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M-Edge Sues Amazon

M-Edge Sues Amazon

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Published by Gus Sentementes
Maryland-based M-Edge sues Amazon over business practices.
Maryland-based M-Edge sues Amazon over business practices.

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Published by: Gus Sentementes on Dec 28, 2011
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12/28/2011

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Binders:4822-2276-7374v1|101743-000000|12/22/2011
IN THE UNITED STATESDISTRICT COURTFOR THE DISTRICT OF MARYLANDM-EDGE ACCESSORIES LLC,Plaintiff,v.AMAZON.COM INC.andAMAZONSERVICES LLC,Defendants.Civil Action No: MJG11 cv 3332JURY TRIAL DEMANDED
FIRST AMENDED COMPLAINT
Plaintiff, M-Edge Accessories LLC,complainsof Defendants,Amazon.com Inc.,andAmazon Services LLC,as follows:
NATURE OF THE CASE
1.This case presents a classic example of unlawful corporate bullying. M-Edgedeveloped a very successful product line: personal electronic devicejackets with multiplefeatures for the Kindle and other e-readers. Amazon thereafter repeatedly sought to hijack the product through threats, deceit, interference with M-Edge’s customer relationships,and patentinfringement. M-Edge now asserts claims for patent infringement, unfair competition,intentional interference with contractsand economic relations,and false advertising.
THE PARTIES
2.M-Edge Accessories LLC(“M-Edge”) is a Marylandlimited liability company of approximately 50 employees located at1360 Blair Drive, Odenton, MD 21113-1343. Dr.Patrick Mish founded M-Edge in 2006 to create fashionable and protective accessories for e-readers. M-Edge’s products have been featured in numerous publications such as
 People
Case 1:11-cv-03332-MJG Document 10 Filed 12/22/11 Page 1 of 15
 
Binders:4822-2276-7374v1|101743-000000|12/22/2011
Magazine
. Before Amazon “de-listed” M-Edge from Amazon.com, M-Edge’s productsroutinely constituted at least 20 of the top 25 most popular products in Amazon’s “Kindle Store”.One such product was M-Edge’s innovative lighted jacket which M-Edge patented.3.AmazonServices LLC is a Nevada limited liability company with its corporateheadquarters and principal place of business at 1200 12
th
Avenue Street, Suite 1200, Seattle,Washington 98114-2734. Amazon Services LLC has appointed as its registered agentCorporation Service Company, 300 Deschutes Way SW, Suite 304, Tumwater, Washington08501.4.Defendant Amazon.com Inc. is a Delaware corporation with its corporateheadquarters and principal place of business at1200 12
th
Avenue South, Suite 1200, Seattle,Washington 98114-2734. Amazon.com, Inc.has appointed as its registered agent CorporationService Company, 300 Deschutes Way SW, Suite 304, Tumwater, Washington 08501.Amazon Services LLC and Amazon.com, Inc. are collectively referenced as “Amazon.”
JURSIDICTION AND VENUE
5.This Court has jurisdiction over the subject matter of this action pursuant to 28U.S.C.§§1331 and 1367(a).6.Amazontransactssubstantial business in this judicial district and hascommittedacts of infringement in this judicial district, at least by soliciting advertising from Marylandcompanies and by operating Internet websites and conducting business over those Internetwebsites that are accessible to residents of Maryland, includingwww.amazon.com,which offersfor sale products which infringe the patent-in-suit. Amazon also has directed its tortious activityagainst a Maryland company, resulting in injury within Maryland.7.Venue is proper in this district under 28 U.S.C. §§ 1391 and 1400(b).
Case 1:11-cv-03332-MJG Document 10 Filed 12/22/11 Page 2 of 15
 
Binders:4822-2276-7374v1|101743-000000|12/22/2011
BACKGROUND
8.In 2008, Amazon released the first generation Kindle e-reader. Though the devicewas popular, it came with a flimsy cover whichmostconsumers didnotlike; among other  problems, the device frequently fell out of the cover. M-Edge addressed this shortcoming by producing a superior jacket which it marketed on Amazon.com.9.M-Edge sold its jackets and other Kindle accessories under Amazon’s standardcontract, which resulted in an 8% commission to Amazon. After Oprah Winfrey discussed theKindle on her showin October of 2008, M-Edge sold out its entire inventory within a matter of hours.10.Amazon quickly recognized the success of the M-Edge product line, and in aJanuaryof2009 meeting in San Francisco, Amazon executives represented that they wanted M-Edgeto be a “special partner” with Amazona relationship,which Amazon represented wouldgive M-Edge pre-launch information about next generation Kindles. In February of 2009, M-Edge entered into a “Kindle Compatible” agreement with Amazon, in which M-Edgeagreed to pay Amazon another 7% fee (half of which was marketing dollars) in order to place M-Edgeaccessories in Amazon’s “Kindle Store” on Amazon.com.11.In May of 2009, M-Edge met with Amazon in Seattleat Amazon’s requesttodiscuss the possibility of beinga“first-party” seller; in other words, a direct seller to Amazon.Given its small size, M-Edge was reluctant to enter into such an arrangement. Plus, the terms proposed by Amazon seemed overly generous to Amazon. M-Edge stated that it needed to defer a discussion of the first-party seller arrangement to a later date.12.In November 20, 2009, Amazon and M-Edge entered into a new,“enhanced”agreement, purportedly reflecting M-Edge’s status as a preferred seller due to the high volume of 
Case 1:11-cv-03332-MJG Document 10 Filed 12/22/11 Page 3 of 15

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