Case Document 37 Filed 02/05/16 Page 1 of 13 1 Barry L. Breslow Nevada Bar No. 3023 2 Michael A. Burke Nevada Bar No. 1 1527 3 ROBISON, BELAUSTEGUI, SHARP LOW A Professional Corporation 4 71 Washington Street Reno, Nevada 89503 5 Telephone: 775-329-3151 Facsimile: 775-329-7941 6 Emails: 7 Attorneys for Defendant 8 CHANGZHOU FIRST INTERNATIONAL TRADE CO., LTD. 9 UNITED STATES DISTRICT COURT 10 DISTRICT OF NEVADA 1 1 FUTURE MOTION, INC., Civil Action No. 2: 1 12 Plaintiff, MOTION FOR AWARD 13 OF ATTORNEY FEES, COSTS, AND vs. DAMAGE 14 CHANGZHOU FIRST INTERNATIONAL 15 TRADE co, LTD., 16 Defendant. 1 7 18 Defendant Changzhou First International Trade Co., Ltd. (?Changzhou?) hereby moves the 19 Court to reopen this case for the purpose of awarding Changzhou its attorneys? fees and costs for 20 responding to Plaintiff Future Motion, Inefs (?Future Motion?) Emergency Motion for an Ex 21 Par-re Temporary Restraining Order and a Preliminary Injunction. (See Dkt. Nos. 24-29.) Further, 2?2 as previously set forth in Changzhou?s opposition to the preliminary injunction motion, 23 Changzhou moves for an award of a bond in the amount of $100,000 to reimburse Changzhou for 24 business expenses incurred, lost sales suffered, and reputational damage resulting from Future 25 Motion? 5 imprOper and unwarranted temporary restraining order (Dkt. No. 24 at 43 -44.) 26 Future Motion ?led and was granted the ex parte TRO on January 6, 2016. (Dkt. Nos. 8 27 and 11.) It is now abundantly clear, however, that the sole purpose of Future Motion?s TRO was to Reason, Bemtegig deprive its chief competitor Changzhou of its lawful right to diSplay Changzhou?s Trotter product itadaf?ei?iife st. Reno, Nv 89503 1 (775) 329-3151 Case Document 37 Filed 02/05/16 Page 2 of 13 1 at the Consumer Electronics Show in Las Vegas, Nevada on January 6?9, 2016. CBS is 2 the world?s largest electronics and technology show, and was a major opportunity for Changzhou 3 to promote sales of its Trotter product. Instead, Future Motion orchestrated an effort to obtain a 4 baseless TRO and to effect seizure of Changzhou?s products from CES. These acts caused 5 Changzhou to lose sales and suffer public embarrassment at a critical juncture in marketing its new 6 Trotter product. Indeed, Future Motion engaged in a signi?cant media campaign to gain ?ee 7 publicity from the fact that it wrongfully prevented Changzhou?s sales. (See, Exhibit A 8 attached hereto.) 9 Moreover, Future Motion directly relied upon its baseless TRO to obtain additional 10 ?nancial backing for itself. On February 3, 2016, Future Motion announced that it had obtained 11 $3.2 million in additional funding for its business. (See Exhibit attached hereto.) One of the 12 stated bases for obtaining that funding was that Future Motion ?vigorously protects its Intellectual 13 Property as it protects safety and a ride experience that cannot be replicated by knock-offs.? (Id) 14 Interestingly, Future Motion dropped this lawsuit against Changzhou on February 4, 2016 the 15 next day after announcing it obtained the new funding. 16 It is now apparent that Future Motion? 5 actions were conducted with full knowledge that 17 that the asSerted patents (US Patent Nos. and 9,101,317) were non?inninged and invalid. 13 (Dkt. Nos. 24-29.) Future Motion undoubtedly sought the TRO and preliminary injunction with 19 the expectation that Changzhou would not fight back in this litigation, and therefore would not 20 discover the fatal ?aws in Future Motion? case. Unfortunately for Future Motion, Changzhou did 21 ?ght back. 22 Changzhou ?led an opposition to the preliminary injunction motion on January 29, 2016, 23 explaining in detail that the two patents in suit were both noninfringed by Changzhou?s Trotter 24 product and invalid in light of Future Motion?s own prior art (as well as the prior art of others), 25 most of which was never disclosed to the United States Patent Of?ce. (Dkt Nos. 24-29.) For 26 example, with respect to Future Motion?s design patent, its ?proof? of infringement consisted of a 27 single sentence by the inventor, coupled with a few of the ?gures in the patent. (Dkt. No. 24 at 2_8 This was insuf?cient on its face, as a design patent must be construed and f? Reno, NV 89503 2 (775) 329-3151 Case Document 37 Filed 02/05/16 Page 3 of 13 1 infringement evaluated based on all of the ?gures. Contessa Food Prods, Inc. v. Conagra, Inc, 282 F.3d 1370, 1379 (Fed. Cir. 2002) (?We hold that the ?ordinary observer? analysis is not limited to the ornamental features of a subset of the drawings, but instead must encompass the claimed ornamental features of all ?gures of a design patent?) Further, with respect to Future Motion?s utility patent, the ?proof? of infringement provided no claim construction analysis (which is required under Federal Circuit law) and relied on a conclusory claim chart. (Dkt. No. 24 at 22:6? 26:17.) Moreover, Future Motion baldly stated that it was aware of no anticipatory prior art to either patent, but it neglected to tell the Court about prior art disclosures of Future Motion?s own product and other similar products. (Id. at 17:14-22:5; 10 Upon reviewing Changzhou?s opposition and supporting declarations, Future Motion 11 simply gave up, ?ling a voluntary notice of dismissal. Even then, Future Motion only offered to 12 dismiss without prejudice despite the uncontroverted evidence that the patents in suit were non- 13 infringed and invalid. 1?4 Future Motion never had a reasonable basis for ?ling this litigation. Instead, Future Motion 15 misused the judicial system for the unfounded purpose of preventing its competitor from 16 displaying a competing product at the industry?s largest trade show. After obtaining its TRO and 17 in?icting unwarranted harm on Changzhou, Future Motion now hopes it can slink away unnoticed, 18 with no repercussions. This Court, however, should hold Future Motion accountable for its 19 actions. Changzhou requests that the Court exercise its inherent powers to reopen this case for the 20 limited purpose of gaming the following relief: 21 1. An award of $100,000 to fully compensate Changzhou for expenses to attend CBS, 22 lost sales at CES that were wrongfully restrained by the TRO, and embarrassment caused at CBS and subsequently due to the improper 23 2. An award of Changzhou?s attorneys? fees and costs for the signi?cant, yet 24 unnecessary, effort in responding to Future Motion?s preliminary injunction motion; 25 26 3. An order that Future Motion will issue a press release notifying the public that it dismissed the present case. 27 See Milora v. Hexion Specialty Chems. Canada, Inc, No. 2015 US. Dist. LEXIS 28 Robison, Belaustegui, Sharp Low 71 Washington St. Reno, NV 89503 3 (775) 329?3151 Case Document 37 Filed 02/05/16 Page 4 of 13 1 50998, at *9 (D. Or. Apr. 16, 2015) (citing Samho Co. v. SorkS-Itump, 254 F. App?); 569, 570 (9th 2 Cir. 2007)) dismissal under RuZe does not deprive the district court from 3 jurisdiction over the issue of attorney?s fees and costs?); US. DID. Corp. v. 4 Comma, Inc., 775 F.3d 128, 131 (2nd Cir. 2014) (?We agree that a district court may grant 5 recovery ?om a TRO security after the plaintiff ?les a notice of voluntary dismissal?). 6 Changzhou previously submitted a declaration in support of its expenses to attend CBS, 7 lost sales at CBS, and embarrassment resulting ?om the improper TRO. (Dkt. No. 25) It is also 8 willing to provide an accounting of its attorneys? fees and costs in responding to the preliminary 9 injunction motion, if requested by the Court to do so. Changzhou likewise is willing to submit 10 further brie?ng on the lack of a reasonable basis by Future Motion for ?ling this litigation, 11 including making a motion under Rule 11 of the Federal Rules of Civil Procedure, if the Court 12 deems such brie?ng useful.1 I 13 Further, Changzhou understands that Future Motion?s ?ling of the Notice of Voluntary 14 Dismissal automatically dissolves the TRO put in place by the Court, and that Changzhou is free 15 to begin Selling its Trotter product in the United States. To remove any potential ambiguity in the 16 mind of the public, however, Changzhou requests that the Court enter an Order explicitly 17 dissolving the TRO. 18 Finally, Changzhou requests a hearing with the Court to further address its petition for 19 attorneys? fees, costs and damages. 20 Respectfully submitted this day of February, 2016. 21 ROBISON, BELAUSTEGUI, SHARP LOW 22 A Professional Corporation 71 Washington Street 23 Reno, Nevada 89503 24 25 BARRY Li. BRESLOW MICHAEL A. BURKE 26 27 1 If the Court requests further brie?ng, Changzhou may request an order granting it discovery on Future Motion?s bases for ?ling its Complaint and motion for TRO, including but not limited to Future Motion?s knowledge of the 28 invalidity and non-in?ingement of the asserted patents. Robison, Belaustegui, Low 71 Washington St. Reno, NV 89503 4 (775) 329-3151 Case Document 37 Filed 02/05/16 Page 5 of 13 1 Of Counsel: Jeffrey D. Blake 2 NIERCHANT GOULD, RC. 191 Peachtree Street, NE, Suite 3800 3 Atlanta, GA 30303 Tel: (404) 954-5100 4 Jeffrey S. Ward 5 Wendy M. Ward Stephen Howe 6 MERCHANT GOULD RC. 10 East Doty Street, Suite 600 7 Madison, WT 53703 Tel: (608) 280?6750 8 Tong Wu 9 MERCHANT GOULD RC. 3200 IDS Center 10 80 South Eighth Street Minneapolis, MN 55402 11 Tel: (612) 332-5300 12 Attorneys for Defendant CHANGZHOU FIRST INTERNATIONAL TRADE 13 CO., LTDRobison, Belanstegui, Sharp 3.: Low 71 Washington St. Reno, NV 39503 5 (775) 329-3151 Case Document 37 Filed 02/05/16 Page 6 of 13 1 CERTIFICATE OF SERVICE 2 Pursuant to FRCP I certify that I am an employee of ROBISON, BELAUSTEGUI, SHARP 85 LOW, that I am over the age of 18 and not a party to the above?referenced case, and 3 that on the date belowI caused to be served a true copy of the MOTION FOR AWARD OF ATTORNEY FEES, COSTS, AND DAMAGES on all parties to this action by the 4 method(s) indicated below: 5 I hereby certify that on the date below, I electronically ?led the foregoing with the 6 Clerk of the Court by using the ECF system Which served the following parties electronically: 7 W. West Allen 3 Lewis Roca Rothgerger Christie, LLP 3993 Howard Hughes Parkway, Suite 600 9 Las Vegas, Nevada 89169 Email: wallen@lrrlaw.con1 10 Kolish Hartwell, RC. 11 Shawn J. Kolitch, Esq. 200 Paci?c Building 12 520 SW. Yamhill Street Portland, Oregon 97204 13 Email: shawn@khpatent.com 14 Attorneys for Plaim?z??Future Motion, Inc. 15 Why placing an original or true c0py thereof in a sealed envelope, with suf?cient postage af?xed thereto, in the United States mail at Reno, 16 Nevada, ad i 17 DATED: This Robison, Belmtegui, Sharp Low 71 Washington St. Reno, NV 89503 6 (775) 329.3151 Case Document 37 Filed 02/05/16 Page 7 of 13 Exhibit A Case Document 37 Filed 02/05/16 Page 8 of 13 1!29!2016 .S. arshais Raid Hoverboard Booth at CES Bloomberg Business US. Marshals Raid Hoverboard Booth at CES The maker of the Onewheel electric skateboard called in federal marshals to shut down the booth of a company making a similar product. Joshua Brustein joshuabmstein January 7, 2015 5:24 PM CST On Thursday afternoon, two US. federal marshals showed up at the Consumer Electronics Show to conduct a raid. As a crowd gathered, the marshals packed up a one-wheeled skateboard on display at a Chinese company?s booth, as well as a sign and ?iers promoting the product, and carried them away. It quickly became clear this wasn't the usual CBS publicity stunt. Staffers for the company, Changzhou First International Trade Co., were stunned. Until that moment, Changzhou First International Trade was having a successful day. It wasn?t the only discount electronic skateboard dealer around, but passersby seemed taken by the design of its product, the Trotter. Instead of a board with a wheel on either end, like the popular hoverboards seen around the show, the Trotter looks like a seesaw with one big wheel in the middle. One man with a microphone and a camera stopped to take some footage; another quizzed employees about how fast the thing could go. The booth?s staff had trouble answering even basic questions in English, but they did their best. CES, the world's largest annual gadget conference taking place in Las Vegas this week, has always been of small-bore dealers, many from China, selling products that look like something you might ?nd in the discount bin at a Best Buy. The Consumer Technology Association, the trade group that puts on the show, welcomes them, as long as they pay the appropriate fees to rent a booth. Unoriginality is not against the rules. But there is a long?running strain of resentment among companies that feel their patents and trademarks are being violated by low-cost competitors. CES's legal department issues guidelines for those who feel wronged, and there?s even a list of rules for face-to-face disputes, including prohibitions on "loud, o??ensive or embarrassing confrontations" and a limit on the number of people who come along to accuse someone of ripping them off. The CTA asks companies not to bring more than two employees, one translator, and a 113 Case Document 3.7 Filed 02/05/16 Page 9 of 13 1f29!2016 U.S. Marshals Raid Hoverboard Booth at CES - Blocmberg Business lawyer. The raid on the show ?oor, which involved federal law enforcement, was the result of a weekslong effort by Future Motion, a Silicon Valley startup that said it invented and patented a self-balancing electric skateboard that looks strikingly similar to the ones the marshals con?scated. The company sent about a half-dozen people from its legal team to accompany the marshals in the raid. The CTA declined to comment, as did a woman present during the raid who appeared to be in charge of the booth, saying the company intended to consult a lawyer. Lynzey Donahue, a U.S. Marshals of?cial, said marshals served a court order at CBS. Future Motion?s Onewheel skateboard is the braincth of Kyle Doerksen, a designer who had previously worked on electric bicycles. Several years ago, Doerksen quit his job at the design company Ideo, made a prototype, and rented a booth at CES 2014. The idea was popular enough that a Kickstarter campaign, launched on the same day, eventually raised $63 0,000. The following year, Doerksen came back with a more ?nished model. His company, which decided against getting a booth this year, is in town to meet with potential business partners. Doerksen began the process of patenting aspects of the Onewheel several years ago. In August, Future Motion received a patent for the underlying technology. Earlier this week, it got a second one for the device's design. This patent prohibits competitors from making something that an ordinary observer might confuse with the Onewheel. ?Would we have done this without the design patent being issued? The answer is we wouldn?t have bothered,? said Shawn Kolitch, a lawyer for the company. ?If you can show the design patent drawing next to an accused product side by side, and they look identical, it helps your case.? Future Motion ?rst found out about the Changzhou First International Trade product late last year, when a Onewheel user posted about it in an online forum. A li_st'_1ng by the Chinese company on Alibaba's online marketplace promised to provide some 2,000 boards per month for about $500 apiece to retailers. (Future Motion sells the Onewheel for $1,500 through its website.) ?We said, ?Wow, that?s clearly a knockoff,? Doerksen said. According to Alibab'a?s website, retailers in Iceland, Germany, and the US. bought about $70,000 worth of products. In December, Kolitch sent a letter to Changzhou First International Trade demanding that it stop selling the products. He never heard back. Kolitch tried again the day before the show ?oor opened, by approaching the booth directly but got nowhere. By 3 :30 pan. on Wednesday, Onewheel ?led a request with a judge to stop the Trotters from being displayed on the show ?oor. The newfangled electronic skateboards that have captured the imagination of geeks recently have been 2f3 Case Document 37 Filed 02/05/16 Page 10 of 13 1i2912016 (1.8. Marshals Raid Hoverbeard Booth at CES - Bloom berg Business dominated by dozens of o??brand companies. A recent segment on Planet Money reported how the hoverboard trend has emerged almost spontaneously from dozens of Chinese factories at once. But Shane Chen, a Chinese?American inventor, disputed that idea. He said the so?called hoverboards were his idea. Like Doerksen, Chen is trying to get the government to crack down on his competitors. After the raid at CBS, all the merchandise and signs had been stripped off the booth. The Chinese company?s sta?? sat around, unclear about what to do next. For Doerksen, getting the booth shut down serves not only to cut off what he saw as an illegitimate competitor but also to protect the reputation of the entire electric skateboard industry. The explosion in popularity of these products have been threatened by reports of low-quality hoverboards bursting into ?ames. ?If customers start to View the space as full of low?quality, low-cost products, that re?ects poorly on everybody,? said Doerksen. ?We hate to see someone poison the well.? Read this next This Company Is Winning the Hoverboard Race Lexus Builds a Functional Hoverboard Prototype CBS 3?3 Case Document 37 Filed 02/05/16 Page 11 of 13 Exhibit Case Document 37 Filed 02/05/16 Page 12 of 13 - Real Money Pro Portfolio I Chairman?s Club FREE: I TheStreat - MainStreel: - Hot Topics: - Distre?ed Companies 0 Super Bowl Stocks ?Toxlc Stocks - Stocks Under $10 - Crarner?s Best Stocks 2016 - Grantor?s ABCs at Top 5 Stools for February Is Wall Street Bracing for the Worst Year Since 2008? If you have a $500,000 portfolio, download the latest report by ?rm. it includes research and Investor Alert FREE Access to Cramer?s $2.5-Million Trading Portfolio Future Motion, The Company That Invented Onewheel?, Raises In Series A Funding Round By PR Newswire I 0303;15 - 07:30 AM EST Exclusive FREE Report: Jim Cramers Best Stocks for 2016 ?lm SANTA CRUZ, Calif., Feb. 3, 2016 lPRNewswire/ -- Future Motion Inc, makers of the popular Onewheei, the revolutionary electric boardsport, today announced it closed $3.2 million in Series A funding to expand operations, ship more Onewheels and innovate next-generation products. New investor Deshe Holdings led the round, with participation from sports marketing leader Paul Crandell. "Ever since I ?rst tried the Onewheel, I knew it was a category?de?ning product," said El Ie Desire, Partner, Desi-re Capital LLC. "Personal mobility is the next technological wave, and Future Motion's Onewheel is uniquely positioned to lead the industry. We're glad to support Kyle and his team during this exciting period of growt . Future Motion will use the new funding to Increase manufacturing capacity and expand their team, particularly in engineering, marketing and operations. Additionally, the company is building out a new RSLD center in Santa Cruz with advanced equipment to rapidly develop next- generation recreation?transportation products. 02/05/2016 Case Document 37 Filed 02/05/16 Page 13 of 13 "This round of funding aliows us to scale up to reach the warm elming market demand for Onewheel," said Kyle Doerksen, CEO of Future Motion. "Electric transportation is taking over the world, from cars to to bikes and personal digital vehicles like Onewheel. Since software and sensors de?ne the ride experience, the technology is getting better incredibly fast. Consumers are demanding high-quality, safe products from reputable companies that deliver unmatched experiences." Future Motion is also opening a European distribution and service center to accelerate growth in Europe while providing fast shipping to customers and after-sales support. Onewheel was just awarded the prestigious ISPO BRANDNEW 2016 award at ISPO, the world's largest sporting goods show in Munich, Germany. The Onewheel experience is unlike anything offered by other products on the market. Designed and built in California from premium materials, It provides a sensation familiar to experienced board riders and approachable for ?rst-timers. - The company vigoroust protects its Intellectual Property as it protects safety and a ride experience that cannot be replicated by knock-offs. STOCKS TO BUY: TheStreet Quaint Ratings has identified a handful of stocks with serious upside potential in the next 12-months. Learn more. 1 of 3 You May Also Like Top 10 IT Companies 5. Business Strategy Tools 2. innovative Business ideas 6. Onllne Company Registration 3. Top 10 Growing Companies 7? 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