IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA ) ) ) ) Civil Action No.

________________ ) ) ) ) ) COMPLAINT ) (Jury Trial Demanded) ) ) ) ) )

GUIDECRAFT, INC., Plaintiff,

v.

MAGFORMERS, LLC, Defendant.

For its complaint against Defendant Magformers, LLC ("Magformers" or Defendant), Plaintiff Guidecraft, Inc. (Guidecraft or Plaintiff) hereby states as follows: Nature of the Case 1. This is an action for a declaratory judgment of non-infringement of a United

States patent and an action for unfair competition and misconduct in the marketplace under the Lanham Act. This action is commenced pursuant to the Declaratory Judgment Act, 28 U.S.C. 2201, and arises under the United States patent laws, 35 U.S.C. 1, et seq. and the Lanham Act 15 U.S.C 1051 et seq. Parties 2. Plaintiff, Guidecraft is a New York corporation with places of business at 55508

State Highway, 19 West, Winthrop, Minnesota, 55396 and 204 Route 17, 2nd floor, Tuxedo Park, NY 10987-4410. Guidecraft is a worldwide leader in the design and manufacture of toys, furniture for children, and art and craft products that are designed for children.

3.

Plaintiff offers to sell and sells its products nationally, internationally, and within

this judicial district. 4. Plaintiff sells toys and other products in this judicial district, including stores such

as USA Baby, located at 2257 Babcock Blvd., Pittsburgh, PA 15237 and All About Kids, located at 3043 Washington Rd., McMurray, PA 15317. Plaintiff also offers its products in catalogs that are distributed throughout the United States including this judicial district. 5. Plaintiff further advertises its products and provides customer service and other

services throughout the world and in this judicial district via its website, www.guidecraft.com. 6. On information and belief, Defendant is a Utah limited liability company having a

place of business located at 1440 East 4045, Salt Lake City, Utah 84124. 7. On information and belief, Defendant sells its products throughout the United

States and internationally, including in this judicial district. 8. On information and belief, Defendant advertises its products in this judicial

district, sells its products in this judicial district, and offers to sell its products in this judicial district. 9. On information and belief, Defendant sells its products to retailers such as

Amazon.com, which sells Defendants products in this judicial district and throughout the United States 10. On information and belief, Defendant also advertises its products, offers its

products for sale, and sells its products at its website, www.magformers.com. 11. On information and belief, Defendant offers to sell its products in this judicial

district via its online store at the uniform resource locator (URL) http://www.magformers.com/shop.html.

12.

On information and belief, Defendant sells its products in this judicial district via

its online store that is available via the internet. 13. On information and belief, Defendant sells its products to retailers in this judicial

district, such as the Learning Express store located at 4100 William Penn Highway, Monroeville, PA 15146 and the Learning Express store located at 20418 Route 19, Cranberry Township, PA 16066. 14. On information and belief, Defendant also has offered to sell and sells its products

to national retailers such as Toys R Us. Jurisdiction And Venue

15.

This action arises under the patent laws of the United States. 35 U.S.C.

1, et seq. This Court enjoys subject matter jurisdiction over this controversy pursuant to 28 U.S.C. 1331 and 1338, and is empowered to grant declaratory relief pursuant to 28 U.S.C. 2201. 16. This Court has personal jurisdiction over Defendant because Defendant has

established minimum contacts with the forum such that the exercise of personal jurisdiction over Defendant will not offend the traditional notions of fair play and substantial justice. 17. Venue is proper in this District under 28 U.S.C. 1391 and 1400(b) at least

because Defendant resides in this judicial district, a substantial part of the events or omissions giving rise to these events are located within this judicial district, and Defendant is subject to the Courts personal jurisdiction.

Defendants Allegations Of Patent Infringement 18. At the Toy Fair tradeshow held in New York on February 10-13, 2013, Guidecraft

displayed and offered for sale its PowerClixTM toys, which are toys that include spherical magnets encased within different shaped structures. The PowerClixTM toys provide a 3D building system that lets children or other users build models while learning the basics of science, construction, and engineering. 19. An employee or agent of Defendant came to Guidecrafts booth at Toy Fair, saw

PowerClixTM toys displayed and offered for sale and told Guidecrafts representatives that the sale of the PowerClixTM products infringed Defendants patent. Customers and potential customers were present and heard this allegation. 20. On information and belief, Defendants representatives have told customers of

Guidecraft and prospective customers of Guidecraft, including customers who do business in this judicial district that the sale of the PowerClixTM products infringed Defendants patent. 21. On information and belief, the allegations made by Defendant have led some

customers and potential customers to not purchase the PowerClixTM products. 22. In a letter dated August 8, 2013, an attorney for Defendant sent a letter to

GuideCraft stating that Magformers is the owner of the U.S. Patent No. 7,154,363 (the 363 patent) and that Guidecrafts sale of Power Clix infringes the Patent and breaches Magformers rights under 35 U.S.C. 271. A copy of this letter is provided herewith as Exhibit A. A copy of the 363 patent is provided herewith as Exhibit B. 23. In the letter of August 8, 2013, Defendant asserts that if Guidecraft does not stop

selling its PowerClixTM products, Defendant will pursue all available legal remedies; including, but not limited to, seeking injunctive relief, disgorgement of profits, costs and attorneys fees.

24.

The letter of August 8, 2013 was the first time that Defendant identified the 363

patent to Guidecraft. 25. The letter of August 8, 2013 does not cite a single claim that Defendant contends

cover the PowerClixTM toys. 26. The letter of August 8, 2013 quotes language from the Abstract of the 363 patent

to assert that Guidecrafts PowerClixTM toys infringe the 363 patent. 27. The letter of August 8, 2013 explicitly states Guidecrafts sale of PowerClixTM

products infringes the 363 patent because they are a plurality of magnetic connector bodies in various different forms for magnetic connection of two or more bodies together along mutuallyconfronting, longitudinally-elongated, linear peripheral border edges, each linear peripheral border edge having at least one particularly-configured longitudinally elongated, cylindrical magnet supported adjacent thereto for rotation of the magnet adjacent said peripheral edge of each connector body for orientation of the magnetic polarity of magnets of confronting connector bodies for mutual magnetic attraction along, mutually confronting, linear, peripheral border edges of magnetic connector bodies. See the Patents abstract.

U.S. Patent No. 7,154,363 28. The 363 patent is entitled Magnetic Connector Apparatus, lists Larry Dean

Hunt as the sole inventor, and issued on December 26, 2006. 29. On information and belief, no assignment has been recorded with the United

States Patent and Trademark Office for the rights to the 363 patent as of the filing date of this Complaint. 30. In the Background Of The Invention section of the patent the 363 patent says that

U.S. Patent No. 5,347,253 to Ogikubo provides a connector body arranged to contain a

spherical magnet rotatably within its interior, for substantially universal rotation of the spherical magnet body on any diametric axis through the magnet for orientation of the opposite, north and south poles of the magnet as needed for proper magnetic attraction to a corresponding magnet of a second body member. (Exhibit B at Col. 1, lines 28-34). 31. The 363 patent, says, Of critical importance to the present invention is the

particular, required configuration of the particular magnet body 16 contained in the aforementioned magnet pocket 14 disposed adjacent each peripheral linear confronting border edge of each connector body 10. (Exhibit B at Col. 5, lines 35-39) (emphasis added). 32. The 363 patent explicitly states that the magnet 16 is specifically provided in

the form of a longitudinally elongated cylinder having a selected, longitudinal length dimension that is greater than its selected uniform diameter dimension, the magnet body arranged for rotatable containment within the particular, corresponding magnet pocket 14 provided in a linear leg 12 of the connector bodies. (Exhibit B at Col. 5, lines 40-45) (emphasis added). 33. 34. Claim 1 of the 363 patent is the lone independent claim of this patent. Claim 1 is for a magnetic connector apparatus and recites that the connector

apparatus comprises, among other limitations, a longitudinally extending, cylindrical magnet in each said at least one magnet pocket of each said body member, each said magnet arranged with opposite magnetic poles occupying opposite diametric halves of the cylindrical magnet throughout its entire longitudinal length, each magnet supported in a magnet pocket for rotation therein about the longitudinally-extending axis of the diametric center line through the longitudinal length of the magnet, said axis of rotation extending substantially

parallel to said longitudinally extending, linear peripheral border edge of the connector body (emphasis added). 35. Claims 2-6 of the 363 patent depend from claim 1 and therefore include the

limitations of claim 1. The PowerClixTM Toys 36. 37. Guidecraft makes and sells PowerClixTM toys that permit a child to build a model. The PowerClixTM toys made and sold by Guidecraft include parts that each

contains spherical magnets at each corner or end of the part. 38. Each of the spherical magnets of the PowerClixTM toys rotate within the interior

of the part in which the magnet is located for substantially universal rotation of the spherical magnet body on any diametric axis through the magnet for orientation of the opposite, north and south poles of the magnet as needed for proper magnetic attraction to a corresponding magnet of another part. 39. The spherical magnets provide a quick connect for fast, simple, and powerful 3D

modeling so that a child may build different structures (e.g. a model of a bridge, building, car, or animal). 40. Below is an annotated image of different parts of the PowerClixTM toy system that

permits the building of different objects:

Spherical magnets providing quick connection to other parts

Spherical magnets providing quick connection to other parts

41.

Below is a first annotated image of one of the numerous different structures that

could be made by use of the PowerClixTM toys: Spherical magnets providing quick connection between adjacent parts

Spherical magnets providing quick connection between adjacent parts

42.

Below is a second annotated image of one of the numerous different structures

that could be made by use of the PowerClixTM toys: Spherical magnets providing quick connection between adjacent parts

43.

Each of the spherical magnets within the different parts of the PowerClixTM toys

does not have an elongated length that is greater than its diameter dimension. 44. Each of the spherical magnets within the different parts of the PowerClixTM toys

does not have a longitudinally-extending axis of a diametric center line through a longitudinal length of the magnet. 45. Each of the spherical magnets within the different parts of the PowerClixTM toys

does not have an axis of rotation extending substantially parallel to a longitudinally extending, linear peripheral border edge of a connector body. 46. 47. None of the parts in the PowerClixTM toys contain a cylindrical magnet. None of the parts in the PowerClixTM toys contain a magnet that is elongated.

48. elongated. 49.

None of the parts in the PowerClixTM toys contain a magnet that is longitudinally

None of the parts of the PowerClixTM toys contain a magnet that has a

longitudinal length. Defendants Review Of The PowerClixTM Toys 50. On information and belief, Defendant asserted that Guidecraft infringed the 363

patent prior to reviewing the claims of the 363 patent to determine whether any of the claims of the 363 patent were infringed. 51. On information and belief, Defendant was unable to explain its basis for asserting

patent infringement by Guidecraft at the Toy Fair tradeshow in New York. 52. In the letter of August 8, 2013, Defendant did not identify a single claim that was

infringed by the PowerClixTM toys. 53. In the letter dated August 8, 2013, Defendant never explained how a spherical

magnet found in the PowerClixTM toys could be a cylindrical magnet. 54. On information and belief, Defendant never had a patent attorney review the

PowerClixTM toys to determine whether any claim of the 363 patent was infringed by the 363 patent. 55. On information and belief, Defendant never had a patent agent review the

PowerClixTM toys to determine whether any claim of the 363 patent was infringed by the 363 patent. COUNT I DECLARATORY JUDGMENT OF NON-INFRINGEMENT

56.

Paragraphs 1-55 are incorporated by reference herein as if fully recited herein.

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57.

Guidecraft reasonably apprehends that Defendant will commence infringement

litigation against Guidecraft alleging that the manufacture, sale and/or use of Guidecrafts PowerClixTM toys infringes the '363 patent. 58. Consequently, there is an actual case and controversy between Guidecraft and

Defendant concerning whether Guidecraft infringes any valid claim of the '363 patent. 59. patent. 60. The manufacture, use and sale of Guidecrafts PowerClixTM toys do not infringe Guidecraft has not infringed and does not infringe any valid claim of the 363

any valid claim of U.S. Patent No. 7,154,363.

COUNT II LANHAM ACT VIOLATION

61. 62.

Paragraphs 1-60 are incorporated by reference herein as if fully recited herein. Defendant, through its public statements and actions asserting that sale of the

PowerClixTM infringes its patent has violated 15 U.S.C. 1125 of the Lanham Act. 63. Due to Defendants actions and erroneous allegations made with respect to the

363 patent, customers and the marketplace for toys are confused and are likely to be confused as to whether or not Guidecraft infringes the 363 patent. 64. There are numerous express limitations of claims 1-6 of the 363 patent that are

clearly not found within the PowerClixTM toys. 65. Defendants erroneous allegations of patent infringement that have been publicly

made to the toys marketplace misrepresent the nature, characteristics, and qualities of Guidecrafts PowerClixTM toys.

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66. baseless.

On information and belief, Defendants actions are in bad faith and are objectively

WHEREFORE, Guidecraft prays that this honorable Court grant Guidecraft the following relief: A. Declare that the manufacture, use and sale of Guidecrafts PowerClixTM toys do

not infringe any valid claim of U.S. Patent No. 7,154,363. B. If the facts demonstrate that this is an exceptional case pursuant to 35 U.S.C.

285, order Defendants to reimburse Guidecraft for its attorneys' fees and cost reasonably incurred in prosecuting this action; and C. Enjoin Defendant, its offers, employees, sales representatives, and agents from

telling others that Guidecrafts PowerClixTM toys infringes U.S. Patent No. 7,154,363; and D. Award Guidecraft such further relief as this Court deems just and reasonable

under the circumstances. Jury Demand Guidecraft hereby demands trial by jury of all issues properly so triable.

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Dated: August 23, 2013

Respectfully submitted,

GUIDECRAFT, INC. /s/ Lynn J. Alstadt Lynn J. Alstadt Ralph G. Fisher

Buchanan Ingersoll & Rooney, PC

One Oxford Center 301 Grant Street Pittsburgh, PA 15219 (412) 562-1632 (tel.) lynn.alstadt@bipc.com ralph.fischer@bipc.com Attorneys for Plaintiff

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