Lanphere v. Schwabe et. al

7/31/2019 Lanphere v. Schwabe et. al.

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IN THE UNITED STATES DISTRICT COURTFOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

DONALD J. LANPHERE, JR., )

) Civil Action No.:Plaintiff, )

v. ) Hon. Judge:)

TERRY SCHWABE, ) Magistrate Judge:TOM LAWRENCE, and )STEVE LUNDGREN, )

)Defendants. )

__________________________________________ ) JURY TRIAL DEMANDED

COMPLAINT

Plaintiff DONALD J. LANPHERE, JR. (hereinafter Don Lanphere), by his undersigned

attorneys, for his complaint against Defendants TERRY SCHWABE, TOM LAWRENCE, and

STEVE LUNDGREN (hereinafter collectively the Defendants), states and alleges as follows:

Cause of Action

1. This action arises from the Defendants fraud and inequitable conduct in obtaining U.S.

Design Patent No. US D651,355 S (the 355 patent) and in subsequently using this invalid patent

as an excuse or justification to infringe upon the rights of or otherwise unfairly compete with Don

Lanphere, thereby causing substantial damage to Don Lanphere as a result of this fraud, inequitable

conduct and unfair competition.

2. There is an actual case or controversy regarding the validity and use of the '355 patent. The

Defendants are knowingly using an invalid patent to unfairly compete with Don Lanphere. The

Defendants have also attached a copy of the 355 patent as Exhibit A to their Counterclaims against Don

Case: 1:12-cv-05152 Document #: 1 Filed: 06/27/12 Page 1 of 39 PageID #:1


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Lanphere in a co-pending lawsuit between the parties hereto, namely Civil Action No. 10-4774 pending

in this Court.

Parties

3. Plaintiff Don Lanphere is an individual, U.S. citizen residing at 1741 Ridgewood Ln. E.,

Glenview, Illinois 60025.

4. Upon information and belief, Defendant Terry Schwabe is an individual, U.S. citizen

residing in East Moline, Illinois, and has an address at 767 Fifty-Second Avenue, Suite 203, Moline,

Illinois 61265.

5. Upon information and belief, Defendant Tom Lawrence is an individual, U.S. citizen

residing in Moline, Illinois, and has an address at 767 Fifty-Second Avenue, Suite 203, Moline,

Illinois 61265.

6. Upon information and belief, Defendant Steve Lundgren is an individual, U.S. citizen

residing in Lenexa, Kansas, and has an address at 15621 W. 87th Parkway, Lenexa, Kansas, 66219.

Jurisdiction and Venue

7. This action arises under the provisions of the Patent Laws, Rules and Regulations, 35

U.S.C. 271 et seq., 37 C.F.R 1.56, under 15 U.S.C. 1125 et seq., under the Declaratory Judgments

Act, 28 U.S.C. 2201 et seq., and related state and/or common law.

8. This Court has jurisdiction of these claims under, inter alia, the provisions of 28 U.S.C.

2201, 2202, 1338, 1367, under the Patent Laws, Rules and Regulations, 35 U.S.C. 1 et seq., and

37 C.F.R 1.56 et seq., and under the Lanham Act, 15 U.S.C. 1501 et seq.

9. Venue is proper in this District under, inter alia, the provisions of Section 1391 of Title

28, United States Code.



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Background Facts

10. On January 15, 2008, United States Patent No. D559,502S (the 502 patent),

entitled Helmet-Shaped Hat with Facemask, was duly and legally issued to Don Lanphere, the

named inventor and sole owner of the subject matter claimed in the 502 patent. A true and correct

copy of the 502 patent is attached hereto as Exhibit A.

11. Effective March 7, 2011, United States Copyright Registration No. VA-1-768-794

(the 794 Copyright) entitled Helmet Shaped Hat With Flexible Removable Facemask was duly

and legally registered to Don Lanphere, the author and sole copyright claimant of sculpture/3-D

artwork subject matter in the 794 Copyright. A true and correct copy of the 794 Copyright is

attached hereto as Exhibit B.

12. In the late summer/early fall of 2009, an acquaintance of Don Lanphere, Mr. Todd

Potter, introduced him to Terry Schwabe, Tom Lawrence and Steve Lundgren, who agreed to secure

for Don Lanphere the necessary licenses to gain accesses to the collegiate market for, and to act as a

distributor of Don Lanpheres patented and copyrighted Huddle Hat products. The defendants

accepted an inventory of approximately 10,000 of Don Lanpheres Huddle Hat products, after

informing Don Lanphere that they would quickly obtain the necessary licenses and begin

distributing the patented products during the 2009 college football season.

13. Around this time, a number of Don Lanpheres Huddle Hat products were distributed

to, used by and/or sold to one or more third parties or otherwise publicly used or disclosed to the

public. The defendants were well aware of Don Lanpheres Huddle Hat products and the public

disclosure of the Huddle Hat products.



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14. After the inventory of Don Lanpheres Huddle Hat products was ready for sale, Don

Lanphere repeatedly asked these defendants when they would start distributing the patented

products. The defendants repeatedly kept telling Don Lanphere that they would start shipping the

Huddle Hat products within just a few days. Despite their assurances that the Huddle Hat products

would soon be distributed, days turned to weeks and the Huddle Hat products were never distributed.

15. After the defendants breached their agreement with Don Lanphere to obtain licenses

for, and to market and sell Don Lanpheres Huddle Hat products, the defendants extorted $8000

from Don Lanphere before they would allow Don Lanphere to pick up and leave with his inventory

of Huddle Hat products.

16. Upon information and belief, the defendants then decided to make and sell a modified

version of the Huddle Hat product as their own helmet-shaped hat with removable flexible face

mask. The defendants modified version of Don Lanpheres Huddle Hat product is called the

Fanaticap.

17. On July 2, 2010, the defendants filed a design patent application on their Fanaticap

product. On December 27, 2011, the defendants were issued U.S. Design Patent No. US D651,355

S on this application (the 355 patent). A true and correct copy of the 355 patent is attached hereto

as Exhibit C.

18. Upon information and belief, the Fanaticaps helmet shaped hat is substantially the

same overall shape as the Huddle Hat products helmet shaped hat. Further upon information and

belief, the Fanaticaps removable flexible face mask is substantially the same overall shape as a well

known NFL face mask known as the Schutt EGOP.



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19. Upon information and believe, the Fanaticap is an obvious combination of the Huddle

Hat products helmet-shaped hat with a removable flexible face mask in the shape of a well known

NFL face mask. Further, any slight variances thereto are simply an obvious matter of design choice.

As such, the 355 patent is invalid in view of this obvious combination.

20. Pursuant to 37 C.F.R 1.56, each of the defendants and their attorneys had a duty of

candor and good faith in dealing with the U.S. Patent & Trademark Office (USPTO), which

included a duty to disclose to the USPTO all information known to that individual to be material to

patentability. Each of the defendants acknowledged this duty in their Declarations filed with the

355 patents application.

21. Upon information and belief, during the prosecution of the 355 patents application,

the defendants filed four information disclosure statements disclosing various prior art to the

USPTO.


the defendants and/or their attorneys had knowledge of the Huddle Hat product, yet despite filing

four information disclosure statements, intentionally failed to disclose the Huddle Hat product to the

USPTO.

23. Upon information and belief, the defendants and/or their attorneys knew or should

have known that the Huddle Hat products were material to patentability of the Fanaticap. As such,

the defendants and/or their attorneys violated their duty of disclosure and breached their duty of

candor and good faith in dealing with the USPTO by failing to disclose the Huddle Hat products to

the USPTO in any one of their four information disclosure states or in a subsequent information

disclosure statement.



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24. Upon information and belief, through the defendants and/or defendants attorneys

intentional failure to disclose the Huddle Hat product to the USPTO, the defendants and/or their

attorneys practiced or attempted to practice fraud on the Office and/or violated their duty of

disclosure through bad faith and/or intentional misconduct.


the defendants and/or their attorneys had knowledge of the well known NFL face mask known as the

Schutt EGOP, worn by many NFL stars such as Eric Dickerson and Deion Sanders, yet despite filing

four information disclosure statements, intentionally failed to disclose the NFL face mask known as

the Schutt EGOP to the USPTO.


have known that the well known NFL face mask known as the Schutt EGOP was material to

patentability of the Fanaticap. As such, the defendants and/or their attorneys violated their duty of

disclosure and breached their duty of candor and good faith in dealing with the USPTO by

intentionally failing to disclose the well known NFL face mask known as the Schutt EGOP to the

USPTO in any one of their four information disclosure states or in a subsequent information

disclosure statement.


intentional failure to disclose the well known NFL face mask known as the Schutt EGOP to the

USPTO, the defendants and/or their attorneys practiced or attempted to practice fraud on the Office

and/or violated their duty of disclosure through bad faith and/or intentional misconduct.

28. Further, during the course of the litigation ofCivil Action No. 10-4774, the defendants

and their attorneys have asserted that Don Lanpheres 502 patent is invalid in view of various prior art



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references. A true and correct copy of the defendants Final Invalidity Contentions regarding the

the 502 patent is attached hereto as Exhibit D. The assertions made by the defendants and their

attorneys in their Final Invalidity Contentions clearly is information known to these individual to

be material to patentability.

29. The Defendants assertions in their Final Invalidity Contentions are an admission

against interest with respect to the patentability of their Fanaticap. By their own reasoning in their

Final Invalidity Contentions, and in view of the Huddle Hat products, the Defendants knew or

should have known that their 355 patent is obvious in view of known prior art.


the defendants and/or their attorneys had knowledge of their Final Invalidity Contentions, yet

despite filing four information disclosure statements, intentionally failed to disclose their Final

Invalidity Contentions to the USPTO.


have known that their Final Invalidity Contentions were material to patentability of the Fanaticap.

As such, the defendants and/or their attorneys violated their duty of disclosure and breached their

duty of candor and good faith in dealing with the USPTO by intentionally failing to disclose their

Final Invalidity Contentions to the USPTO in any one of their four information disclosure states or

in a subsequent information disclosure statement.


intentional failure to disclose their Final Invalidity Contentions to the USPTO, the defendants

and/or their attorneys practiced or attempted to practice fraud on the Office and/or violated their

duty of disclosure through bad faith and/or intentional misconduct. Upon information and belief, the



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above described fraudulent actions and/or omissions of the defendants and/or their attorneys were

intention, willful, wanton and in bad faith.

33. In view of the defendants above described fraud and inequitable conduct in

intentionally failing to disclose information known to be material to patentability, the 355 patent is

therefore invalid.

34. Upon information and belief, the Defendants have the knowledge or should have the

knowledge that the 355 patent is invalid for one or more of the above described reasons. Despite

this knowledge, the Defendants have used the fact the 355 patent issued, albeitfraudulently, as a

justification to infringe upon Don Lanpheres rights in and to the Huddle Hat products, as part of or

in support of their counterclaims against Don Lanphere in ofCivil Action No. 10-4774, to obtain one

or more collegiate licenses for their Fanaticaps and to sell their Fanaticaps, and to otherwise unfairly

compete with Don Lanphere, all to the severe damage and detriment of Don Lanphere.

COUNT I

Declaration of Invalidity of the 502 Patent based on Prior Art

35. Don Lanphere repeats and realleges paragraphs 1-34 as though fully stated herein.

36. An actual and justiciable controversy has arisen and now exists between Don

Lanphere and the defendants concerning whether the 355 patent is invalid.

37. The 355 patent is invalid for failure to comply with one or more provisions of the

Patent Laws of the United States, including, without limitation, 35 U.S.C. 102 and 103.

38. Absent a declaration that the 355 patent is invalid, the defendants will continue to

wrongfully maintain and use the 355 patent, and notify others of the 355 patent, in violation of the

laws and contrary to the public policy of the United States, and will thereby continue to cause Don



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Lanphere irreparable injury and damage.

39. Because the above activities and actions have created an actual and justiciable

controversy, Don Lanphere seeks a declaration that the 355 patent is invalid.

COUNT II

Declaration of Invalidity due to Inequitable Conduct


41. An actual and justiciable controversy has arisen and now exists between Don

Lanphere and the defendants concerning whether the 355 patent issued as a result of the defendants

and/or their attorneys fraud and inequitable conduct during the prosecution of the 355 patent.

42. The 355 patent is invalid due to the defendants and/or the defendants attorneys

willful, intentional and bad faith violation of their duty of candor and good faith in dealing with the

USPTO, under the provisions of the Patent Laws, Rules and Regulations, including, without

limitation, 37 C.F.R. 1.56.

43. Absent a declaration that the 355 patent was fraudulently obtained through

inequitable conduct and is therefore invalid, the defendants will continue to wrongfully maintain and

use the 355 patent, and notify others of the 355 patent, in violation of the laws and contrary to the

public policy of the United States, and will thereby continue to cause Don Lanphere irreparable

injury and damage.

44. Because the above activities and actions have created an actual and justiciable

controversy, Don Lanphere seeks a declaration that the 355 patent is invalid.

COUNT III

Fraud on the Patent Office



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46. The Defendants and/or their attorneys knowingly and intentionally withheld and did

not disclose to the USPTO, with the intent to deceive, the above describe information material to the

patentability of their Fanaticap as applied for in the 355 patents application.

47. The defendants and/or their attorneys knew of the above described material

information, knew that it was material, and made a deliberate and intentional decision to withhold it.

48. The USPTO would have refused the claim of the 355 patent based on this material

information.

49. Therefore, the defendants and/or their attorneys misconduct resulted in the unfair

benefit of receiving an unwarranted claim/patent.

50. Defendants fraudulent conduct as aforesaid has caused great and irreparable injury to

Don Lanphere, and unless the 355 is invalidated and held unenforceable, it will continue to cause

Don Lanphere great and irreparable injury.

COUNT IV

Federal Unfair Competition


52. The Defendants fraudulent procurement and use of a knowingly invalid patent has

resulted in unfair competition with Don Lanphere.

53. The acts of the Defendants complained of herein constitute are in violation of Section

43 of the Lanham Act, 15 U.S.C. 1125.

54. Defendants have, and on information and belief intend to continue to, willfully

engage in unfair competition under the federal law by the acts complained of herein, in complete



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disregard of Don Lanpheres rights.

55. On information and belief, the Defendants actions complained of herein were

committed willfully and intentionally.

56. As a result of the foregoing alleged actions of the Defendants, the Defendants are

being unjustly enriched and Don Lanphere has been and is being injured and damaged. Unless the

foregoing actions of the Defendants are restrained by this Court, Don Lanphere will continue to be

irreparably harmed, damaged and injured.

COUNT V

Common Law Unfair Competition


58. The acts of the Defendants complained of herein constitute unfair competition in

violation of the common law.

59. Defendants have, and on information and belief intend to continue to, willfully and

intentionally engage in unfair competition under the common law by the acts complained of herein,

in complete disregard of Don Lanpheres rights.

60. As a result of the foregoing alleged actions of the Defendants, the Defendants are

being unjustly enriched and Don Lanphere has been and is being injured and damaged. Unless the

foregoing alleged actions of the Defendants are restrained by this Court, Don Lanphere will continue

to be irreparably harmed, damaged and injured.

JURY DEMAND

Pursuant to Federal Rule of Civil Procedure 38(b), Plaintiff demands a trial by jury as to

all issues so triable in this action.



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WHEREFORE, plaintiff Don Lanphere prays that this Court enter judgment against the

Defendants as follows:

A. That the 355 patent is invalid under 35 U.S.C. 102 and/or 103;

B. That the 355 patent is invalid and unenforceable due to the defendants and/or their

attorneys inequitable conduct;

C. That the Defendants and/or their attorneys committed fraud on the USPTO and violated

their duty of candor and good faith in dealing with the Office;

D. That the Defendants have been and continue to compete unfairly with Don Lanphere

by obtaining the 355 patent through inequitable conduct and through their use of a knowingly

invalid patent;

E. That this Court award damages adequate to compensate Don Lanphere for the

Defendants fraud on the patent office;

F. That this Court award damages adequate to compensate Don Lanphere for the

Defendants unfair competition;

G. That this is an exceptional case pursuant to 35 U.S.C. 285 and 15 U.S.C. 1117;

H. That this Court award costs and reasonable attorneys fees pursuant to 35 U.S.C.

285 and 15 U.S.C. 1117; and

I. That this Court preliminarily, permanently and finally enjoin the Defendants, their

agents, officers, servants, employees, attorneys, successors, companies, customers and assignees, and all

those in active concert or participation with them, from competing unfairly with Don Lanphere;

J. That this Court grant all other relief as this Court may deem just and proper.

Respectfully submitted,



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DONALD J. LANPHERE, JR.

Date: June 27, 2012 By: s/Charles T. Riggs Jr.One of the Attorneys for Plaintiff

Timothy T. Patula ([email protected])Charles T. Riggs Jr. ([email protected])PATULA & ASSOCIATES, P.C.116 S. Michigan Ave., 14th Fl.Chicago, Illinois 60603(312) 201-8220



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EXHIBIT A



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EXHIBIT B



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EXHIBIT C



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Documents

Lanphere v. Schwabe et. al