MMI v. Rich Godfrey Assocs. - Complaint
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UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ARIZONA
MMI, Inc., an Arizona corporation,
Plaintiff,
v.
Rich Godfrey & Associates, Inc., an Arizona Corporation, dba ColemanPowersports; Richard W. Godfrey and
Jane Doe Godfrey, husband and wife;Cabela’s, Inc., a foreign corporation;BJ’s Wholesale Club, Inc., a foreigncorporation; Recon Enterprise, LLC,an Arizona limited liability company;
John and Jane Does 1-97, and Blackand White Companies 1-97,
Defendants.
No.
COMPLAINT FOR PATENTINFRINGEMENT
AND
DEMAND FOR JURY TRIAL
Plaintiff MMI, Inc. (hereinafter “Plaintiff”), for its Complaint against the
Defendants, alleges as follows:
THE PARTIES
1.
Plaintiff MMI, Inc., (hereinafter “MMI”) is a corporation organized and
existing under the laws of the State of Arizona, with its principal place of business at
8512 East Jenan in Scottsdale, Arizona.
2. At all times relevant, Defendant Rich Godfrey & Associates, Inc
(hereinafter “RGA”), was an Arizona corporation doing business in Maricopa County
Arizona, and doing business as Coleman Powersports.
3. At all times relevant, and upon information and belief, Defendants
Richard W. Godfrey and Jane Doe Godfrey (hereinafter “Godfrey”), were husband
MICHAEL GERITY , B AR NO. 015750ISRAEL & GERITY , PLLC3300 NORTH CENTRAL A VENUE, SUITE 2000PHOENIX , ARIZONA 85012 TELEPHONE: (602) 274-4400F ACSIMILE: (602) 274-4401MGERITY @IG-LAW .COM
A TTORNEYS FOR PLAINTIFF
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and wife, and reside in Maricopa County, Arizona. At all times material to the
Complaint, Defendant Richard Godfrey, if married, acted on behalf of and in
furtherance of his marital community with his wife, Jane Doe Godfrey. The name
Jane Doe Godfrey is a fictitious name used to represent the wife of DefendantGodfrey until her true identity is discovered
4.
At all times relevant, Defendant Cabela’s, Inc (hereinafter “Cabelas”)
was a Nebraska corporation authorized to and doing business in Maricopa County
Arizona.
5.
At all times relevant, Defendant BJ’s Wholesale Club, Inc. (hereinafter
“BJ’s”), was a Delaware corporation authorized to and doing business in Maricopa
County, Arizona.
6.
At all times relevant, Recon Enterprise, LLC (hereinafter “Recon”), was
an Arizona limited liability company doing business in Maricopa County, Arizona.
7. The true names or capacities, whether individuals, corporations
associations or otherwise of defendants John and Jane Does 1 through 97, and Black
and White Companies 1-97, are unknown to Plaintiff, who therefore sues said
Defendants by fictitious names. Plaintiff is informed and believes, and thereupon
alleges, that each of the Defendants designated herein as such is legally responsible in
some manner for the events and happenings herein referred to, and thereby
proximately caused injury and damage to Plaintiff as herein alleged. Plaintiff prays for
leave to amend this Complaint so as to allege their true names and capacities as
ascertained.
JURISDICTION AND VENUE
8.
Subject matter jurisdiction is proper in this Court pursuant to 28 U.S.C
§§ 1331 and 1338 because this action, at least in part, is for patent infringement and
arises under the Patent laws of the United States, Title 35 of the United States Code.
Jurisdiction also exists pursuant to 28 U.S.C. § 1332(a) because complete diversity of
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citizenship exists between the parties and the amount in controversy exceeds the sum
or value of $75,000, exclusive of interest and costs. This Court has jurisdiction over
any Arizona state law claims under principles of pendent, ancillary, and supplemental
jurisdiction, 28 U.S.C. §§ 1338(b) and 1367(a).9. Venue is proper in this district pursuant to 28 U.S.C. §§ 1391(b), (d), and
1400(b) because, inter alia , one or more of the acts of infringement complained of took
place in this district and have had or will have had effect in this judicial district.
GENERAL AVERMENTS
MMI Background and the Patent
10.
MMI and its principal have been leaders in designing and developing
motorbike and related products for decades. Plaintiff has dedicated substantia
resources to remain on the cutting edge of an ever-changing and challenging market.
11.
To protect its investment in its designs and technology, Plaintiff has
procured several patents, including design patents. Plaintiff’s products built around
these patented designs have been widely successful, appreciated and embraced by the
industry.
12.
On April 28, 2009, United States Patent No. D591,203S (“the ‘203
Patent”) was duly and legally issued to Christopher V. Martin. MMI is the assignee of
all rights in and title to the ‘203 Patent. A true and correct copy of the ‘203 Patent is
attached as Exhibit A, and incorporated herein by this reference.
13.
The ‘203 Patent applies, at least in part, to the ornamental design of an
asymmetrical mini bike.
Defendants and the Infringing Activity
14.
Defendant Richard Godfrey is the sole owner, director and officer of
Defendant RGA. He formerly associated with Plaintiff, both as an employee of other
companies and on his own, in the business of distributing and selling mini bikes
including those incorporating the design of the ‘203 Patent and other patented designs.
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15.
Both Defendant Richard Godfrey and Defendant RGA engage, have
engaged and continue to engage in the manufacture, marketing, distribution and sale of
mini bikes.
16.
As an employee of a former licensee of ‘203 Patent, Defendant RichardGodfrey was made well aware of the existence, value and scope of that Patent, as well
as other patents owned by or otherwise assigned to Plaintiff. In fact, Defendant
Godfrey was a material witness in a prior lawsuit for infringement of the ‘203 Patent
that was brought against Defendant’s prior employer.
17.
After that litigation against his former employer was concluded
Defendant Godfrey entered into discussions with Plaintiff to license the ‘203 Patent
and sell mini bikes pursuant to such a license.
18.
As part of those discussions, and in furtherance of the proposed license
Defendant Godfrey was provided with a prototype mini bike that Plaintiff had built
using the design set forth in the ‘203 Patent. That prototype remained the property of
Plaintiff at all times. Defendant Godfrey specifically agreed he would return the
prototype to Plaintiff after he had used it to attempt to secure manufacturing and
distributing agreements for the mini bike pursuant to the proposed license.
19.
Instead of using the prototype mini bike for the intended purposes,
Defendant Godfrey took possession and control of it, deprived Plaintiff of it. Upon
information and belief, Defendant Godfrey shipped or caused the prototype to be
shipped to China to be copied into an almost identical mini bike model that directly
incorporated the design elements of the ‘203 Patent (hereinafter referred to as the
“Infringing Products”).
20.
Defendant Godfrey failed and refused to return the prototype mini bike,
in violation of the parties’ agreement.
21.
While the parties had come to a licensing agreement in principle
Defendant Godfrey failed and refused to reduce the terms to writing. Nonetheless
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the parties very plainly agreed, and Defendant Godfrey specifically acknowledged, that
he would only manufacture, market, import, distribute or sell mini bikes pursuant to a
license agreement with Plaintiff.
22.
Thereafter, Defendant Godfrey formed Defendant RGA for thepurposes of manufacturing, marketing, importing, distributing and selling the
Infringing Products.
23.
Notwithstanding Defendant Godfrey’s knowledge and appreciation of
the value and scope of the ‘203 Patent, upon information and belief, Defendant
Godfrey, by himself or in conjunction with Defendant RGA, has made, imported,
distributed, sold, offered for sale and/or used Infringing Products.
24.
Upon information and belief, Defendants Godfrey and/or RGA have
sold the Infringing Products to, or have otherwise made the Infringing Products
available for subsequent purchase by, Defendant Cabelas.
25. Upon information and belief, Defendant Cabelas has thereafter made
imported, distributed, sold, offered for sale and/or used Infringing Products.
26.
Upon information and belief, Defendants Godfrey and/or RGA have
sold the Infringing Products to, or have otherwise made the Infringing Products
available for subsequent purchase by, Defendant BJ’s.
27.
Upon information and belief, Defendant BJ’s has thereafter made,
imported, distributed, sold, offered for sale and/or used Infringing Products.
28. Upon information and belief, Defendants Godfrey and/or RGA have
sold the Infringing Products to, or have otherwise made the Infringing Products
available for subsequent purchase by, Defendant Recon.
29.
Upon information and belief, Defendant Recon has thereafter made
imported, distributed, sold, offered for sale and/or used Infringing Products.
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30.
Upon information and belief, Defendants Godfrey and/or RGA have
actively induced and currently are actively inducing others to infringe one or more
claims of the ‘203 Patent through their sale of certain products.
31.
Upon information and belief, Defendants Godfrey and/or RGA have
contributorily infringed and currently are contributorily infringing the ‘203 Patent by
their offer for sale and sale of certain products.
32.
Defendants Godfrey’s and/or RGA’s Infringing Products infringe the
claim of the ‘203 Patent.
33. Upon information and belief, Defendants Godfrey and/or RGA have
been aware of their infringing activity since the time the prototype was taken on oraround October 21, 2013.
34.
Upon information and belief, Defendants Cabelas, BJ’s and Recon have
been aware of the infringing activity since at least June 25, 2014, when they were sent a
demand letter on behalf of Plaintiff by undersigned counsel.
35.
Despite notice of their infringing activity, Defendants have continued
and continue the above activities to date.
36. The activities of the Defendants, with regard to their manufacture
importation, distribution, sale, offers for sale and/or use of the Infringing Products,
are and have been without authorization from Plaintiff.
COUNT I
PATENT INFRINGEMENT
37.
This cause of action arises under the Laws of the United States, Title 35
United States Code.
38. Plaintiff hereby realleges and incorporates all of the allegations contained
in the above Paragraphs as though fully set forth herein.
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39.
Upon information and belief, Defendants have infringed the ‘203 Patent
under 35 U.S.C. § 271 et seq. Upon information and belief, this infringement was
intentional.
40.
Upon information and belief, Defendants continue to infringe the ‘203
Patent under 35 U.S.C. § 271 et seq. Upon information and belief, these ongoing acts
of infringement are intentional.
41.
Upon information and belief, Defendants, acting through and by their
respective officers and owners, have, without authority, consent, right or license, and
in direct infringement of the ‘203 Patent, made, imported, distributed, sold, offered for
sale and/or used the Infringing Products in this country, and such Infringing Productshave been sold and used in this jurisdiction and district.
42.
Defendants’ infringing conduct is intentional and unlawful and, upon
information and belief, will continue unless enjoined by this Court.
43.
Because the ‘203 Patent is a design patent, the additional remedy
provided for by 35 U.S.C. § 289 applies, and Defendants are liable to Plaintiff to the
extent of their total profit on the Infringing Products, but not less than $250.
COUNT II
INDUCEMENT OF PATENT INFRINGEMENT
44.
This cause of action arises under the Patent Laws of the United States
Title 35, United States Code, in particular under 35 U.S.C. § 271(b).
45.
Plaintiff hereby realleges and incorporates all of the allegations contained
in the above Paragraphs as though fully set forth herein.
46.
Upon information and belief, Defendants, acting through and by their
respective officers and owners, have, in this country, actively and/or intentionally
induced others to make, import, distribute, sell, offer for sale and/or use the Infringing
Products, in direct infringement of the ‘203 Patent.
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47.
Defendants’ infringing conduct is intentional and unlawful and, upon
information and belief, will continue unless enjoined by this Court.
COUNT III
CONTRIBUTORY PATENT INFRINGEMENT
48.
This cause of action arises under the Patent Laws of the United States
Title 35, United States Code, in particular under 35 U.S.C. § 271(c).
49.
Plaintiff hereby realleges and incorporates all of the allegations contained
in the above Paragraphs as though fully set forth herein.
50. Upon information and belief, Defendants are furthermore liable for
contributory infringement, pursuant to 35 U.S.C. § 271(c), in that Defendants havemade, imported, distributed, sold, offered for sale and/or used within the United
States a component of a patented combination or composition, consisting of a
material part of the invention, knowing the same to be especially made or adapted for
use in the infringement of the ‘203 Patent and not a staple article or commodity of
commerce suitable for substantial non infringing use.
51. Defendants’ infringing conduct is intentional and unlawful and, upon
information and belief, will continue unless enjoined by this Court.
COUNT IV
BREACH OF CONTRACT
(As to Defendant Godfrey)
52.
Plaintiff hereby realleges and incorporates all of the allegations contained
in the above Paragraphs as though fully set forth herein.
53.
Plaintiff and Defendant Godfrey entered into valid and binding
agreements regarding the use of the prototype mini bike and any subsequent sales of
mini bike products.
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54.
Plaintiff has made demand upon Defendant Godfrey for the return of
the prototype mini bike. Defendant Godfrey has failed and refused to return it
although demand therefor has been made.
55.
Plaintiff has made demand upon Defendant Godfrey to cease and desist
all sales of Infringing Products, or to finalize a license agreement as was agreed by the
parties. Defendant Godfrey has failed and refused to do so, although demand therefor
has been made.
56.
There is now due, owing and unpaid from Defendant Godfrey to
Plaintiff, an amount to be proven at trial, but in no event less than the value of the
prototype mini bike, plus interest on the amount unpaid at the rate of ten percent(10%) per annum until paid, which amount remains due and owing despite demand
therefor.
57.
By virtue of the foregoing, Defendant Godfrey has breached his
contractual and legal obligations to Plaintiff, thereby causing Plaintiff to suffer damage
injury, and loss for which it is entitled to recover against Defendant. In addition
Plaintiff seeks its costs, expenses, and attorneys’ fees, and such other and further relief
as the court deems just and reasonable, pursuant to A.R.S. § 12-341.01 and the terms
of the parties’ agreement.
COUNT V
BREACH OF COVENANT OF GOOD FAITH AND FAIR DEALING
(As to Defendant Godfrey)
58.
Plaintiff hereby realleges and incorporates all of the allegations contained
in the above Paragraphs as though fully set forth herein.
59. The law implies in every contract, including the agreements referenced
herein, a covenant of good faith and fair dealing. The actions of Defendant Godfrey
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including but not limited to those described above, constitute breaches of the
covenant of good faith and fair dealing imposed on him.
60. As a direct result of Defendant’s breach of the covenant of good faith
and fair dealing, Plaintiff has suffered damages in an amount to be proven at trial.
COUNT VI
FRAUD
(As to Defendant Godfrey)
61.
Plaintiff hereby realleges and incorporates all of the allegations contained
in the above Paragraphs as though fully set forth herein.
62.
In requesting that Plaintiff provide Defendant Godfrey with itsprototype, Defendant Godfrey made false representations of material facts, omitted to
state material facts necessary to prevent statements made from being false, and/or
made promises he did not intend to fulfill. Defendant Godfrey knew that these
statements were false when made, that the omissions rendered certain statements false
and that Defendant had no intention of fulfilling his promises.
63. Upon information and belief, Defendant Godfrey intended that Plaintiff
rely on such misrepresentations, omissions and promises.
64.
Defendant Godfrey’s misrepresentations, omissions and promises were
material to Plaintiff’s decision to provide the prototype to Defendant Godfrey
Plaintiff was unaware of the falsity of the statements or omissions or Defendant
Godfrey’s intention not to fulfill his promises to Plaintiff.
65.
Plaintiff reasonably relied on Defendant Godfrey’s misrepresentations
omissions and promises, and had a right to so rely.
66. As a direct result of their detrimental reliance on Defendant Godfrey’s
misrepresentations, omissions and promises, Plaintiff has suffered damages in an
amount to be proven at trial.
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67.
Defendant Godfrey’s conduct and misrepresenting or omitting certain
material facts or making promises he did not intend to fulfill was in conscious
disregard of Plaintiff’s rights and interests and therefore warrants the imposition of
punitive damages.
COUNT VII
FRAUDULENT INDUCEMENT
(As to Defendant Godfrey)
68.
Plaintiff hereby realleges and incorporates all of the allegations contained
in the above Paragraphs as though fully set forth herein.
69.
Defendant Godfrey made untrue misrepresentations to and/or failed todisclose to Plaintiff facts and conditions concerning his intentions of entering into a
licensing agreement with Plaintiff.
70.
Defendant Godfrey knew or should have known that his statements or
failure to disclose all relevant facts and conditions surrounding that proposed
agreement would have the effect of materially misleading Plaintiff into providing
Defendant Godfrey with the prototype mini bike. Upon information and belief
Defendant Godfrey intended to induce Plaintiff to rely upon misrepresentations and
omissions.
71.
The misleading or undisclosed facts, particularly those regarding
Defendant’s inability or unwillingness to enter into a licensing agreement, were central
to Plaintiff’s basic decisions concerning Defendant Godfrey, and Plaintiff would not
have provided the prototype mini bike to Defendant Godfrey but for his
misrepresentations.
72. Plaintiff did not and should not have known that the misleading or
undisclosed facts were either untrue or had failed to be disclosed.
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73.
Plaintiff reasonably relied upon the representations made by Defendant
Godfrey.
74. Defendant Godfrey’s untrue statements and omissions fraudulently
induced Plaintiff to provide him with the prototype mini bike, and Plaintiff is entitled
to recover from Defendant Godfrey the damages resulting from Plaintiff’s reliance
along with all costs and reasonable attorneys’ fees.
COUNT VIII
NEGLIGENT MISREPRESENTATION
(As to Defendant Godfrey)
75.
Plaintiff hereby realleges and incorporates all of the allegations containedin the above Paragraphs as though fully set forth herein.
76.
Defendant Godfrey had a duty to impart true and correct information to
Plaintiff with regard to Defendant Godfrey’s willingness or ability to enter into a
licensing agreement, and to otherwise deal in good faith.
77.
Defendant Godfrey breached his duty to Plaintiff by falsely and recklessly
asserting that Defendant would enter a licensing agreement.
78. Defendant Godfrey knew or should have known that Plaintiff would rely
on this information in making its decision to provide Defendant with the prototype
mini bike.
79.
Plaintiff materially relied on this information when it decided to provide
Defendant Godfrey with the prototype mini bike.
80.
As a direct and proximate cause of Defendant Godfrey’s breach of his
duty of care, Plaintiff has suffered damages.
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COUNT IX
INJUNCTIVE RELIEF
81. Plaintiff hereby realleges and incorporates all of the allegations contained
in the above Paragraphs as though fully set forth herein.
82.
Defendants’ wrongful conduct has caused and threatens to cause
irreparable harm to Plaintiff that is incapable of being adequately determined and
adequately remedied by money damages.
83.
Plaintiff will continue to suffer irreparable harm unless Defendants are
enjoined from continuing improper acts, including but not limited to, wrongfully
infringing, inducing infringement of, and contributing to the infringement of the ‘203Patent.
84.
Accordingly, Plaintiff is entitled to a preliminary injunction and a
permanent injunction, prohibiting Defendants from making, using, selling, offering for
sale, importing and offering to import any and all Infringing Products.
85.
A Preliminary Injunction is appropriate in this matter: (a) because
Plaintiff has a likelihood of success on the merits; (b) Plaintiff faces immediate and
irreparable harm due to Defendants’ acts and conduct; (c) that there is a special
urgency warranting the grant of injunctive relief; and (d) the balance of hardship tips in
favor of Plaintiff.
DAMAGES
86.
Plaintiff has suffered, is suffering, and will continue to suffer irreparable
harm and injury as a result of Defendants’ aforesaid activities. Defendants will, unless
restrained and enjoined, continue to act in the unlawful manner complained of herein,
all to Plaintiff’s irreparable damage. Plaintiff’s remedy at law is not adequate to
compensate it for the injuries suffered and threatened.
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87.
By reason of Defendants’ acts complained of herein, Plaintiff has
suffered monetary damages in an amount that has not yet been determined, but upon
information and belief, is substantially in excess of the sum or value of $75,000,
exclusive of interest and costs.
88.
Pursuant to 35 U.S.C. § 284, Plaintiff is entitled to: an accounting by
Defendants of all revenues received through the commercial exploitation of the
Infringing Products; the imposition of a constructive trust for the benefit of Plaintiff
upon all such funds in the custody or control of Defendants; and to such other
damages to which Plaintiff may be determined to be entitled.
89.
Pursuant to 35 U.S.C. § 289, Plaintiff is entitled to recover Defendants’total profit on the Infringing Products, but not less than $250, as an additional remedy
for infringement of a design patent.
REQUEST FOR JURY TRIAL
90.
Plaintiff hereby demands that this cause be tried by a jury.
PRAYER FOR RELIEF
WHEREFORE, Plaintiff prays as follows:
A. That judgment be entered that Defendants have infringed, actively
induced others to infringe, and/or contributorily infringed United States Letters Patent
No. D591,203S.
B. That Defendants, their agents, officers, directors, employees
servants, attorneys, privies, successors and assigns, and all holding by, through or
under Defendants, and all those acting for or on the behalf of Defendants, or in active
concert, participation, or combination with them, be enjoined and restrained
immediately and preliminarily, during the pendency of this action and permanently
thereafter from:
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(1) making, using, selling and/or importing the Infringing
Products, or any colorable imitation thereof,
(2) otherwise infringing upon Plaintiff’s Patent.
C. That this Court order Defendants, and their officers, agents
servants and employees, to deliver up to this Court, and to permit the seizure by
Officers appointed by the Court of all articles and materials infringing upon the rights
of Plaintiff, and particularly, without limitation, all products or other merchandise
which embodies or includes the Infringing Products, and to be delivered up for
destruction on the issuance of a final Order in this action, including all Infringing
Products, and all equipment, molds and other matter or materials for reproducing suchInfringing Products.
D. That Defendants be required to file with the Court within thirty
(30) days after entry of final judgment of this cause a written statement under oath
setting forth the manner in which Defendants have complied with the final judgment.
E. That Defendants be required to pay to Plaintiff such damages as
Plaintiff has sustained in consequence of Defendants’ infringement of the ‘203 Patent.
F. That Defendants, as an additional remedy for infringement of a
design patent, be ordered to account for and pay over to Plaintiff all their respective
gains, profits and advantages derived from the infringement of Plaintiff’s Patents
pursuant to 35 U.S.C. § 289, or such damages as may appear to the Court as proper
within the Patent Laws.
G. That in the alternative, a reasonable royalty be awarded to Plaintiff
pursuant to 35. U.S.C. § 284.
H. Due inter alia to Defendants’ willful infringement of Plaintiff’s
patent rights, that Defendants be ordered to pay Plaintiff enhanced damages (e.g.,
treble damages).
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I. That Defendants be ordered to pay to Plaintiff the costs of this
action, prejudgment interest, and post-judgment interest.
J. That Defendants be ordered to pay to Plaintiff its reasonable
attorneys’ fees, pursuant to 35 U.S.C. § 285, as well as pursuant to A.R.S. § 12-341.01.
K. Due inter alia to Defendants’ willful and flagrant disregard of
Plaintiff’s patent rights, that this case be found to be exceptional and that Defendants
be ordered to pay Plaintiff’s reasonable attorneys’ fees and experts’ fees.
L. That Plaintiff has such other and further relief as the Court may
deem just and proper.
RESPECTFULLY SUBMITTED this 11th day of March 2015.
ISRAEL & GERITY, PLLC
By: /s/Michael GerityMichael GerityIsrael & Gerity, PLLC3300 North Central Avenue, Suite 2000Phoenix, Arizona 85012
Attorneys for Plaintiff
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CERTIFICATE OF SERVICE
I hereby certify that on this 11th day of March 2015, I electronically transmittedPlaintiff’s Complaint and Jury Demand using the CM/ECF system for filing. Thereare no CM/ECF registrants at this time.
DATED this 11th day of March 2015.
ISRAEL & GERITY, PLLC
By: /s/Michael GerityMichael Gerity3300 North Central AvenueSuite 2000Phoenix, Arizona 85012
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EXHIBIT A
‘203 Patent
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