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Craig R. Rogers, Oregon State Bar No.

984410
craig.rogers@resnaissanceiplaw.com
Matthew C. Phillips, Oregon State Bar No. 040979
Matthew.phillips@renaissanceiplaw.com
RENAISSANCE IP LAW GROUP, LLP
9600 SW Oak St., Suite 560
Portland, Oregon 97223
Phone: (503) 517-8900
Fax: (503)517-9919
Attorneys for Plaintiff KEE Action Sports, LLC
FILED14
UNITED STATES DISTRICT COURT
DISTRICT OF OREGON
PORTLAND DIVISION
KEE ACTION SPORTS, LLC, a Delaware
limited liability company,
Plaintiff,
v.
SHYANG HUEI INDUSTRIAL CO., LTD., a
Taiwan Company, dba SUNWORLD
INDUSTRIAL CO, LTD., also dba
DANGEROUS POWER, also dba DP
ENGINEERING, and
AMAZONE, INC., a California Corporation
Defendants.
CV - 0 71 - HZ
COMPLAINT FOR PATENT
INFRINGEMENT
Breach of Contract; Breach of
Covenant of Good Faith and Fair
Dealing; Declaratory Judgment;
Willfulness; Exceptional Case
(Pursuant to 35 U.S.C. 271, 281,
284 and 285 and Oregon State and
Common Law)
DEMAND FOR JURY TRIAL
REQUEST FOR EXPEDITED
DETERMINATION PURSUANT
TO Fed. R. Civ. P. 57
UNDER
SEAL
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#55blt3
COMPLAINT FOR PATENT INFRINGEMENT, Breach of Contract, Breach of Covenant of
Good Faith and Fair Dealing, Declaratory Judgment, Willfulness, and Exceptional Case
COMPLAINT
Plaintiff KEE Action Sports, LLC ("KEE") by and through its undersigned counsel, for
its Original Complaint against Shyang Huei Industrial Co., Ltd., doing business as SunWorld
Industrial Co., and also doing business as Dangerous Power and DP Engineering (collectively,
"Sun World"), and Amazone, Inc. ("Amazone") (collectively, "Defendants"), states as follows:
I. INTRODUCTION
This is an action for Breach of Contract, Breach of Covenant of Good Faith and Fair
Dealing, and Declaratory Judgment brought pursuant to the laws of the State of Oregon and
common law. This is also an action for Patent Infringement that arises under the Patent Laws of
the United States, Title 35, United States Code, brought pursuant to 35 U.S.C. 271 and 281,
including a request for treble damages under 35 U.S.C. 284, and an assertion that this case is
exceptional under 35 U.S.C. 285.
II. THE PARTIES
1. Plaintiff KEE Action Sports, LLC is a Delaware limited liability company with
its principal place of business at 570 Mantua Boulevard, Sewell, New Jersey 08080.
2. Upon information and belief, Defendant Shyang Huei Industrial Co., Ltd., is a
company organized and existing under the laws of Taiwan, having a principal place ofbusiness
at No. 132, Zhengnan 1
51
St., Yongkang Dist., Tainan City 710, Taiwan, Taiwan, R.O.C., and is
doing business as Sun World Industrial Co., Ltd., and is also doing business as Dangerous Power
and DP Engineering.
3. Upon information and belief, Defendant Amazone, Inc., is a company organized
and existing under the laws of the State of California, and having a principal place of business at
15350 Valley Blvd., City oflndustry, California, 91746.
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Good Faith and Fair Dealing, Declaratory Judgment, Willfulness, and Exceptional Case
III. JURISDICTION AND VENUE
4. The amount in controversy in this matter exceeds the sum of $75,000, exclusive
of interest and costs, and is between citizens of different states and a foreign state. Diversity
jurisdiction therefore exists pursuant to 28 U.S.C. 1332.
5. Jurisdiction in this Court over the Patent Infringement action is proper under 28
U.S.C. 1331 and 1338(a), as this claim for patent infringement arises under the patent laws of
the United States.
6. Venue is proper in this Court under 28 U.S.C. 1391(b), 1391(c), and 1400(b),
as Defendants have consented to this forum and, upon information and belief, have further
offered for sale, advertised, solicited orders for, and sold products that are the subject of this
litigation in this District.
IV. FACTUAL BACKGROUND
A. Contract-in-Suit
7. The Amended and Restated Patent License Agreement ("Restated License
Agreement"), executed between Sun World and KEE in January 2012, is included as part ofthe
Settlement Agreement, a true and correct copy of which is attached hereto as Exhibit A. See
Exh. A, pp. 9-18.
B. Patents-in-Suit
8. On October 19, 1999, the U.S. Patent and Trademark Office ("U.S. PTO")
duly and legally issued U.S. Patent No. 5,967,133 (the "'133 patent"), entitled "Pneumatically
Operated Projectile Launching Device." A true and correct copy ofthe '133 patent is attached
as Exhibit B.
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Good Faith and Fair Dealing, Declaratory Judgment, Willfulness, and Exceptional Case
9. On November 5, 2002, the U.S. PTO duly and legally issued U.S. Patent No.
6,474,326 (the "'326 patent"), entitled "Pneumatically Operated Projectile Launching Device."
A true and correct copy of the '326 patent is attached as Exhibit C.
10. On October 28, 2003, the U.S. PTO duly and legally issued U.S. Patent No.
6,637,421 (the '"421 patent"), entitled "Pneumatically Operated Projectile Launching Device." A
true and correct copy ofthe '421 patent is attached as Exhibit D.
11. On September 5, 2006, the U.S. PTO duly and legally issued U.S. Patent No.
7,100,593 (the '"593 patent"), entitled "Pneumatically Operated Projectile Launching Device." A
true and correct copy of the '593 patent is attached as Exhibit E.
12. On October 20, 2009, the U.S. PTO duly and legally issued U.S. Patent No.
7,603,997 (the '"997 patent"), entitled "Electrical Control Unit for Paintball Gun." A true and
correct copy of the '997 patent is attached as Exhibit F.
13. On November 3, 2009, the U.S. PTO duly and legally issued U.S. Patent No.
7,610,908 (the '"908 patent"), entitled "Pneumatically Operated Projectile Launching Device." A
true and correct copy of the '908 patent is attached as Exhibit G.
14. On May 24, 2011, the U.S. PTO duly and legally issued U.S. Patent No.
7,946,285 (the '"285 patent"), entitled "Pneumatically Operated Projectile Launching Device." A
true and correct copy of the '285 patent is attached as Exhibit H.
15. KEE is the owner by assignment from Smart Parts, Inc. ("Smart Parts") ofthe
'133, '326, '421, '593, '997, '908, and '285 patents (the "patents-in-suit") and owns all rights,
title, and interest in the patents-in-suit, including the right to sue for and recover all past, present,
and future damages for infringement of the patents-in-suit.
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Good Faith and Fair Dealing, Declaratory Judgment, Willfulness, and Exceptional Case
16. The patents-in-suit are valid, enforceable and were duly issued in full compliance
with Title 35 ofthe United States Code.
C. Facts Supporting Claim for Relief
17. In January 2012, KEE, Sun World, and Amazone entered into a Settlement
Agreement to resolve all outstanding disputes between the parties, including assertions of patent
infringement by both KEE and Sun World against each other. See Exh. A.
18. As part ofthe Settlement Agreement, KEE and Sun World entered the Restated
License Agreement granting Sun World a non-exclusive, worldwide license to manufacture,
import, offer for sale, and sell products covered by the '133, '326, '421, '593, "997, '908, and
'285 patents and their related patents (collectively, the "Electronic Paintball Gun Patents"). See
Exh. A, pp. 9-18.
19. Despite agreeing to the terms ofthe Restated License Agreement to induce KEE
to enter into the Settlement Agreement, Sun World promptly breached the terms of the Restated
License Agreement by, among other things, failing to provide the required report or pay the
royalties accrued under the Restated License Agreement for the first quarter 2012.
20. Upon information and belief, Sun World materially breached the Restated License
Agreement before obtaining any opinion of counsel with respect to non-infringement or
invalidity.
21. Upon information and belief, Sun World attempted to retroactively justify its
material breach by hiring counsel to provide an opinion of invalidity.
22. In a letter dated July 30, 2012, Sun World, through its counsel, purported to justify
its refusal to pay royalties or otherwise comply with the Restated License Agreement by merely
asserting that "its electronic paint ball gun products do not infringe any valid claim of any of the
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Good Faith and Fair Dealing, Declaratory Judgment, Willfulness, and Exceptional Case
'Electronic Paint ball Gun Patents."' A true and correct copy of Sun World's letter to KEE dated
July 30, 2012 is attached hereto as Exhibit I.
23. Sun World has since failed to provide any ofthe reports required by the Restated
License Agreement, has failed to pay any of the royalties due under the Restated License
Agreement, and has further refused to comply with any of the other terms of the Restated
License Agreement.
24. Upon information and belief, despite its failure to comply with the terms of the
Restated License Agreement, Sun World continues to manufacture, import, offer for sale, and sell
products covered by the Electronic Paintball Gun Patents, including its Dangerous Power Fusion,
FX, F8, Threshold, G3, G4, G5, El, Rev-I, and/or M3Al branded paintball guns (collectively,
"Infringing Products").
25. Upon information and belief, Amazone is Sun World's exclusive U.S. distributor
and distributes Infringing Products covered by the Electronic Paintball Gun Patents within the
United States.
26. By materially breaching the provisions of the Restated License Agreement and by
continuing to manufacture, import, sell, offer for sale, and distribute Infringing Products without
paying the required royalties thereon, Defendants are infringing the patents-in-suit.
27. Defendants' infringing activities have deprived KEE of sales without providing
KEE with the benefits of the Restated License Agreement, have permitted Defendants to market
and sell Infringing Products without paying for use of the patented technology-thereby
providing them with an unfair competitive advantage over KEE and its licensees, and have
diminished the value ofKEE's patented technology.
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Good Faith and Fair Dealing, Declaratory Judgment, Willfulness, and Exceptional Case
D. Historical Background
i. Industry Innovation
28. The sport of paintball is still relatively young and dynamic. Since the first
paintball game over 30 years ago, a few key technological advances have changed the way the
sport is played.
29. Securing more than 40 U.S. and International patents related to paintball, Smart
Parts provided some of the foremost technological innovations in the sport ofpaintball.
30. Among its major innovations, Smart Parts revolutionized the sport of paintball in
1996 by introducing the first electro-pneumatic paint ball gun (or "marker") to the market.
31. Realizing the importance of this technology, Smart Parts filed and prosecuted
more than 12 separate patents to issuance relating to the electronic control ofpaintball guns,
including United States Patent Nos. 5,881,707; 5,967,133; 6,035,843; 6,474,326; 6,637,421;
7,100,593; 7,603,997; and 7,610,908; 7,946,285, as well as several foreign patents (collectively,
the "Electronic Paintball Gun Patents").
32. Smart Parts' intuition into the importance of this innovation has been confirmed
by the development of the industry.
33. Despite initial industry skepticism regarding the viability of these inventions, after
viewing Smart Parts' success, numerous other companies scrambled to introduce electro-
pneumatic paintball guns.
34. Although not a single electro-pneumatic paintball marker existed on the market
before Smart Parts conceived and reduced its invention to practice, since Smart Parts' trade show
demonstration of an electro-pneumatic paintball marker in January 1996, almost every other
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Good Faith and Fair Dealing, Declaratory Judgment, Willfulness, and Exceptional Case
major paintball gun manufacturer has subsequently introduced one or more electro-pneumatic
paintball markers.
35. Currently, professional paintball competitions are almost entirely played with
electro-pneumatic paintball markers.
36. The rapid industry transition from reluctance to embracing Smart Parts'
innovation is a testament to the importance of this technology to the industry and to the
extraordinary value of the proprietary interests granted through the Electronic Paint ball Gun
Patents.
37. Recognizing both the importance of the technology and the corresponding patent
rights granted to Smart Parts, nearly all of the companies that manufacture electro-pneumatic
paintball guns took a license under the Electronic Paintball Gun Patents to permit them to
manufacture and sell electro-pneumatic paintball guns.
38. After the Electronic Paintball Gun Patents began issuing, and beginning with
National Paintball Supply, Inc. (a predecessor to KEE) in 2003, more than 15 separate
companies have taken a license under the Electronic Paintball Gun Patents to produce products
covered by these patents.
39. In 2008 and 2009, the paintball industry suffered a severe blow as a result of the
economic downturn, and Smart Parts was forced to declare bankruptcy in 201 0 despite its
extremely popular electro-pneumatic paintball gun line and the numerous licenses issued under
its Electronic Paintball Gun Patents.
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Good Faith and Fair Dealing, Declaratory Judgment, Willfulness, and Exceptional Case
ii. KEE's Acquisition
40. As a licensee ofthe Electronic Paintball Gun Patents, and recognizing the
tremendous value of this technology, on or around March 2011, KEE paid a substantial sum of
money to acquire all of the intellectual property assets belonging to Smart Parts.
41. The intellectual property assets of Smart Parts, and, in particular, the Electronic
Paint ball Gun Patents, represented some of the most valuable business assets of Smart Parts at
the time of its bankruptcy.
42. Plaintiffs Electronic Paintball Gun Patents remain extremely valuable business
assets that mandate stringent enforcement to protect their value.
43. Without strict enforcement, KEE will be deprived of the benefit of its substantial
investment in this intellectual property.
iii. The Bad Faith and Infringing Actions of Sun World
44. Upon information and belief, Sun World entered the paintball gun market on or
around 2006, with its introduction of the Dangerous Power Fusion branded paint ball marker.
45. Sun World's Fusion paintball marker was similar in design to Planet Eclipse's Ego
paintball marker, which was a licensed electro-pneumatic paintball marker covered by Smart
Parts' royalty bearing license agreement with Planet Eclipse.
46. Upon information and belief, recognizing their need for a license under Smart
Parts' patents to continue to produce their Fusion marker and to compete in the industry,
Sun World entered into a license agreement with Smart Parts effective January 1, 2007, agreeing
that their Fusion marker was a covered Patented Product. A true and correct copy of the Smart
Parts/Sun World Patent License Agreement ("Patent License Agreement") is attached hereto as
Exhibit J.
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Good Faith and Fair Dealing, Declaratory Judgment, Willfulness, and Exceptional Case
4 7. Despite its agreement to pay royalties on all sales of its Patented Products,
Sun World, upon information and belief, significantly underreported the number of Patented
Products which they manufactured and sold, and failed to account for and pay royalties
amounting to over $300,000.00 during the time period between execution of the Patent License
Agreement and September 30, 2011.
48. After its acquisition of the Electronic Paintball Gun Patents and related license
agreements, KEE contacted Sun World to get an accounting of its royalties due under the Patent
License Agreement and to ensure future payment thereof.
49. Based on industry information, KEE had reason to believe that Sun World had
significantly underreported its royalty obligations under the Patent License Agreement.
50. During Sun World's subsequent negotiations with KEE with respect to its
underreported and unpaid past due royalty obligations, Sun World raised numerous issues related
to its own patents.
51. Among other things, Sun World asserted that three of its own patents, U.S. Patent
Nos. 7,252,080 and 7,392,802 (related to a clamping feedneck design), and U.S. Patent No.
7,156,135 (related to a quick release ASA adapter) were being infringed by KEE.
52. In order to settle all outstanding disputes between the parties and to ensure that no
future disputes arose between these parties related to these patents, KEE, Sun World, and
Amazone entered into a global Settlement Agreement and supporting agreements in January
2012. See Exh. A.
53. As a key part of the Settlement Agreement to resolve these disputes, the parties
mutually agreed to prohibit any future challenges to the validity or enforceability of any of the
patents asserted by any of the other parties.
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Good Faith and Fair Dealing, Declaratory Judgment, Willfulness, and Exceptional Case
54. Specifically, the Restated License Agreement included a provision in which
Sun World "and its Related Companies agree[ d] not to contest or otherwise challenge, and
agree[d] not to assist others in contesting or challenging, the validity and/or enforceability of the
Electronic Paintball Gun Patents." Exh. A, pp. 10-11, 2.05.
55. In order to assure mutual protection against future challenges to the validity of
their asserted patents, Sun World included substantially identical provisions to this in its license
agreements to KEE.
56. Specifically, in the clamping feedneck Patent Cross-license Agreement, "Each
party agree[ d] not to contest or otherwise challenge, and agree[ d] not to assist others in
contesting or challenging, the validity and/or enforceability of the other party's Clamping
Feedneck Patents." Exh. A, p. 21, 2.05.
57. Similarly, in Sun World's Quick-Release ASA Patent License Agreement to KEE,
Sun World required KEE to "agree not to contest or otherwise challenge, and agree not to assist
others in contesting or challenging, the validity and/or enforceability of the Patent." (Exh. A, p.
29, 6.02).
58. As part of the Restated License Agreement, Sun World also acknowledged that the
Electronic Paintball Gun Patents covered several of their paintball gun products, including their
E1, G4, Fusion, Rev-1, G3, and Threshold branded paintball guns (collectively "Patented
Products"), and agreed to pay continuing royalties for those Patented Products Sold during the
term of the Restated License Agreement. See Exh. A, p. 18, Schedule A.
59. The Fusion, Threshold, G3, Rev-1, G4, and E1 paintball markers are therefore all
admittedly covered by the Electronic Paintball Gun Patents.
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Good Faith and Fair Dealing, Declaratory Judgment, Willfulness, and Exceptional Case
60. The Fusion X (FX), F8, G3 Spee-R, M3A1, and G5 paintball guns operate on
principles similar to the Patented Products included in Schedule 1 of the Restated License
Agreement and are similarly covered by the Electronic Paintball Gun Patents.
61. As part of the Settlement Agreement and Restated License Agreement, Sun World
further agreed to pay, and did pay, a substantial sum of money to cover its past due unreported
and underreported royalties, giving Sun World ample motivation and opportunity to contest the
validity of the Electronic Paintball Gun Patents at that time. See Exh. A, p. 3, 1.01.
62. Despite committing to the terms of the Restated License Agreement to induce
KEE into entering the Settlement Agreement and its related documents, Sun World almost
immediately reneged on its commitments made under that agreement.
63. Sun World's violations ofKEE's patent rights have been in knowing disregard of
KEE's rights under the Electronic Paintball Gun Patents and, upon information and belief, were
begun before obtaining any opinion of counsel with respect to non-infringement or invalidity.
64. Likewise, upon information and belief, Sun World's decision to breach the
Restated License Agreement was made before obtaining any opinion of counsel with respect to
non-infringement or invalidity.
65. Although Sun World made a royalty payment for the final quarter of2011 within a
few weeks after the Settlement Agreement was executed, Sun World thereafter failed to make its
required royalty payments under the Restated License Agreement for the first quarter of 2012.
66. Upon information and belief, Sun World unilaterally decided not to pay royalties
under the Restated License Agreement sometime during the first quarter of 2012.
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Good Faith and Fair Dealing, Declaratory Judgment, Willfulness, and Exceptional Case
67. Upon information and belief, Sun World's decision not to pay royalties under the
Restated License Agreement came before receiving any opinion of counsel with respect to the
validity and/or enforceability of the Electronic Paintball Gun Patents.
68. Upon information and belief, despite the parties' mutual agreement not to contest
the validity of each others' asserted patents, and in an effort to retroactively support its decision
not to pay royalties under the Restated License Agreement, Sun World retained counsel to
produce an opinion of invalidity with respect to Electronic Paintball Gun Patents.
69. Several months after failing to pay its first quarter 2012 royalties, and at the time
its second quarter 2012 royalties were coming due, Sun World, through its counsel, sent a letter to
KEE (dated July 30, 2012) alleging invalidity of the Electronic Paintball Gun Patents and
refusing to further comply with any of the requirements under the Restated License Agreement.
See Exh. I.
70. Demonstrating a pattern of bad faith, despite finally correcting its failure to
comply with the terms of the original Patent License Agreement and despite its renewed promise
to pay royalties under the Restated License Agreement, shortly after entering into the Settlement
Agreement, Sun World materially breached the terms of the Restated License Agreement by
failing to pay royalties for the first quarter of 2012 and make the required report.
71. Further demonstrating a pattern ofbad faith, Sun World further materially
breached the terms of the Restated License Agreement by later contesting the validity of the
Electronic Paintball Gun Patents, despite having agreed not to raise such a challenge and despite
also requiring KEE to agree not to raise such challenges against Sun World's asserted patents.
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Good Faith and Fair Dealing, Declaratory Judgment, Willfulness, and Exceptional Case
72. Further demonstrating a pattern ofbad faith, Sun World further materially
breached the terms of the Restated License Agreement by refusing to comply with any of the
terms of the Restated License Agreement in its letter from counsel dated July 30, 2012.
73. Sun World has further continued to materially breach the terms of the Restated
License Agreement by failing to provide the required reports and royalty payments, by failing to
appropriately mark the Patented Products, by failing to provide notice of new Patented Products,
and/or by failing to pay the required interest payments, among other things.
74. Upon information and belief, Sun World's assertion of invalidity with respect to
KEE's more than 12 licensed Electronic Paintball Gun Patents, collectively including well over
150 issued patent claims, was created retroactively in bad faith and relies entirely on a single
reference unrelated to paintball guns.
75. Defendants' continued manufacture, importation, offer for sale, and sale of
Patented Products, despite failing to comply with the terms of the Restated License Agreement,
constitute acts of infringement which must be immediately and permanently enjoined.
76. After several months of unsuccessfully attempting to negotiate a resolution of
these issues with Sun World, KEE has been forced to bring this lawsuit to enforce its patents and
to effectuate the entire scope of the Settlement Agreement between the parties.
77. Sun World's pattern ofbad faith and willful disregard for its contractual
obligations should not be rewarded.
78. Sun World should be compelled by this Court to comply with each of its promises
under the Restated License Agreement, including, among other things, its obligation to pay
royalties and accrued interest on Patented Products sold during the term of the agreement and its
promise not to contest the validity or enforceability of the Electronic Paint ball Gun Patents.
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Good Faith and Fair Dealing, Declaratory Judgment, Willfulness, and Exceptional Case
79. Defendants should be permanently enjoined from any acts of infringement ofthe
Electronic Paint ball Gun Patents, including the unauthorized sale of Patented Products for which
the appropriate royalties have not been paid and/or which are not appropriately marked with the
required patent markings.
COUNT I
(Breach of Contract)
80. KEE hereby incorporates by reference the averments set forth in Paragraphs 1
through 79 of this Complaint as if they were set forth fully herein.
81. KEE has performed all acts required of it under the Restated License Agreement
or has offered to perform all of the obligations required of it under the Restated License
Agreement (and related Settlement Agreement).
82. By its actions and inactions described herein, Defendant Sun World has breached
its contractual obligations under the Restated License Agreement in one or more of the following
ways:
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a. by failing to provide the required reports for the first quarter of 2012 and
every quarter thereafter;
b. by failing to pay royalties and accrued interest thereon for Patented
Products sold during the first quarter of 2012 and every quarter thereafter;
c. by contesting the validity of the Electronic Paint ball Gun Patents
immediately following the second quarter 2012;
d. by failing to appropriately mark the Patented Products with the patent
numbers of the Electronic Paint ball Gun Patents; and
COMPLAINT FOR PATENT INFRINGEMENT, Breach of Contract, Breach of Covenant of
Good Faith and Fair Dealing, Declaratory Judgment, Willfulness, and Exceptional Case
e. by refusing to comply with any of its other contractual obligations under
the Restated License Agreement effective as of its letter to KEE dated July
30, 2012.
83. Each ofthe breaches by Sun World was material.
84. By its actions and inactions described herein, Sun World is in default and has
materially breached its obligations under the Restated License Agreement.
85. As a result ofthe material breach of Sun World's covenant not to contest the
validity of the Electronic Paint ball Gun Patents, KEE has lost the expected benefits of the
Settlement Agreement and other related agreements entered between the parties, including the
expectation that no further issues would be raised between the parties regarding the validity
and/or enforceability of either party's asserted patents.
86. KEE has no adequate remedy at law for Sun World's breach ofthis provision of
the Restated License Agreement. KEE can only be made whole if Sun World is required to
specifically perform this provision ofthe Restated License Agreement.
87. As a result of the material breaches by Sun World, KEE has lost sales and market
share with respect to products covered by the Electronic Paintball Gun Patents, in addition to
other anticipated benefits of protection under the U.S. Patent Laws, without receiving the agreed
upon compensation therefore in the form of royalties and interest that should have been paid.
88. KEE has therefore been damaged in an amount to be proven at trial, but believed
to exceed more than $300,000 in unpaid royalties and accrued interest thereon.
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Good Faith and Fair Dealing, Declaratory Judgment, Willfulness, and Exceptional Case
COUNT II
(Breach of Covenant of Good Faith and Fair Dealing)
89. KEE hereby incorporates by reference the averments set forth in Paragraphs 1
through 88 of this Complaint as if they were set forth fully herein.
90. Implied in every contract is a covenant of good faith and fair dealing. This
covenant prohibits either party from engaging in any act that will have the effect of destroying or
injuring the right of the other party to receive the fruits of the contract.
91. The parties' entire purpose of entering into the Settlement Agreement was to
resolve all of the outstanding disagreements between the parties and provide a license structure
for the relationship between the parties moving forward that would preclude future disputes.
92. Despite knowing this purpose and inducing KEE to enter into the Settlement
Agreement by making the covenants and promises contained in the Restated License Agreement,
Sun World knowingly contravened its promises and negated KEE's expectations under the
Settlement Agreement by challenging the validity ofKEE's patents, refusing to pay the agreed
upon royalties, and refusing in all other respects to comply with the terms of the Restated
License Agreement.
93. Due to Sun World's willful and intentional contravention of the explicit terms of
the Restated License Agreement, KEE has been prevented from enjoying the expected benefits
of the Settlement Agreement entered into between the parties.
94. KEE has no adequate remedy at law. KEE can only be made whole if Sun World
is required to specifically perform the terms of the Restated License Agreement.
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Good Faith and Fair Dealing, Declaratory Judgment, Willfulness, and Exceptional Case
COUNT III
(Declaratory Judgment)
95. KEE hereby incorporates by reference the averments set forth in Paragraphs 1
through 94 of this Complaint as if they were set forth fully herein.
96. A real controversy exists between KEE and Sun World regarding their respective
rights and obligations under the Restated License Agreement.
97. KEE requests this Court's declaration that:
f. the Restated License Agreement is a valid and binding contract.
g. Sun World is obligated to effectuate the terms ofthe Restated License
Agreement.
98. KEE has no adequate remedy at law. KEE can only be made whole if Sun World
is required to specifically perform the terms of the Restated License Agreement.
99. Pursuant to ORS 128.100, Plaintiff is entitled to recover its costs.
COUNT IV
(Willful Patent Infringement- U.S. Patent Nos. 5, 967,133; 6,474,326;
6,637,421; 7,100,593; 7,603,997; 7,610,908; and 7,946,285)
100. KEE hereby incorporates by reference the averments set forth in Paragraphs 1
through 99 of this Complaint as if they were set forth fully herein.
101. As a result of its failure to comply with the terms of the Restated License
Agreement, Defendants' manufacture, use, importation, offer for sale, and sale of its Fusion, F8,
Fusion X (FX), Threshold, G3, G3 Spee-R, Rev-1, G4, E1, M3A1, and G5 model paintball guns
constitutes direct infringement under 35 U.S.C. 271 of one or more claims of each ofKEE's
'133, '326, '421, '593, '997, '908, and '285 patents.
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Good Faith and Fair Dealing, Declaratory Judgment, Willfulness, and Exceptional Case
102. Sun World's actions further constitute inducement to infringe under 35 U.S.C.
271(b). Upon information and belief, Sun World knowingly induced direct infringement by
Amazone and others with specific intent to encourage their infringement, with knowledge of the
Electronic Paintball Gun Patents, and before having obtained opinion of counsel.
103. KEE has been, and continues to be, damaged by Defendants' patent infringement
in a manner that cannot be fully measured or compensated in economic terms.
104. Defendants' patent infringement has damaged, and will continue to damage
KEE's market share and deteriorate the market value of Plaintiffs patented technology.
105. Such irreparable harm will continue unless and until Defendants' infringing
actions are enjoined.
106. Defendants' direct and indirect infringement has been willful, entitling Plaintiffto
treble damages under 35 U.S.C. 284.
107. This case is exceptional pursuant to 35 U.S.C. 285 and Plaintiff is entitled to an
award of its reasonable attorney's fees and costs.
REQUEST FOR RELIEF
WHEREFORE, Plaintiff, KEE, requests that judgment be entered in its favor and against
Defendants, as follows:
A. Declaring that Sun World has materially breached its contractual obligations under
the Restated License Agreement, by, among other things: failing to report Patented Products
(including serial numbers) sold from between January 1, 2012 to present; and failing to pay
royalties due on Patented Products sold from between January 1, 2012 to present; and failing to
pay interest accrued thereon.
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Good Faith and Fair Dealing, Declaratory Judgment, Willfulness, and Exceptional Case
B. Ordering specific performance of the Restated License Agreement requiring
Sun World to: provide the reports required under the Restated License Agreement; pay the
royalties and accrued interest for Patented Products Sold during the term of the Restated License
Agreement; and comply in all other respects with the terms of the Restated License Agreement.
C. Declaring that Sun World has materially breached its contractual obligations under
the Restated License Agreement by contesting the validity of the Electronic Paint ball Gun
Patents.
D. Ordering specific performance of the Restated License Agreement and prohibiting
Sun World from challenging and/or assisting others in challenging the validity ofthe Electronic
Paintball Gun Patents.
E. Ordering that Sun World, its officers, agents, servants, and employees, and all
persons and organizations in active concert or participation with them, be required to specifically
perform all of their duties and obligations under the Restated License Agreement.
F. Finding that pursuant to ORS 28.100, Plaintiff is entitled to recover its costs.
G. Declaring that Defendants have directly infringed upon KEE's United States
Letters Patent Nos. 6,474,326; 6,637,421; 7,100,593; 7,603,997; 7,610,908; 7,946,285 through
their unlicensed manufacture, importation, offer for sale, and/or sale of Fusion, Fusion X, F8,
Threshold, Rev-I, G3, G4, G5, and M3A1 model paintball guns.
H. Declaring that Sun World has indirectly infringed upon KEE's United States
Letters Patent Nos. 6,474,326; 6,637,421; 7,100,593; 7,603,997; 7,610,908; 7,946,285 through
its inducement of infringement by Amazone and others.
I. Ordering that Defendants, and their officers, agents, servants, and employees, and
all persons and organizations in active concert or participation with them, be permanently
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Good Faith and Fair Dealing, Declaratory Judgment, Willfulness, and Exceptional Case
enjoined and restrained from any and all acts of infringement ofUnited States Patent Nos.
6,474,326; 6,637,421; 7,100,593; 7,603,997; 7,610,908; and 7,946,285, including the unlicensed
manufacture, use, sale, offer for sale, advertising, promotion, importation and/or distribution of
any and all paintball guns (including the Fusion, Fusion X, F8, Threshold, Rev-I, G3, G4, G5,
and M3A1 model paintball guns) that incorporate the claimed technology.
J. Ordering that Defendants' pay to Plaintiff damages equal to a reasonable royalty
for all sales oflnfringing Products from January 2012 to present.
K. Finding that Defendants' infringement has been willful and trebling the amount of
damages pursuant to 35 U.S.C. 284.
L. Finding that this case is exceptional, and awarding to KEE its reasonable
attorney's fees and costs pursuant to 35 U.S.C. 285.
M. And such other relief as this Court deems just and proper.
JURY TRIAL DEMANDED pursuant to Federal Rule of Civil Procedure 38(a).
Matthew C. Phillips
OSB # 040979
RENAISSANCE IP LAW GROUP, LLP
9600 SW Oak St., Suite 560
Portland, Oregon 97223
Phone: (503) 517-8900
Fax: (503) 517-9919
Attorneys for Plaintiff KEE Action Sports, LLC
Page 21- COMPLAINT FOR PATENT INFRINGEMENT, Breach of Contract, Breach of Covenant of
Good Faith and Fair Dealing, Declaratory Judgment, Willfulness, and Exceptional Case