Traxxas v. Vertical Partners West - Complaint
Traxxas v. Vertical Partners West - Complaint
Traxxas v. Vertical Partners West - Complaint
MARSHALL DIVISION
TRAXXAS, L.P., §
§
Plaintiff, §
§ Civil Action No. 2:18-cv-385
v. §
§ JURY TRIAL DEMANDED
VERTICAL PARTNERS WEST, LLC §
dba VENOM POWER, §
§
Defendant. §
COMES NOW Plaintiff Traxxas, L.P. and files this Complaint for False Advertising,
Unfair Competition, Patent Infringement, and Unjust Enrichment against Defendant Vertical
1. This is a claim for false advertising and unfair competition arising under the
Lanham Act, 15 U.S.C. § 1051 et seq., patent infringement arising under the United States patent
laws, 35 U.S.C. § 101 et seq., and related claims for unfair competition and unjust enrichment
3. Defendant Vertical Partners West, LLC dba Venom Power (“Venom Power”)
is an Idaho limited liability company having a principal place of business in Rathdrum, Idaho.
4. Pursuant to 15 U.S.C. § 1121(a) and 28 U.S.C. §§ 1331 and 1338(a), this Court
has subject matter jurisdiction over the federal false advertising and unfair competition claims
because those claims arise under the Lanham Act, 15 U.S.C. § 1051 et seq., and over the patent
infringement claims because those claims arise under the United States patent laws, 35 U.S.C.
§ 101 et seq.
5. Pursuant to 28 U.S.C. § 1367(a), this Court has subject matter jurisdiction over
the state unfair competition and unjust enrichment claims because those claims arise from the
same nucleus of operative facts as the federal false advertising, unfair competition, and patent
infringement claims.
6. This Court has specific personal jurisdiction over Venom Power pursuant to due
process and the Texas Long Arm Statute because Venom Power, directly or through
intermediaries, has conducted and does conduct substantial business in this forum, such
substantial business including but not limited to: (i) at least a portion of the activities complained
of herein; (ii) purposefully and voluntarily placing one or more Venom Accused Products into
the stream of commerce with the expectation that they will be purchased by consumers in this
forum; or (iii) regularly doing or soliciting business, engaging in other persistent courses of
conduct, or deriving substantial revenue from goods and services provided to individuals in
7. Venue is proper in this Court under 28 U.S.C. §§ 1391(b)-(d) for the reasons set
forth above. Furthermore, venue is proper because Venom Power, directly or through
intermediaries, sells and offers to sell Venom Accused Products to persons in this District, as
discussed below. Each of Venom Power’s acts complained of herein occurring in this District
IV. BACKGROUND
8. The business Traxxas operates was started in 1986 and has grown to become the
number-one selling name in Ready-To-Run nitro and electric model vehicles in the United
States.
9. Traxxas takes the safety of its customers seriously and has invested millions of
dollars into its products and technology in its quest to have not only the best, but also the safest
10. In 2014, Traxxas launched its Traxxas iD® power cell battery and charger
system.
11. In addition to performance benefits, the Traxxas iD® system includes important
c. integrated balancing wires that eliminate the need for both external
12. A true and correct copy of United States Patent No. D743,339 (the “’339 Patent”),
13. Traxxas is the current owner by assignment of all rights, title, and interest in and
under the ’339 Patent, which duly and legally issued on November 17, 2015, with Casey
Christen Jens Christensen, Kent Poteet, and Otto Karl Allmendinger as the named inventors.
14. At all times, each and every patentee of the ’339 Patent, and each and every
person making, offering for sale, or selling within the United States, or importing into the United
States, any patented article for or under the ’339 Patent, has complied with the marking
15. Venom Power, directly or through intermediaries, makes, uses, sells, offers for
sale, distributes, and advertises within the United States, or imports into the United States,
certain rechargeable batteries, battery chargers, battery connectors, and components thereof
(collectively the “Venom Accused Products”), including Venom Power part numbers 1525-7,
1526-7, 1527-7, 1532, 1532-7, 1540, 1544, 1546, 1546-7, 1547, 1548, 1548-7, 1552, 1553, 1554,
1555, 1557, 1558, 1577, 1580, 1581, 1582, 15008, 15009, 15022, 15023, 15024, 15026, 15027,
15031, 15056, 15057, 15058, 15059, 15080, 15084, 15085, 15086, 15091, 15093, 15094, 15107,
15108, 15112, 15113, 15128, 15129, 15149, 15173, and 15189, and any reasonably similar
16. In connection with its products that include the UNI Plug System 2.0, Venom
Power uses in interstate commerce the description or representation of fact that the UNI Plug
17. For example, the commercial advertising or promotional web page located
18. Although the UNI Plug System 2.0 allows a user to connect a Venom Power
battery to a Traxxas iD® charger, the UNI Plug System 2.0 does not contain auto battery
19. Venom Power’s description or representation of fact that the UNI Plug System
promotion that the UNI Plug System 2.0 is “Traxxas® ID® Compatible” misrepresents the
nature, characteristics, or qualities of Venom Power’s products that include the UNI Plug System
2.0.
21. Venom Power’s claim that the UNI Plug System 2.0 is “Traxxas® ID®
Compatible” not only misleads the public; it endangers the public because the UNI Plug System
2.0 circumvents several of the safety precautions of the Traxxas iD® system.
22. On August 24, 2018, Traxxas issued via email a Consumer Safety Alert (attached
as Exhibit C) and a Dealer Safety Alert (attached as Exhibit D) warning consumers and dealers
about the fire risks associated with using the Venom UNI Plug 2.0 system with Traxxas
products.
23. An ordinary observer comparing the two designs in the context of the prior art
would think that the design of the Venom Accused Product component depicted below is
24. Venom Power’s false or misleading claim that the UNI Plug System 2.0 is
“Traxxas® ID® Compatible” and Venom Power’s colorable imitation of the design claimed by
the ’339 Patent enable Venom Power to trade on and receive the benefit of goodwill built up at
great labor and expense by Traxxas over many years, and to gain acceptance for its products not
solely on their own merits, but on the reputation and goodwill of Traxxas and its products.
25. Venom Power’s false or misleading claim that the UNI Plug System 2.0 is
“Traxxas® ID® Compatible” and Venom Power’s colorable imitation of the design claimed by
the ’339 Patent unjustly enrich Venom Power at Traxxas’ expense. Venom Power has been and
continues to be unjustly enriched, obtaining a benefit from Traxxas by taking undue advantage of
26. Specifically, Venom Power has taken unfair advantage of Traxxas by trading on
and profiting from the goodwill in the Traxxas iD® system and the design claimed by the ’339
Patent, which both were developed and are owned by Traxxas, resulting in Venom Power
wrongfully obtaining a monetary and reputational benefit for its own business and products.
27. Unless these acts of Venom Power are restrained by this Court, these acts will
continue and will continue to cause irreparable injury to Traxxas and to the public for which
28. On August 17, 2018, Traxxas provided Venom Power with written notice of its
V. CLAIMS
29. Traxxas repeats and incorporates by reference the allegations of the foregoing
30. Venom Power’s acts complained of herein constitute false advertising and unfair
31. Traxxas repeats and incorporates by reference the allegations of the foregoing
33. Traxxas repeats and incorporates by reference the allegations of the foregoing
34. The Venom Accused Products are covered by the claim of the ’339 Patent.
35. Venom Power has directly infringed and continues to infringe the claim of the
’339 Patent in violation of 35 U.S.C. § 271(a) by, directly or through intermediaries and without
Traxxas’ authority, making, using, selling, or offering to sell Venom Accused Products in the
United States, or importing Venom Accused Products into the United States.
36. Traxxas repeats and incorporates by reference the allegations of the foregoing
37. Venom Power’s acts complained of herein constitute unjust enrichment of Venom
VI. DAMAGES
38. Traxxas repeats and incorporates by reference the allegations of the foregoing
39. Venom Power’s acts complained of herein have damaged Traxxas in an amount to
be proven at trial, but no less than Venom Power’s profits under 15 U.S.C. § 1117(a) and 35
U.S.C. § 289.
40. Venom Power’s acts complained of herein have been deliberate, willful,
intentional, or in bad faith, with intent to trade on Traxxas’ goodwill in its products or to harm
the reputation of Traxxas. In view of the egregious nature of Venom Power’s acts, this is an
exceptional case within the meaning of 15 U.S.C. § 1117(a) and 35 U.S.C. § 285.
a. A judgment in favor of Traxxas that Venom Power has falsely advertised and
unfairly competed with Traxxas under the Lanham Act, as described herein;
b. A judgment in favor of Traxxas that Venom Power has unfairly competed with
c. A judgment in favor of Traxxas that Venom Power has directly infringed the ’339
d. A judgment in favor of Traxxas that Venom Power has been unjustly enriched at
e. A permanent injunction:
implying that any Venom Power product is compatible or suitable for use
sell within the United States, or importing into the United States, any
article applying the design claimed by the ’339 Patent or any colorable
imitation thereof;
concert, or participation with it, to destroy all products applying the design
advertisements, and any other material applying the design claimed by the
(5) requiring Venom Power to file with this Court and to serve upon Traxxas,
within thirty days after the entry and service on Venom Power of the
injunction, a report in writing and under oath setting forth in detail the
manner and form in which Venom Power has complied with the
injunction;
profits resulting from the activities complained of herein, including Venom Power’s profits for
any continuing post-verdict or post-judgment activities, and that such profits be paid over to
Traxxas, increased as the Court finds to be just under the circumstances of this case;
g. A judgment and order requiring Venom Power to pay Traxxas its damages
h. A judgment and order requiring Venom Power to pay Traxxas its costs, expenses,
i. A judgment and order requiring Venom Power to pay Traxxas its reasonable
j. Such other and further relief as the Court deems just and proper.
Pursuant to Federal Rule of Civil Procedure 38(b), Traxxas requests a jury trial of all
Exhibit A
Case 2:18-cv-00385 Document 1-1 Filed 08/31/18 Page 2 of 15 PageID #: 13
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Case 2:18-cv-00385 Document 1-3 Filed 08/31/18 Page 1 of 4 PageID #: 31
Exhibit C
Case 2:18-cv-00385 Document 1-3 Filed 08/31/18 Page 2 of 4 PageID #: 32
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Case 2:18-cv-00385 Document 1-4 Filed 08/31/18 Page 1 of 3 PageID #: 35
Exhibit D
Case 2:18-cv-00385 Document 1-4 Filed 08/31/18 Page 2 of 3 PageID #: 36
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Case 2:18-cv-00385 Document 1-5 Filed 08/31/18 Page 1 of 1 PageID #: 38
JS 44 (Rev. 08/18) CIVIL COVER SHEET
The JS 44 civil cover sheet and the information contained herein neither replace nor supplement the filing and service of pleadings or other papers as required by law, except as
provided by local rules of court. This form, approved by the Judicial Conference of the United States in September 1974, is required for the use of the Clerk of Court for the
purpose of initiating the civil docket sheet. (SEE INSTRUCTIONS ON NEXT PAGE OF THIS FORM.)
(b) County of Residence of First Listed Plaintiff Collin, Texas County of Residence of First Listed Defendant
(EXCEPT IN U.S. PLAINTIFF CASES) (IN U.S. PLAINTIFF CASES ONLY)
NOTE: IN LAND CONDEMNATION CASES, USE THE LOCATION OF
THE TRACT OF LAND INVOLVED.
(c) Attorneys (Firm Name, Address, and Telephone Number) Attorneys (If Known)
The Davis Firm, PC
213 N. Fredonia Street, Suite 230
Longview TX 75601 (903) 230-9090
II. BASIS OF JURISDICTION (Place an “X” in One Box Only) III. CITIZENSHIP OF PRINCIPAL PARTIES (Place an “X” in One Box for Plaintiff
(For Diversity Cases Only) and One Box for Defendant)
’ 1 U.S. Government ’ 3 Federal Question PTF DEF PTF DEF
Plaintiff (U.S. Government Not a Party) Citizen of This State ’ 1 ’ 1 Incorporated or Principal Place ’ 4 ’ 4
of Business In This State
’ 2 U.S. Government ’ 4 Diversity Citizen of Another State ’ 2 ’ 2 Incorporated and Principal Place ’ 5 ’ 5
Defendant (Indicate Citizenship of Parties in Item III) of Business In Another State