendant purposefully caused injury to Plaintiff in the State 4 Califomia, County of Sacram ento. Plaintiff is informed and believes, and thereon alleges, th5 Defendant regularly conducts business in the State of California, including business with t6 residents of this state through eBay , a corporation w ith its principal place of business 7 Califomia. Plaintiff is informed and believes, and thereon alleges, that the actions of Defenda8 as fully set forth below w ere specifically directed toward, and did cause damage to. Plaintiff 9 the State ofCa lifomia, County of Sacramento.

    10 8. Venu e is proper in this judicial district pursuant to Cal. Code Civ. Proc. 395(a)11 FACTUAL ALLEG ATIONS12 9. Plaintiff repeats, re-alleges, and incorporates the allegations set forth 13 Paragraphs 1 through 8, inclusive.14 10. Plaintiff is in the business of selling fumiture, including, but not limited t15 wicker patio fumiture. A significant portion of Pla intiffs sales are conducted over the inteme16 including through eBay.17 11. Defendant sells fumiture, including wicker patio furniture, similar to that sold b18 Plaintiff. Like Plaintiff, Defendant conducts sales over the intemet, including through eBay.19 12. The wicker patio fumiture sold by Plaintiff and Defendant is available f20 purchase through several different factories located in China; however. Plaintiff and Defenda21 order from the same factory.22 13. The wicker patio fumiture sold by Plaintiff and Defendant is not subject to an23 design patent(s) and the public has not come to associate and identify the wicker patio fumitu24 with any particular designer, person, and/or entity.25 14. Defendant know s that it does not have design patents for the wicker pat26 fumiture that both Plaintiff and Defendant sell on eBay . Desp ite requests from Plaintif27 Defendant has not provided any evidence that they have design patents for any ofth e furniture 28 issue.

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    1 15. eBay is a virtual Inteme t marketplace on which mem bers can sell goods a2 services in an auction-style or fixed-price format. It is by far the largest site of its kind on t3 Intem et, with mo re than one hundred million registered users Each product for sale on eB4 has its own web page, called a "listing" or "auc tion," which describes the product and allo5 potential purchas ers to bid on or purchase the product.6 16. As an Intemet Service Provider ("ISP" ), eBay is protected from liability by t7 Digital Millennium C opyright Act ("DM CA ") for listings that contain copyrighted text 8 pictures or that advertise unauthorized copies of copyrighted material. {Hendrickson v eBa9 Inc (CD Cal 2001) 165 F.Supp.2d 1082, 1088.) T he DM CA provides ISPs safe harbor fro

    10 liability for "infringement of copyright by reason of the storage at the direction of a user 11 material that resides on a system or network controlled or operated by [the ISP] " (17 U.S .12 512(c)(1).) To qualify for protection from liability under this provision, an ISP must a13 expeditiously to remo ve material that is claimed to be infringing upon receiving a "notice 14 claimed infring em enf from the copyright owne r. {Id 512(c)(1)(C).) The requirements of15 notice of claimed infringement are spelled out in 17 U.S .C. 512(c)(3)16 17. The DM CA also provides a mechanism for a subscriber to an ISP who is target17 by a notice of claimed infringement to contest the notice with the ISP Under 17 U.S .C.18 512(g), a subscriber to an ISP can submit a "counter nofice" to the ISP stating "under penalty 19 perjury that the subscriber has a good faith belief that the material was removed . as a result 20 mistake or misidenfification o ft he m aterial." {Ibid 512(g)(3).) An ISP continues to enj21 safe harbo r from liability if, upon receiv ing a counter notice from a subscriber, it notifies t22 person who filed the notice of claimed infringement that it will reinstate the removed m aterial 23 ten to fourteen business days unless it receives notice that there is a pending legal action 24 restrain the subscriber from continuing to post the allegedly infringing material. {Id 25 512(g)(2).)26 18. To meet the safe harbor requirements in the DM CA , eBay implemented 27 program called the "Verified Rights Ow ner" or "V eR O " program . {See Hendrickson, supr28 165 F.Supp.2d at 1085 (citing eBay statement that VeR O procedures "are intended

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    1 substantially com ply with the requirements o fth e [DM CA ]").) Ow ners of intellectual proper2 who register for the VeR O program can submit a notice of claimed infringement to eBay stati3 that a particular auction violates their intellectual property rights. In filling out the nod ce 4 claimed infringement, the VeR O member must sign a statemen t, under penalty of perjury, that5 has a good-faith belief that the identified auction violates its intellectual property rights or t6 intellectual property rights of someo ne it represents.7 19. W hen a VeR O mem ber submits a notice of claimed infringement regarding8 particular aucfion listing, eBay automafically terminates that listing eBay does n9 independently review the validity of the notice of claimed infringement and trusts the VeR

    10 mem ber's honesty that a particular auction is infringing.11 20. W hen a certain number of an eBay seller's auctions are terminated because 12 notices of claimed infringement from a VeRO mem ber, eBay will suspend that seller's accoun13 The number of termina tions required before the seller's accoun t is suspended varies from sell14 to seller.15 21 . If it is the first time a seller has been suspended , eBay will reinstate the selle16 account ifthe seller subm its a signed request for reinstatement swearing under penalty of perju17 not to knowing ly offer any items or post any listings on eBay that are illegal or that infringe th18 rights of an y third parties. If a seller's account is suspended a second time because of notices 19 claimed infringement from V eRO mem bers, eBay will not reinstate the account absent a reque20 from the VeR O memb er that caused the suspension or a court order.21 22. Defendant is a member of eBay's VeRO program. After joining the program22 eBay informed D efendant that if it received a notice of claimed infringement regarding 23 particular auction, it would automatically terminate the auction and would reinstate the auctio24 at the VeRO mem ber's request.25 23 . On or about September 23 , 2010 , Defendant filed several notices of claime26 infringement w ith eBay , swearing under penalty of perjury that they had a good faith belief th27 Plaintiffs auctions of wicker patio fumiture violated Defen dant's intellectual property right28 including copyrights belonging to Defendant. Defendant continues to submit notices of claime

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    1 infringement to eBay in an effort to have Plain tiffs ability to sell its products on eB2 permanently terminated .3 24. After receiving the nofices of claimed infringement from Defendant, eBay se4 Plaintiff several em ails notifying it that its auctions had been terminated . The message fro5 eBay stated, "Yo ur item was removed because of a request we received from VeRO participa6 Zen Path, LL C, asking us to remov e the item for: Item(s) infringes co py righ ts.... " eB7 notified bidders on the auction that the auction had been terminated and that their bids we8 canceled.9 25. No ne of Plainfiffs lisfings contained any copyrighted information belonging

    10 Defendant. Defendant w as aware of this fact at the time it submitted the notices of claim11 infringement un der penalty of perjury to eBay, and it did so with the sole intent of dam aging a12 causing harm to Plainfiff.13 26. As a result of Defendant's misrepre sentations to eBay, Plaintiff h14 approxim ately 35 auctions terminated and has been prevented from listing any new items f15 sale. T hen um ber of terminated auctions continues to grow each day.16 27 . Plainfiff has lost sales and will confinue to lose sales until such time as its righ17 are reinstated by eBay.18 28. Plaintiff has been damaged, and will be dam aged, in an amo unt in excess of t19 jurisdictiona l limit of this Court.20 FIRST CLAIM FOR RE LIE F21 MISREPR ESENT ATION OF COPY RIGHT INFRINGE ME NT UNDER THE DMCA, 122 U.S.C . 512(f)23 29. Plaintiff repeats, re-alleges, and incorporates the allegations set forth 24 Paragraphs 1 through 28, inclusive.25 30. By subm itting notices of claimed infringement to eBay regarding Plaintif26 wicker patio furniture. Defendant knowingly and materially misrepresented that P laintif27 auctions infringed upon Defe ndant's copyright.28 31 . De fend ant's conduct has resulted in lost profits for Plaintiff and other dam ages.

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    1 32. Plaintiff is entitled to recover its dam ages, including, but not limited to, puniti2 dam ages, costs and attom eys ' fees incurred in responding to the take down and costs and fe3 associated with this suit pursuant to 17 U.S.C . 505.4 SECOND CLAIM FOR REL IEF5 T O R T I O U S I N T E R F E R E N C E W I T H C O N T R A C T6 33 . Plaintiff repeats, re-alleges, and incorporates the allegations set forth 7 Paragraphs 1 through 32, inclusive.8 34. Plaintiff had a valid contract with eBay to sell produc ts on its auction site.9 35. Plaintiff also had valid contracts with eBay shoppe rs who had placed bids on

    10 agreed to purchase Plaintiffs merchandise.11 36. Defendant knew about Plaintiffs contracts with eBay and eBay shoppers.12 37. Defendant intentionally filed false notices of claimed infringement to dism13 Plaintiffs co ntracts. In the altema tive, Defendant negligently filed the false notices of claim14 infringement.15 38. De fenda nt's conduct caused eBay to interfere with its contract with Plaintiff b16 terminating Pla intif fs auctions and prevenfing Plaintiff from postmg further auctions17 39. De fend ant's conduct also caused eBay shoppe rs who had placed bids or agreed 18 buy its produc ts to terminate their contracts with Plaintiff.19 40. De fenda nt's conduct resulted in lost profits and other dam ages for Plaintiff in 20 amo unt to be proven at trial but alleged to be in excess of the jurisdictional m inimum of th21 Court..22 4 1 . De fend ant's conduct was willful, wanton , and ma licious thereby entitlin23 Plaintiff to an award of punitive damages.24 THIRD CLAIM FOR RE LIEF2 5 T O R T I O U S I N T E R F E R E N C E W I T H P R O S P E C T I V E E C O N O M I C A D V AN T AG E26 42. Plaintiff repeats, re-alleges, and incorporates the allegations set forth 27 Paragraphs 1 through 41, inclusive.2 8 / / /

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    1 43 . Plaintiff had an econom ic relationship with eBay, with the probability of futu2 econom ic benefit to Plaintiff.3 44. Plaintiff also had econom ic relationships with potential purchasers who had b4 on its me rchandise and/or agreed to purchase its me rchandise or would have bid on or purchas5 Pla intiffs merchandise from ongoing and/or future auctions6 45 . Defendant knew about Plainfiffs econo mic relationship with eBay and potent7 purchasers of its me rchandise by virtue of its involvem ent with eBay and its know ledge 8 Plaintiffs business activity on eBay.9 46. Defendant intentionally filed false notices of claimed infringement with eBay

    10 disrupt Plaintiffs pro spective economic advantage so as to prevent Plaintiff from com pleti11 sales. As a direct result of Defendant's unlawful conduc t, eBay removed Pla intiffs auctio12 which thereby terminated Pla intiffs ability to make one or mo re sales to prospective purchase13 of its produ cts. In the altem ative. Defendant negligently filed the false notices of claim14 infringement against Plaintiff.15 47. De fend ant's conduct was independently wrongful in that it violated the terms an16 condifions of the VeR O agreement, consfituted an intentional violation of the DM CA an17 constituted defamation per se.18 48 . De fend ant's conduct has caused, and will continue to cause. Plaintiff to lo19 future econo mic benefits by causing lost sales.20 49. De fenda nt's conduct was willful, wanton , and malicious thereby entitli21 Plaintiff to an award of punitive dam ages.22 FOURTH CLAIM FOR RE LIEF23 UNFA IR, DEC EPT IVE, AND FRAUDU LENT BUSINESS PRA CTICE S24 50. Plaintiff incorporates by reference paragrap hs 1 through 49 above as though f25 set forth herein26 51 . The acts of Defendants, and each of them, as alleged herein constitute unfair 27 unlawful com petition in violation of California comm on law and California Business 28 Professions Code section 17200. A s demo nstrated elsewhe re herein, Plaintiffh as lost mon ey

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    1 property and suffered injury in fact as a result of De fendan ts' unfair and unlawful busi2 practices.3 52. By reason of the foregoing, Defendants, and each of them, have been improp4 and unjustly enriched at the expense ofth e pu blic and Plaintiff in an amo unt to be determined 5 according to proof at trial. Defendants are obligated to mak e restitution to Plaintiff6 53 . Plaintiff and the public are being irreparably harmed by Defendants' un7 business practices and unfair competition. There is no adequate remedy at law, thereby justif8 preliminary and perm anen t injunctive relief under Califomia Bu siness and Professions C9 section 17203.

    10 FIFTH CLAIM FOR RE LIE F11 DECLARATO RY AND INJUNTIVE RE LIEF12 54. Plaintiff repeats, re-alleges, and incorporates the allegations set forth 13 Paragraphs 1 through 53, inclusive.14 55. Defendant contends that Pla intiffs sale of wicker patio fumiture infringes up15 their copyright, tradem ark, and other unidentified intellectual property rights16 56. Plaintiff contends that its actions do not infringe upon any of De fend an17 copyright, tradem ark, or other rights.18 57. Defendant has threatened to take legal action against Plaintiff if Plaint19 continues selling the furniture at issue.20 58. Plaintiff continues to sell the fumiture at issue under threat of legal action 21 Defendant and plans to continue doing so for the indefinite future.22 59. Defendant has terminated Plaintiffs eBay auctions and has threatened to contin23 doing so.24 60. There is a real and actual controversy between Plaintiff and Defendant regardin25 whether the continued sale of the fumiture at issue is lawful or whether it infringes d efendan26 rights.27 DEMAND FOR RE LIEF28 Plaintiff dem ands judgm ent as follows:

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    1 1. Actual dam ages and interest thereon;2 2. Punitive damages;3 3. Costs and attorn eys'fe es;4 4. A declaratory judgm ent that Plainfiffs sale o fth e furniture at issue is lawful a5 does not infringe upon Defendant's copyright, trademark, or other rights;6 5. Injunctive relief; and7 6. Such other relief as the Court finds appropriate.89 DATED : September 28, 2010 BERRY & BLOCK LLP

    10 V ^By _11 BRIAN CRONEERICK C. TURNER12 Attom eys for Plaintiff

    1314 DEMAND FOR JUR Y TRIA L15 Plaintiff Design Fum ishings, Inc. hereby requests a trial by jury on all issues triable 16 right by ajur y.1718 DATED : September 28, 2010 BERRY & BLOCK LLP1920 BRIA N CRONE

    ERICK C. TURNER21 Atto me ys for Plaintiff22232425262728

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    Exhibit 2

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    SUM-100SUMMONS(CITACION JUDICIAL)NOTICE TO DEFENDANT:(AVISO AL DEMANDADO):ZEN PATH, LLC, and DOES 1 through 20 , inclusiveYOU ARE BEING SUED BY PLAINTIFF:(LO E S T A DEIVIANDANDO EL DEMANDANTE):DESIGN FURNISHINGS, INC.

    FOR COURr USE ONLY(SOLO PARA USO DE LACORTE)

    Syperior Court Qf Califotfn

    Bva- '

    NOTICE! You have been sued The court may decide against you without your being heard unless you respond within 30 days Read the informationbelowYou have 30 CALENDAR DAYS after this summons and legal papers are served on you to file a written response at this court and have a copyserved on the plaintiff A letter or phone call will not protect you Your written response must be in proper legal form if you want the court to hear yourcase There may be a court form that you can use foryour response You can find these court forms and more information at the California CourtsOnline Self-Help Center (www courtinfo ca gov/selfhelp), your county law library, or the courthouse nearest you Ifyou cannot pay the filing fee, askthe court clerk fora fee waiver form Ifyou do not file your response on time, you may lose the case by default, and your wages, money, and propertymay be taken without further warning from the courtThere are other legal requirements You may want to call an attorney nght away Ifyou do not know an attorney, you may want to call an attorneyreferral service Ifyou cannot afford an attorney, you may be eligible for free legal services from a nonprofit legal services program You can locatethese nonprofit groups at the California Legal Services Web site {www lawtielpcalifomia org), the California Courts Online Self-Help Center

    {www courtinfo ca gov/selfhelp), orby contacting your local court orcounty bar association NOTE The court has a statutory hen for waived fees andcosts on any settlement orarbitration award of$10,000 ormore in a civil case The court's hen must be paid before the court will dismiss the caselAVISOl Lo han demandado St no responde dentro de 30dias, la corte puede decidir en su contra sin escuchar su versidn Lea la infonmacion acontinuaadnTiene 30 D I A S DE CALENDARIO despu6s de que le entreguen esta ataadn y papeles legales para presentar una respuesta por escrito en estacorte y hacer que se entregue una copia al demandante Una carta o una llamada telefdnica no lo protegen Su respuesta por escnto tiene que estaren formato legal correcto st desea que procesen su caso en la corte Es posible que haya un formulano que usted pueda usar para su respuestaPuede encontrar estos formulanos de la corte y mcis informacion en el Centro de Ayuda de las Cortes de California ("www sucorte ca gov , en labiblioteca de leyes de su condado o en lacorte que le quede mis cerca Si no puede pagar la cuota depresentaadn, pida al secretario de la corteque le d6 un formulano de exencidn de pago de cuotas St no presenta su respuesta a tiempo, puede perder el caso por incumplimiento y la corte lepodr^ quitar su sueldo, dinero y btenes sm mis advertencia

    Hay otros requisites legales Es recomendable que llame a un abogado inmediatamente Si no conoce a un abogado, puede llamar a un sen/icio deremisidn a abogados Si no puede pagar a un abogado, es posible que cumpla con los requisites para obtener serviaos legales gratuitos de unprograma de serviaos legales sin fines de lucro Puede encontrar estos grupos sin fines de lucro en el sttio web de California Legal Services,(www lawhelpcalifornia orgX en el Centro de Ayuda de las Cortes de California, fwww sucorte ca gov^ o poniindose en contacto con la corte o elcolegio de abogados locales A VISO Por ley, la corte tiene derecho a reclamar las cuotas y los costos exentos por imponer un gravamen sobrecualquier recuperacidn de $10,000d mi s de valor reabida mediante un acuerdo o una concesion de arbitraje en un caso de derecho civil Ttene quepagar el gravamen de la corte antes de que la corte pueda desechar el caso

    The name and address ofthe court is(El nombre y direccidn de la corte es) Sacramento Super io r Cou rt720 Ninth Street, Sacramento, CA, 95814

    CASE NUMBER(Numero del Caso)-^c)io-ooQeS'4i3The name, address, and telephone number of plaintiffs attorney, or plaintiff without an attorney, is'El nombre. la direccidn v el numero de teldfono del abogado del demandante. o del demandante que no tiene aboaado. es)Brian Crone, Berry & Block, LLP, 2150 River Plaza Dr., Ste 415, Sacramento, CA 5*5833, (916) 564-2000DATE(Fecha)

    S E P 2 9 2010 Clerk, by(Secretario)

    Deputy(Adjunto)

    (For proof of service ofthis summons, use Proof of Service of Summons (form POS-010))(Para prueba de entrega de esta citatidn use el formulano Proof of Service of Summons, (POS-010))

    NOTICE TO THE PERSON SERVED: You are served1 as an individual defendant2 I I as the person sued under the fictitious name of (specify)

    on behalf of (specify)under CCP 416 10 (corporation)

    CCP 416 20 (defunct corporation) CD CCP 416 60 (minor)CCP 416 70 (conservatee)CCP 416 40 (association or partnership) | | CCP 416 90 (authorized person)other (specify)

    4 I I by personal delivery on (date) Page 1 of 1Form Adopted forMandatoty UseJudiaal Council ofCaliforniaSUM-100 [Rev July 1,2009]

    SUMMONS Code ofCivil Procedure 412 20 465www courimfo ca gov

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    Exhibit 3

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    CM-010ATTORNEY OR PARTY WITHOUT ATTORNEY (Name. State Bar number, and addressj-Bnan Crone (SBN 191731)BERRY & BLOCK, LLP2150 River Plaza D rive, Suite 415Sacramento, CA 95833TELEPHONENO ( 9 1 6 ) 5 6 4 - 2 0 0 0 FAXNO ( 9 1 6 ) 5 6 4 - 2 0 2 4ATTORNEY FOR (Na fie; Plaintiff, D E S I G N F U R N I S H I N G S , IN C .SUPERIOR COURT OF CALIFORNIA, COUNTT OF S A C R A M E N T OSTREETADDRESS 7 2 0 N i t i t h S t r e e t

    MAILING ADDRESSCITYANDZIPCODE S a c r a m e i i t o , C A 9 5 8 1 4

    BRANCH NAMECASE NAMEDesign Furnishings, Inc. v. Zen Path, LLC, et al.

    FOR COURT USE ONLY

    FfLEOSuper io r Cour t Qf Ca lS foS a c r a m e n t o

    C a s e N u m b a r :

    T

    e f u tC I V I L C A S E C O V E R S H E E T

    [ 7 1 U n l i m i t e d L i m i t e d(Amount (Amountdemanded demanded isexceeds $25,000) $25,000 or less)

    Co mp le x Ca s e De s ig n a t io nI I Co unte r I I Jo in derFi led with f irst appearance by defend ant(Cal Rules of Court, aile 3 402)

    CASE NaMBEP_

    JUDGEDEPT

    I tems 1-6 below must be completed (see instruct ions on page 2)1 Check one box below for the case type that

    Auto TortC Z ] Auto (22)I I Uninsured motonst (46)Other PI/PD/WD (Personal Injury/PropertyDamageA/Vrongful Death) To rtI j Asbestos (04)I I Product liability (24)I I Medical malpractice (45)I I Other PI/PD/WD (23)Non-PI/PD/WD (Other) Tort

    best describes th is caseContract

    Business tort/unfair business practice (07)Civil nghts (08)Defamation (13)Fraud (16)Intellectual property (19)Professional negligence (25)Other non-PI/PD/WD tort (35)

    EmploymentI I Wrongful termination (36)I I Other employment (15)

    Breach of contract/warranty (06)Rule 3 740 collections (09)Other collections (09)Insurance coverage (18)Other contract (37)

    Real PropertyI I Eminent domain/Inversecondemnation (14)I I Wrongful eviction (33)I I O ther real property (26)Unlawful DetainerI I Comm ercial (31)I I Residential (32)d l Drugs (38)Judicial ReviewL J Asset forfeiture (05)I I Petition re arbitration award (11)I I W rit of mandate (02)I I O ther judic ial review/ (39)

    Provisionally Complex Civil Litigation(Cal Rules of Court , rules 3 400-3 403)I I Antitrust/Trade regulation (03)I I Construction defect (10)I I Mass ton (40)I I Securities litigation (28)I I Environmental/Toxic tort (30)I I Insurance coverage claims ansing from theabove listed provisionally complex casetypes (41)Enforcement of Judgment1 J Enforcement of judgment (20)Miscellaneous Civil ComplaintI I RICO (27)I I Other complaint (not specified above) (42)Miscellaneous Civil PetitionI I Partnership and corporate governance (21)[ I O ther petition (not specified above) (43)

    This case I I is I / I is not com plex under rule 3 400 of the California Rules of Court If the case is comp lex, mark thefactors requinng exceptional judic ia l managementa I I Large number of separately represented part iesb I I E xtensive motio n practice raising difficult or novel

    issues that wil l be t ime-consum ing to resolvec I I Substantia l am ou nto f docum entary evidenceRemedies sought (check al l that apply) a I I monetaryNum ber of cause s of action (specify) 5This case I I is I / I is not a class action suitIf there are any known related cases, file and serve a notice of relatedDate September 28,2010BRIAN CRONE

    (TYPE OR PRINT NAME)

    d I I Large number of witnessese I I Coordination with re lated actions pending in one or more courts

    in other counties, states, or countnes, or in a federal courtf I I Substantia l postjudgment judic ia l supervis ion

    b I I nonm onetary , decla ratory or injunctive relief c | I punitive

    N O T I C E Plaintiff must file this cover sheet with the first paper filed in the action or proce eding ( excep t small claim s cases or cases filedunder the Probate Co de, Fam ily Code , or We lfare and Institutions Code) (Cal Rule s of Court, rule 3 220 ) Fa ilure to file may resultin sanctions File this cover sheet in addition to any cover sheet require d by local court rule If this case is comp lex und er rule 3 400 et seq of the California R ules of Court, you mu st serve a copy of this cover sheet on al lother parties to the action or proceeding Unless this is a collections case un der rule 3 740 or a complex cas e, this cover shee t will be used for statistical purposes onlyPage 1 of iForm Adopted for Mandatory UseJudicial Counal of CaliforniaCM-010 [Rev July 1,2007) CIVIL CASE COVER SHEET Cal Rules of Court rules 2 30 3 220 3 400 -3 403 3 740Cal Standards of Judicial Administration std 3 10www couflmfo ca gov

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    Exhibit 4

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    BRIAN CRONE , State Ba rN o. 191731ERICK C TURNER, State BarN o. 236186BERRY & BLOCK LLP2150 River Plaza Drive, Suite 415Sacramento, CA 95833(916)564-2000(916) 564-2024 FAXAttomeys for PlaintiffDESIGN FURNISHINGS, INC.

    FILED/ENDORSED I

    I By- V. DAVIS. DEPUTY CLERK

    SUPERIOR COURT OF THE STATE OF CALIFORNIACOUNTY OF SACRAMENTO

    DESIGN FURNISHINGS, INC.Plaintiff,

    V .ZEN PATH, LLC, and DOES 1 through 10,inclusive,

    Defendants.

    CaseNo. 34-2010-00088443PLAINTIFF DESIGN FURNISHINGS,INC. 'S EX PARTE APPL ICATION RE:PRELIMINARY INJUNCTION FORORDER TO SHOW CAUSE ANDR E Q U E S T F O R T E M P O R A R YRESTRAINING ORDER PURSUANTTO C.C.P . 526, 527 and B US. &P R O F . CODE 17203Date: October 1, 2010Time: 1:45 p.m.Dept.: 54Complamt Filed September 29, 2010

    TO DEFENDANT AND ITS ATTORNEY OF RECORD:Plaintiff DESIGN F URN ISHINGS, INC ("Plaintiff or "DF I") hereby applies ex par

    for a temporary restraining order and for an order requiring Defendant ZEN PATH, LL("Defendant"), and any officers, directors, shareholders, agents, employees, or anyone elsacting on behalf of or for Defendant to show cause why a preliminary injunction should noissue pending trial in this action, enjoining Defendant and anyone acting in concert witDefendant, from the following:1. Submitting any further notices of claimed infringement to eBay stating that anparticular auction conducted by DFI violates Defendant's copyright, trademark, and otheintellectual property rights (collectively, "IP "); and/ / / i

    PL AINT IFF DE SIGN FUR NISHINGS, INC. 'S EX PART E APPL ICAT ION RE : PRE L IMINARY INJUNCT ION FOR ORDE R T OSHOW CA USE AND REQUES T FOR TEMPOR ARY RESTRAININ G O RDER PURSUAN T TO C.C.P. 526,527 and BUS. &PROF. CODE 17203

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    24

    1 2. Further engaging in any action with eBay with the intent of interfering with Plain tif2 ability to perform and transact business on eBay3 DFI also requests the Court order Defendant to imm ediately notify eBay that DFI d4 not infringe upon Defend ant's copyright, trademark, or other intellectual property right5 This application is made pursuant to the provisions of Code of Civil Procedure sectio6 527 on the grounds that Defendant has repeatedly com mitted violations of Section 512(f) of th7 Digital Millenium Copyright Act, intentionally and tortuously interfered with D FI's contractu8 relations and prospec tive economic advantage , and engaged in unfair business practices 9 violation ofC alifornia Business & Professions Code section 17200, et seq.

    10 This application is based upon the Memorand um of Points and Authorities in Suppor11 the Declaration of Jennifer Hayes, the Declaration of Erick C Tum er, all the pleadings, orde12 and files in this action, and such other and further evidence as may be presented at hearing.13 Pursuant to Local Rule 3.04, the court will make a tentative rating on the merits of th14 matter by 2:00 p.m ., the court day before the hearing. You may access and download the cou rt15 ruling from the cou rt's website at http://www.saccourt ca.gov Ifyo u do not have online acces16 you may obtain the tentative ruling over the telephone by calling (916) 874-8142 and a deput17 clerk will read the ruling to you. If you wish to request oral argument, you must contact th18 courtroom clerk at (916) 874-7858 (Department 53) or (916) 874-7848 (Department 54) and th19 opposing party before 4:00 p.m. the court day before the hearing. If you do not call the cou

    '20 and the opposing party by 4:00 p.m. on the court day before the hearing, no hearing will b21 held.'2223 DATED: September 30, 2010 B E R R y& B L 0 ( Z K LLP

    By_25 BRIA N CRCE RIC K C y u p ^ E R26 Attomeys fpr/'laintiff2728

    2PL AINT IFF DE SIGN FURNISHINGS, INC. 'S EX PART E APPL ICAT ION RE : PRE L IMINARY INJUNCT ION FOR ORD E R T OSHOW CAUSE AND RE Q UE ST FOR T E MPORA RY R E ST RAINING ORDE R PURSUANT T O C.C.P . 526 ,527 and BUS. &PROF. CODE 17203

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    http://www.saccourt/http://www.saccourt/
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    Exhibit 5

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    BRIAN CRONE, State BarNo. 191731ERICK C TUR NER, State Bar No 236186BERRY 8c BLOCK LLP2150 River Plaza Drive, Suite 415Sacramento, CA 95833(916) 564-2000(916) 564-2024 FA XAttomeys for PlaintiffDESIGN FURNISHINGS, INC.

    FILED/ENDORSED |

    BY: V. DAVIS, DEPUTYCLERK

    SUPERIOR COURT OF THE STATE OF CALIFORNIACOUNTY OF SACRAMENTO

    DESIGN FURNISHINGS, INC.Plaintiff,

    V .ZEN PATH , LLC, and DOES 1 through 10,inclusive.

    Defendants

    CaseNo 34-2010-00088443PLAINTIFF DESIGN FURNISHINGS,INC. 'S MEMORANDUM OF POINTSAND AUTHORITIES IN SUPPORT OFE X P A R T E A P P L I C A T I O N R E :PRELIMINARY INJUNCTION FORORDER TO SHOW CAUSE ANDR E Q U E S T F O R T E M P O R A R YRESTRAINING ORDER PURSUANTTO C.C.P . 526, 527 and B US. &P R O F . CODE 17203Date: October 1, 2010Time: 1-45 p.m.Dept.: 54Complam t Filed September 29, 2010

    I . INTRODUCTIONAs described more fully below. Defendant ZEN P ATH , LLC ("Defenda nf) ha

    embarked upon a crasade of vindictive, malicious, and unlawful behavior against PlaintiDESIGN FUR NISH INGS , INC. ("DFI" or "Pla intiff) with the sole purpose of pemianentiy anineparably damaging DFI's ability to lawfully operate a business in competition wiDefendant.

    DFI and Defendant both market and sell wicke r patio fumiture on eBay. eBay is virtual Intemet marketplace on which members can sell goods and services in an auction-style ofixed-price format. (Declaration of Jennifer Hayes ("Hayes Decl ") at ^ f 2 and 7.)

    On or about September 22, 2010, Defendant falsely and maliciously represented to eBathat several of DFI's auctions infringed upon Defendant's copyright, trademark, and otheintellectual property rights (collectively, "IP"). De fend ant's m isrepresenta tions caused eBay ti

    PL AINT IFF DE SIGN FURNISHINGS, INC. 'S ME MORANDUM OF POINT S AND AUT H ORIT IE S IN SUPPORT OF E X PART EAPPL ICAT ION RE : PRE L IMINARY INJUNCT ION FOR ORDE R T O SHOW CAUSE AND RE QUE ST FOR T E MPORARYRESTRA INING ORD ER PURSU ANT TO C.C.P. 526,527 and BUS. & PROF . CODE 17203

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    1 terminate approximately 35 of Plaintiffs then ongoing auctions. Defendan2 misrepresen tations fiirther caused eBay to suspend DF I's ability to conduct new sales and/3 create new auction postings . Since the date of its first misrep resentation to eBay, Defendant h4 continued to subm it written misrepresentations to eBay that additional auctions conducted 5 DFI infringe upon its alleged IP. Rather than report the alleged infringements in one sing6 filing with eBay, Defendant is reporting the alleged infringements as separate and distin7 claims. Defendant has intentionally proceeded in this fashion to reduce DFI 's "policy violati8 rating " with eBay so low that eBay will, in accordance w ith its policies, perman ently clo9 DF I's account. (Hayes Decl. at K 12-14.)

    10 Out of necessity, DFI now requests the Court imm ediately enjoin Defendant as well 11 De fendan t's officers, directors, emp loyees, represen tatives, agen ts, and anyone acting on 12 behalf (collectively "D efen dan f), and schedule an Order to Show Cause why Defendant shou13 not be enjoined pending trial of the action from: (1) subm itting any further notices of claim14 infringement to eBay stating that any particular auction conduc ted by DFI violates D efend an15 IP; and (2) further engaging in any action with eBay with the intent of interfering with Pla intif16 ability to perform and transact business on eBay . DFI also requests the Court order Defenda17 to imm ediately notify eBay that DFI did not infringe upon Defen dan t's copyright, tradem ark, 18 other intellectual property rights.19 I I . STAT EM ENT OF FAC TS20 DFI is in the business of selling fumiture, including, but not limited to, wicker pati21 fumiture (the "fiimiture"). 100% of DF I's sales are conducted over the internet, with 95 % o22 those sales com ing through eBay. Defendant sells fumiture, including wicker patio furnitur23 similar to that sold by DFI. Like DFI, Defendant conducts sales over the intemet, includin24 through eBay. The fumiture sold by Plaintiff and Defendant is available for purchase throug25 several different factories located in China; howe ver. Plaintiff and Defendant order from th26 same factory. (Hayes Decl. at T 2.)27 In or about June 2010 , Defendant contacted D FI 's owne r, Jennifer Hay es, an28 knowingly misrepresented to M s. Hayes that certain items DFI was selling on eBay belonged t

    2PL AINT IFF DE SIGN FURNISHINGS, INC. 'S ME MORANDUM O F POINT S AND AUT HO RIT IE S IN SUPPORT OF E X PART EAPPL ICAT ION RE : PRE L IMINARY INJUNCT ION FOR ORDE R T O SHOW CAUSE AND RE QUE ST FOR T E MPORARYRESTR AININ G ORD ER PURSUA NT TO C.C.P. 526,527 and BUS. & PRO F. CODE 17203

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    1 Defendant and were protected by copyrights and/or paten ts. Defendant falsely claimed th2 certain pictures of the fumiture on D FI's auctions were copyrighted photographs belonging 3 Defendant Although Defendant did not provide proof that the photographs were copyrighte4 Ms. Hayes imm ediately removed the allegedly copyrighted photog raphs, informing Defenda5 that the photograp hs had been provided by the manu facturer. Thereafter, DFI used its ow6 photographs for auction postings. Ms. Hayes requested that Defendant provide registratio7 numb ers for the design patent(s) for the furniture in which Defendant claim ed an intellectu8 property interest. M s. Hay es agreed to cease selling the fumiture in question once Defenda9 provided proof of its intellectual property rights in the fumiture. DFI had conducted its ow

    10 research and was unable to locate any design patent(s) for the fumiture. Defendant nev11 provided DFI with the requested proof; therefore, DFI continued to sell the fumiture. (Haye12 Decl. at T 3 and Exhibits A - B thereto.)13 After DFI refused to stop selling the fumiture, Defendant contacted the manufacturer 14 China and threatened to sue if the manufacturer continued selling the fiimiture to DFI. Th15 manufacturer, however, refiised to comply with De fend ant's dem and and continues to sell th16 fumiture to DF I. (Hayes Dec l. at T 4.)17 DFI did not hear anything more from Defendant conc em ing the fumiture or the pictur18 (which had been immediately removed ) until Septem ber 8, 2010 when DFI received a lett19 from an attome y claiming to represent Defendant. The letter dem anded that DFI cease sales 20 the fiimiture. The letter claimed that DFI had violated copyright law by posting photograph21 belonging to Defendan t. The letter contained several exhibits showing that copyrig22 applications for the photograph s had been submitted on Augu st 27, 2010, which was near23 three (3) mo nths after DFI stopped using the photograp hs for its auctions. The letter threatene24 litigation if DFI refiised to comply with the demands set forth in the letter. (Hayes Decl. at T25 and Exhibit C thereto.)26 eBay is a virtual Intemet marketplace on which membe rs can sell goods and services 27 an auction-style or fixed-price format. It is by far the largest site of its kind on the Intemet, wi28 more than one hundred m illion registered users. Each product for sale on eBay has its own we

    3PL AINT IFF DE SIGN FURNISHINGS, INC. 'S ME MORANDUM OF POINT S AND AUT HOR IT IE S IN SUPPORT OF E X PAR T EAPPL ICAT ION RE : PRE L IMINARY INJUNCT ION FOR ORDE R T O SHOW CAUSE AND RE QUE ST FOR T E MPORARYRESTR AINING ORD ER PURSU ANT TO C.C.P. 526,527 and BUS. & PR OF. CODE 17203

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    1 page , called a "listing " or "auction ," which describes the produc t and allows potent2 purchasers to bid on or purchase the product. (Hayes Decl. at ^ 7.) As an Intemet Servi3 Provider ("ISP"), eBay is protected from liability by the Digital Millennium C opyright A4 ("DM CA") for listings that contain copyrighted text or pictures or that advertise unauthoriz5 copies of copyrighted material. {Hendrickson v eBay, Inc., 165 F. Supp. 2d 1082, 1088 (C6 Cal. 2001).) The DMC A provides ISPs safe harbor from liability for "infringemen t of copyrig7 by reason of the storage at the direction of a user of material that resides on a system or netwo8 controlled or operated by [the ISP]." (17 U.S.C . 512(c)(1).) To qualify for protection fro9 liability under this provision, an ISP must act expeditiously to remo ve material that is claimed

    10 be infringing upon receiving a "notice of claimed infringement" from the copyright owner. {11 512 (c)(l)(C).) The requirem ents o f a notice of claimed infringement are spelled out in 12 U.S.C . 512(c)(3).13 To meet the safe harbor requirements in the DM CA , eBay implem ented a program call14 the "Verified Rights Own er" or "V eR O" program . {See Hendrickson, sup ra, 165 F. Supp. 2d 15 1085 (citing eBay statemen t that VeRO procedures "are intended to substantially comp ly wi16 the requirem ents of the [DM CA ]").) Ow ners of intellectual property who register for the VeR17 program can submit a notice of claimed infringement to eBay stating that a particular aucti18 violates their intellectual property rights. In fillin g out the notice of claim ed infringement, t19 VeRO mem ber must sign a statement, un de r pena lty of perjury , that it has a good-faith beli20 that the identified auction violates its intellectual pro pe rty rights or the intellectual pro pe r21 rights of someone it repr esents. (Hayes Decl. at f 8.)22 When a VeR O mem ber submits a notice of claimed infringement regarding a particul23 auction listing, eBay automatically terminates that listing. eBay does not independently revie24 the validity of the notice of claimed infringement and trusts the VeR O mem ber's honesty that25 particular auction is infringing. When a certain num ber of an eBay seller's auctions a26 terminated because of notices of claimed infringement from a VeR O mem ber, eBay w27 suspend that seller's accou nt. (Hayes Decl. at ^ 9 and Exhibit D thereto.)2 8 / / /

    4PL AINT IFF DE SIGN FURNISHINGS, INC. 'S ME MORANDUM OF POINT S AND AUT H ORIT IE S IN SUPPORT O F E X PART EAPPL ICAT ION RE : PRE L IMINARY INJUNCT ION FOR ORDE R T O SHOW CAUSE AND RE QUE ST FOR T E MPORARYRESTR AINING ORD ER PURSUA NT TO C.C.P. 526,527 and BUS. & PR OF. CODE 17203

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    1 If it is the first time a seller has been suspended, eBay will reinstate the seller's accoun2 the seller subm its a signed request for reinstatement sw earing under penalty of perjury not 3 knowingly offer any items or post any listings on eBay that are illegal or that infringe the righ4 of any third parties. If a seller's account is suspended a second time because of notices 5 claimed infringement from VeRO m emb ers, eBay will not reinstate the account absent a requ6 from the VeR O mem ber that caused the suspension or a court order. (Hayes Dec l. at ^ 10 )7 Defendant is a member of eB ay's VeRO program. After joining the program, eB8 informed D efendant that if it received a notice of claimed infringement rega rding a particu9 auction, it would automa tically terminate the auction and would reinstate the auction at t

    10 VeR O mem ber's request. (Hayes Dec l. at ^ 11.)11 On or about September 22, 2010, Defendant filed a notice of claimed infringement wi12 eBay, swearing under penalty ofperjury that it had a good faith belief that D FI's auctions o ft13 fumiture violated De fendant's intellectual property rights, including copyrights belonging 14 Defendant. After receiving the notices of claimed infringement from Defendant, eBay sent D15 several ema ils notifying it that its auctions had been terminated. The message from eB ay state16 "Your item was removed because of a request we received from VeRO participant, Zen Pat17 LL C, asking us to remo ve the item for: Item(s) infringes cop yri gh ts.. .." eBay notified bidde18 on the auction that the auction had been terminated and that their bids were canceled. F19 auctions that had already ended, all evidence of the postings was deleted. Thus, history 20 recent sales made by DFI vanished. Unless DFI is contacted by the purchaser(s) on those sale21 those sales and profits will be lost forever. (Hayes Decl. at 12 and Exhibits E - F thereto.)22 Non e of D FI 's listings contained any copyrighted information belonging to Defendan23 Defendant was aware of this fact at the time it submitted the notices of claimed infringeme24 under penalty of perjury to eBay, and it did so with the sole intent of damag ing and causin25 harm to DFI. As a result of DF I's misrepresentation to eBay on or about September 23, 20126 DFI had approximately 35 auctions terminated and was prevented from listing any new items f27 sale. Because of De fend ant's malicious actions, DFI was blocked by eBay from posting an28 new auctions, whe ther or not the auction is for the ftimiture. (H ayes Decl. at TI 13.)

    5PL AINT IFF DE SIGN FURNISHINGS, INC. 'S ME MORANDUM OF POINT S AND AUT H ORIT IE S IN SUPPORT OF E X PART EAPPL ICAT ION RE : PRE L IMINARY INJUNCT ION FOR ORDE R T O SHOW CAUSE AND RE QUE ST FOR T E MPORARYRESTRA INING ORD ER PURSUANT TO C .C.P. 526, 527 and BUS. & PRO F. CODE 17203

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    1 Defendant has continued, and is continuing, to submit notices of claimed infringement2 eBay. Defendant is now submitting individual notices of claimed infringement for each 3 DF I's remaining listings in order to drive DF I's policy violation rating with eBay so low th4 eBay will perm anently suspend D FI's account. To date. Defendant has submitted 63 claims 5 infringement which caused DF I's policy violation rating to go from "h igh" to "very low " on o6 of D FI 's accounts and from " high " to "low " on a second accoun t. (Hayes Decl. at Tf 14 a7 Exhibits G - N thereto.)8 I I I . LEGAL ARGUM ENT9 A. Stan dard for Injunct ion (Restraining Or der )

    10 A preliminary injunction may be granted at any time before judgm ent. (Cal. Code 11 Civ. Proc. 527(a).) The granting o f a m otion for a preliminary injunction is addressed to t12 exercise of discretion by the court. The Court considers two intene lated factors when decidi13 whether to grant an injunction. The first factor is the likelihood that the moving party w14 prevail on the merits of its claims at trial. The second factor considered is the interim harm th15 the moving party is likely to sustain ifth e injunction were denied as compared to the harm t16 non-mo ving party is likely to suffer if the preliminary injunction were issued. {F ord ev B an k17 Fm anc e (1982) 136 Cal.App.3d 38, 42; Pillsbury, Madison & Sutro v Schectman (1997) 518 Cal.App.4"^ 1279.)19 Califomia Business & Professions Code section 17203 provid es, in pertinent part, "[a]n20 person who engag es, has engaged, or proposes to engage in unfair competition may be enjoin21 in any court of competent jurisdiction. The court may make such orders or judgme nts . . . 22 may be necessary to prevent the use or employm ent by any person of any practice whic23 constitutes unfair com petition . . . ." In Na tiona l Fo otba ll Leag ue Pro pertie s, Inc v Wichi24 Fa lls Sportswear, I n c , the court held that an injunction is the primary remedy for unfa25 com petition. The courts will generally, when unfair com petition has been alleged an26 adequately demons trated, grant an injunction to protect the party from harm to its business. "A27 injunction is the standard remedy in unfair com petition cas es." {National Fo otba ll Leagu28 Properties, Inc v Wichita Fa lls Sportswear, Inc (W.D . Wash. 1982) 532 F.Supp. 651 , 664

    6PL AINT IFF DE SIGN FURNISHINGS, INC. 'S ME MORANDUM O F POINT S AND AUT HO RIT IE S IN SUPPORT OF E X PAR T EAPPL ICAT ION RE : PRE L IMINARY INJUNCT ION FOR ORDE R T O SHOW CAUSE AND RE QUE ST FOR T E MPORARYRESTRA INING ORD ER PUR SUANT TO C.C.P. 526,527 and BUS. & PROF. CODE 17203

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    1 Given the foregoing, the Court may grant an injunction wh ere, as here, the circumstan2 wa nan t it.3 Defendant has dem onstrated time and again that it has no intentions of abiding by t4 law. Defendant has further demon strated that it will not cease its unlawful conduct until su5 time as DFI is perm anently prohibited from selling on eBay , if then. Consequently, D FI 's on6 remedy is for this Court to enjoin Defendant from continuing in its unlawfiil actions and to ord7 Defendant to undo the wrong it has done.8 B. I r repa rable Harm/Ba lance of Hardship9 DFI will be inep arab ly harmed if Defendant is not enjoined from misrepresen ting

    10 eBay that DFI has infringed on Defendant's IP rights, becaus e DF I's account with eBay will 11 perman entiy shut dow n, which will cause DFI to lose 95-100 % of its annual revenue. DFI w12 be forced out of business ifi t is no longer able to sell on eBay . (Hayes Dec l. at T| 15.)13 Defendant has clearly demo nstrated that it intends not only to continue its efforts 14 undermine DF I's busine ss, but to further "up the an te" by causing DF I's violation rating 15 plumm et to the point that eBay will permanently shut down D FI 's account. The ongoing natu16 of De fendant's ac tions makes it obvious that Defendant has no intention of stopping i17 unlawful behavior. Acco rdingly, the only way that Defendant will discontinue its illeg18 conduct is ifth is Court enjoins him from doing so. (Hayes Decl. at TT 11-14.)19 In Bwsafe-One , Tne v Haw ks, 524 F.Supp.2d 452 (S.D.N .Y. 2007) the Court granted20 preliminary injunction to stop improper infringement n otices by a plaintiff to an action. T21 court there held, "[a] preliminary injunction is necessary to retum de fendants to the positio22 they occupied before plaintiffs filed the DM CA notices with their web hosting com panies, 23 plaintiffs have demon strated twice that they will submit notices even when defendants' websi24 is not infringing." Here , Defendant has submitted mu ltiple false claims to eBay. (Hayes Dec25 at Tflf 11-14 .)26 Ifth is injunction is granted, Defendant will experience little, ifany , hardship. Defenda27 will still be able to pursue its business by any lawful me ans. Conv ersely, DFI will suffer2 8 / / /

    7PL AINT IFF DE SIGN FURNISHINGS, INC. 'S ME MORANDUM OF POINT S AND AUT H ORIT IE S IN SUPPORT OF E X PARTAPPL ICAT ION RE : PRE L IMINARY INJUNCT ION FOR ORDE R T O SHOW CAUSE AND RE QUE ST FOR T E MPORARYRESTRAINING ORDER PURSUANT TO C.C.P. 526,527 and BUS. & PROF. CODE 17203

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    1 imm easurable injury from the denial of th e requested injunction. {Shoemaker v County of L2 Angeles (1995) 37 Cal.App .4"' 618.)3 If not enjoined. Defendant will continue to submit false notices of infringement there4 perman ently and irreparably damaging D FI 's ability to conduct its business on eBay. This w5 destroy DF I's business. (Hayes Decl. at T 15.)6 C. Likelihood of Preva iling on Me rits7 In determining if a preliminary injunction should issue, a court must determine if t8 moving party is likely to succeed on the merits of his case. {U C Nuclear Weapons La9 Conversion Pro ject v Lawrence Livermore (1984) 154 Cal.App.3d 1157, 1160.) The facts

    10 this case dem onstrate that DFI is likely to succeed on the merits of its claims.'11 1. De fend ant has Violated Section 512(f) of the DM CA .12 To meet the safe harbor requirements in the DM CA , eBay implem ented a program call13 the "Verified Righ ts Ow ner" or "V eR O" program . {See Hendrickson, su pra , 165 F. Supp. 2d 14 1085 (citing eBay statement that VeRO procedures "are intended to substantially comp ly wi15 the requirem ents of th e [DM CA ]").) Ow ners of intellectual property who register for the VeR16 program can submit a notice of claimed infringement to eBay stating that a particular auctio17 violates their intellectual property rights. In filling out the notice of claimed infringement, th18 VeRO m ember must sign a statement, under penalty of perjury, that it has a good-faith beli19 that the identified auction violates its intellectual property rights or the intellectual proper20 rights of someone it represents.21 Defendant is well aware that it has no IP right in the fumiture. Defendant is also we22 aware that D FI 's auction postings did not contain any IP belonging to Defendant. Mo23 importantly. Defendant was aware of these facts at the time it subm itted the notices of claim o24 infringement to eBay. Acco rdingly, DFI is likely to succeed on the merits of its claim under th25 DMCA.2627 , DF I's claims were asserted in the Complaint filed on September 29, 2010. The Comp laint is28 attached hereto for the Co urt's convenience .

    8PL AINT IFF DE SIGN FURNISHINGS, INC. 'S ME MORANDUM OF POINT S AND AUT H ORIT IE S IN SUPPORT OF E X PART EAPPL ICAT ION RE : PRE L IMINARY INJUNCT ION FOR ORDE R T O SHOW CAUSE AND RE QUE ST FOR T E MPORARYRESTR AINING ORD ER PURSUANT TO C .C.P. 526, 527 and BUS. & PRO F. CODE 17203

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    2. Defendant Tort iously Interfered with DFI 's Contractual Relat ions.In Califomia, "courts provide a damage remedy against third party conduct intended

    disrapt an existing contract precisely because the exchange of promises resulting in suchformally cemented economic relationship is deemed worthy of protection from interference bystranger to the agreemen t." {Delia Pen na v Toyota Motor Sales, U S A , In(199 5) l lCal .4 th376 , 392 .)

    DFI had existing contracts with eBay and customers who had bid on its items at the timDefendant intentionally misrepresented, under penalty ofperjury, that DFI had infringed on copyright, tradem ark, or other intellectual property right. As a result of De fendant's unlawfconduct, D FI 's contracts were disrupted. Defendant specifically intended to disrapt D Fcontractual relationships with these parties when it violated the DMCA. Accordingly, DFI likely to succeed on the merits of its claim for tortious interference with contract.

    3. Defendant Tort iously Interfered with DFI 's Prospect ive EconomicAdvantage.While the courts have recognized that everyone is entitled to "establish and conduct

    lawful business" and is entitled to "the protection of organized society," the courts have placelimits on this imm unity. Seymour Buxbom v. E. F. Smith (1944) 23 Cal.2d 53 5, 546 state"...the commission of an actionable wrong is established against anyone who is shown to hav

    19 intentionally interfered with [another's business], without justifiable cause or e xc us e. .. "20 DFI has invested considerable time and expense in establishing itself as a premier sell21 on eBay. (Hayes Decl. at TI 6.) Defendant has, on num erous occasions, know ing22 misrepresented to eBay that DFI infringed upon De fend ant's copyright, trademark, or oth23 intellectual property rights. (Hay es Decl. at TITf 11-14.) As a direc t result of Defen dan24 conduct, eBay terminated approximately 63 auctions and blocked DFI from posting an25 additional items for auction; thus, precluding DFI from making any sales. Accordingl26 Defendan t's actions have unlawfully interfered with D FI 's busines s. (Hayes Dec l. at TfTI 11-1427 Defe ndant's me thods are unfair and unlawful.2 8 / / /

    9PL AINT IFF DE SIGN FURNISHINGS, INC. 'S ME MORANDUM OF POINT S AND AUT H ORIT IE S IN SUPPORT OF E X PAR T EAPPL ICAT ION RE : PRE L IMINARY INJUNCT ION FOR ORDE R T O SHOW CAUSE AND RE QUE ST FOR T E MPORARYRESTRA INING ORD ER PUR SUANT TO C.C.P. 526,527 and BUS. & PR OF . COD E 17203

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    1 4. De fenda nt 's Unlawful Actions Con stitute Unfa ir Com petition.2 Unfair com petition is defined as "any unlawful, unfair or fraudulent business act 3 practice " (Bus & Prof Code 17200.) Section 17200 was purposely defined broadly4 include anything that can properly be called a business practice . {Podolsky, et al v Fi5 He althc are Corp oratio n (1996) 50 Cal.App.4"' 632; Summit Technology, Inc v High-L i6 Me dical Instruments, Co (1996) 933 F.Supp. 918, 942.)7 In the instant case, Defendant intentionally misrepresented that DFI had infringed up8 its copyright, tradem ark, or other intellectual property in violation of th e DM CA. Defenda n9 actions were deliberate, premeditated, and intended to further De fenda nt's ability to conduct

    10 business free of any com petition. De fendan t's acts, as described above, were clearly unlawf11 and constituted unfair com petition.12 IV. CON CLUS ION13 Mo netary dam ages are inadequate in the present case becau se, unless enjoined by t14 Court, Defendant will continue to disrupt DF I's business and harm D FI 's reputation and goo15 will. DFI will be required to maintain a multiplicity of judicial proceed ings to protect 16 interests, and will be irreparably harmed by the significant loss of business reputation an17 revenue. The dram atic losses resulting from Defend ant's unlawful activity may comp romise t18 viability of th e business as an ongoing concem. Accordingly, DFI respectfully requests that t19 Court issue preliminary and permanent injunctive relief enjoining Defendant from: (20 subm itting any ftirther notices of claimed infringement to eBay stating that any particul21 auction conducted by DFI violates Defe ndant's intellectual property rights; and (2) fiirth22 defaming DFI. DFI also requests the Court order Defendant to imm ediately notify eBay th23 DFI did not infringe upon Defend ant's copyright, tradem ark, or other intellectual proper24 rights.25 DATE D: September 30, 2010 BE RR /&/1B L0C K LLP2627 ^ R I A M R Q N EJRNER28 A tt o r^ ys |f(/r Plaintiff

    10PL AINT IFF DE SIGN FURNISHINGS, INC. 'S ME MORANDUM O F POINT S AND AUT H ORIT IE S IN SUPPORT OF E X PART EAPPL ICAT ION RE : PRE L IMINARY INJUNCT ION FOR ORDE R T O SHOW CAUSE AND RE QUE ST FOR T E MPORARYRESTRA INING ORD ER PUR SUANT TO C.C.P. 526,527 and BUS. & PRO F. CODE 17203

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    Exhibit 6

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    BRIAN CRONE, State Bar N o. 191731ERICK C TURNER, State Ba rN o. 236186BERRY & BLOCK LLP2150 River Plaza Drive, Suite 415Sacramento, CA 95833(916)564-2000(916) 564-2024 FAXAttomeys for PlaintiffDESIGN FURNISHINGS, INC.

    E N D O R S E DSEP 3 0 2009

    BY V DAVIS, DEPU TYCLERK

    SUPERIOR COURT OF THE STATE OF CALIFORNIACOUNTY OF S A C R A M E N T O

    DESIGN FURNISHINGS, INC.Plaintiff,

    V .ZEN PATH, LL C, and DOES 1 through 10,inclusive.

    Defendants.

    Case No. 34-2010-00088443P R O O F OF S E R V I C E

    PROOF OF SERVICE

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    Design Furnishings v Zen PathSacramento Superior C ourt, Case No. 34-2010-00088443DECLARATION OF SERVICE

    I am a citizen ofthe United States, over the age of 18 years, and not a party to or interein this action. I am an employee of Be ny & Block LLP, and my business address is 2150 RivePlaza Drive, Suite 41 5, Sacram ento, CA 9583 3. On this day I caused to be served the followindocument(s):

    PLA INTIFF DESIGN FURNISHINGS, INC. 'S EX PART E APPLICAT ION R E:PRELIMINARY INJUNCTION FOR ORDER TO SHOW CAUSE AND REQUEST FOTEM POR ARY RESTR AINING ORDE R PURSUAN T TO C.C.P. 526, 527 and BUS. P R O F . CODE 17203 ; MEMO RANDUM OF POINTS AND AU THO RITIES;DECLAR ATION O F ERIC K C . TURNER; DECLARAT ION OF JENN IFER HAYE Sand [PROPOSED] ORDERKl by placing O the original ^ a trae copy into sealed envelopes addressed and served afollows:

    Attornev for PlaintiffMark D. NielsenCISLO fe THOMAS1333 Second Street, Suite 500Santa Monica, CA 90401-4110(310) 451-0647; Fax: (310) 394-4477

    PlaintiffDarla MessengerZEN PATH, LLC6620 Escondido Street, Suite ALas Vegas, NV 89119

    D BY M A IL : I am familiar with this firm's practice whereby the mail, after being placedin a designated area, is given fully prepaid postage and is then deposited with the U.S.Postal Service at Sacramento, Califomia, after the close ofthe day's business.BY PERSON AL DELIVERY:

    D%

    D

    I caused such envelope to be delivered by h a n d ." ^ ^ !BY O VE RN IG HT CO UR IER : I caused such envelope to be placed for collection anddelivery in accordance with standard overnight delivery procedures for delivery the nexbusiness day.BY FA C SI M IL E : I caused such documents(s) to be transmitted by facsimiletransmission from (916) 564-2024 to the person(s) and facsimile transmission withoutnum ber(s) shown about. The facsimile transmission was reported as complete withoutenor and a transmission report was properly issued by the transmitting facsimilemachine. A true and cone ct copy ofthe transmission report will be attached to thispro of of service after facsim ile service is completed .-V o Nvo.

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    Exhibit 7

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    123456789

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    BRIAN CRONE, State BarNo. 191731ERICK C TURNER, State Bar No. 236186BERRY & BLOCK LLP2150 River Plaza Drive, Suite 415Sacramento, CA 95833(916)564-2000(916) 564-2024 FA XAttomeys for PlaintiffDESIGN FURNISHINGS, INC.

    F I L E D ^ N D O R S E DSEP 3 0 2009

    BY- V. DAVIS, DEPUTY CLERK

    SUPERIOR COURT OF THE STATE OF CALIFORNIACOUNTY OF SACRAMENTO

    DESIGN FURNISHINGS, INC.Plaintiff,

    V .

    ZEN PATH, LLC , and DOES 1 through 10,inclusive,Defendants.

    CaseNo. 34-2010-00088443DECLARATION OF ERICK C .TURNER IN SUPPORT OF PLAINTIFFDESIGN FURNISHINGS, INC. 'S EXP A R T E A P P L I C A T I O N R E :PRELIMINARY INJUNCTION FORORDER TO SHOW CAUSE ANDR E Q U E S T F O R T E M P O R A R YRESTRAINING ORDER PURSUANTTO C.C.P . 526, 527 and BUS . i&P R O F . CODE 17203

    Date: October 1, 2010Time: 1 45 p.m.Dept: 54Complaint Filed September 29, 2010.

    I, ERICK C TURNER, hereby declare:1. I am an attomey licensed to practice before the Courts of the State of Califom

    and am an associate in the law firm of Berry & Block, LLC, attomeys of record for PlaintiDESIGN FUR NISH INGS , INC. ("DFI's") in the above-entitled a ction. The following is baseon my personal knowledge and if called upon to testify I could and would competentiy testifthereto.

    2 On September 30, 2010, at approximately 9:30 a.m., I e-mailed Mark Nielsenattomey for Defendant, a letter informing him that our office would be appearing ex parte oFriday, October 1, 2010, at 1:45 p.m. in Dept. 54 ofthe Court to be heard on DFI's applicatio

    iDE CL ARAT ION OF E RICK C. T URNE R IN SUPPORT OF PL AIN T IFF DE SIGN FURNISHINGS, INC. 'S EX PART EAPPL ICAT ION RE : PREL IIVIINARY INJUNCT ION FOR ORDE R T O SHOW CAU SE AND RE QUE ST FOR T E MPO RARYRESTRA INING ORD ER PUR SUANT TO C.C.P. 526,527 and BU S. & PR OF . CODE 17203

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    for order to show cause and temporary restraining order. My assistant, W endy Grimm , also sethe letter to Mr. Nielsen via facsimile at or about 9:45 a.m. Attached as Exhibit A hereto istrae and conect copy of my letter to Mr. Nielsen and the e-mail that it was attached tAttached as Exhibit B hereto is a trae and conect copy of the facsimile transmission to MNielson.

    I declare under penalty of perjury under the laws of the State of California that foregoing is true and conect.

    Execu ted this 30 th day of Septeifehbr, 2010 at S acram ento, California

    DE CL ARAT ION OF E RICK C . T URNE R IN SUPPORT OF PL AINT IFF DE SIGN FURNISHINGS, INC. 'S E X PART EAPPL ICAT ION RE : PRE L IMINARY INJUNCT ION FOR ORDE R T O SHOW CAUSE AND RE QUE ST FOR T E MPORARYRESTR AININ G ORD ER PURSU ANT TO C.C.P. 526,527 and BUS. & PRO F. COD E 17203

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    Case 2:10-cv-02765-WBS-GGH Document 1-1 Filed 10/13/10 Page 36 of 41

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    Erick TurnerFrom:Sent:To:Cc:Subject:Attachments:

    Mr. Nielsen,

    Erick TurnerThursday, September 30, 2010 9 39 AM'Mark Nielsen'Brian Crone, llene BlockDesign Furnishings, Inc v Zen Path, LLCNielson - Ex Parte doc

    Attached please find notice of tom orr ow 's ex parte hearing on Design Furnishings, Inc's a pplication for tem pora ryrestraining order.Erick C. TurnerAttorney at LawBERRY & BLOCK, LLP2150 River Plaza Drive, Suite 415Sacram ento, CA 95833eturner(5)berrvblock.comTelephone: (916) 564-2000Facsimile: (916) 564-202 4POSSIBLE ATTORNEY/CUENT COMMUNICATIONThis transmission may contain m ater ial covered by the Attorney/Client privilege and may be intended as a confidentialcommunication This comm unication is intended fo r the addressee only Ifyo u are no t the intended recipient or anemployeeresponsible fo r receipt of this transmission, you should be aware that any distribution, copying, or com munication of thistransmission is prohibited. Ifyou have received this communication in error, please no tify us immediately

    To ensure compliance w ith requirements imposed by the IRS, Berry & B lock, LLP informs you that, ifany advice concerning a U S.Federal tax issue is contained in this comm unication (including any attachments), such advice is not intended or written to be used,and cannot be used, fo r the purpose o f( i) avoiding penalties under the Interna l Revenue Code or (11) promoting, marketing, orrecommending to another party any transaction o r m atter addressed herein

    Case 2:10-cv-02765-WBS-GGH Document 1-1 Filed 10/13/10 Page 37 of 41

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    warnB E R R Y & B LO C K LLP

    A T T O R N E Y S A T LA WSeptember 30, 2010

    VIA E-MAIL AN D FA CSIM ILE (310) 394-4477Mark D. Nielson, Esq.Cislo & Thomas LLP1333 2"" Sfreet, Suite 500Santa Monica, CA 90401-4110R e : Design Fu rnishings, Inc. v . Zen Path, LL CCase N o. 34-201034-00088443

    Dear Mr, Nielson:Please be advised that we will be appearing ex parte tomonow aftemoon onan application for order to show cause and for temporary restraining order preventingZen Path, LLC from submitting further fraudulent claims that Design Fumishings,Inc. is infringing on its copyright, trademark, patent, and/or other intellectual propertyrights to eBay . Your clien t's malicious and unlawful actions have caused, andcontinue to cause, my client to suffer ineparable harm.The ex parte hearing is scheduled for Friday, October 1, 2010, at 1:45 p.m. inDepartment 54 of the Superior Court, County of Sacramento, located at 800 9thStreet, Sacramento, CA 95814. Please advise whether you or anyone else on yourbehalf intends to appear and oppose our client's application so that we may advise theCourt at the time ofth e hearing.Should you have any questions conceming this matter, please do not hesitateto contact our office.

    Very traly,

    B ER R Y & B LO C K , LLP

    Cc: client2150 Ktver Plaza Drive, Suite 415Sacramento, CA 95833

    te l: 916 564-2000 \ f a x : 916-564-2024 \ to ll free: 877-564-2770web:www.herryhlock.cotn

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    http://www.herryhlock.cotn/http://www.herryhlock.cotn/
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    mm W^B E R R Y & B L O C K L L P

    A T T O R N E Y S A T L A WSeptember 30, 2010

    VL4 E-MAIL AN D FA CSIM ILE (310) 394-4477Mark D. Nielson, Esq.Cislo & Thomas LLP1333 2"'' Street, Suite 500Santa Monica, CA 90401-4110R e : Design F urnishings, Inc. v . Zen Path, LL CCaseNo. 34-201034-00088443

    Dear Mr. Nielson:Please be advised that we will be appearing ex parte tomonow aftemoon onan application for order to show cause and for temporary restraining order preventingZen Path, LLC from submitting further fraudulent claims that Design Fumishings,Inc. is infringing on its copyright, trademark, patent, and/or other intellectual propertyrights to eBay . Your clien t's malicious and unlawful actions have caused, andcontinue to cause, my client to suffer irreparable harm.The ex parte hearing is scheduled for Friday, October 1, 2010, at 1:45 p.m. inDepartment 54 of the Superior Court, County of Sacramento, located at 800 9thStreet, Sacramento, CA 95814. Please advise whether you or anyone else on yourbehalf intends to appear and oppose our client's application so that we may advise theCourt at the time ofthe hearing.Should you have any questions conceming this matter, please do not hesitateto contact our office.

    Very truly,

    B ER R Y & B LO C K , LLP

    Cc: client2150 Rxver Pla za Dnv e, Suite 415 Sacramento, CA 95833

    te l: 916-564-2000 \ f ax : 916-564-2024 \ to ll free : 877-564-2770web: www.berryblock.com

    Case 2:10-cv-02765-WBS-GGH Document 1-1 Filed 10/13/10 Page 40 of 41

    http://www.berryblock.com/http://www.berryblock.com/
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    Wendy GrimmFro m:Sent :T o :Sub ject :

    SBSFAxService@berryblock comThursday, September 3 0, 2010 9 45 AMWendy GnmmFax Design Furnishings, Inc v Zen Path, LLC was successfully sent to Mark D Nielson, Esqat+1 (310)394-4477At tachmen ts : Fax Tif

    Fax.Tif (70 KB)Fax Design Furnishings, Inc.Esq. at +1 (310) 394-4477.Fax submitted: 9:43:05 AMTo server; BBKING2Transmission started: 9:43:06 AMTransmission end:- 9:44:40 AMNumber of retries: 0Number of pages: 2

    Zen Path, LLC was successfully sent to Mark D. Nielson,

    Case 2:10-cv-02765-WBS-GGH Document 1-1 Filed 10/13/10 Page 41 of 41