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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF MICHIGAN
`
`
`CHOON’S DESIGN LLC,
`a Michigan limited liability company,
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`Plaintiff
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`v.
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`LAROSE INDUSTRIES, LLC,
`a New Jersey limited liability company, and
`TOYS “R” US, INC,
`a New Jersey corporation.
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`Defendants
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`Case No.:
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`COMPLAINT & JURY DEMAND
`
`NOW COMES Plaintiff Choon’s Design LLC (“Choon”), by and through its attorneys,
`
`Carlson, Gaskey & Olds, P.C., and for its Complaint against Defendants LaRose Industries, LLC
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`(“LaRose”) and Toys “R” Us, Inc (“Toys”R”Us) (collectively “Defendants”) states as follows:
`
`PARTIES
`
`1.
`
`Choon is a Michigan limited liability company having its primary place of
`
`business at 48813 West Road, Wixom, MI 48393.
`
`2.
`
`LaRose is a New Jersey limited liability company with its primary place of
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`business at Building 5, 1578 Sussex Turnpike, Randolph New Jersey, 07869.
`
`3.
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`Toys”R”Us is a corporation with its primary place of business at One Geoffrey
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`Way, Wayne, New Jersey 07470.
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`JURISDICTION AND VENUE
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`4.
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`This Court has original subject matter jurisdiction over the claims in this action
`
`pursuant to 28 U.S.C. §1331 (federal question), §1332 (diversity), and §1338 (patents).
`
`
`
`LaRose Exh. 1002, p. 1
`
`
`
`2:13-cv-13569-TGB-MKM Doc # 1 Filed 08/19/13 Pg 2 of 9 Pg ID 2
`
`
`
`5.
`
`LaRose and Toys”R”Us are subject to personal jurisdiction in this Court. In
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`particular, this Court has personal jurisdiction over LaRose and Toys”R”Us because LaRose and
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`Toys”R”Us have engaged in continuous, systematic and substantial activities within this judicial
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`district, including the marketing and sales of products in this judicial district. Furthermore, upon
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`information and belief, this Court has personal jurisdiction over LaRose and Toys”R”Us in this
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`case because LaRose and Toys”R”Us have committed acts giving rise to Choon’s claims within
`
`and directed to this judicial district.
`
`6.
`
`Venue in this Court is proper pursuant to 28 U.S.C. §1391(b) and (c) and 28
`
`U.S.C. §1400(b).
`
`BACKGROUND
`
`7.
`
`In late 2011, Choon introduced its Rainbow Loom product – a loom designed to
`
`be used with rubber bands to form links for making bracelets, necklaces, and even bags and other
`
`items – to the market (“the Rainbow Loom”).
`
`8.
`
`Choon introduced the Rainbow Loom by selectively placing it in specialty toy and
`
`craft stores. Choon did not initially sell the product to any retail chains – although it does now.
`
`9.
`
`Notwithstanding, the Rainbow Loom product was, from the get go, received with
`
`great fanfare and accomplished almost immediate and monumental success – even without any
`
`relationships with retail chains.
`
`10.
`
`The Today show featured Choon’s Rainbow Loom as the “Summer’s hottest craft
`
`craze” in a story aired August 15, 2013.
`
`11.
`
`In an article dated July 19, 2013 (attached as Exhibit A), one store owner noted
`
`"[w]e are selling the Rainbow Loom like crazy!" The article further notes that the Rainbow
`
`Loom is “[t]he summer obsession … [and] … is flying off shelves so quickly that stores can't
`
`
`
`2
`
`LaRose Exh. 1002, p. 2
`
`
`
`2:13-cv-13569-TGB-MKM Doc # 1 Filed 08/19/13 Pg 3 of 9 Pg ID 3
`
`
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`keep them in stock for long.” Id. The popularity of the Rainbow Loom has “‘spread like
`
`wildfire throughout the country,’ especially with kids 5 to 15.” Id.
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`12.
`
`Since its introduction into the market, Choon has sold more than one million
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`Rainbow Looms. Of course, Choon has also sold large volumes of other complementary
`
`products that are used with the Rainbow Loom such as rubber bands and c-clips (which are used
`
`to hold the two ends of a necklace or bracelet together). This tremendous success has led to
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`numerous copycats trying to capitalize on Choon’s hard work.
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`13.
`
`After taking note of Choon’s great success, LaRose and Toys”R”Us, decided to
`
`take action, producing and selling their own loom kit, the cra-Z-loom bracelet maker, that
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`includes a loom, rubber bands, and clips, among other things. LaRose and Toys”R”Us also sell
`
`the rubber bands separately (Exhibit B.)
`
`14.
`
`LaRose and Toys”R”Us sell its cra-Z-loom through various channels, including
`
`Toys”R”Us’s website.
`
`15.
`
`LaRose sells the cra-Z-loom to Toys”R”Us who then sells it and replacement
`
`bands and clips through its website www.toysrus.com.
`
`16.
`
`LaRose adverstises the cra-Z-loom through its Cra-Z-Art brand through television
`
`commercials and internet sites as being available only at Toys”R”Us.
`
`17.
`
`18.
`
`Choon owns a U.S. Patent that covers its Rainbow Loom.
`
`Specifically, on July 16, 2013, the United States Patent and Trademark Office
`
`duly and lawfully issued United States Patent No. 8,485,565 (“the ‘565 patent”), entitled
`
`“Brunnian Link Making Device and Kit.” A true and correct copy of the ‘565 patent is attached
`
`hereto as Exhibit C.
`
`19.
`
`The ‘565 patent names Cheong Choon Ng as inventor.
`
`
`
`3
`
`LaRose Exh. 1002, p. 3
`
`
`
`2:13-cv-13569-TGB-MKM Doc # 1 Filed 08/19/13 Pg 4 of 9 Pg ID 4
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`
`
`20.
`
`21.
`
`Choon is the owner by assignment of all right, title and interest in the ‘565 patent.
`
`The ‘565 patent generally relates to, inter alia, a novel method and device for
`
`creating a linked item.
`
`22.
`
`LaRose and Toys”R”Us’s cra-Z-loom infringes one or more of the claims of
`
`Choon’s ‘565 patent.
`
`COUNT I - LAROSE AND TOYS”R”US’S DIRECT INFRINGEMENT OF THE
`‘565 PATENT
`
`Choon incorporates and re-alleges Paragraphs 1 through 22 as each were fully set
`
`23.
`
`forth herein.
`
`24.
`
`25.
`
`The ‘565 patent remains valid, enforceable and unexpired.
`
`Upon information and belief, LaRose and Toys”R”Us are directly infringing and
`
`have directly infringed the ‘565 patent, including, without limitation, by making, using, selling,
`
`offering for sale, and/or importing, without license or authority, its cra-Z-loom which is covered
`
`by the ‘565 patent.
`
`26.
`
`The cra-Z-loom falls within the scope of one or more claims of the ‘565 patent.
`
`Upon information and belief, LaRose and Toys”R”Us directly infringes at least claims 1 and 6-
`
`18 of the ‘565 patent.
`
`27.
`
`Upon information and belief, LaRose and Toys”R”Us’s have actual knowledge of
`
`the ‘565 patent and knowledge of their infringement of the ‘565 patent. Toys”R”Us has this
`
`knowledge by virtue of at least its receipt of an email from Choon communicating grant of the
`
`‘565 patent to a representative of Toys”R”Us, Jeff Osnato on July 26, 2013 (Exhibit D). Upon
`
`information and belief, this information was then conveyed by Toys”R”Us to LaRose. Upon
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`information and belief, LaRose and Toys”R”Us’s infringement has been and continues to be
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`willful and deliberate.
`
`
`
`4
`
`LaRose Exh. 1002, p. 4
`
`
`
`2:13-cv-13569-TGB-MKM Doc # 1 Filed 08/19/13 Pg 5 of 9 Pg ID 5
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`
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`28.
`
`As a result of LaRose and Toys”R”Us’s infringement, Choon will suffer severe
`
`and irreparable harm, unless that infringement is enjoined by this Court, and has suffered
`
`substantial damages.
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`COUNT II – LAROSE AND TOYS”R”US’S
`CONTRIBUTORY INFRINGEMENT OF THE ‘565 PATENT
`
`Choon incorporates and re-alleges Paragraphs 1 through 28 as each were fully set
`
`29.
`
`forth herein.
`
`30.
`
`As described in Count I, the cra-Z-loom and the use of the cra-Z-loom fall within
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`the scope of at least claims 1 and 6-18 of the ‘565 patent.
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`31.
`
`Upon information and belief, with knowledge of the ‘565 patent, LaRose and
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`Toys”R”Us have contributed to and continue to contribute to the infringement of the ‘565 patent
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`under 35 U.S.C. § 271(c) by selling, offering to sell and/or importing the cra-Z-loom for use by
`
`their customers. LaRose and Toys”R”Us’s customers directly infringe the ‘565 patent by using
`
`the Cra-Z-loom to create linked items from elastic bands.
`
`32.
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`Upon information and belief, the cra-Z-loom is marketed and sold to customers
`
`who use it to create linked items for elastic bands. By following the instructions provided by
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`LaRose and Toys”R”Us, customers who use the cra-Z-loom directly infringe the ‘565 patent.
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`33.
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`Upon information and belief, LaRose and Toys”R”Us’s cra-Z-loom have no
`
`substantial non-infringing use for at least the reason that the cra-Z-loom can only be used to
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`directly infringe the ‘565 patent. In other words, when LaRose and Toys”R”Us’s instructions are
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`followed, the cra-Z-loom is only used in an infringing manner, and is only advertised by LaRose
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`and Toys”R”Us for such an infringing use. See Instruction Manual attached as Exhibit E.
`
`
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`5
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`LaRose Exh. 1002, p. 5
`
`
`
`2:13-cv-13569-TGB-MKM Doc # 1 Filed 08/19/13 Pg 6 of 9 Pg ID 6
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`
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`34.
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`Upon information and belief, the accused Cra-Z-loom also constitutes a material
`
`part of the invention of the ‘565 patent for at least the reason it is the very product used to
`
`practice the invention of the ‘565 patent.
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`35.
`
`Upon information and belief, LaRose and Toys”R”Us know that the accused Cra-
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`Z-loom is especially made or especially adapted for use in an infringement of the ‘565 patent for
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`at least the reason that the Cra-Z-loom is advertised, sold, and/or offered for sale only to create
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`linked items from elastic bands in a manner covered by the ‘565 patent.
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`36.
`
`Upon information and belief, LaRose and Toys”R”Us have actual and/or
`
`constructive knowledge of the ‘565 patent and that LaRose and Toys”R”Us’s customers’ use of
`
`the accused Cra-Z-loom directly infringes the claims of the ‘565 patent. Toys”R”Us has this
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`knowledge by virtue of at least its receipt of an email from Choon communicating grant of the
`
`‘565 patent to a representative of Toys”R”Us, Jeff Osnato on July 26, 2013 (Exhibit D). Upon
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`information and belief, this information was then conveyed by Toys”R”Us to LaRose.Upon
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`information and belief, at the very least, LaRose and Toys”R”Us were willfully blind as to the
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`existence of the ‘565 patent, and therefore willfully blinded themselves to its customers’ direct
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`infringement of the ‘565 patent resulting from their use of the Cra-Z-loom.
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`37.
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`As a result of LaRose and Toys”R”Us’s contributory infringement, Choon will
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`suffer severe and irreparable harm, unless the infringement is enjoined by this Court, and has
`
`suffered substantial damages.
`
`COUNT III – LAROSE AND TOYS”R”US’S
`INDUCED INFRINGEMENT OF THE ‘565 PATENT
`
`Choon incorporates and re-alleges Paragraphs 1 through 37 as each were fully set
`
`6
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`
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`38.
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`forth herein.
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`
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`LaRose Exh. 1002, p. 6
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`
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`2:13-cv-13569-TGB-MKM Doc # 1 Filed 08/19/13 Pg 7 of 9 Pg ID 7
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`
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`39.
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`Upon information and belief, with knowledge of the ‘565 patent, LaRose and
`
`Toys”R”Us have induced to and continue to induce to the infringement of the ‘565 patent under
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`35 U.S.C. § 271(b) by selling, offering to sell and/or importing the Cra-Z-loom and its
`
`replacement rubber bands for use by their customers. LaRose and Toys”R”Us’s customers
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`directly infringe by using the Cra-Z-loom and the replacement rubber bands to create linked
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`items.
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`40.
`
`LaRose and Toys”R”Us specifically intended their customers to infringe at least
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`claims 1 and 6-18 of the ‘565 patent and knew that their customers’ acts constituted
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`infringement. Upon information and belief, despite a high likelihood that its actions would
`
`induce its customers’ direct infringement of the ‘565 patent, LaRose and Toys”R”Us marketed
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`and sold the Cra-Z-loom and replacement rubber bands to their customers to practice the claimed
`
`invention. LaRose and Toys”R”Us’s customers directly infringe the ‘565 patent by creating
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`linked articles from elastic bands by following the instructions provided with the Cra-Z-loom
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`Bracelet Kits and on LaRose and Toys”R”Us’s website.
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`41. With regards to the rubber bands, LaRose and Toys”R”Us induced people to
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`infringe claims 6-18 of the ‘565 patent by selling their rubber bands for use on its Cra-Z-loom.
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`42.
`
`Upon information and belief, LaRose and Toys”R”Us knew that their customers’
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`actions, when performed, would directly infringe the ‘565 patent.
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`43.
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`Upon information and belief, LaRose and Toys”R”Us have not made any changes
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`to the Cra-Z-loom despite their knowledge of the ‘565 patent.
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`44.
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`Upon information and belief, LaRose and Toys”R”Us have not made any changes
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`to any of its publically available instructional materials, despite their knowledge of the ‘565
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`patent.
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`
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`7
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`LaRose Exh. 1002, p. 7
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`2:13-cv-13569-TGB-MKM Doc # 1 Filed 08/19/13 Pg 8 of 9 Pg ID 8
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`
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`45.
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`Upon information and belief, despite having actual knowledge of the ‘565 patent,
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`LaRose and Toys”R”Us continue to actively induce infringement of the ‘565 patent by
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`continuing to promote the infringing Cra-Z-loom and replacement rubber bands. LaRose and
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`Toys”R”Us intended their customers to directly infringe the ‘565 patent, or at the very least,
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`were willfully blind to the fact that LaRose and Toys”R”Us’s customers’ use of the infringing
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`Cra-Z-loom and replacement rubber bands would directly infringe the ‘565 patent.
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`46.
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`Upon information and belief, LaRose and Toys”R”Us have actual knowledge of
`
`the ‘565 patent. Toys”R”Us has this knowledge by virtue of at least its receipt of an email from
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`Choon communicating grant of the ‘565 patent to a representative of Toys”R”Us, Jeff Osnato on
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`July 26, 2013 (Exhibit D). Upon information and belief, this information was then conveyed by
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`Toys”R”Us to LaRose.
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`47.
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`As a result of LaRose and Toys”R”Us’s inducement of infringement, Choon will
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`suffer severe and irreparable harm, unless that infringement is enjoined by this Court, and has
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`suffered substantial damages.
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`PRAYER FOR RELIEF
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`
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`WHEREFORE, Choon requests judgment in its favor against LaRose and Toys”R”Us for
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`the following relief:
`
`A.
`
`B.
`
`An order adjudging that LaRose and Toys”R”Us have infringed the ‘565 patent;
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`An order adjudging LaRose and Toys”R”Us to have willfully infringed the ‘565
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`patent;
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`C.
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`A preliminary and permanent injunction enjoining LaRose and Toys”R”Us, its
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`officers, directors, agents, servants, employees and those persons in active concert
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`
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`8
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`LaRose Exh. 1002, p. 8
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`
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`2:13-cv-13569-TGB-MKM Doc # 1 Filed 08/19/13 Pg 9 of 9 Pg ID 9
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`
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`or participation with LaRose and Toys”R”Us, from directly or indirectly
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`infringing the ‘565 patent in violation of 35 U.S.C. §271;
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`D.
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`An award of damages adequate to compensate Choon for LaRose’s and
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`Toys”R”Us’s infringement of the ‘565 patent;
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`E.
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`An award of damages adequate to compensate Choon for infringement including
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`those damages provided for in 35 U.S.C. §154(d);
`
`F.
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`An order for a trebling of damages and/or exemplary damages because of
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`LaRose’s and Toys”R”Us’s willful infringement pursuant to 35 U.S.C. §284;
`
`G.
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`An order adjudging that this is an exceptional case;
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`H.
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`An award to Choon of its attorney fees and its costs and expenses incurred in
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`connection with this action pursuant to 35 U.S.C. §285; and
`
`I.
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`Such other and further relief that this Court deems just and proper.
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`JURY DEMAND
`
`Pursuant to Fed R. Civ. P. 38(b) and 5(d), Plaintiff demands a trial by jury for all issues
`
`
`
`CARLSON, GASKEY & OLDS, P.C.
`
`
`
`/s/ Brian S. Tobin
`Theodore W. Olds, III (P42004)
`John M. Siragusa (P62573)
`Brian S. Tobin (P67621)
`Carlson Gaskey & Olds, P.C.
`
`400 W. Maple, Suite 350
`Birmingham, Michigan 48009
`Telephone: (248) 988-8360
`Facsimile: (248) 988-8363
`Email: tolds@cgolaw.com
` jsiragusa@cgolaw.com
` btobin@cgolaw.com
`
`
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`
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`so triable.
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`
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`Dated: August 19, 2013
`
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`9
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`LaRose Exh. 1002, p. 9
`
`
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`2:13-cv-13569-TGB-MKM Doc # 1-1 Filed 08/19/13 Pg 1 of 1 Pg ID 10
`
`INDEX OF EXHIBITS
`
`July 19, 2013 Rainbow Loom article
`
`cra-Z-loom website marketing
`
`United States Patent No. 8,485,565
`
`July 26, 2013 email from Choon to representative of Toys”R”Us, Jeff Osnato
`
`cra-Z-loom instruction manual
`
`A.
`
`B.
`
`C.
`
`D.
`
`E.
`
`LaRose Exh. 1002, p. 10
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`
`
`2:13-cv-13569-TGB-MKM Doc # 1-2 Filed 08/19/13 Pg 1 of 3 Pg ID 11
`
`
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`EXHIBIT A
`
`LaRose Exh. 1002, p. 11
`
`
`
`http://articles.philly.com/2013-07-19/news/40659252_1_silly-bandz-brac...
`Rainbow Loom is summer's cool craft - Philly.com
`2:13-cv-13569-TGB-MKM Doc # 1-2 Filed 08/19/13 Pg 2 of 3 Pg ID 12
`
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`Collections • Summer
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`Ads by Google
`
`Haley Short, 11, works on the Rainbow Loom at Learning Express in Havertown. The kit, with instructional
`book, costs $16.99.
`
`GALLERY: Weaving rubber
`bands on the Rainbow
`Loom, and finished…
`(AKIRA SUWA…)
`
`Ads by Google
`
`By Jessica Pasquarello, For The Inquirer
`POSTED: July 19, 2013
`
`First there were slap bracelets, then friendship wristlets and Silly
`Bandz, and now comes the newest youth accessory obsession, the
`Rainbow Loom. It differs from its predecessors in that kids can express
`their creativity by forming the colorful rubber-band bracelets
`themselves.
`
`"We are selling the Rainbow Loom like crazy!" says Christine Gorham,
`owner of Cherry Hill's Sweet & Sassy. The summer obsession, also
`sold at Learning Express, Michaels, Hallmark, and various
`independently owned toy stores as well as online, is flying off shelves
`so quickly that stores can't keep them in stock for long.
`
`And while kids aren't usually eager to be in a classroom during
`summer, they eagerly fill up the many Rainbow Loom instructional
`classes being offered in the region.
`
`"It's kind of fascinating seeing the patterns and designs that I can
`make," says Peter Leibrandt, 10, of Havertown, explaining the
`popularity of Rainbow Looms, a simple concept using rubber bands to
`create bracelets, rings, necklaces, and, in the cases of some young
`experts, even handbags, shoes, jump ropes, hats, and iPod cases
`
`At Learning Express Toys in Havertown, eight free instructional classes
`are held each week, available for both Rainbow Loom novices and
`advanced aficionados. Girls and boys hone their bracelet-making skills
`while bonding with fellow Loom-lovers.
`
`"They teach how to make different kinds of bracelets that you can only
`learn here," says Daniel Teti, 10, of Drexel Hill.
`
`"I love seeing how colors look together," adds Haley Short, 11, of
`Ardmore.
`
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`
`Parents also welcome the fad, says Allyson Smith, mother of 6-year-old daughter Slone. She says she's "happy to buy" her kids
`
`1 of 2
`
`8/16/2013 4:11 PM
`
`LaRose Exh. 1002, p. 12
`
`
`
`http://articles.philly.com/2013-07-19/news/40659252_1_silly-bandz-brac...
`Rainbow Loom is summer's cool craft - Philly.com
`2:13-cv-13569-TGB-MKM Doc # 1-2 Filed 08/19/13 Pg 3 of 3 Pg ID 13
`
`something that involves thinking and doing. Moms nearby echoed that,
`saying they preferred the craft over buying mindless toys or video
`games. Jean Tryson, grandmother of Daniel Teti and his sister,
`Genevieve, 6, added that the Rainbow Loom "benefits hand-eye
`coordination and concentration."
`
`Rich Gordon, Havertown's Learning Express owner, says
`Loom-makers find the craft "purely engaging and only limited by
`imagination."
`
`Although it may seem as if the Rainbow Loom is a craze that appeared
`overnight, the sensation has been growing steadily in appeal since late
`2012. Invented by Michigan resident Cheong-Choon Ng, the Rainbow
`Loom, Gordon says, has now "spread like wildfire throughout the
`country," especially with kids 5 to 15.
`
`One need look no farther than the assortment of Loomers at the
`Havertown class, all proudly sporting their creations. Many claim to
`have made 50 bracelets, some having learned from the instructional
`book that comes with the $16.99 kit (refills cost $4 to $5) or watching tutorials on YouTube.com.
`
`Jessica Wilding, a sixth grader from Springfield, gives most of her creations to family and friends. Peter Leibrandt and his
`classmates often offer their designs to teachers. Cay Scheuer, one of the instructors of the Rainbow Loom classes in Havertown,
`says she frequently hears stories of children who sell their creations and donate the proceeds to charity.
`
`But parents seem to be the main beneficiaries.
`
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`2 of 2
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`8/16/2013 4:11 PM
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`LaRose Exh. 1002, p. 13
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`2:13-cv-13569-TGB-MKM Doc # 1-3 Filed 08/19/13 Pg 1 of 6 Pg ID 14
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`EXHIBIT B
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`2:13-cv-13569-TGB-MKM Doc # 1-3 Filed 08/19/13 Pg 2 of 6 Pg ID 15
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`2:13-cv-13569-TGB-MKM Doc # 1-4 Filed 08/19/13 Pg 1 of 16 Pg ID 20
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`EXHIBIT C
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`LaRose Exh. 1002, p. 20
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`2:13-cv-13569-TGB-MKM Doc # 1-4 Filed 08/19/13 Pg 2 of 16 Pg ID 21
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`2:13-cv-13569-TGB-MKM Doc # 1-4 Filed 08/19/13 Pg 3 of 16 Pg ID 22
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`2:13-cv-13569-TGB-MKM Doc # 1-4 Filed 08/19/13 Pg 9 of 16 Pg ID 28
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`2:13-cv-13569-TGB-MKM Doc # 1-4 Filed 08/19/13 Pg 15 of 16 Pg ID 34
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`2:13-cv-13569-TGB-MKM Doc # 1-5 Filed 08/19/13 Pg 1 of 4 Pg ID 36
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`EXHIBIT D
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