Trademark Trial and Appeal Board Electronic Filing System. http://estta.uspto.gov
`
`ESTTA Tracking number:
`
`ESTTA800867
`
`Filing date:
`
`02/13/2017
`
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`
`Proceeding
`
`92064833
`
`Party
`
`Correspondence
`Address
`
`Defendant
`David M. Semas
`
`DAVID M SEMAS
`9900 WILBUR MAY PKWY UNITE 2406
`RENO, NV 89521
`UNITED STATES
`david@sierradorado.com
`
`Submission
`
`Filer's Name
`
`Filer's e-mail
`
`Signature
`
`Date
`
`Attachments
`
`Reply in Support of Motion
`
`David M. Semas
`
`david@sierradorado.com
`
`/s/ David M. Semas
`
`02/13/2017
`
`Semas TTAB Suspension Ltr 021317.pdf(117535 bytes )
`EX 01 - A-Complaint with exhibits.pdf(4247675 bytes )
`EX 01 - B-Complaint with exhibits.pdf(4580003 bytes )
`EX 01 - C-Complaint with exhibits.pdf(2920879 bytes )
`EX 02 - Answer.pdf(1627096 bytes )
`EX 03 - Counterclaim.pdf(1492236 bytes )
`EX 04 - Response to Counterclaim.pdf(173512 bytes )
`EX 06 - Answer to First Amended Complaint.pdf(272451 bytes )
`EX 07 - Transcript of Settlement Conference.pdf(1255181 bytes )
`EX 08 - Order Approving Settlement.pdf(1415103 bytes )
`EX 09 - Beesley Transcript Semas vs Chemeon 120315.pdf(271272 bytes )
`
`

`

`
`Metalast, Inc.
`9900 Wilbur May Parkway
`Unit 2406
`Reno, Nevada 89521
`(775) 790-8324
`
`
`
`
`
`February 13, 2017
`
`
`
`TRADEMARK TRIAL AND APPEAL BOARD (TTAB)
`The Trademark Assistance Center
`Madison East, Concourse Level Room C55
`600 Dulany Street
`Alexandria, Virginia 22314
`
`
`
`Chemeon Surface Technology, LLC, Petitioner v. David M. Semas, Respondent
`Cancellation Number: 92064833
`Motion To Suspend Supplement – Civil Litigation Pleadings
`
`RE:
`
`
`
`Dear Victoria:
`
`The order issued and withdrawn on February 2, 2017 required that I file a copy of
`pleadings in Chemeon Surface Technology, LLC v. Metalast International, Inc., Case No.
`3:15-CV-00294-MMD-VPC (D. Nev.). I have included the following pleadings:
`
`Exhibit
`1
`2
`3
`4
`5
`6
`7
`8
`9
`
`
`
`Description
`Date
`06/03/2015 Complaint (ECF No. 1)
`07/06/2015 Answer (ECF No. 32)
`09/08/2015 Amended Counterclaim (ECF No. 51)
`10/02/2015 Response to Counterclaim (ECF No. 62)
`04/07/2016 First Amended Complaint; Demand for Jury (ECF No 108)
`05/03/2016 Answer to First Amended Complaint (ECF No. 113)
`01/29/2015 Transcript of Judge Zive Settlement Conference
`03/02/2015 Order of Judge Beesley Approving Settlement
`12/03/2015
`Judge Beesley Transcript Re-affirming Settlement Agreement
`
`
`There are hundreds of other filings in the District Court case, including various
`motions, stipulations, and status reports. Please let me know if you need a complete
`docket for the District Court action.
`
`As noted in my papers, the ownership and validity of the Metalast® trademark was also
`litigated in the U.S. Bankruptcy Court for the District of Nevada. Those disputes were
`settled on January 27, 2015 in a judicial settlement conference. (Exhibit 7).
`
`
`Motion To Suspend – Supplement
`DMS/ds 021317
`
`Page 1 of 3
`
`

`

`
`
`
`Metalast, Inc.
`9900 Wilbur May Parkway
`Unit 2406
`Reno, Nevada 89521
`(775) 790-8324
`
`
`
`As part of the settlement, the Petitioner agreed that, 90 days after formal approval of
`the settlement, on or before June 9th the Petitioner would no longer use the name
`"Metalast" in any fashion or manner whatsoever. The Petitioner has refused to
`comply with the plain language of the settlement agreement. Exhibit 7, page 6. That
`agreement was formally approved and became effective on March 11, 2015. Exhibit
`8. Thus, the 90-day period for the Petitioner to have stopped the use of the "Metalast"
`name expired almost two years ago. Following the settlement, however, Petitioner
`first objected to its own settlement on grounds that it was impractical for Petitioner
`to stop using the Metalast mark, but then withdrew the objection. On June 3, 2015
`(one week before the ban on using the Metalast mark was to begin) Petitioner
`initiated the District Court case.
`
`In that case, Petitioner argued that the settlement did not preclude it from marketing
`and selling its products as "formerly known as Metalast." Over my objections,
`Petitioner has not halted this practice. The District Court asked the Bankruptcy Court
`to interpret the settlement. The Bankruptcy Court confirmed that the settlement
`precluded the Petitioner’s use of the trademark and was an “absolute prohibition”
`from using the name "Metalast" for any purpose at all. Exhibit 9, pages 6, 8, 9, 15.
`
`The March 11, 2015 settlement also includes Petitioner's complete release of me and
`my business entities.
`
`The current Petition to Cancel the registration of the Metalast mark is plainly a third
`attempt to subvert the March 11, 2015 settlement agreement. It is also inconsistent
`with the positions Petitioner had taken before. The Petitioner alleges “Abandonment
`For Non-Use” in this action, yet claimed that I have engaged in "Unfair Competition"
`by using the mark. See First Amended Complaint, Exhibit 5, pages 44-45.
`
`The Proof of Service of mailing a true and correct copy of this submission to Robert
`Ryan of Holland & Hart LLP, attorney for the Petitioner is attached. I can be reached
`by telephone at (775) 790-8324 or by email at: david@sierradorado.com. Thank You.
`
`Page 2 of 3
`
`
`
`
`
`
`
`Respectfully submitted,
`
`
`/s/ David M. Semas
`David M. Semas, in Pro Se
`An individual
`
`
`
`Motion To Suspend – Supplement
`DMS/ds 021317
`
`

`

`
`Metalast, Inc.
`9900 Wilbur May Parkway
`Unit 2406
`Reno, Nevada 89521
`(775) 790-8324
`
`
`
`
`
`
`
`
`
`
`CERTIFICATE OF SERVICE
`
`I hereby certify that, on this 13th day of February, 2017, a true and correct copy of the
`
`foregoing Motion To Suspend Supplement – Civil Litigation Pleadings has been
`
`served by email on the Petitioner, by sending it to their email address as follows:
`
`RCRyan@hollandhart.com and TReid@hollandhart.com
`
`/s/ David M. Semas
`
`
`
`
`
`David M. Semas, in Pro Se
`
`
`
`Robert C. Ryan
`Christopher B. Hadley
`Tamara Reid
`Michelle N. Brooks
`HOLLAND & HART LLP
`5441 Kietzke Lane, 2nd Floor
`Reno, Nevada 89511
`
`
`
`
`
`
`
`
`Motion To Suspend – Supplement
`DMS/ds 021317
`
`Page 3 of 3
`
`

`

`Exhibit'1'
`Exhibit 1
`
`

`

`Case 3:15-cv-00294-VPC Document 1 Filed 06/03/15 Page 1 of 45
`
`
`
`Robert C. Ryan (#7164)
`Anthony Hall (#5977)
`Tamara Reid (#9840)
`HOLLAND & HART LLP
`5441 Kietzke Lane, Second Floor
`Reno, Nevada 89511
`Phone: (775) 327-3042
`Fax: (775) 786-6179
`rcryan@hollandhart.com
`ahall@hollandhart.com
`treid@hollandhart.com
`
`Christopher B. Hadley
`(Pro hac vice to be filed)
`HOLLAND & HART LLP
`222 South Main St., Suite 2200
`Salt Lake City, UT 84101
`Phone: (801) 799-5873
`Fax: (801) 618-4238
`cbhadley@hollandhart.com
`
`
`Attorneys for Plaintiff
`
`UNITED STATES DISTRICT COURT
`
`DISTRICT OF NEVADA
`
`Case No. __________________
`
`
`
`COMPLAINT
`DEMAND FOR JURY
`
`CHEMEON SURFACE TECHNOLOGY,
`LLC, a Nevada limited liability company,
`
`Plaintiff,
`
`17
`
`v.
`
`18
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`19
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`20
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`21
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`22
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`23
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`METALAST INTERNATIONAL, INC., a
`Nevada corporation; METALAST, INC., a
`Nevada corporation; SIERRA DORADO, INC., a
`Nevada corporation; DAVID M. SEMAS, an
`individual; GREG D. SEMAS, an individual; and
`WENDI SEMAS-FAURIA, an individual.
`
`
`Defendants.
`
`
`
` Plaintiff CHEMEON Surface Technology, LLC (“Plaintiff” or “CHEMEON”), by and
`
`through its counsel, Holland & Hart LLP, for its Complaint against Defendants Metalast
`
`International, Inc., Metalast, Inc., Sierra Dorado, Inc., David M. Semas, Greg D. Semas, and
`
`Wendi Semas-Fauria (collectively referred to as, “Defendants”), states and alleges as follows:
`
`
`
`
`
`1
`
`(Cancellation 92064833) EX 1, Complaint, Page 01
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`1 2 3 4 5 6 7 8 9
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`11
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`12
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`13
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`14
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`15
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`Phone: (775) 327-3000 ♦ Fax: (775) 786-6179
`
`Reno, NV 89511
`
`5441 Kietzke Lane, 2nd Floor
`HOLLAND & HART LLP
`
`
`
`

`

`Case 3:15-cv-00294-VPC Document 1 Filed 06/03/15 Page 2 of 45
`
`
`
`NATURE OF THE ACTION
`
`1.
`
`Plaintiff seeks injunctive, declaratory, equitable, and monetary relief against
`
`Defendants for trade secret misappropriation, declaratory judgment of no trademark infringement,
`
`cancellation of trademark, common law trademark infringement, copyright infringement,
`
`intentional interference with prospective economic advantage, unfair competition, deceptive trade
`
`practices and unjust enrichment.
`
`THE PARTIES
`
`2.
`
`Plaintiff CHEMEON Surface Technology, LLC, is a Nevada limited liability
`
`company with its principal place of business at 2241 Park Place Ste B, Minden, Nevada 89423.
`
`3.
`
`Defendant Metalast International, Inc., is a Nevada corporation with its principal
`
`place of business at 2248 Meridian Blvd. Ste. H, Minden, Nevada, 89423 (“MII”).
`
`4.
`
`Defendant Metalast, Inc., is a Nevada corporation with its principal place of
`
`business at 2248 Meridian Blvd. Ste. H, Minden, Nevada, 89423.
`
`5.
`
`Defendant Sierra Dorado, Inc., is a Nevada corporation with its principal place of
`
`business at 2248 Meridian Blvd. Ste. H, Minden, Nevada, 89423.
`
`6.
`
`Defendant David M. Semas is an individual that upon information and belief
`
`resides in Gardnerville, Nevada. Upon information and belief, Mr. Semas is the owner, manager,
`
`member, executive or equity owner of the various co-defendant Metalast entities.
`
`7.
`
`Defendant Greg D. Semas is an individual that upon information and belief resides
`
`in San Jose, California. Upon information and belief, Greg D. Semas is the owner, manager,
`
`member, executive or equity owner, or other affiliate or representative of the various co-defendant
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`Metalast entities.
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`8.
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`Defendant Wendi Semas-Fauria is an individual that upon information and belief
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`resides in Nevada. Upon information and belief, Mrs. Semas-Fauria is the owner, manager,
`
`member, executive or equity owner, or other affiliate or representative of the various co-defendant
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`26
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`Metalast entities.
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`9.
`
`This action arises and is brought under the Declaratory Judgment Act, 28 U.S.C.
`
`JURISDICTION
`
`2
`
`Phone: (775) 327-3000 ♦ Fax: (775) 786-6179
`
`Reno, NV 89511
`
`5441 Kietzke Lane, 2nd Floor
`HOLLAND & HART LLP
`
`
`
`(Cancellation 92064833) EX 1, Complaint, Page 02
`
`

`

`Case 3:15-cv-00294-VPC Document 1 Filed 06/03/15 Page 3 of 45
`
`
`
`§§ 1331, 1338, 2201-2202, the Trademark Act, commonly known as the Lanham Act, 15 U.S.C. §
`
`1051, et seq., the United States Copyright Act, 17 U.S.C. §101 et seq., the Nevada Uniform Trade
`
`Secrets Act (NRS 600A.030, et seq.), and other Nevada statutory and common law.
`
`10.
`
`This Court has supplemental jurisdiction over the factually-related state law claims
`
`in this dispute pursuant to 28 U.S.C. §1367.
`
`11.
`
`This Court has personal jurisdiction over Defendants because Defendants are
`
`Nevada corporations and limited liability companies with principal places of business in this State
`
`and are individuals who reside in this State.
`
`12.
`
`On information and belief, Defendant Greg D. Semas is subject to personal
`
`jurisdiction in the District of Nevada, consistent with the principles of due process and the Nevada
`
`long-arm statute, because Greg D. Semas’s actions in Nevada caused damage to and give rise to
`
`Plaintiff’s claims that occurred in Nevada, including, but not limited to unlawful acquisition and
`
`use of CHEMEON’s trade secrets.
`
`13.
`
`Venue is proper in this District pursuant to 28 U.S.C. § 1391(b) because
`
`Defendants are subject to personal jurisdiction in this District, and/or a substantial part of the
`
`events giving rise to the claims in this action occurred within this District.
`
`GENERAL ALLEGATIONS
`
`14.
`
`This litigation arises out of a twenty year history between the individuals and
`
`companies at the center of the dispute.
`
`15.
`
`CHEMEON Surface Technology, LLC, is a Nevada limited liability company.
`
`CHEMEON, headquartered in Minden, Nevada, is a business-to-business provider offering metal
`
`surface engineering solutions to its global customers.
`
`16.
`
`CHEMEON provides metal finishing products including alkaline and acid metal
`
`finishing chemistry cleaners, blended alkaline etches, aluminum anodizing chemical deoxidizers,
`
`organic and inorganic specialty chemical dyes, and nickel and magnesium sealants. The company
`
`offers its products for corrosion resistance, sealing, improving paint adhesion, and coating
`
`durability. The company’s products include CHEMEON TCP-HF, an anodizing sealer and
`
`CHEMEON AA-200, an anodizing additive. Additionally, it offers surface engineering chemistry
`
`
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`Phone: (775) 327-3000 ♦ Fax: (775) 786-6179
`
`Reno, NV 89511
`
`5441 Kietzke Lane, 2nd Floor
`HOLLAND & HART LLP
`
`
`
`(Cancellation 92064833) EX 1, Complaint, Page 03
`
`

`

`Case 3:15-cv-00294-VPC Document 1 Filed 06/03/15 Page 4 of 45
`
`
`
`development and technical support services. Its services include parts processing, customized
`
`technical support, product testing and analyses, research and development, and advanced surface
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`technology training classes.
`
`17.
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`Through an asset purchase agreement arising out of a state court receivership
`
`action, CHEMEON acquired the assets of a Nevada limited-liability company, now defunct,
`
`known as Metalast International, LLC (“Metalast International” and/or “ MILLC” and/or “the
`
`Company”).
`
`A. METALAST INTERNATIONAL FORMATION AND OPERATIONS
`
`18. Mr. Semas organized Metalast International in December, 1994, to acquire,
`
`develop, market, and license a patent protected and proprietary product and process for anodizing
`
`aluminum called METALAST®.
`
`19. METALAST® has scientifically demonstrated its ability to generally use less
`
`energy than conventional anodizing and accelerate the anodizing process, thus improving
`
`productivity (the “METALAST® process”).
`
`20. Metalast International’s operating Agreement provided that the Company would be
`
`managed by a manager elected annually by a majority of the Common Members (as opposed to its
`
`Preferred Members).
`
`21.
`
`Upon its creation in 1994, Metalast International’s Common Members elected
`
`defendant MII as the Company’s manager. The CEO and Chairman of MII was Mr. Semas.
`
`22.
`
`In 1995, Metalast International constructed a 17,000 square foot office, warehouse,
`
`and technical center in Minden, Nevada, and assembled a team of chemical and software
`
`engineers, experts, and scientists.
`
`23.
`
` In 1996, Metalast International developed and manufactured one of the first
`
`industrial process control systems for anodizing.
`
`24.
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`During 1998-1999, the Company began to offer its proprietary and patented
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`anodizing technology to domestic metal finishers including a highly effective chemical additive
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`called METALAST® AA-200, which greatly increased throughput, required less decanting,
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`Phone: (775) 327-3000 ♦ Fax: (775) 786-6179
`
`Reno, NV 89511
`
`5441 Kietzke Lane, 2nd Floor
`HOLLAND & HART LLP
`
`
`
`(Cancellation 92064833) EX 1, Complaint, Page 04
`
`

`

`Case 3:15-cv-00294-VPC Document 1 Filed 06/03/15 Page 5 of 45
`
`
`
`reduced rejects, enhanced lubricity, decreased surface cracking, and provided a superior and
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`consistent surface finish over all aluminum and titanium substrates.
`
`25.
`
`By 2002, Metalast International broadened its business with the introduction of a
`
`complete line of eighty (80) specialty chemical products for anodizing that included private label
`
`manufactured additives (11), cleaners (6), etchants (7), deoxidizers (7), defoamer (1), dyes (42),
`
`color enhancements (2), and sealants (4).
`
`26.
`
`In 2004, the Company was licensed by the Department of Defense, U.S. Navy to
`
`formulate, manufacture, sell and distribute Navy TCP (“Trivalent Chromium Process”). The
`
`Company improved and enhanced Navy TCP into its own brand called METALAST TCP-HF®.
`
`27.
`
`The Company also offered engineering, design, and manufacturing of complete
`
`turnkey process lines, training, education, R&D, and technical support to both metal finishers and
`
`the manufacturers they support.
`
`
`
`28.
`
`Since its inception through approximately 2012, Metalast International raised and
`
`spent over $125,000,000 in investment equity and debt.
`
`29.
`
`At all pertinent times, Mr. Semas and MII knew that, since the creation of Metalast
`
`International in December, 1994, the MILLC was the operating entity of the pertinent
`
`“METALAST” business.
`
`30.
`
`The Company website, www.metalast.com, indicated for many years that:
`
`
`
`Metalast International, LLC (MILLC) is a Nevada limited liability company and
`is the operating entity of the organization. Metalast International, Inc. is the
`manager of the LLC as required by law. The company and its operations are
`commonly referred to as METALAST.
`
`
`(All emphasis in this document added unless otherwise indicated.)
`
`
`31.
`
`At all pertinent times, Mr. Semas and MII knew, and actively promoted to investors
`
`and potential investors in the Company, that the Metalast International Operating Agreement
`
`provided that Mr. Semas and MII owed fiduciary duties to the Company.
`
`32.
`
`For example, the due diligence packages provided by Mr. Semas and MII to
`
`potential investors from 1995 through at least 2012 included the Company Operating Agreement,
`
`which provided:
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`Phone: (775) 327-3000 ♦ Fax: (775) 786-6179
`
`Reno, NV 89511
`
`5441 Kietzke Lane, 2nd Floor
`HOLLAND & HART LLP
`
`
`
`(Cancellation 92064833) EX 1, Complaint, Page 05
`
`

`

`Case 3:15-cv-00294-VPC Document 1 Filed 06/03/15 Page 6 of 45
`
`
`
`
`14.3 Duty of Loyalty and Good Faith. The Manager and the Members of the Company
`have a duty of undivided loyalty to the Company in all matter affecting the Company’s
`interests and are obligated to act in good faith in dealing with the Company and other
`members.
`
`33.
`
`In a June 26, 2009, letter to the U.S. Securities and Exchange Commission (“SEC”)
`
`referring to the MILLC, Mr. Semas and MII advised the SEC:
`
`At the request of the staff of the Los Angeles Regional Office of the Securities
`and Exchange Commission (“Commission”) per your letter of July 19, 2009,
`METALAST International, LLC (“MILLC” of METALAST®”), through its
`Manager METALAST International, Inc. (“MII”) is providing you with answers,
`documents, and a reply to your request . . . .
`. . . .
` . . . Management has . . . a proper fiduciary on behalf of the MILLC Members. . .
`
`
`34.
`
`In a September 2009 speech to the MILLC members, Mr. Semas and MII again
`
`emphasized his and MII’s fiduciary duty to the members of the MILLC, which he called
`
`“METALAST”:
`
`
`Annual Member’s Speech – DVD/Video Presentation
`
`1. Good Morning! I’m David Semas, Chairman, CEO and founder of
`METALAST International, Inc., of “MII,” the Manager for METALAST
`International, LLC, or “METALAST.”
`. . . .
`[A]s your Manager and as fiduciary on behalf of the LLC Members, I am
`obligated and both legally and ethically required to keep you fully apprised and
`informed as to the current status of the Company.
`. . . .
`. . . If you are looking where to lay the blame “The Buck Must Stop Here”, with
`me as your Manager. I stand behind the decisions I have made and take full
`responsibility for where METALAST sits today.
`
`
`
`35.
`
`At all pertinent times, Mr. Semas and MII knew, and actively promoted to investors
`
`and potential investors in Metalast International, that the Company Operating Agreement required
`
`the Company, Mr. Semas, and MII to maintain all Metalast International financial records in
`
`compliance with generally accepted accounting principles (“GAAP”).
`
`36.
`
`For example, the copy of the Company Operating Agreement routinely included by
`
`Mr. Semas and MII in the Company Due Diligence packages provided to potential investors stated
`
`“All financial records shall be maintained and reported consistent with generally accepted
`
`accounting principles.”
`
`
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`Phone: (775) 327-3000 ♦ Fax: (775) 786-6179
`
`Reno, NV 89511
`
`5441 Kietzke Lane, 2nd Floor
`HOLLAND & HART LLP
`
`
`
`(Cancellation 92064833) EX 1, Complaint, Page 06
`
`

`

`Case 3:15-cv-00294-VPC Document 1 Filed 06/03/15 Page 7 of 45
`
`
`
`37.
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`Thus, at all pertinent times Mr. Semas and MII knew that they had a duty to protect
`
`the Company’s assets and not to spend Company funds on property, such as trademark
`
`registrations, owned or to be owned by MII or Mr. Semas.
`
`38.
`
`This duty arose from multiple sources, including their fiduciary duty to Metalast
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`International, their duty to maintain Company records in compliance with GAAP, and their
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`contractual and legal obligations such as to accurately report the Company’s income and expenses
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`to Metalast International members and the IRS and to honestly represent ownership of the
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`Company’s METALAST brand and other trademarks and service marks to the SEC and the United
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`States Patent and Trademark Office (“USPTO”).
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`39.
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`From 1995 through 2011, at the direction of Mr. Semas and MII, federal
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`registrations were applied for in the name of MII, not MILLC, as purported “owner” of the marks,
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`for the logo and the word mark, “Metalast.”
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`40.
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`Nevertheless, consistent with their identification of the MILLC as the operating
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`entity and MII as merely its Manager, Mr. Semas and MII caused the MILLC to: (i) pay the
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`attorney fees, attorney expenses, and filing and maintenance fees for the Metalast word and logo
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`trademarks; (ii) record these expenses as MILLC expenses in the MILLC’s financial records; (iii)
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`identify the Metalast word and logo trademarks as MILLC assets in financial statements given to
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`potential investors; and (iv) deduct depreciation of the expenditures for the trademark registrations
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`in the MILLC’s IRS tax returns.
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`41. Mr. Semas and MII repeatedly told potential investors, investors, and MILLC
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`members that MILLC was “METALAST” and the user and owner of the word and logo marks as
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`defined below.
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`42.
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`In a 1998 “Investment Brief” to potential MILLC investors, Mr. Semas and MII
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`explained that the MILLC owned the METALAST technology and owned the exclusive rights to
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`license, distribute, and market the technology as well:
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`
`Introduction. METALAST International, LLC (the “Company”) owns the
`exclusive worldwide licensing, distribution and marketing right to a new, patent-
`protected and proprietary aluminum anodizing process called “METALAST.”
`The Company was organized in 1994 to market and license METALAST to
`metal finishers currently anodizing aluminum for end-users or manufacturers.
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`Phone: (775) 327-3000 ♦ Fax: (775) 786-6179
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`Reno, NV 89511
`
`5441 Kietzke Lane, 2nd Floor
`HOLLAND & HART LLP
`
`
`
`(Cancellation 92064833) EX 1, Complaint, Page 07
`
`

`

`Case 3:15-cv-00294-VPC Document 1 Filed 06/03/15 Page 8 of 45
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`
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`the first anodizing
`is
`The METALAST Technology (the “Technology”)
`technology which provides the benefits of computerized process computerized
`process control supported by a technology center staffed with anodizing and
`metallurgical scientists. . . . The Company believes its Technology and technical
`support capabilities represent the most significant advance in the aluminum
`surface industry in decades.
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`43.
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`In the MILLC’s August 2000 investment summary provided to potential investors
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`at about that time, Mr. Semas and MII identified MILLC as “METALAST” and repeatedly
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`emphasized that the MILLC, “METALAST,” has an internationally recognized, premiere, and
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`growing reputation and name:
` . . . .
`
`THE COMPANY
`the 21st century, METALAST INTERNATIONAL, LLC
`into
`To move anodizing
`the “Company”) has developed
`the first sophisticated and
`(“METALAST” or
`programmable anodizing process control computer. METALAST has assembled the finest
`professional and scientific staff and has built the world’s first multi-million dollar technical
`and training center dedicated to advancing the state of the art of light metal surface
`treatment. With its alliance partner capabilities and its proposed acquisition of a leading
`manufacturer of automated metal finishing equipment, METALAST is positioned to expand
`its products and services greatly. Together with its growing reputation as the premier
`technology and process control provider in the anodizing industry, the Company intends to
`expand its operations to include other aspects of the metal finishing business and automated
`processing including metal plating, anodizing, electroplating, E-coat, and circuit board
`manufacturing, serving the automotive, electronic, aerospace, marine, telecommunications,
`consumer products, and sporting goods industries.
` . . .
`METALAST’s growing internationally recognized reputation for its advanced proprietary
`and patented aluminum anodizing surface-treatment technologies, together with the overall
`metal finishing automated line manufacturing expertise and credibility of PLASFAB will
`propel METALAST into the forefront of this multi-billion dollar market place.
`. . . .
`. . . METALAST has accomplished more toward earning industry-wide respect and name
`and product recognition that any other company before it.
`. . . .
`. . . [METALAST management has] launch[ed] the new METALAST ad campaign,
`‘METALAST meets the Millenium.’
`. . . .
`In anticipation of significant revenues and profits by 2004, METALAST is positioning
`itself for either an IPO, or acquisition [by] one of the large international metal finishing
`companies.
`
`
`
`44.
`
`In 2004, Mr. Semas and MII reported to the MILLC Members that “Metalast™” is
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`“our,” i.e., the MILLC’s, “private label”:
`
`
`METALAST INTERNATIONAL, LLC
`Managers Annual Report
`“Year In Review”
`October 9, 2004
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`Phone: (775) 327-3000 ♦ Fax: (775) 786-6179
`
`Reno, NV 89511
`
`5441 Kietzke Lane, 2nd Floor
`HOLLAND & HART LLP
`
`
`
`(Cancellation 92064833) EX 1, Complaint, Page 08
`
`

`

`Case 3:15-cv-00294-VPC Document 1 Filed 06/03/15 Page 9 of 45
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`
`
`We are providing you with this annual report of METALAST International, LLC
`(“MILLC” or the “Company”) to provide you with a summary of the activities of
`the Company during the last quarter of 2003 and the first three quarters of 2004.
`. . .
`
`YEAR TO DATE SUMMARY
`During the prior year our primary focus was directed toward increasing our sales
`force . . . . Our METALAST™ private label chemical business and our
`manufacturing PAVCO alliance are taking shape. We [i.e., the LLC] executed
`final TCP-HP contracts with the Department of Defense, United States Navy in
`June of this year . . .
`
`45.
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`In fact, that Navy contract was with MILLC, not MII.
`
`46.
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`In a July 2005 Private Placement Memorandum soliciting investment in the
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`MILLC, Mr. Semas and MII repeatedly explained that the MILLC––again identified as
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`“METALAST”––owned the METALAST technology and brand:
`
`
`Members of METALAST International, LLC (“METALAST” or
`
`Issuer:
`“Company”)
`. . . .
`METALAST Branding: Management believes that the Company has successfully
`branded the name METALAST® and perfected its process control technology in
`preparation for bringing its first product to the mass metal finishing market. The
`Company has built its technology center, hired and trained qualified scientists,
`industry experts, formulated chemistry and processed samples for well over 600
`companies.
`
`47.
`
`In addition, in the risk factors section of this document, MII was not identified as
`
`being a competitor or as an owner of any METALAST intellectual property.
`
`48.
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`In September 2005, Mr. Semas and MII reported to the MILLC Members that
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`“METALAST” is the MILLC’s brand and that it would be “very rewarding”:
`
`
`METALAST INTERNATIONAL, LLC
`Managers Annual Report
`“Year In Review”
`September 19, 2005
`
`
`We are providing you with this annual report of METALAST International, LLC
`(“MILLC” or the “Company”) to provide you with a summary of the activities of
`the Company during the last quarter of 2004 and the first three (3) quarters of
`2005.
`
`OVERVIEW AND RECAP The building of METALAST and branding our
`name, has been a long and tedious journey, but we believe it will soon prove to
`be very rewarding. At the end of last year’s Annual [LLC] Members Meeting, I
`emphasized that we were poised, and ready to launch our T-REX marketing
`campaign and to begin to generate significant revenues.. . . In November 2004,
`T-REX was successfully launched, and to date, we have presented the
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`Phone: (775) 327-3000 ♦ Fax: (775) 786-6179
`
`Reno, NV 89511
`
`5441 Kietzke Lane, 2nd Floor
`HOLLAND & HART LLP
`
`
`
`(Cancellation 92064833) EX 1, Complaint, Page 09
`
`

`

`Case 3:15-cv-00294-VPC Document 1 Filed 06/03/15 Page 10 of 45
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`
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`METALAST story to well over 150 of the leading corporations of America. . . .
`Our audience continues to attend our seminars and our message is being heard.
`
`49.
`
`In a June 2009 letter to the SEC, Mr. Semas and MII advised the SEC that the
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`MILLC had spent over $44,000,000 “branding the METALAST® name,” building the MILLC’s
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`“reputation,” and “always act[ing] as a proper fiduciary” to the MILLC members:
`
`
`. . . MILLC has spent fourteen (14) years and $44 million dollars of our
`investor’s capital in developing products, branding the METALAST® name and
`building a quality reputation with manufacturers from around the globe and
`throughout the metal finishing industry.
`. . . .
`. . . Management has always acted as a proper fiduciary on behalf of the MILLC
`Members. . . .
`
`50. Mr. Semas and MII included this letter in the Due Diligence package sent to
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`investors soliciting investment in the MILLC in or about July 2009.
`
`51.
`
`In the MILLC’s July 2009 Private Placement Memorandum, Mr. Semas and MII
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`promoted the investment as being in “the METALAST brand” and repeatedly referred to the
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`MILLC as “METALAST”:
`PRIVATE PLACEMENT MEMORANDUM
`METALAST INTERNATIONAL, LLC
`. . . .
`METALAST International, LLC., a Nevada limited liability company (the
`“Company”) [was] organized in December 1994 to acquire, develop, market and
`license a patent protected and proprietary process for anodizing aluminum
`called METALAST®. METALAST® has scientifically demonstrated its ability to
`generally use less energy than conventional anodizing and accelerate the
`anodizing process, thus improving productivity (the “METALAST® process”).
`The Company constructed a 17,000 square foot facility technical center in
`Minden, Nevada (45 miles south of Reno) and assembled a team of chemical and
`software engineers, experts and scientists. In 1996 METALAST conducted R&D,
`designed and manufactured one of the first industrial process control systems for
`anodizing . . . . By 2002 the business was broadened with the introduction of a
`complete line of eighty (80) specialty chemical products for anodizing. In 2004,
`METALAST expanded into all forms of electrochemical processing . . . and was
`licensed by the DoD, Navy . . . . METALAST improved and enhanced Navy
`TCP into its own brand called METALAST TCP-HF® . . . .
`
`. . . Proceed of the offering will be used by the Company to . . . provide research
`and development funds for the continued development of METALAST® products
`and services . . . .
`. . . .
`Need for Proceeds of Offering: The Company has limited working capital and
`has an immediate need for the proceeds of the Offering . . . to finance marketing,
`advertising, and licensing of its METALAST® Process.
`
`. . .
`. . . Management further anticipates that . . . a good portion of aviation and
`aerospace industries [will] approve or require use of METALAST TCP-HF.
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`Phone: (775) 327-3000 ♦ Fax: (775) 786-6179
`
`Reno, NV 89511
`
`5441 Kietzke Lane, 2nd Floor
`HOLLAND & HART LLP
`
`
`
`(Cancellation 92064833) EX 1, Complaint, Page 10
`
`

`

`Case 3:15-cv-00294-VPC Document 1 Filed 06/03/15 Page 11 of 45
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`
`
`Management believes that as such the METALAST brand should capture at least
`a