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Lewis and Roca LLP 3993 Howard Hughes Parkway Suite 600 Las Vegas, Nevada 89169

MICHAEL J. McCUE (Nevada Bar No. 6055) MMcCue@LRLaw.com JONATHAN W. FOUNTAIN (Nevada Bar No. 10351) JFountain@LRLaw.com LEWIS AND ROCA LLP 3993 Howard Hughes Parkway, Suite 600 Las Vegas, Nevada 89169 Tel: (702) 949-8200 Fax: (702) 949-8398 -andDavid R. Sugden (pro hac vice application pending) dsugden@calljensen.com Vonn R. Christenson (pro hac vice application pending) vchristenson@calljensen.com CALL & JENSEN 610 Newport Center Drive, Suite 700 Newport Beach, CA 92660 Tel: (949) 787-3000 Fax: (949) 717-3100 Attorneys for Plaintiff DAHON NORTH AMERICA INC.

UNITED STATES DISTRICT COURT DISTRICT OF NEVADA DAHON NORTH AMERICA INC., a California corporation, Plaintiff, v. MOBILITY HOLDINGS, LTD., a Hong Kong company, and STILE PRODUCTS, INC., a California corporation, Defendants. For its complaint, Plaintiff Dahon North America Inc. (DNA or Plaintiff) alleges as follows: NATURE OF THE CASE Plaintiff seeks a declaration that its use of certain intellectual property does not infringe upon Defendants Stile Products, Inc. (Stile) and Mobility Holdings, Ltd. (Mobility Holdings) -1599409.1

COMPLAINT (JURY DEMAND)

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(collectively Defendants) rights. Concurrent with this Complaint, Plaintiff also seeks that the Court require Defendants to provide notice of any ex parte motions that would potentially interfere with Plaintiffs proposed use and display of bicycles at the 2011 Interbike International Bicycle Expo and Outdoor Demo (Interbike Expo) currently scheduled to run from September 12-16, 2011, in Las Vegas, Nevada and Boulder City, Nevada. PARTIES 1. Plaintiff Dahon North America Inc. is and was at all times mentioned in this

Complaint a corporation organized and existing under the laws of California, with its principal place of business located at 833 Meridian St., Duarte, California 91010. 2. Upon information and belief, Defendant Mobility Holdings, Ltd. (Mobility

Holdings) is a Hong Kong company, with its principal place of business located at Room 1201, 12th Floor, Connaught Commercial Building, 185 Wanchai Road, Wanchai, Hong Kong. Mobility Holdings is owned and controlled by Joshua Hon and Florence Hon. 3. Upon information and belief, Defendant Stile Products, Inc. is a California

corporation with its principal place of business located at 4067 Hardwick St. Suite 288, Lakewood, California 90172. JURISDICTION AND VENUE 4. 5. This Court has subject matter jurisdiction pursuant 28 U.S.C. 1331 and 1338(b). This Court has specific personal jurisdiction over Defendants because Plaintiffs

claim for declaratory relief is based upon Defendants use of intellectual property within this judicial district. 6. This Court also has general personal jurisdiction over Defendants because of their

substantial, systematic, and continuous transaction of business within this judicial district namely, their marketing, promotion, importation, distribution, and sale of bicycles and accessories to consumers located within the United States, including in this judicial district. 7. Venue is proper in this district pursuant to 28 U.S.C. 1391(b)(2) because a

substantial part of the events or omissions giving rise to Plaintiffs claim has occurred or will occur in this judicial district. -2599409.1

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BACKGROUND AND GENERAL ALLEGATIONS Founding of Dahon 8. Plaintiff DNA is the parent company that oversees a collection of subsidiaries that

design, manufacture and sell folding bicycles and bicycle accessories worldwide. (This collection of companies, comprising DNA and its subsidiaries, is collectively referred to herein as Dahon). 9. Dahon was founded by Dr. David T. Hon1 and Henry Hon in 1979. (The word

Dahon is derived from the name David Hon.) With a vision of merging cycling and mass transportation for convenient and fuel efficient personal mobility, Dahon began designing folding bicycles in an effort to make a significant contribution toward decreased pollution, less dependence on gasoline, and a healthier lifestyle. The resulting Dahon folding bicycle was an immediate success. DNA is Formed 10. By February 1982, Dahon had attracted a group of more than 35 investors who

invested several million dollars into what is now known as DNA, with a goal of further expanding the Dahon brand. 11. Having been one of the first companies to develop and sell folding bicycles, DNA

developed valuable intellectual property rights for its bicycle-related patents, trademarks and copyright. Indeed, Dahons technologies have become part of the industry standard for folding bicycles all over the world. DNA now has more than 1,000 employees, including a team of over 70 engineers, and owns over 220 patents. Dahons Corporate Structure Expands 12. As Dahons product offerings and market presence grew, Dahons corporate

structure grew as well. Dahon is now made up of a family of companies and subsidiaries, with DNA as the parent corporation. Dahon Taiwan 13. In 1982, Dahon began operating its first Asian subsidiary in Taiwan, after an initial

investment from DNA of approximately $1.5 million. The assets of that Taiwan operation were
1

Dr. David Hon is married to Florence Hon. Joshua Hon is their son. -3599409.1

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transferred in or around 1996 to a new DNA subsidiary: Dahon and Hon Industrial Labs, Ltd., Taiwan (Dahon Taiwan). Throughout its existence, at least until the wrongful acts complained of herein, Dahon Taiwan has been operated by DNA as a wholly-owned subsidiary, and Dahon Taiwan has always operated under the control and direction of DNA. For instance, several Dahon Taiwan employees were paid with DNA funds, including salaries, social security taxes, and medical insurance; DNA occasionally directed that intellectual property in smaller markets be registered under Dahon Taiwans name, to be held on behalf of and for the benefit of DNA; all Dahon intellectual property was used freely by all Dahon companies, including Dahon Taiwan; profits for the licensing and sale of Dahon products were shared among the various Dahon entities in the form of profit centers and consolidated financial reports to Dahon management; and Dahon Taiwan worked jointly with other Dahon companies to market Dahon products and to fulfill customer orders. Dahon China 14. Dahon Technologies, Ltd. (Dahon China), like DNA, is headed by Dr. Hon as

CEO. Dahon China, of course, is located in China Dahons largest market for folding bicycles. DNA and Dahon China own the intellectual property rights to the Dahon brand in major markets such as the European Union, the United States of America, Japan and China. Defendant Mobility Holdings Annexation of Dahon Taiwan 15. Since the formation of DNA to the present, Florence Hon, Dr. Hons wife, served

as a director and as the corporate secretary for DNA. As DNAs agent, acting at the direction of DNAs board and president, Florence was appointed as CEO of Dahon Taiwan. The shares of Dahon Taiwan were put under Florences name, to be held strictly on behalf of and for the benefit of DNA and the Dahon brand. 16. Joshua Hon, Dr. Hons son, joined Dahon in August 1992, well after graduating

from the university, and after Dahon had already established itself as the number one brand in its market niche. Joshua learned much over the years working for Dahon, gaining valuable

experience, and eventually becoming the Vice President, Sales & Marketing for DNA and the Dahon brand. As Vice President, Sales & Marketing, Joshua helped oversee and develop the sales -4599409.1

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and marketing strategies for the Dahon brand. Throughout his career at Dahon, Joshua reported directly to the CEO and president of DNA (Dr. Hon). 17. Over the years, Joshua and Florence performed in their respective positions as

officers of DNA. However, Joshua and Florence gradually began focusing more and more of their attentions to Dahon Taiwan. As was later revealed, despite their fiduciary obligations to DNA and to the Dahon brand, Joshua and Florence were not simply looking to improve performance at Dahon Taiwan, but were laying the groundwork to annex Dahon Taiwan and many of DNAs assets, including real personal and intellectual property, from DNA to form a new company to compete with DNA and the Dahon brand. 18. Upon information and belief, to carry-out their calculated plan to take over Dahon

Taiwan, Florence transferred 50% of the shares for Dahon Taiwan into Joshuas name, without informing DNA of this transaction, without receiving any payment from Joshua, and without knowledge of or authorization from DNA. Upon information and belief, by mid-2010, Joshua and Florence no longer held the shares of Dahon Taiwan strictly on behalf of and for the benefit of DNA as originally intended. Rather, they began to view and use these shares as their personal ownership interests and as their key to controlling Dahon Taiwan as their own. 19. To position themselves for this take-over, Joshua and Florence also began

consolidating as much of Dahons intellectual property as possible into Dahon Taiwan. For instance, on July 8, 2009, without making any payment to DNA, and without the knowledge or permission of DNA, Joshua and Florence filed an assignment in the United States Patent & Trademark Office which purportedly transferred one of Dahons BIOLOGIC brand trademarks to Dahon Taiwan. They then transferred it to Defendant Mobility Holdings in an effort to hide the ownership. 20. Moreover, it has since been learned that much of the intellectual property that

Joshua was instructed to register on behalf of Plaintiff was wrongfully registered under Joshuas name individually, rather than under Plaintiffs name. As with the Dahon Taiwan shares, by mid2010, Joshua and Florence were no longer holding Dahons intellectual property strictly on behalf of and for the benefit of DNA as intended. -5599409.1

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21.

In September 2010, Joshua and Florence created Mobility Holdings. Once again

without the knowledge or permission of DNA, and in clear violation of their duties owed to DNA, rather than holding the shares of Dahon Taiwan and Dahons intellectual property strictly on behalf of and for the benefit of DNA as intended, Joshua and Florence instead began transferring these ownership interests to Mobility Holdings, including the intellectual property rights. 22. Joshua and Florence also began to inform customers and distributors that they

would soon be breaking off from the Dahon brand due to alleged issues with Dahon China. For instance, at a March 2011 trade show in Taiwan, Joshua informed over 30 Dahon distributors that Dahon Taiwan would stop cooperating on the Dahon brand in the following year and that he would instead be selling new product designs through a competing company called Tern Bicycles. 23. On or around June 18, 2011, Joshua and Florence officially announced the launch

by Mobility Holdings and Tern Bicycles of a new Tern brand. However, upon information and belief, the employees, assets, funds, bank accounts, and property (intellectual, personal, and real) of Mobility Holdings and of the new Tern brand and business all trace back to Dahon. Indeed, upon information and belief, all products currently being offered for sale bearing the Tern and/or Biologic brands were developed by, and by using the funds of, Dahon. 24. Since announcing Tern, Joshua has made repeated inaccurate and misleading

statements in the media regarding the relationship between DNA and its subsidiaries, as well as regarding the ownership of Dahon intellectual property. 25. Joshua and Florence are now actively operating Mobility Holdings to market the

Tern brand to directly compete with Dahon. 26. Mobility Holdings established and owns 90% of Defendant Stile, a California-

based distribution company set up to market and sell Tern bicycles and Biologic branded bicycle accessories throughout North America. 27. 28. Stile is run by Steven Boyd, DNAs former COO. As a result of the conduct by Joshua, Florence, Mobility Holdings, and Tern

Bicycles, on or around July 15, 2011, DNA brought claims against these four entities in the Central District of California (Case No. 2:11-cv-05835-ODW-JCG) (California Action) for -6599409.1

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breach of fiduciary duty, conversion (including of Plaintiffs intellectual property), an accounting, and unfair competition. A motion for preliminary injunction against Joshua, Florence, Mobility Holdings, and Tern Bicycles is currently pending in the California Action. Trade Shows 29. Not only have Defendants improperly used Dahons own intellectual property and

assets to launch a brand and business to compete with Dahon, but Defendants are also now actively attempting to prohibit DNA from using its own intellectual property. 30. For instance, on August 17, 2011, just days before the Eurobike 2011 international

bicycle trade show, one of the most important trade shows for the European market held in Munich, Germany, Mobility Holdings sent a cease and desist letter to DNA wrongly asserting that DNA was infringing on certain intellectual property rights allegedly held by Mobility Holdings. 31. In responding to the cease-and-desist letter on August 22, 2011, DNA informed

Mobility Holdings of the reasons why its demands were misplaced, including the fact that such intellectual property rights were already at issue in the California Action, and that DNA used patents and designs that differed from those identified in the cease-and-desist letter. 32. In addition, DNAs German counsel contacted Mobility Holdings German counsel

to inform him of his representation, to inform him that DNA would oppose any motion for injunctive relief, and to request that he be given notice should Mobility Holdings in fact seek injunctive relief in German court. 33. Despite being provided with this notice and request, on or around August 29, 2011,

Mobility Holdings went in to German court - without providing any notice to DNA or its counsel to seek injunctive relief on the items identified in the August 17, 2011 letter. Upon information and belief, Mobility Holdings acted in bad faith by failing to provide notice to DNA, by failing to provide DNA with an opportunity to oppose the requested relief, and by failing to inform the German court of the pending California Action. 34. Defendants now appear poised to repeat their bad faith actions from Germany, as

they once again sent DNA a cease-and-desist letter on September 7, 2011, which is just days before the Interbike Expo being held on September 12-16, 2011, here in Nevada. -7599409.1

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35.

Perhaps as an attempt to feign independence from the California Action,

Defendants sent the September 7, 2011 cease-and-desist letter on behalf of Stile rather than Mobility Holdings. However, as noted above, Stile is 90% owned by Mobility Holdings, and Stile is the North American distributor for the Tern and Biologic brands on behalf of Mobility Holdings. Moreover, Stile is being represented by the same counsel representing Mobility

Holdings in the California Action. Indeed, any difference between Stile and Mobility Holdings for purposes of this dispute is without significance. 36. Defendants September 7, 2011 cease-and-desist letter again wrongly accuses DNA

of infringing on certain intellectual property rights allegedly held by Defendants. In particular, Stile contends that it owns exclusive licensing rights to U.S. Patent No. 7,798,786 (786 Patent) covering a specific model of a seat post pump, and U.S. Design Patent Nos. D632,615 and D622,638 (the Design Patents) for certain bicycle frame designs. Plaintiff can only assume Stile was purportedly granted these exclusive rights by Mobility Holdings. 37. Plaintiff denies that it is infringing on any of Defendants rights, as DNAs bicycles

use patents and designs that differ from those identified in the September 7, 2011 cease-and-desist letter. Moreover, all of the intellectual property identified in Defendants cease-and-desist letter is already at issue in the California Action. 38. Both Plaintiff and Defendants are registered to exhibit at the Interbike Expo

scheduled to take place from September 12-16, 2011 in Las Vegas, Nevada and Boulder City, Nevada.2 This, coupled with Defendants recent cease-and-desist letter to Plaintiff, and

Defendants recent bad faith actions in Germany in failing to provide notice to Plaintiff of similar requested relief, leads Plaintiff to reasonably believe that Defendants will similarly attempt to petition this Court on an ex parte basis and without notice to enjoin Plaintiff from displaying certain bicycle models which Defendants wrongly believe infringe upon their alleged intellectual property rights. Plaintiff therefore brings this action for declaratory relief.

Stile has two booths: one for the Tern brand bicycles which will display at the Outdoor Demo portion of the show in Boulder City, Nevada, and one for Biologic accessories which will display at the Sands Convention Center (which is the main area for the Interbike Expo). -8599409.1

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COUNT I (Declaratory Relief) 39. Plaintiff incorporates the allegations set forth in each of the preceding paragraphs

as if fully set forth herein. 40. Defendants. 41. Plaintiff has a reasonable apprehension that litigation in this Court is imminent over An actual controversy and an adversarial conflict exists between Plaintiff and

Plaintiffs alleged use of intellectual property rights claimed by Defendants, including in particular the 786 Patent and the Design Patents. 42. This controversy is ripe for adjudication. PRAYER FOR RELIEF WHEREFORE, Plaintiff respectfully requests that the Court grant the following relief: A. Enter a declaratory judgment that Plaintiff is not infringing Defendants rights, if

any, in U.S. Patent No. 7,798,786, and U.S. Design Patent Nos. D632,615 and D622,638; B. Require Defendants to provide Plaintiff proper notice of any ex parte

motions/applications that would potentially interfere with Plaintiffs proposed use and display of bicycles at the 2011 Interbike International Bicycle Expo and Outdoor Demo, currently scheduled to run from September 12-16, 2011, in Las Vegas, Nevada and Boulder City, Nevada, and any future trade shows; and C. /// /// /// /// /// /// /// /// -9599409.1

Grant Plaintiff all other relief to which it is entitled.

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REQUEST FOR JURY Plaintiff hereby requests a jury trial on all issues triable by a jury. LEWIS AND ROCA LLP By: /s/Michael J. McCue Michael J. McCue Jonathan W. Fountain 3993 Howard Hughes, Pkwy., Suite 600 Las Vegas, NV 89169 Tel. (702) 949-8200 Fax (702) 949-8398 -andDavid R. Sugden (pro hac vice application pending) dsugden@calljensen.com Vonn R. Christenson (pro hac vice application pending) vchristenson@calljensen.com CALL & JENSEN 610 Newport Center Drive, Suite 700 Newport Beach, CA 92660 Tel: (949) 787-3000 Fax: (949) 717-3100 Attorneys for Plaintiff DAHON NORTH AMERICA INC.

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