1 Dominica J.

Minore, #019671

NUSSBAUM GILLIS & DINNER, P.C.

2 14850 N. Scottsdale Road, #450

Scottsdale, Arizona 85254 (480) 609-0011 Fax: (480) 609-0016 4 DMinore@ngdlaw.com

3 Tel: 5 Attorneys for Plaintiffs 6 7 8 9 10

IN THE UNITED STATES DISTRICT COURT IN AND FOR THE DISTRICT OF ARIZONA JAMES JEFFERY CARON and SPELLBINDERS PAPER ARTS COMPANY, LLC, an Arizona limited liability company, Plaintiffs, Case No. COMPLAINT FOR PATENT INFRINGEMENT WITH JURY DEMAND

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ATTORNEYS AT LAW 14850 N. SCOTTSDALE ROAD, #450 SCOTTSDALE, ARIZONA 85254 480-609-0011
NUSSBAUM GILLIS & DINNER, P.C.

LIFESTYLE CRAFTS, LLC, a Utah limited liability company, Defendant. Plaintiffs, James Jeffery Caron (Mr. Caron) and Spellbinders Paper Arts Company, LLC (Spellbinders), by and for their Complaint against Defendant, Lifestyle Crafts, LLC (Lifestyle), allege as follows: THE PARTIES 1. Mr. Caron is an individual citizen of the United States residing at 6310 East

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Maverick Road, Paradise Valley, Arizona 85253. 2. Spellbinders designs, manufactures, markets, and sells die-cutting tools and

other scrapbooking supplies to the craft and hobby industry; is a limited liability company organized under the laws of the State of Arizona; and has a principal place of business at 1125 West Pinnacle Peak Road, Building 3, Suite 124, Phoenix, Arizona 85027. 3. 4. Mr. Caron is the Chief Executive Officer of Spellbinders. Upon information and belief, Lifestyle is a limited liability company

organized under the laws of the State of Utah, with a principal place at business at 1450 West 105 North, Orem, Utah 84057. Lifestyle is a supplier of scrapbooking, crafts, and
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NUSSBAUM GILLIS & DINNER, P.C. ATTORNEYS AT LAW 14850 N. SCOTTSDALE ROAD, #450 SCOTTSDALE, ARIZONA 85254

hobby supplies, including dies for cutting, embossing, and stenciling sold under the LIFESTYLE CRAFTS and QUICKUTZ brands; is a competitor of Spellbinders; and has advertised, offered for sale, and sold its scrapbooking, crafts, and hobby supplies in the State of Arizona. JURISDICTION AND VENUE 5. This is an action for patent infringement under the laws of the United States,

specifically 35 U.S.C. 281. 6. This court has subject matter jurisdiction over the patent infringement claim

pursuant to 28 U.S.C. 1331 and 1338(a) and under 35 U.S.C. 281, because this action arises under the patent laws of the United States. 7. This court has personal jurisdiction over Lifestyle, because the cause of

action asserted herein arises from Lifestyles transaction of business in the State of Arizona, from Lifestyles causing tortious injury to Plaintiffs in the State of Arizona, and from Lifestyles causing tortious injury to Plaintiffs in the State of Arizona by acts taken outside the State of Arizona. 8. Specifically, this Court has personal jurisdiction over Lifestyle, because

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Lifestyle has committed acts of infringement in this judicial district by advertising, selling, and offering to sell infringing products in the State of Arizona and this judicial district, specifically including dies that infringe Mr. Carons patent as explained below. 9. Venue is proper in this judicial district pursuant to 28 U.S.C. 1391(c) and

1400(b), because Lifestyle is subject to personal jurisdiction in this judicial district and thus resides in this judicial district under 28 U.S.C. 1391(c). FACTUAL BACKGROUND 10. Mr. Caron has been an innovator in the field of scrapbooking, crafts, and

hobby supplies and has been granted numerous U.S. patents in the field. 11. Mr. Caron has invented a novel die for die cutting, embossing, and

stenciling sheet material, such as paper and the like.

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NUSSBAUM GILLIS & DINNER, P.C. ATTORNEYS AT LAW 14850 N. SCOTTSDALE ROAD, #450 SCOTTSDALE, ARIZONA 85254

12.

On December 30, 2008, U.S. Patent No. 7,469,634 (the 634 Patent) was

issued to Spellbinders, with Mr. Caron as a listed inventor. The 634 Patent is entitled Apertured Media Embellishing Template and System and Method Using Same. A copy of the 634 Patent is attached hereto as Exhibit A. 13. On July 17, 2009, Spellbinders assigned its entire right, title, and interest in

and to the 634 Patent to Mr. Caron. 14. 634 Patent. 15. Spellbinders has an exclusive license to manufacture, have manufactured, Mr. Caron is the owner of the entire right, title, and interest in and to the

offer for sale, and sell products covered by the claims of the 634 Patent. 16. On June 22, 2010, the U.S. Patent and Trademark Office (PTO) issued an

order granting a request for ex parte reexamination of the 634 Patent that had been filed by attorneys for QuicKutz, Inc. 17. Upon information and belief, shortly after the PTO granted the

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reexamination request for the 634 Patent, Lifestyle acquired the assets of QuicKutz, Inc. 18. Lifestyles Web site, at http://lifestylecrafts.com/about/, states: In 2010,

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QuicKutz underwent a makeover to become Lifestyle Crafts. 19. On November 21, 2011, the PTO issued a Notice of Intent to Issue Ex Parte

Reexamination Certificate confirming the patentability of all claims then under consideration in the reexamination proceeding. Claims 18, 19, 21-23, 28-31, 33 and 35 of the 634 Patent were confirmed in the same form as originally issued. A copy of the Notice of Intent is attached hereto as Exhibit B. A copy of a supplemental reply listing all of the confirmed claims and showing amendments where made is attached hereto as Exhibit C. 20. Lifestyle manufactures, advertises, offers for sale, and sells dies, including

but not limited to nesting dies sold under Lifestyles LIFESTYLE CRAFTS and

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NUSSBAUM GILLIS & DINNER, P.C. ATTORNEYS AT LAW 14850 N. SCOTTSDALE ROAD, #450 SCOTTSDALE, ARIZONA 85254

QUICKUTZ brands, that are covered by one or more claims of the 634 Patent as confirmed by the PTO in reexamination (the accused products). 21. Lifestyle sells the accused products with instructions directing its customers

to perform embellishing operations that are covered by one or more claims of the 634 Patent as confirmed by the PTO in reexamination. 22. Patent. 23. Lifestyle is not authorized to induce its customers to practice the subject Lifestyle is not authorized to practice the subject matter claimed in the 634

matter claimed in the 634 Patent. 24. U.S.C. 287. 25. Lifestyle has actual notice of the 634 Patent and the reexamination Lifestyle has constructive and actual notice of the 634 Patent pursuant to 35

proceedings for the 634 Patent. CLAIM FOR RELIEF (Infringement of the 634 Patent) 26. Plaintiffs incorporate herein the allegations of Paragraphs 1 through 25 of

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this Complaint as if fully stated herein. 27. By manufacturing or causing to be manufactured, importing or causing to be

imported, advertising, offering for sale, and/or selling the accused products, Lifestyle has infringed, contributed to infringement of, and/or induced infringement of one or more claims of the 634 Patent, as originally issued and as confirmed in reexamination, in violation of 35 U.S.C. 271, either literally or under the doctrine of equivalents. 28. Upon information and belief, Lifestyle will continue its infringing conduct

to the detriment of Plaintiffs unless enjoined by this Court. 29. Upon information and belief, Lifestyles infringement has been willful,

intentional, and in conscious disregard of Plaintiffs rights in the 634 Patent.

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NUSSBAUM GILLIS & DINNER, P.C. ATTORNEYS AT LAW 14850 N. SCOTTSDALE ROAD, #450 SCOTTSDALE, ARIZONA 85254

30.

Lifestyle, by its infringement of the 634 Patent, has damaged Plaintiffs and

unlawfully derived profits and gains that Plaintiffs otherwise would have received and to which Plaintiffs are entitled. 31. Plaintiffs have suffered and are suffering irreparable injury as a result of

Lifestyles infringement of the 634 Patent and have no adequate remedy at law. 32. This action is an exceptional case, as Lifestyles infringement has been

knowing and willful. 33. 285. PRAYER FOR RELIEF WHEREFORE, Plaintiffs respectfully pray for relief as follows: (a) That this Court enter a decree holding that Defendant has infringed, Plaintiffs are entitled to recovery of their attorney fees pursuant to 35 U.S.C.

contributed to the infringement of, and induced infringement of the 634 Patent; (b) That this Court order that Defendant, its officers, agents, servants,

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employees, attorneys, all parent, subsidiary, and affiliated companies, all assignees and successors in interest, and those persons in active concert or participation with them be preliminarily and permanently enjoined from manufacturing or causing to be manufactured, importing or causing to be imported, advertising, offering for sale, and selling the accused products and from otherwise infringing, contributing to the infringement of, and/or inducing infringement of the 634 Patent, and further order Defendants to provide confirmation of compliance with any injunction issued by this Court within 20 days of issuance; (c) That Plaintiffs be awarded damages adequate to compensate them for

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Defendants infringement of the 634 Patent in accordance with 35 U.S.C. 284, but in any event not less than a reasonable royalty;

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(d)

That Defendant be ordered to marshal, recall, and account for any and all

infringing products and return same to Plaintiffs or destroy same in a manner reasonably acceptable to Plaintiffs; (e) That, as a result of Defendants willful patent infringement, any damages

awarded to Plaintiffs be increased up to three (3) times the amount assessed; (f) That Plaintiffs be awarded their costs, as well as pre-judgment and post

judgment interest on the damages assessed; (g) That this case be declared exceptional and Plaintiffs be awarded their

reasonable attorney fees under 35 U.S.C. 285; and (h) That this Court grant such other and further relief as may be deemed just

and proper under the circumstances. RESPECTFULLY SUBMITTED this 19th day of January, 2012. NUSSBAUM GILLIS & DINNER P.C.

NUSSBAUM GILLIS & DINNER, P.C. ATTORNEYS AT LAW 14850 N. SCOTTSDALE ROAD, #450 SCOTTSDALE, ARIZONA 85254

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By: s/ Dominica J. Minore Dominica J. Minore NUSSBAUM GILLIS & DINNER,P.C. 14850 N. Scottsdale Road, #450 Scottsdale, Arizona 85254 Tel:(480) 609-0011 Fax:(480) 609-0016 Email: DMinore@ngdlaw.com Attorneys for Plaintiffs Of Counsel (Pro Hac Vice Forthcoming) Philip J. Moy Jr. FAY SHARPE LLP The Halle Building, 5th Floor 1228 Euclid Avenue Cleveland, Ohio 44115 Tel: 216.363.9000 Fax: 216.363.9001 Email: pmoy@faysharpe.com

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JURY DEMAND Pursuant to Fed. R. Civ. P. 38, trial by jury with the maximum number of jurors allowed is hereby demanded on all matters pled in this Complaint and in this action. RESPECTFULLY SUBMITTED this 19th day of January, 2012. NUSSBAUM GILLIS & DINNER P.C.

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NUSSBAUM GILLIS & DINNER, P.C. ATTORNEYS AT LAW 14850 N. SCOTTSDALE ROAD, #450 SCOTTSDALE, ARIZONA 85254

By: s/ Dominica J. Minore Dominica J. Minore NUSSBAUM GILLIS & DINNER,P.C. 14850 N. Scottsdale Road, #450 Scottsdale, Arizona 85254 Tel:(480) 609-0011 Fax:(480) 609-0016 Email: DMinore@ngdlaw.com Attorneys for Plaintiffs Of Counsel (Pro Hac Vice Forthcoming) Philip J. Moy Jr. FAY SHARPE LLP The Halle Building, 5th Floor 1228 Euclid Avenue Cleveland, Ohio 44115 Tel: 216.363.9000 Fax: 216.363.9001 Email: pmoy@faysharpe.com

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854328/15633-1 CPEQ 700069US01 472268 1

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