UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WISCONSIN

PENTAIR WATER POOL AND SPA, INC., Plaintiff, v. FAIL-SAFE, LLC, Defendant. Case No. 2:13-cv-1321 JURY TRIAL DEMANDED

COMPLAINT

Plaintiff, Pentair Water Pool and Spa, Inc. (“Pentair”) by its attorneys, Quarles & Brady LLP, alleges its complaint against Defendant, Fail-Safe, Inc. (“Fail-Safe”) as follows: THE PARTIES 1. Pentair is a corporation duly organized and existing under the laws of the State of

Delaware. Pentair has a principal place of business at 1620 Hawkins Avenue, Sanford, North Carolina and operates several facilities in Wisconsin. 2. Pentair, among other things, designs, manufactures, markets, and sells swimming

pool and spa equipment and accessories, including variable speed high performance pumps, and sells such products in this judicial district and across the United States and throughout various parts of the world. 3. Fail-Safe, LLC is a Colorado limited liability company with its principal place of

business at 413 Wilcox Street, Castle Rock, Colorado. 4. Fail-Safe is the owner and assignee of U.S. Patent No. 8,281,425 (“the ’425

Patent”) entitled “Load Sensor Safety Vacuum Release System,” which issued October 9, 2012. A true and correct copy of the ’425 Patent is attached hereto as Exhibit A. 1
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JURISDICTION AND VENUE 5. This Court has subject matter jurisdiction of this action under 28 U.S.C. §§ 1331

and 1338, with reference to the United States Patent Laws, 35 U.S.C. § 1, et seq. 6. Fail-Safe asserted that its patent rights have been violated by Pentair’s SVRS

Swimming Pool Pumps, specifically the IntelliFlo VS+SVRS and the IntelliPro VS+SVRS. 7. Pentair has sold the allegedly infringing products, the SVRS Swimming Pool

Pumps, specifically the Intelliflo VS+SVRS and the Intellipro VS+SVRS, in Wisconsin. 8. Sta-Rite Industries, LLC (“Sta-Rite”), located in Delevan, Wisconsin, is a sister

company to Pentair Water Pool and Spa, Inc. and was involved in developing the technology Fail-Safe has accused of infringement. 9. Fail-Safe has substantial and continuous contacts with A.O. Smith, a corporation

with its principle place of business in Milwaukee, Wisconsin, who manufactures motors for pool and spa pumps. 10. Upon information and belief, Fail-Safe may have made potentially invalidating

public disclosures of the technology at issue to A.O. Smith. 11. Fail-Safe disclosed and demonstrated potentially invalidating prior art to A.O.

Smith without a non-disclosure agreement. 12. In furtherance of Fail-Safe’s ongoing relationship with Wisconsin resident A.O.

Smith, Mr. Joe Cohen, Fail-Safe’s founder, traveled to Milwaukee, Wisconsin to meet with A.O. Smith representatives. 13. Representatives of A.O. Smith visited Sta-Rite in Delevan, Wisconsin to discuss

suction entrapment including discussions of information Fail-Safe had disclosed to A.O. Smith.

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14.

When A.O. Smith’s and Fail-Safe’s business relationship deteriorated, Fail-Safe

chose to bring suit in the Eastern District of Wisconsin and filed case number 2:08-cv-00310JPS, which alleged claims in which Fail-Safe attempted to enforce intellectual property rights in the very same technology that is now the subject of the recently issued patent now at issue. 15. this forum. 16. This Court may declare the rights and other legal relations of the parties under the Thus, Fail-Safe has previously attempted to enforce related technology rights in

Federal Declaratory Judgment Act, 28 U.S.C. §§ 2201 and 2202, because this action presents a case of actual controversy within this Court’s jurisdiction. 17. This Court has personal jurisdiction over Fail-Safe under 28 U.S.C. § 1400 and

Wis. Stat. § 801.55. 18. Venue is proper in this Court under 28 U.S.C. §§ 1319 and 1400(b). THE PRESENCE OF AN ACTUAL CONTROVERSY 19. On August 8, 2013, Bill Schlanger, CFO of Fail-Safe, sent a letter to Angela

Lageson of Pentair. A true and correct copy of this letter is attached hereto as Exhibit B. 20. In that letter, Fail-Safe asserted that its patent rights have been violated by

Pentair’s SVRS Swimming Pool Pumps, specifically the Intelliflo VS+SVRS and the Intellipro VS+SVRS. 21. 22. On October 22, 2013, Bill Schlanger sent a letter to Pentair’s counsel. In that letter, Fail-Safe again notified Pentair of its alleged infringement of the

’425 Patent and offered Pentair a non-exclusive license to the ’425 Patent. A true and correct copy of this letter is attached hereto as Exhibit C.

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23.

Pentair has neither ceased the allegedly infringing behavior nor accepted a license

to the ’425 Patent. Pentair continues to manufacture, use, sell, and offer to sell its Intelliflo VS+SVRS and Intellipro VS+SVRS swimming pool pumps. 24. Pentair believes it has a right to continue to manufacture, use, sell, and offer to

sell its products because the ’425 Patent is invalid and unenforceable. 25. Under all of the circumstances, there is a substantial controversy between Fail-

Safe and Pentair of sufficient immediacy and reality to warrant the issuance of a declaratory judgment. COUNT I DECLARATION OF INVALIDITY OF THE ’425 PATENT 26. Pentair realleges and incorporates by reference as if fully set forth herein the

allegations contained in paragraphs 1 through 25. 27. The claims of the ’425 Patent are invalid for failure to meet and/or otherwise

comply with Title 35 of the United States Code, including at least 35 U.S.C. §§ 102, 103, and 112. 28. In a brochure published before the critical date, Fail-Safe publicized its SVRS

system including a swimming pool pump motor with a load sensor. 29. In an operator’s manual published before the critical date, Fail-Safe publicized its

SVRS system including a swimming pool pump with a load sensor. 30. Fail-Safe has disclosed and potentially offered to sell valve technology relevant to

the technology claimed in the ’425 Patent to A.O. Smith without a non-disclosure agreement or confidentiality agreement.

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31.

It is likely that after a reasonable opportunity for further investigation or

discovery Pentair will have evidentiary support sufficient to sustain a claim of invalidity under 35 U.S.C. § 102(a)(1) through prior public use and/or through the on sale bar. 32. Because of the acts described in the foregoing paragraphs, there exists a

substantial controversy of sufficient immediacy and reality to warrant the issuance of a declaratory judgment. 33. A judicial declaration is necessary and appropriate so that Pentair may ascertain

its rights regarding the ’425 Patent. COUNT II DECLARATION OF UNENFORCEABILITY OF THE ’425 PATENT 34. Pentair realleges and incorporates by reference as if fully set forth herein the

allegations contained in paragraphs 1 through 33. 35. The ’425 Patent is unenforceable due to inequitable conduct because at least

Joseph D. Cohen and David J. McCrosky made false statements in papers submitted to the U.S. Patent and Trademark Office (“USPTO”) during the prosecution of Application Serial No. 11/163,860 which became the ’425 Patent. The false statements were made with the knowledge of the falsity and with the intent to deceive the USPTO. 36. The false statements resulted in Fail-Safe unfairly obtaining an unwarranted

patent through misconduct. 37. On November 1, 2005, Fail-Safe submitted to the USPTO an affidavit executed

by Joseph D. Cohen, the President and Manager of Fail-Safe (the “Cohen Affidavit”). A true and correct copy of the Cohen Affidavit is attached hereto as Exhibit D. 38. In the Cohen Affidavit, Mr. Cohen stated he discovered that a pump motor could

operate as a safety vacuum release system (“SVRS”) if the load-sensor was adjusted properly. 5
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Mr. Cohen further stated that Fail-Safe’s swimming pool pump motor was never sold, certified, nor publicized as an SVRS. 39. In a brochure published on December 31, 2000, Fail-Safe publicized its SVRS

system including a swimming pool pump motor with a load sensor. A true and correct copy of this brochure is attached hereto as Exhibit E. 40. In an operator’s manual published on April 8, 2003, Fail-Safe publicized its

SVRS system including a swimming pool pump with a load sensor. A true and correct copy of this operator’s manual is attached hereto as Exhibit F. 41. Fail-Safe knew of the brochure and operator’s manual and intended to mislead or

deceive the USPTO with its false statements. 42. On January 21, 2011, through its counsel Mr. McCrosky, Fail-Safe again

submitted the Cohen Affidavit to the USPTO, this time as evidence to an Appeal Brief. In the Appeal Brief, Fail-Safe asserted that it made secondary indicia of nonobviousness of record by submitting the Cohen Affidavit. A true and correct copy of the Appeal Brief is attached hereto as Exhibit G. 43. The examiner withdrew the obviousness rejection of the claims based on the

arguments set out in the Appeal Brief as evidenced by the Cohen Affidavit. 44. These false statements in the Cohen Affidavit are material because Fail-Safe used

them, at least in part, as secondary indicia of nonobviousness to overcome the examiner’s obviousness rejection. 45. These false statements in the Cohen Affidavit are also material because

reasonable examiners would believe they would not need to look for references evidencing the on sale bar under 35 U.S.C. 102(b).

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46.

This inequitable conduct renders all claims of the ’425 Patent unenforceable. PRAYER FOR RELIEF

WHEREFORE, plaintiff Pentair Water Pool and Spa, Inc. respectfully request judgment and relief against Fail-Safe, LLC as follows: A. B. This Court declare that every claim of the ’425 Patent is invalid; This Court declare that every claim of the ’425 Patent is unenforceable due to

inequitable conduct. C. This Court enter judgment declaring that this case is exceptional, and that Pentair

is entitled to recover its costs and reasonable attorneys’ fees incurred in this action, under 35 U.S.C. § 285; and D. proper. JURY DEMAND Pentair demands a trial by jury on all issues properly tried to a jury. Dated this 22nd day of November, 2013. s/ Johanna M. Wilbert Mark A. Kircher, Bar No. 1013403 David R. Cross, Bar No. 1002866 Christopher J. Fahy, Bar No. 1055445 Johanna M. Wilbert, Bar No. 1060853 QUARLES & BRADY LLP 411 East Wisconsin Avenue Suite 2040 Milwaukee, WI 53202 Telephone: (414) 277-5000 Fax: (414) 271-3552 E-mail: Mark.Kircher@quarles.com ATTORNEYS FOR THE PLAINTIFF This Court award Pentair such other and further relief as this court deems just and

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